A natural experiment on sick pay cuts,sickness absence,and labor costs

This study estimates the reform effects of a reduction in statutory sick pay levels on sickness absence behavior and labor costs. German federal law reduced the legal obligation of German employers to provide 100% continued wage pay for up to six weeks per sickness episode. In 1996 statutory sick pay was decreased to 80% of foregone gross wages. Within the reform's target group – private sector employees – this measure increased the proportion of employees having zero days of absence between 6 and 8%. Quantile regression estimates indicate that employees with up to 5.5 annual absence days reduced their days of absence by about 12%. Extended analyses suggest that in industries that enforced the cut, behavioral effects were about twice as large. We show that the direct labor cost savings effect stemming from the cut in replacement levels clearly exceeds the indirect effect due to the decrease in absenteeism. Our calculations about the total decrease in labor costs are very much in line with official data which suggest that total employer-provided sick pay decreased by 6.7% or €1.7 billion per year.     

Innovation strategies and firm performance: Simple or complex strategies?

This paper analyzes the effect of various innovation strategies (ISs) of firms on their future performance, captured by labor productivity. Using five waves of the Community Innovation Survey in Sweden, we have traced the innovative behavior of firms over a decade, that is, from 2002 to 2012. We defined ISs to be either simple or complex (in various degrees). We call an IS a simple IS when firms engage in only one of the four types of Schumpeterian innovations, that is, product, process, marketing, or organizational, while a complex IS is when firms simultaneously engage in more than one type. The main findings indicate that those firms that choose and afford to have complex ISs are better off in terms of their future productivity in comparison with those firms that choose not to innovative (base group) and also in comparison with those firms that choose simple ISs. The results are mostly robust for those complex innovators that have a higher degree of complexity and also keep the balance between technological (product and process) and non-technological (organizational and marketing) innovations.     

Multibranded Platform Development: A Corporate Strategy with Multimanagerial Challenges

Product platforms have become a principal fundament and a prerequisite for profitable product development in almost every industry today. Since platforms have a desirable potential to reduce development and production costs, there is an extensive bulk of knowledge describing underlying platform principles and challenges. But the vast majority of the identified challenges are based on single firms and brand contexts, which imply that previous findings might not be applicable when platform development involves several brands, here called multibranded platforms. In the present article it is therefore suggested that there is lack of knowledge describing managerial challenges of multibranded platform development. To be able to capture such a strategy that holds certain complexity and unknown dimension, an explorative and longitudinal field study is supposed to achieve the finest insights into a yet incompletely documented phenomenon. Because of the field‐study approach, findings from the study are theoretically validated in relation to existing knowledge from other contributions. To start developing a multibranded product platform development framework, the present study identifies three distinctively different strategic forces that must be handled in such multibranded platform development: (1) the creation of a common architecture; (2) accomplishing product differentiation within an expanded and multibranded product scope; and (3) corporate responsibility in the transition from single‐branded to multibranded platform development. Three dimensions of managerial challenges are identified. The first is technology management challenges, which deal with commonalization in terms of the development of common multibranded architectures. The major challenge to achieve architectural commonalization is that no individuals from any brand have the proper multibranded architectural knowledge. Instead, multibranded architectures must evolve from the beginning and be founded on a new and expanded brand scope. Architectural commonalization also includes elements of unlearning since previous experiences have little relevance. The second challenge is brand management challenges and deals with brand differentiation in terms of portfolio management. Differentiation is an effect of increased diversification that particularly challenges brands of opposite generic competitive strategies. The third challenge dimension is called corporate management challenges and deals with the combination of the two others. From a corporate management perspective, it seems important to provide new organizational structures that support and combine interests of technology and brand management. Finally, multibranded platform development is a corporate strategy that affects business units and functional units thoroughly.     

