Investor Pessimism and the German Stock Market: Exploring Google Search Queries

We analyze the relationship of retail investor sentiment and the German stock market by introducing four distinct investor pessimism indices (IPIs) based on selected aggregate Google search queries. We assess the predictive power of weekly changes in sentiment captured by the IPIs for contemporaneous and future DAX returns, volatility and trading volume. The indices are found to have individually varying, but overall remarkably high explanatory power. An increase in retail investor pessimism is accompanied by decreasing contemporaneous market returns and an increase in volatility and trading volume. Future returns tend to increase while future volatility and trading volume decrease. The outcome is in line with the conjecture of correction effects. Overall, the results are well in line with modern investor sentiment theory.     

The effect of prospective payment under DRGs on the market value of hospitals

This article investigates the effect of a change in Medicare payment regulations on for-profit hospital market values. A theoretical argument on the effects of this regulatory event is presented in which hospital managers are concerned about firm wealth but also value prestige, provider perceptions of quality, and perhaps other prerequisites. In this case, DRGs will induce hospitals to seek higher wealth because they increase the opportunity cost of nonpecuniary benefits. The issue is pursued empirically by estimating the market response to DRG legislation using seemingly unrelated regressions.     

Comment: Marrying Functional Differentiation and Institutional Economics: Reflections on Steffen Roth’s Article

The Luhmannian idea of functional differentiation offers a novel and radical systems-theoretic framework reinforcing the institutionalist vision of the embeddedness of the economic system in the societal and natural environment. Reflecting on Steffen Roth’s article, I formulate two complementary arguments. The first is that any self-organized complexity can be supported by the installation of a systemic boundary protecting it from the outer environment. The second is that this boundary prevents the complexity of the outer environment from being fully translatable into the intra-systemic complexity. Both arguments potentially inform the institutionalist analysis of the operational and moral problems of the economic function system.     

ACCOUNTABILITY AND THE PUBLIC INTEREST IN THE NONPROFIT SECTOR: A CONCEPTUAL FRAMEWORK

This paper clarifies the nature of nonprofit accountability by distinguishing between the substantive and processual understandings of the public interest. The major theories of the nonprofit sector are shown to imply that this sector's activities correspond to the public interest only in its processual understanding, but not in the substantive one. Policy and management implications of this argument are discussed.     

Technicity in nursing and the dispensation of thinking

While technology and health care delivery are inextricably and increasingly intertwined and technology has driven major advances in quality and efficiency in health care, technology does not replace the need for a thinking human being in care delivery. The term "technicity" refers to the tension created by the ability of humans to think versus their risk of being exploited as objects subservient to technologies. Drawing upon the philosophical works of Thoreau, Heidegger, and others, the authors pause on the conundrum created by expanding technology with the assumption that technological "improvements" should be evaluated with caution. Health care information systems are an example of tools that have improved our ability to collect and store information, but when systems "go down," staff can be rendered helpless. Similarly, technology can impose personal distance between the patient and provider in instances where staff are positioned as a mechanism for collecting data rather than a person interacting with another person. In some cases, health care providers function as navigators helping patients reach the correct pharmaceutical, rather than as teachers helping patients seek better health. Lastly, the tendency toward systems analysis in the context of the complex hospital environment leads solely toward uniform solutions rather than instances where a customized solution is warranted.     

LATTICE OPTION PRICING BY MULTIDIMENSIONAL INTERPOLATION

This paper proposes a method for pricing high-dimensional American options based on modern methods of multidimensional interpolation. The method allows using sparse grids and thus mitigates the curse of dimensionality. A framework of the pricing algorithm and the corresponding interpolation methods are discussed, and a theorem is demonstrated, which suggests that the pricing method is less vulnerable to the curse of dimensionality. The method is illustrated by an application to rainbow options and compared to least squares Monte Carlo and other benchmarks.     

