Fusionen und Übernahmen im Licht der Hybris – Überblick über den Forschungsstand

Although corporate acquisitions are ubiquitous a large number of M&A fails. One explanation for such failure is the hubris hypothesis for corporate takeovers. A decision maker affected with hubris (or overconfidence) will overestimate his abilities in raising potential synergies and is likely to make investment decisions destroying shareholder wealth. The growing literature on CEO hubris proposes various ways to measure hubris. We present these indicators and discuss possible advantages and drawbacks. (71 words)     

The impact of expatriate personality traits on cross-cultural adjustment: A study with expatriates in Japan

While regarded as among the most important factors affecting expatriate cross-cultural adjustment, little focused research with a broad array of personality traits has been conducted. This study draws from the cultural fit hypothesis and the socio-analytic theory to examine the impact of expatriate personality traits through the Multicultural Personality Questionnaire on the general-, interaction-, and work-related facets of cross-cultural adjustment among 181 expatriates in Japan. The results show positive relationships between the personality traits of Open Mindedness and interaction adjustment, Emotional Stability and Cultural Empathy and general adjustment, and Social Initiative and work adjustment.     

On the economic benefits of software-defined networking and network slicing for smart grid communications

To ensure stable operation, Smart Grids rely on ultra-reliable, low latency communications for transmitting critical measurements and control commands. Though modern Information and Communication Technology (ICT) provides adequate means for asserting hard service guarantees, the installation, configuration and operation of corresponding infrastructures is typically very costly, involving significant administration efforts. Therefore, we propose Software-Defined Networking (SDN) to facilitate configuration and administration drastically, thus reducing expenditures. We identify technical advantages of introducing this approach to Smart Grid communication infrastructures and derive economic benefits. Numerical results for a reference power system indicate Operational Expenditures (OPEX)-driven savings that allow SDN solutions to outperform legacy networks within less than four years. Also, SDN-driven network slicing enables sharing infrastructures between critical power systems and end consumer broadband traffic, allowing for further cost reductions, while maintaining hard service guarantees. Under this paradigm, we compare the installation and operation of dedicated infrastructure by the grid operator to arranging service contracts with telecommunication network operators. This is referred to as make or buy decision. It can be deduced that a shared infrastructure, building on network slicing, provides an optimal solution for both parties.     

Dringend gebraucht — aktive Wirtschaftspolitik,um Außenhandelsüberschüsse abzubauen

What can Germany do to reduce its high current account and trade surpluses? The article uses a macroeconometric model to simulate how a more expansionary fiscal policy as well as a combination of such a fiscal policy and higher wage growth would affect the trade balance, the fiscal balance and the public debt ratio. A much more expansionary fiscal policy than in the past would reduce the trade surplus only a little but would lead to a deterioration of the fiscal deficit and the public debt-to-GDP ratio. However, combined with higher wage growth, such a fiscal policy would reduce the trade surplus more effectively, would lead to higher tax growth and inflation and thus would also decrease the public debt ratio.     

A note on Chui,Gai and Haldane’s “Sovereign liquidity crisis: Analytics and implications for public policy”

This note corrects the welfare calculations in Chui, Gai and Haldane’s paper on sovereign liquidity crisis [Chui, M., Gai, P., Haldane, A.G., 2002. Sovereign liquidity crisis: Analytics and implications for public policy. Journal of Banking and Finance 26, 519–544]. We show that the exact formula not only dramatically reduces the computed welfare consequences from 66% of ex-ante expected output to roughly 13%, but also changes the direction of some reported comparative static results. In addition, we clarify the difference between fundamentals-driven and belief-driven welfare costs and extend some of the sensitivity calculations.     

