The challenge of using standard contracts in public–private partnerships

A call for an increased use of standard contracts in public–private partnerships (PPPs) for infrastructure development is noticeable in practice. These contracts are expected to simplify and improve procurement by creating opportunities for learning, lower transaction costs, and better competition. This paper delineates standard contracts in PPP as a new venue for research and unfolds their potential impact. Here lies an important challenge since the benefits of standardization are not as straightforward as they look at first sight, particularly when taking into account the tension between the powerful, control-oriented role of contracting authorities and the need for contingent, informal contracting.     

Social Media Metrics — A Framework and Guidelines for Managing Social Media

Social media are becoming ubiquitous and need to be managed like all other forms of media that organizations employ to meet their goals. However, social media are fundamentally different from any traditional or other online media because of their social network structure and egalitarian nature. These differences require a distinct measurement approach as a prerequisite for proper analysis and subsequent management. To develop the right social media metrics and subsequently construct appropriate dashboards, we provide a tool kit consisting of three novel components. First, we theoretically derive and propose a holistic framework that covers the major elements of social media, drawing on theories from marketing, psychology, and sociology. We continue to support and detail these elements — namely ‘motives,’ ‘content,’ ‘network structure,’ and ‘social roles & interactions’ — with recent research studies. Second, based on our theoretical framework, the literature review, and practical experience, we suggest nine guidelines that may prove valuable for designing appropriate social media metrics and constructing a sensible social media dashboard. Third, based on the framework and the guidelines we derive managerial implications and suggest an agenda for future research.     

Are Public and Private Social Expenditures Complementary?

Most analyses of social protection are focussed on public arrangements. However, social effort is not restricted to the public domain; all kinds of private arrangements can be substitutes to public programs. OECD data indicate that accounting for private social benefits has an equalising effect on levels of social effort across a number of countries. This suggests complementarity between public and private social expenditures. But their distributional effects differ. Using cross-country data, we find a negative relationship between net public social expenditures and income inequality, but a positive relationship between net private social expenditures and income inequality. We conclude that changes in the public/private mix in the provision of social protection may affect the redistributive impact of the welfare state.Part of Leiden Social Security Incidence Project. Revised version of a paper presented at the 57th International Atlantic Economic Conference, Lisbon, Portugal (March 10–14, 2004), and at the 60th Congress of the International Institute of Public Finance, Milan, Italy (August 23–26, 2004). The usual disclaimer applies.     

Time-varying integration,interdependence and contagion

Bekaert et al. (2005) define contagion as “correlation over and above what one would expect from economic fundamentals”. Based on a two-factor asset pricing specification to model fundamentally-driven linkages between markets, they define contagion as correlation among the model residuals, and develop a corresponding test procedure. In this paper, we investigate to what extent conclusions from this contagion test depend upon the specification of the time-varying factor exposures. We develop a two-factor model with global and regional market shocks as factors. We make the global and regional market exposures conditional upon both a latent regime variable and three structural instruments, and find that, for a set of 14 European countries, this model outperforms more restricted versions. The structurally-driven increase in global (regional) market exposures and correlations suggest that market integration has increased substantially over the last three decades. Using our optimal model, we do not find evidence that further integration has come at the cost of contagion. We do find evidence for contagion, however, when more restricted versions of the factor specifications are used. We conclude that the specification of the global and regional market exposures is an important issue in any test for contagion.     

Children and advergames: the role of product involvement,prior brand attitude,persuasion knowledge and game attitude in purchase intentions and changing attitudes

The central aim of this study is to build upon previous research by investigating the role of product involvement, prior brand attitude, persuasion knowledge and game attitude in the brand attitude changes and purchase intentions of children after playing an advergame. In all, 279 respondents between the ages of 10 and 12 years participated in the study. First, they were asked to complete a pre-test survey addressing product involvement and prior brand attitude towards several products and brands. Two weeks later, the respondents were asked to play an advergame and complete a survey addressing brand attitude, purchase intention, persuasion knowledge and attitude towards the game. Our analysis reveals that a positive attitude change is more likely when the game player has already evaluated the brand positively. Furthermore, game attitude is positively related to attitude changes towards the advertised brands, consistent with affect transfer theory. Counterintuitively, a higher level of persuasion knowledge is associated with a higher intention to buy the advertised product. Finally, children who had a more positive attitude towards the game were more likely to report higher purchase intentions, indicating that games which provide good experiences positively influence behavioural intentions. We conclude the paper by discussing the study's limitations and suggestions for future research.     

