Theme: Whole of government accounting— international trends

This article reconstructs the literature on corporate turnaround in terms of its recurring features. It then tests these against the experience of four very different cases of the turnaround or attempted turnaround of public and non-profit organizations. It concludes that while some concepts from the corporate literature usefully highlight important aspects, other critical complicating features of what is needed to achieve a turnaround in public and non-profit contexts would be overlooked or poorly treated if the situation were considered simply in these terms. These complicating features deserve the attention both of practitioners and researchers.     

IPO or SBO?: The Increasing Importance of Operational Performance for Private Equity Exits Following the Global Financial Crisis of 2007–08

The authors report the findings of their recent study of the role of portfolio company operating performance in determining the choice of exit options by private equity firms between initial public offerings (IPOs) and secondary buyouts (SBOs), and how that role may have changed since the Global Financial Crisis of 2007–2008. Virtually all studies of PE exits in all countries have found that portfolio companies that exit through IPOs tend to be larger and have higher operating returns than companies that exit through SBOs or sales to other companies. After examining the exits of PE portfolio companies based in Denmark and Sweden during the period 2003–2013, the authors report that, although general market conditions continue to be a major factor, operating performance and size have become even more important requirements for IPO exits since the crisis. And thus PE firms that fail to make operating improvements in their portfolio companies are likely to find their exit options limited.     

The diversity of high-frequency traders

The regulatory debate concerning high-frequency trading (HFT) emphasizes the importance of distinguishing different HFT strategies and their influence on market quality. Using data from NASDAQ-OMX Stockholm, we compare market-making HFTs to opportunistic HFTs. We find that market makers constitute the lion's share of HFT trading volume (63–72%) and limit order traffic (81–86%). Furthermore, market makers have higher order-to-trade ratios and lower latency than opportunistic HFTs. In a natural experiment based on tick size changes, we find that the activity of market-making HFTs mitigates intraday price volatility.     

Teacher shortages and the business cycle

The ability of the public sector to recruit skilled workers is important for the quality of public sector services. Centralized and rigid pay systems in the public sector might reduce labour supply and lead to shortages of qualified personnel in areas and periods with strong outside labour markets. This paper shows that teacher shortages measured by the share of teachers without approved education are strongly procyclical in Norway. Using a large panel of Norwegian local governments for 1981–2002 and exploiting the rigid wage system, we find a sizeable negative relationship between teacher shortages and the regional unemployment rate.     

Do insurers adjust prices for the adoption of loss prevention technologies? Evidence from Danish municipal contracts

Using data from 40 Danish municipalities on building characteristics, loss prevention technologies, insurance claims, and insurance bids from 2008 to 2019, we investigate whether and how loss prevention technologies influenced contract prices. The insurance bids cover a variety of municipal buildings across a range of risks including fire, water leakage, and building security as well as structure detection and alarm systems. The study shows that the magnitude of historical claims may affect both pricing offers and interest in loss prevention technologies. We do not find that loss prevention technologies have any significant influence on contract price. This suggests inefficiencies in the market from imperfect information.     

On choice of statistics in credibility estimation

Abstract

The question on what statistics to base our credibility estimators, is discussed in a general model. We introduce concepts of sufficiency, completeness, θ-sufficiency, and θ-completeness that are useful in this connection, and use methods of Rao-Blackwell type. Some of the present results are closely related to results by Taylor (1977).