Failure Risks in the Insurance Industry: A Quantitative Systems Analysis

We present in this article the findings from a study on insolvency in the property–casualty insurance industry that was commissioned by the Risk Foundation. The Risk Foundation contacted us for this work to draw from our experience in risk analysis based on systems analysis and probability. Therefore, we provide a different perspective on failure in the insurance industry by opening the "black box" to assess the contribution of different factors to the overall risk. Besides the development of a quantitative model for insolvency risk, our study for the Risk Foundation included insights from (1) unstructured interviews with 15 insurance industry experts and with six insurance regulators in different states, and (2) a statistical analysis of insolvency data (A.M. Best) covering the 1970 through 2005 period. Our focus here is centered on the practical insights that came out of the study, rather than on the technical details that led us to those insights.     

The importance of equity finance for R&;D activity

This article analyzes the importance of equity finance for the R&D activity of small- and medium-sized enterprises. We use information on almost 6,000 German SMEs from a company survey. Using the intensity of banking competition at the district level as an instrument to control for endogeneity, we find that a higher equity ratio is conducive to a higher R&D intensity. Owners may only start R&D activities if they have the financial resources to sustain them until successful completion. We find a larger influence of the equity ratio for young companies. Equity may be more important for young companies which have to rely on the original equity investment of their owners since they have not yet accumulated retained earnings and can rely less on bank financing.     

Designing credit agent incentives to prevent mission drift in pro-poor microfinance institutions

Credit agents in microfinance institutions (MFIs) must be given incentives to acquire information on potential borrowers and select them in accordance with the MFI's objectives. We show that while giving incentives has no cost in for-profit MFIs, it is costly in pro-poor MFIs: When repayment and wealth are positively correlated, a pro-poor MFI cannot obtain the selection of poor clients in the proportion it wishes with incentives based solely on repayment. It then becomes necessary to audit the share of very poor borrowers selected by an agent in order to provide the latter with adequate incentives. When audit costs are large, pro-poor MFIs may have to forego selection on wealth — and use other targeting devices such as working in impoverished geographical locations. Driven by donor concerns with ‘mission drift’ away from the poor, audits on the wealth status of clients have been introduced at the level of MFIs. We show that introducing pro-poor incentives requires extending such audits to the level of credit agents.     

Medien- und Kommunikationswissenschaft als Hauptfach: Die Göttinger Universität stärkt mit dem neu gegründeten Zentrum für interdisziplinäre Medienwissenschaft (ZIM) ihre Medienkompetenz

Ohne Zusammenfassung     

Decomposing service exports adjustments along the intensive and extensive margin at the firm‐level

Using a panel data set of Austrian service exporting firms this paper examines the determinants of service exports at the firm/destination country level. We implement a random effects Heckman sample selection firm‐level gravity model as well as a fixed effects Poisson model. Expected firm‐level service exports are decomposed into the intensive and extensive margins of adjustment as a response to counterfactual changes. We find market demand to be a key determinant. Results also suggest high service export potentials due to regulatory reform in partner countries within the EU. Adjustments at the extensive margin only play a marginal role. Increases in firm size as well as changes in distance related costs are most effective in developing new export relationships in services.     

Understanding Preferences for Dietary Supplements and Fortified Food during Pregnancy: A Discrete Choice Experiment

Using a discrete choice experiment, we examine pregnant women’s preferences to determine the relative importance they place on product attributes when choosing between nutritionally fortified food and beverage products, and supplement tablets. The choice experiment was included in a cross-sectional web-based questionnaire completed by 857 pregnant Australian women. Latent class analysis identified four distinct consumer segments: ‘Nulliparous information seekers’ (42% of sample), ‘Lower-income milk-lovers’ (22%), ‘Older multiparous tablet users’ (16%), and ‘Young juice-lovers’ (20%). While nutrient levels were a strong driver of choice in the largest segment, over one-third of pregnant women were not influenced by levels of recommended nutrients (folate or iodine) in supplement products. Pregnancy supplements endorsed by a reputable government science agency were most appealing in three of the segments. The information gained regarding product preferences of different consumer segments can aid in targeting pregnant women and those planning pregnancy with more appropriate nutrition information, advice, and products.     

Absorbing partner knowledge in R&D collaborations – the influence of founders on potential and realized absorptive capacity

We investigate whether founder participation in research and development collaborations enhances the two dimensions of absorptive capacity (ACAP): potential ACAP and realized ACAP. Based on a longitudinal firm-patent dataset of over 700 collaborations, and using a novel measure of ACAP, we find that founder involvement enhances potential ACAP provided the knowledge bases of focal firm and partner are related. Once knowledge has been absorbed, founder involvement increases realized ACAP irrespective of relatedness. Thus, we highlight the merit of treating the dimensions of ACAP separately by showing differing effects of founder involvement. Our paper emphasizes the outstanding role founders play in the R&D process of their firms. Firms should consider carefully the allocation of team members to R&D projects because team members differ with respect to their ACAP.     

Trust in the investor relationship marketing of startups: a systematic literature review and research agenda

Management Review Quarterly - An important task of entrepreneurs is the management of investor relations. Past literature has emphasized the role of trust for managing relationships and regulating...     

National versus supranational bank regulation: Gains and losses of joining a banking union

We ask how the structure of international banking affects the decision of a national regulator to join a banking union and to transfer regulatory powers to the supranational level. The focus is on bank supervision and bank resolution. A national regulator ignores possible gains or losses, which accrue to other jurisdictions if banks are internationally active. A supranational regulator takes these regulatory external effects into account. While supranational regulation improves total welfare, this is not necessarily the case for welfare in single countries. By analyzing the size and determinants of spillover effects we show how they constrain a country’s willingness to participate in a banking union. Our results may explain why some member states of the European Union currently hesitate to join the European Banking Union.     

Insuline richtig spritzen

Die meisten Menschen mit Diabetes führen ihre Insulininjektionen mittlerweile selbst durch. In der ambulanten oder station?ren Pflege ist das nicht immer m?glich. Hier sind Patienten nicht selten auf die Unterstützung der Pflegekr?fte angewiesen. Wissen Sie, worauf es dabei ankommt?