How does public spending affect technical efficiency? Some evidence from 15 European countries

The relationship between government size and economic growth has been widely debated. Revisiting the subject from a distinct angle with respect to the mainstream approach, we provide an empirical analysis of the impact of government size on technical efficiency. The aim of this paper is to estimate the impact of public sector's size and of public expenditure components on 15 European countries’ technical efficiency from 1996 to 2014 by using a True Random Effect model. Using the total public expenditure as a proxy for the government size we estimate simultaneously national optimal production function and technical efficiency by controlling for income distribution and institutional quality. Our main findings show that the effect of public sector's size on efficiency is positive while the type of public expenditures may have both positive and negative impact. In more details, results suggest that education and health expenditures have a positive effect on technical efficiency, while others have a negative impact.     

Acquisitions and CEO power: Evidence from French networks

During mergers and acquisitions, the CEOs of the acquiring firms are likely to cancel the deal if the market does not react favorably to its announcement. Using a sample of French acquisition announcements during the period from 2000 to 2005, this paper studies the conditions in which CEOs are more willing to listen to investors. Furthermore, according to the strong networks developed through French elite schools' alumni and board ties, the well-connected CEOs are more likely to complete any deal in spite of a negative market reaction to acquisition announcements.     

Pay-As-You-Drive Angebote von Erstversicherern für Privatkunden

“Pay-as-you-drive” (PAYD) concepts for car liability insurances envisage that real driving behavior and situation data are captured and processed via car sensors and tracking systems in order to calculate case-specific insurance rates which better correspond to the risk profiles of policy holders (PH) than conventional tariffs. The present article provides an outline of PAYD insurance variants, of legal arrangements with particular relevance for PAYD offerings in Germany and of the international dissemination of PAYD concepts. It shows that although PAYD offerings of direct insurers (DI) for private customers are not barred by insurmountable technical or legal barriers, they so far have little practical relevance in Germany. Against this background expected PAYD impacts on revenues and costs of DI are discussed in detail in order to analyze the extent to which DIs’ cautious PAYD offering strategies may be qualified as economically reasonable. The investigation suggests that the profitability effects of PAYD insurances of DI targeted at private customers are far from being definitely and clearly positive. Thus, it is very unlikely that DI will make significant investments on their own in order to create a large German residential market for PAYD insurances. Rather such a market will not emerge without accompanying state interventions.