The devil dwells in the tails

This paper explores firm growth rate distribution in a Gibrat’s Law context. It is novel in two respects. First, rather than limiting the analysis to a focus on the conditional mean, we investigate the entire shape of the distribution. Second, we show that differences in the firm growth rate process between large and small firms are highly circumstantial and depend on the industry dynamics. The data used include more than 9,000 Danish manufacturing, services and construction firms. We provide robust evidence indicating that firm growth studies should concentrate less on explaining means and instead focus on other parts of the firm growth rate distribution.     

Decisions,decisions: Cybervetting through the eyes of students

How do students believe employers use social media in vetting job candidates? In this instructional experiment, students evaluated three hypothetical job candidates who had divergent social media presences. Questionable content, even if through an indirect link, was thought to reflect on a candidate's character and was extrapolated to future work performance. Professionally related social media activity boosted perceptions of both the candidate's character and skills. A nonexistent online presence prompted polarized assumptions—most frequently that he/she was asocial, deceptive, or technologically inept. Findings from this activity can inform business educators and help students develop a sharper awareness of how employers might weigh the online profiles of job candidates.     

Parameter estimation for a bivariate lifetime distribution in reliability with multivariate extensions

Bivariate lifetime distributions are considered which describe physically motivated dependencies like those proposed by Freund (1961) and Marshall and Olkin (1967a). Such distributions arise in reliability problems with two-component systems. Generalizations of some previous models are investigated and the maximum likelihood estimates for a combined bivariate exponential distribution are given. The case of dependent random censorship is considered in connection with two-component series systems. Some simulations show how censorship affects the parameter estimates.     

The Social Dimension: convergence or diversification of IR in the Single European Market?

The discussions raised in the theories of convergence and diversification of industrial relations are again becoming relevant due to the Single European Market and the proposals coming from the EC-Commission regarding a common EC regulation and harmonisation of the European labour market. How far the EC-development will imply an internationalisation of European industrial relations is analysed here.     

A Finite Difference Approach to the Valuation of Path Dependent Life Insurance Liabilities

This paper sets up a model for the valuation of traditional participating life insurance policies. These claims are characterized by their explicit interest rate guarantees and by various embedded option elements, such as bonus and surrender options. Owing to the structure of these contracts, the theory of contingent claims pricing is a particularly well-suited framework for the analysis of their valuation.The eventual benefits (or pay-offs) from the contracts considered crucially depend on the history of returns on the insurance company's assets during the contract period. This path-dependence prohibits the derivation of closed-form valuation formulas but we demonstrate that the dimensionality of the problem can be reduced to allow for the development and implementation of a finite difference algorithm for fast and accurate numerical evaluation of the contracts. We also demonstrate how the fundamental financial model can be extended to allow for mortality risk and we provide a wide range of numerical pricing results.