Swiss Market Research Articles

Policy changes and the dynamics of capacity expansion in the Swiss electricity market

Capacity of supply is a crucial matter in electricity markets as it directly influences reliability of supply, price volatility and blackout risk. In this paper, we analyse the dynamics of capacity expansion in the Swiss electricity market and the impact of different policies such as nuclear phaseout and management of electricity exchanges – imports and exports – policies. This article develops the conceptualization model presented in [Ochoa, P., 2007b. Policy changes in the Swiss electricity market: a system dynamics analysis of likely market responses. Socio-Economic Planning Sciences 41 (4):336–349.]. We build a system dynamics model based on the dynamics of capacity expansion explained in the latter paper and present and analyse different scenarios. We conclude that international electricity exchanges are important for the Swiss market as they help to lower costs and to increase the income of the utility companies; however, we illustrate the need for explicit policies for managing imports and exports of electricity to avoid import dependence from neighbouring countries.

Trans fatty acid content of selected Swiss foods: The TransSwissPilot study

The objective of this study was to analyse the trans fatty acid (TFA) content of a selection of foods sold on the Swiss market in order to get an overview of the situation and to find indicators to assess the origins of TFA. 119 food items from different food groups were purchased in the city of Zurich and analysed for their TFA content with gas chromatography. TFA were detected in all but two samples and the content ranged from 0 to 29% of the total fat. Nearly 40% of the analysed samples had more than 2% TFA. The highest mean value was observed in the fine bakery products (6% TFA) and the lowest with the breakfast cereals (<0.4% TFA). Trans-C18:1 was the predominant TFA in all samples except for the plant oils, in which trans-C18:2 and trans-C18:3 isomers made up the bigger part of the total TFA content. An analytical distinction of the TFAs according to their origin seems possible when concomitantly considering the amounts of t11-C18:1, c9, t11-C18:2, and total TFA. The situation regarding the TFA content in Swiss food was similar to many other countries worldwide.

Assessing the Effects of a Road Surfacing Cartel in Switzerland

The last couple of years have seen an increasing interest in the evaluation of competition policy both in practice and in academia. With respect to the former, the Office of Fair Trading in the UK, for instance, recently started to estimate the ‘positive impact’ of ist activities on direct benefits to consumers. In academia, recent research shows an increasing interest in special topics such as the effectiveness of merger control, the effects of competition policy interventions or the robustness of certain methods to evaluate competition policy.Against this background, this paper assesses the impact of the detection of a hard-core cartel in the Swiss market for road surfacing on post-cartel competition. In addition to an investigation of supply-side factors, demand-side factors, and market prices, the paper also derives estimates of the economic effects of the decision. The results indicate that the detection of the cartel may have led to short-term price reductions; however, the persistent collusion-friendly industry structure forecloses larger and durable gains for the customers.With respect to the implications of the case study for general cartel policy, one improvement possibility would be to carry out screenings to identify potentially collusionfriendly industries by using a set of collusion factors. Subsequently, these suspicious industries should then be investigated more closely focusing on market structure, market behavior and market results, possibly in the form of ‘inquiries’ conducted by the UK Competition Commission. Such an approach would not only raise the probability to detect cartels directly but it would also create a signal for the firms in the respective industries that they are on a watch. Ideally, one of the companies becomes nervous enough to decide to apply for leniency.

The Impact of Institutional Investors on Corporate Governance: A View of Swiss Pension Funds in a Changing Financial Environment

Theories on corporate governance have developed in line with the development of the financial markets and the increasing power of institutional investors. Indeed, the financial markets' power can be measured by the ability of shareholders, and of institutional investors in particular, to influence businesses and their managers. A number of reforms have been implemented in several countries, Switzerland included, in order to strengthen shareholders' powers. Making specific reference to Swiss case studies, this paper aims to create a better understanding of the role of institutional investors in corporate governance. Indeed, Switzerland is paradoxical in that it is generally considered Rhenish, with banks and families taking a leading role in controlling big business (David et al. 2004; Windolf &amp; Nollert 2001), whilst developing a pension fund system which, since the mid-1980s, has attracted considerable funds and is still experiencing strong growth. How do these two approaches, traditionally at opposite ends of the spectrum as far as the subject's literature is concerned, reconcile themselves in the Swiss market?

Alpha insurance: A computational framework to measure hedging demands for active investors

The purpose of the paper is to develop the concept of portfolio insurance against active managers' stock selection risks. The insurance premium is estimated through the use of exotic options and the impact on investors' utility is analysed within a multi-moment efficient frontier framework. For illustration, the suggested methodology is applied to the Swiss Market Index and employed to estimate the hedging demands faced by investors when the portfolio choice problem is considered in a multi-period framework.

