The paper analyses the relationship between succession and firm performance. Applying a non-parametric matching approach on a panel of roughly 4,000 Austrian family firms we evaluate the impact of past succession as well as future succession plans on employment growth. Analysing succession plans, we do not find a 'shadow of succession' effect. No significant difference in employment growth is found between firms that plan to transfer the firm in the next ten years and those who do not. In contrast, past succession exerts a significant and positive employment growth effect which becomes stronger over time. Thus, our findings provide support for the existence of a positive employment shadow after a transfer, whereas the shadow of succession hypothesis has to be rejected prior to transition. / Series: Discussion Papers SFB International Tax Coordination

The number of investor-state arbitration disputes has been on the rise since the mid 1990s. Their determinants are still not fully understood. This study empirically examines the effects of economic crises on investor-state arbitration claims, based on international investment agreements (IIAs). We use a unique dataset containing 961 investor-state arbitration claims covering 132 host (defendant) and 75 home (claimant) countries over the 1986-2017 period. We find that episodes of economic crises are positively and significantly associated with the number of investor-state arbitration cases and we uncover evidence that the type of economic crisis matters. In addition, the positive impact of economic crises on arbitration cases is inversely related to the rule of law in a host country. These results are consistent with the view that governments are prioritizing policy actions aiming at mitigating the negative impact of economic crises over compliance with their obligations in IIAs. From a policy perspective, our results suggest that besides strengthening the rule of law domestically, the IIA system should be reformed with a focus on avoiding a vicious circle, thus shortening the recovery period after economic crises. / Series: Department of Economics Working Paper Series

This paper aims at providing a comprehensive overview of existing literature on the topic of comparability adjustments. Based on existing literature the most commonly used adjustments can be categorized in two broad categories: "accounting and financial risks adjustments" and "strategic/market adjustments". With the exception of working capital adjustments, the lack of guidance and recognized standardized application will quite possibly lead to continued discrepancies in their use. Taxpayers continue to struggle with the immense amount of documentation as well as justification requirements when it comes to adjustments, as there is no clear path to follow and very few practical application examples, which would unify the application of adjustments. As seen, even though the topic of comparability adjustments has been around since before the first version of the OECD TP Guidelines, the topic is yet to be fully explored in both official guidance as well as literature, research and especially practical tools. / Series: WU International Taxation Research Paper Series

This paper proposes a method to study the relationship between voters' attitudes towards immigration and the educational attainment of immigrants and their children, and applies it to Austrian data. We measure attitudes towards immigration using data on political parties' positions regarding immigration and the share of votes that each party received at the regional level. We then study the educational attainment and intergenerational educational mobility of immigrants who grew up in the regions whose political environment we observe. Preliminary results for Austria suggest that, surprisingly, better attitudes towards migration are associated with lower educational attainment for immigrants. However, immigrants are more likely than their native peers to obtain more education than their parents. Here, the returns to more positive attitudes towards immigration play a large role in explaining the mobility gap across migration background. / Series: Department of Economics Working Paper Series

In this paper we forecast daily returns of crypto-currencies using a wide variety of different econometric models. To capture salient features commonly observed in financial time series like rapid changes in the conditional variance, non-normality of the measurement errors and sharply increasing trends, we develop a time-varying parameter VAR with t-distributed measurement errors and stochastic volatility. To control for overparameterization, we rely on the Bayesian literature on shrinkage priors that enables us to shrink coefficients associated with irrelevant predictors and/or perform model specification in a flexible manner. Using around one year of daily data we perform a real-time forecasting exercise and investigate whether any of the proposed models is able to outperform the naive random walk benchmark. To assess the economic relevance of the forecasting gains produced by the proposed models we moreover run a simple trading exercise.

We analyze the pass-through of cost changes to retail tariffs in the German electricity market over the 2007-2014 period. We find an average pass-through rate of around 60%. This significantly varies with demand factors: while the pass-through rate to baseline tariffs, where firms have greater market power because customers are less willing to switch, is only 50%, it increases to 70% in the competitive segment of the market. Although the pass- through rate of independent firms is significantly higher than that of other firms in the competitive market segment, the extent of supply-side heterogeneity is limited. Thus, the firms' ability to exercise market power and reduce pass-through appears to be constrained by competition and largely determined by demand side factors. Finally, we find that the pass-through rate in the competitive market segment has been approaching unity over the past years, indicating a rise in competitive pressure.

Different types of shocks, or the treatment of one of the players in a specific network, may influence not only the future performance of themselves but also affect their network connections. It is crucial to explore the behaviour of the whole network in response to such an event. This paper focuses on the cases of endogenously formed shock. The logic used in the peer effect literature is adopted to develop the dynamic model and accounts for the endogeneity of the shock. The model allows us to predict the endogenous part of the shock and use the remaining unexpected component to estimate the effect of the shock on the changes in the performance of network connections. The identification conditions for effect are derived, and the consistent estimation procedure is proposed. / Series: Department of Economics Working Paper Series

Exam failures of the students in a specific network may influence not only the future performance of the student but also all students from their friendship networks, affecting the overall cohort's performance. Therefore, it is crucial to understand how the whole network responses to failure. The difficulty of such analysis is incorporated in the probability of the failures being highly endogenous. In this paper, I am applying the novel identification and estimation approach to deal with such endogeneity. I am exploring the dynamic data on the students' networks in HSE, Nizhniy Novgorod. The results suggest that, on average, the exam failure of the friend have a negative effect on future performance. / Series: Department of Economics Working Paper Series

This paper studies five mergers in the European wireless telecommunication industry and analyzes their impact on prices and capital expenditures of both merging carriers and their rivals. We find substantial heterogeneity in the relationship between increases in concentration and carriers' prices. The specifics of each merger case clearly matter. Moreover, we find a positive correlation between the price and the investment effect; when the prices after a merger increase (decrease), the investments increase (decrease) too. Thus, we document a trade-off between static and dynamic efficiency of mergers.

In this paper we aim to improve existing empirical exchange rate models by accounting for uncertainty with respect to the underlying structural representation. Within a flexible Bayesian non-linear time series framework, our modeling approach assumes that different regimes are characterized by commonly used structural exchange rate models, with their evolution being driven by a Markov process. We assume a time-varying transition probability matrix with transition probabilities depending on a measure of the monetary policy stance of the central bank at the home and foreign country. We apply this model to a set of eight exchange rates against the US dollar. In a forecasting exercise, we show that model evidence varies over time and a model approach that takes this empirical evidence seriously yields improvements in accuracy of density forecasts for most currency pairs considered. / Series: Department of Economics Working Paper Series