How Do Investment Banks Value Initial Public Offerings (IPOs)?

Abstract:  We investigate the valuation and the pricing of initial public offerings (IPOs) by investment banks for a unique dataset of 49 IPOs on Euronext Brussels in the 1993–2001 period. We find that for each IPO several valuation methods are used, of which Discounted Free Cash Flow (DFCF) is the most popular. The offer price is mainly based on DFCF valuation, to which a discount is applied. Our results suggest that DDM tends to underestimate value, while DFCF produces unbiased value estimates. When using multiples, investment banks rely mostly on future earnings and cash flows. Multiples based on post-IPO forecasted earnings and cash flows result in more accurate valuations.     

Governance and Globalisation

Unlike the large literature on ‘democracy and trade’, there is a much smaller literature on the effect of the level of democracy in a nation on the level of its foreign direct investment (FDI) inflow. These few studies reveal mixed empirical results, and surprisingly only one study has examined bilateral FDI flows. Moreover, few of these studies use multiple governance indicators separating the ‘pluralism’ effect of democratic institutions from the ‘good governance’ effect, there are no studies on democratic institutions’ various effects on the level of FDI relative to trade, and there are no studies of democratic institutions’ various effects on the selection of countries into FDI. We focus on three contributions. First, we examine the simultaneous effects of the World Bank's (six) Worldwide Governance Indicators (WGIs) – which allow separating the effects of pluralism from those of five other good governance measures – on bilateral trade, FDI and FDI relative to trade using state‐of‐the‐art gravity specifications. Second, we find strong evidence that – after accounting for host governments’ effectiveness in various roles of good governance – a higher level of pluralism as measured by the WGIs’ Voice and Accountability Index reduces trade levels, likely by increasing the ‘voice’ of more protectionist less‐skilled workers, but not FDI levels. Moreover, we find qualitatively different effects of other WGIs – such as political stability – on trade versus FDI flows. Third, we account for firm heterogeneity alongside a large number of zeros in bilateral FDI flows using recent advances in gravity modelling. We distinguish between the (country) intensive and extensive margins and show that pluralism affects FDI inflows negatively at the intensive margin, but positively at the extensive margin.     

Sport participation and the social and physical environment: explaining differences between urban and rural areas in the Netherlands

In this study, we investigated the intensity of sport participation in the Netherlands comparing urban and rural areas. Using a socio-ecological theoretical model, we focussed on the extent to which the rural–urban divide in sport participation is explained by micro-level (socio-demographics), meso-level (safety and socio-economic status of neighbourhoods) and exo-level (variety and proximity of sport facilities) characteristics. We tested our theoretical expectations using representative data on 17,910 Dutch inhabitants between 6 and 79 years of age. Our study reconfirmed the importance of individual socio-demographics (micro-level), such as age, education and household income for sports participation. Furthermore, our results showed that weekly sport participation was more common in rural than in urban areas. This rural–urban divide in sport participation especially was attributed to social environmental factors (meso-level); physical conditions of the environment provided no explanation. Our findings should, however, not be taken as a denial of the importance of the physical environment (exo-level). This study was conducted in the Netherlands, a country with a high density, abundant sport facilities and a supportive sport climate. Moreover, variety of sport facilities nearby proved significant in explaining an individual’s monthly sport participation. To conclude, this study enhances our understanding of the rural–urban divide in sport participation and highlights the importance of especially meso-level features in addition to the socio-demographics. It thus may inform policymakers to critically assess sport promotion policies.