how important is the capacity of local governments for improvements in welfare evidence from decentralised uganda abstract decentralisation is often claimed to be effective for improvements in welfare and hence the reduction of poverty but empirical evidence is scarce this paper seeks to gain further insights into the relationship between decentralisation and welfare by investigating the role of local governments capacity for household consumption and school enrolment in uganda using household survey data it finds suggestive evidence that both household consumption and school enrolment are positively related with the level of capacity of district governments

testing for nonlinear dependence in daily foreign exchange rates the purpose of this article is to investigate whether daily changes in five major foreign exchange rates contain any nonlinearities although the data contain no linear correlation evidence indicates the presence of substantial nonlinearity in a multiplicative rather than additive form further examination reveals that a generalized autoregressive conditional heteroskedasticity model can explain a large part of the nonlinearities for all five exchange rates copyright 1989 by the university of chicago

uncovering nonlinear structure in real time stock market indexes the s p 500 the dax the nikkei 225 and the ftse 100 this article tests for nonlinear dependence and chaos in real time returns on the world s four most important stock market indexes both the brock dechert scheinkman and the lee white and granger neural network based tests indicate persistent nonlinear structure in the series estimates of the lyapunov exponents using the nychka ellner gallant and mccaffrey neural net method and the zeng pielke and eyckholt nearest neighbor algorithm confirm the presence of nonlinear dependence in the returns on all indexes but provide no evidence of low dimensional chaotic processes given the sensitivity of the results to the estimation parameters we conclude that the data are dominated by a stochastic component

what is a relationship worth repeated exchange and the development and deployment of relational capital organization scholars have highlighted the value of relationships in fostering effective exchange suggesting that repeated exchange creates a relational asset with latent value derived from elevated social connections norms and simple expectations of exchange continuity yet the empirical evidence supporting such claims remains largely indirect as a consequence few studies have been able to directly examine how contextual factors shape the accumulation of this relational asset or define its value in application we directly measure the value of relationships between suppliers and a large buyer using the buyer s choices in internet enabled procurement auctions to estimate the degree to which stronger relationship histories with suppliers increase willingness to pay for high volume commodity like parts our setting also allows us to examine how this willingness to pay for relationships is shaped by the social context in which they develop and by the exchange context in which they are subsequently depl

a new approach to understanding labour supply of disabled people abstractthe main interest of this article is to propose an individual utility maximization model to explain the low participation of disabled people we account for heterogeneity of preferences and

nonlinear monetary dynamics this article uses the correlation dimension technique along with the residual and shuffle tests to look for evidence of nonlinear dynamic structure in various weekly monetary aggregates their components the monetary base and the money multipliers the results support the barnett and chen 1988 and chen 1988 findings of nonlinearity in divisia m2 divisia m3 and simple sum m2 evidence of nonlinear structure is also found for simple sum m1 currency demand deposits all checkable deposits m3 minus m2 the monetary base and the multipliers of m1 m2 and m3

episodic nonlinearity and nonstationarity in alberta s power and natural gas markets abstract this paper uses a new method of testing for linear and nonlinear lead lag relationships between time series introduced by brooks and hinich brooks c and hinich m j cross correlations and cross bicorrelations in sterling exchange rates journal of empirical finance 20 1999 385 404 on alberta s natural gas and power markets the test based on the concepts of cross correlation and cross bicorrelation is used after pre whitening of the data to test for the existence of residual nonlinearity as well as the episodic nature of the nonlinearity our evidence points to a relatively rare episodic nonlinearity within and across the two series having important implications for forecasting these series

poverty comparisons over time and across countries in africa abstract we use demographic and health surveys dhs to compare poverty at two or more points in time within and between african countries our welfare measure is an index resulting from a factor analysis of various household characteristics durables and household heads education an advantage of this measure is that for intertemporal and intraregional comparisons we need not rely on suspect price deflators and currency conversion factors the wide availability and similarity of questionnaires of the dhs facilitate comparisons over both time and countries our results generally show declines in poverty during the previous decade largely due to improvements in rural areas

the changing technology of technological change general and abstract knowledge and the division of innovative labour abstract in the past most innovations have resulted from empiricist procedures the outcome of each trial yielding knowledge that could not be readily extended to other contexts while trial and error may remain the primary engine of innovation developments in many scientific disciplines along with progress in computational capabilities and instrumentation are encouraging a new approach to industrial research instead of relying purely on trial and error the attempt is also to understand the principles governing the behaviour of objects and structures the result is that relevant information whatever its source can now be cast in frameworks and categories that are more universal the greater universality makes it possible for the innovation process to be organised in new ways firms can specialise and focus upon producing new knowledge and the locus of innovation may be spread across both users and producers more generally the use of general and abstract knowledge in innovation opens up the possibility for a division of labour in inventive activity the division of innovative labour the implications for public policy especially that on intellectual property rights are discussed

health and schooling investments in africa this paper first outlines an organizing framework for considering how health and schooling affect labor productivity and growth and how household and community factors can in turn affect the demand for these human capital investments both cross country growth models and various aspects of microeconomic studies of individual productivity as related to education and health are discussed the conclusion offers some tentative leads for policy in this area based on existing research and an agenda for future research

