Initial coin offerings (ICOs) to finance new ventures

In an initial coin offering (ICO), new ventures raise capital by selling tokens to a crowd of investors. Often, this token is a cryptocurrency, a digital medium of value exchange based on the distributed ledger technology. Both the number of ICOs and the amount of capital raised have exploded since 2017. Despite attracting significant attention from ventures, investors, and policy makers, little is known about the dynamics of ICOs. This initial study therefore assesses the determinants of the amount raised in 423 ICOs. Drawing on signaling theory, the study explores the role of signaling ventures' technological capabilities in ICOs. The results show that technical white papers and high-quality source codes increase the amount raised, while patents are not associated with increased amounts of funding. Exploring further determinants of the amount raised, the results indicate that some of the underlying mechanisms in ICOs resemble those found in prior research into entrepreneurial finance, while others are unique to the ICO context. The study's implications are multifold and discussed in detail. Importantly, the results enable investors to more accurately understand crucial determinants of the amount raised (e.g., technical white papers, source code quality, token supply, Ethereum-standard). This reduces the considerable uncertainty that investors face when investing in ICOs and enables more informed decision-making.     

Heteroskedasticity-consistent covariance matrix estimators for spatial autoregressive models

In the presence of heteroskedasticity, conventional test statistics based on the ordinary least squares (OLS) estimator lead to incorrect inference results for the linear regression model. Given that heteroskedasticity is common in cross-sectional data, the test statistics based on various forms of heteroskedasticity-consistent covariance matrices (HCCMs) have been developed in the literature. In contrast to the standard linear regression model, heteroskedasticity is a more serious problem for spatial econometric models, generally causing inconsistent extremum estimators of model coefficients. This paper investigates the finite sample properties of the heteroskedasticity-robust generalized method of moments estimator (RGMME) for a spatial econometric model with an unknown form of heteroskedasticity. In particular, it develops various HCCM-type corrections to improve the finite sample properties of the RGMME and the conventional Wald test. The Monte Carlo results indicate that the HCCM-type corrections can produce more accurate results for inference on model parameters and the impact effects estimates in small samples.     

Outward foreign direct investment by Polish state-owned multinational enterprises: is ‘stateness’ an asset or a burden?

State-owned enterprises (SOEs) are commonly associated with undue advantages due to preferential treatment by the state. Simultaneously they are often quoted as handicapped given the notorious state interference, management problems and agency tensions. They used to be regarded as a mainly domestic issue but in the context of globalisation and the fact that states enter treaties with new obligations, SOEs’ performance ceased to be solely a domestic problem, increasingly so as state-owned multinational enterprises (SOMNEs) emerge. This article presents the results of research on Polish SOEs’ outward foreign direct investment (OFDI). It offers an overview of overseas activities of nine major Polish firms with a state stake and aims to contribute to the conceptual literature on foreign investments conducted by SOMNEs. We distinguish between FDI by SOMNEs as specific – privileged (facilitated) or discriminated (hampered) – investments subject to the home country’s state power and the host country’s state perception.     

ALICE: Composite leading indicators for euro area inflation cycles

This paper develops Area-wide Leading Inflation CyclE (ALICE) indicators with the aim to provide early signals for turning points in the euro area headline and core inflation cycles. The headline (core) ALICE leads the reference cycle by three (four) months and the lead times extend to five (nine) months based on longer-leading series. Both ALICE indicators signalled turning points in the inflation cycles ex post and also performed well in a simulated real-time exercise. Moreover, in particular the headline ALICE also appeared to be useful for quantitative forecasting of the direction and level of inflation.     

An Exploratory analysis of flight delay propagation in China

Delay propagation is the flight departure delay caused by the arrival delay of pre-segment flight. Chinese airline market has suffered very poor on-time performance (OTP) in recent years. It is, however, unclear whether delay propagation prevails as one major source for such problem. This study first aims to empirically quantify delay propagation in the Chinese airline market. Specifically, we shed light on heterogenous levels of delay propagations across different airports and airlines. Then, the distinct delay propagation patterns in China are also discussed and compared with other developed airline markets (e.g., the US and Europe). Our estimation is based on OTP data for over 12 million Chinese flights covering the 2015–2017 period. Specifically, it is found that 10 min arrival delay of pre-segment flight within 1 hr before the departure lead to an average of 7.49 mins delay propagation for subsequent departure flight. Arrival delay of earlier pre-segments (1–2 and 2–3 hr before the departure) leads to much less delay propagation, due to longer ground buffer. Chinese airlines arrange longer ground and flight buffer than that of the US airlines to prevent the delay propagation from accumulating along the subsequent flights in a day. Thus, unlike the US market, delay propagation is not the major reason for poor OTP in China. In addition, delay propagation is less prevailing at the Chinese hub airport. This is because China has relied on point-to-point network, which does not require sophisticated schedule coordination. And the local passengers at these Chinese hub airports have higher time value such that the Chinese airlines also try to improve OTP at these hub airports to better serve these lucrative but time-sensitive local passengers. Unlike the European LCCs, Spring Airlines, the largest low-cost carrier (LCC) in China, outperforms major full-service carriers (FSCs) in controlling delay propagation. This finding may also apply to other Northeast Asian LCCs sharing common operational characteristics as Spring Airlines. Last, we find that airlines purposely tolerate moderate departure delays of up to 15 min, which is the threshold that defines delays, no matter whether the pre-segment flight arrives late or on-time. The relevant policy and managerial implications are also discussed.     