Who trades with whom — the income pattern of international trade

Zusammenfassung Wer treibt mit wem Handel? Das Einkommensmuster im internationalen Handel. — Dieser Aufsatz zeigt für 100 L?nder das Durchschnittseinkommen der Handelspartner, und zwar sowohl für die Importals auch für die Exportseite. Diese Angaben werden mit fiktiven Durchschnittseinkommen verglichen, die sich ergeben würden, wenn die geographische Verteilung des Handels rein zuf?llig w?re. Dabei stellt sich heraus, daΒ die Abweichung der tats?chlichen von den zuf?lligen Handelspartner-Einkommen mit der geographischen Konzentration des Handels, mit dem Anteil des mit den USA geführten Handels am gesamten AuΒenhandel sowie mit dem eigenen Pro-Kopf-Einkommen des jeweils betrachteten Landes zunimmt. Der positive Einkommenseffekt zeigt, daΒ zumindest für die industrialisierten reichen L?nder das Einkommensmuster des internationalen Handels mit Linders Hypothese übereinstimmt. Sein AusmaΒ deutet allerdings darauf hin, daΒ dieser Faktor nur wenig dazu beitragen kann, die Richtung des internationalen Handels zu erkl?ren.

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Résumé Qui fait de commerce avec qui? La structure de revenu dans le commerce international. — Cet article présente des données pour cent pays sur le revenu moyen des partenaires commerciaux de chaque pays, en ce qui concerne les importations aussi bien que les exportations. Ces données sont comparées avec les revenus moyens qui résulteraient d’une structure géographique du commerce par pur hasard. Les auteurs trouvent que la divergence entre le revenu du partenaire commercial actuel et le revenu du partenaire commercial par hasard s’accroit avec la concentration géographique du commerce, avec l’importance du commerce qui est fait avec les E.U. et avec le revenu per capita du pays respectif. L’effet positif de revenu démontre que la structure de revenu en ce qui concerne le commerce des pays riches et industrialisés est conforme avec 1’ hypothése de Linder. Sa dimension, cependant, suggére aussi que ce facteur est peu important d’expliquer la direction du commerce international.

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Resumen Quièn comercia con quièn — el patron de ingresos del comercio international. — Este articulo prèsenta datos de 100 pafses sobre el ingreso promedio de los socios comerciales de un pais, tanto para importaciones como exportaciones. Estas cifras se contrastan con los ingresos promedios que se obtendrian si el patron geográfico del comercio fuera puramente al azar. Se descubrió que la divergencia entre el patron de ingresos de los socios comerciales actual y al azar aumenta con la concentracion geográfica del comercio, con la parte del comercio efectuada con los EEUU y con el ingreso per capita propio del pais. El efecto ingreso positivo muestra que el patron de ingresos del comercio, a cualquier tasa, de pafses industrializados y ricos, están de acuerdo con la hip?tesis de Linder. Su magnitud, sin embargo, sugiere tambièn que este factor es de pequena importancia para explicar la dirección del comercio international.

     

International springboard as an entrepreneurial act

International springboard is an entrepreneurial act that requires international entrepreneurial orientation (IEO). An important aspect of international springboard is the establishment of a deeply localized flagship foreign subsidiary to help pursue diverse international strategic goals. We model parent-level IEO as a mediator in the relationships between diversity of international strategic goals and flagship subsidiary localization strategies (customer responsiveness, market scope, and local cooperativeness). The results from a sample of 208 Chinese MNEs demonstrate that the three dimensions of IEO (innovativeness, proactiveness, and risk taking) play an important but differentiated mediation role. The study illustrates the connection between parent-level entrepreneurial behavior and subsidiary-level strategic actions through which MNEs capture cross-national entrepreneurial opportunities.     

Achieving Temporal Ambidexterity in New Ventures

Organizations face a common intertemporal choice problem, where actions suitable in the shortterm are different from those that work in the longterm. Building on the organizational ambidexterity theory, we argue that organizations can reconcile their short‐term and long‐term tensions, but this does necessitate managerial endeavours that orchestrate this reconciliation. We introduce the concept of temporal ambidexterity and define four intertemporal tensions involving an organization’s objectives, resources, markets, and uncertainty. We examine how firms can address these tensions successfully in the context of new ventures, and to do so we focus on three managerial capabilities of founder‐CEOs: expertise breadth, external connectivity, and empowering leadership. Results from 243 new ventures in China suggest that temporal ambidexterity improves with these managerial capabilities, and more so for younger ventures. Our findings shed light on solutions and mechanisms by which intertemporal balance is fulfilled, particularly for new ventures in a dynamic environment.