WILL GERMAN BANKS EARN THEIR COST OF CAPITAL?

In recent years, the German banking sector has overcome major challenges such as the global financial crisis and the European debt crisis. This paper analyzes a recent development as a particular determinant of the future outlook for the German banking sector. Interest rates are at historically low levels and may remain at these levels for a considerable period of time. Such levels pose a specific challenge to banks which are heavily dependent on interest income, as is the case for most German banks. We consider different interest rate scenarios and analyze the extent to which they cause a further narrowing of the interest rate margin. Our results indicate that a projected decline in this margin will result in no more than 20% of German banks earning a cost of capital of 8% by the end of this decade. However, we show that this decline is alleviated by the fact that German banks can apply a special feature of German accounting standards by using hidden and open reserves. We discuss how these income smoothing tools will provide a cushion that supports short‐ and medium‐term adjustments through a buffer effect. (JEL G21, G28)     

Hook vs. hope: How to enhance customer engagement through gamification

Many digital service providers have adopted gamification to promote customer engagement. Critical questions, however, remain about the most effective way to enhance customer engagement and increase sales by applying gamification. With a research design that combines qualitative and quantitative methods, including the use of objective sales data from a large field study and replication of the findings across different contexts, this study explores how gamification fosters customer engagement. Both field study results and a simulation study reveal gamification principles (i.e., social interaction, sense of control, goals, progress tracking, rewards, and prompts) that promote hope and consequently increase customer engagement and digital sales. Furthermore, we find that hope is more strongly associated with customer engagement than the psychological condition of compulsion, which even exerts a negative impact. This research thus explores how gamification creates value for customers and provides actionable insights for managers to foster hope through gamification as opposed to get customers hooked.     

Private information in currency markets

Using daily abnormal currency returns for the universe of countries with flexible exchange rates, we show local currency depreciations ahead of unscheduled, public sovereign debt downgrade announcements. Consistent with the private information hypothesis, the effect is stronger in lower institutional quality countries and holds after we control for concurrent public information and for publicly available rumors about the forthcoming downgrades. Our results persist when abnormal currency returns are adjusted for global carry and dollar risk factors, world equity and bond returns, as well as local stock market returns. Finally, the currency depreciations are permanent, providing evidence for a link between fundamentals and currency markets.     

DOES BIG GOVERNMENT HURT GROWTH LESS IN HIGH‐TRUST COUNTRIES?

Social trust is linked to both public sector size and to economic growth, thereby helping to explain how some countries combine high taxes with high levels of economic growth. This paper examines if social trust insulates countries against the negative effects of public sector size on growth, documented in several studies. We note that the effect is theoretically ambiguous. In panel data from 66 countries across 40 years, we find no robust evidence of insulation effects: when excluding countries with uncertain trust scores, our results suggest that big government hurts growth also in high‐trust countries, and that the mechanism is by lowering private investments. (JEL H10, O11, P16, Z10)     

Target price forecasts: The roles of the 52-week high price and recent investor sentiment

This paper reveals that in addition to fundamental factors, the 52-week high price and recent investor sentiment play an important role in analysts’ target price formation. Analysts’ forecasts of short-term earnings and long-term earnings growth are shown to be important explanatory variables for target prices; equally, the 52-week high price and recent investor sentiment are also shown to explain target price levels and especially target price biases. Our analysis additionally reveals that analysts place greater weight on these two non-fundamental factors in settings with greater task complexity and to some extent in those with greater resource constraints. Conversely, on balance, the results suggest that this increased reliance does not translate into an increased impact per unit of each non-fundamental factor on forecast bias. Finally, our results show that target prices are useful in predicting future stock returns beyond earnings forecasts and commonly used risk proxies. However, in an internally consistent fashion, the informativeness of target prices for future returns is significantly reduced when greater weight is placed on either the 52-week high or recent investor sentiment in the target price formation process.     

智慧BIM乔木模型：从设计图纸到施工 现场

现有的BIM应用软件提供的乔木模型多为RPC或高 精度3D模型等3D CAD类型。这些模型着重于表达美感或进 行展示，无法反映根系情况。虽然可能包含一定附加属性，但 表达乔木生长和空间需求的功能有限。因而，冲突检查、工序 调度等BIM的优势功能无从应用。风景园林实践领域已就此问 题开始构建自己的模型库，但能够准确反映现状树木真实尺寸 体量，以及现状树木和规划树木未来空间需求的模型仍未广泛 出现。提出一种基于树冠、树干和根系构型与生长功能的实体/ 网面封装建模方法构建BIM乔木模型。模型形态通过一组参数 调整，并根据树龄和反映环境限制因子的值来反映其变化。所 包含的数据和参数数量随后期设计阶段所需的LoD(详细层级) 及专业实践的具体要求而增加。该模型可以与提供本地区内外 苗木商品信息的植物数据库连接使用。     

EQUALITY OF OPPORTUNITY: EAST VS. WEST GERMANY

The case of German reunification has been subject to extensive research on earnings inequality and labour market integration. However, little is known about the development of equality of opportunity (EOp) in East and West Germany after 1990. Using German micro data, we empirically analyse how circumstances beyond the sphere of individual control relate to inequality in East and West Germany. Our results show that EOp is larger in East than in West Germany. However, despite increasing income inequality, EOp remained surprisingly constant.     

Green Project Bonds als finanzielle Alternative für Energieunternehmen

The reorientations of energy policy, and in particular the promotion of renewables, have changed the market conditions for energy companies significantly. Over recent years, the resulting challenges put the energy companies’ financial ratios under severe stress. As the need to invest remains urgent, energy firms seek to broaden and diversify their sources of funding. Against this backdrop, the article addresses an innovative form of securities-based debt financing for energy companies, which explicitly links the financing transaction to the investing of funds in renewable energy projects. Due to the early stage of development of so called green (project) bonds, an initial disambiguation is essential. Thereafter, current market processes, structures and rules are considered. Based hereupon, it is possible to discuss the new opportunities that green project bonds afford energy companies.     

PERSONALITY TRAITS AND THE PERCEPTION OF MACROECONOMIC INDICATORS: SURVEY EVIDENCE

I examine the determinants of both perceived inflation and unemployment in one single survey and include Big Five traits in the analysis. This is the first survey on this topic in Germany. My sample consists of 1771 students from different fields and levels. Using PhD students’ estimates as a reference, I create categories for underestimation and overestimation of both variables. Multinomial logit regressions show that females overestimate both variables. Education and news consumption reduce misestimation. A higher level of Neuroticism is related with a higher probability to overestimate unemployment. Overstating (understating) one indicator is associated with overstating (understating) the other.     

Consuming Alone: Broadening Putnam's “Bowling Alone” Thesis

Despite the popularity of Wi‐Fi technologies and social networks, many residents in developed nations are more socially isolated now than a few decades ago. Applying fuzzy‐set qualitative comparative analysis, using a nationally representative sample in one developed nation this study investigates the relationship between social isolation and advice‐giving and advice‐seeking behaviors with regard to brands or products. This study raises the proposition that people who are socially isolated lack the opportunity to give and seek advice, and, thus, abstain from doing so. Additionally, the study proposes that lacking ability or motivation also represent causal conditions for isolation. The study also investigates consumer behavior outcomes of low advice‐giving and advice‐seeking behaviors; that is, pampering and status buying. The findings from an analysis of an omnibus annual survey of residents in one nation support the propositions that the study proposes from theory and are likely relevant for residents of most developed nations.