a comparison of regret based and utility based discrete choice modelling an empirical illustration with hospital bed choice there is some concern that the unobserved preference heterogeneity in random utility maximization theory based discrete choice experiment modelling is an important source of error variability the

green transition of energy systems in rural china national survey evidence of households discrete choices on water heaters abstract energy systems in rural china are experiencing a transition from traditional fossil fuels to renewables this paper aims to investigate the potential factors that influence the choices of rural residents regarding water heaters with a focus on the low carbon transition to solar water heating systems to this end a face to face questionnaire survey is undertaken with 3404 rural households randomly selected among 12 representative provinces a comprehensive set of discrete choice modelling approaches were used the empirical results show that 1 sociodemographic variables have significant effects on residents first stage choice of a water heater to buy or not to buy but few effects on the second stage decision to choose electric lpg or solar water heaters which type to buy 2 information spillover is important to facilitate the usage of water heaters particularly of solar products 3 the electricity price which is regulated at a very low rate has no apparent effect on the choice of solar water heaters 4 government subsidy has a significant effect in the first stage but no differentiated effect on the decision choice in the second stage policy and managerial implications are presented to speed up the ongoing low carbon transition of energy systems in china

intergovernmental fiscal transfers international lessons for developing countries abstract this paper reviews the central issues that arise in designing intergovernmental transfers and surveys the approaches adopted in a number of countries with special emphasis on developing countries since circumstances and objectives differ from country to country no simple uniform pattern of transfers is universally appropriate but experience around the world makes it clear that if services are to be efficiently provided transfers must be designed so that those receiving them have a clear mandate adequate resources sufficient flexibility to make decisions and are accountable for results

is individual environmental consciousness one of the determinants in transport mode choice this article models negative impact on the environment as one of the attributes of transport mode by this modelling we are able to examine whether individual environmental consciousness of this impact plays a significant role in his her choice of transport mode a survey data from saito and onohara area in northern osaka of japan is used to estimate the model with the heteroscedastic extreme value specification both of the estimated and simulated results imply that individual environmental consciousness does influence his her decision on transport mode choice in the sample furthermore the likelihood ratio tests indicate that both the utility and scale parameters are not equivalent across sub samples of university commuters research facility commuters and residents the results of the comparison across sub samples suggest that sometimes we may learn more from sub dividing a whole sample into several sub samples if we could distinguish them by their characteristics

testing producer perceptions of jointly beneficial best management practices for improved water quality this paper examines producer perceptions of jointly beneficial relationships among best management practices for improved water quality identifying producer tendencies to bundle these types of practices may increase adoption and lower the costs of voluntary adoption programmes particularly those relying on dissemination of information unlike previous studies perceived changes in environmental quality as well as perceived changes in profits are used to define jointly beneficial inputs the econometric model used in the analysis demonstrates that two of the three management practices considered are perceived to be jointly beneficial

are citizens willing to pay for agricultural multifunctionality agricultural multifunctionality is the recognition of the joint exercise of economic environmental and social functions by the agricultural sector in order to make the concept operative for the design of public policies it is necessary to estimate the social demand for such functions the main objective of this article is to present an empirical application in this sense for this purpose we have adopted the agricultural system of cereal steppes in tierra de campos in spain as a case study the economic valuation technique used is the choice experiment the results suggest the existence of a significant demand for the different functions although the demand is heterogeneous depending on the socioeconomic characteristics of the individuals surveyed

nonlinear dynamics and stock returns simple deterministic systems are capable of generating chaotic output that mimics the output of stochastic systems for this reason algorithms have been developed to distinguish between these two alternatives these algorithms and related statistical tests are also useful in detecting the presence of nonlinear dependence in time series in this article the authors apply these procedures to stock returns and find evidence that indicates the presence of nonlinear dependence on weekly returns from the center for research in security prices value weighted index copyright 1989 by the university of chicago

martingales nonlinearity and chaos abstract in this article we provide a review of the literature with respect to the efficient markets hypothesis and chaos in doing so we contrast the martingale behavior of asset prices to nonlinear chaotic dynamics discuss some recent techniques used in distinguishing between probabilistic and deterministic behavior in asset prices and report some evidence moreover we look at the controversies that have arisen about the available tests and results and raise the issue of whether dynamical systems theory is practical in finance

early warning systems and systemic banking crises in low income countries a multinomial logit approach abstract this paper estimates an early warning system ews for predicting systemic banking crises in a sample of low income countries in sub saharan africa since the average duration of crises in this sample of countries is longer than one year the predictive performance of standard binomial logit models is likely to be hampered by the so called crisis duration bias the bias arises from the decision to either treat crisis years after the onset of a crisis as non crisis years or remove them altogether from the model to overcome this potential drawback we propose a multinomial logit approach which is shown to improve the predictive power of our ews compared to the binomial logit model our results suggest that crisis events in low income countries are associated with low economic growth drying up of banking system liquidity and widening of foreign exchange net open positions

