The impact of investor sentiment on the German stock market

This paper develops a broad-based sentiment indicator for Germany and investigates whether investor sentiment can explain stock returns on the German stock market. Based on a principal component analysis, we construct a sentiment indicator that condenses information of several well-known sentiment proxies. We show that this indicator explains the return spread between sentiment sensitive stocks and stocks that are not sensitive to sentiment fluctuations. Specifically, stocks that are difficult to arbitrage and hard to value are sensitive to the indicator. However, we do not find much predictive power of sentiment for future stock returns.     

Contractual relations and organizational structure in franchising

In this paper, we employ a new dataset based on a sample of 123 franchise systems originating from Germany to empirically test hypotheses stemming from agency theory and capital scarcity considerations on the contractual relations and the organizational structure in franchising. We include proxies for the franchisor’s capital scarcity as well as for moral hazard on the franchisee’s and the franchisor’s side. Furthermore, we distinguish between initial and ongoing franchisor support. Our results indicate that agency models based on double moral hazard do explain the design of franchise contracts and the organizational structure in terms of the proportion of franchised outlets. We find that the incentive component of the franchise contract (the royalty rate) is not influenced by moral hazard on the franchisee’s side, but rather by moral hazard on the franchisor’s side. Furthermore, the proportion franchised is strongly influenced by moral hazard on the franchisee’s side. Hence, after providing incentives to outlet managers by turning them into franchisees, thereby granting them residual claimancy, the royalty rate mainly serves to ensure ongoing franchisor input. The franchisor’s capital scarcity influences the fixed fee in franchise contracts and the proportion of franchised outlets, thus supporting standard capital scarcity arguments.     

Emoticons und Personenwahrnehmung: Der Einfluss von Emoticons auf die Einschätzung unbekannter Kommunikationspartner in der Online-Kommunikation

Text-based computer-mediated communication is a daily experience in social as well as work-related communication. Enriching text messages with emoticons to convey emotions or non-verbal communication aspects can provide the recipients with important background information. However, it’s still not well understood how impression formation takes place in text-based computer-mediated communication. This study investigated how using emoticons influences the perception of communication partners in anonymous computer-mediated communication settings. In an online experiment (N?=?50) participants rated communication partners, who used emoticons in the experimental condition and did not use emoticons in the control condition, on the following dimensions: Openness, Friendliness, Warmth, Sense of Humor, and Respectability. Furthermore, they guessed the senders’ sex. Results show medium to strong effects on the dimensions “Warmth” and “Friendliness”: Senders using emoticons received higher ratings on these dimensions. Methodical limitations and implications for further research are discussed.     

Understanding Knowledge Activists’ Successes and Failures

Firms are increasingly relying on “knowledge activists” to facilitate the flow of knowledge. This paper discusses which initiatives by activists are most likely to succeed. It identifies a conceptual framework that illustrates the conditions essential to full knowledge sharing and illustrates its effectiveness through a selection of case studies. It concludes by saying that the rigidity and priorities of organisations often preclude the flexibility and entrepreneurism necessary for successful knowledge initiatives.     

Long memory versus structural breaks: An overview

We discuss the increasing literature on misspecifying structural breaks or more general trends as long-range dependence. We consider tests on structural breaks in the long-memory regression model as well as the behaviour of estimators of the memory parameter when structural breaks or trends are in the data but long memory is not. Methods for distinguishing both of these phenomena are proposed. The financial support of Volkswagenstiftung is gratefully acknowledged.     

Participation and inclusiveness in private rule-setting organizations: does it matter for effectiveness?

