Multimarket contact and sales growth: evidence from insurance

Research on pricing, profits, and firm survival has shown that multimarket contact causes mutual forbearance against competition, but has not considered the consequences of imperfect observability of competitive moves. Here, predictions are developed to explain how mutual forbearance occurs—but sometimes fails—in markets with imperfect observability. Mutual forbearance means that firms do not seek to take market share from each other through price cuts or nonprice competition, and thus that sales grow at uniform rates. Firms defect from mutual forbearance, and hence have higher sales growth, if the potential rewards are high and the likelihood of being discovered is low. This theory is tested on a panel of firms operating in the Norwegian general insurance industry. The evidence suggests that sales growth is most rapid in firms that do not meet many multimarket competitors in a given market and firms that are economically troubled. Growing or highly concentrated markets have higher heterogeneity of growth rates. Copyright © 2007 John Wiley & Sons, Ltd.     

The Evolution of Private Equity Fund Terms Beyond 2 and 20

With the remarkable increases in the assets under management of private equity firms, the standard compensation arrangement of a 2% management fee plus 20% carried interest has raised concerns of a misalignment of interests between limited partners (LPs) and general partners (GPs). Using a proprietary data set that includes detailed fund terms of 210 PE buyout funds with vintage years between 1989 and 2012, the authors summarize the findings of their recent study of the evolution of fund terms. The authors report that PE fund terms have been remarkable mainly for their resistance to change, and that the only important force for bringing about reductions in percentage management fees has been the recent increase in fund sizes. But the modest cuts in management fees that have accompanied the increase in fund sizes have done little to address what appears to be a conflict of interest between LPs and GPs over the optimal PE fund size. As one possible solution to this conflict, the authors analyze a recent innovation by Bain Capital that involves considerably smaller management fees (say, 1%) and larger carried interest (as high as 30%). According to the authors, such terms have a good chance of becoming the new industry standard for two reasons: First, LPs have become increasingly “professionalized,” which has led to greater focus on GP compensation and ways of realigning their interests with LPs'. Second, the “signaling” benefits for those GPs willing to distinguish themselves by offering terms like “1 and 30” could encourage more GPs to move in this direction. In the authors' words, “For all but the most reputable and established PE firms, those GPs that do not offer the new terms may well be seen as signaling little confidence in their ability to do what they're being paid to do: namely, produce above‐market returns.”     

Public management reform in Denmark

Abstract

This article discusses public management reform in Denmark. First, the institutional features of the Danish public sector are introduced. Danish ministries enjoy a considerable amount of autonomy that makes central co-ordinated public management reform challenging. The second part of the article outlines the contents of public management reform and provides an overview of the major reform initiatives of the last three governments. Denmark's reforms are characterized as a mixture of strategies for modernization and marketization, but with most emphasis on the former rather than the latter. Together with successive governments, the Danish Ministry of Finance has argued strongly for efficiency, economy and effectiveness as key values and they have been institutionalized in modernization efforts. Denmark should now be considered a country where NPM reforms have taken a firm hold.     

The impact of international outsourcing on individual employment security: A micro-level analysis

The paper analyzes how international outsourcing affected individual employment security. The analysis is carried out at the micro-level, combining monthly spell data from household panel data and industry-level outsourcing measures. By utilizing micro-level data, problems such as aggregation and potential endogeneity bias, as well as crude skill approximations that regularly hamper industry level displacement studies, can be reduced considerably. The main finding is that international outsourcing significantly lowers individual employment security. Interestingly, the effect does, however, not differ between high-, medium-, and low-skilled workers but only varies with job duration.     

保险业要么锁定客户，要么收购

贝恩公司调查发现,仅有1／10的保险公司成功地实现连年持续地创造价值。许多公司最终表现欠佳的主要原因在于,他们严重误判自己提供客户所需产品／服务的能力。当高级主管被问及是否认为本公司提供最佳客户体验时,77％的高管自认为是,但仅有6％的客户认同。那么,究竟什么才是保险业实现最佳股东回报的关键呢?     

