We develop a theory of bank information sharing, highlighting the interactions between credit and labor markets. A better-informed relationship bank competes with a less informed foreign bank for borrowers under asymmetric information about borrowers' creditworthiness. Credit market competition triggers competition for the relationship bank's loan officers, who possess valuable information about the borrowers' creditworthiness. The relationship bank can share credit information to soften the labor market competition, despite intensifying the credit market competition. When labor market mobility is moderate, information sharing emerges as the optimal strategy of the relationship bank.
{"title":"A Tale of Two Markets: Labor Market Mobility and Bank Information Sharing","authors":"Yinxiao Chu, Zhao Li, Jianxing Wei, Weixing Wu","doi":"10.2139/ssrn.3946967","DOIUrl":"https://doi.org/10.2139/ssrn.3946967","url":null,"abstract":"We develop a theory of bank information sharing, highlighting the interactions between credit and labor markets. A better-informed relationship bank competes with a less informed foreign bank for borrowers under asymmetric information about borrowers' creditworthiness. Credit market competition triggers competition for the relationship bank's loan officers, who possess valuable information about the borrowers' creditworthiness. The relationship bank can share credit information to soften the labor market competition, despite intensifying the credit market competition. When labor market mobility is moderate, information sharing emerges as the optimal strategy of the relationship bank.","PeriodicalId":74863,"journal":{"name":"SSRN","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-10-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44431136","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, I analyze the local labor market consequences of multinational firms reallocating employees across their affiliates in response to antitax avoidance policies. I leverage the introduction of a worldwide debt cap in 2010 in the United Kingdom as a quasi-natural experiment that limited one of the forms of profit shifting—debt shifting—for a group of multinational corporations (MNCs). Multinationals affected by the reform reallocated their employees from the United Kingdom to foreign locations. This affected London-based service sector firms the most. I show that this led to a reduction in the number of jobs available in regions exposed to the reform in the United Kingdom. In foreign countries, the initial reallocation of labor across firms resulted in a much larger expansion of the affected local labor markets. These results suggest that a reallocation of labor across firms generates asymmetries in how negative and positive firm-level shocks are amplified through regional markets.
{"title":"Labor Market Consequences of Antitax Avoidance Policies","authors":"Katarzyna Bilicka","doi":"10.2139/ssrn.3947891","DOIUrl":"https://doi.org/10.2139/ssrn.3947891","url":null,"abstract":"In this paper, I analyze the local labor market consequences of multinational firms reallocating employees across their affiliates in response to antitax avoidance policies. I leverage the introduction of a worldwide debt cap in 2010 in the United Kingdom as a quasi-natural experiment that limited one of the forms of profit shifting—debt shifting—for a group of multinational corporations (MNCs). Multinationals affected by the reform reallocated their employees from the United Kingdom to foreign locations. This affected London-based service sector firms the most. I show that this led to a reduction in the number of jobs available in regions exposed to the reform in the United Kingdom. In foreign countries, the initial reallocation of labor across firms resulted in a much larger expansion of the affected local labor markets. These results suggest that a reallocation of labor across firms generates asymmetries in how negative and positive firm-level shocks are amplified through regional markets.","PeriodicalId":74863,"journal":{"name":"SSRN","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-10-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48235522","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We evaluate the performance of US active equity funds based on their Sharpe ratios. Only 13% of funds outperform the market index after fees. We estimate the aggregate annual loss to investors in US active equity funds at $235 billion. This loss can be decomposed into an inefficient portfolio allocation component of $186 billion, and a fees component of $49 billion. The loss estimate based on Sharpe ratios is about 10 times larger than estimates based on alphas, and we argue that Sharpe ratios are more relevant from the perspective of most investors. We discuss possible explanations for the persistence of this large inefficiency and suggest ways to mitigate it.