Bayesian estimation of a Markov-switching threshold asymmetric GARCH model with Student-t innovations

A Bayesian estimation of a regime‐switching threshold asymmetric GARCH model is proposed. The specification is based on a Markov‐switching model with Student‐t innovations and K separate GJR(1,1) processes whose asymmetries are located at free non‐positive threshold parameters. The model aims at determining whether or not: (i) structural breaks are present within the volatility dynamics; (ii) asymmetries (leverage effects) are present, and are different between regimes and (iii) the threshold parameters (locations of bad news) are similar between regimes. A novel MCMC scheme is proposed which allows for a fully automatic Bayesian estimation of the model. The presence of two distinct volatility regimes is shown in an empirical application to the Swiss Market Index log‐returns. The posterior results indicate no differences with regards to the asymmetries and their thresholds when comparing highly volatile periods with the milder ones. Comparisons with a single‐regime specification indicates a better in‐sample fit and a better forecasting performance for the Markov‐switching model.

Sensory descriptive analysis and consumer acceptability of selected Swiss goat and sheep cheeses

Production and processing of goat and sheep milk is a booming sector in the Swiss milk economy. To increase understanding of the acceptance of goat and sheep cheese by Swiss consumers, the Agroscope Liebefeld-Posieux Research Station ALP conducted a sensory profile analysis and a consumer test in a national cheese market. For the investigation, two typical samples of each type of cheese were selected, one with a more intense and one with a less intense animalic aroma. These samples were investigated by the trained sensory panel, and evaluated by 688 consumers. For both types of cheese, the sensory profile analysis indicated a significantly higher intensity of the goaty or sheepy flavours for the two animalic samples. However, this sensory difference is not recognised by the majority of consumers. In fact, consumers rated both samples as having the same intensity of goaty flavour in the case of the goat cheese and rating the less animalic sample as significantly more sheepy in the case of the sheep cheese. Despite the sensory lack of knowledge of the typical aromas, the less animalic cheese was preferred by over 70% of participants (in the case of goat cheese) and by over 80% (in the case of sheep cheese). Interestingly, the evaluation of participants’ responses when asked about their reasons for purchase emphasises the special flavour experience as the most important factor for the consumption of these products. Overall, these results clearly underline the discrepancy between lack of knowledge, prejudice, and yet curiosity of Swiss consumers towards goat and sheep cheese and provide important initial scientific findings for producers and sellers in this new Swiss market segment.

Pricing (Multi-) Barrier Reverse Convertibles

This paper examines the pricing of (multi-) barrier reverse convertibles in the Swiss market. These structured products with exotic characteristics have a knock-in feature and are usually specified as 'worst of' products. The daily closing prices of 522 products between July 2006 and August 2007 are compared to their theoretical values based on Monte Carlo simulations. This investigation takes in both the primary and the secondary market. In the primary market, the study reveals large implicit premiums in favor of the issuing banks. For the secondary market, the product life cycle turns out to be a decisive pricing parameter, as pricing errors clearly decrease during the product life cycle. The expectation of the issuers regarding the order flow might be an explanation for this phenomenon. This hypothesis is supported by our observation of declining liquidity during the life cycle. Moreover, we clearly observe differences in the pricing behavior of the various issuers in the primary market as well as across the life cycle.

Fast screening and quantitation of microcystins in microalgae dietary supplement products and water by liquid chromatography coupled to time of flight mass spectrometry

Cyanobacteria, commonly called “blue-green algae”, may accumulate in surface water supplies as “blooms” and may concentrate on the surface as blue-green “scums”. Some species of cyanobacteria produce toxins and are of relevance to water supplies and to microalgae dietary supplements. To ensure the safety of drinking water and blue-green algae products, analyses are the only way to determine the presence or absence of toxins. This paper shows the use of ultra performance liquid chromatography (UPLC) coupled to orthogonal acceleration time of flight (TOF) mass spectrometry for the detection and quantitation of microcystins. The method presented is very sensitive, simple, fast, robust and did not require fastidious clean-up step. Limits of detection of 0.1 μg L −1 in water and 0.1–0.2 μg g −1 in microalgae samples were achieved. Method performances were satisfactory and appropriate for monitoring of water and dietary supplements. The method was applied in routine to samples taken from Swiss market or buy on internet website. Among 19 samples, six showed the presence of microcystins LR and LA at harmful levels.

