Abstract not available

We investigate the impact of the angels’ share—the angel investors’ proportion of ownership—on entrepreneurial performance. We argue that below the blockholder level of ownership, the angels’ share is associated with greater innovation but lower market performance. In contrast, we predict that above the blockholder level of ownership, the angels’ share is associated with lower innovation but higher

We consider a dynamic game of electoral competition with adverse selection, moral hazard, and imperfect monitoring. We show that this dynamic game can be estimated using a flexible maximum likelihood estimator. We implement the estimator using data from recent mayoral elections in large US cities with binding two-term limits. Our empirical findings suggest that there are large differences in performance

This paper develops a flexible recipe for identifying unobserved input allocations, as well as quantity- and revenue-based total factor productivity (TFP) across product lines, for multiproduct producers, using demand- and supply-side information. Applying variants of this recipe to a panel of plants manufacturing machinery in India from 2000–2007 yields sizable within-plant TFP differences. Removing

Many firms claim that “social impact” influences their strategies. This paper develops a structural model that quantifies social impact as the sum of surpluses to a firm and its stakeholders. With data from a for-profit firm whose prosocial expenditures are measurable and salient to consumers, the analysis shows that the firm spends prosocially beyond profit maximization, thereby increasing welfare

How are financial markets pricing the monetary policy outlook? We use surveys to decompose excess returns on money market instruments into expectation errors and term premia. Excess returns are primarily driven by expectation errors, whereas term premia are negligible. Investors face challenges when learning about the Federal Reserve’s response to large, but infrequent, negative shocks in real-time

Green growth plays a vital role in achieving ecological sustainability in the presence of eco-innovation. This study explores the relationship between technological innovation, the knowledge economy, and sustainability using panel 1996–2017 data from 30 Organization for Economic Cooperation and Development countries. The knowledge economy variables are presented as intangible assets from the EU KLEMS

We study the liquidity of the global currency market by analyzing the price impact of trading volume. We analyze a decade of CLS intraday data representative of global foreign exchange (FX) trading by developing a refinement of the popular Amihud (2002) illiquidity measure that we call realized Amihud, which is the ratio between realized volatility and trading volume. Inversely related to market depth

Previous research has examined the cap-and-trade mechanism with carbon emission reduction for productive firms. This paper encompasses the earlier studies by integrating borrowing firms (productive firms) conducting cap-and-trade transactions with life insurer lending decisions in a black swan environment. Our research provides the first cap call option model to describe the insurer-borrowing firm

In this paper we investigate energy futures contracts and the presence of a type of seasonality, that has been given very little to no attention in the literature – we call it trading time seasonality. Such seasonality is exposed through the futures trading time, not its maturity time, nor the underlying spot price. As we show, it can be linked to seasonality in the pricing kernel, but the latter can’t

A new tool for supporting environmental policymaking presented in this paper combines the ease of interpretation of structural decomposition analysis in the environmentally extended input-output (EEIO) model with versality of MINLP optimization. The approach allows finding those coefficients in EEIO model in the case of which a small change of their levels leads to a large reduction of industrial GHG

We model asset management as a continuum between active and passive: managers can deviate from benchmark indices to exploit noise trader–induced distortions, but agency frictions constrain these deviations. Because constraints force managers to buy assets that they underweight when these assets appreciate, overvalued assets have high volatility, and the risk-return relationship becomes inverted. Distortions

This paper studies the cyclical dynamics of skill mismatch and quantifies its impact on labor productivity. We build a tractable directed search model, in which workers differ in skills along multiple dimensions and sort into jobs with heterogeneous skill requirements. Skill mismatch arises because of information frictions and is prolonged by search frictions. Estimated to the United States, the model

The aim of this research is to amend traditional theories on bond pricing with additional determinants specific to green bonds. We introduce a new term, ‘green bond transparency’, and apply panel data analysis to EU government green bonds. Bonds that aim to finance a specific project are considered transparent, while they are classified as non-transparent if the proceeds are used to finance a range

Innovation in hydraulic fracturing methods and micro-seismic technology, along with higher energy prices until 2014, led to oil and gas booms in various U.S. shale plays. While this appears to be a positive event for the country, it is unclear whether and how local communities benefit in the long-term from unconventional gas development. This paper evaluates the impact of oil and gas development on

In the context of climate change, just transition is particularly significant, and digitalization as a possible solution for a just transition is considered in this paper. We construct an econometric model between the digital economy and just transition by using a balanced panel dataset of 72 economies from 2010 to 2019, and explore their dynamic relationship and mechanism impacts by applying a system-generalized