{"title":"The Deadweight Loss of Active Management","authors":"Moshe Levy","doi":"10.2139/ssrn.3947150","DOIUrl":"https://doi.org/10.2139/ssrn.3947150","url":null,"abstract":"We evaluate the performance of US active equity funds based on their Sharpe ratios. Only 13% of funds outperform the market index after fees. We estimate the aggregate annual loss to investors in US active equity funds at $235 billion. This loss can be decomposed into an inefficient portfolio allocation component of $186 billion, and a fees component of $49 billion. The loss estimate based on Sharpe ratios is about 10 times larger than estimates based on alphas, and we argue that Sharpe ratios are more relevant from the perspective of most investors. We discuss possible explanations for the persistence of this large inefficiency and suggest ways to mitigate it.","PeriodicalId":74863,"journal":{"name":"SSRN","volume":"32 1","pages":"17 - 41"},"PeriodicalIF":0.0,"publicationDate":"2021-10-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45934119","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study explores the relationship between boundary decisions and the sense of purpose within firms. Using data from approximately 1.6 million employees and 831 acquisitions, we find that purpose is substantially weaker in companies in the three years following a transaction. This relationship is particularly pronounced when information asymmetry is high, specifically when disclosed rationales use non-specific language or represent unique industry combinations. Moreover, this weakened purpose has implications for the performance of the transaction. Unique transactions are met with outsized market returns upon announcement, consistent with market perception of the strategic value of uniqueness. However, they do not outperform over the long run. Only unique transactions that simultaneously sustain strong purpose ultimately outperform. Altogether, our evidence suggests a possible tension between strategic and motivational implications of firm boundaries: while firms benefit strategically from uniqueness, it may also erode the sense of purpose within firms, with implications for downstream performance.
{"title":"Acquisitions and Organizational Purpose","authors":"Claudine Gartenberg, S. Yiu","doi":"10.2139/ssrn.3811690","DOIUrl":"https://doi.org/10.2139/ssrn.3811690","url":null,"abstract":"This study explores the relationship between boundary decisions and the sense of purpose within firms. Using data from approximately 1.6 million employees and 831 acquisitions, we find that purpose is substantially weaker in companies in the three years following a transaction. This relationship is particularly pronounced when information asymmetry is high, specifically when disclosed rationales use non-specific language or represent unique industry combinations. Moreover, this weakened purpose has implications for the performance of the transaction. Unique transactions are met with outsized market returns upon announcement, consistent with market perception of the strategic value of uniqueness. However, they do not outperform over the long run. Only unique transactions that simultaneously sustain strong purpose ultimately outperform. Altogether, our evidence suggests a possible tension between strategic and motivational implications of firm boundaries: while firms benefit strategically from uniqueness, it may also erode the sense of purpose within firms, with implications for downstream performance.","PeriodicalId":74863,"journal":{"name":"SSRN","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-10-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68649031","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We introduce a Generalized Nested Logit model of demand for bundles that can be estimated sequentially and virtually eliminates any challenge of dimensionality related to large choice sets. We use it to investigate quantity discounts for carbonated soft drinks by simulating a counterfactual with linear pricing. The prices of quantities up to 1L decrease by −31.5% while those of larger quantities increase by +14.8%. Purchased quantities decrease by −20.4%, associated added sugar by −23.8%, and industry profit by −20.5%. Consumer surplus however reduces only moderately, suggesting that linear pricing may be effective in limiting added sugar intake.
{"title":"An Empirical Model of Quantity Discounts with Large Choice Sets","authors":"Alessandro Iaria, Ao Wang","doi":"10.2139/ssrn.3946475","DOIUrl":"https://doi.org/10.2139/ssrn.3946475","url":null,"abstract":"We introduce a Generalized Nested Logit model of demand for bundles that can be estimated sequentially and virtually eliminates any challenge of dimensionality related to large choice sets. We use it to investigate quantity discounts for carbonated soft drinks by simulating a counterfactual with linear pricing. The prices of quantities up to 1L decrease by −31.5% while those of larger quantities increase by +14.8%. Purchased quantities decrease by −20.4%, associated added sugar by −23.8%, and industry profit by −20.5%. Consumer surplus however reduces only moderately, suggesting that linear pricing may be effective in limiting added sugar intake.","PeriodicalId":74863,"journal":{"name":"SSRN","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-10-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47220743","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We show that an increase in the cost of unskilled labor leads to more labor-saving innovation. Larger minimum wage increases are associated with larger increases in automation patent applications and citations received by automation patents. These findings are stronger in states with a higher binding wage percentile, i.e., where the minimum wage increase has more ‘bite’. The increase in automation patents following minimum wage hikes contributes to poorer employment outcomes for unskilled workers employed in routine tasks. We conclude that minimum wage legislation spurs innovation that displaces the very same workers the legislation was designed to help.
