Limited Investor Attention and the Mispricing of American Depositary Receipts
Stefan Eichler
Economics Letters,
Nr. 3,
2012
Abstract
I test whether more investor attention leads to a better exploitation of arbitrage opportunities and, in turn, to less mispricing of American Depositary Receipts (ADRs). Using data on 536 stocks I find that more investor attention significantly reduces ADR mispricing.
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The Impact of Banking and Sovereign Debt Crisis Risk in the Eurozone on the Euro/US Dollar Exchange Rate
Stefan Eichler
Applied Financial Economics,
Nr. 15,
2012
Abstract
I study the impact of financial crisis risk in the eurozone on the euro/US dollar exchange rate. Using daily data from 3 July 2006 to 30 September 2010, I find that the euro depreciates against the US dollar when banking or sovereign debt crisis risk increases in the eurozone. While the external value of the euro is more sensitive to changes in sovereign debt crisis risk in vulnerable member countries than in stable member countries, the impact of banking crisis risk is similar for both country blocs. Moreover, rising default risk of medium and large eurozone banks leads to a depreciation of the euro while small banks’ default risk has no significant impact, showing the relevance of systemically important banks with regards to the exchange rate.
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Extreme Dependence with Asymmetric Thresholds: Evidence for the European Monetary Union
Stefan Eichler, R. Herrera
Journal of Banking and Finance,
Nr. 11,
2011
Abstract
Existing papers on extreme dependence use symmetrical thresholds to define simultaneous stock market booms or crashes such as the joint occurrence of the upper or lower one percent return quantile in both stock markets. We show that the probability of the joint occurrence of extreme stock returns may be higher for asymmetric thresholds than for symmetric thresholds. We propose a non-parametric measure of extreme dependence which allows capturing extreme events for different thresholds and can be used to compute different types of extreme dependence. We find that extreme dependence among the stock markets of ten initial EMU member countries, the United Kingdom, and the United States is largely asymmetrical in the pre-EMU period (1989–1998) and largely symmetrical in the EMU period (1999–2010). Our findings suggest that ignoring the possibility of asymmetric extreme dependence may lead to an underestimation of the probability of co-booms and co-crashes.
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What Drives FDI in Central-eastern Europe? Evidence from the IWH-FDI-Micro Database
Andrea Gauselmann, Mark Knell, Johannes Stephan
Post-Communist Economies,
Nr. 3,
2011
Abstract
The focus of this paper is on the match between strategic motives of foreign investments into Central-Eastern Europe and locational advantages offered by these countries. Our analysis makes use of the IWH-FDI-Micro Database, a unique dataset that contains information from 2009 about the determinants of locational factors, technological activity of the subsidiaries, and the potentials for knowledge spillovers in the Czech Republic, Hungary, Poland, Romania, and Slovakia. The analysis suggests that investors in these countries are mainly interested in low (unit) labour costs coupled with a well-trained and educated workforce and an expanding market with the high growth rates in the purchasing power of potential buyers. It also suggests that the financial crisis reduced the attractiveness of the region as a source for localised knowledge and technology. There appears to be a match between investors’ expectations and the quantitative supply of unqualified labour, not however for the supply of medium qualified workers. But the analysis suggests that it is not technology-seeking investments that are particularly content with the capabilities of their host economies in terms of technological cooperation. Finally, technological cooperation within the local host economy is assessed more favourably with domestic firms than with local scientific institutions – an important message for domestic economic policy.
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The Emergence of Wage Coordination in the Central Western European Metal Sector and its Relationship to European Economic Policy
Vera Glassner, Toralf Pusch
Abstract
In the European Monetary Union the transnational coordination of collective wage bargaining has acquired increased importance on the trade union agenda. The metal sector has been at the forefront of these developments. This paper addresses the issue of crossborder coordination of wage setting in the metal sector in the central western European region, that is, in Germany, the Netherlands and Belgium, where coordination practices have become firmly established in comparison to other sectors. When testing the interaction of wage developments in the metal sector of these three countries, relevant macroeconomic (inflation and labour productivity) and sector-related variables (employment, export-dependence) are considered with reference to the wage policy guidelines of the European Commission and the European Metalworkers’ Federation. Empirical evidence can be found for a wage coordination effect in the form of increasing compliance with the wage policy guidelines of the European Metalworkers’ Federation. The evidence for compliance with the stability-oriented wage guideline of the European Commission is weaker.
