Illiquidity or credit deterioration: A study of liquidity in the US corporate bond market during financial crises

We investigate whether liquidity is an important price factor in the US corporate bond market. In particular, we focus on whether liquidity effects are more pronounced in periods of financial crises, especially for bonds with high credit risk, using a unique data set covering more than 20,000 bonds, between October 2004 and December 2008. We employ a wide range of liquidity measures and find that liquidity effects account for approximately 14% of the explained market-wide corporate yield spread changes. We conclude that the economic impact of the liquidity measures is significantly larger in periods of crisis, and for speculative grade bonds.     

How to Steer the IT Outsourcing Provider

IT executives entering into information technology (IT) outsourcing arrangements seek various strategic, economic, and technological benefits. However, although several cases of IT outsourcing are considered successful, cases of failure can also be observed. Problems and challenges associated with IT outsourcing often not only relate to the strategic decision whether or not to outsource, but to the operational level as well. Especially organizations with little experience of implementing larger IT outsourcing programs face problems with the steering of external outsourcing providers. In this paper, we propose a reference framework that structures the required processes for an effective steering of IT outsourcing relationships. The research is based on the design science paradigm in information systems research. In a first step, we derive a framework from related literature and knowledge in this particular area. We then undertake extensive fieldwork, including expert interviews and field studies to evaluate our framework and to develop it further. The suggested framework proves to be a viable instrument to support the systematic analysis of current processes and the definition of suitable target processes for the steering of IT outsourcing programs. This paper??s primary contribution therefore lies in providing an applicable instrument for practitioners as well as in extending the existing body of knowledge on IT outsourcing governance.     

Convergence to isoelastic utility and policy in multiperiod portfolio choice

This paper considers the problem of the investor who has numerous opportunities for revising his portfolio and whose choices are governed by a utility function defined on ‘terminal’ wealth, U₀(x₀). Attention is focussed on the behavior of the induced utility functions of intermediate wealth with n periods to go, U_n(x_n), and the associated investment policies. Conditions under which the functions U_n(x_n) will tend to isoelasticity have previously been given by Mossin and by Leland. In this paper, the conditions for convergence are weakened further, to the point where they appear sufficiently broad to encompass perhaps most utility functions of practical interest.     

What affects shopper’s choices of carrying devices in grocery retailing and what difference does it make? A literature review and conceptual model

Shopping carts, dating back at least to 1936, are not only used as an aid for shoppers to increase sales but are now being further developed and tested in relation to healthy food selection. To improve retailers’ ability to discover, generate, and capture the value related to both current practice and future innovations; such as consumers using smart carts when shopping, we systematically go through the empirical literature on carrying equipment in in-store shopping. We expose how limited the literature is by revealing the scarce number of studies on the effectiveness of baskets and carts on consumer behavior and especially when classified into different research themes. The contribution is a systematic literature review and a conceptual framework covering the most important factors affecting the choice of in-store carrying equipment, as well as the consequences of these choices in terms of in-store behaviors and transactional outcomes.     

Soziale Marktwirtschaft in der Sinnkrise

Ohne Zusammenfassung Nils Goldschmidt hat eine Vertretungsprofessur für Sozialpolitik und Organisation Sozialer Dienstleistungen an der Universit?t der Bundeswehr München     

Spare the Young Fish: Optimal Harvesting Policies for North-East Arctic Cod

The North-East Arctic cod (Gadus morhua) fishery, as most other commercial fisheries, is wasting the larger part of its potential. Examining a detailed multi-cohort, multi-gear bioeconomic model, we show that the cause is rather a too small mesh size than excessive effort. Although internationally and nationally managed by quota allocations and regulations, the current exploitation pattern implies that essentially the wrong fish are targeted. Catching older and heavier fish could double the fishery’s Net-Present-Value. This increases harvested biomass while it reduces the number of fish removed from the ocean, highlighting the importance of age- and gear-specific modeling. Moreover, optimal harvesting policies would also lead to a much more robust and abundant cod stock.     

Optimal performance-based subsidies in Norwegian intercity rail transport

A Norwegian White Paper on public transport paved the way for performance-based contracts for passenger rail. In order to estimate socially optimal economic incentives, we have calibrated and used a model which optimises public transport services and subsequently allows us to design incentives for operators that will induce them to provide the proper level of service. Our recommendations for intercity services have been implemented in the 2003 contract between the Norwegian State Railways and the Ministry of Transport and Communications.     

Treatment of Mobile Phone Licenses in the National Accounts

This paper addresses the question of how to record mobile phone license payments in the national accounts. It concludes that there are usually two assets involved with mobile phone licenses: the spectrum, which is owned by the government, and the license, which is an intangible nonproduced asset sold by the government to the licenseholder. The values of these two assets are linked complementarily. A set of indicators is proposed that jointly may help judging whether the license or lease arrangement constitutes an asset in its own right or not. Alternative treatments of recording the license payments such as sale of the spectrum itself, other taxes on production, production of a service, or rent, are considered and rejected. Methods of amortization of the license over its life are considered.     

Culture and Economics

The question of how far it is necessary to include cultural factors in the analysis of economic processes has become topical again in recent years. The first contribution to this Forum introduces a cultural approach to economics. This is followed by an article that examines the transition processes in central and eastern Europe from an econocultural perspective. The next article deals with the concept of a country-specific national tax culture and its implications for tax policy, especially in the context of transformation processes. The final paper discusses Turkey’s economic culture and its possible impact on the country’s integration into the European Union. * This outline is in its main parts the result of cooperation with Bernd Remmele and Joachim Zweynert. The author wishes to express his indebtness to Inga Fuchs for central insights on this subject, and to Michael Wohlgemuth, who helped to finish this paper in a short period of time. ** This article originates in a research project on the historical and cultural path dependence of the transition processes in Central and Eastern Europe (with special focus on the Baltic Sea region). The project is carried out jointly by the Hamburg Institute of International Economics and the University of Hamburg and funded by the VolkswagenStiftung.