Forecasting Macroeconomic Labour Market Flows: What Can We Learn from Micro‐level Analysis?

Forecasting labour market flows is important for budgeting and decision‐making in government departments and public administration. Macroeconomic forecasts are normally obtained from time series data. In this article, we follow another approach that uses individual‐level statistical analysis to predict the number of exits out of unemployment insurance claims. We present a comparative study of econometric, actuarial and statistical methodologies that base on different data structures. The results with records of the German unemployment insurance suggest that prediction based on individual‐level statistical duration analysis constitutes an interesting alternative to aggregate data‐based forecasting. In particular, forecasts of up to six months ahead are surprisingly precise and are found to be more precise than considered time series forecasts.     

Women Entrepreneurs: Can We Remove the Barriers?

Entrepreneurial activity among women continues to attract attention world wide. However, despite obvious gains, women lag behind men in business ownership and economic independence on every continent. This paper will review the research on entrepreneurship as a career choice for women, the motivations and career paths followed by women entrepreneurs, the attitudes and behaviors associated with successful ventures, the problems that persist and policies that conspire to keep women’s businesses few and small. A discussion of legislation and practices that have helped and hindered women’s entrepreneurship will follow, with suggestions for reframing the issues and reforming policies.     

Enhancing Market Valuation of ESG Performance: Is Integrated Reporting Keeping its Promise?

This paper studies the effectiveness of a firm's strategy to report on its ESG activities with regard to the extent and direction in which the firm's ESG performance is valued by capital market investors. It is the first to disentangle the moderating effects of different types of ESG reporting on market valuation of ESG performance and to analyze whether following the current integrated reporting trend is worth the effort. Results indicate that ESG performance is valued more strongly and in the (desired) positive direction when firms publish an ESG report, irrespective of its type (stand‐alone or integrated). Furthermore, integrated reporting is associated with superior outcomes compared with a stand‐alone report for composite ESG and corporate governance performance. Our findings are important for corporate managers, as they help to understand market valuation of ESG performance in dependence on the reporting type and provide guidance for formulating and evaluating the reporting strategy. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

Accounting for Employee Stock Options: What Can We Learn from the Market's Perceptions?

The scope of this is paper is to provide new empirical evidence on the value relevance of employee stock options (ESOs) in Europe. We show, empirically, that the market participants when pricing a firm's equity place approximately the same valuation weights on the ESO‐deferred compensation expense (the so called “ESO asset”) and the compensation option liability (the so called “ESO liability”). Our empirical findings support the theoretical work of Ohlson and Penman who suggest that the deferred compensation expense be treated as a contra‐liability. The second contribution of our work rests on the nature of the ESO expense. We show that the distinction between persistent and non‐persistent ESO expenses is of critical importance for the market participants. Accordingly, an improved accounting disclosure should assist the investors in assessing the long‐term goals of the ESO plans at the firm level.     

Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?

Why are some places more entrepreneurial than others? We use Census Bureau data to study local determinants of manufacturing startups across cities and industries. Demographics have limited explanatory power. Overall levels of local customers and suppliers are only modestly important, but new entrants seem particularly drawn to areas with many smaller suppliers, as suggested by Chinitz (1961) . Abundant workers in relevant occupations also strongly predict entry. These forces plus city and industry fixed effects explain between 60% and 80% of manufacturing entry. We use spatial distributions of natural cost advantages to address partially endogeneity concerns.     

Market conditions and the effect of diversification on mutual fund performance: should funds be more concentrative under crisis?

This paper investigates the non-monotonic and non-linear effect of diversification on mutual fund performance. We apply a frontier-based efficiency measure, the stochastic frontier approach, to estimate fund efficiency and the benefit of diversification. The empirical results indicate that concentration strategy may not be appropriate for fund managers, and the benefit of diversification disappears or negatively affects performance when a fund holds too large a number of different stocks. Moreover, this paper examines whether market conditions moderate the relation between diversification and fund performance. The result shows that the benefit of diversification increases within low market return, high market volatility, and financial crisis, implying that the number of stocks needed to achieve a well-diversified portfolio increases under such market conditions.     

Theory and Empirics of Democracy and Crime Revisited: How Much Further Can We Go with Existing Data and Methodologies?

The vast empirical work on the criminogenic nature of democracies has produced strong—albeit suspiciously wide‐ranging—claims. This article reviews existing evidence and methodologies that link crime and democracies. It asks three questions: Do theories generate separable and exclusionary predictions enabling their identification and testing? Could results be more conclusive given existing data limitations and the current methodological state of the art? How far are we from obtaining such results? We conclude that there are far too many arguments with blurry lines predicting just about any result. Data are more likely to constitute the binding constraint rather than methodology issues, despite the fact that the estimation of causality between democracy and crime can still be improved. Finally, the priority should be the harmonization of existing information sources, which will require overcoming externalities associated with the public good nature of global information generation.