The prognosis and surveillance of risks from commercial credit borrowers

This paper reports the main results of an empirical research project dealing with the prognosis and surveillance of corporate credit risks. In the course of the research programme both quantitative (balance sheet analysis, current accounts data analysis) and qualitative (assessment of management) methods were applied. Each of the three parts of the project is independently usable However, the combined application of the three approaches avoids deficiencies of using only one of the components and improves the early detection of credit risks.     

Reconsidering Consumption Risk Sharing among OECD Countries: Some Evidence Based on Panel Cointegration

In this paper we provide a characterization of international consumption risk sharing among a sample of OECD countries based on panel cointegration and error-correction techniques. Our results indicate that around 30% of idiosyncratic consumption risks are shared in the short run. In the long run, however, only about 10% of idiosyncratic consumption risks are shared internationally. In addition, we find that countries characterized by relatively high foreign asset and liability positions are less exposed to shocks. Moreover, the time it takes until idiosyncratic shocks exert their full impact on consumption crucially depends on the foreign asset and liability position.

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Predicting new product success with prediction markets in online communities

The prediction of new product success is still a challenging task. Traditional market research tools are expensive, time consuming, and error prone. Prediction markets have been introduced as a viable alternative. Utilizing inputs from various participants in game‐like environments, they have been shown to produce accurate results by combining dispersed knowledge via market‐based aggregation mechanisms. While most previous studies use employees or experts as a sample, we test whether online consumer communities can be used to predict the sale of new skis via prediction markets. Sixty‐two users took part in the study. The prediction market was open for 12 days before the main skiing season 2010/2011 began. The outcomes of the prediction markets were compared with the actual sales numbers provided by the ski producers. The mean average errors were between 2.74% and 9.09% in the four markets. Overall, it can be concluded that the prediction markets based on consumer communities produce accurate results.     

How important is employment protection legislation for Foreign Direct Investment flows in Central and Eastern European countries?1

In this article we investigate empirically the importance of labour market conditions and in particular the role of employment protection legislation as determinants of bilateral Foreign Direct Investment (FDI). We find that FDI flows are significantly higher in countries with relatively low unit labour costs. We also find that employment protection legislation does not exert a statistically significant impact on FDI flows. Our results are consistent with the interpretation that transition economies attract FDI via low production costs whereas indirect costs related to the rigidity of the labour market are less relevant.     

Eco-social analysis of an East African agro-pastoral system: Management of tsetse and bovine trypanosomiasis

A key constraint for development of many East African agro-pastoral communities is African animal trypanosomiasis or nagana caused by Trypanosoma spp. and vectored by species of tsetse flies (Glossina spp.). Suppression of trypanosomiasis through trapping of tsetse fly populations was conducted from 1995 to 2005 at and near Luke, Southwest Ethiopia. Odor baited mass trapping technology was used to suppress adult fly populations to very low levels while tryponocidal drugs were used to treat trypanosome infections in cattle. Data on ecological, economic and social variables were collected and analyzed in the context of eco-social dynamics in the community.The bio-economic model of Regev et al. [Regev, U., Gutierrez, A.P., Schreiber, S.J., Zilberman, D., 1998. Biological and Economic Foundations of Renewable Resource Exploitation. Ecological Economics 26, 227-242] and Gutierrez and Regev [Gutierrez, A.P., Regev, U., 2005. The bioeconomics of tritrophic systems: applications to invasive species. Ecological Economics 52, 382-396] was used as a methodological framework for qualitative evaluation of the effects of tsetse/trypanosomiasis suppression on ecological, economic and social aspects. An objective function for single farmers was formulated to determine the optimal harvesting level of cattle, exposed to high and low levels of risk from tsetse/trypanosomiasis, as measured by the discount rate (δ) for a given base level pastoral resource (R = pasture or forage for cattle). The socially optimal objective function for resource exploitation by all farmers is that which maximizes the present value of utility of individuals expending revenues (consumption) from the revenue stream in ways that enhance the quality of life and yet assures the persistence of the resource base over an infinite time horizon (i.e., renewable resource sustainability).The bio-economic model predicts that reducing risk (δ) from tsetse and disease increased the cattle populations and their marginal value. The model also predicts that the interaction of decreased δ and increased productivity (θ) can lead to increased human and cattle populations and hence to over-exploitation of base resources (pastures) that lower environmental carrying capacity and reduced sustainability.Trap catches indicated that tsetse populations were reduced to very low levels, while the disease prevalence decreased from 29% to 10%. This led to a substantial increase in cattle including oxen populations, increased calving rates, increased milk production and increased the per-capita income. The availability of oxen allowed an increase in cultivated land from 12 ha in 1995 to 506 ha in 2005. Revenues (consumption) were invested in the purchase of more cattle and the establishment of a school for educating village children. Increases in land allocated to crops and other sources of income were also found.The bioeconomic model predicts the solution of the trypanosomiasis problems so transforms the East African agro-pastoral communities that new social structures will be required to cope with the ecological, economic and social consequences of this technological changes on sustainable development (sensu [Goodland, R., 1995. The concept of environmental sustainability. Annual Review of Ecology and Systematics 26, 1-24]). This insight should not be lost in international rural development programs.     