Current Trends and Challenges in Electronic Procurement: An Empirical Study

This paper presents results from a longitudinal study on the use of ICT for B2B-related business processes in large Swiss companies. In an empirical survey, 68 questionnaires were personally collected from procurement heads and subsequently analysed. The study was initiated by industry partners who wanted to gain more detailed knowledge about the maturity of e-procurement in the Swiss market. Based on an extensive literature review and previous empirical studies, we developed a research framework addressing strategic as well as operational issues. The findings show that reduction of purchase prices is the top priority when setting procurement goals. For 78.2% of the respondents IT makes an important contribution to successfully carrying out the procurement function. Nevertheless, these companies are striving for further optimization and improved process integration. Electronic exchange of invoices (e-invoicing) is a current key topic for over 70% of the companies. Procurement heads sense a lack of supplier involvement, which makes the realization of balanced B2B solution scenarios difficult. The study shows that IT, without doubt, plays a significant role in everyday procurement, but that the expectations of IT are rarely completely fulfilled.

Zelmac [tegaserod] is to be withdrawn from the Swiss market.

Zelmac [tegaserod] is to be withdrawn from the Swiss market.

Ultraviolet Emission Spectra of Sunbeds¶

It is well known that UV radiation contributes to the development of skin cancer. Exposure to solar radiation is predominantly responsible for the high incidence rate of skin cancer, but there are also indications that sunbeds are involved. The aim of the present investigation was to determine the UV emission spectra of sunbeds. It included the most common sunbed models, which cover more than 50% of the Swiss market. The UV emission spectra of sunbeds have special characteristics and are different from the sun spectrum, which can be seen in high-resolution spectral measurements. Sunbed emission spectra are similar to the sun spectrum in the UVB (280–320 nm) range but reach values 10 to 15 times higher in the UVA (320–400 nm) range. An average erythema-effective irradiance of 0.33 W/m2 was determined for sunbeds. This corresponds to a UV index of 13, which is significantly higher than the UV index of 8.5 of the high summer sun at noon at intermediate latitudes. The measurements were spread over the whole effective area of the sunbeds, and an inhomogeneous distribution of the irradiances with variations of up to 30% from the average value was found.

The outperformance of family firms: the role of variance in earnings per share and analyst forecast dispersion on the Swiss market

Recent studies provide empirical evidence that family firms are outperforming their non-family counterparts in terms of stock market performance. For the Swiss stock market we find that family firms indeed outperform their non-family counterparts after controlling for firm size and beta. In addition, our data shows that family firms display more stable earnings per share in contrast to their non-family counterparts. Furthermore we find that the variance of earnings per share positively affects analyst forecast dispersion. According to anomaly literature, lower analyst forecast dispersion has been found to induce higher excess return, which our data supports for the Swiss stock market. By linking variance of earnings per share, analyst forecast dispersion and stock performance we provide an insightful explanation for the excess stock market returns of family firms. In addition, our text extends the theory of dispersion effect with an additional empirical element, the variance of earnings per share.

Reducing energy consumption in road transport through hybrid vehicles: investigation of rebound effects, and possible effects of tax rebates

Hybrid powertrains are considered to be a promising method to raise the overall fuel efficiency of passenger cars. They are predicted to enter the automobile markets in increasing numbers in the near future. This paper investigates 2 aspects relevant to the promotion of hybrid vehicles as part of an energy reduction strategy. First, are hybrid cars accompanied by rebound effects, which counteract their increased fuel efficiency? Second, do tax rebates indeed lead to higher sales numbers? We present results from a survey conducted with all 367 buyers of hybrid second-generation Toyota Prius in Switzerland in the first 9 months after market entry (response rate, 82.6%). As control group, questionnaires were also sent to 250 Toyota Corolla (61% returned) and 250 Toyota Avensis (52%) buyers. Among other items, the surveys asked for the car being replaced, if any. Main results are that the increase in car size for hybrid car buyers was lower than both, the market trend and the control group. Increase in car size was lower for hybrid car buyers than for both control group and market trend. 6% of hybrid car purchases did not replace a previously owned vehicle (control group 3%, P = 0.05), the Swiss market average being 20%. Hence rebound effects could be identified neither for vehicle size nor for vehicle ownership. As an energy policy measure, hybrid vehicles are eligible for tax rebates in parts of Switzerland. We found evidence that these tax rebates indeed lead to significant higher sales. We present a rough cost estimate of such tax rebates as CO 2 abatement policy tool.

