The values of insurance companies under different uncertain portfolios

The value of an insurance company mainly depends on the premiums received in each underwriting period, the probability distribution of the accumulated claims against the company, the equity capital, and the risk-adjusted rate of return determined by the market. We analyze how the value of the company is affected by marginal changes in the underlying determinants, when there is a regulatory requirement on equity capital. The major factor we are interested in is the claims against the company in each underwriting period, which we represent by a stationary stochastic process. The existing orders for partially ranking risks do not suffice for our purpose, and new conditions are found on the risks facing the companies, for the successful ranking of the company values.     

Unemployment hysteresis - macro evidence from 16 OECD countries

This paper investigates empirically the presence ofunemployment hysteresis in 16 OECD countries, applying aggregate quarterly unemployment rates covering the past 25 years. Alternative test procedures are discussed and employed, posing both stationarity and hysteresis as null hypotheses. The results suggest that hysteresis effects are highly significant in Australia and Canada, and to a lesser extent also significant in most European countries and in Japan. Only in the USA, the presence of unemployment hysteresis is strongly and consistently rejected.Without attributing to them opinions or errors in the paper, I wish to thank Steinar Strøm, Ragnar Nymoen, Arvid Raknerud, Anders Rygh Swensen, Jeremy Smith and two referees for helpful comments.     

Liberalizing the energy markets of Western Europe – a computable equilibrium model approach

Using a computable equilibrium model, the short-run effects of a radical liberalization of the West European natural gas and electricity markets are examined. In each model country, oil, gas, coal and electricity are produced, traded and consumed. There are world markets for oil and coal, and well-integrated competitive markets for gas and electricity in Western Europe. Gas and electricity are transported and traded across markets under the assumption of ideal third-party access regimes for transportation and limited capacities in the transportation networks. It is found that relative to the data year 1996, radical liberalization reduces the average end-user price of natural gas by around 20%, and the average end-user price of electricity by around 50%. The supply of electricity increases by around 20%, mainly due to increased coal power production. After such liberalization, coal power emerges with the largest market share of electricity production in Western Europe.     

Benefit-risk trade-offs in retrospect: how major stakeholders perceive the decision-making process in the Barents Sea oil field development

This study provides an analysis of risk-benefit communication and participation of the siting process for the Norwegian Goliat oil field development, within the context of a revised model of the International Risk Governance Council’s framework. The main objective of the study is a retrospective review of the decision-making process seen through the lenses of the major stakeholders involved in this process. The research design used qualitative methods of empirical research including stakeholder interviews during a five-day period in 2011 in Northern Norway. Results showed that the siting process of Goliat was dominated primarily by the issue of benefit sharing. In view of potential risks to such oil development, local stakeholders felt entitled to some compensation in terms of shared benefits. However, over the course of time the high hopes that these benefits would materialize and provide additional benefits to the communities which would then be fairly distributed among the beneficiaries have been disappointed. We review the reasons behind these results as well as formulate recommendations regarding potential improvements to the risk-benefit communication process in addition to future siting processes.     

An asymptotic expansion of bias in a non-linear function of a set of unbiased characteristics from a finite sample

Abstract

Very often one has to make an estimate of some function f (m) of a certain characteristic m belonging to a certain distribution. However, m is often unknown and then it may be necessary, somehow, to estimate m with the corresponding unbiased characteristic x from a sample consisting of n individuals which may be one- or multidimensional. If f (x) is a linear function it is evident that .     

Foreign Direct Investment,Imports and Innovations in the Service Industry

The paper analyses for the first time empirically the impact of foreign competition due to inward foreign direct investment and imports on the innovation activities using data of German service firms. Based on the hypothesis that foreign competition has a disciplining effect on domestic markets derived from the manufacturing sector, a positive impact can be expected on innovation in the service sector, while other theoretical considerations do not absolutely support this optimistic view. In the empirical analysis, variants of two probit models are estimated for a sample of 2,019 service firms to explain their product and process innovation activities. The results show that both foreign direct investment and imports have highly significant positive effects on product and process innovations. Vice versa, the export and foreign production activities of domestic firms support innovations, too.     

Ethics of care and co‐worker relationships in UK banks

Utilising an analytical framework based on an ethics of care approach, this article examines the changing nature of co‐worker relationships in UK banks under the rise of performance management practices. It illustrates that with the implementation of performance management practices in general, and electronic performance management monitoring in bank branches in particular, co‐worker relationships have become increasingly objectified, resulting in disconnected and conflict‐ridden forms of engagement. The analysis reveals the multi‐layered and necessarily complex nature of co‐worker relationships in a changing technologically driven work environment and highlights the possibilities for people to defend the capacity to care for others from the erosive tendencies of individualised processes.