An Experimental Validation of Hypothetical WTP for a Recyclable Product

Using a within-subject experiment, we compare hypothetical andreal willingness to pay (WTP) for an improvement in therecyclability of a product. Subjects are faced with a real paymentscenario after they have responded to a hypothetical question.Contrary to most of the results obtained in similar studies, at apopulation level, there are no significant median differencesbetween actual and hypothetical stated values of WTP. However,within-subject comparisons between hypothetical and actual valuesindicate that subjects stating a low (high) hypothetical WTP tendto underestimate (overestimate) the value of their actualcontributions.     

Exploring the nexus between banking sector reform and performance: Evidence from newly acceded EU countries

The aim of this study is to examine the relationship between banking sector reform and bank performance – measured in terms of efficiency, total factor productivity growth and net interest margin – accounting for the effects through competition and bank risk-taking. To this end, we develop an empirical model of bank performance, which is consistently estimated using recent econometric techniques. The model is applied to bank panel data from ten newly acceded EU countries. The results indicate that both banking sector reform and competition exert a positive impact on bank efficiency, while the effect of reform on total factor productivity growth is significant only toward the end of the reform process. Finally, the effect of capital and credit risk on bank performance is in most cases negative, while it seems that higher liquid assets reduce the efficiency and productivity of banks.     

A novel approach in risk evaluation for ship-to-ship (STS) transfer of cargo using process failure mode and effects analysis (PFMEA)

The ship-to-ship transfer (STS) of oil and oil products plays currently an important role on a worldwide scale. Usually, it refers to the transfer of cargo between seagoing ships positioned alongside each other. Although the procedure of STS transfer has become a day-to-day practice, it remains a difficult operation, which deserves special consideration. To reduce the adverse effect of a potential accident on humans as well as on the environment, a risk assessment is necessary to be done to evaluate the hazards that derive from such a difficult procedure. To this end, the process failure mode and effect analysis (PFMEA), which is under the umbrella of the traditional failure mode and effect analysis, is properly modified and applied to assess the hazards of a typical STS transfer procedure. PFMEA is based on the risk priority number with regard to each risk related to the procedure of interest by multiplying the numerical values of the severity, occurrence and detection indices. Although PFMEA is currently applied mainly to manufacturing processes, the aim of the paper was to implement this methodology to STS transfer of petroleum products. According to the study of PFMEA implementation, the petroleum cargo is the product similar to the product in a manufacturing procedure; hence, the different phases of the STS procedure are similar to the production line of the manufactured product. Moreover, proposals to eliminate the disadvantages of the implementation of PFMEA by a qualitative manner (using linguistic terms) are proposed. The objective target of this effort is to assess and evaluate the effectiveness of implementing the PFMEA in a maritime activity and therefore to address the advantages and disadvantages of such an approach.     

“Too‐Small‐To‐Survive” versus “Too‐Big‐To‐Fail” banks: The two sides of the same coin

In the recent crisis, the U.S. authorities bailed out numerous banks through TARP, whilst let many others to fail as going concern entities. Even though both interventions fully protect depositors, a bail out represents an implied subsidy to shareholders, which is not yet the case with closures where creditors are not subsidised. We investigate this non‐uniform policy, demonstrating that size and not performance is the decision variable that endogenously determines one threshold below which banks are treated as TSTS by regulators and another one above which are considered to be TBTF. We, hence, provide a pair of economic rather than regulatory cut‐offs for TBTF and TSTS banks. The shareholders and the other uninsured creditors of a distressed bank are not bailed out if the bank is considered to be TSTS. We further document that the less complex a bank is, the less likely is to be bailed out and, hence, to have all of its creditors protected.     

Exchange return co-movements and volatility spillovers before and after the introduction of euro

This paper examines return co-movements and volatility spillovers between major exchange rates before and after the introduction of euro. Dynamic correlations and VAR-based spillover index results suggest significant return co-movements and volatility spillovers, however, their extend is, on average, lower in the post-euro period. Co-movements and spillovers are positively associated with extreme episodes and US dollar appreciations. The euro (Deutsche mark) is the dominant net transmitter of volatility, while the British pound the dominant net receiver of volatility in both periods. Nevertheless, cross-market volatility spillovers are bidirectional, and the highest spillovers occur between European markets.     

Winners and Losers in EU State Aid Policy

Who gains and who loses from the European Union’s state aid policy? Using data published by the Competition Directorate from 1992 to 2007, I employ pooled time series analysis to understand the motives behind state aid allocations and then interpret the findings in light of the political relationship between Member States and the Commission. Demand for aid is shaped by national macroeconomic and institutional characteristics. Governments then bargain with the Commission to allocate aid. As a result, the Commission finds itself in a delicate balancing act as controller of state aids and as an institution subject to the political power of member government.     

Managing mutual funds or managing expense ratios? Evidence from the Greek fund industry

This study examines the expense ratio policy of Greek equity funds operating in a small emerging market with an oligopolistic, bank-dominated financial system. Constructing a unique dataset of non-publicly available expense ratios charged by these funds, we examine the impact these expenses have on funds’ performance and flows. The main conclusion is that funds’ performance is negatively related to their expenses, while investors’ flows are not directly affected by expenses. Furthermore, the funds affiliated with one of the three dominant domestic banking groups achieve higher performance and attract higher net flows in comparison to their competitors.     

Revisiting mutual fund performance evaluation

Mutual fund manager excess performance should be measured relative to their self-reported benchmark rather than the return of a passive portfolio with the same risk characteristics. Ignoring the self-reported benchmark results in different measurement of stock selection and timing components of excess performance. We revisit baseline empirical evidence fund performance evaluation utilizing stock selection and timing measures that incorporate the self-reported benchmark. We introduce a new factor exposure based approach for measuring the – static and dynamic – timing capabilities of mutual fund managers. We overall conclude that current studies are likely to be misstating skill because they ignore the managers’ self-reported benchmark in the performance evaluation process.