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This thesis contains four parts that are all connected by their contributions to the Efficient Market Hypothesis and decision-making literature. Chapter two investigates how national stock market indices reacted to the news of national lockdown restrictions in the period from January to May 2020. The results show that lockdown restrictions led to different reactions in a sample of OECD and BRICS countries: there was a general negative effect resulting from the increase in lockdown restrictions, but the study finds strong evidence for underreaction during the lockdown announcement, followed by some overreaction that is corrected subsequently. This under-/overreaction pattern, however, is observed mostly during the first half of our time series, pointing to learning effects. Relaxation of the lockdown restrictions, on the other hand, had a positive effect on markets only during the second half of our sample, while for the first half of the sample, the effect was negative. The third chapter investigates the gender differences in stock selection preferences on the Taiwan Stock Exchange. By utilizing trading data from the Taiwan Stock Exchange over a span of six years, it becomes possible to analyze trading behavior while minimizing the self-selection bias that is typically present in brokerage data. To study gender differences, this study uses firm-level data. The percentage of male traders in a company is the dependent variable, while the company’s industry and fundamental/technical aspects serve as independent variables. The results show that the percentage of women trading a company rises with a company’s age, market capitalization, a company’s systematic risk, and return. Men trade more frequently and show a preference for dividend-paying stocks and for industries with which they are more familiar. The fourth chapter investigated the relationship between regret and malicious and benign envy. The relationship is analyzed in two different studies. In experiment 1, subjects had to fill out psychological scales that measured regret, the two types of envy, core self-evaluation and the big 5 personality traits. In experiment 2, felt regret is measured in a hypothetical scenario, and the subject’s felt regret was regressed on the other variables mentioned above. The two experiments revealed that there is a positive direct relationship between regret and benign envy. The relationship between regret and malicious envy, on the other hand, is mostly an artifact of core self-evaluation and personality influencing both malicious envy and regret. The relationship can be explained by the common action tendency of self-improvement for regret and benign envy. Chapter five discusses the differences in green finance regulation and implementation between the EU and China. China introduced the Green Silk Road, while the EU adopted the Green Deal and started working with its own green taxonomy. The first difference comes from the definition of green finance, particularly with regard to coal-fired power plants. Especially the responsibility of nation-states’ emissions abroad. China is promoting fossil fuel projects abroad through its Belt and Road Initiative, but the EU’s Green Deal does not permit such actions. Furthermore, there are policies in both the EU and China that create contradictory incentives for economic actors. On the one hand, the EU and China are improving the framework conditions for green financing while, on the other hand, still allowing the promotion of conventional fuels. The role of central banks is also different between the EU and China. China’s central bank is actively working towards aligning the financial sector with green finance. A possible new role of the EU central bank or the priority financing of green sectors through political decision-making is still being debated.
Non-probability sampling is a topic of growing relevance, especially due to its occurrence in the context of new emerging data sources like web surveys and Big Data.
This thesis addresses statistical challenges arising from non-probability samples, where unknown or uncontrolled sampling mechanisms raise concerns in terms of data quality and representativity.
Various methods to quantify and reduce the potential selectivity and biases of non-probability samples in estimation and inference are discussed. The thesis introduces new forms of prediction and weighting methods, namely
a) semi-parametric artificial neural networks (ANNs) that integrate B-spline layers with optimal knot positioning in the general structure and fitting procedure of artificial neural networks, and
b) calibrated semi-parametric ANNs that determine weights for non-probability samples by integrating an ANN as response model with calibration constraints for totals, covariances and correlations.
Custom-made computational implementations are developed for fitting (calibrated) semi-parametric ANNs by means of stochastic gradient descent, BFGS and sequential quadratic programming algorithms.
The performance of all the discussed methods is evaluated and compared for a bandwidth of non-probability sampling scenarios in a Monte Carlo simulation study as well as an application to a real non-probability sample, the WageIndicator web survey.
Potentials and limitations of the different methods for dealing with the challenges of non-probability sampling under various circumstances are highlighted. It is shown that the best strategy for using non-probability samples heavily depends on the particular selection mechanism, research interest and available auxiliary information.
Nevertheless, the findings show that existing as well as newly proposed methods can be used to ease or even fully counterbalance the issues of non-probability samples and highlight the conditions under which this is possible.
Survey data can be viewed as incomplete or partially missing from a variety of perspectives and there are different ways of dealing with this kind of data in the prediction and the estimation of economic quantities. In this thesis, we present two selected research contexts in which the prediction or estimation of economic quantities is examined under incomplete survey data.
These contexts are first the investigation of composite estimators in the German Microcensus (Chapters 3 and 4) and second extensions of multivariate Fay-Herriot (MFH) models (Chapters 5 and 6), which are applied to small area problems.
Composite estimators are estimation methods that take into account the sample overlap in rotating panel surveys such as the German Microcensus in order to stabilise the estimation of the statistics of interest (e.g. employment statistics). Due to the partial sample overlaps, information from previous samples is only available for some of the respondents, so the data are partially missing.
MFH models are model-based estimation methods that work with aggregated survey data in order to obtain more precise estimation results for small area problems compared to classical estimation methods. In these models, several variables of interest are modelled simultaneously. The survey estimates of these variables, which are used as input in the MFH models, are often partially missing. If the domains of interest are not explicitly accounted for in a sampling design, the sizes of the samples allocated to them can, by chance, be small. As a result, it can happen that either no estimates can be calculated at all or that the estimated values are not published by statistical offices because their variances are too large.
Broadcast media such as television have spread rapidly worldwide in the last century. They provide viewers with access to new information and also represent a source of entertainment that unconsciously exposes them to different social norms and moral values. Although the potential impact of exposure to television content have been studied intensively in economic research in recent years, studies examining the long-term causal effects of media exposure are still rare. Therefore, Chapters 2 to 4 of this thesis contribute to the better understanding of long-term effects of television exposure.
Chapter 2 empirically investigates whether access to reliable environmental information through television can influence individuals' environmental awareness and pro-environmental behavior. Analyzing exogenous variation in Western television reception in the German Democratic Republic shows that access to objective reporting on environmental pollution can enhance concerns regarding pollution and affect the likelihood of being active in environmental interest groups.
Chapter 3 utilizes the same natural experiment and explores the relationship between exposure to foreign mass media content and xenophobia. In contrast to the state television broadcaster in the German Democratic Republic, West German television regularly confronted its viewers with foreign (non-German) broadcasts. By applying multiple measures for xenophobic attitudes, our findings indicate a persistent mitigating impact of foreign media content on xenophobia.
Chapter 4 deals with another unique feature of West German television. In contrast to East German media, Western television programs regularly exposed their audience to unmarried and childless characters. The results suggest that exposure to different gender stereotypes contained in television programs can affect marriage, divorce, and birth rates. However, our findings indicate that mainly women were affected by the exposure to unmarried and childless characters.
Chapter 5 examines the influence of social media marketing on crowd participation in equity crowdfunding. By analyzing 26,883 investment decisions on three German equity crowdfunding platforms, our results show that startups can influence the success of their equity crowdfunding campaign through social media posts on Facebook and Twitter.
In Chapter 6, we incorporate the concept of habit formation into the theoretical literature on trade unions and contribute to a better understanding of how internal habit preferences influence trade union behavior. The results reveal that such internal reference points lead trade unions to raise wages over time, which in turn reduces employment. Conducting a numerical example illustrates that the wage effects and the decline in employment can be substantial.
For decades, academics and practitioners aim to understand whether and how (economic) events affect firm value. Optimally, these events occur exogenously, i.e. suddenly and unexpectedly, so that an accurate evaluation of the effects on firm value can be conducted. However, recent studies show that even the evaluation of exogenous events is often prone to many challenges that can lead to diverse interpretations, resulting in heated debates. Recently, there have been intense debates in particular on the impact of takeover defenses and of Covid-19 on firm value. The announcements of takeover defenses and the propagation of Covid-19 are exogenous events that occur worldwide and are economically important, but have been insufficiently examined. By answering open research questions, this dissertation aims to provide a greater understanding about the heterogeneous effects that exogenous events such as the announcements of takeover defenses and the propagation of Covid-19 have on firm value. In addition, this dissertation analyzes the influence of certain firm characteristics on the effects of these two exogenous events and identifies influencing factors that explain contradictory results in the existing literature and thus can reconcile different views.
Zeitgleich mit stetig wachsenden gesellschaftlichen Herausforderungen haben im vergangenen Jahrzehnt Sozialunternehmen stark an Bedeutung gewonnen. Sozialunternehmen verfolgen das Ziel, mit unternehmerischen Mitteln gesellschaftliche Probleme zu lösen. Da der Fokus von Sozialunternehmen nicht hauptsächlich auf der eigenen Gewinnmaximierung liegt, haben sie oftmals Probleme, geeignete Unternehmensfinanzierungen zu erhalten und Wachstumspotenziale zu verwirklichen.
Zur Erlangung eines tiefergehenden Verständnisses des Phänomens der Sozialunternehmen untersucht der erste Teil dieser Dissertation anhand von zwei Studien auf der Basis eines Experiments das Entscheidungsverhalten der Investoren von Sozialunternehmen. Kapitel 2 betrachtet daher das Entscheidungsverhalten von Impact-Investoren. Der von diesen Investoren verfolgte Investmentansatz „Impact Investing“ geht über eine reine Orientierung an Renditen hinaus. Anhand eines Experiments mit 179 Impact Investoren, die insgesamt 4.296 Investitionsentscheidungen getroffen haben, identifiziert eine Conjoint-Studie deren wichtigste Entscheidungskriterien bei der Auswahl der Sozialunternehmen. Kapitel 3 analysiert mit dem Fokus auf sozialen Inkubatoren eine weitere spezifische Gruppe von Unterstützern von Sozialunternehmen. Dieses Kapitel veranschaulicht auf der Basis des Experiments die Motive und Entscheidungskriterien der Inkubatoren bei der Auswahl von Sozialunternehmen sowie die von ihnen angebotenen Formen der nichtfinanziellen Unterstützung. Die Ergebnisse zeigen unter anderem, dass die Motive von sozialen Inkubatoren bei der Unterstützung von Sozialunternehmen unter anderem gesellschaftlicher, finanzieller oder reputationsbezogener Natur sind.