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Foreign Subsidiaries in the East German Innovation System – Evidence from Manufacturing Industries
Jutta Günther, Björn Jindra, Johannes Stephan
IWH Discussion Papers,
Nr. 4,
2008
Abstract
This paper analyses the extent of technological capability of foreign subsidiaries located in East Germany, and looks at the determinants of foreign subsidiaries’ technological sourcing behaviour. The theory of international production underlines the importance of strategic and regional level variables. However, existing empirical approaches omit by and large regional level factors. We employ survey evidence from the “FDI micro data- base” of the IWH, that was only recently made available, to conduct our analyses. We find that foreign subsidiaries are above average technologically active in comparison to the whole East German manufacturing. This can be partially explained by the industrial structure of foreign direct investment. However, only a limited share of foreign subsidiaries with R&D and/or innovation activity source technological knowledge from the East German innovation system. If a subsidiary follows a competence augmenting strategy or does local trade, it is more likely to source technological knowledge locally. The endowment of a region with human capital and a scientific infrastructure has a positive effect too. The findings suggest that foreign subsidiaries in East Germany are only partially linked with the regional innovation system. Policy implications are discussed.
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A strategy view on knowledge in the MNE – Integrating Subsidiary Roles and Knowledge Flows
Björn Jindra
East-West Journal of Economics and Business,
1 & 2
2005
Abstract
We assume knowledge inflows endogenous to subsidiary roles. Integrating organisational and knowledge-based views we propose a new subsidiary typology based on MNE integration-subsidiary capability. We hypothesise that both dimensions are positively associated with knowledge inflows into the focal subsidiary. This prediction is tested with data for 425 subsidiaries. The key findings were: (a) the extent for knowledge inflows differs significantly across all subsidiary roles; (c) it diminishes in a anti-clockwise direction starting in the high integration-high capability quadrant of the IC taxonomy; thus (b) both MNE integration and subsidiary capability drive knowledge inflows, although, the balance shifts more towards integration.
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EU Eastern Enlargement and Structural Change: Specialization Patterns in Accession Countries and Economic Dynamics in the Single Market
Albrecht Kauffmann, P. J. J. Welfens, A. Jungmittag, C. Schumann
Diskussionsbeiträge des Europäischen Instituts für Internationale Wirtschaftsbeziehungen (EIIW), Bergische Universität Wuppertal, Nr. 106,
Nr. 106,
2003
Abstract
Der Beitrag untersucht Kernfragen des Strukturwandels und der Spezialisierungsmuster in den Volkswirtschaften der erweiterten Europäischen Union. In allen Transformationsländern wurden, gemessen an Beschäftigung und Produktivität, Verschiebungen von landwirtschaftlichen und industriellen Sektor hin zum Dienstleistungssektor beobachtet – z.T. mit späteren Reindustrialisierungsphasen. Während einige Ländern, insbesondere Tschechien, Ungarn, die Slowakei, Polen, Estland und Slowenien ihre Produktivität in mittleren technologieintensiven Bereichen verbessert haben und die Technologieleiter aufwärts steigen können, bleiben andere bei einer Struktur mit vielen arbeitsintensiven Zweigen. Im Kontext der EU-Erweiterung sind handelsschaffende Effekte – insbesondere in Verbindung mit einem Anstieg des intra-industriellen Handels – und verstärkte Direktinvestitionen zu erwarten. Alle beteiligten Länder müssen sich gemäß ihren komparativen Vorteilen spezialisieren, allerdings können staatliche F&E-Ausgaben sowie Bildungsanstrengungen auf die Entwicklung solcher Vorteile Einfluss nehmen. Die Gerschenkron-Hypothese postuliert für die Beitrittsländer einen „Vorteil der Rückständigkeit“. Da diese Länder in der ersten Transformationsphase niedrige F&E-Intensitäten in der ersten Transformationsphase aufweisen, ist die Modernisierung des Bildungs- und Forschungssektors wesentlich. Für die EU-15 als Ganzes wird ein Erweiterungsgewinn erwartet, aber die Vorteile werden sich über die Länder hinweg unterschiedlich darstellen, da die ökonomische Geografie eine Rolle spielt. Österreich, Deutschland, die skandinavischen Länder, die Niederlande, Italien und Frankreich werden voraussichtlich stärker von der Erweiterung profitieren als die anderen Mitglieder der EU-15. Deutschland und Österreich spielen zusätzlich eine wichtige Rolle als Ursprungsländer für Direktinvestitionen. Es gibt noch einen erheblichen Forschungsbedarf bezüglich Ausmaß und Richtung des Strukturwandels.
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Corporate Social Responsibility and Profit Shifting
Iftekhar Hasan, Panagiotis I. Karavitis, Pantelis Kazakis, Woon Sau Leung
European Accounting Review,
2099
Abstract
This paper examines the relation between corporate social responsibility (CSR) performance and tax–motivated income shifting. Using a profit–shifting measure estimated from multinational enterprises (MNEs) data, we find that parent firms with higher CSR scores shift significantly more profits to their low-tax foreign subsidiaries. Overall, our evidence suggests that MNEs engaging in CSR activities acquire legitimacy and moral capital that temper negative responses by stakeholders and thus have greater scope and chance to engage in unethical profit-shifting activities, consistent with the legitimacy theory.
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