Corporate-level influences on internal capital allocation: The role of financial analyst performance projections

Research contends that internal capital should be allocated in proportion to divisional performance, but scholars are often puzzled to find that managers do not adhere to this winner-picking approach. We argue this is because scholarship has not incorporated corporate-level factors that influence how corporate managers structure holistic capital allocation strategies. In this study, we build on the behavioral theory of the firm to focus on analyst performance projections for multidivisional corporations and how they inform corporate managers' allocation strategies. Specifically, we theorize corporate managers deviate from the winner-picking allocation approach owing to search-related behaviors stemming from projected performance below or above expectations. We further theorize about conditions that offer corporate managers opportunities to deviate from winner-picking, focusing particularly on multidivisional relatedness and asset durability.     

International macroeconomic fluctuations and the current account

Abstract.  Intertemporal models of the current account generally assume that global shocks do not affect the current account. We use this assumption to identify global and country‐specific shocks in a bivariate VAR of output and the current account. Cross‐country evidence from the G7 economies suggests that this identification works surprisingly well. We then employ our method to collect stylized facts on international macroeconomic fluctuations. We find that long‐term output growth is driven mainly by global factors in most G7 countries and that country‐specific shocks are less persistent and generally less volatile than global shocks. JEL Classification: F41, F43, C32
Fluctuations macroéconomiques internationales et compte courant.  Les modèles inter‐temporels du compte courant postulent généralement que les chocs globaux n'affectent pas le compte courant. On utilise ce postulat pour identifier les chocs globaux et ceux qui sont spécifiques à des pays donnés dans un modèle VAR du produit global et du compte courant. Les résultats transversaux pour les pays du G7 suggèrent que cette forme d'identification donne de très bons résultats. On emploie cette méthode pour examiner des faits stylisés des fluctuations macro‐économiques internationales.Il appert que la croissance à long terme du produit dépend de facteurs globaux dans la plupart des pays du G7 et que les chocs particuliers aux pays ont un impact moins permanent et moins volatile que les chocs globaux.     

An emergency supply test for another oil crisis

In the spring of 1978 the International Energy Agency (IEA) staged the second “Allocation System Test”, a simulation exercise designed to check the ability of 19 OECD countries to cope jointly with another oil crisis. The topicality of such a contingency test is demonstrated by the disturbances in Iran. The following article sheds light on the motives, objectives and mechanisms of the IEA concept. *** DIRECT SUPPORT *** A02GP001 00004     

Korruption in Deutschland: Reformmaßnahmen

Ohne Zusammenfassung     

Examining a key corporate role: The influence of capital allocation competency on business unit performance

Research on the role of the corporate office in firm performance has focused on establishing how much performance variance can be attributed to a “corporate effect,” with little attention devoted to understanding how this influence occurs. In this study, we model capital allocation competency as a dynamic managerial capability and find that lower levels of allocation competency in the form of excess investment to business units with relatively poorer future prospects reduce business unit performance. We also find that market conditions affect performance implications of capital allocation—allocation competency is more salient in more competitive markets. These results enhance our understanding of how the corporate office influences business unit performance through its role in allocating capital across business units. Copyright © 2014 John Wiley & Sons, Ltd.     

Bias-correcting the realized range-based variance in the presence of market microstructure noise

Market microstructure noise is a challenge to high-frequency based estimation of the integrated variance, because the noise accumulates with the sampling frequency. This has led to widespread use of constructing the realized variance, a sum of squared intraday returns, from sparsely sampled data, for example 5- or 15-minute returns. In this paper, we analyze the impact of microstructure noise on the realized range-based variance and propose a bias correction to the range-statistic. The new estimator is shown to be consistent for the integrated variance and asymptotically mixed Gaussian under simple forms of microstructure noise. We can select an optimal partition of the high-frequency data in order to minimize its asymptotic conditional variance. The finite sample properties of our estimator are studied with Monte Carlo simulations and we implement it using Microsoft high-frequency data from TAQ. We find that a bias-corrected range-statistic often leads to much smaller confidence intervals for the integrated variance, relative to the realized variance. We should like to thank an anonymous referee and the associate editor for insightful comments on an earlier draft. Parts of this paper were written while Kim Christensen was at the University of California, San Diego, whose hospitality is gratefully acknowledged. Mark Podolskij received financial support from CREATES funded by the Danish National Research Foundation, and Mathias Vetter was supported by the Deutsche Forschungsgemeinschaft grant SFB 475 “Reduction of Complexity in Multivariate Data Structures.” The code for this paper was written in the Ox programming language, due to Doornik (2002). All views expressed here are those of the authors and do not necessarily represent the views of Nordea.     

Swiss made vs. Made in Germany — Kaufentscheidung nach Herkunftsland

Zusammenfassung  Angesichts des überangebots an Informationen zu einem Produkt oder einer Dienstleistung orientieren sich Verbraucher bei einer Kaufentscheidung h?ufig am Herkunftsland des jeweiligen Produktes. Dieses auch als Country-of-Origin-Effekt bekannte Ph?nomen wird in diesem Beitrag anhand der weltweiten Wahrnehmung schweizerischer und deutscher Produkte vorgestellt. Aus Sicht der Unternehmen und insbesondere des Marketingmanagements stellt sich die Frage, ob und unter welchen Bedingungen eine konsequente Vermarktung und Betonung des Herkunftslandes der eigenen Produkte erfolgversprechend sind. Prof. Dr. Sven Reinecke Direktor am Institut für Marketing an der Universit?t St. Gallen (HSG) under Leiter des Kompetenzzentrums „Marketing Performance Management“ sowie Mitherausgeber der Marketing Review St. Gallen. Dr. Stephan Feige Gesch?ftsführender Partner bei der htpSt. Gallen Managementberatung AG, einem Spin-Off der Universit?t St. Gallen. Dipl.-Kfm. Peter Mathias Fischer Wissenschaftlicher Mitarbeiter und Doktorand am Kompetenzzentrum Marketing Performance Management” des Instituts für Marketing der Universit?t St. Gallen.     

Sensorimotor experiences in servicescapes predict attitude formation through memory dynamics: A longitudinal study

In a longitudinal study design with three waves, we show that strong sensorimotor associations of past service experiences positively influence consumers' attitude formation during postconsumption stages by (a) leading to more postconsumptive memories, specifically if (b) the initial experience has been perceived as moderately positive. Our study complements extant research on sensory marketing, consumer retrospection, and cognitive reinforcement by introducing memory frequency as an important mediator to explain time-related antecedents of consumers' word-of-mouth. The results provide novel insights into the dynamics of attitude formation based on prior service experiences and help marketers to create long-lasting customer relationships during postconsumption stages.     

Inequality trends for Germany in the last two decades: A tale of two countries

In this paper we first document inequality trends in wages, hours worked, earnings, consumption, and wealth for Germany from the last twenty years. We generally find that inequality was relatively stable in West Germany until the German reunification, and then trended upwards for wages and market incomes, especially after about 1998. Disposable income and consumption, on the other hand, display only a modest increase in inequality over the same period. These trends occurred against the backdrop of lower trend growth of earnings, incomes and consumption in the 1990s relative to the 1980s. In the second part of the paper we further analyze the differences between East and West Germans in terms of the evolution of levels and inequality of wages, income, and consumption.