Initial coin offerings (ICOs) to finance new ventures

In an initial coin offering (ICO), new ventures raise capital by selling tokens to a crowd of investors. Often, this token is a cryptocurrency, a digital medium of value exchange based on the distributed ledger technology. Both the number of ICOs and the amount of capital raised have exploded since 2017. Despite attracting significant attention from ventures, investors, and policy makers, little is known about the dynamics of ICOs. This initial study therefore assesses the determinants of the amount raised in 423 ICOs. Drawing on signaling theory, the study explores the role of signaling ventures' technological capabilities in ICOs. The results show that technical white papers and high-quality source codes increase the amount raised, while patents are not associated with increased amounts of funding. Exploring further determinants of the amount raised, the results indicate that some of the underlying mechanisms in ICOs resemble those found in prior research into entrepreneurial finance, while others are unique to the ICO context. The study's implications are multifold and discussed in detail. Importantly, the results enable investors to more accurately understand crucial determinants of the amount raised (e.g., technical white papers, source code quality, token supply, Ethereum-standard). This reduces the considerable uncertainty that investors face when investing in ICOs and enables more informed decision-making.     

Migrants' Savings, Purchasing Power Parity, and the Optimal Duration of Migration

If some of the returns to migration accrue from returnmigration, the optimal duration of migration may be shorter thanthe feasible duration of migration. We develop a model that providesand highlights conditions under which return migration takesplace even though a reversal of the inter-country wage differentialdoes not occur. In particular, we consider the higher purchasingpower of savings (generated from work abroad) at home than abroadas a motive for return migration. Inter alia, our model producesa negative relationship between the optimal duration of migrationand the purchasing power differential and in some (but not all)cases, a negative relationship between the optimal duration ofmigration and the wage abroad. In addition, and contrary to ourprior anticipation, our utility maximization analysis suggeststhat East-West migration will tend to be temporary while inter-EuropeanCommunity (or intra-West European) migration will likely be permanent.     

Managing uncertain,complex product development in high‐tech firms: in search of controlled flexibility

This paper investigates ways of managing complexity and uncertainty in R&D simultaneously. Previous research on the subject indicates that these dimensions require different approaches, but these studies tend to provide suggestions either on managing complexity in stable industries or on handling uncertainty in less complex projects. In this paper, the two dimensions are studied simultaneously in three commercial product development projects at a firm that may be viewed as an extreme case of complexity and with multiple dimensions of uncertainty. The paper illustrates that a critical issue in this kind of high‐tech development is the search for and development of approaches that integrate and balance needs for formal organizational control with high levels of project flexibility. Four key elements of such integrated approaches are identified: hybrid formal systems, structured interaction in public arenas, transparent visual communication tools, and a system of participative reflection.     

Electronic Commerce and the Future for SMEs in a Global Market-Place: Networking and Public Policies

This paper explores three inter-related issues: globalisation; the role of small and medium sized enterprises (SMEs); and electronic commerce (e-commerce). A central question is whether e-commerce offers advantages to SMEs that may facilitate their access to global markets and help them overcome the disadvantages they face vis-à-vis large transnational corporations (TNCs)? The paper starts by briefly considering the extent of globalisation and its relationship to free trade. We then go on to consider recent developments in e-commerce, focusing on the key issue of e-payment systems. Differences in the requirements of large and smaller firms are identified, and we identify a number of key issues concerning access of smaller firms to e-payment systems and the (virtual) market place, and outline their implications for regulatory policy. Our analysis highlights the importance of network externalities, and institutional factors affecting trust and the relationships amongst different economic actors. This leads to a consideration of networking and public policies more broadly. One of the central conclusions of our analysis is that there are important synergies between e-commerce (virtual) networks and (real) production networks. This suggests that policy makers and smaller firms should think in terms of extending existing, and catalysing new, real production networks to incorporate e-payment systems for networks of firms in order to facilitate their access to virtual markets.

     

Return migration, wage differentials, and the optimal migration duration

In simple static models, migration increases with the wage differential between host- and home-country. In a dynamic framework, and if migrations are temporary, the size of the migrant population in the host country depends also on the migration duration. This paper analyses optimal migration durations in a model which rationalises the decision of the migrant to return to his home country, despite persistently higher wages in the host country. The analysis shows that, if migrations are temporary, the optimal migration duration may decrease if the wage differential grows larger. Using micro data for Germany, the second part of the paper provides empirical evidence which is compatible with this hypothesis.     

Islamic investing

Using a large international sample of 35 developed and emerging markets, we analyze whether Islamic indices exhibit a different performance to conventional benchmarks. While there is no compelling evidence of performance differences in robust Sharpe ratio tests and after controlling for market risk, we find a significantly positive four-factor alpha for the aggregate developed markets region. This outperformance stems, however, mainly from the U.S. and is largely attributable to the exclusion of financial stocks in Sharia-screened portfolios. As the extensive downturn of financials is related to the recent financial crisis, we do not argue that this outperformance will continue over time. The style analysis reveals that Islamic indices invest mainly in growth stocks and positive momentum stocks. This, for a passive portfolio intriguing result can, however, be explained by the strong sector allocation towards energy firms and their strong momentum characteristic during the sample period.     

Can NN-algorithms and macroeconomic data improve OLS industry returns forecasts?∗

Using an extensive range of macroeconomic indicators and a number of two-stage models mixing OLS and a non-parametric approach known as the nearest neighbour algorithm, the authors analyse the potential for improving forecasts of US industry returns over those built by OLS on industry-specific variables only. Basic performance is measured by the average cross-sectional correlation over time between the 55 forecasted returns and the realized returns across industries. Since investors and asset managers typically want a steady performance over time, the volatility of this cross-sectional correlation is further taken into account in an adaptation of the Sharpe Ratio. Strong evidence is found in favour of certain macroeconomic factors as dominant industry return predictors, and some two-stage models based either purely on OLS or a mix between OLS and the non-linear model can lift both cross-sectional forecasting correlation and Sharpe Ratio. However, viewed overall in relation to the benchmark OLS model, performance is not consistently improved by any particular model.