House Search Duration in Hot and Cold Residential Markets

This study analyzes the determinants of house search duration of consumption‐driven buyers and individual investors in different housing market environments. We use data from surveys of recent house‐buyers in “hot” and “cold” housing markets in the 2000s housing bubble in California characterized by rising and declining residential house prices, respectively. The average house price and the surveyed geographical area are the same for both periods. Expected house ownership horizon is shown to be an important determinant of the realized search duration in addition to commonly considered housing and buyer characteristics. We find a statistically significant positive effect of it on the time until purchase in both housing price environments for consumption‐driven buyers. We also find that consumption‐driven house purchases were highly pronounced in coastal areas in the hot market and inland areas in the cold market. In contrast, long‐horizon investment activity leads that of consumption activity in those areas. Short‐horizon investors, on the other hand, concentrated their house search activity in inland areas in both housing market environments.     

Watch Your Basket ‐ to Determine CEO Compensation

CEOs (chief executive officers) are paid more if they outperform other firms in their blockholders’ portfolios. For every percentage point by which their own firm's return exceeds the return of the largest blockholder's basket of investments in a year, their compensation increases by over $9,800. Once we benchmark to this portfolio, industry returns and own firm returns are of little importance. When the firm is a larger portion of the blockholder's portfolio and when the blockholder is experienced, the reward for outperforming the blockholder's portfolio is greater. Our results are robust to alternate industry classifications and definitions of blockholders.     

Labour market institutions,crisis and gender earnings gap in Eastern Europe

We study gender pay inequality in ten Central and Eastern EU countries before (2007) and during the economic crisis (2009) using quantile regression methods. The analysis reveals remarkable cross‐country diversity in levels and patterns of the gender gap along the earnings distribution; for the majority of the countries the crisis is associated with declining male/female disparities. We address the role played by labour market institutions in shaping the observed gender pay gap levels and patterns. Labour market deregulation increases gender inequality at the middle and at the top of the pay distribution, but reduces disparities at the bottom. Higher union density and wage coordination reduce the pay gap, with stronger equalizing effects on better‐paid jobs. The crisis seems to weaken the already poor role of institutions in the low‐pay sector.     

Can VPIN forecast geopolitical events? Evidence from the 2014 Crimean Crisis

We study the recent Crimean Crisis and the sequence of outcomes that led to the intervention by the Russian Army, which directly affected equity prices in Russia, to investigate how informed traders may have used their advantage to trade prior to the moment markets fell. We compute the Volume-synchronized Probability of Informed Trading (VPIN) for the Russian RTS equity index and for individual stocks, documenting that levels of informed trading increased considerably between one and three trading days before market prices reflected the invasion. We also investigate the predictive power of the cumulative distribution of VPIN on future stock prices, showing a statistically significant (negative) relation during the period of elevated tensions between Russia and Ukraine. Last, we investigate the levels of VPIN measured for global depositary receipts of Russian firms, documenting a similar increasing pattern prior to the invasion date but generally subsequent to the spikes obtained from the corresponding securities locally traded in Russia. Overall, our results provide additional support for the use of VPIN as a tool for monitoring the likelihood of undesirable geopolitical events.     

E-Commerce and Encroachment: Evidence From French Franchise Networks

Encroachment is a critical issue affecting relations among franchisees and between franchisees and franchisors. The Internet increases this risk when a franchisor adopts a transactional website, becoming a “ubiquitous outlet.” Using logistic regression we give evidence of the significant impact of the proportion of franchised outlets in the network on transactional website adoption by French franchisors. The analysis is carried out to facilitate comparison with the United States market. A web-to-store strategy and the click-and-collect system implemented by most French supermarket chains are presented as potential solutions to circumventing e-encroachment.     

Determinants of Russia's Informal Economy: The Impact of Corruption and Multinational Firms

Based on the electricity consumption approach, this study examined empirically (among other determinants) the impact of corruption and multinational firms (MNEs) on the relative size of the informal economy in Russia's regions in 1995–2012. Strong evidence is provided of the positive effect of corruption on the informal regional economies. The significant role of MNEs and regulation in curbing informal activities is revealed. A larger informal economic sector is observed in regions with a higher number of local firms and unemployment. An integrated strategy of dealing with corruption and informal businesses is suggested to be more effective in reducing informal practices.     

Corporate diversification and seasoned equity offering performance

Review of Quantitative Finance and Accounting - We document that diversified firms experience less negative seasoned equity offering (SEO) announcement returns than focused firms. The relatively...