Industry cost of equity capital: European evidence for multifactor models

We estimate the costs of equity capital for 117 industries from 16 European countries employing the CAPM and 8 multifactor asset pricing models as well as a variety of different econometric techniques. In doing so, we extend previous research on cost of equity estimation in mainly two ways. First, our study involves European instead of US or UK industries, which are investigated in previous research, and we find that cost of equity estimates obtained from the CAPM or multifactor asset pricing models are as imprecise for European industries as for US and UK industries. Second, in addition to the CAPM, the Fama and French [1993 Fama, Eugene F., and Kenneth R. French. 1993. “Common Risk Factors in the Returns on Stocks and Bonds.” Journal of Financial Economics 33: 3–56. doi: 10.1016/0304-405X(93)90023-5[Crossref], [Web of Science ®] , [Google Scholar]. “Common Risk Factors in the Returns on Stocks and Bonds.” Journal of Financial Economics 33: 3–56] three-factor model, and the Carhart [1997 Carhart, Mark M. 1997. “On Persistence in Mutual Fund Performance.” The Journal of Finance 52 (1): 57–82. doi: 10.1111/j.1540-6261.1997.tb03808.x[Crossref], [Web of Science ®] , [Google Scholar]. “On Persistence in Mutual Fund Performance.” The Journal of Finance 52 (1): 57–82] four-factor model, which are usually employed, our study includes six multifactor models that have not yet been examined on their ability to provide precise estimates of the costs of equity: the five-factor model of Fama and French [1993 Fama, Eugene F., and Kenneth R. French. 1993. “Common Risk Factors in the Returns on Stocks and Bonds.” Journal of Financial Economics 33: 3–56. doi: 10.1016/0304-405X(93)90023-5[Crossref], [Web of Science ®] , [Google Scholar]. “Common Risk Factors in the Returns on Stocks and Bonds.” Journal of Financial Economics 33: 3–56] as well as the multifactor models of Pástor and Stambaugh [2003 Pástor, Lubos, and Robert F. Stambaugh. 2003. “Liquidity Risk and Expected Stock Returns.” Journal of Political Economy 111 (3): 642–685. doi: 10.1086/374184[Crossref], [Web of Science ®] , [Google Scholar]. “Liquidity Risk and Expected Stock Returns.” Journal of Political Economy 111 (3): 642–685]; Campbell and Vuolteenaho [2004 Campbell, John Y., and Tuomo Vuolteenaho. 2004. “Bad Beta, Good Beta.” American Economic Review 94 (5): 1249–1275. doi: 10.1257/0002828043052240[Crossref], [Web of Science ®] , [Google Scholar]. “Bad Beta, Good Beta.” American Economic Review 94 (5): 1249–1275]; Hahn and Lee [2006 Hahn, Jaehoon, and Hangyong Lee. 2006. “Yield Spreads as Alternative Risk Factors for Size and Book-To-Market.” Journal of Financial &; Quantitative Analysis 41 (2): 245–269. doi: 10.1017/S0022109000002052[Crossref], [Web of Science ®] , [Google Scholar]. “Yield Spreads as Alternative Risk Factors for Size and Book-To-Market.” Journal of Financial &; Quantitative Analysis 41 (2): 245–269]; Petkova [2006 Petkova, Ralitsa. 2006. “Do the Fama–French Factors Proxy for Innovations in Predictive Variables?” The Journal of Finance 61 (2): 581–612. doi: 10.1111/j.1540-6261.2006.00849.x[Crossref], [Web of Science ®] , [Google Scholar]. “Do the Fama–French Factors Proxy for Innovations in Predictive Variables?” The Journal of Finance 61 (2): 581–612]; and Koijen, Lustig, and van Nieuwerburgh [2010 Koijen, Ralph S., Hanno N. Lustig, and Stijn G. van Nieuwerburgh. 2010. “The Cross-Section and Time-Series of Stock and Bond Returns.” Working Paper, University of Chicago, University of California at Los Angeles, New York University. [Google Scholar]. “The Cross-Section and Time-Series of Stock and Bond Returns.” Working Paper, University of Chicago, University of California at Los Angeles, New York University]. Our results suggest that these models provide even more imprecise cost of equity estimates. One main reason for these inaccurate estimates is the large temporal variation of the risk loadings on the non-traded factors in these models.     

Similarities and differences when building trust: the role of cultures

We run an experiment in which students of different European nationalities are matched in groups of five and repeatedly choose with whom within their group they want to play a trust game. Participants observe of each other age, gender, nationality and number of siblings. The region of origin, “North” or “South” is a major determinant of success in the experiment. Participants tend to trust those they trusted before and who trusted them. We do not find evidence of regional discrimination per se. It is only the underlying and significant differences in behavior that translate through repeated interactions into differences in payoffs between the two regions.     

Wann kommt die Kostenwende bei der EEG-Umlage?

The apportionment of the German Renewable Energy Sources Act (EEG-Umlage) constitutes a significant portion of the electricity price for domestic and commercial customers. First, the authors outline the implemented apportionment mechanism, the historical development as well as a couple of the lack of misjudgments. Subsequently, they investigate the question whether and when a reduction of the EEG apportionment can be expected. A model based on the current remuneration rules of the EEG, which is validated based on forecasts conducted by the transmission system operators, is used for the calculation of the EEG apportionment. The calculations show that an increase of the EEG levy to over 8?ct/kWh can be expected in the reference case, followed by a reduction from 2025 onwards. In the context of sensitivity calculations, various uncertainty factors are identified, such as the development of the wholesale price or the magnitude of the remuneration. Those factors significantly influence the EEG levy and thus underline the challenges in the development of a reliable forecast.     

Is the learning community of economics and accounting effective? Empirical assessment of class achievements

Learning communities are increasingly used at colleges and universities, as one of the goals of a learning community is to increase interaction among students and teach them how to apply knowledge. The goal of this research is to assess the learning community of the economics and accounting students in their class performance measured by class grades. By controlling individual characteristics (e.g., gender, high school performance, First Year Experience program) and class-related characteristics (e.g., instructor and major), the authors found that the learning community of economics and accounting, which is organized into both economics and accounting classes on a back-to-back basis, is no more effective for class grades than for non–learning community students.     

Empirical foundation of valence using Aldrich–McKelvey scaling

Review of Economic Design - This paper uses data from the 2004 pre-election survey of the American National Election Study to test empirically different ways of incorporating a valence parameter...