{"title":"The Effect of Labor Cost on Labor-Saving Innovation","authors":"Amrita Nain, Yan Wang","doi":"10.2139/ssrn.3946568","DOIUrl":"https://doi.org/10.2139/ssrn.3946568","url":null,"abstract":"We show that an increase in the cost of unskilled labor leads to more labor-saving innovation. Larger minimum wage increases are associated with larger increases in automation patent applications and citations received by automation patents. These findings are stronger in states with a higher binding wage percentile, i.e., where the minimum wage increase has more ‘bite’. The increase in automation patents following minimum wage hikes contributes to poorer employment outcomes for unskilled workers employed in routine tasks. We conclude that minimum wage legislation spurs innovation that displaces the very same workers the legislation was designed to help.","PeriodicalId":74863,"journal":{"name":"SSRN","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-10-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44007487","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A. Memon, S. Rajput, Vic Benuyenah, G. Afshan, Rana Salman Anwar
The present study highlights the antecedents of green communication. Referring to the literature, the researcher found four important determinants: cultural orientation, technological orientation, non-facilitating conditions, and change orientation, where green communication refers to interned mediated communication. The present study has attempted to explore ways to reduce pollution through remote communication that reduces paper waste, transport emissions, and other factors. The data for the study has been collected from eleven countries across four continents with a sample size of (n=999). The researcher validates the theories of planned behavior, gender schema and generation cohorts, and green communication determinants following factor analyses and structural equation modeling. The findings suggest that cultural orientation, technological orientation, and change orientation significantly enhance the green communication behavior, whereas non-facilitating conditions significantly reduce the same. The study dissected these effects across gender, generation, qualification, and continents and found that determinants' effects vary across the cited groups.
{"title":"Decomposing Green Communication Amidst COVID-19 (A Cross-Gender, Cross-Generations, Cross-Qualification and Cross-Continental Analysis)","authors":"A. Memon, S. Rajput, Vic Benuyenah, G. Afshan, Rana Salman Anwar","doi":"10.2139/SSRN.3946343","DOIUrl":"https://doi.org/10.2139/SSRN.3946343","url":null,"abstract":"The present study highlights the antecedents of green communication. Referring to the literature, the researcher found four important determinants: cultural orientation, technological orientation, non-facilitating conditions, and change orientation, where green communication refers to interned mediated communication. The present study has attempted to explore ways to reduce pollution through remote communication that reduces paper waste, transport emissions, and other factors. The data for the study has been collected from eleven countries across four continents with a sample size of (n=999). The researcher validates the theories of planned behavior, gender schema and generation cohorts, and green communication determinants following factor analyses and structural equation modeling. The findings suggest that cultural orientation, technological orientation, and change orientation significantly enhance the green communication behavior, whereas non-facilitating conditions significantly reduce the same. The study dissected these effects across gender, generation, qualification, and continents and found that determinants' effects vary across the cited groups.","PeriodicalId":74863,"journal":{"name":"SSRN","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-10-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68669503","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study investigates the economic implications of blockchain-based academic journals, proposed by the recent computer science literature, in which authors and referees are individually incentivized. We construct a model in which the journal publishes qualified papers under two types of information asymmetry: paper quality and type of referee. We obtain the conditions under which equilibrium in decentralization exists or fails and leads to a better outcome than in centralization. Our research also helps us understand how to design an incentive structure for information providers required for funding decisions, loan inspections, and credit ratings.
{"title":"Blockchain-based Academic Journals","authors":"Kyoung Jin Choi, Jaevin Park","doi":"10.2139/ssrn.3730355","DOIUrl":"https://doi.org/10.2139/ssrn.3730355","url":null,"abstract":"This study investigates the economic implications of blockchain-based academic journals, proposed by the recent computer science literature, in which authors and referees are individually incentivized. We construct a model in which the journal publishes qualified papers under two types of information asymmetry: paper quality and type of referee. We obtain the conditions under which equilibrium in decentralization exists or fails and leads to a better outcome than in centralization. Our research also helps us understand how to design an incentive structure for information providers required for funding decisions, loan inspections, and credit ratings.","PeriodicalId":74863,"journal":{"name":"SSRN","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-10-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68631772","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Whereas research regarding the impact of climate change on the global financial system is ever growing, the impact of climate change and risks related therewith on deposit insurance has remained largely undealt with in literature. As global financial standard-setters have set the treatment of climate risks high on the agenda , this Policy Brief represents the first attempt to identify five core challenges that climate change may pose to the activity of deposit insurers and their ability to deliver on key objectives. The paper also classifies the challenges as to their risk-nature as well as to their directness, urgency and the feasibility of deposit insurers’ to respond to them. Given the novel nature of these issues as well as the high uncertainty and long time horizon inherent to them, the discussion here is by no means meant to be exhaustive. It is also recognised that the scale and degree to which climate change affects deposit insurers may vary significantly. This may be so due to differences in mandates or geographical exposure to climate risks. Nevertheless, the breath and scope of climate change-related risks as well as financial standard-setters’ omnipresent activities in the field make this topic of strategic interest to the deposit insurance community. The links between these challenges and the IADI Core Principles underscores the strategic urgency of this contemporary policy issue.
