MORAL HAZARD AND CAPITAL STRUCTURE DYNAMICS

We base a contracting theory for a startup firm on an agency model with observable but nonverifiable effort, and renegotiable contracts. Two essential restrictions on simple contracts are imposed: the entrepreneur must be given limited liability, and the investor's earnings must not decrease in the realized profit of the firm. All message game contracts with pure strategy equilibria (and no third parties) are considered. Within this class of contracts/equilibria, and regardless of who has the renegotiating bargaining power, debt and convertible debt maximize the entrepreneur's incentives to exert effort. These contracts are optimal if the entrepreneur has the bargaining power in renegotiation. If the investor has the bargaining power, the same is true unless debt induces excessive effort. In the latter case, a nondebt simple contract achieves efficiency—the noncontractibility of effort does not lower welfare. Thus, when the noncontractibility of effort matters, our results mirror typical capital structure dynamics: an early use of debt claims, followed by a switch to equity‐like claims. (JEL: D820, L140, O261)     

Generic Identifiability of Linear Structural Equation Models by Ancestor Decomposition

Linear structural equation models, which relate random variables via linear interdependencies and Gaussian noise, are a popular tool for modelling multivariate joint distributions. The models correspond to mixed graphs that include both directed and bidirected edges representing the linear relationships and correlations between noise terms, respectively. A question of interest for these models is that of parameter identifiability, whether or not it is possible to recover edge coefficients from the joint covariance matrix of the random variables. For the problem of determining generic parameter identifiability, we present an algorithm building upon the half‐trek criterion. Underlying our new algorithm is the idea that ancestral subsets of vertices in the graph can be used to extend the applicability of a decomposition technique.     

Ein metrikbasierter Ansatz zur Messung der Aktualit?t von Daten in Informationssystemen

Due to the importance of using up-to-date data in information systems, this paper analyzes how the data quality dimension currency can be measured. Therefore, we design a probability based metric that allows for an objective and to a great extent automated assessment of data’s currency. In contrast to existing approaches, the resulting values of the new metric meet important requirements such as ratio scale and can be interpreted as probabilities. Hence, they can also be applied to calculate expected values for decision making in a methodically well-founded manner. Moreover, the metric can be adapted to the context of a particular application considering both, the specific characteristics of attribute values and supplemental data stored in the information system. The evaluation of the approach is based on six requirements for data quality metrics. Furthermore, the case of a mobile services provider illustrates the metric’s applicability and its practical benefit.     

A SINful approach to Gaussian graphical model selection

Multivariate Gaussian graphical models are defined in terms of Markov properties, i.e., conditional independences, corresponding to missing edges in the graph. Thus model selection can be accomplished by testing these independences, which are equivalent to zero values of corresponding partial correlation coefficients. For concentration graphs, acyclic directed graphs, and chain graphs (both LWF and AMP classes), we apply Fisher's z-transform, Šidák's correlation inequality, and Holm's step-down procedure to simultaneously test the multiple hypotheses specified by these zero values. This simple method for model selection controls the overall error rate for incorrect edge inclusion. Prior information about the presence and/or absence of particular edges can be readily incorporated.     

An extension of the Blinder–Oaxaca decomposition to nonlinear models

This paper develops a general Blinder–Oaxaca decomposition that allows the differences in an outcome variable between two groups to be decomposed into (i) a part that is explained by differences in observed characteristics and (ii) a part attributable to differences in the estimated coefficients also for nonlinear regression models. Based on this general model, we show how it can be applied to different models with discrete and limited dependent variables.     

Extreme value index estimator using maximum likelihood and moment estimation

ABSTRACT

When a distribution function is in the max domain of attraction of an extreme value distribution, its tail can be well approximated by a generalized Pareto distribution. Based on this fact we use a moment estimation idea to propose an adapted maximum likelihood estimator for the extreme value index, which can be understood as a combination of the maximum likelihood estimation and moment estimation. Under certain regularity conditions, we derive the asymptotic normality of the new estimator and investigate its finite sample behavior by comparing with several classical or competitive estimators. A simulation study shows that the new estimator is competitive with other estimators in view of average bias, average MSE, and coefficient of variance of the new device for the optimal selection of the threshold.     

International Migration and City Growth in the Global South: An Analysis of IPUMS Data for Seven Countries, 1992–2013

Evidence on the demographic components of city growth in the global South is scarce, and the role played by international migration is neglected. We analyze the importance of recent international migration in cities, compare it with that of internal movements, and evaluate the growth contribution across national contexts and the urban hierarchy. Combining individual-level census data and geographic master files of metropolitan areas with indirect demographic estimation techniques, we cover 377 cities in seven countries. It is found that, in almost one third of cities, population change and replacement has been mainly determined by migration. The international component was larger than the internal one in more than half of cities. Whereas internal migration tends to decrease with rising city size, international movements tend to increase. Positive net international migration substitutes for the net losses from domestic movements in large cities, but complements the gains in intermediate-sized cities.     

Multiscale change point detection for dependent data

In this article we study the theoretical properties of the simultaneous multiscale change point estimator (SMUCE) in piecewise-constant signal models with dependent error processes. Empirical studies suggest that in this case the change point estimate is inconsistent, but it is not known if alternatives suggested in the literature for correlated data are consistent. We propose a modification of SMUCE scaling the basic statistic by the long run variance of the error process, which is estimated by a difference-type variance estimator calculated from local means from different blocks. For this modification we prove model consistency for physical-dependent error processes and illustrate the finite sample performance by means of a simulation study.     

All risk-taking is not the same: examining the competing effects of firm risk-taking with meta-analysis

Although researchers have vigorously studied organizational risk-taking for over 35 years, relatively little emphasis has been placed on theoretically differentiating the unique relationships between the many risk-taking choices organizations make and firm risk or firm performance. In this research, we propose a new framework that builds from March’s exploration–exploitation model to argue that different risk-taking choices can have substantially different influences on firm outcomes. We use meta-analysis to examine the unique and at times competing effects of four of the most commonly studied risk-taking choices on firm risk and firm performance. Results from a meta-analysis of 257 unique studies (N = 499,808) demonstrate support for our proposed framework and cast significant doubt on the idea that commonly studied firm risk-taking choices theoretically aggregate into one overarching risk-taking construct.     

Containment im Coaching

The psychodynamic concept of containment in coaching describes a process where the coach takes on, digests and returns emotional tension, unresolved conflicts und unconscious acting out of the coachee. Using two case studies the article develops the basic elements of containment in coaching. In addition to this interpersonal dimension of containment the article also highlights the structural dimension of containment — to provide sufficient space and conditions for thinking and processing emotional turmoil.