This study empirically estimated disaggregate market transaction costs facing single-family house-owners when energy renovating their dwelling. Two types of energy renovations are analysed: heat insulation and energy-saving windows. An analytical framework was developed including an adjustment mechanism for time-biases displayed by households. The decision process was modelling in three steps where

This paper documents that option-implied oil price volatility measured by CBOE Crude Oil Volatility Index (OVX) can significantly and positively forecast future returns of stocks along the worldwide crude oil supply chain. The portfolio investment exercise also confirms that this predictive model can produce positive economic gains, especially for the supplier-side stock asset allocation. The return

Although tornadoes are considered to be one of the deadliest natural disasters in the United States, there exists limited evidence on how such economic shocks may induce disparities in energy-related expenditures across socioeconomic groups and geographical locations. This article shows that a 10 percent increase in tornado-induced fatalities in the same county where a household resides causes a 1

Information asymmetries are known in theory to lead to inefficiently low credit provision, yet empirical estimates of the resulting welfare losses are scarce. This paper leverages a randomized experiment conducted by a large fintech lender to estimate welfare losses arising from asymmetric information in the market for online consumer credit. Building on methods from the insurance literature, we show

The cost of capital is among the most important variables determining the feasibility of investment in renewable energy projects. In Australia's National Electricity Market, the ability of new variable renewable energy (VRE) plant to arrange requisite project finance at favourable rates largely determines project viability. Such financings are typically only achieved when VRE projects are underpinned

Power outages in the U.S. affect many firms' economic activity and are likely to result in downstream supply chain disruptions. This paper examines the impact of power disturbances in the supply chain for four industries: manufacturing, durable goods manufacturing, nondurable goods manufacturing, and total private industry. This indirect impact includes the losses at downstream firms that might not

In this paper, we employ a new dataset to measure the impact of investor sentiment regarding oil prices on the U.S. inflation premium. Our empirical analysis relies on Structural Vector Autoregression (SVAR) and out-of-sample forecasts. The results indicate that a one standard deviation positive shock to overall investor sentiment regarding oil prices results in a significant increase in the U.S. inflation

We present a new term-structure model for commodity futures prices based on Trolle and Schwartz (2009), which we extend by incorporating multiple jump processes. Our work explores the valuation of plain vanilla options on futures prices when the spot price follows a log-normal process, the forward cost of carry curve and the volatility are stochastic variables, and the spot price and the forward cost

This paper analyzes charging cost of battery electric vehicles (BEVs) for different penetration levels of BEVs and for different charging strategies by taking into account their impact on the electricity sector. We analyze a multi-level equilibrium model, which incorporates endogenous generation capacity investment, network expansion, and congestion management. We calibrate our model for the German

International production fragmentation has generated and reallocated value added as well as CO2 emissions across economies. Prior studies have mainly focused on the embodied emissions or value added in trade. The evidence regarding the embodied emission intensity, and particularly the role of policies, however, remains sketchy. This paper investigates the role of trade and environmental policies in

Abstract not available

This study investigates how US consumers respond to and value a new technology-based carbon label on food products. Results indicate that individual valuation of the carbon labeled bread is $4 per 20 oz., marginally lower than the valuation of the conventional and organic bread products. Moreover, consumer valuation for the novel carbon labeled bread would be greater if we target the specific product

We compare winning and losing firms in lotteries for H-1B visas, matching administrative data on these lotteries to administrative tax data on US firms and to approved US patents. Winning one additional H-1B visa crowds out about 1.5 other workers at the firm. Additional H-1Bs have insignificant and at most modest effects on firm innovation. More general evidence from the universe of US firms and the

A model of banking and means of payment is constructed to analyze the effects of the introduction of central bank digital currency (CBDC). That CBDC is interest bearing is not an advantage, as replacement of physical currency with CBDC does not expand the attainable set of equilibrium allocations. CBDC can increase welfare by competing with private means of payment and shifting safe assets from the

The exponential growth of renewable energy generation, electronic loads, and electromobility in active distribution networks has severe consequences on the network's power quality (PQ) and economic impacts on the utility. The conventional active energy tariff for low-voltage (LV) consumers do not consider the cost associated with the PQ parameters, specifically, power factor and harmonic distortion

A strong dollar has been associated with lower lending to emerging markets and tighter global financial conditions. This paper documents similar patterns for credit in the U.S. economy: when the U.S. broad dollar index appreciates by 1 percent, U.S. banks’ corporate loan originations fall by 4.5 percent, with banks tightening credit standards and lending to safer borrowers. This negative correlation

