Covert operations

Few executives have insight into what really goes on in their organizations. CEO Stephen Martin seized a rare opportunity to anonymously discover the nitty gritty of his company. He shares his insights with Julian Birkinshaw and Stuart Crainer.     

Valuation of digital goods during the coronavirus outbreak in the United States

We examine how the Coronavirus pandemic affected consumer valuation of digital services. Governments responded to the pandemic with various forms of lockdowns and social distancing, leading to increased dependence on digital services for work, social engagement, and leisure activities. We identify consumer valuations through surveys where respondents express their reservation prices for digital services such as email, search, and social media. We compare our results to surveys done in 2016 and 2017 and find an about five-fold increase in valuations.     

Do Information Rents in Loan Spreads Persist over the Business Cycles?

In this paper, we seek empirical evidence for information rents in loan spreads by analyzing a sample of UK syndicated loan contracts for the period from 1996 to 2005. We use various measures for borrower opaqueness and control for bank, borrower and loan characteristics and we find that undercapitalized banks charge approximately 34 bps higher loan spreads for loans to opaque borrowers. We further analyze whether this effect persists throughout the business cycle and find that this effect prevails only during recessions. However, we do not find evidence that banks exploit their information monopolies during expansion phases.     

The Labour Government and the National Health Service

This paper reviews the performance of the National Health Serviceunder the Labour government of Tony Blair. It shows that therehave been some dramatic increases in resources going into theservice, but also that these do not seem to be delivering theimprovements in activities that might have been expected. Thepaper argues that this is partly because of capacity constraints,but also because the mixture of organizational forms introducedby the government has resulted in misdirected and conflictingincentive structures for the key actors.     

Financing agricultural R&D in rich countries: what's happening and why

Governments everywhere are trimming their support for agricultural R&D, giving greater scrutiny to the support that they do provide, and reforming the public agencies that fund, oversee, and carry out the research. This represents a break from previous patterns, which had consisted of expansion in the public funds for agricultural R&D. Private-sector spending on agricultural research has slowed along with the growth of public spending in recent years, but the balance continues to shift towards the private sector. This article presents a quantitative review of these funding trends and the considerable institutional changes that have accompanied them. We discuss new data for 22 OECD countries, providing institutional details for five of these countries, and conclude with an assessment of policy developments.     

Temporary overpessimism: Job loss expectations following a large negative employment shock

Job loss expectations were widespread amongst workers in East Germany following reunification with West Germany. Though experiencing a large negative employment shock, East German workers were nevertheless overpessimistic immediately after reunification with respect to their job loss risk. Over time, job loss expectations fell and converged to West German levels, which was driven by a stabilizing economic environment and by an adaptation of the interpretation of economic signals with workers learning to distinguish individual risk from firm-level risk. In fact, conditional on actual job loss risk, East German workers quickly caught up to West Germans regarding the share of correctly predicted job losses.     

Contents of Volume 7

Volume Contents

Contents of Volume 7     

A meta-analytic review of influence strategies in marketing channel relationships

Influence strategies (ISs) are a dominant topic in channel research. However, the literature lacks a consensus on when noncoercive and coercive strategies are more valuable or damaging to partnership quality, and their judicious applications remain unclear. Mainly based on social exchange perspectives, we review and conceptualize several contingency factors in the IS-partnership quality relationships in this metaanalysis. The moderating results generally suggest that the stronger positive impacts of noncoercive ISs result from a higher appreciation for supportive attempts, whereas the higher negative sensitivity to coercive ISs can be attributed to the low acceptability of forceful influences. We determine degrees of appreciation and acceptability by the perceived significance of benefits/damages, expectations, and tolerance levels for both strategies. Also, we synthesize and meta-analyze the key outcomes and antecedents of both strategies in an integrated framework. The direct-effect results indicate that the choice of effectively applying both strategies necessitates a tradeoff between goals and priorities.     

Eine Bewertung der Regelenergievermarktung im Power-to-Gas-Konzept

The integration of the increasing share of fluctuating renewable energy sources into the energy system requires more options in flexibility. A promising attempt is the power-to-gas concept (PtG) which allows the production of hydrogen and synthetic natural gas (SNG) from electricity and the storage in caverns or existing gas storage facilities. However, an economic operation in Germany is not expected before 2030, when the amount of surplus energy, mainly generated in wind parks, will be sufficient. Currently, a hardly analyzed aspect is the potential commercialization of the flexible electrolysis as controllable load on the electricity balancing market. This offers opportunities to generate additional revenues and to obtain cheap electricity in the form of balancing energy. The present article has been designed to analyze this aspect and to examine the impact of a potential commercialization of balancing energy on the gas production costs within the PtG concept. At first, the current legal framework, the funding instruments of SNG and the differences between the notion ‘Speichergas’ and ‘Biogas’ will be outlined. An overview of the current balancing market will be given and the development of prices on the secondary balancing market will be evaluated as well as expected market trends will be presented. The following calculation of gas production costs, which result from applying an optimal proposal strategy on the secondary balancing market, is model-based and uses historical data. Three scenarios are defined and examined, and the impact of variable electricity prices is analyzed. The electricity balancing market is profitable and offers many opportunities for PtG plants. The results show a decrease of SNG production costs by up to 74 % to 46,9 €/MWh. As for the hydrogen, the production costs amount to approximately 25,8 €/MWh which equals a cost reduction of up to 81 % compared to conventional PtG plants without commercialization of balancing energy.