On the economics of the longevity risk transfer market

We present a model of a longevity risk transfer market with different market players (primary insurers, reinsurers, and capital market investors) and investigate how market dynamics and the market players' roles evolve with progressing market saturation. We find that reinsurers' appetite for longevity risk is the key driver in the early stage of market development. Since diversification benefits with other businesses decrease with every transaction, the reinsurance market is intrinsically antimonopolistic. With the increasing saturation of the reinsurance sector as a whole, its competitiveness shrinks leading to rising expected risk-adjusted returns for capital market investors. We show that in a saturated market, reinsurers should assume the entire longevity risk from primary insurers, diversify it within their business mix, and subsequently pass on only specific (nondiversifiable) components of the longevity risk to the capital markets. Our findings provide valuable suggestions on how to make the best use of the market's limited risk absorption capacity.     

Reviewing the intellectual structure of product modularization: Toward a common view and future research agenda

Product modularization in new product development has attracted considerable interest among scholars and practitioners from diverse fields of specialization. This has resulted in cross-disciplinary diversity in the field, diverting attention from its overall intellectual structure and hindering the development of a common view and shared concepts. Extant research lacks an integrative review, transcending a focal discipline that could identify gaps and ambiguities while making recommendations to advance the field. Considering a period of 30 years (1990–2020), we generate a data set of 2988 citing publications to which we apply a co-citation analysis. Thereby, we uncover the intellectual structure of the field and find three research perspectives that represent key knowledge bases: (1) product system, (2) production system, and (3) organizational system. Delimiting the data set into four periods, we can track developments over time, where we notice an increasing disintegration of the product system perspective, which is rooted in the discipline of engineering design. Within the two other perspectives, we document extensive dynamism in terms of publications, especially in the two most recent periods, indicating an active discussion and a potential receptivity to new trends. For these periods, we also identify an emerging cluster of fundamental publications and an increasing emphasis on the concept of system architecture. Leveraging the synthesis of these results, we forge links between neighboring disciplines and recommend avenues for further research, ideally to develop a more common view.     

Stochastic contracts and subjective evaluations

Subjective evaluations are widely used, but call for different contracts from classical moral-hazard settings. Previous literature shows that contracts require payments to third parties. I show that the (implicit) assumption of deterministic contracts makes payments to third parties necessary. This article studies incentive contracts with stochastic compensation, like payments in stock options or uncertain arbitration procedures. These contracts incentivize employees without the need for payments to third parties. In addition, stochastic contracts can be more efficient and can make the principal better off compared to deterministic contracts. My results also address the puzzle about the prevalence of labor contracts with stochastic compensation.     

The legitimacy of corporate entrepreneurship: a structured literature review

Management Review Quarterly - Corporate entrepreneurship (CE) is essential for today’s firms and currently a topic of considerable interest within the business community. Although the...     

What makes migrants more entrepreneurial? Investigating the role of cultural distance and human capital

International Entrepreneurship and Management Journal - Migrant entrepreneurship is seen as an important way to foster economic prosperity as migrants often come with greater entrepreneurial...