The effects of the monetary policy regime shift to inflation targeting on the real interest rate in the United Kingdom

This paper studies the effects of the monetary policy regime shift to inflation targeting on the stochastic properties of the real interest rate in the U.K. The empirical analysis suggests a constant mean of the real interest rate that shifts with the monetary policy regime change to inflation targeting in October 1992. The mean-reverting level of the real interest rate has decreased from 5.1% to 2.3% per annum with the change in monetary policy to inflation targeting. In addition, the shift in monetary policy regime to inflation targeting has reduced the volatility of the real interest rate and increased the persistence of real interest rate deviations from the mean. The results suggest that the central bank can affect the stochastic properties of the real interest rate through the choice of monetary policy regime over a long period of time.     

New ventures in Cleantech: Opportunities,capabilities and innovation outcomes

Facing the challenge of climate change, innovations that imply environmental benefits create business opportunities for entrepreneurs. This paper analyzes innovation capabilities of startups in Cleantech and how the innovation outcomes of those startups develop over time. Based on the Mannheim Foundation Panel and applying propensity score matching, a cohort of 567 Cleantech startups is analyzed and compared with a control cohort of non‐Cleantech startups. We find that startups in Cleantech have, on average, higher technological capabilities compared with all other startups. Our econometric evidence shows that Cleantech startups are more likely to combine existing technology in a novel way. Finally, we find that Cleantech startups develop more market novelties in subsequent years when compared with their control group peers.     

The social value of income information in a model with market power and endogenous variety

The present paper analyzes the value of public information in a general equilibrium economy with imperfect competition. The welfare effects of an improved information system for perfectly competitive economies have been extensively investigated in the published literature. Schlee (2001) shows that the value of information is always negative in exchange economies if an efficient risk sharing mechanism exists. In contrast, in economies with production, better information reduces welfare provided consumers are sufficiently risk-averse ( Eckwert and Zilcha 2000, 2003 ). In the present paper it will be shown that this result is robust if the production sector exhibits monopolistic competition in the Chamberlinian sense. Even so, the inefficiency of equilibria adds further potential for positive welfare effects of improved information. A model is presented where the degree of market imperfection is positively linked to the value of information. If the markup on competitive prices is sufficiently high, the value of information is positive; that is, better information increases economic welfare.     

Dynamic hedging of paper with T bill futures

Despite the growing importance of the commercial paper market there is no empirical work investigating the hedging performance of dynamic hedging strategies versus traditional static hedging strategies. This article proposes a dynamic hedging model for commercial paper that takes advantage of time dependencies present in the joint density of commercial paper and T-bill futures. The hedging effectiveness of the dynamic model is compared to that of the static regression model. There is clear evidence that dynamic hedging is superior to static hedging in terms of both total variance reduction and expected utility maximization. These results hold even when transactions costs are explicitly taken into account. © 1998 John Wiley & Sons, Inc. Jrl Fut Mark 18:925–938, 1998     

The development of critical capabilities in foreign subsidiaries: disentangling the role of the subsidiary’s business network

Within business literature in general, capabilities have advanced to the prime determinant of the corporation’s economic rents. Within international business literature, it is further assumed that multinational corporations can enhance their pool of capabilities through foreign subsidiaries. Foreign subsidiaries are seen as means to assimilate new capabilities from their local, external network and integrate these capabilities into the multinational corporation. Data from more than 2000 foreign subsidiaries shows that some foreign units actually are endowed with superior capabilities which are useful for other corporate entities. It is argued that the development of critical capabilities within these subsidiaries is driven not only by internal corporate actors, but also by external actors. The analysis provides evidence that the role of different internal and external network partners for capability development varies according to the functional activity under consideration. Thus, subsidiaries benefit from various internal and external network actors in very different ways. The contribution ends with some conclusions and some avenues for future research.     

Do “blacklists” enhance aviation safety?

For some time now, discussions have been under way in the EU on the possible publication of an official “blacklist” of unsafe airlines or countries where accident rates are above average. How effective is this instrument? What are the conceivable alternatives?     

When in Rome ... Moral Maturity and Ethics for International Economic Organizations

A number of multinational enterprises have come under ethical scrutiny over the recent decades. In some cases, this may be due to a lack of maturity of corporate moral reasoning. The article is based on a framework developed by Lawrence Kohlberg. He suggested three main stages of moral development: They are (1) pre-conventional moral reasoning, (2) conventional and (3) post-conventional moral reasoning. The article places different approaches to business ethics into the framework developed by Kohlberg. It is argued that the first two stages form an insufficient basis for ethical guidance for multinational organizations. Five post-conventional ethical perspectives are presented to assist MNC's in their analysis in order to uncover the possible dilemmas, to avoid harming others and also to avoid costly embarrassment at the hands of critics.     

Comparative advantage FDI? A host country perspective

Recent empirical studies of the determinants of multinational activity across countries have found overwhelming support for a horizontal rather than a vertical model of foreign direct investment (FDI). They all use US or other developed country data. This paper, in contrast, uses a detailed industry-level data set on FDI in a relatively skilled-labor and capital scarce country, Mexico, to shed light on the determinants of FDI between largely dissimilar countries. The results indicate considerably more support for a comparative advantage motive for FDI, although a market access motive is present as well. The correlation between skill differences and FDI is positive in all industries, but when differences are large, FDI flows into sectors that are intensive in total labor, regardless of skill level. The concentration of multinational activity in (unskilled) labor intensive industries suggests a potential for spillover effects.     

Military casualties and exchange rates during the First World War: did the Eastern Front matter?

Although the First World War was ultimately decided in the west, historians have emphasized the importance of the often ‘forgotten’ Eastern Front in understanding its complex evolution. This article examines the perception of contemporary foreign exchange traders concerning the relative importance of the Eastern Front over time. Using a newly compiled dataset on prisoners of war and on soldiers killed and wounded, we show that traders were concerned with casualties on both fronts, recognizing the significance of the two‐front war in the early war years. From the autumn of 1916 onwards, traders seemed to believe the key to winning the war lay in the west only.     

Mobil im Alter

Selbstst?ndigkeit f?rdern - Mobilit?t ist die F?higkeit, sich in seiner Umgebung frei zu bewegen und die Aktivit?ten des t?glichen Lebens unabh?ngig auszuführen. Im Alter ist sie eine wichtige Voraussetzung für ein selbstst?ndiges Leben. Oft entscheidet gerade die Mobilit?t darüber, wie sich für den betagten Menschen die weitere Lebenssituation gestaltet.