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Grant-making foundations commonly use financial returns on investment in support of a public purpose. Recently, more attention has been given in academic research to the role of foundations as sustainable investors. According to the concept of socially responsible investing (SRI), foundations should integrate their social purposes into their investment strategies. However, foundations are also required to comply with national legal frameworks. Our research interest lies in those investment funds that are specifically developed for foundations in Germany. In this study, we answer two research questions: First, what are the characteristics of the market for foundation investment funds in Germany? Second, to what extent are foundation investment funds useful for foundations pursuing an SRI strategy? We build on a full sample comprising all 52 German foundation investment funds that are currently available and then use data from MSCI to apply a sustainability rating for these funds. With these data, we evaluate the financial performance of foundation investment funds in relation to their sustainability ratings. Multidimensional Scaling (MDS) was used to reduce complexity in the dataset and detect similarities among a set of objects. Our findings differentiate between two distinct clusters of foundation investment funds. The first "discrete" cluster represents the majority of funds, and these funds are generally smaller with lower performance and lower levels of SRI conformity. The funds in the second "attached" cluster are generally larger, more diversified, and have higher performance. Finally, we call for further research offer implications for both fund managers and foundation asset managers. Plain Language Summary: Shortcommings in sustainable investing through foundation investment funds Grant-making foundations commonly use financial returns on investment in support of a public purpose. Recently, more attention has been given in academic research to the role of foundations as sustainable investors. According to the concept of socially responsible investing (SRI), foundations should integrate their social purposes into their investment strategies. However, foundations are also required to comply with national legal frameworks. Analyzing the performance of specific foundation investment funds in Germany we find two distinct clusters. The first "discrete" cluster represents the majority of funds, and these funds are generally smaller with lower performance and lower levels of SRI conformity. The funds in the second "attached" cluster are generally larger, more diversified, and have higher performance. This study highlights the need for foundations to develop their own SRI investment policies and thoroughly check the investment vehicles they use. [ABSTRACT FROM AUTHOR]

The ongoing demographic change in most developed countries consists of two coinciding independent developments that differ in structure and persistence: A slow, monotonic and (presumably) permanent longevity effect caused by an increasing life expectancy; and a more rapidly changing, non-monotonic and less permanent cohort effect caused by fluctuations in the size of cohorts. This paper shows the longevity effect has a positive impact on the rates of return households generate within a pay-as-you-go (PAYG) pension system. The cohort effect, by contrast, results in winners and losers in PAYG systems. The paper additionally shows that the type of PAYG pension system alters the results significantly. Taking the remarkable demographic change in Germany as an example, a large-scale overlapping generation model quantifies rates of return within the PAYG pension system for every cohort. The results show that the two effects combined cause return differentials of almost 1.3 percentage points between generations. [ABSTRACT FROM AUTHOR]

In this study, the performance of Isobutane/Isopentane (zeotropic mixture) is studied in the new proposed Organic Rankine Cycle (NORC). Operating parameters included temperatures of two series evaporators and regenerative, degree of superheating, and pinch point temperature difference in the first evaporator are optimized with multi-objective functions i.e., exergy as thermodynamic, Specific Investment Cost (SIC) as economic and exergoeconomic as the third objective function that considered exergy and SIC simultaneously. Optimization results for Isobutane/Isopentane indicate that the value of exergy has a sharp decrease when the mole fraction of Isobutane increases to 0.5, and after that, the exergy amount rises significantly and reaches a peak at 54.584% for pure Isobutane. Also, return on investment (ROI) is employed as an economic indicator to get the center of attention in economic proficiency by utilizing Isobutane/Isopentane in NORC configuration according to the exergoeconomic results for fifteen countries as two groups of developed and developing in order to compare profitability all around the world. The results represent that, by the growing of Isobutane mole fraction in Isobutane- Isopentane mixture, ROI indicator is reduced. The maximum and the minimum value of ROI are related to Germany (57.64%) and India (4.09%), respectively. • A new cycle was designed to improve basic organic Rankine cycle performance. • Peng Robinson equation of state was used to obtain properties of organic fluids. • Operating parameters were optimized with two objective functions simultaneously. • The new cycle performance was investigated using zeotropic mixture. • Return on investment of 15 countries was estimated as economic viewpoint. [ABSTRACT FROM AUTHOR]

Prior research has reported less favorable attitudes toward and more violent crimes against ethnic out-group members in East (vs. West) Germany. We conducted two pre-registered lost letter studies in West versus East German cities (Study 1, N = 400) and in West versus East German rural areas (Study 2, N = 400). To investigate supportive behavior regarding refugee integration, we manipulated the addressee (refugee-integration vs. immigration-stop projects). Contrary to predictions, letter return rates did not differ between West and East Germany. Across western and eastern German regions, return rates were higher for the refugee-integration project in urban areas while no differences emerged in rural areas. A pooled analysis found greater support for the refugee-integration (vs. immigration-stop) project. [ABSTRACT FROM AUTHOR]

