Publication database

We study the prices individual banks pay for liquidity (captured by borrowing rates in repos with the central bank and benchmarked by the overnight index swap) as a function of market conditions and bank characteristics. These prices depend in particular on the distribution of liquidity across banks, which is calculated over time using individual bank level data on reserve requirements and actual holdings. Banks pay more for liquidity when positions are more imbalanced across banks, consistent with the existence of short squeezing. We also document that small banks pay more for liquidity and are more vulnerable to squeezes. Healthier banks pay less, but contrary to what one might expect, banks in formal liquidity networks do not. State guarantees reduce the price of liquidity, but do not protect against squeezes.

With permission of Elsevier

Purpose - The paper "Made in heaven - produced on earth: creative leadership as art of projection" is about the concept of projection in the context of leadership. Design/methodology/approach - This article takes a close look at Jeff Koons, a successful and highly controversial contemporary artist. The paper explores the way in which storytelling linked to his artwork has been the key element of the way he has projected himself as a credible leader in the world of contemporary art. Findings - This article examines how the artist Koons is using the three universal story lines used by leaders to excite and gain buy-in from an audience as described by the sociologist Howard Gardner: (1) who am I - How life experience has shaped my individuality and character; (2) who are we - Demonstrate the values and behaviors of a group; and (3) where are we going - Explains what is new, and creates a sense of excitement about direction. The authors find that throughout his career and his various artistic production cycles like the inflatables, the New, Equilibrium, Luxury Degradation, Statuary, Kiepenkerl, Banality, Made in Heaven, Puppy, Celebration, Easyfun, Popeye, and Hulk Elvis, Jeff Koons is using key elements of the art of projection by linking his art work to the three universal story lines who am I, who are we, and where are we going. A closer analysis of Koons' work reveals how he has leveraged each of these dimensions of effective storytelling as a broad narrative to link his various series together as a consistent whole. Practical implications - The authors suggest that Koons' use of storytelling, and the manner in which he has come to embody the themes and concepts that he seeks to communicate through his artworks, present powerful lessons for managers as to how they can manage their own leadership projection. By looking at Koons, managers can better understand not only how to establish credibility and drive buy-in, but also how to project themselves as leaders in their respective fields of business endeavor. Originality/value - While there is literature on the art of storytelling there has been less focus on the sphere of art and how artists use storytelling and projection to take their audience with them. This new perspective not only creates new insights on the concept of storytelling and potential future research but has implications for managers and leaders and the way they want to drive change in organizations and take people on their managerial journey.

With permission of Emerald Insight

This paper examines the broader effects of the U.S. financial crisis on global lending to retail customers. In particular we examine retail bank lending in Germany using a unique dataset of German savings banks during the period 2006 through 2008 for which we have the universe of loan applications and loans granted. Our experimental setting allows us to distinguish between savings banks affected by the U.S. financial crisis through their holdings in Landesbanken with substantial subprime exposure and unaffected savings banks. The data enable us to distinguish between demand and supply side effects of bank lending and find that the U.S. financial crisis induced a contraction in the supply of retail lending in Germany. While demand for loans goes down, it is not substantially different for the affected and non-affected banks. More importantly, we find evidence of a significant supply side effect in that the affected banks reject substantially more loan applications than non-affected banks. This result is particularly strong for smaller and more liquidity-constrained banks as well as for mortgage as compared to consumer loans. We also find that bank-depositor relationships help mitigate these supply side effects.

With permission of Elsevier

This article introduces "career entrepreneurship," a rapidly spreading phenomenon in the global knowledge-driven economy. Career entrepreneurship involves taking an entrepreneurial approach to managing our careers. It means doing things that seem "illegitimate" to other people and contradict socially-recognized and accepted sequences of work experiences in terms of age, education, or socio-economic progression. This kind of behavior challenges established norms about typical career development. The evidence presented in this article suggests new possibilities for thinking about the way individuals invest in their careers, new insights for organizations interested in capturing the potential of career entrepreneurship, and new ideas for career and life coaches to support people embracing the phenomenon. The article offers a primer on career entrepreneurship to all three groups of readers, calling for more effective collaborative relationships and more effective leveraging of individuals' career investments.

With permission of Elsevier

The existing literature identifies patent thickets indirectly. In this paper we propose a novel measure based on patent citations which allows us to measure the density of patent thickets directly. We discuss the algorithm which generates the measure and present descriptive results validating it. Moreover, we identify technology areas which are particularly impacted by patent thickets.

With permission of Elsevier

We study competitive market outcomes in economies where agents have other-regarding preferences (ORPs). We identify a separability condition on monotone preferences that is necessary and sufficient for one's own demand to be independent of the allocations and characteristics of other agents in the economy. Given separability, it is impossible to identify ORPs from market behaviour: agents behave as if they had classical preferences that depend only on own consumption in competitive equilibrium. If preferences, in addition, depend only on the final allocation of consumption in society, the Second Welfare Theorem holds as long as any increase in resources can be distributed in a way that makes all agents better off. The First Welfare Theorem generally does not hold. Allowing agents to care about their own consumption and the distribution of consumption possibilities in the economy, the competitive equilibria are efficient given prices if and only if there is no Pareto-improving redistribution of income.

© The Author 2011. Published by Oxford University Press on behalf of The Review of Economic Studies Limited.

The business world has a healthy appetite for learning from unusual role models. In this article from the 2006 archives, Jamie Anderson, Martin Kupp and Jorg Reckhenrich reveal the entrepreneurial side of an entertainment legend.

© 2011 London Business School