Der zweite Teil erörtert auf der Basis von zwei quantitativ empirischen Studien, inwiefern die Registrierung von Markenrechten sich zur Messung sozialer Innovationen eignet und mit finanziellem und sozialem Wachstum von sozialen Startups in Verbindung steht. Kapitel 4 erörtert, inwiefern Markenregistrierungen zur Messung von sozialen Innovationen dienen können. Basierend auf einer Textanalyse der Webseiten von 925 Sozialunternehmen (> 35.000 Unterseiten) werden in einem ersten Schritt vier Dimensionen sozialer Innovationen (Innovations-, Impact-, Finanz- und Skalierbarkeitsdimension) ermittelt. Darauf aufbauend betrachtet dieses Kapitel, wie verschiedene Markencharakteristiken mit den Dimensionen sozialer Innovationen zusammenhängen. Die Ergebnisse zeigen, dass insbesondere die Anzahl an registrierten Marken als Indikator für soziale Innovationen (alle Dimensionen) dient. Weiterhin spielt die geografische Reichweite der registrierten Marken eine wichtige Rolle. Aufbauend auf den Ergebnissen von Kapitel 4 untersucht Kapitel 5 den Einfluss von Markenregistrierungen in frühen Unternehmensphasen auf die weitere Entwicklung der hybriden Ergebnisse von sozialen Startups. Im Detail argumentiert Kapitel 5, dass sowohl die Registrierung von Marken an sich als auch deren verschiedene Charakteristiken unterschiedlich mit den sozialen und ökonomischen Ergebnissen von sozialen Startups in Verbindung stehen. Anhand eines Datensatzes von 485 Sozialunternehmen zeigen die Analysen aus Kapitel 5, dass soziale Startups mit einer registrierten Marke ein vergleichsweise höheres Mitarbeiterwachstum aufweisen und einen größeren gesellschaftlichen Beitrag leisten.
Die Ergebnisse dieser Dissertation weiten die Forschung im Social Entrepreneurship-Bereich weiter aus und bieten zahlreiche Implikationen für die Praxis. Während Kapitel 2 und 3 das Verständnis über die Eigenschaften von nichtfinanziellen und finanziellen Unterstützungsorganisationen von Sozialunternehmen vergrößern, schaffen Kapitel 4 und 5 ein größeres Verständnis über die Bedeutung von Markenanmeldungen für Sozialunternehmen.
The Belt and Road Initiative (BRI) has had a significant impact on China in political, economic, and cultural terms. This study focuses on the cultural domain, especially on scholarship students from the countries that signed bilateral cooperation agreements with China under the BRI. Using an integrated approach combining the difference-in-differences method and the gravity model, we explore the correlation between the BRI and the increasing number of international scholarship students funded by the Chinese government, as well as the determinants of students' decision to study in China. The panel data from 2010 to 2018 show that the launch of BRI has had a positive impact on the number of scholarship students from BRI countries. The number of scholarship recipients from non-BRI countries also increased, but at a much slower rate than those from BRI countries. The sole exception is the United States, which has trended downward for both state-funded and self-funded students.
The outbreak of the COVID-19 pandemic has also led to many conspiracy theories. While the origin of the pandemic in China led some, including former US president Donald Trump, to dub the pathogen “Chinese virus” and to support anti-Chinese conspiracy narratives, it caused Chinese state officials to openly support anti-US conspiracy theories about the “true” origin of the virus. In this article, we study whether nationalism, or more precisely uncritical patriotism, is related to belief in conspiracy theories among normal people. We hypothesize based on group identity theory and motivated reasoning that for the particular case of conspiracy theories related to the origin of COVID-19, such a relation should be stronger for Chinese than for Germans. To test this hypothesis, we use survey data from Germany and China, including data from the Chinese community in Germany. We also look at relations to other factors, in particular media consumption and xenophobia.
Despite significant advances in terms of the adoption of formal Intellectual Property Rights (IPR) protection, enforcement of and compliance with IPR regulations remains a contested issue in one of the world's major contemporary economies—China. The present review seeks to offer insights into possible reasons for this discrepancy as well as possible paths of future development by reviewing prior literature on IPR in China. Specifically, it focuses on the public's perspective, which is a crucial determinant of the effectiveness of any IPR regime. It uncovers possible differences with public perspectives in other countries and points to mechanisms (e.g., political, economic, cultural, and institutional) that may foster transitions over time in both formal IPR regulation and in the public perception of and compliance with IPR in China. On this basis, the review advances suggestions for future research in order to improve scholars' understanding of the public's perspective of IPR in China, its antecedents and implications.
We study planned changes in protective routines after the COVID-19 pandemic: in a survey in Germany among >650 respondents, we find that the majority plans to use face masks in certain situations even after the end of the pandemic. We observe that this willingness is strongly related to the perception that there is something to be learned from East Asians’ handling of pandemics, even when controlling for perceived protection by wearing masks. Given strong empirical evidence that face masks help prevent the spread of respiratory diseases and given the considerable estimated health and economic costs of such diseases even pre-Corona, this would be a very positive side effect of the current crisis.
Institutional and cultural determinants of speed of government responses during COVID-19 pandemic
(2021)
This article examines institutional and cultural determinants of the speed of government responses during the COVID-19 pandemic. We define the speed as the marginal rate of stringency index change. Based on cross-country data, we find that collectivism is associated with higher speed of government response. We also find a moderating role of trust in government, i.e., the association of individualism-collectivism on speed is stronger in countries with higher levels of trust in government. We do not find significant predictive power of democracy, media freedom and power distance on the speed of government responses.
Teamwork is ubiquitous in the modern workplace. However, it is still unclear whether various behavioral economic factors de- or increase team performance. Therefore, Chapters 2 to 4 of this thesis aim to shed light on three research questions that address different determinants of team performance.
Chapter 2 investigates the idea of an honest workplace environment as a positive determinant of performance. In a work group, two out of three co-workers can obtain a bonus in a dice game. By misreporting a secret die roll, cheating without exposure is an option in the game. Contrary to claims on the importance of honesty at work, we do not observe a reduction in the third co-worker's performance, who is an uninvolved bystander when cheating takes place.
Chapter 3 analyzes the effect of team size on performance in a workplace environment in which either two or three individuals perform a real-effort task. Our main result shows that the difference in team size is not harmful to task performance on average. In our discussion of potential mechanisms, we provide evidence on ongoing peer effects. It appears that peers are able to alleviate the potential free-rider problem emerging out of working in a larger team.
In Chapter 4, the role of perceived co-worker attractiveness for performance is analyzed. The results show that task performance is lower, the higher the perceived attractiveness of co-workers, but only in opposite-sex constellations.
The following Chapter 5 analyzes the effect of offering an additional payment option in a fundraising context. Chapter 6 focuses on privacy concerns of research participants.
In Chapter 5, we conduct a field experiment in which, participants have the opportunity to donate for the continuation of an art exhibition by either cash or cash and an additional cashless payment option (CPO). The treatment manipulation is completed by framing the act of giving either as a donation or pay-what-you-want contribution. Our results show that donors shy away from using the CPO in all treatment conditions. Despite that, there is no negative effect of the CPO on the frequency of financial support and its magnitude.
In Chapter 6, I conduct an experiment to test whether increased transparency of data processing affects data disclosure and whether the results change if it is indicated that the implementation of the GDPR happened involuntarily. I find that increased transparency raises the number of participants who do not disclose personal data by 21 percent. However, this is not the case in the involuntary-signal treatment, where the share of non-disclosures is relatively high in both conditions.
Retirement, fertility and sexuality are three key life stage events that are embedded in the framework of population economics in this dissertation. Each topic implies economic relevance. As retirement entry shifts labour supply of experienced workers to zero, this issue is particularly relevant for employers, retirees themselves as well as policymakers who are in charge of the design of the pension system. Giving birth has comprehensive economic relevance for women. Parental leave and subsequent part-time work lead to a direct loss of income. Lower levels of employment, work experience, training and career opportunities result in indirect income losses. Sexuality has decisive influence on the quality of partnerships, subjective well-being and happiness. Well-being and happiness, in turn, are significant key determinants not only in private life but also in the work domain, for example in the area of job performance. Furthermore, partnership quality determines the duration of a partnership. And in general, partnerships enable the pooling of (financial) resources - compared to being single. The contribution of this dissertation emerges from the integration of social and psychological concepts into economic analysis as well as the application of economic theory in non-standard economic research topics. The results of the three chapters show that the multidisciplinary approach yields better prediction of human behaviour than the single disciplines on their own. The results in the first chapter show that both interpersonal conflict with superiors and the individual’s health status play a significant role in retirement decisions. The chapter further contributes to existing literature by showing the moderating role of health within the retirement decision-making: On the one hand, all employees are more likely to retire when they are having conflicts with their superior. On the other hand, among healthy employees, the same conflict raises retirement intentions even more. That means good health is a necessary, but not a sufficient condition for continued working. It may be that conflicts with superiors raise retirement intentions more if the worker is healthy. The key findings of the second chapter reveal significant influence of religion on contraceptive and fertility-related decisions. A large part of research on religion and fertility is originated in evidence from the US. This chapter contrasts evidence from Germany. Additionally, the chapter contributes by integrating miscarriages and abortions, rather than limiting the analysis to births and it gains from rich prospective data on fertility biography of women. The third chapter provides theoretical insights on how to incorporate psychological variables into an economic framework which aims to analyse sexual well-being. According to this theory, personality may play a dual role by shaping a person’s preferences for sex as well as the person’s behaviour in a sexual relationship. Results of econometric analysis reveal detrimental effects of neuroticism on sexual well-being while conscientiousness seems to create a win-win situation for a couple. Extraversions and Openness have ambiguous effects on romantic relationships by enhancing sexual well-being on the one hand but raising commitment problems on the other. Agreeable persons seem to gain sexual satisfaction even if they perform worse in sexual communication.