is the business cycle characterized by deterministic chaos abstract tests are conducted on u s macroeconomic data for the presence of low dimensional deterministic chaos where deterministic chaos is defined as in grandmont s 1985 walras bowley lecture or in brock 1986 the idea is to test for evidence of endogenous instability causing the business cycle low order autoregressions are hard to reject with our methods evidence of chaos is weak but our tests may be too weak to detect it evidence of nonlinearity is present in employment 1950 i to 1983 iv unemployment 1949 i to 1982 iv monthly post war industrial production and pig iron production 1877 1937

nonlinear dynamics in cee stock markets indices abstract we investigate the existence of nonlinearities in the dynamics of the returns of stock markets indices from cee economies we use several types of nonlinear tests we discuss the implications of the results with respect to the efficient market hypothesis

energy sector pricing on the role of neglected nonlinearity modern economies have been subjected to a number of shocks during the past several years such as the burst of the internet bubble terrorist attacks corporate scandals the war in iraq the uncertainty about energy prices and the recent subprime mortgage crisis in particular during the last few years the energy shock has caused concerns for potential stagflation for both the united states and numerous other countries we perform numerous univariate tests for non linearity and chaotic structure using price data from the energy sector to resolve whether the sector s fundamentals or exogenous shocks drive these prices

conjoint analysis of demand for ip telephony the case of japan with the recent diffusion of broadband bb services internet protocol ip telephony is expected to spread significantly in japan this article investigates the demand for ip telephony by using conjoint analysis projecting ip telephony demand also contributes to japanese info communication policy discussions two points are made first ip telephony is still currently considered an optional supplement or an add on service option of high speed bb internet access services in japan rather than a close substitute of existing plain old telephone service pots at this point we find little evidence that many households will promptly forsake their fixed line service for ip telephony second we conclude that the key condition for the proliferation of ip telephony is the complete guarantee of quality of service qos including voice quality number portability fax usage and emergency access comparable to or exceeding that of existing pots

the willingness to pay for the health care under taiwan s national health insurance system in this study we utilized the nested multinomial logit model to estimate the willingness to pay wtp values for different national health insurance nhi coverage plans in taiwan the wtp value for having care from clinics in a hospital care only hco plan is nt 178 us 6 per person month the wtp value for having care from hospitals in a clinic care only cco plan is nt 1342 us 43 per person month the wtp value for the nhi with a universal coverage uc is nt 1540 us 49 per person month the figure nt 1540 us 49 is equivalent to 8 77 of monthly household income much higher than the new premium rate of the new nhi tax 2 5 4 of monthly household income proposed by the taiwan s government our result suggests that taiwan s government may increase the new premium rate further in order to make taiwan s nhi financially more sustainable

long run money demand revisited evidence from a non linear approach abstract in this paper we argue that employing the conventional linear cointegration approach in examining long run money demand may not be appropriate after taking into account the existence of transaction costs we provide evidence to show that deviations from equilibrium money demand follow an exponential smooth transition autoregressive process that is mean reverting outside a given range and has a unit root inside the range our findings also provide an alternative explanation for the failure of much of the existing literature to support a long run money demand function

discrete choice models with multiple unobserved choice characteristics since the pioneering work by daniel mcfadden utility maximization based multinomial response models have become important tools of empirical researchers various generalizations of these models have been developed to allow for unobserved heterogeneity in taste parameters and choice characteristics here we investigate how rich a specification of the unobserved components is needed to rationalize arbitrary choice patterns in settings with many individual decision makers multiple markets and large choice sets we find that if one restricts the utility function to be monotone in the unobserved choice characteristics then up to two unobserved choice characteristics may be needed to rationalize the choices

characteristics of households in the informal sector of an emerging economy using the case study of trinidad and tobago we investigate the socio economic demographic and attitudinal characteristics of households that participate in the informal sector of an emerging economy and their perception of the risk of detection by tax authorities while doing so data are gathered from a cross sectional field survey covering 570 households results using multinomial logit and ordered probit models suggest that households are motivated to participate in the informal sector when members spend little time in formal sector activity believe that taxes are too high and their incomes are too low have dependents to support and believe that the resulting tax evasion will go undetected their perception of the risk of detection by the tax authority is determined largely by the income they earn in the formal sector and the extent of government bureaucracy prevailing there

self selection bias in the evaluation of voluntary energy conservation programs while voluntary energy conservation programs have been extensively promoted by electric utilities and public utility commissions their effectiveness has been insufficiently critiqued this paper contributes to the growing evaluation of such programs by measuring the net energy savings directly attributable to an actual set of programs the analysis explicitly corrects for the self selection bias that can arise in program evaluation the correction is found to be important traditional evaluation methods are subject to considerable bias correcting for this bias the amount of program induced energy savings is found to be considerably less than traditionally believed copyright 1988 by mit press

