infonet-economy

The fact that collateral whose function is to secure repayment via its attributed low credit and liquidity risk is traded prominently in a "shadow" banking environment may still go unnoticed. This article analyzes the role of credit rating agency (CRA) ratings in the construction of collateral using the example of sovereign ratings as eligibility criterion for sovereign…

We explore how public opinion polls affect candidates' campaign spending in political competition. Generally, polls lead to (more) asymmetric behavior. Under a majority rule there always exists an equilibrium in which the initially more popular candidate invests more in the campaign and thereby increases her lead in expectation: polls create momentum. When campaigning is very…

Based on the Canadian National Population Health Survey we estimate the effects of individ-ual sports and exercise on individual labor market outcomes. The data covers the period from 1994 to 2008. It is longitudinal and rich in life-style, health, and physical activity in-formation. Exploiting these features of the data allows for a credible identification of the effects as well as…

We use individual U.S. commercial bank balance sheet and income statement information
to develop stylized facts about bank portfolio choices in both the cross section and over
time. We then estimate the structural parameters of a quantitative model of bank portfolio
choices (new loans, liquid investments and endogenous failure) that are made in the presence
of…

Does after-school care provision promote mothers' employment and balance the allocation of paid work among parents of schoolchildren? We address this question by exploiting variation in cantonal (state) regulations of after-school care provision in Switzerland. To establish exogeneity of cantonal regulations with respect to employment opportunities and preferences of the…

To prevent profit shifting by manipulation of transfer prices, tax authorities typically apply the arm's length principle in corporate taxation and use comparable market prices to ‘correctly' assess the value of intracompany trade and royalty income of multinationals. We develop a model of firms subject to financing frictions and offshoring of intermediate inputs. We find…

This paper studies the impact of trade policy on industry concentration. Based on the Swiss Business Census, concentration levels for all four-digit manufacturing industries in Switzerland are calculated. Then the effect of a bilateral reduction in technical barriers to trade with the European Union is estimated. Adopting a difference-in-differences approach, it turns out that…

This paper develops a theoretical model of multinational firms with an internal capital
market. Main reasons for the emergence of such a market are tax avoidance through
debt shifting and the existence of institutional weaknesses and financial frictions across host countries. The model serves to derive hypotheses regarding the role of local versus foreign characteristics…