Differences Make a Difference: Diversity in Social Learning and Value Creation
Yiwei Fang, Bill Francis, Iftekhar Hasan
Journal of Corporate Finance,
2018
Abstract
Prior research has demonstrated that CEOs learn privileged information from their social connections. Going beyond the importance of the number of social ties in a CEO's social network, this paper studies the value generated from a diverse social environment. We construct an index of social-network heterogeneity (SNH) that captures the extent to which CEOs are connected to people of different demographic attributes and skill sets. We find that higher CEO SNH leads to greater firm value through the channels of better corporate innovation and diversified M&As. Overall, the evidence suggests that CEOs' exposure to human diversity enhances social learning and creates greater growth opportunities for firms.
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Who Benefits from GRW? Heterogeneous Employment Effects of Investment Subsidies in Saxony Anhalt
Eva Dettmann, Mirko Titze, Antje Weyh
IWH Discussion Papers,
Nr. 27,
2017
Abstract
The paper estimates the plant level employment effects of investment subsidies in one of the most strongly subsidized German Federal States. We analyze the treated plants as a whole, as well as the influence of heterogeneity in plant characteristics and the economic environment. Modifying the standard matching and difference-in-difference approach, we develop a new procedure that is particularly useful for the evaluation of funding programs with individual treatment phases within the funding period. Our data base combines treatment, employment and regional information from different sources. So, we can relate the absolute effects to the amount of the subsidy paid. The results suggest that investment subsidies have a positive influence on the employment development in absolute and standardized figures – with considerable effect heterogeneity.
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Meaningless Work Threatens Job Performance
Adrian Chadi, Sabrina Jeworrek, Vanessa Mertins
LSE Business Review,
2017
Abstract
Open, transparent communication across the organisation is generally associated with improved employee motivation and organisational outcomes. For supervisors, the question arises how to deal with rather inconvenient information, such as in the case of a project failure. Informing employees after significant investments of time and effort might lead to negative effects on subsequent work motivation, one could argue. To identify a causal relationship between the meaning of previously completed work and workers’ subsequent work performance, we exploited a natural working environment in which the loss of the job’s meaning occurred as a matter of fact. At the same time, it was possible to credibly guide only part of the workforce to believe in the sudden loss of meaning by conducting a controlled experiment.
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The Role of Information in Innovation and Competition
Ufuk Akcigit, Qingmin Liu
Journal of the European Economic Association,
Nr. 4,
2016
Abstract
Innovation is typically a trial‐and‐error process. While some research paths lead to the innovation sought, others result in dead ends. Because firms benefit from their competitors working in the wrong direction, they do not reveal their dead‐end findings. Time and resources are wasted on projects that other firms have already found to be fruitless. We offer a simple model with two firms and two research lines to study this prevalent problem. We characterize the equilibrium in a decentralized environment that necessarily entails significant efficiency losses due to wasteful dead‐end replication and an information externality that leads to an early abandonment of the risky project. We show that different types of firms follow different innovation strategies and create different kinds of welfare losses. In an extension of the core model, we also study a centralized mechanism whereby firms are incentivized to disclose their actions and share their private information in a timely manner.
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Bottom-up or Direct? Forecasting German GDP in a Data-rich Environment
Katja Drechsel, Rolf Scheufele
Abstract
This paper presents a method to conduct early estimates of GDP growth in Germany. We employ MIDAS regressions to circumvent the mixed frequency problem and use pooling techniques to summarize efficiently the information content of the various indicators. More specifically, we investigate whether it is better to disaggregate GDP (either via total value added of each sector or by the expenditure side) or whether a direct approach is more appropriate when it comes to forecasting GDP growth. Our approach combines a large set of monthly and quarterly coincident and leading indicators and takes into account the respective publication delay. In a simulated out-of-sample experiment we evaluate the different modelling strategies conditional on the given state of information and depending on the model averaging technique. The proposed approach is computationally simple and can be easily implemented as a nowcasting tool. Finally, this method also allows retracing the driving forces of the forecast and hence enables the interpretability of the forecast outcome.