Traditionell werden Zufallsstichprobenerhebungen so geplant, dass nationale Statistiken zuverlässig mit einer adäquaten Präzision geschätzt werden können. Hierbei kommen vorrangig designbasierte, Modell-unterstützte (engl. model assisted) Schätzmethoden zur Anwendung, die überwiegend auf asymptotischen Eigenschaften beruhen. Für kleinere Stichprobenumfänge, wie man sie für Small Areas (Domains bzw. Subpopulationen) antrifft, eignen sich diese Schätzmethoden eher nicht, weswegen für diese Anwendung spezielle modellbasierte Small Area-Schätzverfahren entwickelt wurden. Letztere können zwar Verzerrungen aufweisen, besitzen jedoch häufig einen kleineren mittleren quadratischen Fehler der Schätzung als dies für designbasierte Schätzer der Fall ist. Den Modell-unterstützten und modellbasierten Methoden ist gemeinsam, dass sie auf statistischen Modellen beruhen; allerdings in unterschiedlichem Ausmass. Modell-unterstützte Verfahren sind in der Regel so konstruiert, dass der Beitrag des Modells bei sehr grossen Stichprobenumfängen gering ist (bei einer Grenzwertbetrachtung sogar wegfällt). Bei modellbasierten Methoden nimmt das Modell immer eine tragende Rolle ein, unabhängig vom Stichprobenumfang. Diese Überlegungen veranschaulichen, dass das unterstellte Modell, präziser formuliert, die Güte der Modellierung für die Qualität der Small Area-Statistik von massgeblicher Bedeutung ist. Wenn es nicht gelingt, die empirischen Daten durch ein passendes Modell zu beschreiben und mit den entsprechenden Methoden zu schätzen, dann können massive Verzerrungen und / oder ineffiziente Schätzungen resultieren.
Die vorliegende Arbeit beschäftigt sich mit der zentralen Frage der Robustheit von Small Area-Schätzverfahren. Als robust werden statistische Methoden dann bezeichnet, wenn sie eine beschränkte Einflussfunktion und einen möglichst hohen Bruchpunkt haben. Vereinfacht gesprochen zeichnen sich robuste Verfahren dadurch aus, dass sie nur unwesentlich durch Ausreisser und andere Anomalien in den Daten beeinflusst werden. Die Untersuchung zur Robustheit konzentriert sich auf die folgenden Modelle bzw. Schätzmethoden:
i) modellbasierte Schätzer für das Fay-Herriot-Modell (Fay und Herrot, 1979, J. Amer. Statist. Assoc.) und das elementare Unit-Level-Modell (vgl. Battese et al., 1988, J. Amer. Statist. Assoc.).
ii) direkte, Modell-unterstützte Schätzer unter der Annahme eines linearen Regressionsmodells.
Das Unit-Level-Modell zur Mittelwertschätzung beruht auf einem linearen gemischten Gauss'schen Modell (engl. mixed linear model, MLM) mit blockdiagonaler Kovarianzmatrix. Im Gegensatz zu bspw. einem multiplen linearen Regressionsmodell, besitzen MLM-Modelle keine nennenswerten Invarianzeigenschaften, so dass eine Kontamination der abhängigen Variablen unvermeidbar zu verzerrten Parameterschätzungen führt. Für die Maximum-Likelihood-Methode kann die resultierende Verzerrung nahezu beliebig groß werden. Aus diesem Grund haben Richardson und Welsh (1995, Biometrics) die robusten Schätzmethoden RML 1 und RML 2 entwickelt, die bei kontaminierten Daten nur eine geringe Verzerrung aufweisen und wesentlich effizienter sind als die Maximum-Likelihood-Methode. Eine Abwandlung von Methode RML 2 wurde Sinha und Rao (2009, Canad. J. Statist.) für die robuste Schätzung von Unit-Level-Modellen vorgeschlagen. Allerdings erweisen sich die gebräuchlichen numerischen Verfahren zur Berechnung der RML-2-Methode (dies gilt auch für den Vorschlag von Sinha und Rao) als notorisch unzuverlässig. In dieser Arbeit werden zuerst die Konvergenzprobleme der bestehenden Verfahren erörtert und anschließend ein numerisches Verfahren vorgeschlagen, das sich durch wesentlich bessere numerische Eigenschaften auszeichnet. Schließlich wird das vorgeschlagene Schätzverfahren im Rahmen einer Simulationsstudie untersucht und anhand eines empirischen Beispiels zur Schätzung von oberirdischer Biomasse in norwegischen Kommunen illustriert.
Das Modell von Fay-Herriot kann als Spezialfall eines MLM mit blockdiagonaler Kovarianzmatrix aufgefasst werden, obwohl die Varianzen des Zufallseffekts für die Small Areas nicht geschätzt werden müssen, sondern als bereits bekannte Größen betrachtet werden. Diese Eigenschaft kann man sich nun zunutze machen, um die von Sinha und Rao (2009) vorgeschlagene Robustifizierung des Unit-Level-Modells direkt auf das Fay-Herriot Model zu übertragen. In der vorliegenden Arbeit wird jedoch ein alternativer Vorschlag erarbeitet, der von der folgenden Beobachtung ausgeht: Fay und Herriot (1979) haben ihr Modell als Verallgemeinerung des James-Stein-Schätzers motiviert, wobei sie sich einen empirischen Bayes-Ansatz zunutze machen. Wir greifen diese Motivation des Problems auf und formulieren ein analoges robustes Bayes'sches Verfahren. Wählt man nun in der robusten Bayes'schen Problemformulierung die ungünstigste Verteilung (engl. least favorable distribution) von Huber (1964, Ann. Math. Statist.) als A-priori-Verteilung für die Lokationswerte der Small Areas, dann resultiert als Bayes-Schätzer [=Schätzer mit dem kleinsten Bayes-Risk] die Limited-Translation-Rule (LTR) von Efron und Morris (1971, J. Amer. Statist. Assoc.). Im Kontext der frequentistischen Statistik kann die Limited-Translation-Rule nicht verwendet werden, weil sie (als Bayes-Schätzer) auf unbekannten Parametern beruht. Die unbekannten Parameter können jedoch nach dem empirischen Bayes-Ansatz an der Randverteilung der abhängigen Variablen geschätzt werden. Hierbei gilt es zu beachten (und dies wurde in der Literatur vernachlässigt), dass die Randverteilung unter der ungünstigsten A-priori-Verteilung nicht einer Normalverteilung entspricht, sondern durch die ungünstigste Verteilung nach Huber (1964) beschrieben wird. Es ist nun nicht weiter erstaunlich, dass es sich bei den Maximum-Likelihood-Schätzern von Regressionskoeffizienten und Modellvarianz unter der Randverteilung um M-Schätzer mit der Huber'schen psi-Funktion handelt.
Unsere theoriegeleitete Herleitung von robusten Schätzern zum Fay-Herriot-Modell zeigt auf, dass bei kontaminierten Daten die geschätzte LTR (mit Parameterschätzungen nach der M-Schätzmethodik) optimal ist und, dass die LTR ein integraler Bestandteil der Schätzmethodik ist (und nicht als ``Zusatz'' o.Ä. zu betrachten ist, wie dies andernorts getan wird). Die vorgeschlagenen M-Schätzer sind robust bei Vorliegen von atypischen Small Areas (Ausreissern), wie dies auch die Simulations- und Fallstudien zeigen. Um auch Robustheit bei Vorkommen von einflussreichen Beobachtungen in den unabhängigen Variablen zu erzielen, wurden verallgemeinerte M-Schätzer (engl. generalized M-estimator) für das Fay-Herriot-Modell entwickelt.
This thesis sheds light on the heterogeneous hedging behavior of airlines. The focus lies on financial hedging, operational hedging and selective hedging. The unbalanced panel data set includes 74 airlines from 39 countries. The period of analysis is 2005 until 2014, resulting in 621 firm years. The random effects probit and fixed effects OLS models provide strong evidence of a convex relation between derivative usage and a firm’s leverage, opposing the existing financial distress theory. Airlines with lower leverage had higher hedge ratios. In addition, the results show that airlines with interest rate and currency derivatives were more likely to engage in fuel price hedging. Moreover, the study results support the argument that operational hedging is a complement to financial hedging. Airlines with more heterogeneous fleet structures exhibited higher hedge ratios.
Also, airlines which were members of a strategic alliance were more likely to be hedging airlines. As alliance airlines are rather financially sound airlines, the positive relation between alliance membership and hedging reflects the negative results on the leverage
ratio. Lastly, the study presents determinants of an airlines’ selective hedging behavior. Airlines with prior-period derivative losses, recognized in income, changed their hedge portfolios more frequently. Moreover, the sample airlines acted in accordance with herd behavior theory. Changes in the regional hedge portfolios influenced the hedge portfolio of the individual airline in the same direction.
