Knowledge Spillovers,Competition and Innovation Success

We study the relationship between a patent-based measure of knowledge spillovers that calculates technological proximity based on technologically relevant firms and innovation success. We find – for a representative sample of Swiss firms – that knowledge spillovers have a positive and significant association with the commercial success of innovative products. The paper shows the importance of market conditions for the relationship of spillovers with innovation performance: It is only positive and significant in markets with a medium number of competitors in the main product market, but not in monopolistic or polypolistic market structures.     

Measuring the effectiveness of US monetary policy during the COVID-19 recession

The COVID-19 recession that started in March 2020 led to an unprecedented decline in economic activity across the globe. To fight this recession, policy makers in central banks engaged in expansionary monetary policy. This paper asks whether the measures adopted by the US Federal Reserve (Fed) have been effective in boosting real activity and calming financial markets. To measure these effects at high frequencies, we propose a novel mixed frequency vector autoregressive (MF-VAR) model. This model allows us to combine weekly and monthly information within a unified framework. Our model combines a set of macroeconomic aggregates such as industrial production, unemployment rates, and inflation with high-frequency information from financial markets such as stock prices, interest rate spreads, and weekly information on the Fed's balance sheet size. The latter set of high-frequency time series is used to dynamically interpolate the monthly time series to obtain weekly macroeconomic measures. We use this setup to simulate counterfactuals in absence of monetary stimulus. The results show that the monetary expansion caused higher output growth and stock market returns, more favorable long-term financing conditions and a depreciation of the US dollar compared with a no-policy benchmark scenario.     

Estimating the gravity model when zero trade flows are frequent and economically determined

ABSTRACT

Since the 1950s, we have known that the presence of zero-valued dependent variables can seriously bias econometric estimates whether the zeros are included or excluded. Yet the widely-used gravity model is frequently estimated on samples that include large fractions of zeros. An influential paper by Santos Silva and Tenreyro – based on simulations that include no economically-determined zeros – concludes that the bias problems resulting from zeros and those resulting from heteroscedasticity and nonlinearity can be solved using the Poisson Pseudo-Maximum-Likelihood (PPML) model including the zero values. This paper begins by adapting the Santos Silva and Tenreyro experimental design to include economically-determined zeros to see whether this conclusion continues to hold. With this design, it finds that alternative estimators have lower bias than PPML. Changing to a Monte Carlo design that replicates the much-higher real-world frequency of predicted values near zero restores the finding of lower bias with the PPML estimator. The results highlight the need for very careful design of Monte Carlo experiments when evaluating alternative estimators of the gravity model.     

The So-Called 2015 Migration Crisis and Euroscepticism in Border Regions: Facing Re-Bordering Trends in the Danish–German Borderlands

ABSTRACT

This paper examines the role of Euroscepticism on regional cross-border cooperation between Germany and Denmark. It demonstrates that Euroscepticism, while absent from local mainstream politicians, had already caused civic unrest in the 1997 attempts to construct a return to history Euro-region Schleswig. It resulted in a re-scaling of the Euro-Region to Region and Schleswig to “Sønderjylland/Schleswig”, omitting any reference to Europe, European identity or a commitment to a closer European union in the relevant agreements. Border controls, on the agenda in 2011 and again since 2015, have demonstrated the institutional weakness of cross-border politics when faced with determined initiatives from the national center. Furthermore, the Eurosceptic Danish People’s Party had its best results in the border precincts both at the latest European and Danish national elections. Euroscepticism, even though difficult to measure on a regional level, seems to have been an ever present underneath current despite a political rhetoric of successful cooperation and cross-border reconciliation. The Danish-German case’s development might be more distinct, but nonetheless representative for European border (and cross-border) regions. While European metropolises develop into thriving cosmopolitan post-nation state societies, this is not necessary the case at Europe’s borders, where categorization and bordering remain common social practices by the large majority of national borderlanders with only a small portion of transnational borderlanders or ‘regionauts’ getting involved in border crossing social practices on a larger scale.     