In this paper, we have covered many of the roles that banks play in the financial system. Banks act as delegated monitors that ensure that economic agents allocate their resources effectively, thus leading to the sustainable development of entrepreneurship. Moreover, they also play an important role in sharing risks in the economy and protecting economic agents against market fluctuations through various means such as financial derivatives. These are the positive aspects of the roles of banks, but it should be noted that the way banks act to ensure an acceptable rate of return can cause fragility and instability throughout the financial system. In fact, banks are most often at the center of financial crises, as in the case of the global financial crisis that began in the summer of 2007. Banks may even contribute to spreading the negative effects of these financial crises because small shocks can have major effects on the financial system and economy. Banks also play an important role by facilitating the access of economic agents to financing and contributing to the development of the economy. In addition, they are important for good corporate governance, especially in countries such as Germany where bankers hold positions on the boards of private companies and can represent more shareholders in voting decisions. [ABSTRACT FROM AUTHOR]

Individual and institutional investors can trade German initial public equity offerings on an as-if/when-issued basis before the start of secondary trading. Using actual when-issued trades made by a sample of clients at a large German retail broker during 1999 and 2000, the paper documents that retail buyers consistently overpay for initial public offerings (IPOs) in the when-issued market relative to the immediate aftermarket. The observed willingness to overpay points to sentiment as a driver of retail trading decisions. Consistent with this interpretation and with sentiment affecting prices, IPOs that are aggressively bought by individuals in the when-issued market exhibit high first-day returns as well as poor aftermarket returns relative to benchmarks of similar stocks. [ABSTRACT FROM AUTHOR]

We examine the yield curve behavior and the relative performance of affine term structure models (ATSMs) using government bond yield data from Canada, Germany, Japan, the U.K., and the U.S. We find strong predictability of forward rates for excess bond returns and reject the expectations hypothesis in all five countries. A three-factor model is sufficient to capture movements in the yield curve of Canada, Japan, the U.K., and the U.S., but may not be enough for Germany. An exhaustive comparison among ATSMs with no more than three factors reveals that the three-factor essential affine model (A1(3)E), with only one factor affecting the volatility of the short rate but with all three factors affecting the price of risk, performs best in all five countries. Simulations provide inconclusive evidence on whether this best affine model can successfully generate the rich yield curve behavior observed in the data. [ABSTRACT FROM AUTHOR]

Background In context of the multidisciplinary German scientific guideline "Use of extracorporeal circulation (extracorporeal life support [ECLS]/extracorporeal membrane oxygenation) for cardiac and circulatory failure," a nationwide survey should depict the status of organization and application of ECLS therapy in Germany. Methods Between June and October 2017, a standardized questionnaire consisting of 30 items related to ECLS therapy was sent to all German cardiosurgical departments, and all returned results were analyzed and evaluated. Results The return rate amounted to 92.9% (78 out of 84 departments). In the participating departments, ECLS therapy is subject to different responsibilities, and exhibits divergent processes and various ways for specialization of the involved personnel. This also concerns local application standards, such as cannulation strategies, anticoagulation management, left ventricular unloading, antiwatershed treatment, and weaning from circulatory support. Conclusion This nationwide survey underlines the necessity of a multidisciplinary guideline concerning ECLS therapy. [ABSTRACT FROM AUTHOR]

The article presents the results of an empirical test, analysis, and comparison of the rate of return investors might expect in U.S., German, French and Japanese equity markets. The author notes the importance of this research in capital market theory—especially as it relates to the general market and individual securities. This empirical test involves developing, estimating and analyzing approximations and measuring them against the International Asset pricing model. The author develops a model to measure the expectations of the four international markets and then tested considering ex-post transformations of the model.