We study how shifting global macroeconomic conditions affect sovereign bond prices. Bondholders earn premia for two sources of systematic risk: exposure to low-frequency changes in the state of the economy, as captured by expected macroeconomic growth and volatility, and exposure to higher-frequency macroeconomic shocks. Our model predicts that the first source, labeled long-run macro risk, is the

Ninety-two percent of the 1348 North American executives we survey believe that improving corporate culture would increase firm value. A striking 84% believe their company needs to improve its culture. But how can that be achieved? Our paper provides some guidance by documenting the following: executives’ views on what corporate culture is and how it operates, distinguishing between stated values and

Improving environmental performance has been widely regarded as a key action to promote environmental sustainability. However, in most environmental performance models, the optimization pathways are pre-determined, neglecting the heterogeneity of the optimization pathways inherent in different producers, which can lead to a potential risk of distorting the results of environmental performance and generating

Amenity clusters consisting of coffee shops, restaurants and other small businesses improve urban life and are a source of employment for city dwellers. Although most small business clusters were hit hard by restrictions imposed during the COVID-19 pandemic, some were able to adapt. What determines the economic resilience of amenity clusters? Using store-location data for Seoul from 2016 to 2021, we

Bond underwriters, lacking “Greenshoe options” and formal systems to track “flipping” activity, have fewer tools than equity underwriters to manage secondary market order flow uncertainty. We show that bond underwriters respond by selectively “overallocating” some issues to attain net short positions. Overallocations are economically substantive, facilitate the syndicate's price stabilization efforts

We examine the effect of temperature shocks on the proclivity to be in energy poverty and combine our estimates with simulated weather data to predict the effect of global warming on the incidence of energy poverty over the rest of the century. To do so, we match representative household panel data for Australia with weather data at a geographically localized level. We find that each additional ‘cold

Natural gas is an essential resource to achieve energy transition and carbon neutrality, and the allocation of natural gas resources depends on the integrated development of the natural gas market. This paper presents a quantile spillover approach to measure changes in the integration of the European gas futures market when major events occur. The empirical results show that extreme events exacerbate

By modelling dynamism in the global oil market by three essential market-centric observables (viz., Market Expansion, Market Regime, and Market Liquidity), we study forecasting potential of the future oil markets within a memory-driven interdependence setting. We combine spot prices with our derived market proxies to produce representative global market proxies. The latter are used to quantify the

We analyse how carbon emissions are reduced utilizing the new NordLink cable between Norway and Germany, taking policy plans of platform electrification in Norway into account. Building a stochastic model based on existing data for Norwegian and German electricity production and demand (Open Power system data, 2020) to account for uncertainty, we found that the cable can be used as an effective way

This paper assesses different econometric approaches to working with count-based outcome variables and other outcomes with similar distributions, which are increasingly common in corporate finance applications. We demonstrate that the common practice of estimating linear regressions of the log of 1 plus the outcome produces estimates with no natural interpretation that can have the wrong sign in expectation

In this paper, we analyze the response of the future world’s carbon stock to a reduction in global inequality among countries, using a framework that allows countries to make their environmental policy strategically. Heterogeneity across countries is related to income, emission technology, and environmental damage costs. We show that reducing global inequality would have a mitigating effect on the

This paper examines the aspect pertaining to the returns connectedness between renewable energy tokens, namely, Powerledger-POWR and WePower-WPR, and the fossil fuel markets, namely, WTI oil, Brent oil, and Natural gas. For this purpose, we employed a quantile-based regression approach, in order to explore the dependence structures that exist under diverse market conditions. The results of the analysis

We propose a novel method to model daily peak electricity demand using temperature and additional hourly and daily weather covariates, such as humidity and wind speed. Rather than enter into the temperature response function additively, the additional covariates may flexibly impact the demand response to temperature. Such flexibility allows differential responses to the actual temperature based on

We investigate the link between poverty and decision-making in a sample of farmers in Zambia, who were given the opportunity to exchange randomly assigned household items for alternative items of similar value. Analyzing a total of 5,842 trading decisions and leveraging multiple sources of variation in financial constraints, we show that exchange asymmetries decrease in magnitude when participants

This short note addresses a serious problem in combining macro (country-level) time series data, e.g., oil price uncertainty (OPU) or economic/trade policy uncertainty (EPU/TPU), with micro (firm-level) financial and accounting panel data, e.g., corporate leverage, investment, and innovation, to name a few. In most of the applications, the main interest is to assess the impacts of country-level explanatory