the determinants of the management hierarchy evidence from italian plants abstract the paper aims to test some of the predictions of economic theory on the organizational architecture by looking at the relation between the depth of the management hierarchy of plants and plant and industry specific variables i test this relation through the estimates of an ordered logit econometric model on a sample of 438 italian manufacturing plants the findings show that the plant size the characteristics i e vintage and extent of use of the production and communication technology in use the plant s ownership status i e state versus private ownership and differences in the nationality of firms to which plants belong figure prominently in explaining the complexity of a plant s organization

does microcredit increase household welfare in the absence of microinsurance summary this study answers the question does a combination of microcredit and microinsurance improve the wellbeing of low income households we examine this challenge through heckman sample selection instrumental variable and treatment effect models the findings indicate that households using microcredit in combination with microinsurance derive significant gains in terms of welfare improvement microcredit may be good but its benefit to the poor is enhanced and sustained if the poverty trapping risks are covered with microinsurance to this extent combining microcredit with microinsurance will empower the poor to make a sustainable exit from poverty

agglomeration adjustment and state policies in the location of foreign direct investment in the united states abstract using u s state level data we show that agglomeration externalities influence the level of foreign invested capital in a location our empirical model allows the separation of agglomeration effects from the rate of capital stock adjustment two forces that previous research has conflated we estimate an agglomeration elasticity of investment of 0 11 to 0 15 with respect to same source country investment lower than previous estimates we also investigate the influence of state policies and find that although general investment incentives do not affect the location of fdi targeted policies such as unitary taxation and state foreign offices influence investment

the impact of microcredit on the poor in bangladesh revisiting the evidence abstractwe replicate and reanalyse the most influential study of microcredit impacts m m pitt s r khandker s the impact of group based credit on poor households in bangladesh does the gender of participants matter published in the journal of political economy 106 1998 that study was celebrated for showing that microcredit reduces poverty a much hoped for possibility though one not confirmed by recent randomised controlled trials we show that the original results on poverty reduction disappear after dropping outliers or when using a robust linear estimator using a new program for estimation of mixed process maximum likelihood models we show how assumptions critical for the original analysis such as error normality are contradicted by the data we conclude that questions about impact cannot be answered in these data

it s what you say not what you pay an experimental study of manager employee relationships in overcoming coordination failure we study manager employee interactions in experiments set in a corporate environment where payoffs depend on employees coordinating at high effort levels the underlying game being played repeatedly by employees is a weak link game in the absence of managerial intervention subjects invariably slip into coordination failure to overcome a history of coordination failure managers have two instruments at their disposal increasing employees financial incentives to coordinate and communication with employees we find that communication is a more effective tool than incentive changes for leading organizations out of performance traps examining the content of managers communication the most effective messages specifically request a high effort point out the mutual benefits of high effort and imply that employees are being paid well

the rise fall and rise again of industrial location theory m ccann p and sheppard s 2003 the rise fall and rise again of industrial location theory reg studies 37 649 663 in this paper we will argue that new academic fashions new international institutional arrangements new communications technology and new developments in data availability have all renewed the need for a redevelopment of analytical industrial location theory our paper will argue that the microeconomic foundations of industrial location theory must now be reconsidered in particular the methodological basis of traditional industrial location models needs to be reconciled with recent models of clustering the new economic geography literature and also more aggregate systemic levels of analysis we will argue that in order to do this it is necessary first to specify the transactions cost assumptions underlying these various approaches second to adopt broader definitions of spatial transactions costs and third to incorporate environmental characteristics within an orthodox loca

a retrospective impact evaluation of the tamil nadu empowerment and poverty alleviation pudhu vaazhvu project abstractcommunity based livelihood interventions which focus directly on increasing income and employment have become an increasingly important component of large scale poverty reduction programmes we evaluate the impact of a participatory livelihoods intervention the tamil nadu empowerment and poverty reduction pudhu vaazhvu project pvp using propensity score matching methods the paper explores the impact of pvp on its core goals of empowering women and the rural poor improving their economic welfare and facilitating public action we find significant effects of pvp on reducing the incidence of high cost debt and diversifying livelihoods we also find evidence of women s empowerment and increased political participation

globalization and its challenges rudi was born and grew up in krefeld germany he was an undergraduate at the university of geneva and completed his ph d at the university of chicago in 1971 which is where we met he was a student of robert mundell and both the subject matter the development of the mundell fleming model and the elegance and insights of his early work reflected mundell s influence he taught at the university of rochester and at the university of chicago before accepting an offer from mit in 1975

a theory of focal points the paper presents a theoretical framework that distinguishes between the strategic structure of a game the existential game and the way the players describe the game to themselves each player works with a private description of the game in which strategies are identified by labels labels are generated by a stochastic labeling procedure each player chooses a decision rule which for each possible private description picks one of the available strategy labels a criterion of collective rationality is applied to choices among decision rules the implications of collective rationality are explored for a range of games with different labeling procedures copyright 1995 by royal economic society

credit for what informal credit as a coping strategy of market women in northern ghana abstract this paper explores the use of informal credit as a strategy for managing risks by market women in northern ghana a broad concept of the costs of risk management strategies is introduced and encompasses both a time and monetary dimension based on qualitative data the analysis reveals that market women invest a considerable amount of time in maintaining complex networks of informal credit providers to ensure their access to credit once a shock occurs informal credit involves high transaction costs and prevents market women from growing out of poverty in the long term

efficient intra household allocations a general characterization and empirical tests the neoclassical theory of demand applies to individuals yet in empirical work it is usually taken as valid for households with many members this paper explores what the theory of individuals implies for households that have more than one member we make minimal assumptions about how the individual members of the household resolve conflicts all we assume is that however decisions are made outcomes are efficient we refer to this as the collective setting we show that in the collective setting household demands must satisfy a symmetry and rank condition on the slutsky matrix we also present some further results on the effects on demands of variables that do not modify preferences but that do affect how decisions are made we apply our theory to a series of surveys of household expenditures from canada the tests of the usual symmetry conditions are rejected for two person households but not for one person households we also show that income pooling is rejected for two person households we then test for our collective setting conditions on the couples data none of the collective setting restrictions are rejected we conclude that the collective setting is a plausible and tractable next step to take in the analysis of household behavior