Abstract: Aims: To evaluate costs, effects and cost‐effectiveness of increased reach of specific smoking cessation interventions in Germany. Design: A Markov‐based state transition return on investment model (EQUIPTMOD) was used to evaluate current smoking cessation interventions as well as two prospective investment scenarios. A health‐care perspective (extended to include out‐of‐pocket payments) with life‐time horizon was considered. A probabilistic analysis was used to assess uncertainty concerning predicted estimates. Setting: Germany. Participants: Cohort of current smoking population (18+ years) in Germany. Interventions: Interventions included group‐based behavioural support, financial incentive programmes and varenicline. For prospective scenario 1 the reach of group‐based behavioral support, financial incentive programme and varenicline was increased by 1% of yearly quit attempts (= 57 915 quit attempts), while prospective scenario 2 represented a higher reach, mirroring the levels observed in England. Measurements: EQUIPTMOD considered reach, intervention cost, number of quitters, quality‐of‐life years (QALYs) gained, cost‐effectiveness and return on investment. Findings: The highest returns through reduction in smoking‐related health‐care costs were seen for the financial incentive programme (€2.71 per €1 invested), followed by that of group‐based behavioural support (€1.63 per €1 invested), compared with no interventions. Varenicline had lower returns (€1.02 per €1 invested) than the other two interventions. At the population level, prospective scenario 1 led to 15 034 QALYs gained and €27 million cost‐savings, compared with current investment. Intervention effects and reach contributed most to the uncertainty around the return‐on‐investment estimates. At a hypothetical willingness‐to‐pay threshold of only €5000, the probability of being cost‐effective is approximately 75% for prospective scenario 1. Conclusions: Increasing the reach of group‐based behavioural support, financial incentives and varenicline for smoking cessation by just 1% of current annual quit attempts provides a strategy to German policymakers that improves the population's health outcomes and that may be considered cost‐effective. [ABSTRACT FROM AUTHOR]

This paper shows how long-term value added driven competitiveness is widely adopted by German DAX 30 corporations and how it can be measured. It explains and shows how different measures such as shareholder value, economic value added (EVA), return on capital employed (ROCE), return on equity (ROE) and others are calculated and how they correlate to show longterm value added and, therefore, competitive differentiation. As part of the highly professionalized corporate governance approach, the German Corporate Governance Codex (Regierungskommision Deutscher Corporate Governance Kodex, 2015) asks for "sustainable creation of value". The analyses of 2015 and 2016 annual reports of all 30 corporations state that 80% of the firms show financially relevant value added data and as such measurable competitive advantage on the long run. The paper focuses on which measures are used to quantify the competitive value addition and then shows how EVA or company specific EVA-like measures in addition to ROCE are the most used ones. Furthermore, the paper shows that ROCE with a factor of 0.97 in 2015 and 0.74 in 2016 correlates best with EVA and, in absence of an EVA calculation, is the best measure to represent value creation as a competitive differentiator. The results can be useful to strengthen competitiveness for policymakers both in non-profit and for-profit social economy entities. [ABSTRACT FROM AUTHOR]

This is one of the first comprehensive studies of drivers of private equity performance in the German‐speaking region known as the DACH, made up of Germany, Austria, and Switzerland. It contributes three things to private equity research: First, it explains how operational value drivers affect operational performance (operational alpha) and unlevered rates of return. Second, it whether the same relationships hold across different kinds of private equity business models (those with either organic or inorganic growth strategies; or whether PE investments are small‐cap or mid‐to‐large‐cap). Third, it distinguished between the periods before and after the global financial crisis of 2008. The authors found that (1) annualised benchmark‐adjusted EBITDA margin growth (i.e. improvement in EBITDA margin) is the most significant determinant in abnormal operational performance and unlevered returns, regardless of the business model; (2) private equity firms executing a buy‐and‐build strategy generate lower unlevered returns than those executing an organic growth strategy when the benchmark company is clearly outperformed, most likely because of limited PE managerial resources; (3) mid‐to‐large‐cap private equity firms generate higher unlevered returns and operational alphas than small‐cap private equity firms when the benchmark company is clearly outperformed, because, we believe, larger companies have a higher fixed cost leverage than smaller ones; and we have found that (4) buyout transactions exited during or after the financial crisis yield higher operational alphas but lower unlevered returns compared to buyout transactions exited before the crisis, when the portfolio company underperforms its benchmark company. [ABSTRACT FROM AUTHOR]

Entrepreneurs often struggle to find sufficient funding for their start-ups. A relatively new way for companies to attract capital is via an internet platform, locating investors who in return receive something in return for their ventures. Equity crowdfunding is one of several types of crowdfunding, and is also known as crowdinvesting in the German-speaking realm. This article predominantly advances the scientific knowledge regarding the success factors of equity crowdfunding for German start-ups. The study conducted nine qualitative interviews with start-ups and crowdinvesting platforms. Its first result is that German start-ups select crowdinvesting because (1) it is a funding opportunity and (2) it has an expected marketing effect. To organize the results of relevant success factors, the Crowdinvesting Success Model was designed by the researchers. This supports German entrepreneurs by presenting 20 important success elements that help to increase the capital collected during a campaign. The key finding is that an attractive business model, an appropriate preparation in the pre-campaign period, ongoing activities during the campaign, and corresponding advertising activities have a positive impact on a German start-up’s crowdinvesting campaign’s chances of success. The article closes with implications for theory and practice, as well as further research suggestions. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to estimate the association between religious affiliation and the rate of return to human capital for German men and women. Design/methodology/approach – This paper employs data from the 1997, 2003, 2007 and 2011 waves of the German Socio-Economic Panel for German men and women in full-time employment between the age of 25 and 54. The association between religious affiliation and wages was estimated using a conventional human capital model. Findings – This paper finds that Catholic men (women) received a wage premium of 4 per cent (3 per cent) relative to their Protestant counterparts, even after controlling for an extensive range of demographic, economic and social characteristics. Originality/value – The study contributes to the literature by providing – to the best of the authors’ knowledge – the first results on the wage premium received by Catholic men and women in the German labour market. [ABSTRACT FROM AUTHOR]