What's on the Menu? Policies to Reduce Young People's Sugar Consumption

Young people in the UK consume far above the maximum recommended levels of added sugar. It is likely that neither they nor their parents fully take account of the future health, social and economic costs of this high sugar consumption. This provides a rationale for policy intervention. The majority of young people's added sugar consumption occurs in the home, where purchases are typically made by parents. This means that understanding the purchase decisions of adults is important for policy design, even if the policies aim to reduce the consumption of young people. We discuss the merits of popular policies, including taxes, advertising restrictions and restrictions on the availability of specific foods, and we identify promising avenues for future research.     

The marketing of love: how attachment styles affect romantic consumption journeys

Journal of the Academy of Marketing Science - The experience of romantic love is closely interlocked with consumption journeys—yet how and why consumers engage in romantic consumption is not...     

Are stricter investment rules contagious? Host country competition for foreign direct investment through international agreements

We argue that competitive diffusion is a driver of the trend toward international investment agreements with stricter investment rules, namely defensive moves of developing countries concerned about foreign direct investment (FDI) diversion in favor of competing host countries. Accounting for spatial dependence in the formation of bilateral investment treaties and preferential trade agreements that contain investment provisions, we find that the increase in agreements with stricter provisions on investor-to-state dispute settlement and pre-establishment national treatment is a contagious process. Specifically, a developing country is more likely to sign an agreement with weak investment provisions if other developing countries that compete for FDI from the same developed country have previously signed agreements with similarly weak provisions. Conversely, contagion in agreements with strong provisions exclusively derives from agreements with strong provisions that other FDI-competing developing countries have previously signed with a specific developed source country of FDI.     

Firm Heterogeneity and Export Pricing in India

We examine export pricing by Indian manufacturing firms in the early 2000s using a unique data set that matches firm characteristics with product and destination‐level trade data. We find that, in contrast to China and other countries, firm productivity is negatively associated with export prices, and export prices are negatively associated with distance while positively associated with remoteness. Our conjecture is that Indian innovation costs, which are higher than China's, drive down the scope for quality differentiation causing a negative association between productivity and prices. To the best of our knowledge, this is the first empirical evidence consistent with heterogenous goods and short quality ladders, a theoretical possibility noted in the study by Antoniades (2012), an outcome that arises here because of domestic Indian economic and regulatory features.     

Zur Integration heuristischer Managementstrategien in die Dynamische Finanzanalyse

Dynamic financial analysis (DFA) has become an important tool in analyzing the financial situation of insurance companies. Constant development and documentation of DFA tools has occurred during the last years. However, several questions concerning the implementation of DFA systems have not been answered in the DFA literature to date. One such important issue is the consideration of management strategies in the DFA context. The aim of this paper is to study the effects of different management strategies on a non-life insurer’s risk and return profile. Therefore, we extend the results of a recent working paper by Eling / Parnitzke / Schmeiser (2007) with two variants and test these variants numerically within a DFA simulation study.     

An Empirical Analysis of Triple Bottom-Line Reporting and its Determinants: Evidence from the United States and Japan

This paper investigates triple bottom‐line (TBL) disclosures of 50 of the largest US and Japanese companies. Twenty disclosure criteria were developed for each of the TBL disclosure areas: economic, social, and environmental. Disclosure information was examined in annual reports, stand‐alone reports, and special website reports. Regression analysis was used to examine empirically the determinants of TBL disclosure practice. Our results indicate that, for total TBL disclosure (combining economic, social, and environmental categories), the extent of reporting is higher for firms with larger size, lower profitability, lower liquidity, and for firms with membership in the manufacturing industry. Further analysis indicates that the results for the total TBL disclosure are primarily driven by non‐economic disclosures. We also find that the extent of overall TBL reporting is higher for Japanese firms, with environmental disclosure being the key driver. This result could be attributed to the differences in national cultures, the regulatory environment, and other institutional factors between the United States and Japan.