Twenty-Five Years after the Fall of the Berlin Wall: An Empirical Revisit of West German Consumers' Attitudes Toward Products and Brands from Former East Germany

More than 25 years after the German reunification, data show that products/brands from the eastern regions of Germany (“Neue Länder”) still do not have significant shares in the country's western part (“Alte Länder”). To analyze potential reasons for this phenomenon, our current study replicates a previous study that investigated selected attitudes of Alte Länder consumers toward products/brands from the Neue Länder. It is shown that factors such as consumer ethnocentrism, product judgment, willingness to buy, and economic animosity continue to influence consumer behavior and as such our study offers potential explanation for the failure of Neue Länder products/brands in the western regions of Germany.     

Book Reviews

M. Arsjad Anwar, Thee Kian Wie, Iwan Jaya Azis, Pemikiran, Pdaksanaan, dan Perintisan Pembangunan Ekonomi[Concepts, Implementation, and Pioneering in Economic Development], Fakultas Ekonomi Universitas Indonesia and PT Gramedia Pustaka Utama, Jakarta, 1992, pp. xx + 700.

Adam Schwarz, A Nation in Waiting: Indonesia in the 1990s, Allen and Unwin, Sydney, and Westview, Boulder, 1994, pp. 370. Paper: A$24.95.

East Asia Analytical Unit, Expanding Horizons: Australia and Indonesia into the 22st Century,Department of Foreign Affairs and Trade, Canberra, 1994, pp. xviii + 346. A$34.95.

Sjahrir, Pikiran Politik[Political Ideas], LP3ES, Jakarta, 1994, pp. xiv + 191.

Sjahrir, Persoalan Ekonomi Indonesia: Moneter, Perkreditan dan Nenca Pembayaran[Problems of the Indonesian Economy: Money, Credit and the Balance of Payments], Pustaka Sinar Harapan, Jakarta, 1995, pp. xv + 205.

Sjahrir, Analisis Bursa Efek[Analysis of the Stock Exchange], PT Gramedia Pustaka Utama, Jakarta, 1995, pp. xiv + 169.

Sjahrir, Ekonomi Indonesia dalam Perspektif Bisnis[The Indonesian Economy in a Business Perspective], PT Jurnalindo Aksara Grafika, Jakarta, 1994, pp. xvi + 239.

Sjahrir, Kebijakan Negara Mengantisipasi Masa Depan[National Policy: Anticipating the Future], Yayasan Obor Indonesia, Jakarta, 1994, pp. xv + 251.

Sjahrir, Formasi Mikro-Makro Ekonomi Indonesia[Indonesia's Macro and Micro Economy], Penerbit Universitas Indonesia, Jakarta, 1995, pp. xii + 313

F.B.A. Bouman and Otto Hospes, Financial Landscapes Reconstructed: The Fine Art of Mapping Development,Westview, Boulder, 1994, pp. xi + 416. US$45.00

Robert Cribb (ed.), The Late Colonial State in Indonesia: Political and Economic foundations of the Netherlands Indies 1880–1942,Verhandelmgen van het Koninklijk Instituut voor Taal-, Land- en Volkenkunde 163, KITLV Press, Leiden, 1994, pp. xiii + 295.

Shinya Sugiyama and Milagros C. Guerrero (eds), International Commercial Rivalry in Southeast Asia in the Inierwar Period,Yale Southeast Asia Studies Monograph 39, Yale Center for International and Area Studies, New Haven, 1994, pp. ix + 222.

W.L. Korthals Altes, Changing Economy in Indonesia. Volume 15: Prices (Non-Rice) 1814–1940,Royal Tropical Institute, Amsterdam, 1994, pp. 175. Paper: Dfl. 48.00.     

Kontrollierte Inflation—ein mißglücktes Experiment?

Summary This study examines how internal economic equilibrium was achieved in Austria after World War II. In contrast to many other Western European countries, the change from a more or less centrally planned economy to a market economy was not accomplished in one step through a currency reform, but through a policy proceeding in several steps which can be regarded as the starting point of the Austrian social partnership after World War II. Through 5 price-wage agreements an attempt was made, with due regard to structural shifts, to adjust the greatly reduced level of production to the level of prices that had remained fixed since the beginning of the war. This article investigates the reasons this attempt eventually failed, and why inflation, which could not be suppressed in the end, was successfully brought under control.     

