The Lack of International Consumption Risk Sharing: Can Inflation Differentials and Trading Costs Help Explain the Puzzle?

The bulk of evidence on the lack of international risk sharing is based on regressions of idiosyncratic consumption growth on idiosyncratic output growth. This paper argues that the results from such regressions obtained from international data are, however, not directly comparable to those based on regional data: the standard practice of running such regressions on international data fails to account for persistent international differentials in consumer prices, whereas—implicitly—most of the literature based on regional data has accounted for these differences. When risk sharing regressions are set up in conceptually the same way in international and regional data sets, the estimated coefficients are also very similar. To explore this result further, we adapt the variance decomposition of Asdrubali et al. (Q J Econ 111:1081–1110, 1996) to allow for deviations from purchasing power parity across countries. While quantity (income and credit) flows are the dominant channel of risk sharing among regions, relative consumption and output price (internal terms of trade) fluctuations account for the bulk of the deviation from the complete markets outcome in international data. To the extent that persistent differences in consumer prices are an indication of goods market segmentation, our findings provide empirical evidence for the proposition by Obstfeld and Rogoff (NBER Macroeconomics Annual 2000, 2000) that segmented international goods markets rather than asset market incompleteness may account for the (apparent) lack of risk sharing between countries.

Multinationals: Too Many or Too Few?— The Proximity–concentration Trade-off

The paper builds an analytically tractable model that illustrates the “proximity–concentration trade-off” involved in horizontal multinationals. For low trade costs, firms are single-plant firms, for intermediate costs, some are single-plant firms whereas others are multinationals, for large trade costs, firms are multinationals. Because of the modeling strategy, the model is suited for a welfare analysis of multinationals. It shows that too many firms choose to concentrate their production in only one location. Also, for some transport costs, a reduction in transport costs worsens welfare.

State‐owned Enterprises: NWSC's Turnaround in Uganda

Abstract: Oversight agencies in the water sector emphasize performance monitoring based on outputs, such as customers served, volume delivered, and service quality. However, bureaucratic tendencies can curtail operational innovation and creativity. In situations where managers lack full operating knowledge and capacities, proactive and consultative monitoring and regulation can yield benefits. This study reviews the results of Uganda's National Water and Sewerage Corporation's (NWSC) approach to performance monitoring (and ‘self‐regulation’). The purpose of this study is to outline corrective actions undertaken by the NWSC Management and Staff to turn around performance, the sequencing of those steps, and the outcomes from this reform program. The NWSC focuses on promoting improvements in technical processes and input selection. Improvements in service quality and network expansion resulted from aligning performance improvement initiatives with the organization's financial performance and team development. The program's success required managing organizational rigidities and moving towards full cost‐recovery. In particular, organizational incentives and information flows encouraged managers to reduce rules and procedures that hindered strong performance. African proverbs are interspersed throughout the article to underscore key themes and lessons for those designing, implementing, and evaluating infrastructure sector reform initiatives.     

Consumer adoption of Internet banking in Jordan: Examining the role of hedonic motivation,habit, self-efficacy and trust

Despite the rapid growth of Internet banking (IB), customers in developing countries still hesitate to adopt this technology and its use in the Middle East remains low. This study aims to identify and examine the factors that predict behavioural intention and adoption of IB in Jordan. Four factors – hedonic motivation, habit, self-efficacy and trust – are proposed in a conceptual model. Data was collected by means of a survey with bank customers in Jordan. Structural equation modelling (SEM) was used to analyse the data. The results strongly supported the conceptual model. Further, hedonic motivation, habit, self-efficacy and trust were all confirmed to have a significant influence on behavioural intention. Trust was found to be strongly predicted by both hedonic motivation and self-efficacy. This study provides both academics and practitioners with an insight into the factors that can be used to encourage customer adoption of IB specifically in a Middle East context.     

What Plato Knew About Enron

This paper applies Plato’s cave allegory to Enron’s success and downfall. Plato’s famous tale of cave dwellers illustrates the different levels of truth and understanding. These levels include images, the sources of images, and the ultimate reality behind both. The paper first describes these levels of perception as they apply to Plato’s cave dwellers and then provides a brief history of the rise of Enron. Then we apply Plato’s levels of understanding to Enron, showing how the company created its image and presented information to support that image, and how the public eventually emerged from the cave to realize the truth about Enron’s actual accounting practices and financial state, which led to the corporation’s downfall. We find Plato’s allegory both useful in analyzing the relationship between Enron and the public and instructive about the power and moral responsibility of Enron’s executives.     

