Self-perceptions, government policies and tax compliance in Germany

The policy of choice to fight tax non-compliance is an increase in deterrence, i.e. fines and audits, which seems to be well-grounded theoretically as the economics of crime justifies such an increase of the expected costs of illegal activities. In this paper, the impact of subjectively perceived deterrence on undeclared work is analyzed for the German case. Germany is particularly interesting because it considerably increased deterrence to fight tax non-compliance recently. The data set used for this analysis contains several waves of survey data conducted between 2004 and 2008. According to our evidence, (subjectively perceived) deterrence has an impact on undeclared work, but the influence of social norms is similarly important.     

Return enhancement trading strategies for size based portfolios

Recent theoretical work suggests that definitions of market efficiency that allow for the possibility of time-varying risk-premia will generally lead to return sign predictability. Consistent with this theory, we show that a logit model based on the lagged value of the market risk premium is useful for successfully predicting the return sign for CRSP small decile portfolio returns, but not large ones. We additionally employ this model in market timing simulations of micro-cap mutual funds in which investment can actually be made. The results indicate that a market-timing strategy based on our return-sign forecasting model outperforms a buy-and-hold strategy for 13 of 14 micro-cap funds studied. On average, the buy-and-hold strategy produces an average compound return of 11.98% per annum versus an average of 16.60% for the market-timing strategy. Nevertheless, trading restrictions make the return-sign forecasting model more practical to employ by the micro-cap fund portfolio manager rather than the individual fund investor.

Analysis of SMEs partner proximity preferences for process innovation

This paper explores small and medium enterprises’ (SMEs) proximity preferences when selecting partners for collaborative process innovation. Drawing on a survey of 362 Danish SMEs, we address four partner proximity characteristics: geographic, cognitive, organizational, and social. The results show that SMEs prioritize geographic openness over regional clustering. Furthermore, to simultaneously facilitate collaboration and ensure innovation, firms tend to collaborate with partners that are characterized by cognitive similarity at a technological level and knowledge distance at a market level. Technological proximity is also found to be more relevant than social proximity when it comes to bridging the potential geographic and market distance between the collaborative partners. Finally, the results indicate that the tendency of organizational proximity to facilitate informal interactions with partners enhances process innovation only at two of four process innovation levels. Thus, the results highlight the fact that the value of partner proximity characteristics change with the level of process innovation considered.     

ARE COOPERATIVES MORE PRODUCTIVE THAN INVESTOR‐OWNED FIRMS? CROSS‐INDUSTRY EVIDENCE FROM PORTUGAL

We analyse empirically whether cooperatives and investor‐owned firms differ in terms of productive efficiency. Using rich Portuguese panel data covering a wide range of industries, we apply two different empirical approaches to estimate potential differences in productive efficiency. The results from our benchmark random‐effects model show that cooperatives are significantly less productive, on average, than investor‐owned firms, both at the aggregate level and for most of the industries considered. However, the results derived from a System‐GMM approach, which is our preferred empirical strategy, are much less conclusive, and we cannot conclude that cooperatives are generally less efficient that investor‐owned firms. With either approach, though, we find no evidence that cooperatives are more productive than investor‐owned firms in any industry.     

National pricing with local quality competition

We study the incentives of national retail chains to adopt national (uniform) prices across local markets that differ in size and competition intensity. In addition to price, the chains may also compete along a quality dimension, and quality is always set locally. We show that absent quality competition, the chains will never use national pricing. However, if quality competition is sufficiently strong there exist equilibria where at least one of the chains adopts national pricing. We also identify cases in which national pricing benefits (harms) all consumers, even in markets where such a pricing strategy leads to higher (lower) prices.     

Assessing market dominance

We propose a new measure to assess market dominance. Contrary to concentration measures such as the Herfindahl–Hirschman index that characterizes the concentration of an industry, our dominance measure suggests an approach that classifies when an individual firm has a dominant position. In our measure, the criterion for dominance is relaxed as the intensity of existing competition increases or as entry barriers are lowered. We apply the dominance measure to a number of well-known competition cases.     

Attitudes of police managers to different leadership roles in their jobs: An empirical study in Norway

The background for this study is the increased complexity in policing that has become more knowledge‐based and more professional in the past decade. The aim of this article is to present empirical results from a study of attitudes of police managers to different leadership roles in their jobs in two police districts in Norway. A questionnaire was developed and administered among police managers in two police districts in Norway. Participants in leadership programs were selected for this survey research. The Follo police district and Hedmark police district had a total of 130 participants in these programs, with 60 managers from Follo and 70 managers from Hedmark. The research was carried out in March and April 2010. The personnel leader role was found to be most important, followed by the resource allocator role. Responding police managers reported that they felt least competent in the liaison role.     

R&D investment intensity and jump volatility of stock price

Review of Quantitative Finance and Accounting - This paper studies the important but unexplored relationship between R&D investment intensity and different components of stock price...     

Using inverted Engel curves to estimate material standards of living in a household

This article demonstrates how to estimate latent total consumption expenditure or material standard of living in households by inverting estimated Engel curves. While the conventional estimator, total purchase expenditure, is unbiased for latent total household consumption expenditure, it is not variance minimizing since it is an un-weighted sum. In two stages, this article derives a variance-minimizing, unbiased estimator by first estimating and inverting Engel curves; then combining the estimators from the inverted Engel curves. The employed latent variable method allows for utilization of non-expenditure relations. The suggested method may help improve the accuracy in studies of consumption inequality and tax evasion.