The formerly communist countries in Central and Eastern Europe (transitional economies in Europe and the Soviet Union – for example, East Germany, Czech Republic, Hungary, Lithuania, Poland, Russia) and transitional economies in Asia – for example, China, Vietnam had centrally planned economies, which did not allow entrepreneurship activities. Despite the political-socioeconomic transformations in transitional economies around 1989, they still had an institutional heritage that affects individuals’ values and attitudes, which, in turn, influence intentions, behaviors, and actions, including entrepreneurship.
While prior studies on the long-lasting effects of socialist legacy on entrepreneurship have focused on limited geographical regions (e.g., East-West Germany, and East-West Europe), this dissertation focuses on the Vietnamese context, which offers a unique quasi-experimental setting. In 1954, Vietnam was divided into the socialist North and the non-socialist South, and it was then reunified under socialist rule in 1975. Thus, the intensity of differences in socialist treatment in North-South Vietnam (about 21 years) is much shorter than that in East-West Germany (about 40 years) and East-West Europe (about 70 years when considering former Soviet Union countries).
To assess the relationship between socialist history and entrepreneurship in this unique setting, we survey more than 3,000 Vietnamese individuals. This thesis finds that individuals from North Vietnam have lower entrepreneurship intentions, are less likely to enroll in entrepreneurship education programs, and display lower likelihood to take over an existing business, compared to those from the South of Vietnam. The long-lasting effect of formerly socialist institutions on entrepreneurship is apparently deeper than previously discovered in the prominent case of East-West Germany and East-West Europe as well.
In the second empirical investigation, this dissertation focuses on how succession intentions differ from others (e.g., founding, and employee intentions) regarding career choice motivation, and the effect of three main elements of the theory of planned behavior (e.g., entrepreneurial attitude, subjective norms, and perceived behavioral control) in transition economy – Vietnam context. The findings of this thesis suggest that an intentional founder is labeled with innovation, an intentional successor is labeled with roles motivation, and an intentional employee is labeled with social mission. Additionally, this thesis reveals that entrepreneurial attitude and perceived behavioral control are positively associated with the founding intention, whereas there is no difference in this effect between succession and employee intentions.
Structured Eurobonds - Optimal Construction, Impact on the Euro and the Influence of Interest Rates
(2020)
Structured Eurobonds are a prominent topic in the discussions how to complete the monetary and fiscal union. This work sheds light on several issues going hand in hand with the introduction of common bonds. At first a crucial question is on the optimal construction, e.g. what is the optimal common liability. Other questions that arise belong to the time after the introduction. The impact on several exchnage rates is examined in this work. Finally an approximation bias in forward-looking DSGE models is quantified which would lead to an adjustment of central bank interest rates and therefore has an impact on the other two topics.
Entrepreneurial ventures are associated with economic growth, job creation, and innovation. Most entrepreneurial ventures need external funding to succeed. However, they often find it difficult to access traditional forms of financing, such as bank loans. To overcome this hurdle and to provide entrepreneurial ventures with badly-needed external capital, many types of entrepreneurial finance have emerged over the past decades and continue to emerge today. Inspired by these dynamics, this postdoctoral thesis contains five empirical studies that address novel questions regarding established (e.g., venture capital, business angels) and new types of entrepreneurial finance (i.e., initial coin offerings).
With two-thirds to three-quarters of all companies, family firms are the most common firm type worldwide and employ around 60 percent of all employees, making them of considerable importance for almost all economies. Despite this high practical relevance, academic research took notice of family firms as intriguing research subjects comparatively late. However, the field of family business research has grown eminently over the past two decades and has established itself as a mature research field with a broad thematic scope. In addition to questions relating to corporate governance, family firm succession and the consideration of entrepreneurial families themselves, researchers mainly focused on the impact of family involvement in firms on their financial performance and firm strategy. This dissertation examines the financial performance and capital structure of family firms in various meta-analytical studies. Meta-analysis is a suitable method for summarizing existing empirical findings of a research field as well as identifying relevant moderators of a relationship of interest.
First, the dissertation examines the question whether family firms show better financial performance than non-family firms. A replication and extension of the study by O’Boyle et al. (2012) based on 1,095 primary studies reveals a slightly better performance of family firms compared to non-family firms. Investigating the moderating impact of methodological choices in primary studies, the results show that outperformance holds mainly for large and publicly listed firms and with regard to accounting-based performance measures. Concerning country culture, family firms show better performance in individualistic countries and countries with a low power distance.
Furthermore, this dissertation investigates the sensitivity of family firm performance with regard to business cycle fluctuations. Family firms show a pro-cyclical performance pattern, i.e. their relative financial performance compared to non-family firms is better in economically good times. This effect is particularly pronounced in Anglo-American countries and emerging markets.
In the next step, a meta-analytic structural equation model (MASEM) is used to examine the market valuation of public family firms. In this model, profitability and firm strategic choices are used as mediators. On the one hand, family firm status itself does not have an impact on firms‘ market value. On the other hand, this study finds a positive indirect effect via higher profitability levels and a negative indirect effect via lower R&D intensity. A split consideration of family ownership and management shows that these two effects are mainly driven by family ownership, while family management results in less diversification and internationalization.
Finally, the dissertation examines the capital structure of public family firms. Univariate meta-analyses indicate on average lower leverage ratios in family firms compared to non-family firms. However, there is significant heterogeneity in mean effect sizes across the 45 countries included in the study. The results of a meta-regression reveal that family firms use leverage strategically to secure their controlling position in the firm. While strong creditor protection leads to lower leverage ratios in family firms, strong shareholder protection has the opposite effect.
This dissertation investigates corporate acquisition decisions that represent important corporate development activities for family and non-family firms. The main research objective of this dissertation is to generate insights into the subjective decision-making behavior of corporate decision-makers from family and non-family firms and their weighting of M&A decision-criteria during the early pre-acquisition target screening and selection process. The main methodology chosen for the investigation of M&A decision-making preferences and the weighting of M&A decision criteria is a choice-based conjoint analysis. The overall sample of this dissertation consists of 304 decision-makers from 264 private and public family and non-family firms from mainly Germany and the DACH-region. In the first empirical part of the dissertation, the relative importance of strategic, organizational and financial M&A decision-criteria for corporate acquirers in acquisition target screening is investigated. In addition, the author uses a cluster analysis to explore whether distinct decision-making patterns exist in acquisition target screening. In the second empirical part, the dissertation explores whether there are differences in investment preferences in acquisition target screening between family and non-family firms and within the group of family firms. With regards to the heterogeneity of family firms, the dissertation generated insights into how family-firm specific characteristics like family management, the generational stage of the firm and non-economic goals such as transgenerational control intention influences the weighting of different M&A decision criteria in acquisition target screening. The dissertation contributes to strategic management research, in specific to M&A literature, and to family business research. The results of this dissertation generate insights into the weighting of M&A decision-making criteria and facilitate a better understanding of corporate M&A decisions in family and non-family firms. The findings show that decision-making preferences (hence the weighting of M&A decision criteria) are influenced by characteristics of the individual decision-maker, the firm and the environment in which the firm operates.
In the modeling context, non-linearities and uncertainty go hand in hand. In fact, the utility function's curvature determines the degree of risk-aversion. This concept is exploited in the first article of this thesis, which incorporates uncertainty into a small-scale DSGE model. More specifically, this is done by a second-order approximation, while carrying out the derivation in great detail and carefully discussing the more formal aspects. Moreover, the consequences of this method are discussed when calibrating the equilibrium condition. The second article of the thesis considers the essential model part of the first paper and focuses on the (forward-looking) data needed to meet the model's requirements. A large number of uncertainty measures are utilized to explain a possible approximation bias. The last article keeps to the same topic but uses statistical distributions instead of actual data. In addition, theoretical (model) and calibrated (data) parameters are used to produce more general statements. In this way, several relationships are revealed with regard to a biased interpretation of this class of models. In this dissertation, the respective approaches are explained in full detail and also how they build on each other.
In summary, the question remains whether the exact interpretation of model equations should play a role in macroeconomics. If we answer this positively, this work shows to what extent the practical use can lead to biased results.
External capital plays an important role in financing entrepreneurial ventures, due to limited internal capital sources. An important external capital provider for entrepreneurial ventures are venture capitalists (VCs). VCs worldwide are often confronted with thousands of proposals of entrepreneurial ventures per year and must choose among all of these companies in which to invest. Not only do VCs finance companies at their early stages, but they also finance entrepreneurial companies in their later stages, when companies have secured their first market success. That is why this dissertation focuses on the decision-making behavior of VCs when investing in later-stage ventures. This dissertation uses both qualitative as well as quantitative research methods in order to provide answer to how the decision-making behavior of VCs that invest in later-stage ventures can be described.
Based on qualitative interviews with 19 investment professionals, the first insight gained is that for different stages of venture development, different decision criteria are applied. This is attributed to different risks and goals of ventures at different stages, as well as the different types of information available. These decision criteria in the context of later-stage ventures contrast with results from studies that focus on early-stage ventures. Later-stage ventures possess meaningful information on financials (revenue growth and profitability), the established business model, and existing external investors that is not available for early-stage ventures and therefore constitute new decision criteria for this specific context.
Following this identification of the most relevant decision criteria for investors in the context of later-stage ventures, a conjoint study with 749 participants was carried out to understand the relative importance of decision criteria. The results showed that investors attribute the highest importance to 1) revenue growth, (2) value-added of products/services for customers, and (3) management team track record, demonstrating differences when compared to decision-making studies in the context of early-stage ventures.