innovation in complex products and system over the past 5 to 10 years empirical study has provided a much improved understanding of how innovation occurs in complex high value capital goods research has began to illustrate the specific ways in which so called complex products and systems cops are produced by firms often working together in projects and how innovation processes in cops differ from those commonly found in mass produced goods this is an important research endeavour for at least three reasons first cops play a vital part in the modern economy and wider society as the major capital goods which underpin manufacturing services trade and distribution cops play a critical role in modern industrial and economic progress as rosenberg n 1976 technological change in the machine tool industry 1840 1910 in perspectives on technology cambridge univ press cambridge rosenberg 1976 has argued capital goods are a key point of entry of new technology into the economic system second because much conventional innovation wisdom is derived from research on high volume consumer products new evidence models and concepts are needed to properly understand innovation processes in cops third at the practical levels of firm strategy and government policy a robust understanding of innovation in cops is needed to enable firms to improve their performance and to guide the policy and regulatory agencies directly involved in decision making in cops drawing from recent research the purpose of this special issue is to provide substantial new insights into the innovation dynamics of cops dealing with firm strategy capability building management practices organisational form product life cycles government policy measurements and conceptual frameworks in this introduction we argue not only that cops underpin the production of modern goods and services but that much conventional innovation wisdom derived from studies of mass produced goods e g the automobile and the semiconductor either does not apply or applies with substantial qualification to cops the aim of the issue is to put innovation in cops centre stage in the analysis of innovation part 1 of the introduction provides a definition of cops highlighting the innovation and production contrasts with mass produced commodity goods part 2 outlines key innovation issues raised by cops showing the importance of systems integration software and project management as core capabilities in the production of modern systems part 3 briefly summarises some of the key unanswered questions posed by cops while part 4 shows how each of the papers in this special issue attempt to answer some of these questions finally part 5 maps out future research directions stressing the importance of building a deeper historical perspective on cops as a key transmission mechanism for new technology within the industrial and wider economic system

federalism as a commitment to reserving market incentives the authors advance a new perspective in the study of federalism their approach views federalism as a governance solution of the state to credibly preserving market incentives market incentives are preserved if the state is credibly prevented from compromising on future economic success and from bailing out future failures the salient features of federalism decentralization of information and authority and interjurisdictional competition help provide credible commitment or these purposes in addition the authors suggest that some federalism are self sustaining

on endogenous competitive business cycles the belief that the long run equilibrium of a competitive monetary economy that does not experience any exogeneous shocks whether originating from the external environment or from policy should be modelled as a state that is stationary or perhaps growing at a constant rate seems to be deeply rooted in the mind of some economists

public funding of environmental amenities contingent choices using new taxes or existing revenues for coastal land conservation alternative funding approaches affect stated preferences an individual s willingness to reallocate existing tax dollars exceeds willingness to pay new taxes to conserve land however stated preferences also imply a non zero opportunity cost to existing tax dollars different income groups reveal statistically equivalent marginal utilities both for income and for reallocating tax dollars yet individuals with lower income show a relatively larger increase in their willingness to support land conservation when the choice shifts from new taxes to reallocation of existing tax dollars the paper encourages consideration of equity implications that may be obscured when analysts focus on willingness to pay

parental wealth and first time homeownership a cohort study of family background and young adults housing situation in sweden this paper investigates whether family background seems to have any influence on first time homeownership recent studies have indicated that it has become more difficult to become established in the housing market and such situations may increase the importance of parental wealth in this study parental wealth is estimated as family background information on parents homeownership father s socioeconomic status and single parenting unique cohort data for three birth cohorts suggest that there is a significant cohort effect in young adults tenure decision furthermore the results imply that parents homeownership has become a more important predictor of the transition to first time homeownership for those young adults facing increasing problems in the housing market

a comparison of choice based multinomial and nested logit models the family structure and welfare use decisions of divorced or separated women home based work differs from other employment because the work site is the home itself this difference means that the fixed costs of working at home are less than the fixed costs of working on site and that home based workers may engage in joint market

taxes and agglomeration economies how are they related to nonprofit firm location author affiliation teresa d harrison department of economics drexel university 3141 chestnut street philadelphia pa 19104 usa tharrison drexel edu1 introductionnonprofits are an ever increasing component of the u s economy from 1997 2001 employment growth in the nonprofit sector averaged 2 5 outpacing both the business 1 8 and the government sectors 1 6 moore 2004 much of this growth stems from new nonprofits yet few studies have investigated possible determinants of nonprofit entry and location decisions most of these studies focus on demand side factors wolch and geiger 1983 downes and greenstein 1996 bielefeld murdoch and waddell 1997 for example downes and greenstein 1996 focus on demographic and religious characteristics of the surrounding community and its relation to private school location in this paper i use firm level data and focus on potentially important supply side variables tax rates and agglomeration economies most nonprofits are exempt from corporate sales and property taxes hansmann 1987 and gulley and santerre 1993 find evidence that higher corporate property and sales taxes are positively related to nonprofit market share however market share measures obfuscate the dynamics of the industry in terms of entry and exit rates if market share for nonprofits increases in response to higher tax rates this could be because new nonprofits are entering or because for profits are leaving the industry identifying these two cases is impossible with market share data using nonprofit tax return data i examine the relation between these tax exemptions and state county location decisions of new nonprofits to my knowledge this is the first paper to study these interactions at the individual firm level nonprofits also receive tax favored status due to the individual tax deduction on charitable contributions gentry and penrod 1998 employees of and donors to the nonprofits will be affected by the individual tax rates this in turn alters the costs to the nonprofit of location in a high or low tax area unlike previous studies i therefore investigate the relation between individual marginal tax rates and nonprofit location another potential supply side determinant of firm location decisions is the existing firm concentration in the area the potential economies of scale generated by proximity to other firms have been extensively examined in for profit industries 1 previous studies have generally found a positive relation between agglomeration and location carlton 1983 bartik 1985 woodward 1992 gius and frese 2002 rosenthal and strange 2003 to my knowledge bielefeld et al 2004 is the only study that examines nonprofit agglomeration finding evidence of agglomeration in dallas texas this warrants additional examination because nonprofit output is generally service driven and less mobile thus agglomeration implies greater direct competition making market saturation a larger issue in the nonprofit market using a nationwide dataset i examine how location and existing firm concentration are related and explore the potential presence of market saturation i also investigate possible differences between inter and intra industry agglomeration my results provide new insight into nonprofit firm behavior in most cases higher tax rates are associated with new firm location but the results for corporate and property taxes vary across the sample years i find that individual tax rates are an important consideration for nonprofits and are positively correlated to location my analysis also contributes to the literature by examining how the sensitivity to tax rates varies according to the sources of revenues for the institution firms that depend highly on individual donations are more likely to locate in high individual tax states while nonprofits with large mission related revenues are more sensitive to the property tax rate

