An Empirical Analysis of Legal Insider Trading in The Netherlands
Frank de Jong, Jérémie Lefebvre, Hans Degryse
De Economist,
No. 1,
2014
Abstract
In this paper, we employ a registry of legal insider trading for Dutch listed firms to investigate the information content of trades by corporate insiders. Using a standard event-study methodology, we examine short-term stock price behavior around trades. We find that purchases are followed by economically large abnormal returns. This result is strongest for purchases by top executives and for small market capitalization firms, which is consistent with the hypothesis that legal insider trading is an important channel through which information flows to the market. We analyze also the impact of the implementation of the Market Abuse Directive (European Union Directive 2003/6/EC), which strengthens the existing regulation in the Netherlands. We show that the new regulation reduced the information content of sales by top executives.
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How does Institutional Setting Affect the Impact of EU Structural Funds on Economic Cohesion? New Evidence from Central and Eastern Europe
Marina Grusevaja, Toralf Pusch
Journal of Common Market Studies,
2012
Abstract
Structural Funds are the main instrument of the EU Cohesion Policy. Their effective use is subject to an ongoing debate in political and scientific circles. European fiscal assistance under this heading should promote economic and social cohesion in the member states of the European Union. Recently the domestic institutional capacity to absorb, to distribute and to invest Structural Funds effectively has become a crucial determinant of the cohesion process and has attracted attention of the scientific community. The aim of this study is to shed light on the effectiveness of Structural Funds in the countries of the first Central and Eastern European enlargement round in 2004. Using regional data for these countries we have a look on the impact of several institutional governance variables on the effectiveness of Structural Funds. In the interpretation of results reference is made to regional economics. Results of the empirical analysis indicate an influence of certain institutional variables on the effectiveness of Structural Funds in the new member states.
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How does Institutional Setting Affect the Impact of EU Structural Funds on Economic Cohesion? New Evidence from Central and Eastern Europe
Marina Grusevaja, Toralf Pusch
Abstract
Structural Funds are the main instrument of the EU cohesion policy. Their effective use is subject to an ongoing debate in political and scientific circles. European fiscal assistance under this heading should promote economic and social cohesion in the member states of the European Union. Recently, the domestic institutional capacity to absorb, to distribute and to invest Structural Funds effectively has become a crucial determinant of the cohesion process and has attracted attention of the scientific community. The aim of this study is to shed light on the effectiveness of Structural Funds in the countries of the first Central and Eastern European enlargement round in 2004. Using regional data for these countries, we have a look on the impact of several institutional governance variables on the effectiveness of Structural Funds. In the interpretation of results, reference is
made to regional economics. Results of the empirical analysis indicate an influence of certain institutional variables on the effectiveness of Structural Funds in the new member states.
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Macroeconomic Challenges in the Euro Area and the Acceding Countries
Katja Drechsel
Dissertation, Fachbereich Wirtschaftswissenschaften der Universität Osnabrück,
2010
Abstract
deutscher Titel: Makroökonomische Herausforderungen für die Eurozone und die Beitrittskandidaten
Abstract: The conduct of effective economic policy faces a multiplicity of macroeconomic challenges, which requires a wide scope of theoretical and empirical analyses. With a focus on the European Union, this doctoral dissertation consists of two parts which make empirical and methodological contributions to the literature on forecasting real economic activity and on the analysis of business cycles in a boom-bust framework in the light of the EMU enlargement. In the first part, we tackle the problem of publication lags and analyse the role of the information flow in computing short-term forecasts up to one quarter ahead for the euro area GDP and its main components. A huge dataset of monthly indicators is used to estimate simple bridge equations. The individual forecasts are then pooled, using different weighting schemes. To take into consideration the release calendar of each indicator, six forecasts are compiled successively during the quarter. We find that the sequencing of information determines the weight allocated to each block of indicators, especially when the first month of hard data becomes available. This conclusion extends the findings of the recent literature. Moreover, when combining forecasts, two weighting schemes are found to outperform the equal weighting scheme in almost all cases. In the second part, we focus on the potential accession of the new EU Member States in Central and Eastern Europe to the euro area. In contrast to the discussion of Optimum Currency Areas, we follow a non-standard approach for the discussion on abandonment of national currencies the boom-bust theory. We analyse whether evidence for boom-bust cycles is given and draw conclusions whether these countries should join the EMU in the near future. Using a broad range of data sets and empirical methods we document credit market imperfections, comprising asymmetric financing opportunities across sectors, excess foreign currency liabilities and contract enforceability problems both at macro and micro level. Furthermore, we depart from the standard analysis of comovements of business cycles among countries and rather consider long-run and short-run comovements across sectors. While the results differ across countries, we find evidence for credit market imperfections in Central and Eastern Europe and different sectoral reactions to shocks. This gives favour for the assessment of the potential euro accession using this supplementary, non-standard approach.
