Regulations, institutions and income smoothing by managing technical reserves: international evidence from the insurance industry
Chrysovalantis Gaganis, Iftekhar Hasan, Fotios Pasiouras
Omega,
No. 3,
2016
Abstract
This paper investigates the role of technical reserves in the income smoothing behavior of insurance companies. This is one of the first attempts in the literature to trace such relationship in the insurance industry, especially at a multi-country setting. The experience of 770 insurance firms operating in 87 countries over the period 2000–2009 reveals that there is a significant evidence of income smoothing. The paper also finds that institutional characteristics, e.g., the rule of law, common law legal origin, economic freedom, and regulations relating to technical provisions and supervisory power constrain income smoothing but other factors such as capital requirements, tax deductibility of provisions, auditing, and corporate governance do not have a significant effect.
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A Review of Empirical Research on the Design and Impact of Regulation in the Banking Sector
Sanja Jakovljević, Hans Degryse, Steven Ongena
Annual Review of Financial Economics,
2015
Abstract
We review existing empirical research on the design and impact of regulation in the banking sector. The impact of each individual piece of regulation may inexorably depend on the set of regulations already in place, the characteristics of the banks involved (from their size or ownership structure to operational idiosyncrasies in terms of capitalization levels or risk-taking behavior), and the institutional development of the country where the regulation is introduced. This complexity is challenging for the econometrician, who relies either on single-country data to identify challenges for regulation or on cross-country data to assess the overall effects of regulation. It is also troubling for the policy maker, who has to optimally design regulation to avoid any unintended consequences, especially those that vary over the credit cycle such as the currently developing macroprudential frameworks.
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Research Explorer – Technical Documentation of Routines
Wilfried Ehrenfeld
IWH Technical Reports,
No. 3,
2015
Abstract
The Research Explorer is a directory of institutes at German universities and non-university research facilities, which is provided by the German Research Foundation (DFG) and the German Academic Exchange Service (DAAD). It is available for download for free and currently comprises ca. 23,000 entries. Two versions of this directory, which differ with regard to depth and coverage, are available to us. One version comprises 1712 entries, while the other holds over 22,000.
Primary goal of the presented routines is the comparison and complement of these two versions of the Research Explorer. The necessity for this arises from the differences in depth and coverage of the different versions. Furthermore, both versions are incomplete at some points, which means that individual institutions had to be added manually. The resulting data sets of the modified Research Explorer can subsequently be used for the mapping of cooperation relations.
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RegDemo: Preparation and Merger of Actor Data – Technical Documentation of Routines and Datasets
Wilfried Ehrenfeld
IWH Technical Reports,
No. 1,
2015
Abstract
Primary objective of the presented routines is the mapping of cooperative relations of companies, universities, non-university research facilities and other institutions on three levels of innovation activity (joint projects; publications, patents). This includes a) the standardization and merging of the three innovation-related databases (funding catalog (“Förderkatalog”); Web of Knowledge; DPMA patents) and b) linking this combined data pool with the data from the institution data sets Amadeus and Research Explorer by means of record linkage procedures. For this project the merger comprises the six regions considered in the RegDemo project. Spatial planning regions (“Raumordnungsregionen”) are used for delimitation: 501 - Aachen; 513 - Siegen; 602 - Nordhessen (= “Kassel”); 1302 – Mittleres Mecklenburg/Rostock (= “Rostock”); 1401 - Oberes Elbtal/Osterzgebirge (= “Dresden”); 1504 - Magdeburg.
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06.07.2015 • 27/2015
Rejection of Reforms as a Chance for Reforms
The President of the Halle Institute for Economic Research (IWH) – Member of the Leibniz Association continues to see a chance for an agreement between the European Union (EU) and Greece. On the surface, Grexit looks now more likely than ever. But the resignation of Yanis Varoufakis, Minister of Finance, and the outcome of the referendum may also provide a chance for the Greek government to agree on reforms and save face. But the window of opportunity is closing very fast.
Reint E. Gropp
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Spillover Effects among Financial Institutions: A State-dependent Sensitivity Value-at-Risk Approach
Z. Adams, R. Füss, Reint E. Gropp
Journal of Financial and Quantitative Analysis,
No. 3,
2014
Abstract
In this paper, we develop a state-dependent sensitivity value-at-risk (SDSVaR) approach that enables us to quantify the direction, size, and duration of risk spillovers among financial institutions as a function of the state of financial markets (tranquil, normal, and volatile). For four sets of major financial institutions (commercial banks, investment banks, hedge funds, and insurance companies) we show that while small during normal times, equivalent shocks lead to considerable spillover effects in volatile market periods. Commercial banks and, especially, hedge funds appear to play a major role in the transmission of shocks to other financial institutions.