Not only do the characteristics of a venture influence the decision to invest, additional indirect factors, such as individual characteristics or characteristics of the investment firm, can influence individual decisions. Relying on cognitive theory, this study investigated the influence of various individual characteristics on screening decisions and found that both investment experience and entrepreneurial experience have an influence on individual decision-making behavior. This study also examined whether goals, incentive structures, resources, and governance of the investment firm influence decision making in the context of later-stage ventures. This study particularly investigated two distinct types of investment firms, family offices and corporate venture capital funds (CVC), which have unique structures, goals, and incentive systems. Additional quantitative analysis showed that family offices put less focus on high-growth firms and whether reputable investors are present. They tend to focus more on the profitability of a later-stage venture in the initial screening. The analysis showed that CVCs place greater importance on product and business model characteristics than other investors. CVCs also favor later-stage ventures with lower revenue growth rates, indicating a preference for less risky investments. The results provide various insights for theory and practice.
This study examines to what extent a banking crisis and the ensuing potential liquidity shortage affect corporate cash holdings. Specifically, how do firms adjust their liquidity management prior to and during a banking crisis when they are restricted in their financing options? These restrictions might not result from firm-specific characteristics but also incorporate the effects of certain regulatory requirements. I analyse the real effects of indicators of a potential crisis and the occurrence of a crisis event on corporate cash holdings for both unregulated and regulated firms from 31 different countries. In contrast to existing studies, I perform this analysis on the basis of a long observation period (1997 to 2014 respectively 2003 to 2014) using multiple crisis indicators (early warning signals) and multiple crisis events. For regulated firms, this study makes use of a unique sample of country-specific regulatory information, which is collected by hand for 15 countries and converted into an ordinal scale based on the severity of the regulation. Regulated firms are selected from a single industry: Real Estate Investment Trusts. These firms invest in real estate properties and let these properties to third parties. Real Estate Investment Trusts that comply with the aforementioned regulations are exempt from income taxation and are punished for a breach, which makes this industry particularly interesting for the analysis of capital structure decisions.
The results for regulated and unregulated firms are mostly inconclusive. I find no convincing evidence that the degree of regulation affects the level of cash holdings for regulated firms before and during a banking crisis. For unregulated firms, I find strong evidence that financially constrained firms have higher cash holdings than unconstrained firms. Further, there is no real evidence that either financially constrained firms or unconstrained firms increase their cash holdings when observing an early warning signal. In case of a banking crisis, the results differ for univariate tests and in panel regressions. In the univariate setting, I find evidence that both types of firms hold higher levels of cash during a banking crisis. In panel regressions, the effect is only evident for financially unconstrained firms from the US, and when controlling for financial stress, it is also apparent for financially constrained US firms. For firms from Europe, the results are predominantly inconclusive. For banking crises that are preceded by an early warning signal, there is only evidence for an increase in cash holdings for unconstrained US firms when controlling for financial stress.
A basic assumption of standard small area models is that the statistic of interest can be modelled through a linear mixed model with common model parameters for all areas in the study. The model can then be used to stabilize estimation. In some applications, however, there may be different subgroups of areas, with specific relationships between the response variable and auxiliary information. In this case, using a distinct model for each subgroup would be more appropriate than employing one model for all observations. If no suitable natural clustering variable exists, finite mixture regression models may represent a solution that „lets the data decide“ how to partition areas into subgroups. In this framework, a set of two or more different models is specified, and the estimation of subgroup-specific model parameters is performed simultaneously to estimating subgroup identity, or the probability of subgroup identity, for each area. Finite mixture models thus offer a fexible approach to accounting for unobserved heterogeneity. Therefore, in this thesis, finite mixtures of small area models are proposed to account for the existence of latent subgroups of areas in small area estimation. More specifically, it is assumed that the statistic of interest is appropriately modelled by a mixture of K linear mixed models. Both mixtures of standard unit-level and standard area-level models are considered as special cases. The estimation of mixing proportions, area-specific probabilities of subgroup identity and the K sets of model parameters via the EM algorithm for mixtures of mixed models is described. Eventually, a finite mixture small area estimator is formulated as a weighted mean of predictions from model 1 to K, with weights given by the area-specific probabilities of subgroup identity.
Stiftungsunternehmen sind Unternehmen, die sich ganz oder teilweise im Eigentum einer gemeinnützigen oder privaten Stiftung befinden. Die Anzahl an Stiftungsunternehmen in Deutschland ist in den letzten Jahren deutlich gestiegen. Bekannte deutsche Unternehmen wie Aldi, Bosch, Bertelsmann, LIDL oder Würth befinden sich im Eigentum von Stiftungen. Einige von ihnen, wie beispielsweise Fresenius, ZF Friedrichshafen oder Zeiss, sind sogar an der Börse notiert. Die Mehrzahl der Stiftungsunternehmen entsteht dadurch, dass Unternehmensgründer oder Unternehmerfamilien ihr Unternehmen in eine Stiftung einbringen, anstatt es zu vererben oder zu verkaufen.
Die Motive hierfür sind vielfältig und können familiäre Gründe (z. B. Kinderlosigkeit, Vermeidung von Familienstreit), unternehmensbezogene Gründe (z. B. Möglichkeit der langfristigen Planung durch stabile Eigentümerstruktur) und steuerliche Gründe (Vermeidung oder Reduzierung der Erbschaftssteuer) haben oder sind durch die Person des Gründers motiviert (Möglichkeit, das Unternehmen auch nach dem eigenen Tod über die Stiftung noch weiterhin zu prägen). Aufgrund der Tatsache, dass Stiftungsunternehmen zumeist aus Familienunternehmen hervorgehen, wird in der Forschung häufig nicht zwischen Familien- und Stiftungsunternehmen differenziert. Aus diesem Grund werden in dieser Dissertation zu Beginn anhand des Drei-Kreis-Modells für Familienunternehmen die Unterschiede zwischen Stiftungs- und Familienunternehmen dargestellt. Die Ergebnisse zeigen, dass nur eine sehr geringe Anzahl von Stiftungsunternehmen eine große Ähnlichkeit zu klassischen Familienunternehmen aufweist. Die meisten Stiftungsunternehmen unterscheiden sich zum Teil sehr stark von Familienunternehmen. Diese Ergebnisse verdeutlichen, dass Stiftungsunternehmen als separates Forschungsfeld betrachtet werden sollten.
Da innerhalb der Gruppe der Stiftungsunternehmen ebenfalls eine starke Heterogenität herrscht, werden im Anschluss Performanceunterschiede innerhalb der Gruppe der Stiftungsunternehmen untersucht. Hierzu wurden die Daten von 142 deutschen Stiftungsunternehmen für die Jahre 2006-2016 erhoben und mittels einer lineareren Regression ausgewertet. Die Ergebnisse zeigen, dass zwischen den verschiedenen Typen signifikante Unterschiede herrschen. Unternehmen, die von einer gemeinnützigen Stiftung gehalten werden, weisen eine signifikant schlechtere Performance auf, als Unternehmen die eine private Stiftung als Shareholder haben.
Im nächsten Schritt wird die Gruppe der börsennotierten Stiftungsunternehmen untersucht. Mittels einer Ereignisstudie wird getestet, wie sich die Stiftung als Eigentümer eines börsennotierten Unternehmens auf den Shareholder Value auswirkt. Die Ergebnisse zeigen, dass eine Anteilsverringerung einer Stiftung einen positiven Einfluss auf den Shareholder Value hat. Stiftungen werden vom Kapitalmarkt dementsprechend negativ bewertet. Aufgrund der divergierenden Ziele von Stiftung und Unternehmen birgt die Verbindung zwischen Stiftung und Unternehmen potentielle Konflikte und Herausforderungen für die beteiligten Personen. Mittels eines qualitativen explorativen Ansatzes, wird basierend auf Interviews, ein Modell entwickelt, welches die potentiellen Konflikte in Stiftungsunternehmen anhand des Beispiels der Doppelstiftung aufzeigt.
Im letzten Schritt werden Handlungsempfehlungen in Form eines Entwurfs für einen Corporate Governance Kodex erarbeitet, die (potentiellen) Stifterinnen und Stiftern helfen sollen, mögliche Konflikte entweder zu vermeiden oder bereits bestehende Probleme zu lösen.
Die Ergebnisse dieser Dissertation sind relevant für Theorie und Praxis. Aus theoretischer Sicht liegt der Wert dieser Untersuchungen darin, dass Forscher künftig besser zwischen Stiftungs- und Familienunternehmen unterscheiden können. Zudem bringt diese Arbeit den aktuellen Forschungsstand zum Thema Stiftungsunternehmen weiter. Außerdem bietet diese Dissertation insbesondere potentiellen Stiftern einen Überblick über die verschiedenen Ausgestaltungsmöglichkeiten und die Vor- und Nachteile, die diese Konstruktionen mit sich bringen. Die Handlungsempfehlungen ermöglichen es Stiftern, vorab potentielle Gefahren erkennen zu können und diese zu umgehen.
A phenomenon of recent decades is that digital marketplaces on the Internet are establishing themselves for a wide variety of products and services. Recently, it has become possible for private individuals to invest in young and innovative companies (so-called "start-ups"). Via Internet portals, potential investors can examine various start-ups and then directly invest in their chosen start-up. In return, investors receive a share in the firm- profit, while companies can use the raised capital to finance their projects. This new way of financing is called "Equity Crowdfunding" (ECF) or "Crowdinvesting". The aim of this dissertation is to provide empirical findings about the characteristics of ECF. In particular, the question of whether ECF is able to overcome geographic barriers, the interdependence of ECF and capital structure, and the risk of failure for funded start-ups and their chances of receiving follow-up funding by venture capitalists or business angels will be analyzed. The results of the first part of this dissertation show that investors in ECF prefer local companies. In particular, investors who invest larger amounts have a stronger tendency to invest in local start-ups. The second part of the dissertation provides first indications of the interdependencies between capital structure and ECF. The analysis makes clear that the capital structure is not a determinant for undertaking an ECF campaign. The third part of the dissertation analyzes the success of companies financed by ECF in a country comparison. The results show that after a successful ECF campaign German companies have a higher chance of receiving follow-up funding by venture capitalists compared to British companies. The probability of survival, however, is slightly lower for German companies. The results provide relevant implications for theory and practice. The existing literature in the area of entrepreneurial finance will be extended by insights into investor behavior, additions to the capital structure theory and a country comparison in ECF. In addition, implications are provided for various actors in practice.