what is behind the recent surge in patenting abstract we investigate the cause of an unprecedented surge of us patenting over the past decade conventional wisdom points to the establishment of the court of appeals of the federal circuit by congress in 1982 we examine whether this institutional change which has benefited patent holders explains the burst in us patenting using both international and domestic data on patent applications and awards we conclude that the evidence is not favorable to the conventional view instead it appears that the jump in patenting reflects an increase in us innovation spurred by changes in the management of research

location intentions of immigrants at retirement stay return or go back and forth this article analyses the intentions of immigrants regarding their residential choice after retirement three options are investigated stay in the host country go back to the origin country and adopt a mobile strategy sharing time between the host and the origin country defined as back and forth for this purpose we analyse a cross section of non french nationals aged above 45 who are not yet retired the impacts of several potential determinants of such intentions are investigated with particular focus on the effect of the actual location of the respondents children the estimation is conducted using a multinomial logit model instrumental variable technique is used to address the issue of endogenous children s location with respect to parents location intention results suggest that the immigrants prefer to return rather than stay in the host country when their children live in the country of origin however children s location does not seem to affect the back and forth strategy with respe

property rights regimes in complex fishery management systems a choice experiment application the tonle sap wetland fishery was previously divided into 3 different management zones for conservation open access fishing and private fishing rights to the private fishing zone involved auctions for exclusive rights to temporarily designated plots this paper aims to explore the auction based system by investigating how this fishery management system affects different groups of small scale fishermen and how different characteristics of the fishing lots affect the bidding a choice experiment approach was used to model fishermen s choices in a hypothetical auction market by offering fishermen the choice between purchasing different potential fishing lots and a no purchase option implying fishing only in the communal fishing grounds the preferred latent class model with two segments of fishermen showed that the bidding behavior of the more privileged group out competes the other group irrespective of the lot characteristics this result suggests that it is unlikely that the redesign of the auction system itself would be an effective way of securing access to fishing resources for the two observed groups of fishermen this implies that open access fishing grounds and or other regulations may also be needed in future management as they serve an important role for the poorer segments

tail estimates of east european exchange rates in the literature a consensus exists that distributions of exchange rate returns are fat tailed we use a nonparametric tail index estimator based on extreme value theory to shed light on some of the characteristics of the empirical distribution of black market exchange rate returns for seven east european currencies between 1955 and 1990 focusing on the information in the tails of the distribution we modify an existing tail index estimator to take into account information in both tails the results support the existence of finite second moments in exchange rate returns implicitly the sum stable distribution is rejected

comment on nonlinear monetary dynamics by decoster and mitchell the concept of dimension its uses and the difficulties in estimation are not universally well understood a recent article in the journal of business economic statistics by decoster and mitchell 1991 dm illustrates our claim dimension calculations are useful for characterizing the topological properties of the data the nonexistence of a lowdimensional attracting set however implies nothing about the presence of complicated dynamics for succinct reference to these ideas see ramsey sayers and rothman 1990 the purpose of this comment is twofold first we wish to remind the reader of two practical difficulties in estimating the grassberger and procaccia gp dimension concept second using an alternative procedure that mitigates many of the problems that stem from small sample sizes we reestimate dm s strongest result and show that the finding of nonlinearity in divisia m2 see p 460 of dm cannot be sustained by the dimension calculations cited the interested reader can find a more complete discussion of these and related issues in the article by ramsey and rothman 1992 and the references cited therein

balancing rural poverty reduction and citizen participation the contradictions of uganda s decentralization program abstract uganda s ambitious decentralization program is analyzed in terms of a dual mode system of local governance under a technocratic mode conditional funding from the center is earmarked for particular programs but with little local participation in contrast the patronage mode is an elaborate system for local bottom up planning but with limited resources which are largely consumed in administrative costs and political emoluments along with the spoils of a committee system controlling contracts and appointments these resources provide the means for building political alliances and loyalty in the absence of a culture of transparency and civic engagement to assure downward accountability it remains to be seen whether decentralization can promote both efficient service delivery and local empowerment simultaneously