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The Impact of Preferences on Early Warning Systems - The Case of the European Commission's Scoreboard
Tobias Knedlik
European Journal of Political Economy,
2014
Abstract
The European Commission’s Scoreboard of Macroeconomic Imbalances is a rare case of a publicly released early warning system. It allows the preferences of the politicians involved to be analysed with regard to the two potential errors of an early warning system – missing a crisis and issuing a false alarm. These preferences might differ with the institutional setting. Such an analysis is done for the first time in this article for early warning systems in general by using a standard signals approach, including a preference-based optimisation approach, to set thresholds. It is shown that, in general, the thresholds of the Commission’s Scoreboard are set low (resulting in more alarm signals), as compared to a neutral stand. Based on political economy considerations the result could have been expected.
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Gemeindegröße, Verwaltungsform und Effizienz der kommunalen Leistungserstellung – Das Beispiel Sachsen-Anhalt
Peter Haug
Raumforschung und Raumordnung,
No. 4,
2013
Abstract
Municipality Size, Institutions and Efficiency of Municipal Service Provision: The Case of Saxony-Anhalt: In this contribution we analyze the determinants of the efficiency of municipal service production using the example of the German state of Saxony-Anhalt. The focus lies on the effects of municipality size, institutional setting and spatial or demographic factors. We perform a robust non-parametric frontier estimation (Convex order-m).The results reveal e.g. no efficiency deficits of municipal associations and a significant impact of demographic factors and settlement structures.
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4th Halle Forum on Urban Economic Growth: „The Development of Cities in Central and Eastern Europe“
Albrecht Kauffmann
Wirtschaft im Wandel,
No. 2,
2013
Abstract
Das Halle Forum on Urban Economic Growth findet seit 2006 im zweijährigen Rhythmus am IWH statt. Die Tagung vom 29. und 30. November 2012 befasste sich mit Problemen der Entwicklung mittel- und osteuropäischer Städte. Thematisch umfassten die Vorträge ein breites Spektrum, in dessen Mitte die Frage nach der Wirkung formeller und informeller Institutionen auf die Stadtentwicklung stand. Sie verstand sich damit gleichzeitig als Auftaktveranstaltung des multinational angelegten IWH-Projekts „The Economic Re-positioning of Post-socialist Cities (RePoCit) – Institutional Settings, Local Strategies and Urban Economic Growth“.
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Gemeindegröße, Verwaltungsform und Effizienz der kommunalen Leistungserstellung – Das Beispiel Sachsen-Anhalt
Peter Haug
External Publications,
2012
Abstract
Municipality Size, Institutions and Efficiency of Municipal Service Provision: The Case of Saxony-Anhalt In this contribution we analyze the determinants of the efficiency of municipal service provision using the example of the German state of Saxony-Anhalt. The focus lies on the effects of municipality size, institutional setting and spatial or demographic factors. We perform a non-parametric efficiency estimation (Data Envelopment Analysis and the Convex-order-m approach by Daraio and Simar). In contrast to previous studies, we choose the aggregate budget of municipal associations as the object of our analysis since important competences are settled at the joint administrative level. The results show that municipal associations do not necessarily have to be less efficient than independent municipalities. Furthermore, the results for scale efficiency indicate that most municipalities of Saxony-Anhalt had a sufficiently efficient “firm size” in 2004. Moreover, demographic factors and settlement structures have a significant effect on the technical efficiency of towns and municipalities: While a higher population density might be, to some extent, efficiency-enhancing, an increasing share of senior citizens or population growth might have the opposite effect. The integration of spatial interdependencies in efficiency estimations is a complex problem that has only been solved insufficiently yet. However, the estimation results for Moran’s I show mostly statistically significant but, nevertheless, only little or moderate relationships between the single inputs and outputs. Hence, there is no cause for concern about a substantial bias in the results if we neglect spatial interrelationships in our calculation. Furthermore, we found no evidence that the surrounding municipalities benefit from their proximity to core cities by increased efficiency.
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