Entrepreneurship is a process of discovering and exploiting opportunities, during which two crucial milestones emerge: in the very beginning when entrepreneurs start their businesses, and in the end when they determine the future of the business. This dissertation examines the establishment and exit of newly created as well as of acquired firms, in particular the behavior and performance of entrepreneurs at these two important stages of entrepreneurship. The first part of the dissertation investigates the impact of characteristics at the individual and at the firm level on an entrepreneur- selection of entry modes across new venture start-up and business takeover. The second part of the dissertation compares firm performance across different entrepreneurship entry modes and then examines management succession issues that family firm owners have to confront. This study has four main findings. First, previous work experience in small firms, same sector experience, and management experience affect an entrepreneur- choice of entry modes. Second, the choice of entry mode for hybrid entrepreneurs is associated with their characteristics, such as occupational experience, level of education, and gender, as well as with the characteristics of their firms, such as location. Third, business takeovers survive longer than new venture start-ups, and both entry modes have different survival determinants. Fourth, the family firm- decision of recruiting a family or a nonfamily manager is not only determined by a manager- abilities, but also by the relationship between the firm- economic and non-economic goals and the measurability of these goals. The findings of this study extend our knowledge on entrepreneurship entry modes by showing that new venture start-ups and business takeovers are two distinct entrepreneurship entry modes in terms of their founders" profiles, their survival rates and survival determinants. Moreover, this study contributes to the literature on top management hiring in family firms: it establishes family firm- non-economic goals as another factor that impacts the family firm- hiring decision between a family and a nonfamily manager.
Why do some people become entrepreneurs while others stay in paid employment? Searching for a distinctive set of entrepreneurial skills that matches the profile of the entrepreneurial task, Lazear introduced a theoretical model featuring skill variety for entrepreneurs. He argues that because entrepreneurs perform many different tasks, they should be multi-skilled in various areas. First, this dissertation provides the reader with an overview of previous relevant research results on skill variety with regard to entrepreneurship. The majority of the studies discussed focus on the effects of skill variety. Most studies come to the conclusion that skill variety mainly affects the decision to become self-employed. Skill variety also favors entrepreneurial intentions. Less clear are the results with regard to the influence of skill variety on the entrepreneurial success. Measured on the basis of income and survival of the company, a negative or U-shaped correlation is shown. Within the empirical part of this dissertation three research goals are tackled. First, this dissertation investigates whether a variety of early interests and activities in adolescence predicts subsequent variety in skills and knowledge. Second, the determinants of skill variety and variety of early interests and activities are investigated. Third, skill variety is tested as a mediator of the gender gap in entrepreneurial intentions. This dissertation employs structural equation modeling (SEM) using longitudinal data collected over ten years from Finnish secondary school students aged 16 to 26. As indicator for skill variety the number of functional areas in which the participant had prior educational or work experience is used. The results of the study suggest that a variety of early interests and activities lead to skill variety, which in turn leads to entrepreneurial intentions. Furthermore, the study shows that an early variety is predicted by openness and an entrepreneurial personality profile. Skill variety is also encouraged by an entrepreneurial personality profile. From a gender perspective, there is indeed a gap in entrepreneurial intentions. While a positive correlation has been found between the early variety of subjects and being female, there are negative correlations between the other two variables, education and work related Skill variety, and being female. The negative effect of work-related skill variety is the strongest. The results of this dissertation are relevant for research, politics, educational institutions and special entrepreneurship education programs. The results are also important for self-employed parents that plan the succession of the family business. Educational programs promoting entrepreneurship can be optimized on the basis of the results of this dissertation by making the transmission of a variety of skills a central goal. A focus on teenagers could also increase the success as well as a preselection based on the personality profile of the participants. Regarding the gender gap, state policies should aim to provide women with more incentives to acquire skill variety. For this purpose, education programs can be tailored specifically to women and self-employment can be presented as an attractive alternative to dependent employment.
Flexibility and spatial mobility of labour are central characteristics of modern societies which contribute not only to higher overall economic growth but also to a reduction of interregional employment disparities. For these reasons, there is the political will in many countries to expand labour market areas, resulting especially in an overall increase in commuting. The picture of the various, unintended long-term consequences of commuting on individuals is, however, relatively unclear. Therefore, in recent years, the journey to work has gained high attention especially in the study of health and well-being. Empirical analyses based on longitudinal as well as European data on how commuting may affect health and well-being are nevertheless rare. The principle aim of this thesis is, thus, to address this question with regard to Germany using data from the Socio-Economic Panel. Chapter 2 empirically investigates the causal impact of commuting on absence from work due to sickness-related reasons. Whereas an exogenous change in commuting distance does not affect the number of absence days of those individuals who commute short distances to work, it increases the number of absence days of those employees who commute middle (25 " 49 kilometres) or long distances (50 kilometres and more). Moreover, our results highlight that commuting may deteriorate an individual- health. However, this effect is not sufficient to explain the observed impact of commuting on absence from work. Chapter 3 explores the relationship between commuting distance and height-adjusted weight and sheds some light on the mechanisms through which commuting might affect individual body weight. We find no evidence that commuting leads to excess weight. Compensating health behaviour of commuters, especially healthy dietary habits, could explain the non-relationship of commuting and height-adjusted weight. In Chapter 4, a multivariate probit approach is used to estimate recursive systems of equations for commuting and health-related behaviours. Controlling for potential endogeneity of commuting, the results show that long distance commutes significantly decrease the propensity to engage in health-related activities. Furthermore, unobservable individual heterogeneity can influence both the decision to commute and healthy lifestyle choices. Chapter 5 investigates the relationship between commuting and several cognitive and affective components of subjective well-being. The results suggest that commuting is related to lower levels of satisfaction with family life and leisure time which can largely be ascribed to changes in daily time use patterns, influenced by the work commute.
Monetary Policy During Times of Crisis - Frictions and Non-Linearities in the Transmission Mechanism
(2017)
For a long time it was believed that monetary policy would be able to maintain price stability and foster economic growth during all phases of the business cycle. The era of the Great Moderation, often also called the Volcker-Greenspan period, beginning in the mid 1980s was characterized by a decline in volatility of output growth and inflation among the industrialized countries. The term itself is first used by Stock and Watson (2003). Economist have long studied what triggered the decline in volatility and pointed out several main factors. An important research strand points out structural changes in the economy, such as a decline of volatility in the goods producing sector through better inventory controls and developments in the financial sector and government spending (McConnell2000, Blanchard2001, Stock2003, Kim2004, Davis2008). While many believed that monetary policy was only 'lucky' in terms of their reaction towards inflation and exogenous shocks (Stock2003, Primiceri2005, Sims2006, Gambetti2008), others reveal a more complex picture of the story. Rule based monetary policy (Taylor1993) that incorporates inflation targeting (Svensson1999) has been identified as a major source of inflation stabilization by increasing transparency (Clarida2000, Davis2008, Benati2009, Coibion2011). Apart from that, the mechanics of monetary policy transmission have changed. Giannone et al. (2008) compare the pre-Great Moderation era with the Great Modertation and find that the economies reaction towards monetary shocks has decreased. This finding is supported by Boivin et al. (2011). Similar to this, Herrera and Pesavento (2009) show that monetary policy during the Volcker-Greenspan period was very effective in dampening the effects of exogenous oil price shocks on the economy, while this cannot be found for the period thereafter. Yet, the subprime crisis unexpectedly hit worldwide economies and ended the era of Great Moderation. Financial deregulation and innovation has given banks opportunities for excessive risk taking, weakened financial stability (Crotty2009, Calomiris2009) and led to the build-up of credit-driven asset price bubbles (SchularickTaylor2012). The Federal Reserve (FED), that was thought to be the omnipotent conductor of price stability and economic growth during the Great Moderation, failed at preventing a harsh crisis. Even more, it did intensify the bubble with low interest rates following the Dotcom crisis of the early 2000s and misjudged the impact of its interventions (Taylor2009, Obstfeld2009). New results give a more detailed explanation on the question of latitude for monetary policy raised by Bernanke and suggest the existence of non-linearities in the transmission of monetary policy. Weise (1999), Garcia and Schaller (2002), Lo and Piger (2005), Mishkin (2009), Neuenkirch (2013) and Jannsen et al. (2015) find that monetary policy is more potent during times of financial distress and recessions. Its effectiveness during 'normal times' is much weaker or even insignificant. This prompts the question if these non-linearities limit central banks ability to lean against bubbles and financial imbalances (White2009, Walsh2009, Boivin2010, Mishkin2011).
The equity premium (Mehra and Prescott, 1985) is still a puzzle in the sense that there are still no convincing explanations for the size of the equity premium. In this dissertation, we study this long-standing puzzle and several possible behavioral explanations. First, we apply the IRR methodology proposed by Fama and French (1999) to achieve large firm level data on the equity premia for N = 28,256 companies in 54 countries around the world. Second, by using preferences data from the INTRA study (Rieger et. al., 2014), we could test the relevant risk factors together with time cognition to explain the equity premium. We document the failure of the Myopic Loss Aversion hypothesis by Benartzi and Thaler (1995) but provides rigorous empirical evidence to support the behavioral theory of ambiguity aversion to account for the equity premium. The observations shed some light on the new approach of integrating risk and ambiguity (together with time preferences) into a more general model of uncertainty, in which both risk premium and ambiguity premium play roles in asset pricing models.