Background: The European-study on Quantifying Utility of Investment in Protection from Tobacco (EQUIPT) project aimed to study transferability of economic evidence by co-creating the Tobacco Return On Investment (ROI) tool, previously developed in the United Kingdom, for four sample countries (Germany, Hungary, Spain and the Netherlands). The EQUIPT tool provides policymakers and stakeholders with customized information about the economic and wider returns on the investment in evidence-based tobacco control, including smoking cessation interventions. A Stakeholder Interview Survey was developed to engage with the stakeholders in early phases of the development and country adaptation of the ROI tool. The survey assessed stakeholders' information needs, awareness about underlying principles used in economic analyses, opinion about the importance, effectiveness and cost-effectiveness of tobacco control interventions, and willingness to use a Health Technology Assessment (HTA) tool such as the ROI tool.Methods: A cross sectional study using a mixed method approach was conducted among participating stakeholders in the sample countries and the United Kingdom. The individual questionnaire contained open-ended questions as well as single choice and 7- or 3-point Likert-scale questions. The results corresponding to the priority and needs assessment and to the awareness of stakeholders about underlying principles used in economic analysis are analysed by country and stakeholder categories.Results: Stakeholders considered it important that the decisions on the investments in tobacco control interventions should be supported by scientific evidence, including prevalence of smoking, cost of smoking, quality of life, mortality due to smoking, and effectiveness, cost-effectiveness and budget impact of smoking cessation interventions. The proposed ROI tool was required to provide this granularity of information. The majority of the stakeholders were aware of the general principles of economic analyses used in decision making contexts but they did not appear to have in-depth knowledge about specific technical details. Generally, stakeholders' answers showed larger variability by country than by stakeholder category.Conclusions: Stakeholders across different European countries viewed the use of HTA evidence to be an important factor in their decision-making process. Further, they considered themselves to be capable of interpreting the results from a ROI tool and were highly motivated to use it. [ABSTRACT FROM AUTHOR]

This study uses logistic regression for the development of prediction models that distinguish between share-repurchasing and non-share repurchasing firms. The estimated models form the basis for an investment strategy, according to which one invests on the stock of the firms that are predicted as repurchasing ones. Using a sample of firms from the UK, France, and Germany, the results show that this strategy generates positive and statistically significant abnormal returns over different investment periods that range between 1 and 18 months. [ABSTRACT FROM AUTHOR]

Order flow imbalance refers to the difference between market buy and sell orders during a given period. This paper is the first study to examine effects of order flow imbalance on returns of stocks traded on the German Xetra trading system on a daily basis. In contrast to previous studies on other markets, we control for unobserved effects using a fixed-effects panel regression. For the concurrent (or conditional) relation between order imbalance and returns, our results confirm those of the literature. For the question of return predictability from past order imbalances (unconditional relation), our results are partly confirmatory. In addition, we provide evidence for size and liquidity effects and analyze changes in imbalance effects during the financial crisis. [ABSTRACT FROM AUTHOR]

The success of incentives for investments in sustainable residential energy technologies depends on individual households actively participating in the energy transition by investing in electrification and by becoming prosumers. This willingness is influenced by the return on investments in electrification and preferences towards environmental sustainability. Returns on investment can be supported by a preferential regulation of Citizen Energy Communities, i.e. a special form of a microgrid regulation. However, the exact effect of such regulation is debated and therefore analyzed in this study. We propose a multi-periodic community development model that determines household investment decisions over a long time horizon, with heterogeneous individual preferences in regards to sustainability and heterogeneous energy consumption profiles. We consider that investment decisions which increase individual utility might be delayed due to inertia in the decision process. Decisions are determined in our model based on individual preferences using a multi-objective evolutionary algorithm embedded in an energy system simulation. In a case study, we investigate the development of a neighborhood in Germany consisting of 30 households in regards to community costs and community emissions with and without Citizen Energy Community regulation as proposed by the European Union. We find that Citizen Energy Community regulation always reduces community costs and emissions, while heterogeneous distributions of economic and ecologic preferences within the community lead to higher gains. Furthermore, we find that decision inertia considerably slows down the transformation process. This shows that policymakers should carefully consider who to target with Citizen Energy Community regulation and that subsidies should be designed such that they counterbalance delayed private investment decisions. • We simulate private investment in Citizen Energy Communities (CECs) over time. • We differentiate between ecological and economical preferences of participants. • The impact of CEC regulation is largest for heterogeneous preferences. • CECs have a socially desirable influence on cost and emission in all analyzed cases. • Decision inertia slows down investment and should be considered by policymakers. [ABSTRACT FROM AUTHOR]

