AN EMPIRICAL MODEL OF CAPITAL STRUCTURE: SOME NEW EVIDENCE

Using a general autoregressive distributed lag model, we estimate the longrun steady state determinants of corporate capital structure. We find that, in the long run, the leverage ratio is related positively to the corporate tax rate and firm size and negatively to future growth opportunities and stock returns. By contrast, there appears to be no relation between leverage and the corporate tax rate on a short-run year to year basis. Our results suggest that prior empirical evidence on capital structure is of questionable value precisely because of its failure to clearly separate the short-run relationship between leverage and its determinants from its long-run relationship.     

The crisis of mass integration: on the development of political repression in Federal Germany

The aim of this essay is to investigate the bases and the specific forms of the development of the political repression which can be clearly observed at the present time in West Germany. The principal fact to be explained is that this development is being implemented by a social democratic-liberal government coalition, which leaves the institutions of the bourgeois-democratic system untouched and receives backing from the Trade Unions. Current attempts to explain this phemomenon, such as the theory of a 'new fascism', have proved to be inadequate. The essay begins by providing a brief overview of the theoretical starting point adopted and proceeds to sketch the economic, social and political conditions for successful mass integration in developed capitalist societies. The increase in repressive tendencies in the state apparatus is traced back to the specific forms in which the institutions for mass integration have failed to fulfil their roles, the main basis of which is to be found in the development of the current economic and social crisis. The most important tendencies in the economic development of the FRG and the particular structures of its political and administrative system are presented in order to validate this thesis. The decisive moment of political destablization can be seen in the growth of autonomous political movements outside the sphere of established institutions. These movements constitute an increasing threat to the existing institutional system of mass integration. The development of repression which has occurred in response to this is directed at a preventive safeguarding of the existing apparatuses for mass integration and at preserving the state's apparatus for the exercise of force as a crisis-reserve. This repression, which has not yet taken the form of the open use of force against the mass of the population—in particular established workers' organizations—is primarily directed against dissident individuals and groups within the state and ideological apparatuses, and against initial steps towards autonomous political organizations and forms of economic—political representation which are not based on the acceptance or granting of concessions.     

The Life History of Cohorts of Exits from German Manufacturing

An investigation of the life history of three cohorts of exits based on longitudinal data covering the population of all manufacturing firms in a German federal state reveals three empirical regularities: (1) Although the probability of exit tends to decline with age ceteris paribus, only about a quarter of all exits is from the group of young firms aged five years or less. (2) Only a minor fraction of exits lived through a period of continous decline of employment for five years or more before closing down. (3) The "impact effect" of job loss due to exits can differ sharply from the "long run effect".     

Entscheidungstheoretische Instrumente für die Politikberatung?

The work of political advisers becomes more and more important for the political decision-makers in a world of growing complexity. In the past, economic advice was primarily based on theoretical considerations. In the last two decades this has changed and now there is a dominance of evidence-based policy advice. In this paper it is argued that it is necessary not only to rely on conventional empirical evidence but also to take experimental and behavioral evidence into account.     

Culture and Economics

The question of how far it is necessary to include cultural factors in the analysis of economic processes has become topical again in recent years. The first contribution to this Forum introduces a cultural approach to economics. This is followed by an article that examines the transition processes in central and eastern Europe from an econocultural perspective. The next article deals with the concept of a country-specific national tax culture and its implications for tax policy, especially in the context of transformation processes. The final paper discusses Turkey’s economic culture and its possible impact on the country’s integration into the European Union. * This outline is in its main parts the result of cooperation with Bernd Remmele and Joachim Zweynert. The author wishes to express his indebtness to Inga Fuchs for central insights on this subject, and to Michael Wohlgemuth, who helped to finish this paper in a short period of time. ** This article originates in a research project on the historical and cultural path dependence of the transition processes in Central and Eastern Europe (with special focus on the Baltic Sea region). The project is carried out jointly by the Hamburg Institute of International Economics and the University of Hamburg and funded by the VolkswagenStiftung.     

Consumers’ perceptions of GM‐free labelled foods: A sensory experiment

As of today, the views of European consumers and policy makers on GM foods are still divided. While only few GM labelled foods (‘does contain’) have entered the market, GM‐free labelling (‘does not contain’) is increasingly introduced in many EU member states. This study aims to examine whether GM‐free labelling affects consumers’ sensory profiling, emotional conceptualizations and overall liking. Based on a within‐subjects experimental design, 126 Belgian subjects evaluated GM‐free and nonlabelled samples of three food products: yogurt, traditional biscuit (‘speculoos’) and crisps. The results show that overall liking did not differ significantly according to label (no vs. GM‐free), regardless of participants’ knowledge of, or attitude towards GMOs. Furthermore, regarding the impact of GM‐free labelling on consumers’ subjective taste perceptions and emotional profiling, few significant differences were reported for crisps and traditional biscuit. Regarding the latter, less positive and more negative emotional terms have been assigned to the GM‐free labelled sample. The findings of this study should be viewed in the context of the stringent EU mandatory GM food labelling policy, which led to an increase of GM‐free rather than GM labels. Future research is needed to further underpin these findings and examine differently framed labels in various settings.     

An evolutionary approach to the examination of capital market efficiency

The paper investigates capital market efficiency on basis of an evolutionary model of asset pricing. Participants of capital markets are considered as organizations in the sense of Nelson and Winter (1982). Behavior of these organizations is described by routines. Routines are regular and predictable behavioral patterns, which determine how individuals gather information, form expectations, and order assets. The participants change their behavior by innovating new routines or by imitating routines of other participants.