-
DIW Discussion Papers 1555 / 2016
Revenue cap regulation is often combined with systematic benchmarking to reveal the managerial inefficiencies when regulating natural monopolies. One example is the European energy sector, where benchmarking methods are based on actual cost data, which are influenced by managerial inefficiency as well as operational heterogeneity. This paper demonstrates how a conditional nonparametric method, which ...
2016| Endre Bjoerndal, Mette Bjoerndal, Astrid Cullmann, Maria Nieswand
-
DIW Discussion Papers 1554 / 2016
The increasing integration of international financial markets means that credit defaults in one country have to be covered by creditors in other countries. If the principle of creditor liability were applied systematically, the financial losses incurred by the financial institution that provided the credit and is thus directly affected by the default would be “passed on” through its domestic and foreign ...
2016| Dieter Schumacher
-
DIW Discussion Papers 1553 / 2016
Natural gas as a source of energy has attracted a lot of interest as its emissions rate and price are lower than other fossil fuel energy sources. In the U.S., natural gas-fired power generation has been rising, as coal has declined as a share of the fuel mix. Likewise, Mexico recently launched its energy reform with focus on greatly expanding use of natural gas over other fossil fuels, primarily in ...
2016| Felipe Feijoo, Daniel Huppmann, Larissa Sakiyama, Sauleh Siddiqui
-
DIW Discussion Papers 1552 / 2016
We show that technical indicators deliver stable economic value in predicting the U.S. equity premium over the out-of-sample period from 1966 to 2014. Results tentatively improve over time and beat alternatives over a large continuum of sub-periods. By contrast, economic indicators work well only until the 1970s, but thereafter they lose predictive power, even when the last crisis is considered. Translating ...
2016| Fabian Baetje, Lukas Menkhoff
-
DIW Discussion Papers 1551 / 2016
We employ a detailed two-stage model to simulate the operation of the Central Eastern European electricity market and network. Implementing different cases of coordination in congestion management between national transmission system operators, numerical results show the beneficial impact of closer cooperation. Specific steps comprise the sharing of network and dispatch information, cross-border counter-trading, ...
2016| Friedrich Kunz, Alexander Zerrahn
-
DIW Discussion Papers 1550 / 2016
The theoretical literature remains inconclusive on whether changes in bank exposure towards the domestic sovereign have an adverse effect on the sovereign risk position via a diabolic loop in the sovereign-bank nexus or reduce perceived default risk by acting as a disciplinary device for the sovereign. In this paper we empirically analyze the impact of exogenous changes in bank exposure on the risk ...
2016| Maximilian Podstawski, Anton Velinov
-
DIW Discussion Papers 1549 / 2016
We propose a new instrument to identify the impact of uncertainty shocks in a SVAR model with external instruments. We construct the instrument for uncertainty shocks by exploiting variations in the price of gold around selected events. The events capture periods of changes in uncertainty unrelated to other macroeconomic shocks. The variations in the price of gold around such events provide a measure ...
2016| Michele Piffer, Maximilian Podstawski
-
DIW Discussion Papers 1548 / 2016
The upheaval in global crude oil markets and the boom in oil production from shale plays in North America have brought scrutiny on the export ban for crude oil in the United States. This paper examines the global flows and strategic refinery adjustments in a spatial, game-theoretic partial-equilibrium model. We consider de- tailed supply chain infrastructure with multiple crude oil qualities (supply), ...
2016| Lissy Langer, Daniel Huppmann, Franziska Holz
-
DIW Discussion Papers 1547 / 2016
Minimum wages may be an important instrument to reduce income inequality in a society and to promote socially inclusive economic growth. While higher minimum wages can support the Chinese transformation towards consumption driven growth, they can worsen the price competitiveness in export markets. As they differ throughout the country, this paper investigates their determinants at the regional level. ...
2016| Christian Dreger, Reinhold Kosfeld, Yanqun Zhang
-
DIW Discussion Papers 1546 / 2016
We analyze the link between R&D, innovation, and productivity in MSMEs with a special focus on micro firms with fewer than 10 employees; usually constituting the majority of firms in industrialized economies. Using the German KfW SME panel, we examine to what extent micro firms are different from other firms in terms of innovativeness. We find that while firms engage in innovative activities with smaller ...