Evaluating a non-linear asset pricing model on international data

The paper analyses the ability of a non-linear asset pricing model suggested by Dittmar [Dittmar, R.F., 2002. Non-linear pricing kernels, kurtosis preference, and the cross-section of equity returns. Journal of Finance 57, 369-403] to explain the returns on international value and growth portfolios. For comparison we use competing pricing models such as the ICAPM, the exchange rate risk augmented ICAPM and the international two-factor model proposed by Fama and French [Fama, E.F., French, K. R., 1998. Value versus growth: The international evidence. Journal of Finance 53, 1975-1999]. All models are evaluated both unconditionally and conditionally. The models are evaluated by applying the Hansen and Jagannathan distance measure, and we also employ several alternative measures to ensure a robust comparison of the models. We find support for the model of Dittmar [Dittmar, R.F., 2002. Non-linear pricing kernels, kurtosis preference, and the cross-section of equity returns. Journal of Finance 57, 369-403]. Evaluated conditionally, this model successfully passes all the different diagnostic tests performed in the analysis.     

Real-time effects of central bank intervention in the euro market

This paper investigates the real-time effects of sterilized foreign exchange intervention using official intraday intervention data provided by the Danish central bank. Our analysis employs a two-step weighted least squares estimation procedure. We control for macro surprises, address the issue of endogeneity, and carry out an array of robustness tests. Only when the direction of intervention is consistent with the monetary policy stance do we find that intervention exerts a significant influence on exchange rate returns.     

Cartels and norms in the Swedish steel industry 1923–1953

This article discusses the reasons for cartel stability by using the Swedish Steel Casting Cartel as an example. Previous research points out organisational structure and the ability to deal with exit entry and cheating as crucial for stability. In this article, the development of social norms, morally legitimised within the cartel, is discussed as a possible explanation for cartel stability. The organisational structure developed was flexible enough to deal with problems of exit entry and cheating. The discussions on quotas and prices led to a common view on fair prices. The conclusion is that the organisational structure can partly explain why the Steel Casting Group was relatively stable but that there are indications that the development of common social norms related to the value of fairness was also an important explanatory factor.     

PRODUCTIVITY GROWTH AND WORKER REALLOCATION*

Productivity dispersion across firms is large and persistent, and worker reallocation among firms is an important source of productivity growth. An equilibrium model of growth and firm evolution designed to clarify the role of worker reallocation in the growth process is studied. We show that it explains the correlations between size measures and labor productivity found in Danish firm data. Conditions under which the reallocation of workers from less to more productive firms contributes to aggregate productivity growth in the economy modeled are derived. Finally, a proof of existence of an equilibrium solution to the model is also provided.     

Hosting major sports events: the challenge of taming white elephants

While the literature on the economic impacts of major sports events has grown considerably over the years, the question of utilisation of venues built for these events after the party is over has received little attention. This article fills some of the gaps in the literature. By means of a Stadium Utilisation Index, it measures the post-event utilisation of venues that were constructed of significantly refurbished to host major sports events in the period from 1996 to 2010. It reveals some of the challenges facing the utilisation of the venues once ‘the circus has left town’. The regressions identify that private owned stadiums have a higher rate of utilisation than publicly built venues. The stadiums with the highest capacity tend to have higher utilisation. Last, but not least in terms of importance, stadiums in nations with a high degree of corruption had the lowest utilisation.     

Public–private innovation: barriers in the case of mobility as a service in West Sweden

Departing from open innovation (OI), this case study explores the development of Mobility as a Service (MaaS) in West Sweden. An analysis of 19 interviews reveals how representatives from involved actors perceive internal and external barriers as hampering the regional public transport authority’s attempts to collaborate with private actors, and that the perception of barriers is incongruent across public and private actors. Transferability to other cases of public–private OI is discussed, and implications for public actors are proposed. The paper expands the knowledge of preconditions for MaaS’ development and of the unique conditions for OI in public–private settings.     

ECB Foreign Exchange Intervention and the EURO: Institutional Framework,News, and Intervention

Using a unique intervention news data set, this paper investigates the impact of ECB intervention and intervention-related news (newswire reports) on the Euro exchange rate. A time-series study of news generated by ECB officials and market participants regarding intervention and the value of the Euro as well as an event study of firm reports of ECB intervention is conducted. Both studies find significant short-run effects on the Euro value, while only negative statements (official statements denying past intervention or ruling out future intervention) appear to have persistent effects.