Globalization and the emergence of global value chains have not only changed the way we live, but also the way economists study international economics. These changes are visible in various areas and dimension. This dissertation deals " mostly empirically " with some of these issues related to global value chains. It starts by critically examining the political economy forces determining the occurrence and the extent of trade liberalization conditions in World Bank lending agreements. The focal point is whether these are affected by the World Bank- most influential member countries. Afterwards, the thesis moves on to describe trade of the European Union member countries at each stage of the value chain. The description is based on a new classification of goods into parts, components and final products as well as a newly developed measure describing the average level of development of a countries trading partners. This descriptive exercise is followed by critically examining discrepancies between gross trade and trade in value added with respect to comparative advantage. A gravity model is employed to contrast results when studying the institutional determinants of comparative advantage. Finally, the thesis deals with determinants of regional location choices for foreign direct investment. The analysis is based on a theoretical new economic geography model and employs a newly developed index that accounts for the presence of potentially all suppliers and buyers at all stages of the value chain.
Service innovation has increasingly gained acknowledgement to contribute to economic growth and well-being. Despite this increased relevance in practice, service innovation is a developing research field. To advance literature on service innovation, this work analyzes with a qualitative study how firms manage service innovation activities in their organization differently. In addition, it evaluates the influence of top management commitment and corporate service innovativeness on service innovation capabilities of a firm and their implications for firm-level performance by conducting a quantitative study. Accordingly, the main overall research questions of this dissertation are: 1.) How and why do firms manage service innovation activities in their organization differently? 2.) What influence do top management commitment and corporate service innovativeness have on service innovation capabilities of a firm and what are the implications for firm-level performance? To respond to the first research question the way firms manage service innovation activities in their organization is investigated and by whom and how service innovations are developed. Moreover, it is examined why firms implement their service innovation activities differently. To achieve this a qualitative empirical study is conducted which included 22 semi-structured interviews with 15 firms in the sectors of construction, financial services, IT services, and logistics. Addressing the second research question, the aim is to improve the understanding about factors that enhance firm-level performance through service innovations. Deploying a dynamic capabilities perspective, a quantitative study is performed which underlines the importance of service innovation capabilities. More specifically, a theoretical framework is developed that proposes a positive relationship of top management commitment and corporate service innovativeness with service innovation capabilities and a positive relationship between service innovation capabilities and the firm-level performance indicators market performance, competitive advantage, and efficiency. A survey with double respondents from 87 companies from the sectors construction, financial services, IT services, and logistics was conducted to test the proposed theoretical framework by applying partial least squares structural equation modeling (PLS-SEM).
Part-time entrepreneurship has become increasingly popular and is a rather new field of research. Two important research topics are addressed in this dissertation: (a) the impact of culture on part-time and full-time entrepreneurship and (b) the motivational aspects of the transition from part-time to full-time entrepreneurship. Specifically, this dissertation advances prior research by highlighting the direct and indirect differential impact of macro-level societal culture on part-time and full-time entrepreneurship. Gender egalitarianism, uncertainty avoidance and future orientation have a significantly stronger impact on full-time than on part-time entrepreneurship. Furthermore the moderating impact of societal culture on micro-level relationships for both forms of entrepreneurship is explored. The age-old and well-established relationship between education and entrepreneurial activity is moderated by different forms of collectivism for part-time and full-time entrepreneurship. Regarding the motivation of part-time entrepreneurs to transition to full-time entrepreneurship, the entrepreneurial motives of self-realization and independence are significantly positively associated with the transition, whereas the entrepreneurial motives of income supplementation and recognition are significantly negatively associated with the transition. This dissertation advances academic research by indicating conceptual differences between part-time and full-time entrepreneurship in a multi country setting and by showing that both forms of entrepreneurship are impacted through different cultural mechanisms. Based on the findings, policy makers can identify the direct and indirect impact of societal culture on part-time and full-time entrepreneurship. As a result, policy makers can better target support and transition programs to foster entrepreneurial activity.
Financing of Small and Medium-Sized Enterprises in Europe - Financing Patterns and 'Crowdfunding'
(2015)
Small and medium-sized enterprises (SMEs) play a vital role for the innovativeness, economic growth and competitiveness of Europe. One of the most pressing problems of SMEs is access to finance to ensure their survival and growth. This dissertation uses both quantitative and qualitative exploratory research methods and increases with its holistic approach the transparency in SME financing. The results of a cluster analysis including 12,726 SMEs in 28 European countries reveal that SME financing in Europe is not homogenous but that different financing patterns exist which differ according to the number of financing instruments used and the combinations thereof. Furthermore, the SME financing types can be profiled according to their firm-, product-, industry- and country-specific characteristics. The results of this analysis provide some support for prior findings that smaller, younger and innovative SMEs suffer from a financing gap which cannot be closed with traditional financing instruments. One alternative to close this financing gap is crowdfunding. Even though crowdfunding has shown tremendous growth rates over the past few years, little is known about the determinants of this financing alternative. This dissertation systematically analyses the existing scientific literature on crowdfunding as an alternative in SME financing and reveals existing research gaps. Afterwards, the focus is on the role of investor communication as a way to reduce information asymmetries of the crowd in equity-based crowdfunding. The results of 24 interviews with market participants in equity-based crowdfunding reveal that crowd investors seem to replace personal contacts with alternative ways of communicating, which can be characterized as pseudo-personal (i.e., by using presentation videos, social media and investor relations channels). In addition, it was found that third party endorsements (e.g., other crowd investors, professional investors, customers and platforms) reduce the information asymmetries of crowd investors and hence, increase the likelihood of their investment.
This thesis deals with economic aspects of employees' sickness. In addition to the classical case of sickness absence, in which an employee is completely unable to work and hence stays at home, there is the case of sickness presenteeism, in which the employee comes to work despite being sick. Accordingly, the thesis at hand covers research on both sickness states, absence and presenteeism. The first section covers sickness absence and labour market institutions. Chapter 2 presents theoretical and empirical evidence that differences in the social norm against benefit fraud, so-called benefit morale, can explain cross country diversity in the generosity of statutory sick pay entitlements between developed countries. In our political economy model, a stricter benefit morale reduces the absence rate, with counteracting effects on the politically set sick pay replacement rate. On the one hand, less absence caused by a stricter norm, makes the tax-financed insurance cheaper, leading to the usual demand side effect and hence to more generous sick pay entitlements. On the other hand, being less likely to be absent due to a stricter norm, the voters prefer a smaller fee over more insurance. We document both effects in a sample of 31 developed countries, capturing the years from 1981 to 2010. In Chapter 3 we investigate the relationship between the existence of works councils and illness-related absence and its consequences for plants. Using individual data from the German Socio-Economic Panel (SOEP), we find that the existence of a works council is positively correlated with the incidence and the annual duration of absence. Additionally, linked employer-employee data (LIAB) suggests that employers are more likely to expect personnel problems due to absence in plants with a works council. In western Germany, we find significant effects using a difference-in-differences approach, which can be causally interpreted. The second part of this thesis covers two studies on sickness presenteeism. In Chapter 4, we empirically investigate the determinants of the annual duration of sickness presenteeism using the European Working Conditions Survey (EWCS). Work autonomy, workload and tenure are positively related to the number of sickness presenteeism days, while a good working environment comes with less presenteeism. In Chapter 5 we theoretically and empirically analyze sickness absence and presenteeism behaviour with a focus on their interdependence. Specifically, we ask whether work-related factors lead to a substitutive, a complementary or no relationship between sickness absence and presenteeism. In other words, we want to know whether changes in absence and presenteeism behaviour incurred by work-related characteristics point in opposite directions (substitutive), the same direction (complementary), or whether they only affect either one of the two sickness states (no relationship). Our theoretical model shows that the relationship between sickness absence and presenteeism with regard to work-related characteristics is not necessarily of a substitutive nature. Instead, a complementary or no relationship can emerge as well. Turning to the empirical investigation, we find that only one out of 16 work-related factors, namely the supervisor status, leads to a substitutive relationship between absence and presenteeism. Few of the other determinants are complements, while the large majority is either related to sickness absence or presenteeism.