The pattern of non-tariff obstacles to international market access

Zusammenfassung Die Struktur nicht-tarif?rer Handelshemmnisse auf den Zutritt zum Weltmarkt. — Die Diskussionen über internationale Schutzzoll- und Handelspolitik nach der Kennedy-Runde besch?ftigen sich zunehmend mit der Bedeutung der Au\enhandelsverzerrungen, die nicht durch Z?lle verursacht werden. Der vorliegende Aufsatz versucht zwei grundlegende Fragen über die Anwendung nicht-tarif?rer Hemmnisse auf den Au\enhandel mit Fertig- und Halbfertigfabrikaten zu beantworten: I. Bis zu welchem Grad gibt es ?hnlichkeiten oder Un?hnlichlichkeiten in der Struktur oder dem Schema der nicht-tarif?ren Verzerrungen des Au\enhandels in den entwickelten Marktwirtschaften ? 2. Scheinen tarif?re und nichttarif?re Handelshemmnisse sich gegenseitig innerhalb nationaler protektionistischer Systeme zu erg?nzen oder zu ersetzen ? Obwohl die Ergebnisse ihrer Natur nach vorl?ufig sind, f?hren sie doch zu wichtigen Schlu\folgerungen in bezug auf die künftige Gestaltung der internationalen Handelspolitik.

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Résumé La structure des obstacles non-tarifaires à l’accès au marché international. — La discussion de la politique internationale protectionniste et commerciale d’après-Kennedy-Round tourne toujours d’avantage autour du r?le que jouent les distorsions du commerce qui ne proviennent pas des tarifs de douane. Cet article cherche à répondre à deux questions fondamentales qui concernent l’application d’obstacles non-tarifaires au commerce des produits finis et mi-finis: I. Jusqu’à quel point y a-t-il similitude ou dissimilitude dans la structure ou le schéma des distorsions non-tarifaires dans les différents pays à économie libre et développée ? 2. Para?t-il que, dans les systèmes nationaux protectionnistes, les obstacles tarifaires et non-tarifaires se suppléent, ou bien qu’ils se substituent les uns aux autres ? Quoique les résultats soient nécessairement préliminaires, ils permettent quand même quelques conclusions importantes en ce qui concerne le développement futur de la politique commerciale internationale.

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Resumen La estructura de barreras no arancelarias sobre el acceso al mercado mundial. — Las discusiones sobre la política comercial internacional se centra, desde la Ronda Kennedy, de forma creciente en la importancia de distorsiones en el comercio exterior, que no se deben a tarifas aduaneras. El presente artículo trata de contestar dos preguntas fundamentales relacionadas con la aplicación de medidas no arancelarias en el comercio exterior con productos semielaborados y acabados: I _- ^a ? Hasta qué punto existen parecidos o diferencias en la estructura o elesquema de distorsiones en el comercio exterior de economias de mercado desarrolladas, producidos por barreras no arancelarias ? 2 _- ^a ? Se complementan los obstáculos arancelarios y no arancelarios dentro de los sistemas nacionales de protección, o son los unos substituto de los otros ? A pesar de que los resultados de este estudio son provisionales, permiten importantes conclusiones acerca de la estructuración futura de la política comercial internacional.

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Riassunto La struttura di impedimenti commerciali non tariffari sull’accesso al mercato mondiale. — Le discussioni sulla politica protezionistica e commerciale dopo il ?Kennedy-Runde? si occupano in misura crescente del significato delle deformazioni del commercio estero che non sono causate da dazi. Il presente articolo cerca di dare una risposta a due questioni fondamentali sull’applicazione di impedimenti non tariffari sul commercio estero con prodotti finiti o semilavorati: 1. Fino a che grado ci sono somiglianze o dissomiglianze nella struttura o nello schema delle deformazioni non tariffarie del commercio ? 2. Impedimenti commerciali tariffari e non tariffari sembrano completarsi o sostituirsi reciprocamente all’interno di sistemi nazionali protezionistici? Sebbene i risultati della loro natura siano ancora prowisori, essi conducono, però, a importanti conclusioni in rapporto alla futura conformazione della politica commerciale internazionale.

