The prize for the best scientific performance in 2017/2018 was awarded to Dr. Dominik Rehse for his paper “The Effects of Uncertainty on Market Liquidity: Evidence from Hurricane Sandy”, co-authored by Ryan Riordan, Nico Rottke and Joachim Zietz. In this paper, the researchers test whether uncertainty has adverse effects on market liquidity. Hurricane Sandy, which raged on the east coast of the USA in October 2012 and unexpectedly hit land near New York City, was thereby used as a source of uncertainty for empirical analysis. The paper examines in detail how the stocks of real estate companies with properties in the regions affected by the hurricane are traded on the New York Stock Exchange prior to the landfall in comparison to stocks of real estate companies who did not hold such properties. The findings showed considerably less trading activity as well as higher bid-ask spreads among those companies with properties in the areas affected by the hurricane, thus confirming the suspected negative effect of uncertainty on market activity. The prize-winning paper will soon be published in the Journal of Financial Economics.
The fact that uncertainty is a key factor that leads to and determines the course of economic and political crises has also become evident during the financial crisis of 2007/08. When explaining the jury’s decision, Claudia Diem from the ZEW Sponsors’ Association pointed out that against the background of the financial crisis, the paper published by Dominik Rehse and his co-authors is a highly relevant analysis from an economic policy perspective, and contributes to a better understanding of financial markets under uncertainty, putting economies in a better position to prepare for future events of uncertainty. According to Diem, another decisive factor for selecting the paper for the prize was its scientific excellence, which is reflected in the fact that it will be published in one of the leading journals of financial economics.
Sound Analysis of the State of Digitalisation
As a team of authors, the ZEW researchers Professor Irene Bertschek, Dr. Jörg Ohnemus, Dr. Thomas Niebel and Dr. Christian Rammer share the award for the best economic policy advising project at ZEW in 2017/2018. The prize-winning study “Monitoring Report DIGITAL Economy 2017” has been published annually since 2012 on behalf of the German Federal Ministry for Economic Affairs and Energy and provides important insights into the current state of digitalisation in Germany in comparison to other countries.
As Claudia Diem pointed out, the “Monitoring Report DIGITAL Economy 2017” is well-known among policymakers and is, for instance, regularly discussed at the German Digital Summit. Over the years, the Monitoring Report has played an important role in providing policymakers, economic actors, researchers as well as members of civil society with a solid information basis in the context of shaping the digital transformation.
Both prizes were presented during an event which took place within the framework of the lecture series “First-Hand Information on Economic Policy” at ZEW on 4 December 2018. The event was organised with the support of the ZEW Sponsors’ Association. In the future, the prize for the best scientific paper at ZEW and the prize for the best economic policy advising project at ZEW will be granted on an annual basis by the ZEW Sponsors’ Association. “I am very pleased about the committed support that the Sponsors’ Association has shown for the work of the researchers at ZEW with these two prizes. The reputation as well as the prize money associated with the award provide an additional incentive for our employees to continue to conduct research, publish and provide policy advice at a first-class level. I would like to extend my sincerest gratitude to the ZEW Sponsors’ Association and all its members for this great initiative,” said ZEW Director Thomas Kohl. Through their membership in the ZEW Sponsors’ Association, around 140 firms as well as private individuals support the work of ZEW. Among other things, the ZEW Sponsors’ Association provides funding for research projects and supports the organisation of lecture series with top-level speakers from the areas of politics, business, academia and civil society at ZEW.