does access to foreign markets shape internal migration evidence from brazil this paper investigates how internal migration is affected by brazil s increased integration into the world economy it analyzes the impact of regional differences in access to foreign demand on sector specific bilateral migration rates between the brazilian states for the years 1995 to 2003 using international trade data a foreign market access measure is computed at the sectoral level which is exogenous to domestic migration a higher foreign market access is associated with a higher local labor demand and attracts workers via two potential channels higher wages and new job opportunities results show that both channels play a significant role in internal migration further we find a heterogeneous impact across industries according to their comparative advantage on the world market however the observed impact is driven by the strong reaction of low educated workers to changes in market access this finding is consistent with the fact that brazil is exporting mainly goods that are intensive in unskilled labor

a matter of location the role of regional social capital in overcoming the liability of newness in r d acquisition activities laursen k masciarelli f and reichstein t a matter of location the role of regional social capital in overcoming the liability of newness in r d acquisition activities regional studies external knowledge acquisition is a precondition for firms competitive advantage however young firms exhibit a lower propensity to acquire external research and development r d than their older counterparts the paper explores the role of regional social capital in moderating this aspect of the liability of newness the results show that young firms operating in regions with low levels of social capital are less likely to acquire r d externally however this is not the case in regions with high levels of social capital suggesting that the liability of newness in terms of acquisition of external r d does not play a role in these regions

no place like home relocation capabilities and firm survival in the german machine tool industry after world war ii we explore the extent to which organizational capabilities are location specific by studying the location choices and longevity of east german machine tool producers that relocated to west germany after world war ii relocating firms were similar in performance to experienced west german incumbents they outperformed new entrants without prewar industry experience this suggests they were able to build on capabilities acquired before the war even though relocating firms tended lo locate in industry agglomerations and in urbanized regions we find no evidence suggesting that firm performance benefited from agglomeration economies copyright 2011 the author 2010 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

the technological competencies of the world s largest firms complex and path dependent but not much variety firm specific technological competencies help explain why firms are different how they change over time and whether or not they are capable of remaining competitive data on more than 400 of the world s largest firms show that their technological competencies have the following characteristics 1 1 they are typically multi field and becoming more so over time with competencies ranging beyond their product range in technical fields outside their distinctive core 2 2 they are highly stable and differentiated with both the technology profile and the directions of localised search strongly influenced by firms principal products 3 3 the rate of search is influenced by both the firm s principal products and the conditions in its home country however considerable unexplained variance suggests scope for managerial choice these findings confirm the importance of complexity and path dependency in the accumulation of firm specific technological competencies and show that managers are heavily constrained in the directions of their technological search they also show the limits of the notion of competition through variety given that the same specific field of technological competence is often essential to the development of a range of possible product configurations technological imperatives still exist

convergent validity of attribute based choice questions in stated preference studies the application of attribute based choice questions is well established in the marketing literature but there are unique aspects of the design that warrant investigation to assess their validity for economic welfare estimation three design issues are investigated in this paper 1 the placement of the monetary stimulus policy cost to respondents in the sequence of attributes 2 the number of policy alternatives respondents are asked to consider in choice questions two versus three and 3 the inclusion versus exclusion of a status quo alternative in choice questions the data used to implement these investigations are from a survey designed to estimate the value maine residents place on a farmland conservation easement program tests of convergent validity indicate that the placement of the monetary stimulus first versus last in the list of attributes did not affect estimates of preference parameters significant differences between questions with three versus two alternatives did occur and the inclusion exclusion of a status quo alternative did not affect preference parameters

exchange rate dynamics central bank interventions and chaos control methods abstract we use a simple chartist fundamentalist model developed by day and huang to explore recent chaos control algorithms as potential candidates for central bank intervention rules we find that methods such as delayed feedback control ogy and constant feedback have in principle the potential to reduce exchange rate variability and deviations from fundamentals even in the presence of large dynamic noise

local capture evidence from a central government transfer program in uganda according to official statistics 20 percent of uganda s total public expenditure was spent on education in the mid 1990s most of it on primary education one of the large public programs was a capitation grant to cover schools nonwage expenditures using panel data from a unique survey of primary schools we assess the extent to which the grant actually reached the intended end user schools the survey data reveal that during 1991 1995 the schools on average received only 13 percent of the grants most schools received nothing the bulk of the school grant was captured by local officials and politicians the data also reveal considerable variation in grants received across schools suggesting that rather than being passive recipients of flows from the government schools use their bargaining power to secure greater shares of funding we find that schools in better off communities managed to claim a higher share of their entitlements as a result actual education spending in contrast to budget allocations is regressive similar surveys in other african countries confirm that uganda is not a special case

re employment probabilities of unemployment benefit recipients this article studies transitions out of unemployment for benefit recipients in spain we analyse the duration of unemployment distinguishing between spells that end in recall workers returning to the previous employer and spells that end in exit to a new job this distinction allows us to find that the recall hazard rate increases around the time of exhaustion of benefits however this happens only for workers receiving unemployment insurance ui because we are unable to replicate this result for workers receiving unemployment assistance ua we believe the finding lends support to the hypothesis that in spain firms and workers make a strategic use of ui