the firm as a communication network this paper analyzes how organizations can minimize costs of processing and communicating information communication is costly because it takes time for an agent to absorb new information sent by others agents can reduce this time by specializing in the processing of particular types of information when these returns to specialization outweigh costs of communication it is efficient for several agents to collaborate within a firm it is shown that efficient networks involve centralization that individuals delegate tasks to subordinates only if they are overloaded and that the number of transits to the top tends to be equalized across individual information items

reorganization of firms and labor market inequality much of the history of economic enterprise has involved reaping the benefits from specialization of labor by dividing increasingly fragemented tasks among different employees as vividly described already by adam smith in his wealth of nations this development was greatly facilitated through the rise of tayloristic organizations where standardized inputs are processed to yield standardized outputs and where different functional tasks e g administration production marketing design are performed in different departments coordinated through a hierarchy of managers these organizations common in both the manufacturing and service sectors testified to the importance of specialization of work in production as well as organization this pervasive organizational structure is now in retreat charlie chaplin at the conveyor belt in the movie modern times is no longer the prototype worker with hindsight the wave of change began well over a decade ago it has accelerated in recent years and may be expected to gather even more pace over the next decade the organization of many firms in both the manufacturing and service sectors is being progressively restructured this process calls into question the need for extreme specialization by skill specific occupation creates demands for new combinations of skills and thereby leads to new patterns of wage inequality the restructuring process is characterized by a number of complementary features first the organizational structure of firms is becoming flatter the new structure is built around teams that report to the central management with few if any intermediaries second production processes are being transformed the application of computer technology flexible tools and programmable multi task equipment reduces returns to scale and permits greater production flexibility third the flow of information within firms has been revolutionized the introduction of computerized data systems permits more individualilzed treatment of employess and customers facilitates the decentralization of decision making and enables employees to perform multiple tasks and exploit complementarities among them fourth firms offer broader product lines in smaller quantities responding more readily to customers requirements customer participation in product design is growing and there is greater emphasis on product quality and ancillary services and fifth the nature of work is changing occupational boundaries are breaking down as workers engage in multi tasking and work rotation these various aspects distinguish the traditional tayloristic organizations from what we shall call holistic organizations recent technological advances and improvements in physical and human capital have undoubtedly played a central role in driving the process whereby tayloristic organizations restructure into holistic ones the increasing use of computers to transmit information within firms and the rising versatility and programmability of equipment have increased the complementarities across tasks e g production marketing customer service product design that a given employee can exploit furthermore the growing amounts of all round knowledge that has been disseminated through the education systems over the past few decades has made young people increasingly capable of performing multiple tasks this accumulation of human capital has also changed people s preferences away from the monotonous single purpose tayloristic jobs to the frequently more varied and stimulating holistic ones in what follows we examine the consequences of these developments for the reorganization of work the move towards multi tasking and the consequent break down of occupational barriers the transformation of job opportunities and the implications for inequality in the labor market

trade and empire we employ a new database of over 21 000 bilateral trade observations from 1870 1913 to assess the contemporaneous effects of empire on trade our analysis shows that belonging to an empire roughly doubled trade relative to those countries that were not part of an empire the use of a common language the establishment of currency unions the monetisation of recently acquired colonies and the establishment of preferential trade agreements and customs unions help to account for the observed increase in trade associated with empire

cheap talk coordination and entry we show how costless nonbinding nonverifiable communication cheap talk can achieve partial coordination among potential entrants into a natural monopoly industry where the payoffs are qualitatively like the battle of the sexes the analysis would apply equally in other economic situations with such payoffs for example bargaining under complete information or choosing compatibility standards while cheap talk helps achieve asymmetric coordination in a symmetric mixed strategy equilibrium it cannot achieve complete coordination if the game involves even a small amount of conflict

institutions transaction costs and entry mode choice in eastern europe the process of change from a centrally planned system to a market economy generates an institutional framework that is only partially reformed and therefore inconsistent and unstable this leads to high transaction costs for economic agents multinational enterprises entering transition countries have to adapt their strategies to the local institutions and reduce exposure to highly imperfect markets this paper analyzes how the costs of organizing business in transition environments influence entry mode choice the empirical results show that host country institutions in transition economies have an impact on the choice of entry modes moreover different mechanisms determine the internalization of managerial and technological knowledge

communication between rational agents abstract conventional game theoretic solution concepts never guarantee meaningful communication in cheap talk games i define a solution concept which does guarantee communication in some games i assume full rationality without imposing equilibrium conditions but add a natural behavioral assumption about how agents use language agents have a propensity to speak the truth and to believe others speak the truth but use the game s strategic incentives to check whether such behavior and beliefs are rational i also define and prove the existence of an equilibrium version of the concept and present examples where its predictions seem more natural than farrell s neologism proof equilibrium

globalization and location choice an analysis of us multinational firms in 1980 and 2000 in this paper we examine foreign location choices of the top 100 us multinational corporations mncs in 1980 and 2000 we first ask whether there has been a change in mnc foreign location choice in this two decade period second we explore the underlying reasons of location change by focusing on country level factors accounting for firm industry and regional level explanations our findings suggest first that the extent of mncs activities around the globe is more extensive than assumed by regionalists arguments and well beyond ohmae s triad but still less widespread than claimed by the globalists the two main traditions within the globalization regionalization debate second we uncover an interesting de location pattern in this period third we develop an integrative framework where both economic and institutional cultural arguments are shown to influence mncs foreign location choice in different ways we conclude with a discussion of our findings and provide suggestions for future research

