Going Multinational: What are the Effects on Home‐Market Performance?

Abstract. This paper compares the home‐market performance of German multinational enterprises (MNEs) and national firms, both before and after switching from national to multinational activities. Regarding the former case, our results show that future multinationals outperform domestic firms. When assessing the ex post performance of multinationals, selectivity issues must be taken into account. Applying an endogenous treatment model, it turns out that after switching, both productivity and wage growth are higher at newly founded MNEs. While capital intensities increase compared with those of national firms, employment growth rates are negatively related to switching, suggesting that home and foreign employment are substitutes.     

The generation of stock market cycles

This paper demonstrates that the relation between stock market and business cycle dynamics can be conceptualized using a dividend discount model. The interaction of changes in earnings and interest rates throughout the economic cycle are shown to cause changes in the level of stock prices. This implies that monitoring and forecasting these factors can help explain and possibly predict stock price behavior over time.     

Societal preferences for fertility treatment in Australia: a stated preference discrete choice experiment

Objective: To investigate preferences for fertility treatment from the Australian general population with the aims of calculating the willingness to pay in tax contribution for attributes (characteristics) that make up treatment and for an “ideal” fertility treatment program. We also assessed whether willingness-to-pay varies by the relationship status or sexual orientation of the patient.

Methods: A stated preference discrete choice experiment was administered to a panel of 801 individuals representative of the Australian general population. Seven attributes of fertility treatment under three broad categories were included: outcome, process, and cost. Attributes were identified through published literature, focus group discussions, expert knowledge, and a pilot study. A Bayesian fractional experimental design was used, and data analysis was performed using a generalized multinomial logit model. Further analyses included interaction terms and latent class modeling.

Results: Six of the seven attributes influenced the choice of a treatment program. Under process attributes, individuals preferred: continuity of care of clinic staff, where patients are seen by the same doctor but different nurses at each visit; “alternative” treatments being offered to all patients; and onsite clinic counseling and peer-support groups. Personalization and tailoring of the treatment journey were not important. Among outcome attributes, the improved success rate of having a baby per cycle and significant side-effects were considered important. Cost of treatment also influenced the choice of treatment program. Individual preferences for fertility treatment were not associated with patients’ relationship status or sexual orientation. Latent class modeling revealed sub-groups with distinct fertility treatment preferences.

Conclusion: This study provides important insights into the attributes that influence the preferences of fertility treatment in Australia. It also estimates socially-inclusive willingness-to-pay values in tax contributions for an “ideal” package of treatment. The results can inform economic evaluations of fertility treatment programs.     

博弈论的目标

本文分两个部分探讨了博弈论的核心任务.第一部分先对博弈论的科学属性进行了思辨性的探讨.作者认为,不能简单用“正确”或“错误”来评价博弈论;一个科学理论不应该试图去得到事实或者接近事实,而是要努力将人们的思想和观察用一种简约的方式进行统一,从这个角度说博弈论不失为符合规范的科学理论.第二部分讨论了博弈论中若干“解”的概念,包括纳什均衡、核和夏普利值等等.作者认为这些概念必须根据它们的应用去加以理解,并且从它们应用的广泛程度和结果的质量进行评判.不同的“解”有不同的应用,每一种解都从某一侧面统一了交互性决策过程中的理性行为.正是基于这种对博弈解的理解,尽管博弈论是基于“理性人”的理论,但这并不妨碍它在解释“社会人”或“现代人”行为上取得引人注目的成功.     

Are new states more corrupt? Expert opinions versus firms’ experiences

We find that new states are perceived to be more corrupt even though businesses do not report more bribery in newer states. This is suggestive of an unearned, and likely high, reputational cost to being a new state. These findings hold over a number of specifications that include additional economic, historical and geographic controls.     

International parity relationships between Germany and the USA revisited: evidence from the post-DM period

In this study, we show the interrelation of the purchasing power parity and the uncovered interest rate parity between the US and Germany for the recent period running from 1999:01 to 2014:04. This study extends the literature by testing both hypotheses simultaneously in a multivariate ECM. This has the advantage that interactions between capital and goods markets can be considered simultaneously. Our finding of two long-run relationships between the variables shows that a disequilibrium in one of the two markets leads to a disequilibrium in the other. While analysing the reaction to cumulative shocks, we show that US variables have a greater impact on German variables than vice versa. Therefore, the rising importance of the euro and the increased integration of the European Union in the recent decade have not changed this relation.     

Sectoral linking of carbon markets: A trade-theory analysis

The linking of emission trading systems (ETS) is a widely discussed policy option for future international cooperation on climate change. Benefits are expected from efficiency gains and the alleviation of concerns over competitiveness. However, from trade-theory it is known that due to general equilibrium effects and market distortions, linking may not always be beneficial for all participating countries. Following-up on this debate, we use a Ricardo-Viner type general equilibrium model to study the implications of sectoral linking on carbon emissions (‘leakage’), competitiveness, and welfare. By comparing pre- and post-linking equilibria, we show analytically how global emissions can increase if one of the ‘linked’ countries lacks an economy-wide emissions cap, although in case of a link across idiosyncratic sectors a decrease of emissions (‘anti-leakage’) is also possible. If – as a way to address concerns about competitiveness – a link between the EU ETS and a hypothetical US system is established, the partial emission coverage of the EU ETS can lead to the creation of new distortions between the non-covered domestic and international sector. Finally, we show how the welfare effect from linking can be decomposed into gains-from-trade and terms-of-trade contributions, and how the latter can make the overall effect ambiguous.     

Exchange traded funds: leverage and liquidity

This paper examines the differences between leveraged and unleveraged Exchange Traded Funds (ETFs), particularly for liquidity and volatility characteristics. The impact of leverage on intraday liquidity (spread and depth) is analysed in two periods – one of normal volatility and the other of abnormal/high volatility. There is a significant difference in spread and depth of leveraged and unleveraged ETFs in periods of both normal volatility and high volatility; however, this difference is more pronounced in higher volatility periods. In high volatility periods, liquidity typically diminishes in all ETFs, and this is even more so for the leveraged ETFs. When leveraged ETFs are segregated into multiples based on their power to replicate the underlying benchmark (i.e. multiples of ?3, ?2, ?1, 2, 3), the difference in spreads between normal and high volatility periods is typically larger. The double-leveraged ETF has the most significant difference between the positive and negative counter parts. However, the relationship in the progression of the multiples does not change linearly to correspond with the level of volatility. This may be due to the nonlinear relation between volume and volatility. We shed light on the magnification effect of financial leverage on microstructure of the ETFs.