choice of contracts in the british national health service an empirical study following major reforms of the british national health service nhs in 1990 the roles of purchasing and providing health services were separated with the relationship between purchasers and providers governed by contracts using a mixed multinomial logit analysis we show how this policy shift led to a selection of contracts that is consistent with the predictions of a simple model based on contract theory in which the characteristics of the health services being purchased and of the contracting parties influence the choice of contract form the paper thus provides evidence in support of the practical relevance of theory in understanding health care market reform

what has happened to the urban population in cote d ivoire since the 1980s an analysis of monetary poverty and deprivation over 15 years of household data abstract this article investigates the evolution of urban poverty in its various dimensions in cote d ivoire since the 1980s the robustness of the results is checked using dominance criteria an econometric analysis of poverty complements the analysis the study shows that the dynamic of poverty in terms of existence conditions can significantly differ from that of monetary poverty as was the case in the 1980s monetary poverty increased strongly in the 1990s in spite of a return to sustained growth following the devaluation of the cfa franc poverty in terms of existence conditions rose less before the adjustment and even decreased afterward

fighting corruption to improve schooling evidence from a newspaper campaign in uganda what are the most effective ways to increase primary school enrollment and student learning we argue that innovations in governance of social services may yield the highest return since social service delivery in developing countries is often plagued by inefficiencies and corruption we illustrate this by using data from an unusual policy experiment a newspaper campaign in uganda aimed at reducing capture of public funds by providing schools parents with information to monitor local officials handling of a large education grant program the campaign was highly successful and the reduction in capture had a positive effect on enrollment and student learning jel d73 i22 o12

design complexity vertical disintegration and knowledge organization in the semiconductor industry this article examines the advantages and drawbacks of internal knowledge integration versus collaborative outsourcing as two polar modes of governance in the design of application specific integrated circuits asics increasing technological complexity miniaturization and the generalization of markets for technology have induced higher integration constraints for designers the pace of innovation and frequent changes in design rules require a tightly controlled design process as a consequence knowledge integrators must develop expertise beyond the scope of their domain of activity if they are to ascertain the overall efficiency of systems we find that although internalization of knowledge integration reduces coordination and agency related costs the involvement of partner firms in upstream design phases facilitates knowledge sharing and improves the coordination of innovation in modules the analysis of the evolution of the asics industry shows that while large system integrators remain the dominant players specialist firms are gaining market shares and do not hesitate to embark on the design of leading edge systems this result may simply reveal the increasing value of component knowledge in a disaggregated value chain however relying on a comparative case study of two similar development processes one with each of the knowledge integration approaches we confirm the strength of decentralized modes of governance on the condition that partner firms engage in a long term relationship copyright 2007 oxford university press

towards a new early warning system of financial crises abstract this paper develops a new early warning system ews model based on a multinomial logit model for predicting financial crises it is shown that commonly used ews approaches which use binomial discrete dependent variable models are subject to what we call a post crisis bias this bias arises when no distinction is made between tranquil periods when economic fundamentals are largely sound and sustainable and crisis post crisis periods when economic variables go through an adjustment process before reaching a more sustainable level or growth path we show that applying a multinomial logit model which allows distinguishing between more than two states is a valid way of solving this problem and constitutes a substantial improvement in the ability to forecast financial crises the empirical results reveal that for a set of 20 open emerging markets for the period 1993 2001 the model would have correctly predicted a large majority of crises in emerging markets

statistical testing of bounded rationality with applications to the newsvendor model abstract in this paper we define bounded rationality in terms of probabilistic cost efficiency this establishes a framework where bounded rationality can be examined rigorously by statistical methods we apply this theory to data from laboratory experiments on the newsvendor model we enter into a theoretical discussion of the classical pull to center effect and explain why underorders are typically larger than overorders

valuing financial health and environmental benefits of bt cotton in pakistan data from a farm survey and choice experiment are used to value the benefits of bt cotton in pakistan unlike previous research on the economic impacts of bt which mostly concentrated on financial benefits in terms of gross margins we also quantify and monetize positive externalities associated with technology adoption due to lower chemical pesticide use on bt cotton plots there are significant health advantages in terms of reduced incidence of acute pesticide poisoning and environmental advantages in terms of higher biodiversity and lower soil and groundwater contamination these positive externalities are valued at us 79 per acre of which half is attributable to health and the other half to environmental improvements adding average gross margin gains of us 204 results in an aggregate benefit of us 283 per acre of bt or us 1 7 billion for the total bt cotton area in pakistan

the contractual nature of the firm for their helpful comments i am grateful to armen a alchian yoram barzel keith leffler john s mcgee and dean worcester 1 ronald h coase the nature of the firm 4 economica 386 1937 the paper however was written several years earlier see note 3 infra 2 the social sciences citation index provides the following information breaking down the period of 1966 80 into three five year periods the total citations of coase s firm paper for each subperiod are 1966 70 17 citations 1971 75 47 citations and 1976 80 105 citations

firm organization industrial structure and technological innovation abstract the formal and informal structures of firms and their external linkages have an important bearing on the rate and direction of innovation this paper explores the properties of different types of firms with respect to the generation of new technology various archetypes are recognized and an effort is made to match organization structure to the type of innovation the framework is relevant to technology and competition policy as it broadens the framework economists use to identify environments that assist innovation