the ethical wealth of nations michael porter argues that some nations manifest a competitive advantage deriving from key elements of their economic structure some nations are thus disposed by structure to possess what porter calls a competitive advantage of nations porter 1990 in this paper i examine the prospect of an ethical advantage of nations and in particular of a set of advantages that extend far beyond the simple dimension of trust so often discussed i consider further how such a range of ethical features would be structured and what the implications of those features would be three conclusions are reached 1 morality may create economic advantages for nations in ways that extend beyond the notion of an idealized market 2 in order for ethics to drive economic advantage ethical concepts must rise to the status of intrinsic value and 3 if claims for national ethical success factors are true then nations should attend to the issue of moral education

some macro data on the regionalisation globalisation debate a comment on the rugman verbeke analysis this paper critiques an earlier contribution by rugman and verbeke 2004 and it does so by considering the global distribution of foreign direct investment fdi it also adds several new dimensions to the regionalisation globalisation debate noticeably by i the incorporation of inward multinational enterprise mne activity ii evaluating changes in the geography of fdi between 1990 and 2003 and iii the introduction of the concept of revealed investment comparative advantage rica of countries and regions while broadly supporting the findings of rugman and verbeke our paper shows that much of the explanation for the regional concentration of fdi and mne activity reflects that of the gross domestic product gdp and trade of the countries concerned rather than any distinctive strategy on the part of investing firms

culture and international business recent advances and their implications for future research the paper provides a state of the art review of several innovative advances in culture and international business ib to stimulate new avenues for future research we first review the issues surrounding cultural convergence and divergence and the processes underlying cultural changes we then examine novel constructs for characterizing cultures and how to enhance the precision of cultural models by pinpointing when cultural effects are important finally we examine the usefulness of experimental methods which are rarely used by ib researchers implications of these path breaking approaches for future research on culture and ib are discussed

why firm size matters investigating the drivers of innovation and economic performance in new zealand using the business operations survey abstractthe performance of the new zealand nz economy is something of an enigma although ranked one of 144 countries for four important growth fundamentals nz is middle of the pack when it comes to economic growth productivity and process innovation using four iterations 2005 2007 2009 and 2011 of the business operations survey this research seeks to shed some new light on this conundrum by using a multivariate probit regression mvprobit approach applied to pooled samples in excess of 22 000 unit record observations of nz firms the results suggest that factors including firm size high perceived quality investment research and development rd while many external issues such as those related to geography market structure business environment have little influence at the firm level innovations in nz are highly dependent on the fi

location and the multinational enterprise a neglected factor this article first traces the changing world economic scenario for international business over the past two decades and then goes on to examine its implications for the location of foreign direct investment and multinational enterprise activity it suggests that many of the explanations of the 1970s and early 1980s need to be modified as firm specific assets have become mobile across natural boundaries a final section of the article examines the dynamic interface between the value added activities of multinational enterprises in different locations

an evolutionary approach to understanding international business activity the co evolution of mnes and the institutional environment this paper examines the co evolution of mne activities and institutions external and internal to the firm we develop a theoretical framework for this analysis that draws on the more recent writings of douglass north on institutions as a response to complex forms of uncertainty associated with the rise in global economic interconnectedness and of richard nelson on the co evolution of technology and institutions we link historical changes in the character of mne activities to changes in the institutional environment and highlight the scope for firm level creativity and institutional entrepreneurship that may lead to co evolution with the environment we argue that the main drivers for institutional entrepreneurship are now found in the increasing autonomy of mne subsidiaries thus mne agency derives from more decentralized forms of experimentation in international corporate networks which competence creating nodes of new initiatives can co evolve with local institutions unlike most other streams of related literature our approach connects patterns of institutional change in wider business systems with more micro processes of variety generation and experimentation within and across individual firms this form of co evolutionary analysis is increasingly important to understanding the interrelationships between mne activities and public policy

complementarity and cumulative learning effects in early diffusion of multiple technologies this paper concentrates on the contextual diffusion of flexible automation production and design engineering technologies in the italian metalworking industry the authors use duration data analysis with explanatory covariates to point out the role of complementarities between the technologies examined and learning by using effects matured with experience of previously available technologies in shaping diffusion paths the impact of industry and plant specific control variables as well as that of the stock of previous adopters on adoption probabilities is also taken into account in addition the authors analyze duration versus calendar time dependence of adoption probabilities copyright 1995 by blackwell publishing ltd

microfinance and gender empowerment in this paper we develop a theoretical model of household production bargaining and credit to analyse how access to microcredit affects intra household decision making and welfare and identify conditions under which female household members are most likely to benefit we show that consistent with ethnographic accounts of the impact of microcredit programmes on poor households access to loans can lead to a variety of outcomes for intra household decision making and welfare depending on initial conditions and that in some instances women borrowers may experience a decline in welfare we identify two instances in which a woman is most likely to benefit when there is scope for investing the loan profitably in a joint activity and when a large share of the household budget is devoted to household public goods

toward an economic theory of leadership leading by example this paper explores leadership within organizations leadership is distinct from authority because following a leader is a voluntary rather than coerced activity of the followers this paper considers how a leader induces rational agents to follow her in situations when the leader has incentives to mislead them copyright 1998 by american economic association

some stylized facts on organization and its evolution abstract there is a striking difference between the large number of theoretical papers on firm organization and the lack of quantitative empirical evidence if on the one side economists are increasingly concerned with organization of firms on the other side organization still remains an ambiguous concept hardly analyzed empirically in this paper we develop a new empirical methodology based upon business history and previous theoretical works which allows us to describe some aspects of the organization of firms in quantitative terms this approach is instrumental to analyzing the hierarchical structure and the allocation of decision making activities in a sample composed of 438 italian metalworking plants we also study the dynamics of firm organization in the period 1975 1997 the results of the analysis show that the static choice of the organizational form crucially relies upon the loss of control phenomenon they also illustrate that the dynamics of hierarchical structure follows an inertial process characterized by incremental adjustments lastly both the organization of firms and more interestingly its evolution differ from one category of firms to another depending crucially on firm size