Umgang mit Aggressionen

Herausforderndes Verhalten bei Demenz - Wenn Aggression, erh?hter Bewegungsdrang, starke Orientierungsprobleme, Selbst- und Fremdgef?hrdung oder andere „herausfordernde“ Verhaltensweisen auftreten, wird die Pflege und Begleitung von Demenzkranken als Belastung erlebt. Doch Pflegende stehen dem Problem nicht hilflos gegenüber. Eine interdisziplin?re Expertengruppe gibt mit ihren Empfehlungen ein Handlungsgerüst.     

The contextual nature of the predictive power of statistically-based quarterly earnings models

We present new empirical evidence on the contextual nature of the predictive power of five statistically-based quarterly earnings expectation models evaluated on a holdout period spanning the twelve quarters from 2000–2002. In marked contrast to extant time-series work, the random walk with drift (RWD) model provides significantly more accurate pooled, one-step-ahead quarterly earnings predictions for a sample of high-technology firms (n = 202). In similar predictive comparisons, the Griffin-Watts (GW) ARIMA model provides significantly more accurate quarterly earnings predictions for a sample of regulated firms (n = 218). Finally, the RWD and GW ARIMA models jointly dominate the other expectation models (i.e., seasonal random walk with drift, the Brown-Rozeff (BR) and Foster (F) ARIMA models) for a default sample of firms (n = 796). We provide supplementary analyses that document the: (1) increased frequency of the number of loss quarters experienced by our sample firms in the holdout period (2000–2002) vis-à-vis the identification period (1990–1999); (2) reduced levels of earnings persistence for our sample firms relative to earnings persistence factors computed by Baginski et al. (2003) during earlier time periods (1970s–1980s); (3) relative impact on the predictive ability of the five expectation models conditioned upon the extent of analyst coverage of sample firms (i.e., no coverage, moderate coverage, and extensive coverage); and (4) sensitivity of predictive performance across subsets of regulated firms with the BR ARIMA model providing the most accurate predictions for utilities (n = 87) while the RWD model is superior for financial institutions (n = 131).

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Foreign Direct Investment in the Enlarged EU: Do Taxes Matter and to What Extent?

Foreign direct investment is of increasing importance in the European Union. This paper estimates the effect of taxes on foreign direct investment (FDI) flows and on three sub-components of these flows for the countries of the enlarged European Union. The model in the spirit of gravity equations robustly explains FDI flows between the 25 member states. Sample selection needs to be addressed in the estimation. We show that the different subcomponents of FDI should and indeed do react differently to taxes. After controlling for unobserved country characteristics and common time effects, the top statutory corporate tax rate of both, source and host country, turn insignificant for total FDI and investment into equity. However, high source country taxes clearly increase the probability of firms to re-invest profits abroad and lower the percentage of debt financed FDI. This might reflect profit re-allocation to avoid taxes. Market size factors have the expected signs.

Wal-Mart’s Impact on Local Revenue and Expenditure Instruments in Ohio, 1988–2003

This research estimates fiscal impacts of Wal-Mart in Ohio from 1985 through 2003. Using a panel of counties, and accounting for spatial autocorrelation in an instrumental variable model I estimate impact of Wal-Mart and Super-Centers on selected revenues and transfer payments. Among the findings is that the presence of a Wal-Mart increases local commercial property tax assessments resulting in collection increases of between $350,000 and $1.3 million. There is also an 18–43% reduction in per capita EITC claims in a county. However, Medicaid expenditures experience growth which amount to roughly 16 additional cases attributable to a single Wal-Mart. The magnitude and statistical certainty of these findings, suggests that local fiscal intervention, either through incentives or a “Wal-Mart Tax” is unwarranted.

Connecting National Safety Nets: The Dialectics of the Basel II Contracting Process

Basel II consists of supervisory guidelines negotiated by representatives of central banks and national regulatory commissions that were members of the Basel committee on Banking Supervision (BCBS). The BCBS is itself a regulatory response to globalization, which is connecting national safety nets in market-driven ways. A country’s financial safety net is a social contract established by short-lived agents for principals in long-lived economic sectors. Restraints placed on the authority of the BCBS members to contract for their principals by domestic politics explains: why Basel II authorizes individual countries to implement the agreement in markedly different ways; why US implementation of Basel II ran into so much doubt, controversy, and delay; and how the implementation debate set small and large banks and the Federal Reserve and other federal regulators against one another.