Geldordnung — eine ordnungspolitische Analyse

Die Geldordnung ist ein zentrales Element einer Volkswirtschaft. Derzeit sehen die Regeln vor, dass Gesch?fts- und Notenbanken den Geldsch?pfungsprozess bestimmen. Johann Walter h?lt dieses Regelwerk nicht für optimal und schl?gt vor, auch dem Staat und seinen regionalen Gebietsk?rperschaften das Recht einzur?umen, Geld zu sch?pfen.     

Innovation through Experience Staging: Motives and Outcomes

There is a growing recognition of the opportunities of innovation through experience staging. The literature, however, tends to focus on high‐profile examples of firms from largely hedonic sectors, such as entertainment and hospitality. These cases provide vivid and persuasive examples, but they fail to address how firms outside these sectors can join the experience economy—a term coined in 1998 by Pine and Gilmore—by developing new products and services with experiences at their core. The paper reports on two studies undertaken to examine why firms that do not belong to sectors that are largely hedonic innovate through experience staging and how they benefit from doing so. The first study is an in‐depth case study of 15 diverse firms, which examines these firms' motives for pursuing innovation through experience staging. The second study is a two‐year longitudinal quantitative survey of 131 small‐ and medium‐sized firms (SMEs) to address the question of the benefits that firms that do not have strong brands can gain by from innovation through staging experiences. The first study provides the basis for classifying firms along two dimensions depending on the nature of the new products or services (referred to collectively as offerings) they create. The first dimension has to do with whether new offerings have a functional or experiential core. The second dimension has to do with the degree of experiential augmentation applied to offerings. The first study suggests that firms adopt an experience‐staging strategy to innovation based on both outward‐facing and inward‐facing motives. The outward‐facing motives include improving a firm's image in its market, entering new markets, and attracting new customers. The inward‐facing motives include improving a firm's attractiveness to employees and increasing profitability. The results of the second study suggest that creating offerings with an experiential core can contribute to success by enhancing a firm's image, its attractiveness to employees, and its ability to enter new markets. Moreover, experiential augmentation contributes to profitability, new customer attraction, and employee attractiveness. This research has important implications for theory and practice. In the first place, this research extends existing theory about experience staging to firms outside sectors that are largely hedonic. In the second place, the managerial implications are that innovation through experience staging can be an effective way for SMEs, even those outside industries, such as entertainment or hospitality, to create competitive advantage.     

Inflation Dynamics in the New EU Member States: How Relevant Are External Factors?

In this paper we evaluate the relative influence of external versus domestic inflation drivers in the 12 new European Union (EU) member countries. Our empirical analysis is based on the New Keynesian Phillips Curve (NKPC) derived in Galí and Monacelli (2005 ) for small open economies (SOE). Employing the generalized method of moments (GMM), we find that the SOE NKPC is well supported in the new EU member states. We also find that the inflation process is dominated by domestic variables in the larger countries of our sample, whereas external variables are mostly relevant in the smaller countries.