is knowledge power knowledge flows subsidiary power and rent seeking within mncs in recent years as multinational corporation mnc subsidiaries have become more closely linked to international networks their knowledge intensity has risen and some of their r d has gained a more creative role simultaneously and often connectedly many subsidiaries have acquired considerable strategic independence in all aspects of their operations and therefore are able to exercise considerable intra firm bargaining power to influence the distribution of the firm s resources in this context we suggest that intra mnc knowledge flows are a key determinant of subsidiary bargaining power we argue that subsidiary managers can exploit such power to pursue their own ends such rent seeking behavior is implicit in much of the literature on managerialism but our analysis suggests that such behavior can now occur in headquarters subsidiary and subsidiary subsidiary relations thus subsidiary strategic independence designed to enhance the competitiveness of outputs market knowledge and inputs asset seeking and learning can be corroded when the pursuit of subsidiary objectives encourages rent seeking empirical analysis of a sample of high technology subsidiaries in the uk provides strong support for the theory we examine several avenues whereby the incentives of units within the mnc can be aligned

determinants of the internationalization of regions the role and effectiveness of public policy measures banno m piscitello l and varum c determinants of the internationalization of regions the role and effectiveness of public policy measures regional studies this paper assesses the role of public policy measures on outward internationalization of regions by including financial and non financial incentives among the determinants of the international competitiveness of regions it is found that the former are important to enhance their active internationalization but that variables related to the knowledge and competence base of regions are even more so financial incentives related to equity participation as well as non financial incentives related to the provision of information come out highly significant in stimulating outward internationalization the empirical analysis is conducted for the twenty italian nuts 2 regions over the period 2003 2008

the impact of microfinance on energy access a case study from peripheral districts of lome togo this study seeks to understand the impact of microfinance on energy access in the peripheral districts of lome in togo we use descriptive statistics multiple regression propensity score matching

incentives and loss of control in an optimal hierarchy this paper studies incentives and loss of control in a hierarchy model which combines and generalizes the models of williamson calvo wellisz and keren levhari in our model of the hierarchy the levels of effort from managers and workers the wage scales the span of control and in particular the total number of tiers are all endogenous using optimal control techniques we show that in the optimal hierarchy the wage scales and effort levels decrease as one moves down the hierarchy as the hierarchy expands with no technological progress workers exert less effort and are paid less top managers work harder and are paid more and the wage distribution becomes increasingly skewed

internationalization in the information age a new era for places firms and international business networks the new techno economic paradigm of the information age has brought about new structures and processes in international business ib in this article we examine the changing nature of the competitive advantages of places the competitive advantages and strategies of firms and the governance structure of ib networks in what has also been called the third industrial revolution these three areas of change in ib activities can be mapped respectively to the location l ownership o and internalization i advantages of the eclectic paradigm we interpret these oli factors as dynamic constructs in order to depict analytically the shifts in the ib environment and their implications for ib

asset exploitation versus asset seeking implications for location choice of foreign direct investment from newly industrialized economies this study examined several hypotheses regarding the location choice of foreign direct investment from newly industrialized economies nies using a sample of 328 taiwanese firms in the analysis this study found that the firms motivations had a significant impact on the choice of their investment location developed countries vs less developed countries yet this impact was moderated by the capabilities that the firms possessed the results suggest that both asset exploitation and asset seeking aspects of investments are predictive of the nie firms location choice of investment

coordination organizational boundaries and fads in business practices management literature focuses on two modes of coordination formal and informal structures informal structure grants significant discretion to individual actions yet two impediments are related to such flexibility those created by opportunism and those created by convergent expectations impediments arising from convergent expectations exist when the expectations of all members of an interdependent system are not properly aligned we use non cooperative game theory to provide a foundation for the study of convergent expectations we argue that the incentive to free ride on the contributions of others is not a necessary condition for generating a lack of convergent expectations and apply the issue of convergent expectations to both the organizational issues of optimal group and firm boundaries and to the role of managerial practices such as total quality management tqm building on research from organization theory social psychology and game theory the paper ties the idea of convergent expectations to the grouping dilemma of the trade off between higher coordination within groups and lower coordination between groups we argue that this grouping dilemma can serve as a basis for determining the actual boundaries of both groups in organizations and the organization itself examining the role of fads in business practices we conclude that however suspect their underlying value as decision aids may be these practices can serve as useful coordination mechanisms

the firm as a nexus of treaties part 1 knowledge its acquisition sharing and or asymmetry the participatory generation of information rents and the theory of the firm masahiko aoki common knowledge and the co ordination of economic activities jacques cremer profit sharing information and employment matti pohjola part 2 vertical integration and the strategic management of the enterprise what is vertical integration michael h riordan vertical integration transaction costs and learning by using kurt lundgren the firm as a nexus of internal and external contracts torger reve part 3 issues of labour organization the viability of worker ownership an economic perspective on the political structure of the firm henry hansmann intellectual skill and the role of employees as constituent members of large firms in contemporary japan kazuo koike the implicit contract for corporate law firm associates ex post opportunism and ex ante bonding robert h mooking part 4 finance and the political structure of the firm capital structure as a mechanism of control a comparison of financial systems erik berglof long term contracts in financial markets hakan lindgren the principle of external accountability in competitive markets herbert gintis union militancy and plant designs kar ove moene can transaction cost economics explain trade associations marc schneiberg and j rogers hollingsworth

precedent transfer in experimental conflict of interest games abstract in this paper i use simple coordination games to examine the process under which precedents or past equilibrium experiences transfer across games i study a 3 player conflict of interest game that possesses two focal equilibria an equal payoff equilibrium and a coalitional equilibrium the social convention of equal sharing is not sufficiently powerful to select the equal payoff equilibrium however after subjects develop homegrown experience playing the equal payoff equilibrium in an analogous 2 player game they are significantly more likely to select the action associated with the equal payoff equilibrium however surprisingly they are also much more likely to select the action associated with the coalitional equilibrium using expectations data also collected in the experiment i speculate on the reasons for this latter effect

reappraising the eclectic paradigm in an age of alliance capitalism this article discusses the implications of the advent of alliance capitalism for our theorizing about the determinants of mne activity in particular it argues that due to the increasing porosity of the boundaries of firms countries and markets the eclectic or oli paradigm of international production needs to consider more explicitly the competitive advantages arising from the way firms organize their inter firm transactions the growing interdependencies of many intermediate product markets and the widening of the portfolio of the assets of districts regions and countries to embrace the external economies of interdependent activities

