IPO underpricing,signaling, and property returns

This paper investigates whether IPO signals reveal proprietary information about the prospects of an issuing firm’s underlying industry. By analyzing a sample of European property company (EPC) IPOs from 1997 to 2007, we take advantage of a heterogeneous set of industry performance measures, i.e., yields and total returns of direct property investments in various European property markets that can be clearly assigned to each individual IPO. The results reveal that the main signal of interest, underpricing, is in fact positively related to average property yields for a 12-month post-IPO period; a result that supports our assumption. Other signals, as proposed in previous research, do not appear to contain any information about the prospects of the IPO firm’s target property investment market. We also show that total returns seem to be a biased measure for direct property performance. Further tests for the signaling model’s preconditioned presence of information asymmetry among EPCs reveal that underpricing levels are a function of company-specific ex ante uncertainty proxies. In contrast, property-specific ex ante uncertainty proxies do not explain underpricing levels.     

Time Series Based Errors and Empirical Errors in Fertility Forecasts in the Nordic Countries*

We use ARCH time series models to derive model based prediction intervals for the Total Fertility Rate (TFR) in Norway, Sweden, Finland, and Denmark up to 2050. For the short term (5–10 yrs), expected TFR‐errors are compared with empirical forecast errors observed in historical population forecasts prepared by the statistical agencies in these countries since 1969. Medium‐term and long‐term (up to 50 years) errors are compared with error patterns based on so‐called naïve forecasts, i.e. forecasts that assume that recently observed TFR‐levels also apply for the future.     

On Ethically Solvent Leaders: The Roles of Pride and Moral Identity in Predicting Leader Ethical Behavior

The popular media has repeatedly pointed to pride as one of the key factors motivating leaders to behave unethically. However, given the devastating consequences that leader unethical behavior may have, a more scientific account of the role of pride is warranted. The present study differentiates between authentic and hubristic pride and assesses its impact on leader ethical behavior, while taking into consideration the extent to which leaders find it important to their self-concept to be a moral person. In two experiments we found that with higher levels of moral identity, authentically proud leaders are more likely to engage in ethical behavior than hubristically proud leaders, and that this effect is mediated by leaders’ motivation to act selflessly. A field survey among organizational leaders corroborated that moral identity may bring the positive effect of authentic pride and the negative effect of hubristic pride on leader ethical behavior to the forefront.     

Evolution and challenges of dairy supply chains: Evidence from supermarkets,industries and consumers in Ethiopia

In developing countries the demand for products of animal origin is expected to grow rapidly in the coming years. Using data collected from 200 urban households this study examines the evolution of the dairy market in Ethiopia. In particular, this study suggests that although the Ethiopian dairy market remains extremely thin and volatile, the commercialization of processed dairy products through supermarkets is expanding and is expected to keep doing so in the foreseeable future. Increasing urbanization and corresponding changes in consumer preferences, behaviour and purchasing power are the identified causes for the rise of supermarket-processor dairy chains. This study shows also that emerging dairy chains provide new market opportunities to Ethiopian farmers, but the existence of retail-industrial monopolies and monopsonies jeopardize farmers’ economic benefits to a great extent. The study concludes with some implications for policy and further research.     

Mandatory Calorie Disclosure: A Comprehensive Analysis of Its Effect on Consumers and Retailers

In 2018 restaurants in the United States will need to provide calorie information on their menus as part of the Patient Protection and Affordable Care Act. In the present research, we examine the efficacy of this legislation in reducing restaurant based food calorie consumption. Specifically, we explore the likely effect of the new policy on both the supply and demand side, that is, consumer and retailer behaviors. To achieve this, two studies are included in this research: a meta-analysis of 186 studies investigating the effect of calorie disclosure on calories selected, and a meta-analysis of 41 studies examining the effect of calorie disclosure on calories offered by retailers. Across these two studies we reveal a significant and unequivocal calorie disclosure effect for menu labels; disclosure results in both fewer calories selected (?27 Calories) and fewer calories offered by retailers (?15 Calories).     

Shifting Taxes from Labor to Consumption: More Employment and more Inequality?

This paper investigates the effect of shifting taxes from labor income to consumption on labor supply and the distribution of income in Germany. We simulate stepwise increases in the value‐added tax (VAT) rate, which are compensated by revenue‐neutral reductions in income‐related taxes. We differentiate between the personal income tax (PIT) and social security contributions (SSC). Based on a dual data base and a microsimulation model of household labor supply behavior, we find a regressive impact of such a tax shift in the short run. When accounting for labor supply adjustments, the adverse distributional impact persists for PIT reductions, while the overall effects on inequality and progressivity become lower when payroll taxes are reduced. This is partly due to increases in aggregate labor supply, resulting from higher work incentives.     

The performance of venture capital investments: Do investors overreact?

Using a unique proprietary data set of over 5400 realized and unrealized venture capital investments between 1980 and 2005, we examine the impact of demand-related factors, e.g. entrepreneurial activity, as well as supply-related factors, i.e. money provided by VC investors, on the return of individual VC investments. This way, we are able to shed more light on the question whether volatile VC investment returns are rather driven by fundamental changes with regard to the number of attractive investment opportunities or by the overreaction by investors. We find that rising demand for VC, i.e. an increase in entrepreneurial activity, results initially in higher returns. However, our results also indicate that overreaction on the supply side can be observed, destroying deal-level results. Overfunding, specifically overinvesting seems to be a recurring characteristic of the VC industry. In fact, contra-cyclical investment strategies yield highest deal-level returns.     

Food Insecurity,Soil Degradation and Agricultural Markets in West Africa: Why Current Policy Approaches Fail

The agricultural sector in West Africa is not at present capable of meeting the growing demand for food for its population and of reversing unfavourable trends in soil degradation. We argue that integrated soil management is an essential condition for sustainable agricultural development in the many regions in West Africa where population pressure forces an intensification of land use. Such an approach combines improved soil-moisture storage measures, and the use of organic and inorganic fertilizers and soil amendments. The synergetic effects which could result from this combination are indispensable for achieving the productivity increases needed to cope with the pressure of population. Current (neo-liberal and ecological-participationist) policy approaches are unable to realize the transition towards integrated soil management technologies. The time lags involved in learning to use new technologies, in the adaptation of technologies to local circumstances, and in reaping the benefits of soil fertility investments call for (at least temporary) support of agricultural incomes.