The consequences of labor market flexibility: Panel evidence based on survey data

We introduce a new data set on hiring and firing restrictions for 21 OECD countries for the period 1984-1990. The data are based on surveys of business people in the countries covered, so the indices we use are subjective in nature. Controlling for country and time fixed effects, and using dynamic panel data techniques, we find evidence that increasing the flexibility of the labor market increases both the employment rate and the rate of participation in the labor force. A conservative estimate suggests that if France were to make its labor markets as flexible as those in the US, its employment rate would increase 1.6 percentage points, or 14% of the employment gap between the two countries. The estimated effects are larger in the female than in the male labor market, although both groups seem to have similar long-run coefficients. There is also some evidence that more flexibility leads to lower unemployment rates and to lower rates of long-term unemployment. We also find evidence consistent with the hypothesis that inflexible labor markets produce “jobless recoveries” and introduce more unemployment persistence.     

Investor Protection and Corporate Valuation

We present a model of the effects of legal protection of minority shareholders and of cash-flow ownership by a controlling shareholder on the valuation of firms. We then test this model using a sample of 539 large firms from 27 wealthy economies. Consistent with the model, we find evidence of higher valuation of firms in countries with better protection of minority shareholders and in firms with higher cash-flow ownership by the controlling shareholder.     

Economic capital for nonperforming loans

A portfolio of nonperforming loans requires economic capital. We present two models for forecasting the portfolio loss and its probability distribution. In the first model, the loss for each nonperforming loan entails a change in provision over the risk horizon. The risk determinants are the single-name concentration, measured by the Herfindahl–Hirschmann index, as well as a systematic factor and the idiosyncratic risk. Our second model allows for interportfolio diversification with a portfolio of performing loans because banks typically own both performing and nonperforming loans. In this model, the nonperforming loan is identified with its systematic risk. Both models allow for closed-form expressions of economic capital and for the capital charge of the single loan. We calibrate the macroeconomic model parameters statistically with a loss panel; the microeconomic parameters depend on the portfolio. The portfolio risk for nonperforming loans mainly depends on the volatility of the systematic economic factor. The dependence becomes more pronounced when interportfolio diversification is taken into account. The magnitude of interportfolio diversification is also marked. Finally, we calculate regulatory capital charges according to Basel II for past-due loans. The regulatory charges are on average smaller than our economic charges and, additionally, take the volatility of economic activity into account only implicitly.     

Transnationalisierte Öffentlichkeit und Klimapolitik

For decades, the analysis of public spheres has been a core field in communication science and neighboring disciplines. Its special importance is grounded in the assumption that the public sphere is the primary realm of societal self-understanding, a sphere in which collectively relevant issues, potential solutions and the activity of political and other stakeholders is discussed and put up for scrutiny and legitimization. In much of this research, the media have played a key role, as they were seen as the generally accessible, permanent and comprehensive “master forum” of the public sphere.In recent years, however, scholarship on the public sphere has undergone a “major theoretical shift”, namely, a widening of the analytical perspective from national to transnational concepts of public spheres. Against the backdrop of a general transnationalization of the social sphere, communication scholars have increasingly paid attention to transnational forms of public sphere(s). Many of them, however, have focused on the (potential) emergence of a European public sphere in light of the expansion of the European Union, and only recently has research started to address transnational public spheres beyond Europe.This study ties in with this field of research. An empirical analysis of (potential) transnational public spheres was conducted by focusing on a subject which has been interpreted as a focal point for the emergence of a transnational or even global public sphere: international climate change policy. Due to its high priority and wide reach, international climate policy is said to constitute conditions conducive for a potential transnationalization of public spheres.We understand transnationalization as a pervasion of national public spheres with transnational references that can be distinguished along two analytical dimensions: “Vertical” transnationalization describes the extent to which organizations and actors representing a form of supranational governance are represented and/or (de)legitimized in national public spheres. The “horizontal” transnationalization describes the extent to which organizations or actors from foreign countries are represented within national public spheres.In addition, we differentiate a “strong” and “weak” variant of vertical resp. horizontal transnationalization. For example, a “weak vertical transnationalization” characterizes a case where supranational governance institutions are merely mentioned within a national public sphere; whereas a “strong vertical transnationalization” characterizes a situation where actors from supranational governance institutions have the opportunity to actively express themselves.Our main research questions are 1) to what extent is the media coverage about climate policy in the examined countries pervaded by transnational references? 2) Which patterns of transnationalization can be identified in the media coverage about climate policy in the examined countries?We conducted a manual as well as an automated quantitative content analysis of newspaper coverage about climate change policy in 15 countries. We analyzed 4955 news articles from quality, tabloid and local newspapers for the whole year of 2014. The articles were downloaded from databases like LexisNexis and Factiva, using a complex search string in four languages. The automated content analysis—used to identify the weak variant of transnationalization—followed the “dictionary approach”, with dictionaries based on elaborated word lists (in German and English) that were translated into Portuguese and Spanish and further adapted for this study. The results of the automated content analysis were tested against a manual analysis of 50 randomly selected articles, with very good reliability for each language-specific dictionary (Krippendorff’s Alpha above 0.909). Regarding the manual content analysis—used to identify the strong variant of transnationalization—11 coders were trained and achieved a satisfying to good reliability (Krippendorff’s Alpha above 0.72).Firstly, our analysis shows a visible transnationalization of public debates about climate change policy. In all countries, foreign and supranational actors dominate the domestic news coverage (weak pattern). Conversely, regarding the strong pattern of transnationalization national actors who actively express themselves are dominant.Secondly, our findings show that the transnationalization of the public sphere differs depending on the dimension examined. On the one hand, the horizontal transnationalization appears more often than the vertical one: References to actors from other countries in climate policy-related debates appear more often than references to supranational institutions. On the other hand, transnational references tend to appear rather in a weak than a strong pattern: Foreign or supranational actors are mentioned more often than they express themselves actively. Furthermore, transnational references seem to concentrate on a few actors like the UN, the EU, China and the USA.Thirdly, we found country and media type-related differences regarding the extent, structural patterns and reach of transnationalization. Media type differences seem to correspond with the findings research about European public sphere yielded: News coverage of quality papers is more transnationalized than regional and especially tabloid papers.     

