Forging Ahead

World-Class Research

Our researchers investigate a wide range of different questions, and the answers they come to are highly relevant for the business community and political decision makers. The authors of 2019’s most interesting studies were named “Researcher of the Month.”

Car or public transportation?

On average, Austrians spend over an hour a day commuting, but how do they make mobility-related decisions? Stefanie Peer from the Institute for Multi-Level Governance and Development investigated how travel times are valued based on different modes of transportation (private car, rail, local public transportation, bicycle, walking), time-related aspects (short- or long-term), and different groups of people. Her results showed that Austrians are more willing to pay for reduced travel times when travelling by car than with public transportation.

The study

“Valuation shows what people are prepared to pay to reduce travel time, giving them more time for other activities. Current studies show that when travelling conditions are comfortable, people are less inclined to pay more for shorter travel times than when conditions are uncomfortable.”
Stefanie Peer, Institute for Multi-Level Governance and Development

Do risky drivers seek higher insurance coverage?

Austrians drive around 13,900 kilometers every year. Depending on individual driver profiles, insurance companies offer many different types of insurance policies. In a current research project, Alexander Mürmann (Department of Finance, Accounting and Statistics) investigated which driving behaviors increase the risk of having an accident and whether people take their individual driving behavior into account when choosing their insurance policy. The researchers found out that frequent driving increases the risk of having an accident, but drivers nevertheless choose their insurance without regard to their driving behavior and their willingness to take risks.

The study

“A possible explanation is that we behave very differently when dealing with non-financial risks as compared to financial risks. If I’m driving carefully to avoid accidents, this doesn’t necessarily mean that I’ll also be taking out a high-coverage insurance policy to avoid financial losses – and vice versa.”
Alexander Mürmann, Department of Finance, Accounting and Statistics

Where does a sense of ownership come from?

We develop our sense of ownership very early in our lives, when we are still toddlers. But this type of ownership is not a legal concept. It’s a psychological mechanism that finds its purest expression in the word “mine.” WU Professor Bernadette Kamleitner from the Institute for Marketing & Consumer Research investigates how and for what we develop a sense of ownership. Her studies have shown that people tend to develop a sense of ownership especially for products with good ergonomics, because they can be controlled especially well.

The study

“If we feel that we can control something particularly well, that we literally have a good handle on it, we are likely to experience a stronger sense of ownership. As a consequence, people also tend to look after such things more carefully.”
Bernadette Kamleitner, Institute for Marketing & Consumer Research

Are internal auditors always objective?

In a recent project, Anne d’Arcy (Institute for Corporate Governance) investigated how internal auditors’ judgements change when they have to report to both the management and the supervisory board and when they are told to aim for different goals. The key finding: What is communicated to internal auditors before the auditing process has a great impact on how they evaluate processes.

The study

“Standard setters and legislators must bear in mind that adding an additional reporting line, for example from internal auditing to the supervisory board, creates conflicts between different objectives. Apart from the desired effects, this may also lead to unwanted side effects.”
Anne d’Arcy, Institute for Corporate Governance

Do donations really help?

Natural disasters often result in massive humanitarian crises, requiring immediate relief from aid agencies. Donors play a very important role, and respond especially well to fundraising campaigns for specific emergencies. Incident-specific, earmarked donations are not always the best way to help, however, according to studies conducted by Tina Wakolbinger (Institute for Transport and Logistics Management). Especially in the case of emergencies with a high level of media attention, agencies often receive more in earmarked funds than needed, which becomes a burden to the agency if they can’t be repurposed.

The study

“Donors who earmark their contributions for specific catastrophes rather than making general donations are often not helping as much as they think they are. Earmarked donations make the agencies more inflexible and often result in higher administrative costs.”
Tina Wakolbinger, Institute for Transport and Logistics Management

More women in the boardroom – but how?

Women continue to be underrepresented in upper-level management. In Austria, they make up only 4.9% of the management boards of listed companies. Heike Mensi-Klarbach from the Institute for Gender and Diversity in Organizations investigated the measures applied to increase the percentage of women in executive roles. The study showed that voluntary self-regulation doesn’t work in Austria without additional pressure. The credible threat of a statutory quota, however, did lead to an increase in the number of women in management positions.