do people play nash equilibrium lessons from evolutionary game theory evolutionary game theory provides an answer to two of the central questions in economic modeling when is it reasonable to assume that people are rational and when is it reasonable to assume that behavior is part of a nash equilibrium and if it is reasonable which equilibrium the traditional answers are not compelling and much of evolutionary modeling is motivated by the need for a better answer evolutionary game theory suggests that in a range of settings agents do eventually play a nash equilibrium moreover evolutionary modeling has shed light on the relative plausibility of different nash equilibria

microeconomics norms and rationality a divergence of views among microeconomists in general and game theorists in particular regarding the explanatory objectives of microeconomic theory has become apparent in recent years this divergence concerns most fundamentally the question whether institutions legal or customary rules or social norms are to be classified among the endogenous as opposed to the exogenous variables in the framework of microeconomic analysis the majority of economists are probably agnostic or ambivalent on this question not having confronted or not having had to confront the issue in their own work many have sidestepped it by treating institutions as immutable or by restricting their analyses to a given rule regime but rules do vary and change and among those who are concerned with studying variation in institutions two diverging views are increasingly identifiable sometimes coexisting even within the writings of the same author the first sees game theory and microeconomic theory in general as an analytical device useful for considering the comparative incentive features of and corresponding outcomes associated with different institutional regimes regimes that might be changed in one s capacity as a policymaker or that have varied in fact as the result of differential historical development in different regions the second position accepts this statement of the objectives of microeconomic theory vis avis institutions for the short run but takes it as the ultimate task of

corporate social responsibility in the multinational enterprise strategic and institutional approaches what is the relationship of global and local country specific corporate social responsibility csr to international organizational strategy applying the strategic logic of the bartlett and ghoshal typology to the realm of csr multinational firms should respond to pressures for integration and responsiveness from salient stakeholders however an institutional logic would suggest that multinational firms will simply replicate the existing product market organizational strategy multidomestic transnational global in their management of csr these alternative approaches are tested with a survey instrument sent to mnes operating in mexico the results of this study are consistent with the proposition that institutional pressures rather than strategic analysis of social issues and stakeholders are guiding decision making with respect to csr we develop implications for mne management and research as well as public policy

financial inclusion gender dimension and economic impact on poor households summary we examine the question in the context of gender dimension what is the evidence of the impact of the financial inclusion programs on poor households represented by women relative to that represented by men by constructing a good counterfactual and comparison group we employ the difference in difference estimator approach with panel least squares and generalized methods of moments using standard errors for a robust analysis we notice that income growth cagr net of inflation effect was 8 40 for women as against 3 97 for men indicating that the gender of participating poor undoubtedly affects the outcomes of these programs

the electronic mail game strategic behavior under almost common knowledge the paper addresses a paradoxical game theoretic example which is closely related to the coordinated attack problem two players have to play one of two possible coordination games only one of them receives information about the coordination game to be played it is shown that the situation with almost common knowledge is very different from when the coordination game played is common knowledge

why micro credit may leave women worse off non cooperative bargaining and the marriage game in south asia abstract micro credit programmes targeting women continue to grow in south asia although research suggests that wives frequently hand over loans to their husbands women may also be unable to control the income generated by micro enterprises this article presents an intra household bargaining model explaining these findings and showing how credit may leave women worse off while benefiting men this game theoretic model also shows why a woman might rationally choose to give her loan to her husband even though she does not expect to benefit and knows he may not repay finally the article identifies the conditions necessary for micro credit to benefit women

the mnc as an agent of change for host country institutions fdi and corruption most empirical research examines how the institutional environment of corruption shapes the behavior of multinational corporations mncs in this study we would like to highlight the other side of the picture how the presence of mncs may shape the institutional environment of corruption over time we propose three avenues through which the mncs may have an impact on its host institutions regulatory pressure effect demonstration effect and professionalization effect based on extensive data on foreign direct investment and corruption for a large sample of countries over the last 30 years the empirical results are generally consistent with our hypothesis such findings provide a glimmer of hope for the future of the host country where corruption is prevalent

do managers behave the way theory suggests a choice theoretic examination of foreign direct investment location decision making many empirical examinations of foreign direct investment location choice have relied on the use of secondary data and surveys on the choices made by firms about the form and location of overseas investment these studies have two inherent and related problems first they rely solely on the location choices made by different firms and assume that the domains of possible options considered were the same second there is an assumption about the rules used by firms to make these decisions yet the decisions are made by boundedly rational managers after reviewing the literature this study examines managers choices about foreign investment location through the use of structured experimentation the results show that in creating sets of investments to consider managers appear to follow fairly rational rules however the choice of actual investments appears less aligned to traditional models

does the internet defy the law of gravity abstract we show that gravity holds in the case of digital goods consumed over the internet that have no trading costs therefore trade costs cannot fully account for the effects of distance on trade in particular we show that americans are more likely to visit websites from nearby countries even controlling for language income immigrant stock etc furthermore we show that this effect only holds for taste dependent digital products such as music games and pornography for these a 1 increase in physical distance reduces website visits by 3 25 for non taste dependent products such as software distance has no statistical effect

over indebtedness in microfinance an empirical analysis of related factors on the borrower level summary this paper analyzes the over indebtedness of microborrowers in ghana from a customer protection perspective it measures over indebtedness as a subjective indicator based on loan related sacrifices that borrowers report it finds that male microborrowers are more likely to be over indebted so are borrowers with adverse economic shocks low returns on investment and non productive loan use over indebtedness is lower for borrowers with good debt literacy general financial literacy and numeracy seem insufficient to reduce over indebtedness the paper details the relationship of the above factors to the specific sacrifices borrowers make and suggests that policy measures address the full complexity of the over indebtedness phenomenon