Distortionary taxation and the free-rider problem

This paper derives a version of the Samuelson rule which takes into account that a distortionary Ramsey-tax system is used to finance public-goods provision. Individuals have private information about their public-goods preferences. Moreover, individuals differ in their productive abilities. The incidence of taxation in the Ramsey model implies that more productive individuals have a lower willingness to pay for public goods than less productive individuals. They are therefore tempted to understate their valuation of public goods and less productive individuals are inclined to exaggerate theirs. The paper characterizes an optimal rule for taxation and public-goods provision that eliminates these biases.     

Spillover Effects of Internal Control Weakness Disclosures: The Role of Audit Committees and Board Connections

We find that firms are less likely to report an internal control material weakness (as mandated by the Sarbanes‐Oxley Act) in a given year if one of their audit committee members is concurrently on the board of a firm that disclosed a material weakness within the prior three years. We find a similar spillover effect for financial restatement disclosures. The spillover from material weakness disclosures is evident only if a shared director has more experience with the disclosing firm or can channel more information about the disclosed material weakness. Our findings suggest that prior director experiences outside the firm influence the work of audit committees inside the firm. One rationale is that a director's prior experience with an adverse disclosure helps diffuse important insights and serves as a catalyst for improvements in a firm's internal control and financial reporting practices. An alternative explanation, which we cannot dismiss, holds that a director's prior experience helps a firm to underreport material weaknesses and financial restatements without any attendant improvements in the underlying practices.     

Is brain hemisphericity a correlate of performance in problem-solving courses? A case study from an HBCU

The authors set out to determine the brain dominance characteristics of students enrolled in business statistics courses in a historically Black university in a major southeastern Texas city. Thereafter, the authors investigated the relationship between a student’s brain hemispheric preference and academic performance in college courses, which emphasize problem solving. The results reported in this study reveal that left brain– and right brain–dominant students are at parity when it comes to performance in a problem-solving course. Moreover, both left brain– and right brain–dominant learners perform better than whole-brain dominant learners in a problem-solving course.     

International diversification with securitized real estate and the veiling glare from currency risk

This paper analyzes diversification benefits from international securitized real estate in a mixed-asset context. We apply regression-based mean-variance efficiency tests, conditional on currency-unhedged and fully hedged portfolios to account for systematic foreign exchange movements. From the perspective of a US investor, it is shown that, first, international diversification is superior to a US mixed-asset portfolio, second, adding international real estate to an already internationally diversified stock and bond portfolio results in a further significant improvement of the risk-return trade-off and, third, considering unhedged international assets could lead to biased asset allocation decisions not realizing the true diversification benefits from international assets.     

Gas storage valuation under limited market liquidity: an application in Germany

Natural gas storages may be valued by applying real options theory. However, it is crucial to take into account that most evolving gas markets, like the German spot market, lack liquidity. This implies that large-scale operation of storages reduces the achievable operating margin since storage operators will pay higher prices for injected gas and earn less on withdrawn gas. Optimal storage operation will take this into account. In this context, considering storage operators as price takers does not account for interdependencies of storage operations and market prices. This paper offers a novel approach to storage valuation taking into account the effect of management decisions on market prices. The methodology proposed within this paper determines the optimal production schedule and value by determining the stochastic differential equation describing the storage value and then applying a finite difference scheme. We find that limited liquidity lowers the storage value and reduces withdrawal and injection amounts. Further, we observe decreasing reservation prices for injection and withdrawing for growing illiquidity resulting in a left shift of injection and withdrawing threshold prices.     

When Less is More: Distinguishing Between Entrepreneurial Choice and Performance

This paper uses NCDS data on individual characteristics to distinguish determinants of entrepreneurial choice, income and job generation. A new model of utility from self-employment shows that relaxing liquidity constraints could inhibit performance. Empirically, we find that a range of inheritance enhances the performance of the self-employed and increases self-employment; while higher education also increases self-employment income and job creation, but reduces the probability of self-employment. Combining these choice and performance effects, we find that education has a positive net effect on job creation, as does inheritance up to a certain threshold.