2016| Julian Baumann, Alexander S. Kritikos
-
DIW Discussion Papers 1545 / 2016
This paper examines the effects of newspaper headlines on the exchange rates vis-à-vis both the US dollar and the euro for the currencies of the BRICS (Brazil, Russia, India, China and South Africa). The data are daily and cover the period 03/1/2000- 12/5/2013. The estimated VAR-GARCH(1,1) model allows for both mean and volatility spillovers and for the possible impact of the recent financial crisis ...
2016| Guglielmo Maria Caporale, Fabio Spagnolo, Nicola Spagnolo
-
DIW Discussion Papers 1544 / 2016
A fundamental question regarding the design of electricity markets is whether adding auctions to the continuous intraday trading is improving the performance of the market. To approach this question, we assess the experience with the implementation of the 3 pm local auction for quarters in Germany at the European Power Exchange (EPEX SPOT) in December 2014 to assess the impact on trading volumes/liquidity, ...
2016| Karsten Neuhoff, Nolan Ritter, Aymen Salah-Abou-El-Enien, Philippe Vassilopoulos
-
DIW Discussion Papers 1543 / 2016
We analyze a simple supply chain with one supplier, one retailer and uncertainty about market demand. Focusing on the incentives of the supplier and the retailer to enhance their private information about the actual market conditions, we show that choices on information acquisition are strategic complements. While the retailer's incentives are mainly driven by the information rent that he can earn, ...
2016| Pio Baake, Andreas Harasser, Friederike Heiny
-
DIW Discussion Papers 1542 / 2016
Unemployment insurance agencies may combat moral hazard by punishing refusals to apply to assigned vacancies. However, the possibility to report sick creates an additional moral hazard, since during sickness spells, minimum requirements on search behavior do not apply. This reduces the ex-ante threat of sanctions. We analyze the effects of vacancy referrals and sanctions on the unemployment duration ...
2016| Gerard J. van den Berg, Barbara Hofmann, Arne Uhlendorff
-
DIW Discussion Papers 1541 / 2016
This paper examines the effects of Islamic banking on the causal linkages between credit and GDP by comparing two sets of seven emerging countries, the first without Islamic banks, and the second with a dual banking system including bothIslamic and conventional banks. Unlike previous studies, it checks the robustness of the results by applying both time series and panel methods; moreover, it tests ...
2016| Guglielmo Maria Caporale, Mohamad Husam Helmi
-
DIW Discussion Papers 1540 / 2016
The emerging literature on power markets with high shares of fluctuating renewables suggests that more frequent start-up procedures of thermal power plants may become an increasing concern, both for costs and possibly also for market design. Based on official scenario assumptions, we investigate how start-ups and related costs develop in Germany, where the share of fluctuating renewables quadruples ...
2016| Wolf-Peter Schill, Michael Pahle, Christian Gambardella
-
DIW Discussion Papers 1539 / 2016
The Fehmarn Belt is a strait between Denmark and Germany, currently served by a ferry. This note analyses the theory of competition between the ferry and a planned tunnel, the Fehmarn Belt Fixed Link. The model is an asymmetric duopoly and addresses two questions: 1. Will the tunnel induce the ferry to exit the market, once it operates? 2. Will the tunnel's toll revenue suffice to cover its cost? To ...
2016| Rafael Aigner
-
DIW Discussion Papers 1538 / 2015
The wage curve introduced by Blanchflower and Oswald (1990, 1994) postulates a negative correlation between wages and unemployment. Empirical results focus on particular theoretical channels establishing the relationship. Panel models mostly draw on unionized bargaining or the efficiency wage hypothesis. Spatial econometric approaches can be rationalized by monopsonistic competition. However, the approaches ...
2015| Reinhold Kosfeld, Christian Dreger
-
DIW Discussion Papers 1537 / 2015
This paper investigates the role of food self-provisioning for the intake of macro- and micronutrients of households in Mongolia. Our analysis is based on rich household survey data that collected food consumption through consumption diaries. We analyze nutritional outcomes within and across the three prevalent Mongolian livelihoods that derive food from different sources: urban wave employees, rural ...
2015| Katharina Lehmann-Uschner, Kati Krähnert
-
DIW Discussion Papers 1536 / 2015
Using the 2007 Mannheim innovation survey, we investigate whether family firms are more financially constrained than other firms and how this affects both innovation input as well as innovation outcomes such as market and firm novelties or process innovations. Based on the CDM framework, estimation of the recursive system of equations shows that family businesses are more likely to be constrained and ...
2015| Dorothea Schäfer, Andreas Stephan, Jenniffer Solórzano Mosquera