Determinants of German Foreign Direct Investment in Latin American and Asian Emerging Markets in the 1990s

Many empirical studies in the area of foreign direct investment (FDI) exclusively focus on flows between industrialized countries. This article makes a contribution to the still relatively sparse literature on FDI in emerging markets by estimating determinants of German FDI flows to Latin America and Asia during the past decade. Using data contained in a newly available Bundesbank microdatabase, an FDI flow variable, constructed from year-to-year differences in FDI stocks adjusted for certain otherwise distorting factors, is empirically tested with respect to several exogenous variables previously found to be significant in the literature. These include so-called non-traditional factors such as country risk and agglomeration effects which are widely regarded as influential for FDI in emerging market economies. This study therefore focuses on estimating the effects of various risk measures and finds that country risk, and partially political risk, is indeed detrimental to investments of German enterprises. Moreover, German FDI in Latin America are found to have been market-seeking while those in emerging Asia tended to exploit low factor costs. Methodically, this paper uses the SUR estimation technique which allows for the contemporaneous correlation of disturbances as well as first-order autocorrelation of the time series disturbances and cross-sectional heteroskedasticity. In arriving at a parsimonious regression for each region, an Extreme Bounds Analysis (Leamer, 1983 & 1985) is performed to select individual variables robust to the inclusion of other explanatory variables. Making empirical use of German firm-level data, additional estimations are performed for direct investment of the manufacturing sector and three of its sub-sectors. Regarding the latter, the hypothesis that capital-intensive industries react particularly strongly to the changes in the regulatory environment of the host country is confirmed by the data. -- Viele empirische Studien im Bereich der ausländischen Direktinvestitionen (?foreign direct investment? ? ?FDI?) beziehen sich ausschließlich auf Investitionsströme zwischen Industrieländern. Dieses Arbeitspapier trägt zu der noch vergleichsweise spärlichen Literatur zu Direktinvestitionen in Schwellenländern bei. Es schätzt die Determinanten deutscher FDIStröme in ausgewählten ?Emerging Markets? während der letzten Dekade. Mit Hilfe von Daten, die in einer seit kurzem verfügbaren Mikrodatenbank der Bundesbank enthalten sind, wird eine Stromgröße, die sich aus den Bestandsveränderungen der Direktinvestitionsbestände errechnet und die um verzerrende Einflüsse bereinigt wird, empirisch hinsichtlich verschiedener exogener, in der Literatur als signifikant befundener Variablen überprüft. Diese schließen sogenannte nicht-traditionelle Faktoren wie Länderrisiko und Agglomerationseffekte ein, die allgemein als einflussreich für Direktinvestitionen in Schwellenländern erachtet werden. Die vorliegende Studie konzentriert sich demnach auf die Schätzung der Bedeutung verschiedener Risikomaße und findet, dass das Länderrisiko und teilweise auch das politische Risiko den Investitionen deutscher Unternehmen abträglich sind. Außerdem wird gezeigt, dass deutsche Direktinvestitionen in Lateinamerika eher markterschließend waren, während jene in den Schwellenländern Asiens stärker die Nutzung niedriger Faktorkosten zum Ziel hatten. Methodisch wird die SUR Schätzmethode angewandt, die eine Berücksichtigung gruppenweiser Korrelation der Störgrößen, eines autoregressiven Prozesses erster Ordnung und Heteroskedastizität ermöglicht. Um ein sparsames Modell schätzen zu können, wird eine ?Extreme Bounds?-Analyse nach Leamer (1983 & 1985) durchgeführt, welche die Auswahl von solchen Variablen bezweckt, deren Einfluss gegen die Einbeziehung anderer exogener Variablen robust ist. Zudem werden Einzeldaten deutscher Firmen genutzt, um weitere Schätzungen der Direktinvestitionen des Verarbeitenden Gewerbes und dreier Untersektoren durchzuführen. Bezüglich Letzterer kann die Hypothese, dass kapitalintensive Sektoren besonders stark auf Änderungen im regulatorischen Umfeld der Empfängerländer reagieren, mit Hilfe der Daten bestätigt werden.foreign direct investment,emerging markets,country risk,panel data analysis

