A stationary stochastic parameter model and OLS estimation of beta: A simulation study

A procedure that explicitly estimates the form of beta nonstationary followed by a security is examined. Beta estimates and forecasts generated from this process are compared with estimates and forecasts generated by the ordinary least squares (OLS) procedure. With the true underlying parameters known in the simulations, estimator basis adn efficiency are both measured. The OLS estimators and predictors are found to be quite robust, generally providing accurate estimates even when OLS conditions are seriously violated. The expanding advocacy of random-coefficient and other stochastic parameter models is open to question.     

Marginal Workers and Their Decisions to Work or to Quit

Abstract . What motivates the marginal worker to decide to work or to quit and collect unemployment insurance or welfare payments? A study of poultry processing plant workers in Georgia indicates that few quit to obtain more leisure. Dissatisfaction with compensation is only a secondary factor. Primary ones are cumulative dissatisfaction with work and the total work environment. Changes in supervision and in the Job structure are suggested.     

Neue Finanztechnologien — Bankenmarkt in Bewegung

Digitalisation opens new channels for financial transactions. Crowdlending and Digital Advice offer additional opportunities for customers to manage their assets. In the banking market, “FinTechs” are the most notable example of what Schumpeter described as “creative destruction”. They could threaten the existence of established banks. Therefore the banks should use the FinTechs as a testing laboratory for customer behavior and testing ground for a more modern marketing policy. This environment gives rise to concerns that there may develop an unregulated area of shadow banks. But it should be considered that a level playing field has to be ensured and that innovative processes and products are not stalled. A potential advantage of Digital Advice is that consumers can have the possibility to access the relevant information they need to make their financial decisions. Consumers, in turn, are only able to benefit from this advantage if competition between financial service providers leads to a supply of clear and comprehensible information about financial products and an appropriate degree of data security. The rise of Big Data analyses in retail banking allows a more precise estimation of creditworthiness risk as well as a consumer’s willingness-to-pay, propensity to switch and responsiveness to marketing offers. This not only impacts on competition, it represents major challenges for policymakers, authorities and consumers alike.     

Hostile–vs.–white‐knight bidders

We examine the hypothesis that white knights enter control contests to spend free cash flow instead of paying it out to shareholders. Tobin's q is used to measure management's inclination to invest in negative NPV investments. We find that historically, white knights have over‐invested and their acquisition of the target is one more negative NPV investment. Alternatively, hostile bidders’ past investment decisions have increased shareholder wealth. Furthermore, white knights’ returns upon the announcement of their bid have a significant negative relationship with free cash flow, implying that their bid reveals information about white knights management's investment decisions. Copyright © 1999 John Wiley & Sons, Ltd.