Purpose – In addition to financial returns, German housing companies are expected to achieve social and ecological outcomes. This achievement is challenging for management, as expectations from different stakeholders are only partly apparent and often conflicting. The paper aims to discuss these issues. Design/methodology/approach – This paper presents a process model that supports the management of housing companies to systematically explore, evaluate, and integrate stakeholders’ interests into the company’s strategic targets. Findings – The integrated process model improves sustainable value creation, as stakeholders’ interests are transparent and can thus be better satisfied. Research limitations/implications – Due to the action research design, further research cycles and empirical testing with other companies are needed before findings can be generalised. Practical implications – The process enables housing companies to focus on value-generating activities, to react timely to changing needs, and to improve their relationships with stakeholders. Management benefits from increased clarity and legitimacy for strategic decisions as stakeholder demands are made transparent and integrated into the strategic targets. Originality/value – Compared to common participation approaches, all stakeholder groups are consulted, and their expectations are documented transparently within the suggested process model. This results in a better foundation for sustainable management planning and decisions. [ABSTRACT FROM AUTHOR]

Investments in education are of great importance for the competitiveness of the German economy. In particular, early childhood education programs promise high returns--because children can benefit from them even years later and find it easier to acquire new skills. These are the results of research in the field of the economics of education in recent years, at least when high quality programs are studied. However, these findings do not necessarily reflect public spending on the different education sectors--in reality, comparatively little is invested in young children. There is a need for more investment in education--especially to increase the quality of education programs--but not only in early childhood. Also, with regard to the expansion of all-day schools, more should be invested in the quality of such programs. In higher education, efforts are needed to improve access of educationally disadvantaged groups and therefore improve intergenerational mobility. All these measures could facilitate a more effective and efficient use of human capital. This is also of particular importance against the backdrop of a forecast decline in labor force potential and predicted skill shortages. [ABSTRACT FROM AUTHOR]

In this article, we analyse whether simple Consumption-based Capital Asset Pricing Models (CCAPMs) using monetary conditioning information (growth of the money aggregates M1, M2 and M3) can explain the cross-section of German size, book-to-market and industry portfolio returns. Our results show that models having stochastic discount factor parameters that vary with money aggregates can reduce the pricing errors of models with constant parameters. However, a large proportion of the cross-sectional variation remains unexplained. [ABSTRACT FROM PUBLISHER]

We exploit a dataset that includes the individual tax returns of all taxpayers in the top percentile of the income distribution in Germany to pin down the effective income taxation of households with very high incomes. Taking tax base erosion into account, we find that the top percentile of the income distribution pays an effective average tax rate of 30.5% and contributes more than a quarter of total income tax revenue. Within the top percentile, the effective average tax rate is first increasing, then decreasing, with income. Since the 1990s, effective average tax rates for the German super-rich have fallen by about a third, with major reductions occurring in the wake of the personal income tax reform of 2001-05. As a result, the concentration of net incomes at the very top of the distribution has strongly increased in Germany. [ABSTRACT FROM AUTHOR]

In this article, new evidence from the financial Almost Ideal Demand Sysytem (AIDS) portfolio model is featured, making use of additional exogenous rate-of-return variation, which has been mostly disregarded in the relevant literature so far. A Two-Stage Budgeting Model (2SBM) of asset demand is constructed and applied to German survey data for a time frame where first implementations of a major income tax reform in Germany significantly altered the tax schedule. Marginal Tax Rates (MTR) at the household level are simulated in an income taxation module. Relatively great rate-of-return elasticities for, among others, owner-occupied housing as well as capital and private pension insurances suggest that return-related reactions are stronger at the asset allocation decision than they are usually found for the consumption-savings decision. [ABSTRACT FROM PUBLISHER]

Micro-econometric intra-cohort profitability analyses of pay-as-you-go (PAYG) pension contributions are rare. We use representative employment histories of German PAYG pension insurants retiring in year 2005 to examine the determinants of the profitability of contributions using nominal internal rates of return (IRR) as measure. When future nominal pension entitlements are frozen at today's level, average IRR is about three percent. It increases in beneficiaries' remaining life expectancies at retirement and in the length of non-contribution periods resulting, for example, from child care. Interestingly, IRR is decreasing in insurants' earnings capacity, indicating that the system entails an intra-cohort progressive element. [ABSTRACT FROM PUBLISHER]

