Einsparpotenziale bei Verwaltungs- und Verfahrenskosten durch die Fusion von gewerblichen Berufsgenossenschaften — eine empirische Analyse für Deutschland

We analyze the cost savings potential with regard to administration and management costs by merging Commercial Employment Accident Insurance Funds (Berufsgenossenschaften) in Germany. We use data from the German Federation of institutions for statutory accident insurance and prevention (HVBG) for 1999 to 2004. Large Berufsgenossenschaften (BGs) have lower administration and management costs per insured person. However, costs per insured person are negatively correlated with insured risk of the BGs which in turn is an important source of administration and management costs.Results of a multivariate regression analysis help to identify cost drivers and the existence of economies of scale. Notifiable accidents, occupational diseases and risk explain administration and management costs. All estimation results are highly significant and allow to conclude that remarkable economies of scale are likely to be present in the organization of the BGs. Our results are robust to alternative specifications. Also, risk turns out to be an important cost driver with regard to management costs.A hypothetical policy reform is considered that reduces the number of BGs from formerly 35 to 18. We come up with an estimate of expected cost savings (without cutting benefits) of 83 million euros, about 10 % of the current management costs of the BGs under consideration.     

A capabilities‐based perspective on target selection in acquisitions

We develop a capabilities‐based theory of acquirer target selection, arguing that acquirers will pursue both low capability targets in existing contexts to deploy existing capabilities, and high capability targets in new contexts to acquire new capabilities. These arguments are formalized in an analytical model that jointly considers the benefits and costs of acquisition as a function of target capability level and context. The predictions from this model are tested in the Chinese brewing industry (1998–2007), with results showing that acquirers strongly prefer inferior targets in existing geographic markets, but are relatively more likely to choose superior targets in new markets, especially if they have strong acquisition capabilities. Our study provides insight into the factors driving target selection, and contributes to a capabilities‐based understanding of acquisitions. Copyright © 2015 John Wiley & Sons, Ltd.     

Pricing the US residential asset through the rent flow: A cross-sectional study

The paper explores how the standard consumption-CAPM fares in pricing housing returns and regional rental income streams in a cross-section of regions. In particular, we estimate the Euler equations associated with the gross housing returns inclusive of price appreciations and rents jointly for several metropolitan areas of the US. The representative agent has a Constant Relative Risk Aversion (CRRA) utility. The rent growth is allowed to depend on the business cycle. When biannual data from 1978 to 2007 is used, the parameter estimates are reasonable, and the model is not rejected. Large standard errors indicate uninformative estimates. The implied price rent ratio time series averages are similar to the data; however the model misses the boom-bust pattern in the prices. The model significantly understates the average and the variance of the price appreciations. Results are robust to allowing housing consumption directly in the utility function or using the Epstein–Zin–Weil utility.     

Managerial foresight and attempted rent appropriation: insider trading on knowledge of imminent breakthroughs

In order to establish a competitive advantage, firms must acquire or create resources at a price below their value in use. Absent pure luck, this requires managers to exercise foresight about a resource's future value and/or complementarities with pre‐existing capabilities. This foresight grants managers the opportunity to exploit information asymmetries for personal gain as well as building organizational capabilities. Nevertheless, there is limited research on the extent of foresight or how managers use it. In our study of insider trading, we found that managers purchase stock well before breakthrough patents are filed. We argue for further research on the extent of managerial foresight and how it affects rent generation and appropriation. Copyright © 2005 John Wiley & Sons, Ltd.     

Dynamic Equilibrium in the Hospital Industry

We present a dynamic model of the hospital industry in which nonprofit and for-profit hospitals coexist and compete and are differentiated by their objective functions, investment technologies, and taxation rates. In our model, patients differ by income and type of insurance coverage, and choose admission to their preferred hospital, while hospitals choose investment, entry, exit, and pricing strategies. We estimate the parameters of the model with aggregate data and a GMM procedure. We then use the model to examine the effects of changes in the Medicare reimbursement system, universal health-care coverage, and taxation of nonprofits.     

Transactions, volume, and volatility

We show that the positive volatility-volume relation documentedby numerous researchers actually reflects the positive relationbetween volatility and the number of transactions. Thus, itis the occurrence of transactions per se, and not their size,that generates volatility; trade size has no information beyondthat contained in the frequency of transactions. Our resultssuggest that theoretical research needs to entertain scenariosin which (i) both the frequency and size of trades are endogenouslydetermined, yet (ii) the size of trades has no information contentbeyond that contained in the number of transactions.     

Entry and pricing in a differentiated products industry: evidence from the ATM market

We estimate a structural equilibrium model of the automatic teller machine market (ATM) to evaluate the implications of regulating ATM surcharges. We use data on bank characteristics, potential and actual ATM locations, and consumer locations; identify the model parameters with a regression discontinuity design; and develop methods to estimate the model without computing equilibria. A surcharge ban reduces ATM entry 12% and consumer welfare 24% but increases firm profits 27%. Total welfare under either regime is 4% lower than the surplus maximizing level. The article can help shed light on the implications of unregulated entry for differentiated products industries.     

Structural homophily or social asymmetry? The formation of alliances by poorly embedded firms

Recent research shows that preexisting network structure constrains the formation of new interorganizational alliances. Firms that are poorly embedded in a network structure are less likely than richly embedded firms to form alliances, because they lack informational and reputational benefits. This study examines the types of ties that poorly embedded firms can form to overcome the constraints that their structural positions impose, in turn helping to explain how firms' actions can transform existing network structures. We argue that poorly embedded firms are more likely to participate in ties characterized by social asymmetry than in ties characterized by structural homophily. We analyze the terms of trade that socially asymmetric partners negotiate for alliance governance and discuss how such alliances influence network dynamics. To test our arguments, we use longitudinal data on the alliance activities of 97 global chemical firms from 1979 to 1991. Copyright © 2009 John Wiley & Sons, Ltd.     

The impact of the Medicare Rural Hospital Flexibility Program on patient choice

This paper seeks to understand the impact of the Medicare Rural Hospital Flexibility (Flex) Program on rural resident hospital choice. The program created a new class of hospital, the Critical Access Hospital (CAH), which receives more generous reimbursement in return for limiting its beds and services. The program's goal is to maintain access to hospital care. Estimates from a patient choice model show that patient utility from visiting a hospital was negatively affected by conversion. While the lower bed capacity appears to play a minor role, the reduction in services results in a 28% drop in admission rates.