The effect of corporate real estate ownership on R&D innovation: credit relief vs. resource replacement in China

Against the background of supply-side structural reform and the real estate financialisation in China, this study investigates the impact of real estate holdings on R&D investment using data of enterprises listed on the Shanghai and Shenzhen stock exchanges. Our empirical results yield five main findings. First, enterprises holding more real estate assets face more serious financial constraints, thus restraining corporate innovation efficiency. Second, when the profit margin gap between entity enterprises and the real estate industry is larger, enterprises are more inclined to transfer industrial capital into the real estate industry, thus reducing R&D investment. Third, when the degree of marketisation is high, intensified market competition, the optimal allocation of factor and product markets, and stronger patent protection will weaken the restraining effect of corporate real estate holdings on R&D investment. Fourth, monopoly enterprises obtain potential profits more than undertaking risks from the real estate industry, they are more willing to hold real estate, thus strengthening the restraining effect of real estate holdings on innovation. Finally, investors' regional preference intensifies the restraining effect of corporate real estate holdings on R&D investment. Our empirical evidence can guide entity enterprises on how to effectively balance short-term (non-productive) and long-term (productive) capital investment.     

Regional job-turnover and industrial policy. a note on a potential time pattern of regional industrial policies and their job effects - the case of the german city-state of bremen

Many regions have experienced long-run economic fluctuations generated by the life cycles of their dominant industrial clusters. During the downswings in the 1970s and 1980s, proactive structural policies were typically launched in German regions to combat job losses in their core clusters and to create new jobs in new industries. With respect to the German State of Bremen, this paper provides empirical evidence of: (1) a long-run regional downswing; (2) the potential job effects of proactive regional industrial policy programmes in terms of increasing regional employment, by safeguarding jobs in the regional core industries and creating new jobs in new growth industries; and (3) a time pattern in the job effects, which are related to the different generations of programmes.     

Improving on two-stage estimators for scale families

Summary Consider the problem of finding an estimator for a scale parameter such that its risk function is bounded by a preassigned constant. As a solution of the problem, two-stage estimators based on only the second sample have been proposed. The paper shows that these estimators can be improved by combining the first and the second sample.     

Delaying integration of immigrant labor for the purpose of taxation

Delayed integration (DI) is a rule for taxing migrants. It requires that immigrants be taxed in the host country only after some period of transition. Conversely, emigrants are released from the obligation to pay taxes only after a certain period. DI is an alternative to the Employment Principle and the Home-Country Principle. The former governs the international taxation of labor. The latter is a close substitute for the Nationality Principle, on which US tax law is based. The paper studies DI in a setting which allows one to trade off the efficiency costs of distortionary taxation and of wasteful government.     

Coherent Distortion Risk Measures and Higher-Order Stochastic Dominances

Abstract

We show that the only coherent distortion risk measure that is consistent with respect to 3-convex order and hence with stochastic dominance of order 3 is the expected value, thus generalizing previous results of Hurlimann and solving a problem posed by Yamai and Yoshiba.     

A Simple Model of Insurance Market Dynamics

Abstract

This paper constructs and studies a simple but realistic model of an insurance market. The model has a minimalist construction in the sense that the number of parameters defining it is strictly limited and the elimination of any one of them would destroy its realism. There are 11 essential parameters. Each of the parameters has a physical interpretation. Some determine competitive effects within the market, some barriers to entry, and so on. The effect of each on various aspects of the market is examined in the presence of simulated loss experience. The aspects of the market considered include stability of premium rates, profitability, and market concentration. Some of the parameters are capable of use as regulatory controls. Two parameters, in addition to the original 11, are explicit price controls. Despite its simplicity, the model displays considerably complex behavior. Some results are intuitive, but some are not. For this reason, regulatory controls need to be applied with great caution lest they induce perverse effects, possibly even the reverse of those intended. The effect of the parameters on market behavior is first studied in the absence of catastrophic events from the loss experience. Subsequently, the effect of a single such event is studied.     

The growth path of the dynamic Asian economies

The rapid and sustained growth of several Asian economies led researchers, policymakers, and decision‐makers in the world of international business to search for a plausible Asian model of growth. Numerous explanations of the dynamic growth in Asia have been put forward, including the ‘new structuralist’ approach proposed by Lin (2012). This paper examines the various explanations of what these countries did to unleash their growth potential. Industrial policy and market intervention are two such explanations. While the dynamic Asian economies did not flout the Washington Consensus, they adapted it in different ways. The policies that they followed under the Beijing Consensus allowed them to proactively follow pro‐business policies. They also exploited the concepts of economic statism or state capitalism, which became an integral part of what became known as the ‘Asia model’.     

Pricing a Heterogeneous Portfolio Based on a Demand Function

Abstract

Consider a portfolio containing number of risk classes. Each class has its own demand function, which determines the number of insureds in this class as a function of the premium. The insurer determines the premiums based on the number of insureds in each class. The “market” reacts by updating the number of the policyholders, then the insurer updates the premium, and so on. We show that this process has an equilibrium point, and then we characterize this point.