An instability of unitary quantum dynamics

Instabilities of equilibrium quantum mechanics are common and well-understood. They are manifested for example in phase transitions, where a quantum system becomes so sensitive to perturbations that a symmetry can be spontaneously broken. Here, we consider the possibility that the time evolution governing quantum dynamics may be similarly subject to an instability, at which its unitarity spontaneously breaks down owing to an extreme sensitivity towards perturbations. We find that indeed such an instability exists, and we explore its immediate consequences. Interpretations of the results both in terms of extreme sensitivity to the influence of environmental degrees of freedom, and in terms of a possible fundamental violation of unitarity are discussed.Comment: 11 pages, 2 figures; Conference proceedings DICE 201

Why do organizational populations die? : evidence from the Belgian motorcycle industry, 1900-1993

Extinctions represent a potential outcome of the evolutionary processes of organizational populations. Nevertheless, scant effort, if none, has been dedicated to investigate this issue. This paper proposes three alternative hypotheses that may account for extinction events. They are drawn from very different literatures: economic geography, economic sociology, and evolutionary biology/paleontology. In particular, two of them rely on exogenous determinants, while one is focused on an endogenous reasoning. The theory presented is tested analyzing the entries of motorcycle producers in Belgium, a population that ceased to exist in 1981. The findings of this research provide evidence to support the internal causation of the event. The implications stemming from the present work are related to the literatures of population ecology and industrial economics.

Conditions for superdecoherence

Decoherence is the main obstacle to quantum computation. The decoherence rate per qubit is typically assumed to be constant. It is known, however, that quantum registers coupling to a single reservoir can show a decoherence rate per qubit that increases linearly with the number of qubits. This effect has been referred to as superdecoherence, and has been suggested to pose a threat to the scalability of quantum computation. Here, we show that superdecoherence is absent when the spectrum of the single reservoir is continuous, rather than discrete. The reason of this absence, is that, as the number of qubits is increased, a quantum register inevitably becomes susceptible to an ever narrower bandwidth of frequencies in the reservoir. Furthermore, we show that for superdecoherence to occur in a reservoir with a discrete spectrum, one of the frequencies in the reservoir has to coincide exactly with the frequency the quantum register is most susceptible to. We thus fully resolve the conditions that determine the presence or absence of superdecoherence. We conclude that superdecoherence is easily avoidable in practical realizations of quantum computers.Comment: 20 pages, 6 figures, quantum journal accepted versio

Dynamical fidelity susceptibility of decoherence-free subspaces

In idealized models of a quantum register and its environment, quantum information can be stored indefinitely by encoding it into a decoherence-free subspace (DFS). Nevertheless, perturbations to the idealized register-environment coupling will cause decoherence in any realistic setting. Expanding a measure for state preservation, the dynamical fidelity, in powers of the strength of the perturbations, we prove stability to linear order is a generic property of quantum state evolution. The effect of noise perturbation is quantified by a concise expression for the strength of the quadratic, leading order, which we define as the dynamical fidelity susceptibility of DFSs. Under the physical restriction that noise acts on the register $k$-locally, this susceptibility is bounded from above by a polynomial in the system size. These general results are illustrated by two physically relevant examples. Knowledge of the susceptibility can be used to increase coherence times of future quantum computers.Comment: 10 pages, 0 figures, corrected typos, section added, changed notatio

Charge Ordering Geometries in Uniaxially-Strained NbSe2_2

Recent STM experiments reveal niobium diselenide to support domains of striped (1Q) charge order side-by-side with its better-known triangular (3Q) phase, suggesting that small variations in local strain may induce a quantum phase transition between the two. We use a theoretical model of the charge order in NbSe$_2$, based on a strong momentum- and orbital-dependent electron-phonon coupling, to study the effect of uniaxial strain. We find that as little as $0.1\%$ anisotropic shift in phonon energies breaks the threefold symmetry in favor of a 1Q state, in agreement with the experimental results. The altered symmetries change the transition into the ordered state from weakly-first-order in the 3Q case, to second order in the 1Q regime. Modeling the pseudogap phase of NbSe$_2$ as the range of temperatures above the onset of long-range order in which phase coherence is destroyed by local phonon fluctuations, we find a shortening of the local ordering wavevector with increasing temperature, complementing recent X-ray diffraction observations within the low-temperature phase.Comment: 5 pages, 3 figure

