Around and Around: The Expectations Hypothesis

We show how to construct models of the term structure of interest rates in which the expectations hypothesis holds. McCulloch (1993) presents such a model, thereby contradicting an assertion by Cox, Ingersoll, and Ross (1981), but his example is Gaussian and falls outside the class of finite-dimensional Markovian models. We generalize McCulloch's model in three ways: (i) We provide an arbitrage-free characterization of the unbiased expectations hypothesis in terms of forward rates; (ii) we extend this characterization to a whole class of expectations hypotheses; and (iii) we show how to construct finite-dimensional Markovian and non-Gaussian examples.     

The Use and Abuse of Export Subsidies: Evidence from Colombia

(12033) Christian Helmers and Natalia Trofimenko We evaluate the impact of firm‐specific export subsidies on exports in Colombia. Using a two‐step selection model, we predict firm‐specific subsidy amounts that can be explained by the characteristics that determine firms’ eligibility for government support and its amount. Drawing on the accounts of the discretionary allocation of subsidies in developing countries, we interpret the discrepancy between the predicted and the observed subsidy amounts as a proxy for a firm's ties to government officials. Controlling for observable and unobservable firm characteristics as well as persistence in exporting, we find that although, in general, subsidies exhibit a positive impact on export volumes, this impact is diminishing in subsidy size and in the degree of a firm's connectedness.     

The role of ethics and product personality in the intention to purchase organic food products: a structural equation modeling approach

The aim of the present study is to examine the role of ethical dimensions and product personality in the purchasing intention of organic food products. The Prospect method (Caprara et al. in Test Psicomet Metodol 7(3–4):113–128, 2000), which integrates the Five factors model of personality (cf. Digman in Annu Rev Psychol 41(1):417–440, 1990) and the Theory of planned behavior (Ajzen in Organ Behav Hum Decis Process, 50(2):179–211, 1991) extended to an ethical dimension, was employed, by using a Structural Equation Modeling approach. Results showed that moral norms—i.e., personal beliefs regarding what is right or wrong (Parker et al. in Br J Soc Psychol, 34(2):127–137, 1995)—can be considered the main motivator of purchasing intention, and they are, in turn, affected by subjective norms and product personality traits of Naturalness and Authenticity. Marketing implications for firms operating in the organic food industry are discussed, in their intent to shift from a “niche” market to a broader diffusion of these products.     

An experimental investigation of soft price caps in uniform price auction markets for wholesale electricity

This paper presents the results from an auction experiment using industry professionals and student participants who compete in a simulated wholesale market for electricity. Motivated by the intervention by FERC in response to the “meltdown” of the California spot market, we investigate the effect of including a “soft” price cap in a uniform price auction as a means of mitigating high prices. When prices are driven above the soft cap, offer curves become flat, in contrast to the hockey stick shape observed in a typical uniform price auction for electricity. This flat offer curve leads to market prices that are relatively insensitive to both generation costs and demand reductions.      

Knowledge flows through social networks in a cluster: Comparing university and industry links

Knowledge spillovers from a university to the local industry play an important role in high-technology clusters, but we know little about these spillovers. This paper examines empirically the extent of informal contacts between employees in firms and local university researchers in a wireless communications cluster. Furthermore, it analyses the features of an engineer who acquires knowledge from these informal contacts. The university–industry contacts are compared to results for informal contacts between employees in firms. The research shows that the interfirm informal contacts are more numerous than university informal contacts. Likewise, knowledge is more frequently acquired from engineers in other firms than through university–industry contacts. However, not all engineers in the cluster have informal contacts or acquire knowledge through these. Engineers who have participated in formal projects with university researchers and engineers who are educated at the local university have a higher likelihood of acquiring knowledge from informal contacts with university researchers.     

Einflussnahme und Mitwirkung von Organisationseinheiten im Multiprojektmanagement

Zusammenfassung Strategische Vorhaben werden zunehmend in Form von Projekten umgesetzt. Daher ist aus Sicht der Unternehmensführung ein besonderes Augenmerk auf die Auswahl, Bewertung und Kontrolle dieser strategischen Projekte zu legen. Es wird die Bildung von Projektportfolios empfohlen, um die Steuerungskomplexit?t zu verringern. Aus konzeptioneller Sicht ist das Multiprojektmanagement für die Lenkung dieser Projektportfolios verantwortlich. In der Literatur werden dabei unterschiedliche Organisationseinheiten diskutiert, die typischerweise im Multiprojektmanagement involviert sind. Die Erkenntnisse einer empirischen Untersuchung zum Einfluss bzw. zur Mitwirkung dieser Organisationseinheiten in 75 deutschen Gro?unternehmen zeigen, dass je nach Aufgabengebiet sowohl die Unternehmensleitung als auch Portfolio-Boards und Multiprojektmanager in hohem Ma?e beteiligt sind.

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Exertion of influence and involvement of organisational units in Multi-Project-Management

Summary Strategic intentions are increasingly transferred into action in the form of projects. Because of this the corporate management has to pay attention particularly to the selection, the valuation and the control of these strategic projects. To decrease the complexity of steering, it is recommended to establish portfolios of projects. Seen from a conceptual perspective the multi-project-management is responsible for guidance of these project-portfolios. In this context literature discusses several organisational units which are typically involved in multi-project-management. The results of an empirical study in 75 German large-scale enterprises concerning the exertion of influence and involvement of organisational units in multi-project-management suggest that depending on the assignment corporate management as well as portfolio-boards and multi-project-managers are involved to a high degree.

     

Corporate governance and incentive contracts: Historical evidence from a legal reform

This paper proposes to exploit a reform in legal rules of corporate governance to identify contractual incentives from the correlation of executive pay and firm performance. In particular, we refer to a major shift in the legal and institutional environment, the reform of the German joint-stock companies act in 1884. We analyze a sample of executive pay for 46 firms for the years 1870–1911. In 1884, a legal reform substantially enhanced corporate control, strengthened the monitoring incentives of shareholders, and reduced the discretionary power of executives in Germany. The pay–performance sensitivity decreased significantly after this reform. While executives received a bonus of about 3–5% in profits before 1884, after the reform this parameter decreased to a profit share of about 2%. At least the profit share that is eliminated by the reform most likely was incentive pay before. This incentive mechanism was replaced by other elements of corporate governance.