Does the ECB act as a lender of last resort during the subprime lending crisis?: Evidence from monetary policy reaction models

We investigate whether the ECB aligns its monetary policy with financial crisis risk in EMU member countries. We find that since the outbreak of the subprime crisis the ECB has significantly increased net lending and reduced interest rates when banking and sovereign debt crisis risk in vulnerable EMU countries (Greece, Ireland, Italy, Portugal, and Spain) increases, while no significant effect is identified for the pre-crisis period and relatively tranquil EMU countries (Austria, Belgium, France, Germany, and the Netherlands). These findings suggest that the ECB acts as a Lender of Last Resort for vulnerable EMU countries.     

Unemployment and debt dynamics in a highly indebted small open economy

The paper analyzes the dynamic effects of a total factor productivity shock and an interest rate risk premium shock in a highly indebted open economy. In contrast to the standard open economy framework, search unemployment and wage bargaining are introduced. We find that a negative total factor productivity shock primarily has effects on the economy's production side and on welfare, but not on its stock of foreign debt and the country specific risk premium, and large part of the adjustment happens in the short-run. In contrast, a pure increase in the country specific risk premium causes substantial dynamics and a considerable reduction in foreign debt, allowing higher consumption in the long run and creating an intertemporal welfare gain, even though unemployment increases strongly in the short-run. A 50% haircut of foreign debt significantly reduces the initial response of the unemployment rate. In case of a temporary productivity shock, sticky wages imply smaller employment, but generate higher welfare than flexible wages.     

Growth and convergence in South–South integration areas: An empirical analysis

Until recently, it has been argued in economic theory that regional integration and trade agreements among developing countries may achieve negative growth effects. This study tests empirically the effects of such South–South agreements on growth and convergence. All three world regions in question are considered: South America, Southeast Asia, and Sub‐Saharan Africa. A comprehensive panel data analysis is conducted that distinguishes between the problems of testing for stronger growth and accelerated convergence, respectively. The data indicate that the considered South–South agreements promote both.     

Novel advancements in the Markov chain stock model: analysis and inference

In this paper we propose further advancements in the Markov chain stock model. First, we provide a formula for the second order moment of the fundamental price process with transversality conditions that avoid the presence of speculative bubbles. Second, we assume that the process of the dividend growth is governed by a finite state discrete time Markov chain and, under this hypothesis, we are able to compute the moments of the price process. We impose assumptions on the dividend growth process that guarantee finiteness of price and risk and the fulfilment of the transversality conditions. Subsequently, we develop non parametric statistical techniques for the inferential analysis of the model. We propose estimators of price, risk and forecasted prices and for each estimator we demonstrate that they are strongly consistent and that properly centralized and normalized they converge in distribution to normal random variables, then we give also the interval estimators. An application that demonstrate the practical implementation of methods and results to real dividend data concludes the paper.     

Zero lower bound,ECB interest rate policy and the financial crisis

We explore whether the ECB’s interest rate setting behaviour changed during the financial crisis by estimating reaction functions over the period 1999–2010, allowing for a smooth transition from one set of parameters to another. The estimates show a swift change in the months following the collapse of Lehman brothers. The ECB appears to have cut rates more aggressively than expected solely on the basis of the worsening of macroeconomic conditions, consistent with the theoretical literature on optimal monetary policy in the vicinity of the zero bound.     

The performance implications of outsourcing customer support to service providers in emerging versus established economies

Recent discussions in the business press query the contribution of customer-support outsourcing to firm performance. Despite the controversy surrounding its performance implications, customer-support outsourcing is still on the rise, especially to emerging markets. Against this backdrop, we study under which conditions customer-support outsourcing to providers from emerging versus established economies is more versus less successful. Our performance measure is the stock-market reaction around the outsourcing announcement date. While the stock market reacts, on average, more favorably when customer-support is outsourced to providers located in emerging markets as opposed to established economies, approximately 50% of the outsourcing firms in our sample experience negative abnormal returns. We find that the shareholder-value implications of customer-support outsourcing to emerging versus established economies are contingent on the nature of the customer support that is being outsourced and on the nature of the outsourcing firm. Customer-support outsourcing to emerging markets is less beneficial for services that are characterized by personal customer contact and high knowledge embeddedness than for customer-support services that involve impersonal customer contact and are low on knowledge embeddedness. Firms higher in marketing resource intensity and larger firms benefit more from outsourcing customer-support services to emerging markets than firms lower in marketing resource intensity and smaller firms.     

Resources and governance in “base of the pyramid”-partnerships: Assessing collaborations between businesses and non-business actors

Identifying, building, and maintaining partnerships with non-business actors are crucial challenges for multinational companies (MNCs) when implementing Base of the Pyramid (BoP) projects. Using a multiple-case study we analyze such partnerships through the lens of the relational view, focusing on resources generating inter-organizational value and on mechanisms for governing the partnerships. The cross-case analysis suggests that proficiency in identifying appropriate partners featuring non-tangible synergy-sensitive resources is vital for BoP ventures. MNCs compensate for their lack of local knowledge, contacts, and legitimacy by recruiting non-business actors for this consultancy and brokering function. Once a suitable network of partners has been identified, these resources need to be explored and exploited by developing personal relationships, communication routines, common goals, and partner-specific capacity building. Synergy-sensitive resources facilitate performance and long-term maintenance of BoP partnerships by establishing well-adapted and well-informed management practice and by creating a lock-in that works as an informal self-enforcing governance mechanism.     

Are rigor and transparency enough? Review and future directions for case studies in technology and innovation Management

It is crucial to assess how technology and innovation management (TIM) scholars use case-based research. Our study provides a theoretical systematic review of qualitative case-based articles published in 31 TIM journals from 2013 to 2018. Our analysis of 311 articles uncovers patterns regarding rigor (including case justification and selection), transparency (including data collection and analytical methods), and paradigmatic consistency and pluralism. Our findings show some evidence of emerging pluralism in how TIM researchers perform qualitative case studies, but also highlight some worrying trends: paradigmatic inconsistencies, lack of transparency, and over-reliance on specific approaches, all of which affect the value of case study research. We provide methodological guidelines for improving the use of qualitative case research in TIM.     

Appropriability mechanisms for manufacturing and service firms: the contingencies of openness and knowledge intensity

Conventional wisdom argues that appropriating returns from innovation requires protection mechanisms. However, there will be limits to the effectiveness of formal and informal appropriability mechanisms for innovation performance. Their effectiveness will be contingent on the nature of the knowledge that firms are trying to protect and the openness of their innovation strategy (sharing knowledge while attempting to protect knowledge is known as the ‘paradox of openness’). Do these boundary conditions apply to both manufacturing and service firms equally though? Analyzing data from the UK Community Innovation Survey, this study provides evidence for a continuum – from discrete product manufacturing firms, whose products rely heavily on codified, explicit knowledge and for which formal methods are strongly associated with innovation performance, to knowledge-intensive service firms, which tend to rely more on complex tacit knowledge and for which innovation is linked to informal, not formal, appropriability. The findings show that the paradox of openness is a limited problem for service firms. The benefits of collaboration for innovation performance outweigh any reduction in the effectiveness of appropriability. For manufacturers, the benefits of collaboration disappear with high formal appropriability, and thus, discrete product manufacturers, contrary to conventional wisdom, may find it beneficial to reduce collaboration breadth and invest in informal appropriability mechanisms. Knowledge-intensive servitized manufacturers find formal methods effective but only with no or minimal collaboration.