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The Russian System of Cities from the Perspective of New Economic Geography
Albrecht Kauffmann
Potsdamer Schriften zur Raumwirtschaft, Bd. 2,
2010
Abstract
Der Anstieg der Energiepreise kann zu einer länger anhaltenden Verteuerung von Gütertransporten führen. Welche Auswirkungen haben steigende Transportkosten auf die Entwicklung von Städtesystemen? Ein solcher Transportkostenanstieg hat in der Russischen Föderation nach der Preisliberalisierung 1992 real, d.h. in Relation zu den Preisen anderer Gütergruppen stattgefunden. Gleichzeitig stellt die Bevölkerungsstatistik der Russischen Föderation Daten bereit, mit deren Hilfe Hypothesen zur Entwicklung von Städtesystemen unter dem Einfluss steigender Transportkosten geprüft werden können. Diese Daten werden in der vorliegenden Arbeit umfassend ausgewertet. Den theoretischen Hintergrund liefert die Modellierung eines Städtesystems mit linearer Raumstruktur im Rahmen der Neuen Ökonomischen Geographie. Damit wird ein Werkzeug geschaffen, das auch auf weiträumige Städtesysteme mit ausgeprägter Bandstruktur angewendet werden kann. Die hier erstmals erfolgte ausführliche Erläuterung des zu Grunde liegenden Theorieansatzes versteht sich als Ergänzung der Standardlehrbücher der Raumwirtschaftstheorie. Die Ergebnisse der empirischen Untersuchung bestätigen die Prognose des Modells, dass in großflächigen Ländern bzw. Regionen mit Ähnlichkeit zur unterstellten Raumstruktur ein Anstieg der Transportkosten Konzentrationstendenzen in den Zentren befördert, während die peripheren Regionen zunehmend abgekoppelt werden.
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A New Metric for Banking Integration in Europe
Reint E. Gropp, A. K. Kashyap
Europe and the Euro,
2010
Abstract
Most observers have concluded that while money markets and government bond markets are rapidly integrating following the introduction of the common currency in the euro area, there is little evidence that a similar integration process is taking place for retail banking. Data on cross-border retail bank flows, cross-border bank mergers and the law of one price reveal no evidence of integration in retail banking. This paper shows that the previous tests of bank integration are weak in that they are not based on an equilibrium concept and are neither necessary nor sufficient statistics for bank integration. The paper proposes a new test of integration based on convergence in banks' profitability. The new test emphasises the role of an active market for corporate control and of competition in banking integration. European listed banks profitability appears to converge to a common level. There is weak evidence that competition eliminates high profits for these banks, and underperforming banks tend to show improved profitability. Unlisted European banks differ markedly. Their profits show no tendency to revert to a common target rate of profitability. Overall, the banking market in Europe appears far from being integrated. In contrast, in the U.S. both listed and unlisted commercial banks profits converge to the same target, and high profit banks see their profits driven down quickly.
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Market Concentration and Innovation in Transnational Corporations: Evidence from Foreign Affiliates in Central and Eastern Europe
Liviu Voinea, Johannes Stephan
Research on Knowledge, Innovation and Internationalization (Progress in International Business Research, Volume 4),
2009
Abstract
Purpose – The main research question of this contribution is whether local market concentration influences R&D and innovation activities of foreign affiliates of transnational companies.
Methodology/approach – We focus on transition economies and use discriminant function analysis to investigate differences in the innovation activity of foreign affiliates operating in concentrated markets, compared to firms operating in nonconcentrated markets. The database consists of the results of a questionnaire administered to a representative sample of foreign affiliates in a selection of five transition economies.