The history of accounting for private railway companies in Germany shows that these companies played a major role in the diffusion of historical cost accounting principles and gave birth, together with big other joint stock companies, to the "dynamic" or second stage of capitalist accounting, at least in continental Europe. If the representatives of such railway companies did not develop new concepts of accounting, notably as concerned depreciation, they had, by 1875-1879, elaborated a new theory of accounting (historical cost or dynamic theory).This theory had a profound impact at least on the German theorists of the late 19th century and early 20th centuries such as Simon, Rieger and Schmalenbach. This new theory was needed to justify a new law favoring shareholders in a hurry for returns on their investments rather than company creditors. It also defeated the ideology of public finance and patrimonial (or static) theories of accounting. This new theory preceded the law which promulgated the new approach and clearly defended the private interests of shareholders as opposed to those of the public in the strict sense. It appears to contradict Watts and Zimmermann's basic hypothesis of the «theory of market excuses». Agency theory seemingly does not to apply either, for the new theory was proposed by managers allied to shareholders, specifically those «hurried share-holders", against creditors. This is why a kind of «theory of alliance» appears to be more consistent with these developments. The main reasons for developing the new accounting theory were linked to the issue of dividends. It was necessary to find an accounting approach which would allow the distribution of dividends at the very beginning of an investment cycle. It was also intended to find an accounting approach which would ensure that profits were distributed as evenly as possible throughout the entire investment cycle and among the different shareholders who had financed the investment. Hence, the second stage of the capitalist accounting development was not connected to measure of performance or information problems (monitoring and bonding) but seems to have been caused by the need to regulate profits and dividends in the interests of managers and shareholders. However, as this change took place within the framework of prudence, it was impossible, at that stage of capitalist accounting, to achieve a perfect smoothing of the rate of accounting profit. The solution to this problem was only to be found at the end of the 20th century with the onset of the third or actuarial stage and the "discovery" of fair value. [ABSTRACT FROM AUTHOR]

Summary. A regression of wages on firm tenure is likely to yield biased estimates of the returns to tenure because tenure and wages are confounded by unobserved attributes of the job and the unobserved quality of the match between the firm and the employee. Previously, the within-job variation in tenure has been used as an instrument to estimate the average returns to tenure. We propose to use instead an easy-to-implement control function estimator for the returns to tenure and their dependence on unobserved heterogeneity. The results obtained for Germany indicate that there is a substantial amount of unobserved heterogeneity in the returns to tenure and that good job matches are characterized by higher returns to tenure in the first 5 years and lower returns thereafter. [ABSTRACT FROM AUTHOR]

Using the parametric Generalized Method of Moments (GMM) methodology of Hansen (1982) and the nonparametric approach of Hansen and Jagannathan (1991), this note investigates the ability of Consumption-based Asset Pricing Models (CCAPMs) to explain the cross-section of investment funds returns in the German market. The parametric analysis shows that both the classic power utility model of Hansen and Singleton (1982) and the habit formation extension of Campbell and Cochrane (1999) are not rejected, but require high risk-aversion to be consistent with the data. Furthermore, only the power utility model suffers from a risk-free rate puzzle. The nonparametric results are not accompanied by a risk-free rate puzzle for both models but the models still show high risk aversion. So using adequate test assets and evaluation methods, this note fully supports Cochrane (2006) saying that work explaining asset returns with consumption-based models should be dying out since there are preferences that can coherently describe the data with high risk-aversion. [ABSTRACT FROM AUTHOR]

This study aims at estimating the losses in old-age wealth and forfeited returns. The analysis is based on the German SAVE study in 2008. In comparison to a scenario without the crisis individuals on average lost 4.3% of their financial wealth. Considering only wealth in investment classes specific for old-age provision the average loss is 2%. Comparing wealth losses at retirement entry reveals that the rates of return of cohorts born between 1940 and 1990 decreased by around 0.1 percentage points (old-age provision wealth) or 0.2 percentage points (financial wealth), respectively. [ABSTRACT FROM AUTHOR]

Utilizing data from the German DAX30 stock index, we investigate whether local analysts have an informational advantage in forecasting stock returns. We analyze whether banks’ buy and sell recommendations improve on the out-of-sample predictability of daily stock returns and the market-timing ability of investors who base their decisions on such recommendations. We find that, indeed, in a few cases German banks do have better stock-forecasting ability for daily stock returns than do foreign banks. However, the value added of bank recommendations is generally small and sensitive to the model-selection criterion used by an investor in setting up a forecasting model for stock returns. [ABSTRACT FROM AUTHOR]

