IQ and corporate insiders’ decisions to time insider and outsider trading

We examine how corporate insiders’ cognitive ability (IQ) affects their decisions to time insider and outsider trading before abnormal stock price changes. Our analysis of archival data on male corporate insiders in Sweden shows they are less prone to time their insider selling and to sell in larger amounts, before abnormal stock price declines as IQ increases. We also find that insiders with a higher IQ are better at timing their outsider buying. Taken together, our results show that corporate insiders’ IQ affects their trading decisions differently, depending on whether they are trading in their insider or outsider stocks.     

Understanding economic openness: a review of existing measures

Review of World Economics - This paper surveys measures of economic openness, the latter being understood as the degree to which non-domestic actors can or do participate in a domestic economy....     

Bundesbeteiligung an den Kosten der Unterkunft — ein „pragmatischer“ Transfer

Wirtschaftsdienst - Die Beteiligung des Bundes an den Kosten der Unterbringung und Heizung (KdU) erfolgt seit der Einführung des SGB II 2005 mit dem Ziel, die Kommunen finanziell zu entlasten....     

Ex-Post Evaluation of Competition Law Enforcement Effects in the German Packaging Waste Compliance Scheme Market

We provide an ex-post evaluation of the impact of competition law enforcement activities in the German packaging waste compliance scheme market. Until 2003, the non-profit compliance scheme DSD enjoyed a monopoly in the market. Numerous antitrust cases, however, paved the way for competitive market structures. We show that these enforcement activities resulted in a series of market entries since 2004, a corresponding drop in DSD’s market share, increased innovation and substantial efficiencies. Furthermore, we apply a difference-in-differences approach to show that prices decreased by 63% and to estimate the aggregated consumer welfare gains achieved by 2011 at a total of €13 billion. In the given case imposing a non-profit obligation on the monopolist did not substitute for the efficiency-enhancing effects of competition.     

Ist das österreichische Rentensystem nachhaltig?

Wirtschaftsdienst - In der deutschen Debatte zur Rentenpolitik wird in letzter Zeit immer wieder auf das Beispiel Österreich verwiesen. Das hohe österreichische Leistungsniveau provoziert...     

The debt brake in the eyes of the German population

In response to the recent sovereign debt crisis, the member states of the European Union agreed to enact balanced budget rules in their national legislation. However, little is known about the public’s opinion of balanced budget rules. To fill this gap, we conducted a survey among 2,000 representatively chosen German citizens. Our findings suggest that 61 % of the German population supports the debt brake, whereas only 8 % oppose it. However, approval rates differ notably among various subgroups of the population. The debt brake enjoys greater support among high-income earners and among those well-informed about the future costs of deficit spending. People who do not trust politicians would like to see the government’s hands tied even more tightly. Opinions about the debt brake also differ markedly across the supporters of different political parties.     

How the German crisis of 1931 swept across Europe: a comparative view from Stockholm†

According to conventional wisdom, the fall of the Swedish currency in September 1931 was caused by the sterling crisis. This article shows that the road towards devaluation began earlier and that financial linkages with Germany proved to be more important than Sweden's economic and monetary relations with Great Britain. It all started in late 1929 when the Swedish financier Ivar Kreuger gave a loan to the German government in exchange for the match monopoly, thus tying his business ventures to Germany's solvency. In addition, a part of this loan was financed by large US dollar credits from the two largest Swedish banks that, in turn, accumulated a sizeable foreign short‐term deficit. When in June 1931 the German fiscal crisis began to escalate, international investors ceased to consider Sweden a safe haven because they knew about the linkages between the German government, Kreuger, and the Swedish banking system. This downgrading, in combination with the foreign short‐term deficit of the banking sector, proved lethal for the reserve position of the Swedish central bank, once the international liquidity crisis in mid‐July 1931 erupted. The sterling crisis only put the final nail in the coffin.     

Earning investor trust: The role of past earnings management

Does earnings management, even though legal, hinder investor trust in reported earnings? Or do investors regard earnings management as a way for firms to convey private information, or simply as a neutral feature of financial reporting? We find that past abstinence from earnings management increases investor responses to future earnings surprises. Importantly, this effect occurs in industries where investor trust has recently been violated, and where managers would in the past have had incentives and opportunities to misrepresent earnings. Overall, investors seem to interpret the extent to which management resists temptations for misreporting as a “litmus test” of trustworthiness.     

Organizational Performance Consequences of Age Diversity: Inspecting the Role of Diversity‐Friendly HR Policies and Top Managers’ Negative Age Stereotypes

This paper seeks to advance the diversity literature by investigating organizational performance consequences of age diversity. Drawing from social‐identity and social‐categorization theory, we theoretically argue that, in age‐diverse companies, age‐based subgrouping processes occur, favouring a shared perception of a negative age‐discrimination climate. This perceived negative age‐discrimination climate in turn negatively relates to organizational performance. As the main contribution, top managers’ negative age‐related stereotypes and diversity‐friendly HR policies are introduced as organizational‐level moderators that increase and attenuate, respectively, the social categorization processes affecting performance in age‐diverse companies. We utilized structural equation modelling (SEM) to test the proposed hypotheses using a multisource dataset comprising 147 companies. The results supported all hypotheses, indicating that low negative top managers’ age stereotypes as well as high diversity‐friendly HR policies are potential organizational factors that can prevent the negative relation of age diversity with organizational performance transmitted through the negative age‐discrimination climate. These results are discussed in light of their contribution to the diversity literature and social‐categorization theory as well as their implication for practitioners.