Observing the Spontaneous Breakdown of Unitarity

During the past decade, the experimental development of being able to create ever larger and heavier quantum superpositions has brought the discussion of the connection between microscopic quantum mechanics and macroscopic classical physics back to the forefront of physical research. Under equilibrium conditions this connection is in fact well understood in terms of the mechanism of spontaneous symmetry breaking, while the emergence of classical dynamics can be described within an ensemble averaged description in terms of decoherence. The remaining realm of individual-state quantum dynamics in the thermodynamic limit was addressed in a recent paper proposing that the unitarity of quantum mechanical time evolution in macroscopic objects may be susceptible to a spontaneous breakdown. Here we will discuss the implications of this theory of spontaneous unitarity breaking for the modern experiments involving truly macroscopic Schrodinger cat states.Comment: 4 pages, no figure

Improved customer choice predictions using ensemble methods

In this paper various ensemble learning methods from machinelearning and statistics are considered and applied to the customerchoice modeling problem. The application of ensemble learningusually improves the prediction quality of flexible models likedecision trees and thus leads to improved predictions. We giveexperimental results for two real-life marketing datasets usingdecision trees, ensemble versions of decision trees and thelogistic regression model, which is a standard approach for thisproblem. The ensemble models are found to improve upon individualdecision trees and outperform logistic regression.Next, an additive decomposition of the prediction error of amodel, the bias/variance decomposition, is considered. A modelwith a high bias lacks the flexibility to fit the data well. Ahigh variance indicates that a model is instable with respect todifferent datasets. Decision trees have a high variance componentand a low bias component in the prediction error, whereas logisticregression has a high bias component and a low variance component.It is shown that ensemble methods aim at minimizing the variancecomponent in the prediction error while leaving the bias componentunaltered. Bias/variance decompositions for all models for bothcustomer choice datasets are given to illustrate these concepts.brand choice;data mining;boosting;choice models;Bias/Variance decomposition;Bagging;CART;ensembles

Different trajectories of industrial evolution : demographical turnover in the European motorcycle industry, 1885-1993

Technological innovation is widely considered as one of the most influential determinants of industry evolution. Along this line of inquiry, the seminal work of Tushman and Anderson (1986) presents one of the most compelling theoretical argumentations. Yet, the empirical support for their theory has been relatively weak, and an academic agreement is still lacking about the long-term consequences of technological innovation for the demographic composition of industries. This paper uses the information collected on 1,906 manufacturers during the period 1895 and 1993, to investigate the influence of technological innovation on the evolution of four different organizational populations - i.e. Great Britain, Germany, France and Italy. The findings of this research only partially agree with the theory. Our results show that, while innovations promoted entries, incumbent firms survived to environmental changes. The implications of this work are related to the literatures of strategic management and population ecology.

The SEC-system : reuse support for scheduling system development

Recently, in a joint cooperation of Stichting VNA, SAL Apotheken, the Faculty of Management and Organization, and the University Centre for Pharmacy, University of Groningen in the Netherlands, a Ph.D-study started regarding Apot(he)ek, Organization and Management (APOM). The APOM-project deals with the structuring and steering of pharmacy organization. The manageability of the internal pharmacy organization, and the manageability of the direct environment of pharmacy organization is the subject matter. The theoretical background of the APOM-project is described. A literature study was made to find mixes of objectives. Three mixes of objectives in pharmacy organization are postulated; the product mix, the process mix, and the customer mix. The typology will be used as a basic starting point for the empirical study in the next phase of the APOM-project.