empowering women with micro finance evidence from bangladesh abstract this article examines the effects of men s and women s participation in micro credit programs on various indicators of women s empowerment using data from a special survey carried out in rural bangladesh these credit programs are well suited to studying how gender specific resources alter intrahousehold allocations because they induce differential participation by gender through the requirement that only one adult member per household can participate in any micro credit program empowerment is formalized as an unobserved latent variable reflecting common components of qualitative responses to a large set of questions pertaining to women s autonomy and decision making power the empirical methods are attentive to various sources of endogeneity and the results are consistent with the view that women s participation in micro credit programs helps to increase women s empowerment the effects of male credit on women s empowerment were generally negative

the effect of natural space on nearby property prices accounting for perceived attractiveness this paper estimates the effect of attractive natural space on dutch residential property prices we operationalize attractive natural spaces by combining land use data with unique data on the perceived attractiveness of natural spaces in our main results the effect of attractive natural space on property prices falls from 16 0 for properties within 0 5 km to 1 6 for properties up to 7 km away our findings advance existing hedonic studies by verifying that economic benefits of living near natural space extend over a larger distance this has important implications for public policy regarding investment in natural space near residential areas jel h41 q51

bounded rationality indeterminacy and the theory of the firm two issues have become increasingly apparent in attempts to apply the prevailing notions of economic rationality to the theory of the organisation of business firms the first goes under the rubric of bounded rationality this is hardly a new idea and has been forcefully brought to our attention in the work of simon and others although awareness of the problem in economics goes back at least to clark i9i8 i shall try to provide a more detailed taxonomy of bounded rationality than is usually done in particular it is important to distinguish between i costly rationality like the costs of observation communication and even computation that require only an extension of the standard savage paradigm and 2 truly bounded rationality like not knowing the implications of everything that one knows which as far as i know goes far beyond the savage paradigm the second issue which i shall call indeterminacy arises in attempts to apply the theory of strategic games to models of organisations namely one often faces a very large multiplicity of solutions which significantly weakens or even destroys the predictive power of the theory by solution i mean here the socalled non cooperative equilibrium usually associated with the names of auguste cournot and john nash and extended and refined byjohn harsanyi reinhard selten and others to cover games in which the players have incomplete information although indeterminacy can arise even in static games with complete information it seems to be especially prevalent in dynamic games and or games with incomplete information both of these issues have profound implications for the organisation of the firm in discussions of this topic it has become commonplace to set up the straw figure of the firm as a black box mysteriously choosing production and investment plans to maximise profits it is true that there are still undergraduate price theory textbooks that present this picture but economists have long been familiar with the phenomenon of the separation of ownership and management at least since the publication of the book by berle and means i932 if not before in fact adam smith had some trenchant comments on it i776 pp 264 5 this phenomenon is also referred to as the separation of ownership and control see fama and jensen i983 today one is likely to see this analysed in terms of the principal agent model with the owner s cast as the principal and the manager s as the agent

the economics of convention c onventions regulate much of economic and social life yet they have received surprisingly little attention from economists by a convention we mean a pattern of behavior that is customary expected and self enforcing everyone conforms everyone expects others to conform and everyone has good reason to conform because conforming is in each person s best interest when everyone else plans to conform lewis 1969 familiar examples include following rules of the road adhering to conventional codes of dress and using words with their conventional meanings conventions with direct economic implications include species of money and credit industrial and technological standards accounting rules and forms of economic contracts indeed it would scarcely be an exaggeration to say that almost all economic and social institutions are governed to some extent by convention the main feature of a convention is that out of a host of conceivable choices only one is actually used this fact also explains why conventions are needed they resolve problems of indeterminacy in interactions that have multiple equilibria indeed from a formal point of view we may define a convention as an equilibrium that everyone expects in interactions that have more than one equilibrium the economic significance of conventions is that they reduce transaction costs imagine the inconvenience if whenever two vehicles approached one another the important exceptions are sugden 1986 and ullman margalit 1977 the interested reader might also refer to the symposium on social norms that appeared in the fall 1989 issue of this journal with articles by sugden 1989 and elster 1989

globalization countries cities and multinationals mccann p and acs z j globalization countries cities and multinationals regional studies this paper explores the relationship between the size of a country the size of its cities and the importance of economies of scale in the modern era of globalization in order to do this it integrates three different literatures namely the literature on the optimal size of a country the literature on historical processes of urbanization and the performance of cities and the literature on the role of multinational firms in the global economy using an economic geography perspective but looking at these issues through the lens of economic history it is demonstrated that the importance of agglomeration effects and in particular relationship between city size and the prosperity of the nation state has changed over the different eras of globalization in earlier eras of globalization the importance of agglomeration was represented by a fairly simple relationship between the scale of the city and the scale

impact of access to credit on labor allocation patterns in malawi summary this paper uses data from the malawi financial markets and household food security survey to examine the impact of gendered access to credit on labor allocation patterns within the household the paper corrects for potential endogeneity of access to credit in the estimations access to credit relies on the credit limit concept thus an individual has access to credit from a particular source if he she is able to borrow a positive amount from that source results suggest that the impact of access to credit depends upon both the gender of the recipient and whether it is formal or informal credit

location and the multinational enterprise john dunning s thoughts on receiving the journal of international business studies 2008 decade award a retrospective by john h dunning on location and the mne written in the form of responses to questions posed by rajneesh narula in an interview recorded at the university of reading which was shown at the jibs decade award session at the aib annual meetings in milan june 2008

the demand for monitoring technologies the case of trucking this paper examines the demand for on board computers in trucking distinguishing between their incentive and resource allocation improving capabilities i find that monitoring s incentive benefits are high when perquisite taking is attractive to drivers driver effort is important and verifying drivers actions to insurers is valuable these results are consistent with agency theory and suggest that networking applications will raise the productivity and pay of difficult toevaluate workers i also find that monitoring s benefits are disproportionately resource allocation related when managerial decisions are least constrained this suggests that networking applications monitoring capabilities raise the returns to delegation when resource allocation decisions are routine and lower them when they are not