Es gibt weiterhin ökonomische Argumente für einen öffentlichen Rundfunk

Recent economic literature criticises the size and mandate of public broadcasting in Germany. Technological progress has changed the methods of producing and distributing broadcasting content. Traditional broadcasting and print media have converged in a digital environment. Some of the classical arguments for publicly funded broadcasting have become invalid. This article argues that the converging media markets are nonetheless characterised by ongoing market failures, mostly because of positive external effects created by public value content. Markets will underprovide such content, which is why they should be publicly funded. We discuss the scope and form of public broadcasting and conclude that there are still economic reasons for dedicated public service broadcasters to exist.     

Corporate identity management and employees’ responses

Main goals in this study are to analyse the effects of corporate identity management (CIM) on the employees’ responses, and the moderating effects of two employee personality traits: proactive personality and resistance to change. Two hundred and ninety-three branch managers in the banking sector in Spain participated in the study, and their responses were analysed through structural equation modelling. Results show that organizational identification is a key variable to explain the CIM effects on employees’ responses. Moreover, employees’ proactive personality and resistance to change exert a moderating influence on the way identification leads to extra-role behaviours. Human resource practices should take into account that proactive employees are more prone to externalize their identification by spreading positive WOM. Besides, identification with the organization will lead to loyalty, especially in employees with low resistance to change.     

Management sub-advising in the mutual fund industry

This is a study of how contractual mechanisms can mitigate agency conflicts in sub-advised mutual funds. Sub-advising contracts allow fund families to expand their product offerings to include new investment styles and thereby gain market share. We show that costly contractual arrangements, such as co-branding, multi-advising, and performance-based compensation, can mitigate agency conflicts in outsourcing and protect investors from potential underperformance. Fund families will find it cost-effective to implement such incentive mechanisms only when investors are sophisticated in assessing manager skill. The findings help to explain why a large percentage of fund families outsource their funds to advisory firms.     

Trade law and trade flows

This paper develops and estimates a model to study the effect of improving the quality of commercial trade law on trade flows. We focus on improvements aimed to privately resolve disputes among trading partners: international commercial arbitration and conciliation. The main novelty of the model is to explicit the balance between the contractual quality of importer and exporter (contractual distance) in an environment with informational frictions (contractual noise). Using a structural gravity estimation with high-dimensional fixed effects, the main contribution of the empirical exercise is to confirm previous results and unravel new traits that align with our theoretical results. Arbitration has a moderate and positive effect on exports that increases (decreases) with the contractual quality of the exporter (importer) and the remoteness of markets. The effects of conciliation are similarly positive, but only for similar trading partners with high levels of income. Results also suggest both domestic trade law reform and international treaties have a positive effect on trade, with a stronger effect of the latter.     

EMU and trade: A PPML re-assessment with intra-national trade flows

This paper examines the EMU effect on trade for the eleven early joiners and Greece relying for the first time on data that include both international and intra-national trade flows, in line with all the microfoundations of the structural gravity model of trade. We find that the overall EMU impact on trade is positive between its members and, specially, for trade between members and non-members. Interestingly, we further show that the effect of the EMU on bilateral trade remarkably differs across countries. For Ireland, Belgium–Luxembourg, Spain, Portugal and Austria, we find robust evidence that EMU has boosted trade both with other members and with third countries, while for Finland, France, Germany, Italy and the Netherlands, the results suggest that only trade with third countries has been enhanced by the EMU. Greece is the only country that shows a negative impact in trade with other EMU members and no effect in trade with non-members. Finally, the results across countries according to the direction of the trade flows (exports versus imports) do not show significant differences in any case.