Redesigning after-sales service: Impact on incumbent product distribution channels

With the growth of multi-channel retailing, many firms that have traditionally relied upon third-party service providers to offer after-sales service (AS) have introduced direct AS channel. While there exist a few studies that examine the effects of adding a direct sales channel on the sales revenue of incumbent channels, there are no studies investigating the effects of adding direct AS channel. This study tries to fill this research gap by exploring cross-channel effects of including AS through the firm's direct brand stores on performance (i.e., revenue, assortment width, and extent of upselling) in both direct and indirect channels. A matched difference-in-difference quasi-experimental design was used to compare the sales outcomes of test and control groups using a five-year longitudinal dataset from a large dual-channel consumer durables firm. Results reveal that providing AS through the firm's direct channel has a positive significant effect on the revenue and upselling in the indirect channel, but no significant impact on assortment width in the indirect channel. However, unlike hypothesized, it results in significantly lower revenue, assortment width, and upselling in the direct channel. We interpret these negative effects as arising from customer confusion and perceived retail crowding. Overall, our research highlights that implementation of going direct with AS should be done with utmost care. Our findings would serve as a building block for future studies that are conducted to understand the dynamic cross-channel effects of introducing direct AS, and would be useful for drawing comparisons and contrasts.     

Beyond classical van Westendorp: Assessing price sensitivity for variants of algae-based meat substitutes

Food product innovations are characterized by high flop rates. In an early development stage, manifold product formulations seem feasible. To determine the most promising product option, market research can help, but is frequently considered too costly and complex. We assess the applicability of the van Westendorp approach, an inexpensive and simple method, for guiding early product design and pricing decisions for novel foods. Findings from a between-subject experiment for meat substitutes consisting of different shares of micro-algae indicate that micro-algae, while a cost driver, has little effect on price preferences. Implications for novel food product design, market research, and retailing are discussed.     

Do Foreign Firms Transfer Gender Norms in the Labour Market? Evidence from Sub-Saharan Africa

Closing the gender gaps in economic opportunities is crucial for boosting economic growth and the empowerment of women. In this paper, we study how foreign firms contribute in reducing gender disparities in the labour market by transferring the gender norms of their country of origin to the affiliates in the host countries. We use cross sectional data on foreign firms located in 19 Sub Saharan Africa countries in 2010 by UNIDO. We find that firms coming from more gender equal countries employ more female workers in their affiliates. This effect is more relevant for the highly skilled female workers.     

Can Direct Payments Facilitate Agricultural Commercialisation: Evidence from a Transition Country

We investigate the impact of direct payments on agricultural commercialisation in Kosovo. Kosovo is one of the poorest countries in Europe but, with European assistance, provides substantial funds to support agriculture, made up of many small and often semi‐subsistence farms. Thus, the effect of this support is a central policy issue. Identifying the effect of direct payments on market participation faces endogeneity issues arising from the possible simultaneous determination of participation in support programmes and market participation. In order to achieve proper identification of the endogenous direct payments, we use a strategy of targeted identification search that employs several different methodological approaches. We find that direct payments for fruit and vegetables, and those for cereals and oilseeds have a positive effect on market participation. However, we cannot identify any definite effect of livestock payments.     

Assessing the effects of policies on China’s outward foreign direct investment

This paper discusses the determinants of China’s outward foreign direct investment (OFDI) with a special focus on the role of government policy. In particular, we investigate the types of policies that are most influential in promoting OFDI. Our main contribution is to analyse, for the first time, China’s OFDI policies by means of quantitative indicators. We refine policies definitions and distinguish between Regulation Policies, Service Policies, Promotion Policies and Supervision Policies, and we develop a methodology for collecting, screening and coding policies; then we create new indices to capture different types of policies. We find that Regulation Policies, Service Policies and the general attitude of the government have significant effects on China’s OFDI at the national level.