Financial markets and the current account: emerging Europe versus emerging Asia

Financial globalisation has been associated with divergent current account patterns in emerging markets. In this paper we test for the relevance of financial market characteristics in explaining different current account patterns in emerging Europe and emerging Asia. We find that better developed and more integrated financial markets increase emerging markets’ ability to borrow abroad. The degree of financial integration within the convergence clubs as well as the extent of reserve accumulation are found to be the most significant factors to explain divergent current account patterns in emerging Europe and emerging Asia.     

Worktime Demands and Work-Family Interference: Does Worktime Control Buffer the Adverse Effects of High Demands?

This study examined whether worktime control buffered the impact of worktime demands on work–family interference (WFI), using data from 2,377 workers from various sectors of industry in The Netherlands. We distinguished among three types of worktime demands: time spent on work according to one’s contract (contractual hours), the number of hours spent on overtime work (overtime hours), and the number of hours spent on commuting (commuting hours). Regarding worktime control, a distinction was made between having control over days off and vacations (leave control) and having control over starting and finishing times (flextime). These three worktime demands were expected to have separate as well as joint effects on WFI, whereas worktime control should buffer these adverse effects of worktime demands on WFI. Stepwise regression analyses showed that working high numbers of contractual and overtime hours was indeed associated with high WFI. Further, worktime control indeed made a difference in terms of WFI: whereas leave control contributed directly to lower WFI, flextime buffered the adverse effects of long contractual workhours. Our results suggest that very long working days should be prevented, and that worktime control may be a powerful tool to help workers maintaining a good work–family balance.     

Cross-ownership as a structural explanation for over- and underestimation of default probability

Based on the work of Suzuki, we consider a generalization of Merton’s asset valuation approach in which two firms are linked by cross-ownership of equity and liabilities. Suzuki’s results then provide no arbitrage prices of firm values, which are derivatives of exogenous asset values. In contrast to the Merton model, the assumption of lognormally distributed assets does not result in lognormally distributed firm values, which also affects the corresponding probabilities of default. In a simulation study we see that, depending on the type of cross-ownership, the lognormal model can lead to both over- and underestimation of the actual probability of default of a firm under cross-ownership. In the limit, i.e. if the levels of cross-ownership tend to their maximum possible value, these findings can be shown theoretically as well. Furthermore, we consider the default probability of a firm in general, i.e. without a distributional assumption, and show that the lognormal model is often able to yield only a limited range of probabilities of default, while the actual probabilities may take any value between 0 and 1.     

Sectoral Heterogeneity in New Service Development: An Exploratory Study of Service Types and Success Factors

The service industry is of fundamental relevance for the economies of industrialized countries, as the service industry produces the highest growth in the gross domestic product. In this regard, new service development (NSD) represents a critical resource for competitive survival and a decisive factor of growth in the service industry. However, service firms across many industries are increasingly faced with the challenge of determining how best to manage their development of new service offerings. Although researchers have shown growing interest in NSD issues, this area is still underutilized. Furthermore, although the heterogeneity of the service industry has been emphasized for years, the current body of research on NSD mainly focuses on specific service environments, providing data that are often not comparable across different service sectors. Additionally, there is no study to date that comprehensively examines innovation activities and the relevance of service innovations’ success factors within different service industries. The aim of this exploratory study is to establish a more balanced picture of the nature of innovation activities in terms of NSD characteristics and success factors in the heterogeneous service industry. From this perspective, this paper begins with an examination of the factors that contribute to the success of NSD. Based on a meta‐analysis of new service success factor studies, 17 different success determinants are classified and aggregated to service‐related success determinants. Subsequently, a cluster analysis of 1016 service companies is used to identify different service innovation types. For the service sector, four service innovation types are determined: efficient developers, innovative developers, interactive adopters, and standardized adopters. Furthermore, based on interviews with service innovation managers, the previously identified success factors are examined for each innovation type using a standardized survey. Finally, based on the results of this exploratory study, the paper concludes with recommendations for NSD management and research propositions for each service innovation type. These propositions support innovation managers to successfully manage service innovations for the innovation type they are operating in.     

Raising Capital in an Insurance Oligopoly Market

We consider an oligopoly market where firms offer insurance coverage against a risk characterised by aggregate uncertainty. Firms behave as if they were risk averse for a standard reason of costly external finance. The model consists in a two-stage game where firms choose their internal capital level at stage one and compete on price at stage two. We characterise the subgame perfect Nash equilibria of this game and focus attention on the strategic impact of insurers capital choice. We discuss the model with regard to the insurance industry specificities and regulation.     

Capital Market Development,Competition, Property Rights,and the Value of Insurer Product‐Line Diversification: A Cross‐Country Analysis

In this article, we show that the effect of product diversification on performance is not homogeneous across countries. Diversified insurance companies perform significantly worse than their focused competitors in countries with well‐developed capital markets, high levels of property rights protection, and high levels of competition. In addition, we find that the diversification–performance relationship for insurance companies depends on company size. For large insurers operating in countries with less developed capital markets, diversification significantly increases performance. Our results suggest that the optimal organizational structure may be different for insurers operating in emerging economies than for insurers operating in developed countries.     

Socioemotional wealth and IPO underpricing of family firms

Socioemotional wealth (SEW), i.e., the noneconomic utility a family derives from its ownership position in a firm, is the primary reference point for family firms. Family firms are willing to sacrifice economic gains in order to preserve their noneconomic utility. Thus, we argue that family firms sacrifice IPO proceeds by choosing higher IPO underpricing than nonfamily firms if underpricing helps them protect their SEW. Our empirical results, based on a sample of 153 German IPOs, support our hypothesis. On average, family firms have 10 percentage points more IPO underpricing than nonfamily firms. Copyright © 2014 John Wiley & Sons, Ltd.     

Stürzen vorbeugen

Zusammenfassung  Prophylaxen in der Pflege — Je ?lter Menschen sind, desto h?ufiger passieren Stürze. In der Gruppe der über 70-J?hrigen stürzt mehr als ein Drittel mindestens einmal. Eine der gravierensten Folgen dabei der Oberschenkelhalsbruch: In Deutschland sind es bis zu 100.000 Frakturen pro Jahr. Sturz ist damit ein relevanter Kostenfaktor für das Gesundheitswesen.