The New Economic Geography

Recently, the 'new economic geography' literature has developed as a theory of the emergence of large agglomerations which relies on increasing returns to scale and transportation costs. This literature builds on diverse intellectual traditions. It combines the insights of traditional regional science with those of modern trade theory and thus attempts to provide an integrative approach to interregional and international trade. The paper surveys this literature and discusses its relation to earlier approaches to similar topics.     

Crowdfunding models: Keep-It-All vs. All-Or-Nothing

Reward-based crowdfunding campaigns are commonly offered in one of two models via fundraising goals set by an entrepreneur: “Keep-It-All” (KIA), where the entrepreneur keeps the entire amount raised regardless of achieving the goal, and “All-Or-Nothing” (AON), where the entrepreneur keeps nothing unless the goal is achieved. We hypothesize that AON forces the entrepreneur to bear greater risk and encourages crowdfunders to pledge more capital enabling entrepreneurs to set larger goals. We further hypothesize that AON is a costly signal of commitment for entrepreneurs yielding a separate equilibrium with higher quality and more innovative projects with greater success rates. Empirical tests support both hypotheses.     

Rezensionen

Ohne Zusammenfassung     

‘Better safe than sorry’: consumer perceptions of and deliberations on nanotechnologies

Although nanotechnologies are considered key technologies that can drive growth‐generating innovations in well‐saturated markets, worldwide investment in nanotechnologies has to date focused largely on technology‐related development programmes and little effort has been expended to research associated risks. As a result, even though prior discourses have sensitized western consumers to potential health‐related dangers, solid knowledge on, for example, the toxicological and eco‐toxicological risks and unintended side effects of nanotechnology are scarce. This paper therefore presents an overview of the current evidence on consumer knowledge and perceptions of nanotechnology and public engagement with it, with a focus on the US, the UK and Germany. Overall, even though survey data suggest that awareness of the term ‘nanotechnology’ has risen slightly, today's consumers are generally ill informed about its nature and its applications in consumer‐related products. Hence, based on our analysis of these data, we argue that early political engagement in the nanotechnology issue – for example, consumer policy options that support consumer interest in the marketing of ‘nanos’– would facilitate objective public discourse.     

Exploring Communication Activities in Online Communities: A Longitudinal Analysis in the Financial Services Industry

Online communities (OCs) are seen as important stimulus to electronic business. However, surprisingly little is known about how the communication activity of their participants develops and changes over time. A longitudinal study bears the potential to better elaborate the enabling and inhibiting factors of the participant's communication activity in OCs. To explore these phenomena, we aimed to develop a conceptual framework that serves as a foundation to guide an explorative data analysis of real OCs. We use the notions of common ground, information overload, interactivity, and social loafing to explain the communication activity of the participants in OCs. The empirically explored framework will help organizations to support the development of OCs and utilize them in an economically successful way.

Based on a literature review, we developed a first conceptual framework. Then, we apply it to describe the development of the communication activity and its determinants in an OC hosted by a German financial service provider. In this study, we examined over 33,000 participants and 1.03 million messages over a period of 3 years. We found a strong effect of external factors on the size of this OC. The size of the OC showed no direct influence on the communication activity of the participants. However, in reaction to the increasing information load, communication strategies changed and herewith influenced the communication activity. The heterogeneity of the participant's activity was growing over time, and a small minority of participants wrote more and more of the postings.     

Designing a European restructuring mechanism without taxpayers’ money

The European Commission’s approach to the supervision and restructuring of the EU banking system has numerous shortcomings. As an alternative, this article proposes a European Resolution Authority and a European Restructuring Fund for systemically important banks and the implementation of a levy paid by banks in accordance with their systemic relevance. This levy should be designed to reduce the risk of future bailouts and the moral hazard inherent in implicit government guarantees.     

The entrepreneur's investor choice: The impact on later-stage firm development

This article analyzes how early-stage financing decisions may affect how entrepreneurial firms ultimately grow. This theoretical study considers an entrepreneur seeking early-stage financing from either a specialist or a generalist investor in the context of stage financing. It is assumed that an early-stage specialist is less efficient in assisting a venture beyond the early-stage round than a generalist. This leads to the following tradeoff: by initially selecting an early-stage specialist, the entrepreneur benefits from increased investor incentives in the first round. Such incentives generate additional value for the entrepreneurial venture, improving valuation in the interim round and thereby mitigating the risk of dilution against follow-up investors and potentially even of premature discontinuation of the project. However, early-stage specialists are more reluctant to finance later rounds. Conversely, using a generalist secures efficient follow-up funding but also leads to weaker investor incentives in the early stage. With this tradeoff, the presence of asymmetric information about the quality of entrepreneurial projects particularly affects generalists; entrepreneurs with strong projects more often choose specialists, while entrepreneurs with weak projects select generalists to secure efficient continuation. The use of convertible securities or adjustment warrants in contracts cannot always eliminate the effect of asymmetric information. Several empirical implications derived from this tradeoff are provided for optimal investor choice.