Governance, from local to global levels, relies increasingly on private governance arrangements. Private actors, specifically corporations and civil society organizations, increasingly design, implement and monitor rules and standards that guide and prescribe behavior in a range of policy areas, including sustainability, banking and international security, to name a few. Even though the involvement of private actors in global politics is not a new phenomenon, the creation of cooperative arrangements in the form of organizations that lead to private regulation – thus complementing traditional ways of political influence – is relatively novel. This paper focuses on private rule-setting organizations that have emerged in the global governance of sustainability. It starts from the observation that, despite seemingly performing similar roles and functions, organizations differ both in terms of outputs they produce as well as rules of participation and decision-making. Accordingly, the paper evaluates whether organizations providing a more inclusive and participatory approach in relation to others have different implications for the quality and relevance of rules (outputs). Hence, it aims to shed light on the way private rules and standards are decided and the associated implications, in view of their increasing role and relevance in sustainability governance. In more detail, we contend that there is no linear relation between democratic legitimacy and effectiveness. While inclusiveness and representativeness in the standard-setting process will probably lead to more stringent and comprehensive rules, those regulatory systems with high stringency will be the ones least taken up. Empirically, the paper illustrates its argument with a comparison of five private rule-setting organizations that have emerged in the global governance of fisheries sustainability: the Marine Stewardship Council, Friend of the Sea, the Aquaculture Stewardship Council, the Global Aquaculture Alliance and GlobalGAP.     

Non-migrants’ interethnic relationships with migrants: the role of the residential area,the workplace,and attitudes toward migrants from a longitudinal perspective

This paper studies the determinants of interethnic relationships between non-migrants and migrants in Germany. A large body of literature documents that such relationships generate positive outcomes for individual migrants as well as non-migrants and the social cohesion of host-societies at large. Previous research tends to focus on the migrant side, thereby neglecting the factors enabling non-migrants’ interethnic relationships. Moreover, the existing research on non-migrants exclusively uses cross-sectional data for causal inferences. In contrast, this paper draws on longitudinal data, thus providing a more comprehensive and empirically rigorous picture of the determinants of interethnic relationships. The paper identifies possible determinants of non-migrants’ interethnic relationships, combining them into a single analytical framework that allows for gauging their relative importance. Moderately high migrant shares in the neighbourhood are found to be connected to more interethnic relationships, while a higher share of foreigners in the wider region only has a positive effect for the employed. Neither employment status nor migrant share at work are found to be connected to non-migrants’ interethnic relationships. Finally, persons feeling threatened by immigration and migrants are largely found to be less likely to have interethnic relationships, while sympathy with migrants works in the opposite direction.     

Individual Wealth and Subjective Financial Well‐being in Marriage: Resource Integration or Separation?

Economic wealth is mostly assumed to be a household‐level resource that is pooled by spouses in married couples. Using comprehensive data on the individual wealth of both spouses in married couples from the German Socio‐Economic Panel Study (N = 13,623 individuals), the author tests this assumption. To this end, the associations between individuals' wealth and their spouses' wealth with individuals' subjective financial well‐being are examined. Results show that women's financial well‐being is equally associated with their own individual wealth and their spouses' wealth in older birth cohorts. In younger birth cohorts, women's financial well‐being is more strongly associated with their own individual wealth than with their spouses' wealth. For men from all birth cohorts, their own individual wealth is more strongly related to their financial well‐being than is their spouses' wealth. These findings suggest that wealth is not generally and fully pooled and that individual ownership matters within married couples in Germany.     

The traveling salesman problem on grids with forbidden neighborhoods

We introduce the traveling salesman problem with forbidden neighborhoods (TSPFN). This is an extension of the Euclidean TSP in the plane where direct connections between points that are too close are forbidden. The TSPFN is motivated by an application in laser beam melting. In the production of a workpiece in several layers using this method one hopes to reduce the internal stresses of the workpiece by excluding the heating of positions that are too close. The points in this application are often arranged in some regular (grid) structure. In this paper we study optimal solutions of TSPFN instances where the points in the Euclidean plane are the points of a regular grid. Indeed, we explicitly determine the optimal values for the TSPFN and its associated path version on rectangular regular grids for different minimal distances of the points visited consecutively. For establishing lower bounds on the optimal values we use combinatorial counting arguments depending on the parities of the grid dimensions. Furthermore we provide construction schemes for optimal TSPFN tours for the considered cases.