Problematik des Helminthenbefalls bei Hauswiederkäuern in der Schweiz: Aktuelle Perspektiven

Potent anthelmintics were introduced into the Swiss market several decades ago. Despite this, gastrointestinal nematodes (GIN), lungworms and the large liver fluke (Fasciola hepatica) can successfully inhabit Swiss ruminant farms. This is mainly due to a high reproductive capacity as well as very efficient survival strategies. In addition some species readily develop anthelmintic resistance. GIN-infections in young cattle are under comparatively good control. However, prophylactic measures are compromised where adult stock is also affected due to incomplete development of immune protection. Under these circumstances control measures must include all age groups. This results in fewer helminths in refugia thus may accelerate the development of anthelmintic resistance. This review aims to present a synopsis of the significance of the major helminth infections obtained on pasture by large and small ruminants in Switzerland. Currently available strategies for strategic helminth control are summarized and an outlook is given on new developments which might expand the spectrum of control measures relevant for veterinary practice in the future.

Modelling and Forecasting Dynamic VaR Thresholds for Risk Management and Regulation

The paper describes alternative methods of estimating Value-at-Risk (VaR) thresholds based on two calibrated models and three conditional volatility or GARCH models. The five models of volatility are used to estimate and forecast the VaR thresholds of an equally-weighted portfolio, comprising four financial stock indexes, namely S&P500, CAC40, FTSE100 a Swiss market index (SMI). On the basis of the number of (non-)violations of the Basel Accord thresholds, the best performing model is PS-GARCH, followed closely by VARMA-AGARCH, neither of which would lead to the imposition of any penalties. The next best performing threshold forecasts are given by the Portfolio-GARCH and RiskmetricsTM-EWMA models, both of which would have a penalty of 0.5. Not surprisingly, the worst forecasts are obtained from the standard normal method based on historical variances.

Bayesian estimation of the Gaussian mixture GARCH model

Bayesian inference and prediction for a generalized autoregressive conditional heteroskedastic (GARCH) model where the innovations are assumed to follow a mixture of two Gaussian distributions is performed. The mixture GARCH model can capture the patterns usually exhibited by many financial time series such as volatility clustering, large kurtosis and extreme observations. A Griddy–Gibbs sampler implementation is proposed for parameter estimation and volatility prediction. Bayesian prediction of the Value at Risk is also addressed providing point estimates and predictive intervals. The method is illustrated using the Swiss Market Index.

PVC plasticizers/additives migrating from the gaskets of metal closures into oily food: Swiss market survey June 2005

Foods with at least a few percent of free oil packed in glass jars with metal closures were analyzed for migration of additives, primarily plasticizers, from the gasket of the lid. One hundred and fifty-eight samples were collected in June 2005, i.e., some 10 months after the problem of excessive migration into oily food was communicated to the industry. In a first step, the composition of the additives in the gaskets was determined. Then the compounds found in the lid were measured in the jar content. Sixty-four percent of the gaskets contained epoxidized soy bean oil (ESBO) as principal plasticizer, 22% a phthalate, and 6% substantial amounts of di(2-ethylhexyl) adipate (DEHA). Concentrations in the food reached 1,170 mg/kg for ESBO, 270 mg/kg for diisononyl phthalate (DINP), 740 mg/kg for diisodecyl phthalate (DIDP), 825 mg/kg for di(2-ethylhexyl) phthalate (DEHP), and 180 mg/kg for DEHA. Further, elevated concentrations of plasticizers not authorized by the EU were found: diisononyl-cyclohexane-1,2-dicarboxylate (DINCH), 2-ethylhexyl palmitate and stearate, as well as epoxidized linseed oil (ELO). The few samples complying with the European rules contained little or well emulsified oil; some others were probably of very recent production (beginning of shelf life). It is concluded that there was still no lid reliably complying with the European rules (EU and national legislation).

The Valuation of Structured Products: Empirical Findings for the Swiss Market

This article analyses the valuation of 192 structured products without a capital guarantee. In contrast to similar studies, this investigation takes in both the primary and the secondary market. Its central element is a comparison of the implied volatilities of the options contained in the structured products with those of comparable EUREX options. Generally speaking, the results may well come as a surprise both concerning the scale of the phenomenon detected and its significance. Taken as a whole, the results provide grounds for assuming that certain inefficiencies exist on the Swiss market for structured products and that lead managers manage to exploit their quasi-monopolistic position in a rational manner.

New Evidence on the Announcement Effect of Convertible and Exchangeable Bonds

This study investigates the announcement and issuance effects of offering convertible bonds and exchangeable bonds using data for the Swiss and German market during January 1996 and May 2003. The analysis shows that announcement effects of convertible bonds and exchangeable bonds are associated with significantly negative abnormal returns. Unlike previous studies, it also investigates the effect of the market return of the announcement effect and finds that the negative abnormal returns are significantly more pronounced when previous market returns have been negative. Furthermore, we analyze the relation between the announcement effects and equity components by controlling for the equity signal sent to the market. We find the size of the equity component of an issue to have a strong influence on the announcement effect for convertible but not for exchangeable securities and offer an explanation for this difference.