human capital and fdi inflow an assessment of the african case summary this study assesses the role of human capital hk on fdi inflows to sub saharan africa it uses panel data for the period 1980 2012 to asses if changing skill needs influence fdi inflows several measures of hk are used to assess whether the quality of labor explains fdi flows over the study period various versions of an fdi model were estimated and the results show that all measures of hk have a significant influence on fdi as are the traditional variables there is no evidence of the increasing importance of hk on fdi over time probably reflecting the type of fdi flowing into ssa

impact of microcredit on borrowers expenditures a fuzzy regression discontinuity design approach abstractthis article uses the data from 69 villages in bangladesh to estimate the effect of participation in microcredit programmes on household expenditures a regression discontinuity design rdd is used to identify the credit effect our results show heterogeneous treatment effect on different types of expenditures we show that access to credit reduces per capita expenditure on durable goods such as kitchen equipment furniture repair and maintenance of house and increases the expenditure on per school going child we also show insignificant impact of access to credit on non durable goods and health care recreation and gifts interestingly our results indicate a positive impact of microcredit on village level expenditures

probing theoretically into central and eastern europe transactions resources and institutions since the 1990s central and eastern europe cee has provided unique societal quasi experiments which represent opportunities to test the applicability of existing theories in international business and management studies and to develop new ones specifically three lines of theorising have been advanced 1 organisational economics theories 2 resource based theories and 3 institutional theories for each of these theories we discuss how they contribute to the understanding of key issues such as entry strategies of foreign investors restructuring strategies of local incumbents and entry and growth strategies of entrepreneurs on this basis we assess how cee research has influenced the overall trajectories of theory development cee research has in particular highlighted the importance of contextual influences such as institutions thus scholars have aimed at incorporating institutions into theories such as organisational economics theories and resource based theories and advancing an institution based view of business strategy as a complementary perspective we outline how future research in cee and other emerging economies may advance this research agenda further

high noon for microfinance impact evaluations re investigating the evidence from bangladesh recently microfinance has come under increasing criticism raising questions of the validity of iconic studies which have justified it such as pitt and khandker chemin applied propensity score matching to the pitt and khandker data finding different impacts but does not disaggregate by gender of borrower we first replicate chemin and extend his analysis in two ways we test the robustness of propensity score matching results to selection on unobservables using sensitivity analysis and we investigate propensity score matching estimates of impacts by gender of borrowers the mainly insignificant impacts of microfinance differ greatly by gender of borrower but are all vulnerable to selection on unobservables we are therefore not convinced that the relationships between microfinance and outcomes are causal with these data

integrating finance into global production networks coe n m lai k p y and wojcik d integrating finance into global production networks regional studies while successful in its aim of globalizing regional development the global production network gpn approach has thus far paid less attention to the role of finance in the dynamics of the global economy and regional development this lacuna is significant as finance is arguably even more globalized and networked than production to address this gap the paper distils the concept of the global financial network gfn from financial geography and related scholarship with advanced business services world cities and offshore jurisdictions at the core interactions between the gpn and the gfn are discussed focusing on the financing and financializing of gpns and the co evolution of globalization and financialization integrating finance into gpn research entails more than a simple extension of the approach it would also enrich it conceptually and enable it methodologically and empirically

the location of overseas production and production for export by u s multinational firms abstract the location of overseas manufacturing production is influenced by common factors that operate in all industries notably proximity to the united states and to other markets within industries opposites attract low wage and low capital intensity parents choose high wage countries production for export is attracted by large internal markets in host countries economies of scale in production presumably make large markets economical as export bases another factor is high trade propensities of host countries u s firms tend to export from high wage countries but labor cost is not in general a major influence on the location of export production

comparing capitalisms understanding institutional diversity and its implications for international business this paper examines the role of institutional analysis within the field of international business ib studies within ib institutions matter but the view of institutions tends to be thin utilizing summary indicators rather than detailed description and thus approaches institutions as unidimensional variables that impact on particular facets of business activity this paper argues that ib research would be usefully advanced by greater attention to comparing the topography of institutional landscapes and understanding their diversity a number of alternative case based approaches are outlined that draw on a growing comparative capitalisms literature in sociology and political science the paper develops a number of empirical examples to show the utility and limits of these approaches for ib scholars

does contingent repayment in microfinance help the poor during natural disasters abstract microfinances in bangladesh introduced a contingent repayment system beginning in 2002 which allowed rescheduling of savings and installments during natural disasters for affected members this paper is one of the first attempts to evaluate the system employing a unique dataset in using evidence from a flood in 2004 the author found that rescheduling plays the role of a safety net by decreasing the probability that people skip meals during negative shocks by 5 1 per cent this effect is even higher on the landless and females this study attempts to contribute to the issue regarding the poverty reduction effect of microfinances

lock in vs critical masses industrial change under network externalities abstract where increasing returns to adoption play a role in the diffusion of a new technology technological lock in is now often claimed to occur however this result and the modeling approach that produces it are problematic further innovations could never have a chance of disseminating if lock in had occurred in the diffusion process of earlier innovations yet in reality industrial change does not come to a halt the paper offers a discussion of the apparent paradox from an alternative modeling approach conditions are derived under which a newly introduced technology can successfully disseminate in the market despite existing network externalities

effects of microcredit and other loans on female empowerment in bangladesh the borrower s gender influences intra household resource allocation this article examines microcredit s effectiveness in empowering women borrowers in rural bangladesh it does so by examining how gender specific borrowing activities influence household expenditures which are either specifically of interest to men or women and by examining the effects of all loans rather than only those provided by microcredit organizations the article uses a quasi experimental design to identify the effects of borrowing by men and women by using an original combination of panel data and instrumental variables on subsamples of the surveyed population it finds that the borrower s gender affects how households allocate their resources to different expenditure items and assets that are valued differently by men and women in all the findings suggest that providing greater credit access to women may improve their household bargaining positions