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Bottom-up or Direct? Forecasting German GDP in a Data-rich Environment
Katja Drechsel, Rolf Scheufele
Abstract
This paper presents a method to conduct early estimates of GDP growth in Germany. We employ MIDAS regressions to circumvent the mixed frequency problem and use pooling techniques to summarize efficiently the information content of the various indicators. More specifically, we investigate whether it is better to disaggregate GDP (either via total value added of each sector or by the expenditure side) or whether a direct approach is more appropriate when it comes to forecasting GDP growth. Our approach combines a large set of monthly and quarterly coincident and leading indicators and takes into account the respective publication delay.
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Lending Technology, Bank Organization and Competition
Hans Degryse, Steven Ongena, Günseli Tümer-Alkan
Journal of Financial Transformation,
2009
Abstract
This paper reviews recent theoretical and empirical studies investigating how both bank technology and organization shape bank-borrower interactions. We refer to two related concepts for bank technology. First, the technologies banks employ in loan granting decisions and second, the advances in information technology linked to the bank's lending technology. We also summarize and interpret the theoretical and empirical work on bank organization and its influence on lending technologies. We show that the choice of lending technology and bank organization depend heavily on the availability of information, the technological progress in the collection of information, as well as the banking market structure and the legal environment. We draw important policy conclusions from the literature. Competition authorities and supervisors have to remain alert to the consequences of the introduction of any new technology because: (1) advances in technology do not necessarily lead to more intense banking competition, and (2) the impact of technological and financial innovation on financial efficiency and stability depends on the incentives of the entire „loan production chain.‟
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The relationship between unemployment and output in post-communist countries
Hubert Gabrisch, Herbert Buscher
Post-Communist Economies,
2006
Abstract
Unemployment is still disappointingly high in most Central and East European countries, and might be a reflection of the ongoing adjustment to institutional shocks resulting from systemic transition, or it may be caused by high labour market rigidity, or aggregate demand that is too weak. In this paper we have investigated the dynamics of unemployment and output in those eight post-communist countries, which entered the EU in 2004. We used a model related to Okun’s Law; i.e. the first differences in unemployment rates were regressed on GDP growth rates. We estimated country and panel regressions with instrument variables (TSLS) and applied a few tests to the data and regression results. We assume transition of labour markets to be accomplished when a robust relationship exists between unemployment rate changes and GDP growth. Moreover, the estimated coefficients contain information about labour market rigidity and unemployment thresholds of output growth. Our results suggest that the transition of labour markets can be regarded as completed since unemployment responds to output changes and not to a changing institutional environment that destroys jobs in the state sector. The regression coefficients have demonstrated that a high trend rate of productivity and a high unemployment intensity of output growth have been occurring since 1998. Therefore, we conclude that labour market rigidities do not play an important role in explaining high unemployment rates. However, GDP growth is dominated by productivity progress and the employment-relevant component of aggregate demand is too low to reduce the high level of unemployment substantially.
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Cross-border bank mergers: What lures the rare animal?
Claudia M. Buch, G. DeLong
Journal of Banking and Finance,
Nr. 9,
2004
Abstract
Although domestic mergers and acquisitions (M&As) in the financial services industry have increased steadily over the past two decades, international M&As were until recently relatively rare. Moreover, the share of cross-border mergers in the banking industry is low compared with other industries. This paper uses a novel dataset of over 3000 mergers that took place between 1985 and 2001 to analyze the determinants of international bank mergers. We test the extent to which information costs and regulations hold back merger activity. Our results suggest that information costs significantly impede cross-border bank mergers. Regulations also influence cross-border bank merger activity. Hence, policy makers can create environments that encourage cross-border activity, but information cost barriers must be overcome even in (legally) integrated markets.
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Evaluation of Further Training Programmes with an Optimal Matching Algorithm
Eva Reinowski, Birgit Schultz, Jürgen Wiemers
IWH Discussion Papers,
Nr. 188,
2004
Abstract
This study evaluates the effects of further training on the individual unemployment duration of different groups of persons representing individual characteristics and some aspects of the economic environment. The Micro Census Saxony enables us to include additional information about a person's employment history to eliminate the bias resulting from unobservable characteristics and to avoid Ashenfelter's Dip. In order to solve the sample selection problem we employ an optimal full matching assignment, the Hungarian algorithm. The impact of participation in further training is evaluated by comparing the unemployment duration between participants and non-participants using the Kaplan-Meier-estimator. Overall, we find empirical evidence that participation in further training programmes results in even longer unemployment duration.
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