Uncovered Interest Rate Parity (UIP) states that bonds in different denomination should produce the same returns if the maturities of the bonds are the same. Given this, if a foreign bond produces a lower holding period return than a home bond of the same maturity, for their remaining lives the same foreign bond ought to produce a return higher than the home bond. A test is designed according to this relationship. With 1 to 6 year interest rate data of U.S., Britain and Germany from 1979 to 2005, our test shows that this relationship is more reliable for 6-year interest rates than the shorter rates in general. This result lends support to the long-run UIP. A trading strategy is developed by utilizing this idea. We show that positive returns can be achieved by the strategy for bonds of longer horizons. This result also serves as indirect evidence of the long-run UIP. [ABSTRACT FROM AUTHOR]

The article looks at changes in Germany's life insurance industry. It notes that the industry has not been severely affected by the global financial crisis but it can be affected more seriously by a further decline in the bonds market, specifically in the market for covered bonds. The corporate tax issues for fund investments that German life insurers might face in 2010 is expected to be influenced by the industry's investment returns. A restructuring of portfolios is likely to shift insurer's tax focus from the technicalities of traditional investments to those of funds and high-yield investments.

This paper seeks to analyse the relationship between wages and education at a European level, using a quantile regression in order to be able to extend the study along the whole wage distribution. This analysis is carried out for a sample of 14 European countries (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain and the United Kingdom), using the European Community Household Panel data-set. The paper aims to investigate whether the relationship between wages and education at European level is homogeneous and stable through time by running regressions for average and current (log)wages. Policy implications are derived. [ABSTRACT FROM AUTHOR]

In this investigation over 144,000 simulations are undertaken of country equity risk premia, based on a scenario analysis of the uncertainty surrounding the period of non-sustainable growth in earnings and stock returns. Final estimates, from the larger data-sets in Japan, the US and the UK, are around 3–6% in nominal terms, and compare well with other methodologies. However, except for Canada, the smaller data-sets in France, Germany and Italy reveal much higher risk premia than expected. Furthermore, given the spreads in estimates generally, the issue of sustainability is still contentious. [ABSTRACT FROM AUTHOR]

The arguments for refinancing the European Union's (EU) higher education via higher tuition fees largely rest on preserving the profitability of the educational investment and offering deferred and income-contingent payments. Using income survey datasets on Belgium, Germany and the United Kingdom (UK) we first estimate how graduates' private return on educational investment is likely to be affected by higher private contributions. We then evaluate the effect of income-contingent and deferred payment mechanisms on lifetime net income and its capacity to account for graduates' ability to pay, considering numerous ways of financing the cost of introducing income-contingency. Our analysis reveals that increasing individuals' contributions to higher education costs, through income-contingent and deferred instruments, does not significantly affect the private rate of return of heterogeneous graduates, allows for payments to be indexed to ability to pay, and can be implemented in ways that minimize the risk of adverse selection. These findings prove robust to significant variations between countries' unharmonised higher education institutional structures. [Copyright &y& Elsevier]

The article reports on a survey of special schools for children with social, emotional, and behavioural difficulties (SEBD) in Germany. The schools were asked by standardised mail questionnaire about their organisational structures. The rate of return was 77% and a total of 397 schools were included in the interpretation of data. The questionnaire asked for several items to analyse the structural elements and organisational compositions of the schools. Rather than measuring the effects of instruction and treatment in the separate school settings, the present study is basic research aiming at stocktaking of the current organisational status of these schools that have barely been the focus of research. The number of structural problems that SEBD schools in Germany have to face is enormous, according to the findings. It is arguable whether optimal service delivery and support to the pupils is possible under the general conditions revealed by the present study, e.g., inadequate number of teachers and other staff members (and thus insufficient staff for child guidance), only a few schools offering full-time schooling services, and in only a few instances do we find inter-agency collaboration. [ABSTRACT FROM AUTHOR]

Using daily data for the January 1997 to June 2002 period, we analyze similarities and differences in the impact of macroeconomic news on stock returns in the United States and Germany. We consider 27 different types of news for the United States and 12 different types of news for Germany. For the United States, we present evidence for asymmetric reactions of stock prices to news. In a boom (recession) period, bad (good) news on GDP growth and unemployment or lower (higher) than expected interest rates may be good news for stock prices. In the period under consideration there is little evidence for asymmetric effects in Germany. However, in the case of Germany, international news appears at least as important as domestic news. There is no evidence that US stock prices are influenced by German news. The analysis of bi-hourly data for Germany confirms these results. [ABSTRACT FROM AUTHOR]

The German energy industries will be subjected to regulation of network access enforced by a sector-specific regulator. Whereas the gas industry broke the regime of negotiated third party access, in electricity nTPA 'worked', although it clearly resulted in a margin squeeze. The government currently discusses whether to use rate-of-return or incentive regulation, to allow ex ante approval of charges, and the length of the regulatory lag. Close examination suggests that generation capacity still is adequate, but in the longer term there is reason to be alert. The regulatory changes and emission trading system can both contribute to supply security by increasing investment. [ABSTRACT FROM AUTHOR]

