On the determination of real interest rates in Europe

In this paper a loanable funds model is estimated over the period 1959–1990 for the determination of after-tax expected real interest rates using aggregated data for four European countries under the assumption that high capital mobility in Europe implies a common capital market. It is concluded that real interest rates in the European Community were mainly driven by movements in temporary income, expected inflation, lagged investment, money growth, and the oil price. Moreover, our aggregate, model appears to be reasonably stable. Finally, individual country rates are shown to depend on the European rate as well as some country-specific variables, suggesting a limited degree of isolation from international financial markets for the countries concerned.At the time of writing the author was still affiliated with the Department of Economics at the University of Groningen. Hence, any views expressed here are those of the author and do not necessarily represent those of De Nederlandsche Bank. This paper benefitted very much from stimulating comments made by Willem Buiter, Kanhaya Gupta, Jakob de Haan, Flip de Kam, Kees Koedijk, and an anonymous referee. The author would like to thank Jan-Egbert Sturm for technical assistence. Of course, the usual disclaimer applies.     

The credibility of the European exchange rate mechanism

Using a panel data approach and three different credibilitymeasures, we argue that unemployment, inflation, and budgetdeficits in participating countries have affected the credibilityof the Exchange Rate Mechanism of the EMS. In contrast to mostprevious research, which focuses upon the credibility of exchangerate policies of individual member states, the analysis focusesupon the credibility of the system. The credibility indicatorsused are short- and long-term interest differentials vis-à-visGermany and short-term interest differentials which have beenadjusted for expected exchange rate movements within the band.Both long-term and error-correction models are estimated.     

20 Jahre EEG: Ist das Förderende für alte Anlagen ein Problem für die Energiewende?

In 2020 Germany’s Renewable Energy Sources Act celebrates its twentieth anniversary. Pioneers of the German energy transition, who have invested early in wind, photovoltaic and biomass plants, may expect this anniversary with sorrow. This is because it will also imply that public support expires for the first renewable energy installations, after 20 years of guaranteed feed in tariffs. It is unclear whether existing installations can be operated profitably without public support. Concerns are growing that the objectives of Germany’s energy transition may be difficult to attain if existing renewable energy plants go offline. Are these concerns justified? And if yes, how should they be addressed by public policy?     

Outsourcing and the HR function: an examination of trends and developments within North American firms

As increased use of outsourcing by a number of firms within North American has produced significant changes over the last decade in how the human resource function delivers services. In this article, we draw on transaction cost economics, the resource-based view, the HR architecture literature, and institutional theory to examine why these changes have been observed. Following this, we use these same theoretical perspectives to examine how different types of firms are likely to make use of outsourcing in the future to provide human resource services and programmes.     

Formal,Justice‐Oriented Voice in the Nonunion Firm: Who Speaks Up and When?

Employee willingness to exercise workplace voice has been the subject of much recent research. However, very different types of voice are observed within the workplace, with some forms of voice receiving limited scholarly attention. In particular, limited attention has been given to the determinants of formal, justice‐oriented voice within a nonunion context. Using a policy‐capturing design, we examine factors that affect decisions to use formal, justice‐oriented voice among 498 nonunion employees who had access to the same appeal procedure. The results suggest that this type of voice is affected by perceptions regarding immunity from negative managerial reactions to voice and also by factors associated with the utility of voice (e.g., the social power of those involved in the appeal and the evidence available to support the appeal). The results further suggest that perceived immunity moderates the impact of the social power of those involved in the appeal and the evidence available.     

The effects of mandatory employment arbitration systems on applicants' attraction to organizations

This study draws on organizational justice theory to investigate the effects of mandatory employment arbitration on organizational attraction. Specific attention is given to the characteristics of employment arbitration procedures that moderate the adverse effects these programs have on applicants' intentions to continue with the recruitment process. A total of 389 professional and executive MBA students read simulated employment brochures. Making employment arbitration mandatory was found to have a significant negative main effect on applicant attraction. This negative effect was mitigated when procedures afforded employees more due process considerations and when employees were given a just‐cause protection in return for giving up their right to sue. Finally, this negative effect was greater among minorities than nonminorities. © 2005 Wiley Periodicals, Inc.     

Do financial conglomerates create or destroy value? Evidence for the EU

There is an ongoing debate about whether firm focus creates or destroys shareholder value. Earlier literature has shown significant diversification discounts: firms that engage in multiple activities are valued lower. Various factors are important in determining the size of the discount, for example cross-subsidization and agency problems. The existing literature, however, generally focuses on non-financial firms or on banks combining investment and commercial banking. Our paper focuses specifically on the valuation of bank-insurance conglomerates. We find no universal diversification discount but significant variability. The discount is explained by the size (increasing), the familiarity with the conglomerate business model (decreasing) and the risk profile (decreasing). Our results are robust to the historical origin, the merger record and the age of the conglomerate, as well as peer group specification and outlier elimination.     

Supervisors and their response to poor performance: A study of disciplinary decision making

This study examines how first-level supervisors make disciplinary decisions when faced with a performance problem. Using a policy-capturing design, subjects (supervisors from a nonunion financial services organization) were asked to make disciplinary decisions about cases that varied in terms of six different factors: magnitude of the performance decrement, documented warning, waiver, tenure, past performance, and the manner of the employee. The impact of these factors was examined in order to gain insight into the degree to which key social and institutional norms impact disciplinary decisions and, in turn, generate nascent rights for employees. The findings are suggestive as to the relative importance of these norms within the sample as a whole as well as for individual managers within the sample. The implications for our understanding of the role of nascent rights within disciplinary systems are discussed.