Members
Members and Research What Alumni Say ...
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Centre for Evidence-based Policy Advice
Centre for Evidence-based Policy Advice (IWH-CEP) ...
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IWH Bankruptcy Research
IWH Bankruptcy Research The Bankruptcy Research Unit of the Halle Institute for...
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Labor Market Power and the Distorting Effects of International Trade
Matthias Mertens
International Journal of Industrial Organization,
January
2020
Abstract
This article examines how final product trade with China shapes and interacts with labor market imperfections that create market power in labor markets and prevent an efficient market outcome. I develop a framework for measuring such labor market power distortions in monetary terms and document large degrees of these distortions in Germany's manufacturing sector. Import competition only exerts labor market disciplining effects if firms, rather than employees, possess labor market power. Otherwise, increasing export demand and import competition both fortify existing distortions, which decreases labor market efficiency. This widens the gap between potential and realized output and thus diminishes classical gains from trade.
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Financial Stability
Financial Systems: The Anatomy of the Market Economy How the financial system is...
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Shareholder Bargaining Power and the Emergence of Empty Creditors
Stefano Colonnello, M. Efing, Francesca Zucchi
Journal of Financial Economics,
No. 2,
2019
Abstract
Credit default swaps (CDSs) can create empty creditors who potentially force borrowers into inefficient bankruptcy but also reduce shareholders’ incentives to default strategically. We show theoretically and empirically that the presence and the effects of empty creditors on firm outcomes depend on the distribution of bargaining power among claimholders. If creditors would face powerful shareholders in debt renegotiation, firms are more likely to face the empty creditor problem. The empirical evidence confirms that more CDS insurance is written on firms with strong shareholders and that CDSs increase the bankruptcy risk of these same firms. The ensuing effect on firm value is negative.
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The Rise of Populist Parties in Europe
The Rise of Populist Parties in Europe: The Dark Side of Globalisation and Technological Change? ...
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Research Clusters
Four Research Clusters ...
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Wage and Employment Effects of Insolvencies
Wage and employment effects of bankruptcies Although the consequences of...
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