We show that there is strong evidence of long-range dependence in the volatilities of several German stock returns. This will be done by applying a method using the difference of the classical log-periodogram regression estimator for the memory parameter and of the tapered periodogram based estimator. Both estimators give similar values for the memory parameter for each series and this indicates long memory. To support our findings we apply also a methodology using the sample variance and a wavelet based estimator to the data. Also these two methods show clear evidence of long-range dependence in the volatilities of German stock returns. [ABSTRACT FROM AUTHOR]

The article refers to the credit downgrading of a German bank, which caused a significant spread jump, and focuses on the potential effect of ratings on the Pfandbriefe bond market. The study is based on bond data for a four-year period, which was taken from the Salomon Smith Barney EuroBig and Merrill Lynch EMU Broad Market indexes. The four market subgroups examined are: agency-rated bond issues that are AAA and AA; and Pfandbriefe types that are conventional and jumbo. Investment risks in the Pfandbriefe market and spread levels in relation to the euro swap curve are mentioned. Risks, returns, and spread volatility are evaluated in two factor risk models. Agency ratings do not significantly affect the risk profile of jumbo issues, but do appear to have some impact on standard issues.

In contrast to the United States and the United Kingdom, little empirical work exists about the distributional characteristics of appraisalbased real estate returns outside these countries. The purpose of this study is to fill this gap by focusing on Germany. In line with other studies, this paper offers an extensive investigation into the distribution of German real estate returns and compares them with and U.S. and U.K. data in the same period. Furthermore, the comovements with bonds and stocks are also examined. In the core, the distributional characteristics for German real estate are comparable to that for the U.S. and U.K. [ABSTRACT FROM AUTHOR]

In this paper nonlinear structures in German bank stock returns are investigated in a stochastic modelling framework. In the first step we show the existence of a nonlinear return structure by means of the McLeod-Li and the BDS test. In the second step we focus our analysis on the kinds of nonlinearity actually present in bank stock data. On the basis of the Hsieh test it is possible to discriminate with high power additive from multiplicative dependencies to provide guidance for the choice of an adequate class of stochastic models. It is shown that the multiplicative dependencies predominating the bank stock returns can be captured by low order GARCH models. [ABSTRACT FROM AUTHOR]

This article investigates the interdependence of stock returns and exchange rate changes within the same economy. Six countries were tested for volatility spillovers, namely the U.S., Great Britain, Japan, Germany, Canada and France. Evidence of spillovers from stock returns to exchange rate changes is found for all countries except Germany. These results suggest that the asset approach to exchange rate determination is valid when formulated in terms of the second moments of the exchange rate distribution for these countries. The spillovers from stock returns to exchange rate changes are symmetric in nature. Volatility spillovers from exchange rate changes to stock returns are insignificant for all countries.

This article reviews the empirical evidence for equity returns, bond returns, and the equity premium in the German capital market for the period from 1870 to 1995. Taken together, the studies reviewed provide convincing evidence that over longer investment periods, average equity returns have been higher than average bond returns. These excess returns, however, have been highly volatile and negative in many years, illustrating the higher risk of equity investments. Moreover, market timing had a major positive or negative impact on overall returns. Despite the historical evidence of a substantial equity premium there is still little equity investment by German households. [ABSTRACT FROM AUTHOR]

Presents a reply to the comments on the study regarding DVFA earnings and stock returns in Germany. Problems in the determination of DVFA figures; Discussion of issues regarding DVFA earnings in the valuation models; Application of intercept binary indicator variables.

In an article published in this journal, Booth et al. (BBL) reach the conclusion that 'DVFA earnings provide information in addition to that provided by earnings calculated under the auspices of German GAAP' (BBL, p.599). Their 'results suggest that the effort spent to develop the method by which DVFA earnings are calculated has been well spent, since it enables market participants to price German stocks more fairly' (BBL, p.600). Although BBL do not distinguish in their model explicitly between reported earnings and DVFA earnings, the reader could get the impression that earnings can explain a great deal of the return variance and that so-called DVFA earnings (in contrast to reported earnings) play the most informative role in the explanation of German stock returns, both of them yielding an R[sup 2] of 0.506. In my opinion, there are some weaknesses in the argumentation, because (1) BBL de-emphasize the problems inherent in the subjectivity of the external determination of DVFA earnings; (2) BBL use a model for evaluating the value relevance of DVFA data that might conflict with the requirements of DVFA data for a valuation model; (3) the model finally used by BBL for the analysis of the value relevance of earnings numbers seems to be inadequate to describe reality; and (4) the process of data selection applied by BBL might also have caused the results. These arguments are explained in more detail in the remainder of this note. [ABSTRACT FROM AUTHOR]