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This paper uses proprietary data on European IPOs with detailed information on the demand at different points of time and allocation for institutional and retail investors. The nature of the data allows us to analyze the reason of why institutional investors as a group get more allocations of underpriced issues than retail investors. By explicitly examining institutional and retail demand for different kinds of stocks, we find that this is due to institutional investors' superior ability to detect underpriced stocks rather than the underwriter's preferential treatment. At the same time, the subset of domestic institutional investors supports the underwriter in issues with weak demand and receives in turn favorable allocations in underpriced issues.

With permission of Elsevier

Globalization has been seen as both a threat and an opportunity whenever it has occurred. Jamie Anderson, Martin Kupp and Jörg Reckhenrich give us an artists' perspective on managing in a global business world.

© 2009 The Author Journal compilation © 2009 London Business School

The Basel II Accord requires banks to establish rigorous statistical procedures for the estimation and validation of default and ratings transition probabilities. This raises great technical challenges when sufficient default data are not available, as is the case for low default portfolios. We develop a new model that describes the typical internal credit rating process used by banks. The model captures patterns of obligor heterogeneity and ratings migration dependence through unobserved systematic macroeconomic shocks. We describe a Bayesian hierarchical framework for model calibration from historical rating transition data, and show how the predictive performance of the model can be assessed, even with sparse event data. Finally, we analyze a rating transition data set from Standard and Poor's during 1981-2007. Our results have implications for the current Basel II policy debate on the magnitude of default probabilities assigned to low risk assets.

With permission of Elsevier

We study the dynamics of usage intensity of second-generation cellular telephony over the diffusion curve. Specifically, we address two questions: First, can we draw conclusions about the underlying drivers of technology diffusion by studying usage intensity? Second, what is the effect of high penetration of previous generations and competing networks on network usage intensity? Using an operator-level panel covering 41 countries with quarterly data over 6 years, we find that heterogeneity among adopters dominates network effects and that different technological generations are complements in terms of usage, but substitutes in terms of subscription.

With permission of Elsevier

Aside from major and minor histocompatibility antigens, genetic polymorphisms of various donor and host genes have been found to be risk factors for graft-versus-host disease and transplantation-related mortality (TRM). The heme oxygenase I (HO-I) protein has been implicated in regulating inflammatory response and has been described as a ßÂ"ßÂ"protective gene'' in solid organ transplantation. In humans, the promoter region displays length polymorphism due to a variable number of GT repeats. Individuals exhibiting 29 or fewer GT repeats express higher levels of HO-I on cellular stress compared with individuals with 30 or more GT repeats. We retrospectively analyzed length polymorphisms of 92 donor-host pairs undergoing allogeneic stem cell transplantation. Our findings demonstrate that mainly donor polymorphism leading to high expression of HO-1 (\30 GT repeats) on stress signals is associated with reduced overall survival, and that TRM is significantly increased in this group. This reduction in survival was most prominent when unrelated donors were used. Polymorphisms of the recipient HO-1 genes did not influence posttransplantation outcomes. We conclude that HO-1 polymorphism represents a new genetic risk factor for TRM and overall survival.

With permission of Elsevier