Monetary policy and dividend growth in Germany: long-run structural modelling versus bounds testing approach

This study examines the long-run relationship between monetary policy and dividend growth in Germany. For this purpose, cointegration is tested for between both variables in the period 1974 to 2003. However, problems related to spurious regression arise from the mixed order of integration of the series used, from mutual causation between the variables and from the lack of a long-run relationship among the variables of the model. These problems are addressed by applying the bounds testing approach to cointegration in addition to a more standard long-run structural modelling approach. In principle, both procedures are capable of dealing with the controversial issue of the exogeneity of monetary policy vis-à-vis dividend growth. However, the structural modelling approach still leaves a certain degree of uncertainty about the integration properties of the interest rate and the dividend growth. Hence, one feels legitimized to refer to the bounds testing procedure and to conclude that in the longer term short-term rates drive stock returns but not vice versa.     

How the ECB and the US Fed set interest rates

Monetary policies of the European Central Bank (ECB) and US Fed can be characterized by ‘Taylor rules’, that is both central banks seem to be setting rates by taking into account the ‘output gap’ and inflation. We also set up and tested Taylor rules which incorporate money growth and the euro–dollar exchange rate, thereby improving the ‘fit’ between actual and Taylor rule based rates. In general, Taylor rules appear to be a much better way of describing Fed policy than ECB policy. Simulations suggest that the ECB's short-term interest rates have been at a much lower level in the last 2 years compared with what a Taylor rule would suggest.     

Foreign-owned plants and job security

We investigate the hypothesis that workers in foreign-owned plants face greater job insecurity than those in domestic-owned plants. Using linked employer-employee data from Germany, we examine whether foreign-owned plants are more likely to close down, and whether workers in foreign-owned plants face higher separation rates. Our results show that, in Germany, foreign-owned plants per se are not associated with greater job insecurity, either through plant exit or worker separation. However, small, non-exporting and privately owned foreign-owned plants do face a higher risk of closure than equivalent domestic plants.     

Ich fühle,also bin ich — Markenemotionen machen den Unterschied

Marken l?sen Gefühle bei den Konsumenten aus. Eine Studie zeigt: Starke Marken profitieren von den mit ihnen verknüpften positiven Emotionen, schwache Marken hingegen k?nnen sogar negative Gefühle erzeugen. Es gilt also, Marken „positiv aufzuladen“. Denn st?rkere Markenbindung und gesteigerte Markenbegehrlichkeit wirken sich letztendlich auch positiv auf die Kaufentscheidung der Verbraucher aus.     

On the Dynamics of Basic Growth Models: Ratio Stability vs. Convergence and Divergence in State Space

Abstract. We show for a class of basic growth models that convergence in ratios does not imply the pathwise convergence to the corresponding balanced growth path in the state space. We derive conditions on parameters and on the elasticity of the savings function for convergence or divergence and apply our results to the Solow model, an augmented Solow model as well as to an optimal growth model. An implication for the convergence debate is that two economies that differ only in the initial capital stock and converge in per capita terms might diverge to infinity in absolute terms.     

Sustainability in shipper-logistics service provider relationships: A tentative taxonomy based on agency theory and stimulus-response analysis

The paper contributes to research on sustainability in dyadic buyer–supplier relationships of logistics services. It presents deeper knowledge on why and how suppliers choose to behave sustainably. The research analyzes how shippers stimulate their LSPs and how LSPs respond by conducting sustainability activities. Agency theory and the stimulus–organism–response model are applied as the theoretical foundations for an explorative case study analysis of three large and five small and medium-sized European logistics service providers (LSPs) active in road transport services. Significant differences are found between the sustainability efforts of SMEs and large LSPs and a tentative taxonomy of the sustainability response types of LSPs is derived. The taxonomy contributes to theory-guided research in sustainable supply chain management and procurement. Thereby, mismatches of stimuli and responses are identified and related agency problems in dyadic relationships in terms of sustainability are discussed. From a managerial point of view, the findings may serve as a starting point for purchasers of logistics services to develop adequate sustainability selection criteria and incentives.     

Exponents of multiattribute models

The effect of different exponents on the predictive ability of multiattribute models is examined. Survey data on 1202 individuals concerning their preferences for television shows is analyzed. The results indicate that the optimal power is not 1, and that consequently it may be somewhat more advantageous to improve on an already strong attribute than on relatively weak ones.     

Alan Krueger mattered

Business Economics - Alan Krueger mattered in so many different ways that it’s hard to capture. Alan and his colleagues at Princeton single-handedly changed the way the economics profession...     

The effects of customer equity drivers on loyalty across services industries and firms

Customer equity drivers (CEDs)—value equity, brand equity, and relationship equity—positively affect loyalty intentions, but this effect varies across industries and firms. We empirically examine potential industry and firm characteristics that explain why the CEDs–loyalty link varies across services industries and firms in the Netherlands. The results show that (1) some previously assumed industry and firm characteristics have moderating effects while others do not and (2) firm-level advertising expenditures constitute the most crucial moderator because they influence all three loyalty strategies (significant for value equity and brand equity; marginally significant for relationship equity), while three industry contexts (i.e., innovative markets, visibility to others, and complexity of purchase decisions) each influence two of the three loyalty strategies. Our results clearly show that specific industry and firm characteristics affect the effectiveness of specific loyalty strategies.