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DIW Discussion Papers 1467 / 2015
We study political determinants of municipality amalgamations during a boundary reform in the German state of Brandenburg, which reduced the number of municipalities from 1,489 to 421. The analysis is conducted using data on the political decision makers as well as fiscal and socio-economic variables for the municipalities. We ask whether party representation in the town council influences the merger ...
2015| Benjamin Bruns, Ronny Freier, Abel Schumann
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DIW Discussion Papers 1466 / 2015
This paper estimates a bivariate VAR-GARCH(1,1) model to examine linkages between food and energy prices. The adopted framework is suitable to analyse both mean and volatility spillovers, and also allows for possible parameter shifts resulting from four recent events, namely: 1) the 2006 food crisis, 2) the Brent oil bubble, 3) the introduction of the Renewable Fuel Standard (RFS) policy, and 4) the ...
2015| Alanoud Al-Maadid, Guglielmo Maria Caporale, Fabio Spagnolo, Nicola Spagnolo
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DIW Discussion Papers 1465 / 2015
Foundational to the discipline of management is the idea that organizational decisions are a function of expected outcomes; hence, the customary empirical approach to employ multivariate techniques that regress performance outcome variables on discrete measures of organizational choices (e.g., investments, trainings, strategies and other managerial decision variables) potentially suffer from self-selection ...
2015| Joseph Clougherty, Tomaso Duso
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DIW Discussion Papers 1464 / 2015
A growing literature uses changes in residual volatility for identifying structural shocks in vector autoregressive (VAR) analysis. A number of different models for heteroskedasticity or conditional heteroskedasticity are proposed and used in applications in this context. This study reviews the different volatility models and points out their advantages and drawbacks. It thereby enables researchers ...
2015| Helmut Lütkepohl, Aleksei Netsunajev
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DIW Discussion Papers 1463 / 2015
In this short note, we use data from different elections in the German state of North-Rhine Westphalia between 1975 and 2010 to show that the social democrats generally profit from higher voter turnout at the expense of the conservatives. We deal with the endogeneity of voter turnout by using election day rain as an instrumental variable. Our particular contribution is the comparison of municipal and ...
2015| Felix Arnold, Ronny Freier
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DIW Discussion Papers 1462 / 2015
One prediction of the calculus of voting is that electoral closeness positively affects turnout via a higher probability of one vote being decisive. I test this theory with data on all mayoral elections in the German state of Bavaria between 1946 and 2009. Importantly, I use constitutionally prescribed two-round elections to measure electoral closeness and thereby improve on existing work that mostly ...
2015| Felix Arnold
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DIW Discussion Papers 1461 / 2015
The integration of emerging markets into the global economy is heavily promoted by foreign direct investment (FDI) inflows. Within the factors driving the location of FDI, regional trade agreements (RTAs) become increasingly relevant for emerging markets. We explore the impact of South-South trade agreements on FDI by dynamic panel models. The MENA countries are compared to the better performing regions ...
2015| Mondher Cherif, Christian Dreger
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DIW Discussion Papers 1460 / 2015
We analyze a client's choice of contract in auctions where Dutch law firms compete for cases. The distinguishing feature is that lawyers may submit bids with any fee arrangement they prefer: an hourly rate, a fixed fee or a \mixed fee," which is a time-capped fixed fee plus an hourly rate for any additional hours should the case take longer than expected. This format of selling legal services is unusual ...
2015| Flóra Felsö, Sander Onderstal, Jo Seldeslachts
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DIW Discussion Papers 1459 / 2015
This paper uses data from a panel of more than 400 Italian banks for the period 2001 – 2012 to examine the main determinants of loan loss provision (LLP), which are classified as either discretionary (income smoothing, capital management,signalling) or non-discretionary (related to the business cycle). The results suggest that LLP in Italian banks is driven mainly by non-discretionary components, especially ...
2015| Guglielmo Maria Caporale, Matteo Alessi, Stefano Di Colli, Juan Sergio Lopez
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DIW Discussion Papers 1458 / 2015
This paper provides some new empirical evidence on the weekend effect (one of the best known anomalies in financial markets) in Ukrainian futures prices. The analysis uses various statistical techniques (average analysis, Student's t-test, dummy variables, and fractional integration) to test for the presence of this anomaly, and then a trading simulation approach to establish whether it can be exploited ...