leadership beliefs and coordination an explorative discussion although recent economics contributions represent important strides forward in the understanding of leadership behavior the cognitive and symbolic dimensions of the phenomenon have attracted virtually no interests from economists and game theorists i argue that an understanding of these dimensions may be founded on coordination games particularly to the extent that these illustrate interactive belief formation in this context leadership is defined as the taking of actions that coordinate the complementary actions of many people through the creation of belief conditions that at least substitute for common knowledge and where these actions characteristically consists of some act of communication directed at those being led the concept of common knowledge or its approximation by means of notions of common belief is argued to be particularly important to understanding leadership thus leaders may establish common knowledge conditions and assist the coordination of strategies in this way or make decisions in situations where coordination problems persist in spite of common knowledge acknowledgments

knowledge based approaches to the theory of the firm some critical comments it is argued that kogut and zander kogut b u zander 1992 knowledge of the firm combinative capabilities and the replication of technology organ sci 3 383 397 and conner conner k r 1991 a historical comparison of resource based theory and five schools of thought within industrial organization economics do we have a new theory of the firm j management 17 121 154 erred in the specific way in which they claimed that a distinct theory of the multi person firm can be constructed on the basis of a theory of organizational knowledge or from resource based insights it is not possible to tell very much of a story about why there should be firms in lieu of notions such as opportunism or moral hazard however properly interpreted knowledge based theories may help shed light on issues relating to the boundaries and internal organization of the firm

network linkages and location choice in foreign direct investment this paper shows that network linkage is an important determinant of location choice in foreign direct investment fdi network linkages are divided into internal intra firm and external inter firm linkages external linkages are further separated into strategic and relational linkages we found that taiwanese firms are keen on making external linkages but are indifferent to or incapable of making internal linkages through fdi strategic linkages motivate taiwanese fdi in the united states while relational linkages facilitate taiwanese fdi in southeast asia and china small firms are more sensitive to relational linkages than large firms in their choice of fdi location

explaining the national cultural distance paradox past studies of the relationship between national cultural distance and entry mode choice have produced conflicting results some scholars find cultural distance associated with choosing wholly owned modes others find cultural distance linked to a preference for joint ventures in this paper we provide both theoretical and empirical evidence to explain the discrepant findings and thus help to resolve the national cultural distance paradox

anarchy in the laboratory and the role of the state abstract a recent literature on the economics of conflict provides conditions under which groups of individuals divide up between producers and predators an anarchic equilibrium as well as conditions under which a government agent is empowered to make collective action choices that can completely deter predation we test these theoretical predictions in a laboratory experiment in the absence of a government agent groups of subjects choose actions consistent with the anarchic equilibrium the introduction of a government agent charged with maximizing the consumption of producers enables subjects to achieve nearly perfect coordination on the pareto superior equilibrium where all individuals choose to be producers

the impact of group based credit programs on poor households in bangladesh does the gender of participants matter this paper estimates the impact of participation by gender in the grameen bank and two other group based micro credit programs in bangladesh on labor supply schooling household expenditure and assets the empirical method uses a quasi experimental survey design to correct for the bias from unobserved individual and village level heterogeneity we find that program credit has a larger effect on the behavior of poor households in bangladesh when women are the program participants for example annual household consumption expenditure increases 18 taka for every 100 additional taka borrowed by women from these credit programs compared with 11 taka for men

high performance work practices decentralization and profitability evidence from panel data the aim of this article is to test the effects on firm profitability of the adoption of both high performance work practices hpwps and changes in organizational design relating to the depth of the corporate hierarchy and the allocation of decision authority for this purpose we resort to panel estimates based on a longitudinal data set that includes information relating to 109 italian manufacturing single plant firms observed in the 1990s during 7 years the econometric results show that the adoption of hpwps leads to better performances especially when it is associated with the delegation of decision authority downward the corporate hierarchy copyright 2007 oxford university press

wage size relation and the structure of work force composition in italian manufacturing firms in this paper we study the impact of firms productivity and scale of activity on the cost of labour for italian manufacturing firms investigating how the work force composition affects the total expenditures for wages our analysis reveals that once productivity differences among firms are accounted for size still retains a positive effect on cost of labour we show that the source of this phenomenon is the relatively higher proportion of non production workers in bigger firms which results in a cost of labour for white collar workers that increases with increasing firm size copyright the author 2009 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

rethinking the effects of microcredit on household welfare in cambodia abstractthis article analyses the effects of microcredit on household welfare in terms of household expenditure per capita in cambodia with data from the cambodia socio economic survey carried out in 2014 the analysis describes the effects via formal and informal lending sectors accounting for endogenous selection bias arising from unobserved factors and for structural differences between borrowers and non borrowers in terms of expenditure functions the findings suggest that microcredit in both sectors reduces household expenditure

transforming european regional policy a results driven agenda and smart specialization the paper examines the nature rationale and logic of the reforms to eu cohesion policy a particular focus of the paper is on the concept of smart specialization and the use of this concept to help facilitate a results oriented policy agenda on the one hand the arguments underpinning the reforms in part relate to modern thinking regarding the role of industrial policy on the other hand they also partly relate to advances in our understanding of the relationships between economic geography technology and institutions at the same time the specific features of the eu context also heavily influence the nature and logic of the changes whereby legal and institutional matters linking cohesion policy to other eu policies all play an important role

communication coordination and nash equilibrium i note a methodological problem in studying the role of pre play communication in ensuring equilibrium to deal with this problem i define a solution concept for the extended game in which talk is followed by play that is intermediate between nash equilibrium and rationalizability in some games our solution concept implies a nash outcome while in others it does not

globalisation and economic growth a historical perspective this paper reviews the historical evidence on the relationship between globalisation and economic growth divergence in the growth of income and industrialisation in the twentieth century is documented but it is also noted that international income inequality appears to have decreased since about 1870 and that long run trends in the human development index are much less pessimistic about the experience of developing countries it is argued that trade liberalisation has been good for growth on average but that successful capital liberalisation requires high institutional quality and that the developmental state may have an important role to play in the early stages of development the recent claim by robert lucas that the 21st century will see a massive reduction in income inequality across countries in a globalised world economy is sceptically discussed in the context of empirical evidence that bad institutions are often persistent and that geography is still a major factor in explaining international income differences