Does pre‐packed bankruptcy create value? An empirical study of postbankruptcy employment retention in The Netherlands

In recent years, there has been growing interest in whether pre‐packed bankruptcy can be a mechanism through which firms facing imminent insolvency can preserve value. Although an extensive body of literature exists on “pre‐packs,” whether such techniques really preserve value remains ambiguous. By analysing bankruptcy proceedings filed with Dutch courts in the period 2012–2018 through the lenses of real options and debt overhang theory, we examined employment retention postbankruptcy as a consequence of the type of bankruptcy proceeding (pre‐packed bankruptcy and conventional bankruptcy) and the severity of prebankruptcy financial distress. The results show that in the Netherlands, a pre‐packed bankruptcy, when compared with a conventional bankruptcy proceeding, positively impacts employment retention rates after bankruptcy. The severity of financial distress before bankruptcy does not affect employment retention rates postbankruptcy. This implies that despite the amount of resource slack, the preservation of employee value is better served under a pre‐packed bankruptcy than a conventional bankruptcy proceeding. This finding is important for insolvency practice, as up to 22 June 2017, employee rights in the Netherlands (including redundancy) were not considered to be automatically transferred to the firm acquiring the bankrupt debtor's assets when a pre‐packed bankruptcy was applied. Implications for insolvency regulation and practice are discussed.     

Heterogeneity in the quality–satisfaction–loyalty framework

Few studies have attempted to compare the results of quality–satisfaction–loyalty (QSL) models across different groups to account for heterogeneity across Business-to-Business dyads. This study confirms the mediation effects of trust, commitment and information sharing in the QSL causal chain, and compares the confirmed model across selected sources of heterogeneity originating from the variance in actor demographics and market characteristics. Our study employed a focal firm approach to consider a network of buyers in the South African Computer Aided Design (CAD) industry. Data was collected from 497 respondents and the empirical model was tested using variance based Structural Equation Modelling and Finite Mixture modelling. Beyond offering further support for the quality–satisfaction–loyalty causal chain, the study provides evidence of heterogeneity often associated of high context emerging markets.     

Harmonising European Insolvency Law: The Emerging Role of Stakeholders

In recent years, the European Commission has given increased room for stakeholder involvement in the area of insolvency and restructuring. In revising the European Insolvency Regulation in 2012–2015 and preparing the proposal for a directive on preventive restructuring frameworks 2016, the role and direct influence of stakeholders has been noteworthy. In these efforts, the Commission touched upon a field of law characterised by diverse stakeholders with strongly opposing interests. Following the active involvement of all stakeholders by the Commission, this study examines what relevant stakeholders are, what their positions are with respect to European Union insolvency legislation and what their role has been and can be in legislative processes in the area of insolvency and restructuring. Copyright © 2018 INSOL International and John Wiley & Sons, Ltd.     

THE ROLE OF TIME‐VARYING PRICE ELASTICITIES IN ACCOUNTING FOR VOLATILITY CHANGES IN THE CRUDE OIL MARKET

There has been a systematic increase in the volatility of the real price of crude oil since 1986, followed by a decline in the volatility of oil production since the early 1990s. We explore reasons for this evolution. We show that a likely explanation of this empirical fact is that both the short‐run price elasticities of oil demand and of oil supply have declined considerably since the second half of the 1980s. This implies that small disturbances on either side of the oil market can generate large price responses without large quantity movements, which helps explain the latest run‐up and subsequent collapse in the price of oil. Our analysis suggests that the variability of oil demand and supply shocks actually has decreased in the more recent past, preventing even larger oil price fluctuations than observed in the data. Copyright © 2012 John Wiley & Sons, Ltd.     

Reform of the regulations on marginal employment lacks cohesion

Conclusion If the federal government is concerned to avoid restricting labour market dynamics in the low-income segment, it should seek a solution that tears down the ‘wall’ represented by the ceiling on marginal employment. This is not achieved by the envisaged reform concept. In fact the way forward was set out in the new government’s coalition agreement. There the government’s intention is expressed to incorporate all forms of paid employment, i.e. including self-employed activities, into the social insurance system. This would tear down the wall consisting of a high marginal tax and contribution burden that still blocks the transition from marginal work to regular part-time employment. Yet this would also require the courage to abolish flat-rate taxation in favour of an extension of individual income taxation. It seems that such a reform—as is the case with a comprehensive concept for a re-regulation of the labour market and a reform of social security—cannot be implemented in the short run. Consequently, the reform of marginal employment should be placed on the agenda of the ‘Alliance for Jobs’: these tripartite talks between employers, unions and the government, that are to be chaired by the Chancellor personally, should serve not only to bring about a reduction in German unemployment in the short-term, but also to find new, sustainable regulations for the labour market and social security. One advantage, at least, of the proposed reform of marginal employment is that it is in fact so marginal that it will not constitute an obstacle to a more comprehensive reform.     

Prices for long-distance voice telephony in Germany

This paper examines the first 16 months of competition in the German market for long-distance voice telephony on the fixed network. It concentrates on price level and price structure. Competition induced by the entry of both network operators and switch-based service providers decreased the price level substantially. Furthermore, after initial attempts to design innovative price structures, most firms gave up differentiation, and instead charged uniform prices for long-distance calls for residential customers. Moreover, the decrease in the price level seems to have induced a shift in the peak-load structure, which raises concern about the regulation of the peak-load structure of interconnection charges.