2015| Guglielmo Maria Caporale, Luis Gil-Alana, Alex Plastun
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DIW Discussion Papers 1457 / 2015
We develop a dispatch and investment model to study the role of power storage and other flexibility options in a greenfield setting with high shares of renewables. The model captures multiple system values of power storage related to arbitrage, dispatchable capacity, and reserves. In a baseline scenario, we find that power storage requirements remain moderate up to a renewable share of around 80%, ...
2015| Alexander Zerrahn, Wolf-Peter Schill
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DIW Discussion Papers 1456 / 2015
We revisit key elements of European power market design with respect to both short term operation and longer-term investment and re-investment choices. For short term markets, the European policy debate focuses on the definition of common interfaces, like for example gate closure time. We argue that that this is insufficient if the market design is to accommodate for the different needs of renewable ...
2015| Karsten Neuhoff, Sophia Rüster, Sebastian Schwenen
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DIW Discussion Papers 1455 / 2015
Changes in residual volatility in vector autoregressive (VAR) models can be used for identifying structural shocks in a structural VAR analysis. Testable conditions are given for full identification for the case where the volatility changes can be modelled by a multivariate GARCH process. Formal statistical tests are presented for identification and their small sample properties are investigated via ...
2015| Helmut Lütkepohl, George Milunovich
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DIW Discussion Papers 1454 / 2015
Academic data sharing is a way for researchers to collaborate and thereby meet the needs of an increasingly complex research landscape. It enables researchers to verify results and to pursuit new research questions with “old” data. It is therefore not surprising that data sharing is advocated by funding agencies, journals, and researchers alike. We surveyed 2661 individual academic researchers across ...
2015| Benedikt Fecher, Sascha Friesike, Marcel Hebing, Stephanie Linek, Armin Sauermann
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DIW Discussion Papers 1453 / 2015
Using annual data for the period 1992-2012, this paper examines trade flows between China and its main trade partners in Asia, North America and Europe, and whether increasing trade has led to industrial structural adjustment and changes in China’s trade patterns. The analysis is based on both economic indicators and the estimation of a gravity model, and applies recently developed panel data methods ...
2015| Guglielmo Maria Caporale, Anamaria Sova, Robert Sova
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DIW Discussion Papers 1452 / 2015
The German support for renewable energies in the electricity sector is based on the feed-in tariff for investors that grants guaranteed revenues for their renewable energy supply. Corresponding to differences of granted tariffs and respective market values, a surcharge on consumption covers differential costs. While granted tariffs are bound to fall with advances in renewable energy technologies, the ...
2015| Thure Traber, Claudia Kemfert
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DIW Discussion Papers 1451 / 2015
We discuss the implications of two price zones, i.e. one northern and southern bidding area, on the German electricity market. In the northern zone, continuous capacity additions with low variable costs cause large regional supply surpluses in the market dispatch while conventional capacity decreases in the southern zone. As the spatial imbalance of supply and load is increasing, the current single ...
2015| Jonas Egerer, Jens Weibezahn, Hauke Hermann
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DIW Discussion Papers 1450 / 2015
Policy-makers face a trade-off between the provision of higher levels of schooling and earlier labour market entries. A fundamental education reform in Germany tackles this trade-off by reducing high school by one year while leaving the total instructional time unchanged. Employing administrative data on all high school graduates in 2002-2013 in Germany, we exploit both temporal and regional variation ...
2015| Mathias Huebener, Jan Marcus
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DIW Discussion Papers 1449 / 2015
Das Papier zeigt, dass die seit Jahrzehnten andauernde Klagen wissenschaftlich tätiger Ökonomen,dass Öffentlichkeit und Politik nicht genug auf Ergebnisse der ökonomischen Forschung hören,zumindest für Deutschland im Quervergleich zu anderen Wissenschaften in Bezug auf das medialeInteressen an ökonomischen Erkenntnissen nicht gerechtfertigt sind. Es wird in bemerkenswerterWeise von der Resonanz kontrastiert, ...
2015| Justus Haucap, Tobias Thomas, Gert G. Wagner
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DIW Discussion Papers 1448 / 2015
The paper analyses the empirical relationship between bank risk and sovereign credit risk in the euro area. Using structural VAR with daily financial markets data for 2003-13, the analysis confirms two-way causality between shocks to sovereign risk and bank risk, with the former being overall more important in explaining bank risk, than vice versa. The paper focuses specifically on the impact of non-standard ...
2015| Marcel Fratzscher, Malte Rieth