     

International trade and resource diversion: The case of environmental management

Zusammenfassung Au\enhandel und Umlenkung von Ressourcen: Der Fall des Umweltmanagements. — Umweltmanagement wird in dieser Arbeit als eine durch die Verschiebung der Pr?ferenzen hervorgerufene gesellschaftliche Umlenkung der Ressourcen von der Produktion von handelbaren zu nichthandelbaren Gütern behandelt. Unterstrichen wird die Bedeutung a. der Assimilationskapazit?t der Umwelt als Angebotsfaktor, der den Au\enhandel direkt (durch die Beeinflussung der komparativen Vorteile) und indirekt (durch das Errichten von Umweltschwellen und durch die erforderliche Umlenkung der Ressourcen) mitdeterminiert und b. der Umweltnachfragefunktionen als Determinanten der Anstrengungen bezüglich des Umweltmanagements. Die Implikationen der internationalen Unterschiede für den Au\enhandel werden für beide Funktionen aufgezeigt, und zwar sowohl allgemein als auch speziell in bezug auf die ?factor-endowment?-Theorie. Es wird gezeigt, da\ langfristige Auswirkungen auf internationale komparative Vorteile erwartet werden k?nnen, auch dann, wenn alle L?nder identische Normen bezüglich der Umweltqualit?t aufstellen sollten.

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Résumé L’échange international et la diversion des ressources: Le cas d’une gestion de l:nvironnement. — La gestion de l:nvironnement est considérée dans cet article comme une diversion sociale des ressources de la production des biens échangeables à celle des biens non échangeables, causée par un changement de préférences. L’auteur accentue l’importance de deux points: (1) La capacité assimilative de l:nvironnement comme un élément de l’offre détermine l’échange international d’une manière directe en exer?ant une influence sur les avantages comparatifs et d’une manière indirecte en établissant des seuils au-dessus de lesquels la qualité de l:nvironnement diminue de plus en plus et exige une diversion des ressources. (2) Les fonctions de demande de qualité de l:nvironnement déterminent des efforts pour contr?ler l’environnement. Les implications pour l’échange international à cause des variations internationales dans les deux fonctions sont esquissées en général et particulièrement à l’égard de la théorie de dotation en facteurs de production. Il est indiqué que des effects à long terme sur l’avantage comparatif peuvent être attendus, même dans le cas oú tous les pays adoptent des normes identiques pour contr?ler la qualité de l’nvironnement.

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Resumen Comercio internacional y desviación de recursos: El caso del manejo del medio ambiente.— En este trabajo se trata al manejo del medio ambiente como una desviaci?n que la sociedad ocasiona en los recursos para la producción comerciable hacia la producción no comerciable, en respuesta a los cambios en las preferencias. Se enfatiza la importancia: (a) de la capacidad de asimilación del medio ambiente como factor de oferta que entra a determinar el comercio tanto directamente (afectando las ventajas comparativas) como indirectamente (estableciendo limites medio-ambientales y requerimientos de desviación de recursos) y, (b) de las funciones de demanda medio-ambientales como déterminantes de los esfuerzos para el control del medio ambiente. Se delinean las implicaciones comerciales de las variaciones internacionales en ambas funciones, en general y en particular referencia a la teorfa corriente de la dotaci?n de recursos. Se indica, que los efectos de largo plazo sobre las ventajas comparativas internacionales se pueden anticipar, incluso si todos los paises adoptan idénticas normas para determinar la calidad medioambiental.