Germany's New Insider Law: The Empirical Evidence after the First Year

Abstract. This paper investigates insider trading activities in German stocks during the first year following implementation of the new Insider Law on 1 July 2002. It can be observed that insiders act as contrarian investors. They buy stocks after prices have fallen and sell stocks after prices have risen. In general, insider trades are very profitable. A typical stock purchased by an insider yields an abnormal return of almost 3 per cent during the 25 days following the transaction. In contrast, a typical stock that has been sold by insiders achieves an abnormal return of nearly −3 per cent over the same time period. Outsiders who copy the transactions of insiders can achieve nearly the same abnormal returns. Abnormal returns remain substantial even after transaction costs. The results suggest that prices of stocks in which insiders trade do not seem to be semi-strong efficient.     

Integration of management systems: A methodology for operational excellence and strategic flexibility

Organisations employ various management systems (MSs) to systematically address the needs of their stakeholders. As the number of MSs is mushrooming, the need has arisen to integrate them into one holistic business management system that addresses various stakeholder requirements in an integrated manner. However, the dynamics of the integration process are not yet fully understood and research has yet to establish how the integration of MSs gives rise to various types of organisational improvements. This paper focuses on how the integration process unfolds in practice to give rise to a number of socio-technical changes essential to the integration of MSs. This research is based on four cases; it reveals that integration streamlines operational processes through a number of structural, functional, and operational changes. Integration reforms bureaucratic structures, further giving rise to operational excellence and strategic flexibility. The research also provides the extension of lean production practices bundles, and an operationalisation of Adler’s concept of enabling bureaucracy.     

When are bonus payments for managers perceived as fair? Results from a quasi-experiment

We investigate under which circumstances bonus payments for managers are accepted as fair, asking workers to judge several hypothetical scenarios. We find that perceptions vary widely with the characteristics of the situation, as well as with the workers’ general attitudes.     

On the link between volatility and growth

A model of growth with endogenous innovation and distortionary taxes is presented. Since innovation is the only source of volatility, any variable that influences innovation directly affects volatility and growth. This joint endogeneity is illustrated by working out the effects through which economies with different tax levels differ in their volatility and growth process. We obtain analytical measures of macro volatility based on cyclical output and on output growth rates for plausible parametric restrictions. This analysis implies that controls for taxes should be included in the standard growth-volatility regressions. Our estimates show that the conventional Ramey–Ramey coefficient is affected sizeably. In addition, tax levels do indeed appear to affect volatility in our empirical application.