A GAME THEORETIC FOUNDATION OF COMPETITIVE EQUILIBRIA WITH ADVERSE SELECTION

We construct an extensive form game that captures competitive markets with adverse selection. It allows firms to offer any finite set of contracts, so that cross‐subsidization is not ruled out. Moreover, firms can withdraw from the market after initial contract offers have been observed. We show that a subgame perfect equilibrium always exists. In fact, when withdrawal is costless, the set of equilibrium outcomes may correspond to the entire set of feasible contracts. We then focus on robust equilibria that continue to exist for small withdrawal costs. We show that the Miyazaki–Wilson contracts are the unique robust equilibrium outcome.     

Learning-by-exporting versus self-selection: New evidence for 19 sub-Saharan African countries

We examine learning-by-exporting effects of manufacturing and services firms in 19 sub-Saharan African countries. Comparing several outlier-robust estimators, our results provide evidence for positive effects in the manufacturing sector when using the MM estimator, but not in the services sector.     

Institutions of conflict management and economic growth revisited: a short note

We study the effects of institutions of conflict management like corporatism, trust, civic norms and group membership on economic growth. By employing Schneider and Wagner’s (Kyklos 54:509–532, 2001) model and data from 1990–2011, we show that corporatism has (still) a positive coordination effect and a negative rent-seeking effect. The total effect is positive for most countries.     

Why is Austria’s Pension System So Much Better Than Germany’s?

The pension systems in both Germany and Austria have undergone substantial reforms, though only one of the countries appears to have had success. Average earners in Austria will receive gross pensions equivalent to 78.1% of their average earnings, whereas in Germany they will receive just 37.5%. The authors argue that Germany has been left with a system that has abandoned the goal of protecting people's standard of living.     

Importing,exporting and performance in sub-Saharan African manufacturing firms

This paper examines productivity differences between internationally trading and non-trading firms using data on a sample of firms from 19 sub-Saharan African countries. The paper provides the first evidence of whether exporters, importers and two-way traders perform better than non-traders, and whether there are differences in performance between different types of trading firms in sub-Saharan Africa. Our results indicate that exporters, importers and two-way traders perform better than non-exporters, non-importers and non-two-way traders. We further find that two-way traders perform better than importers only or exporters only, results largely consistent with recent results for other countries and regions. Considering information on export starters, continuers and exiters we also present some evidence suggesting that there is no significant difference in performance between export continuers and starters.     

Family Business Restructuring: A Review and Research Agenda

Although business restructuring occurs frequently and it is important for the prosperity of family firms across generations, research on family firms has largely evolved separately from research on business restructuring. This is a missed opportunity, since the two domains are complementary, and understanding the context, process, content, and outcome dimensions is relevant to both research streams. We address this by examining the intersection between research on business restructuring and family firms to improve our knowledge of each area and inform future research. To achieve this goal, we review and organize research across different dimensions to create an integrative framework. Building on current research, we focus on 88 studies at the intersection of family firm and business restructuring research to develop a model that identifies research needs and suggests directions for future research.     

Expanding Insights on the Diversity Climate–Performance Link: The Role of Workgroup Discrimination and Group Size

The present study extends knowledge of the performance consequences of workgroup diversity climate. Building upon Kopelman, Brief, and Guzzo's ( 1990 ) climate model of productivity, we introduce workgroup discrimination as a behavioral mediator that explains the positive effects of diversity climate on workgroup performance. In addition, we investigate group size as a moderator upon which this mediated relationship depends. We test these moderated‐mediated propositions using a split‐sample design and data from 248 military workgroups comprising 8,707 respondents. Findings from structural equation modeling reveal that diversity climate is consistently positively related to workgroup performance and that this relationship is mediated by discrimination. Results yield a pattern of moderated mediation, in that the indirect relationship between workgroup diversity climate (through perceptions of workgroup discrimination) and group performance was more pronounced in larger than in smaller workgroups. These results illustrate that discrimination and group size represent key factors in determining how a diversity climate is associated with group performance and, thus, have significant implications for research and practice. © 2014 Wiley Periodicals, Inc.     

PERSISTENCE AND VOLATILITY OF BEVERIDGE CYCLES

This article explains the cyclical behavior of the fluctuations in unemployment and vacancies by demand externalities. Adding such externalities to an otherwise standard search and matching model reduces the need for exogenous shocks in explaining these fluctuations. Under plausible parameter values, the equilibrium dynamics include a stable limit cycle that resembles the empirically observed counterclockwise cycles around the Beveridge curve. Calibrated to the duration of the business cycle, these endogenous “Beveridge cycles” are as persistent as the data, without losing any of the amplification of the standard model.     

Conditional behavior and learning in similar stag hunt games

This paper reports an experiment using Stag Hunt games with different payoff ranges. Specifically, in one treatment for half of the games the payoff dominant and the risk dominant equilibrium coincide and for the other half of the games they conflict; in the second treatment they always conflict. The experiment provides evidence that the payoff range experienced by the participant influences the likelihood of efficient conventions emerging. In particular, experiencing games where payoff dominance and risk dominance coincide appears to make payoff dominance more attractive in games in which they conflict. In the experiment, we also observe conditional behavior emerging with experience. We develop a model of conditional expectations to explain these stylized facts that depends crucially on the assumption that after a brief learning period participants categorize their experience using the same relative bandwidth in both treatments even though the range of experience is twice as large in treatment 1 as it is in treatment 2. The assumption cannot be rejected by the data. The analysis provides a formal example in which increasing experienced diversity by changing the way similar experiences are categorized increases the likelihood of efficient conventions emerging in communities playing similar Stag Hunt games.     

SPAC merger announcement returns and subsequent performance

Special purpose acquisition companies (SPACs) are created to raise capital and then find non-listed operating companies with which to merge. While most of the extant research has focused on SPAC initial public offerings, we study what happens when SPACs announce business combinations. Our analysis of 236 ‘deSPACs’ completed between January 2012 and June 2021 in the United States documents an average short-term announcement return of +7.4% and a 1-year abnormal return of −14.1% (−18.0% over 2 years) for public investors beginning from the merger announcement. Short-term returns decrease with longer times from initial public offering until announcement.