Findings – We find that foreign affiliates in more concentrated markets, when compared to foreign affiliates in less concentrated markets, export more to their own foreign investor's network, do more basic and applied research, use more of the existing technology already incorporated in the products of their own foreign investor's network, do less process innovation, and acquire less knowledge from abroad.
Research limitations/implications – The results may be specific to transition economies only.
Practical implications – The main implications of these results are that host country market concentration stimulates intranetwork knowledge diffusion (with a risk of transfer pricing), while more intense competition stimulates knowledge creation (at least as far as process innovation is concerned) and knowledge absorption from outside the affiliates' own network. Policy makers should focus their support policies on companies in more competitive sectors, as they are more likely to transfer new technologies.
Originality/value – It contributes to the literature on the relationship between market concentration and innovation, based on a unique survey database of foreign affiliates of transnational corporations operating in Eastern Europe.
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Competition between Financial Markets in Europe: What can be Expected from MiFID?
Hans Degryse
Financial Markets and Portfolio Management,
No. 1,
2009
Abstract
The Markets in Financial Instruments Directive (MiFID) could be the foundation of new trading platforms in Europe. This contribution employs insights from the theoretical and empirical literature to highlight some of the possible implications of MiFID. In particular, we argue that more competition will lead to more liquid markets, reflected in lower bid–ask spreads and greater depth. It will also lead to innovation in incumbent markets and stimulate the design of new trading platforms. MiFID has already introduced more competition, as evidenced by the startup of Instinet Chi-X, the announcement of new initiatives, including Project Turquoise and BATS, and the reactions of incumbent exchanges.
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Banking Integration, Bank Stability, and Regulation: Introduction to a Special Issue of the International Journal of Central Banking
Reint E. Gropp, H. Shin
International Journal of Central Banking,
No. 1,
2009
Abstract
The link between banking integration and financial stability has taken center stage in the wake of the current financial crisis. To what extent is the banking system in Europe integrated? What role has the introduction of the common currency played in this context? Are integrated banking markets more vulnerable to contagion and financial instability? Does the fragmented regulatory framework in Europe pose special problems in resolving bank failures? What policy reforms may become necessary? These questions are of considerable policy interest as evidenced by the extensive discussions surrounding the design and implementation of a new regulatory regime and by the increasing attention coming from academia.
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The Exchange Rate of the Euro Cannot be Explained Fundamentally even Ten Years after the Introduction of the New Currency
Tobias Knedlik
Wirtschaft im Wandel,
No. 1,
2009
Abstract
Am 01.01.2009 feiert der Euro seinen zehnten Geburtstag. Mit der Einführung der Gemeinschaftswährung verlor der Fremdwährungsaußenhandel in Europa an Bedeutung. Dennoch stellt der Außenhandel mit Ländern außerhalb der Eurozone weiterhin einen wichtigen Teil der wirtschaftlichen Aktivität dar und beläuft sich auf über ein Viertel des deutschen Bruttoinlandprodukts. Deshalb bleibt der Außenwert des Euro von wesentlicher Bedeutung für die deutsche Wirtschaft. Der Verlauf der Wechselkursentwicklung zeigt eine Phase der Abwertung des Euro, die unmittelbar nach Einführung der neuen Währung einsetzte und ihren Tiefpunkt Ende 2000 erreichte. Seit dieser Zeit wertet der Euro, abgesehen von einer Delle im Jahr 2005, nahezu stetig auf. Erst die aktuelle Finanzkrise stoppte seinen Aufwärtstrend.
In diesem Beitrag wird untersucht, ob die Schwankungen des Euro-Wechselkurses durch zwei zentrale theoretische Konzepte zur Wechselkursbestimmung erklärt werden können. Die empirische Analyse zeigt, dass weder die Gültigkeit der Kaufkraftparitätentheorie noch die Gültigkeit der Zinsparitätentheorie für den Euroraum bestätigt werden kann. Für die Prognosetätigkeit lässt sich daraus schlussfolgern, dass die Verwendung von Zufallsprozessen für die Beschreibung des Wechselkursverlaufs gerechtfertigt ist. Bezüglich der Währungspolitik bliebe zu fragen, welche Alternativen zum ungesteuerten Wechselkurs möglich wären, um der Bedeutung des Wechselkurses für die Geldpolitik gerecht zu werden.
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