{"title":"Climate Change Fever: Can Deposit Insurers Stay Cool?","authors":"Bert Van Roosebeke, Ryan Defina","doi":"10.2139/ssrn.3919977","DOIUrl":"https://doi.org/10.2139/ssrn.3919977","url":null,"abstract":"Whereas research regarding the impact of climate change on the global financial system is ever growing, the impact of climate change and risks related therewith on deposit insurance has remained largely undealt with in literature. As global financial standard-setters have set the treatment of climate risks high on the agenda , this Policy Brief represents the first attempt to identify five core challenges that climate change may pose to the activity of deposit insurers and their ability to deliver on key objectives. The paper also classifies the challenges as to their risk-nature as well as to their directness, urgency and the feasibility of deposit insurers’ to respond to them. Given the novel nature of these issues as well as the high uncertainty and long time horizon inherent to them, the discussion here is by no means meant to be exhaustive. It is also recognised that the scale and degree to which climate change affects deposit insurers may vary significantly. This may be so due to differences in mandates or geographical exposure to climate risks. Nevertheless, the breath and scope of climate change-related risks as well as financial standard-setters’ omnipresent activities in the field make this topic of strategic interest to the deposit insurance community. The links between these challenges and the IADI Core Principles underscores the strategic urgency of this contemporary policy issue.","PeriodicalId":74863,"journal":{"name":"SSRN","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-10-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42183225","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Annika Frede, Kumar Parijat Tripathi, P. Czarnewski, Gustavo Monasterio, Ricardo O. Ramirez Flores, C. Sorini, L. Larsson, Xinxin Luo, Claudio Novella-Rausell, Chiara Zagami, Yue O. O. Hu, Camilla Engblom, Romy Mittenzwei, Nadine Hövelmeyer, J. Lundeberg, Srustidhar Das, Julio Saez-Rodriguez, E. Villablanca
Little is known about the pro-resolution role of immune cells recruited to damaged tissue. Using an experimental model of intestinal epithelial damage and repair, we identified B cells as the dominant cell type in the healing colon. Single-cell RNA-sequencing (scRNAseq) revealed the expansion of an IFN-induced B cell subset during experimental mucosal healing which was associated with colitis severity. In line with this, B cell depletion during mucosal healing resulted in accelerated recovery upon injury, which was associated with enhanced expression of tissue remodeling genes. scRNA-seq from the epithelial and stromal compartment confirmed that lack of B cells during mucosal healing alters gene activity programs associated with tissue remodeling. Combined scRNAseq and spatial transcriptomic analysis showed that IFN-induced B cells are located at sites of damage/remodeling and that absence of B cells resulted in decreased potential interaction and co-localization between stromal and epithelial cells. Thus, we identified a previously undescribed role of B cells impairing cell-cell interactions during mucosal healing.
{"title":"B Cell Expansion Hinders the Stroma-Epithelium Regenerative Crosstalk During Mucosal Healing","authors":"Annika Frede, Kumar Parijat Tripathi, P. Czarnewski, Gustavo Monasterio, Ricardo O. Ramirez Flores, C. Sorini, L. Larsson, Xinxin Luo, Claudio Novella-Rausell, Chiara Zagami, Yue O. O. Hu, Camilla Engblom, Romy Mittenzwei, Nadine Hövelmeyer, J. Lundeberg, Srustidhar Das, Julio Saez-Rodriguez, E. Villablanca","doi":"10.2139/SSRN.3945928","DOIUrl":"https://doi.org/10.2139/SSRN.3945928","url":null,"abstract":"Little is known about the pro-resolution role of immune cells recruited to damaged tissue. Using an experimental model of intestinal epithelial damage and repair, we identified B cells as the dominant cell type in the healing colon. Single-cell RNA-sequencing (scRNAseq) revealed the expansion of an IFN-induced B cell subset during experimental mucosal healing which was associated with colitis severity. In line with this, B cell depletion during mucosal healing resulted in accelerated recovery upon injury, which was associated with enhanced expression of tissue remodeling genes. scRNA-seq from the epithelial and stromal compartment confirmed that lack of B cells during mucosal healing alters gene activity programs associated with tissue remodeling. Combined scRNAseq and spatial transcriptomic analysis showed that IFN-induced B cells are located at sites of damage/remodeling and that absence of B cells resulted in decreased potential interaction and co-localization between stromal and epithelial cells. Thus, we identified a previously undescribed role of B cells impairing cell-cell interactions during mucosal healing.","PeriodicalId":74863,"journal":{"name":"SSRN","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-10-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46271599","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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