Das erste Kapitel "ECOWAS" capability and potential to overcome constraints to growth and poverty reduction of its member states" diskutiert die Analyse wirtschaftlicher und sozialer Barrieren für ökonomisches Wachstum " eine der Hauptelemente für Entwicklungs- und Armutsreduktionsstrategien in Entwicklungsländern. Die Form der länderspezifischen Analyse von Wachstumsbarrieren wurde nach dem Scheitern der auf alle Länder generalisierten Entwicklungsstrategie des Washington Consensus insbesondere durch den Ansatz der "Growth Diagnostics" der Harvard Professoren Hausman, Rodrik und Velasco eingeführt. Es zeigt sich jedoch, dass bisher der Fokus rein auf den länderspezifischen Analysen bzw. Strategieentwicklungen liegt. Diese Arbeit erweiterte die Diskussion auf die regionale Ebene, indem es beispielhaft an der Economic Community of West African States (ECOWAS) die länderspezifischen Wachstumsbarrieren mit den regionalen Wachstumsbarrieren vergleicht. Dies erfolgt mittels einer Darstellung der in Studien und Strategien bereits identifizierten, länderspezifischen Wachstumsbarrieren in den jeweiligen Ländern sowie mit der Auswertung der regionalen Strategien der ECOWAS. Dazu wird ermittelt, inwieweit auf der regionalen Ebene auch messbare Ergebnisse bei der Bekämpfung von Wachstumsbarrieren erzielt werden. Es zeigt sich, dass ,trotz der wirtschaftlichen und sozialen Diversität der Region, die ECOWAS den Großteil der in den Ländern identifizierten Wachstumsbarrieren ebenfalls auflistet und darüber hinaus sogar mit messbaren Ergebnissen dazu beiträgt, Veränderungen des Status Quo zu erreichen. Die Erweiterung des Ansatzes der Growth Diagnostics auf die regionale Ebene sowie die Erweiterung um das vergleichende Element von länderspezifischen und regionalen Wachstumsbarrieren zeigen sich als praktikabler Weg, Entwicklungsstrategien auf regionaler Ebene zu prüfen und subsidiär weiterzuentwickeln. Das zweite Kapitel "Simplifying evaluation of potential causalities in development projects using Qualitative Comparative Analysis (QCA)" diskutiert die Methode der qualitativen komperativen Analyse (QCA) als Evaluierungsmethodik für Projekte der Entwicklungszusammenarbeit. Hierbei stehen die adäquate Messung sowie die verständliche Darstellung der Wirkung von Entwicklungszusammenarbeit im Vordergrund. Dies ist ein Beitrag zu der intensiv geführten Diskussion, wie Wirkung von Hilfe in Entwicklungsländern gemessen und daraus für weitere Projekte gelernt werden kann. Mit der beispielhaften Anwendung der QCA auf einen Datensatz der deutschen Entwicklungszusammenarbeit im Senegal wird erstmalig diese Methode für die Entwicklungszusammenarbeit in der Praxis angewandt. Der Fokus liegt dabei auf der Überprüfung von bestimmten Programmtheorien, d.h. der Annahme bestimmter Zusammenhänge zwischen eingesetzten Mitteln, äußeren Umständen und den Projektergebnissen bei der Implementierung von Projekten. Während solche Programmtheorien in dem Großteil der Projektskizzen der deutschen Entwicklungszusammenarbeit enthalten sind, werden die wenigsten dieser Programmtheorien geprüft. Diese Arbeit zeigt QCA als eine effiziente Methode für diese Überprüfung. Eine eindeutige Bestätigung oder Falsifizierung dieser Theorien ist mittels dieser Methodik möglich. Dazu können die Ergebnisse bei den beiden einfacheren Formen der QCA, der crisp-set sowie der multi-value QCA, leicht nachvollziehbar vermittelt werden. Des Weiteren zeigt die Arbeit, dass QCA ebenfalls die Weiterentwicklung einer Programmtheorie ermöglicht, allerdings ist diese Weiterentwicklung nur begrenzt effizient und stark von den vorliegenden Daten sowie der Datenstruktur abhängig. Die Arbeit zeigt somit das Potential der QCA insbesondere für den Test von Programmtheorien auf und stellt die praktische Anwendung für mögliche Replizierung beispielhaft dar. Das dritte und letzte Kapitel der Doktorarbeit "The regional trade dynamics of Turkey: a panel data gravity model" analysiert den türkischen Handel, um die Veränderungen der letzten Jahrzehnte aufzuzeigen und daran zu diskutieren, inwieweit sich die Türkei als aufstrebendes Schwellenland von den bestehenden Handelsstrukturen loslöst. Diese Arbeit ist ein Beitrag zur Diskussion der sich Verschiebenden Machtkonstellationen durch das wirtschaftliche Aufholen der Schwellenländer. Bei der Türkei ist diese Diskussion zusätzlich interessant, da die Frage, ob die Türkei sich von der westlichen Welt, Nordamerika und Europa, abwendet, berücksichtigt wird. Mittels Dummy-Variablen für verschiedene Regionen in einem Gravitätsmodell werden die türkischen Handelsdaten zuerst insgesamt und nach Sektoren analysiert und die Veränderungen über verschieden Perioden des türkischen Außenhandels betrachtet. Es zeigt sich, dass in den türkischen Handelsbeziehungen eine Regionalisierung und eine Diversifizierung der Handelspartner stattfinden. Allerdings geht dies nicht mit einer Abkehr von westlichen Handelspartnern einher.
This dissertation focuses on the link between labour market institutions and precautionary savings. It is evaluated whether private households react to changes in social insurance provision such as the income replacement in case of unemployment by increased savings for precautionary reasons. The dissertation consists of three self-contained chapters, each focusing on slightly different aspects of the topic. The first chapter titled "Precautionary saving and the (in)stability of subjective earnings uncertainty" empirically looks at the influence of future income uncertainty on household saving behavior. Numerous cross-section studies on precautionary saving use subjective expectations regarding the income variance one year ahead as a proxy for income uncertainty. Using such proxies observed only at one point in time, however, may give rise to biased estimates for precautionary wealth if expectations are not stable over time. Survey data from the Dutch DNB Household Survey suggest that subjective future income distributions are not stable over the mid-term. Moreover, in this study I contrast estimates of precautionary wealth using the variation coefficient observed at one point in time with those using a simple mid-term average. Estimates of precautionary wealth based on the average are about 40% to 80% higher than the estimates using the variation coefficient observed only once. In addition to that, wealth accumulation for precautionary reasons is estimated for different parts of the income distribution. The share of precautionary wealth is highest for households at the center of the income distribution. By linking saving behaviour with unemployment insurance, the following chapters then shed some light on an issue that has largely been neglected in the literature on labour market institutions so far. Whereas the third chapter models the relevance of unemployment insurance for income uncertainty and intertemporal decision making during institutional reform processes, chapter 4 seeks to establish empirically a relationship between saving behavior and unemployment insurance. Social insurance, especially unemployment insurance, provides agents with income insurance against not marketable income risks. Since the early 1990s, reform measures like more activating policies as suggested by the OECD Jobs Study in 1994 have been observed in Europe. In the third chapter it is argued that such changes in unemployment insurance reduce public insurance and increase income uncertainty. Moreover, a simple three period model is discussed which shows a link between a welfare state reform and agents' saving decisions as one possible reaction of agents to self-insure against income risk. Two sources of uncertainty seem to be important in this context: (1) uncertain results of the reform process concerning the replacement rate, and (2) uncertainty regarding the timing of information about the content of the reform. It can be shown that the precautionary motive for saving explains an increased accumulation of capital in times of reform activities. In addition to that, early information about the expected replacement rate increases agents' utility and reduces under and oversaving. Following the argument of the previous chapters, that an important feature of labour market institutions in modern welfare states is to provide cash transfers as income replacement in case of unemployment, it is hypothesised that unemployment benefits reduce the motive to save for precautionary reasons. Based on consumer sentiment data from the European Commission's Consumer Survey, chapter four finally provides some evidence that aggregate saving intentions are significantly influenced by unemployment benefits. It can be shown that higher benefits lower the intention to save.
International private equity development is highly volatile with increasing global diversification. This thesis examines the transaction patterns of cross-border private equity investment with a particular focus on the affinity of country pairs. Analysis is based on a comprehensive dataset of 99 countries over 25 years. A three-dimensional gravity model analysis covering source and host country over time exposes the effects of the country determinants: economic mass, economic distance, banking system, corporate endowment, as well as legal, political, and institutional system on the transactions. A new method is developed to examine countries in their dual roles as investor and target. This approach verifies their global importance as source and host, and also makes possible an analysis of overall private equity investment. For private equity-specific multi-investor deals, a scheme is designed to measure cross-border activity with more precision by participation, proportional deal participation, and deal flow. The analysis identifies intense level of affinity between country pairs and reveals that no single country is ideal for private equity activity. Instead, the findings show that the specific push and pull factors within each country constellation define the optimal country as trading partner. The results verify a correlation between cross-border deals and economic masses and reduced economic distance of countries. Geographic distance and cultural similarities, such as language and legal system, intensify the likelihood of initiating transactions. International trade-oriented countries with a high level of development lower the entrance barriers and increase the chances of deal success. A well-funded financial system for the investor and an efficient and competitive banking system of target countries enhance the probability of investment between countries. Also relevant for the likelihood of starting cross-border deals are low corporate tax burdens and advanced scientific competitiveness, and a well-developed stock market in the investor country. Fundamental to frequency and likelihood of success are well-established, high standards of a country- social, political, and legal systems with widespread confidence in the rules of society. In particular, the reliability of contract enforcement, with proven quality of regulations that promote private sector development, proves to be crucial for deal success.
The main purpose of this dissertation is to solve the following question: How will the emergence of the Euro influence the currency composition of the NICs?monetary reserves? Taiwan and Thailand are chosen as our investigation subjects. There are two sorts of motives for central banks' reserve holdings, i.e., intervention-related motives and portfolio-related motives. The need for reserve holdings resulting from intervention-related motives are justified because of the costs resulting from exchange rate instability. On the other hand, we use the Tobin-Markowitz model to justify the need for monetary reserves held for portfolio-related motives. The operational implication of this distinction is the separation of monetary reserves into two tranches corresponding to different objectives. An analysis of a central bank's transaction balance is a money quality analysis. Such an analysis has to do with transaction costs and non-pecuniary rates of return. The facts point out, that the Euro's emergence will not change the fact that the USD will continue to be the major currency of transaction balances of the central banks in Taiwan and Thailand. In order to answer the question about diversification of monetary reserves as idle balance in the two NICs, we carry out an analysis of the portfolio approach, which is based on the basic ideas of the Tobin-Markowitz model. This analysis shows that Taiwan and/or Thailand respectively cannot reduce risk at a given rate of return or increase the rate of return at a given risk by diversifying their monetary reserves as idle balance from the USD to the Euro.