“Since ‘hard’ quotas often result in resistance and attempts to circumvent them, they are not effective in bringing about long-term cultural changes on their own. For this reason, effective ‘soft’ measures can be a sensible alternative.”
Heike Mensi-Klarbach, Institute for Gender and Diversity in Organizations

The risks of company relocation

Tax benefits, higher dividends – changing the registered office of a company can bring many advantages. Often, however, moving the company’s registered office abroad can create disadvantages for minority shareholders. Martin Winner, Institute for Business Law, worked together with an international group of experts to identify risks for minority shareholders and gaps in the current legislation. They came to the conclusion that, in order to protect shareholders in the event of a relocation, minority shareholders should be given the option to leave with fair compensation.

“The legal issues involved are so complex that shareholders should be given the option of switching to the new legal system or leaving in exchange for a severance payment.”
Martin Winner, Institute for Business Law

What turns supervisors into talent scouts?

The success of every company depends on its employees. Division heads are in a key position to identify talent in a company’s employees. However, they can only fulfill this role if they evaluate employees’ performance appropriately. In her study, Isabella Grabner from the Institute for Strategic Management and Management Control found that division heads are most likely to review fairly and accurately if offered the prospect of career advancement.

“Our results show that those division heads who conducted the most differentiated performance reviews were rewarded with promotions in recognition of their role in talent management.”
Isabella Grabner, Institute for Strategic Management and Management Control

How does CETA work?

The CETA agreement fills around 1,600 pages. It aims to further develop international trade legislation in order to promote trade in goods, services, and investments between the EU and Canada, and to strengthen economic ties between these two players. Erich Vranes (Institute for European and International Law) investigated the complex legal questions resulting from its implementation. The researcher calls for more transparency in future negotiations for similar trade agreements, and for more comprehensive information for national parliaments. He would also like to see more legally binding rules in chapters that balance economic and non-economic interests, like environmental protection.

“According to the EU, agreements like CETA should serve as blueprints for future agreements with other countries. In this sense, these agreements carry great economic and geopolitical significance.”
Erich Vranes, Institute for European and International Law

The effects of Protectionism

The global financial crisis in the 1920s and 1930s was the most far-reaching economic event of the 20th century, and world production and global trade fell dramatically. Markus Lampe (Institute for Economic and Social History) investigated the effects of Great Britain’s changing import policies in the 1930s and what we can learn from the mistakes of the past in the age of Brexit. The results show clearly how drastic the effects can be if multilateral trade and equal market access opportunities are no longer guaranteed.

The study

“Our look at British history suggests that the dissolution of international trading systems and political unilateralism have real consequences that can contribute to national and international tensions.”
Markus Lampe, Institute for Economic and Social History

Does the ECB’s wording affect financial markets?

Eight times a year, the European Central Bank (ECB) sets key interest rates, which are announced in a press release and subsequent press conference. A study by Christian Wagner from the Institute for Finance, Banking and Insurance shows that not only the key rate itself but also the way the ECB communicates it has an impact on financial markets: A more optimistic tone on the part of the ECB is an indicator for more favorable economic developments.

The study

“We observed that future interest rate changes can be predicted quite accurately based on the tone of the ECB’s communications. In other words, the way in which the ECB communicates with the market allows us to draw conclusions about its future interest rate policies.”
Christian Wagner, Institute for Finance, Banking and Insurance

Calculating more reliable credit ratings

Ratings and reviews play an important role in the financial sector, where credit ratings provide crucial information for lenders. However, there is a veritable maze of different rating schemes that is hard to navigate. Kurt Hornik, Institute for Statistics and Mathematics, and his fellow researchers investigated how several different ratings can be combined to obtain a single result – a consensus rating. This research resulted in the development of a model that has been used as a basis for one of the central monetary policy mechanisms of the Eurosystem.

“One variant of these models, that we developed jointly with experts from the Austrian central bank (OeNB), has served as the basis of one of the key monetary policy measures of the Eurosystem for years: the provision of fresh capital to banks, where sufficiently high-quality loans the banks have awarded to business enterprises are accepted as collateral.”
Kurt Hornik, Institute for Statistics and Mathematics
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