employment and child care choices in canada and the united states in this paper we examine employment and child care choices of two parent families with young children in the united states and canada using a pooled data set based on recent national surveys in each country we find that the employment and child care choices of canadian families are similar to those of u s families estimates of a model of employment and child care choices indicate significant effects of child care subsidies child care prices and wage rates on employment and child care choices however none of these factors helps to explain the differences in employment and child care choices between the two countries ce memoire examine le choix de l emploi et du soin des enfants dans les familles ou il y deux parents aux etats unis et au canada en utilisant des donnees d etudes recentes dans les deux pays il appert que les choix des familles canadiennes sont semblables a ceux des familles americaines les calibrations d un modele de ces choix montrent les effets significatifs des subventions au soin des enfants du prix des soins des enfants et des taux de salaires sur ces choix cependant aucun de ces facteurs n explique les diffrences dans les patterns de choix entre les deux pays

investigating the determinants of household welfare in cote d ivoire to predict the effect of economic policies on household welfare one should first understand which characteristics of households and of the localities in which they live enable them to raise their welfare levels this paper outlines a simple procedure for investigating the determinants of household welfare and demonstrates its use with recent data from cote d ivoire despite the relative simplicity much information is obtained from its use on cross sectional survey data results specific to cote d ivoire include high low returns to education in urban rural areas high benefits from cocoa land relative to coffee land a significant impact on economic welfare from the availability of medical services and no apparent benefits from agricultural extension services

capabilities structure agency and evolution this paper examines conceptual issues and reviews empirical results bearing on the relationship between research approaches emphasizing organizational capabilities and those based in transaction cost economics tce or in organizational economics more generally following a review of conceptual fundamentals what capability is and why organizations differ in capability it assesses recent progress toward an integration of the capabilities and transaction cost approaches primarily in the context of the analysis of vertical structure and related phenomena this review suggests that progress has been substantial and that the key elements of a promising dynamic synthesis have been identified the paper then considers issues that call for attention if further progress is to be achieved the first of these is the role of agency which must be seen in expansive terms relative to standard economic rationality if its evolutionary significance is to be fully appreciated the second is the role of structure or more specifically industry architecture which affects capability development by way of its effect on the feedback that firms receive after drawing on the recent financial crisis for an illustration of these ideas this paper considers the rise of interest in business models as a useful field of application and it concludes with a discussion of the role of organizational economics beyond tce we argue that whatever the theoretical perspective at the level of the firm analyses must reach beyond that level to grasp the important causal forces affecting capability development firm boundaries and structural features more generally

networks and innovation in a modular system lessons from the microcomputer and stereo component industries in this paper we examine theoretically and through case studies the phenomenon of the modular system which we distinguish from a product conceived of as a prepackaged entity or appliance we argue that such systems offer benefits on both the demand side and the supply side supply side benefits include the potential for autonomous innovation which is driven by the division of labor and provides the opportunity for rapid trial and error learning demand side benefits include the ability to fine tune the product to consumer needs and therefore blanket the product space more completely both of our case studies suggest that innovation in a modular system can lead to vertical and horizontal disintegration as firms can often best appropriate the rents of innovation by opening their technology to an outside network of competing and cooperating firms we conclude by speculating on the increased importance of modular systems in the future since flexible manufacturing and rising incomes are likely to increase the driving requisites of modular systems low economies of scale in assembly and sophisticated consumer tastes

transaction cost economics in real time this paper attempts to place the theq of the boundaries of thejirm within the context of the passage of time more precisely it resurrects and places in a modem frame some of the insights of the chsical and marshallian theories of organization the modem reinterpretation of those theories centers around the capabilities view of the jirm taken together with governance costs the capabilities ofjirm and market determine the boundaries of the jirm in the short run ovw time capabilities change as firms and markets learn which implies a kind of information or knowledge cost the cost of trandewing the firm s capability to the market w vice versa these dynamic governance costs are the costs of persuading negotiating and coordinating with and teaching others they arise in the face of change notably txchnological and organizational innovation in fit they are the costs of not having the capabilities you need when you need them dynamic transaction costs provide an explanation for vertical integration that is arguably more general than those dominant in the literature in the face of uncertainty and divwgent views ofthe future common ownership of multiple stages of production is a supwior institutional arrangement for coordinating systemic change asset specrfity is neither necessary nor suffient for this to be true dynamic governance costs may also affit internal organization it may sometimes be costly in 3 terms of persuasion negotiation and teaching to create within the firm capabilities readily available on the market indeed in cases in which systemic coordination is not 4 the issue the market may turn out to be the superior institution of coordination in e 2 genwal the capabilities view of the jirm suggests that we look atfim2 and market as alternative and sometimes overlapping institutions of learning 1 transaction costs in the long rzln and the short 9 x classical and neoclassical perspectives

the equity efficiency trade off in environmental policy evidence from stated preferences the design of environmental policy raises several equity issues in particular the distribution of benefits and costs at the same time it has often been argued that there is a trade off in environmental policy between equity and efficiency which brings these issues firmly to the attention of environmental economics in this paper we use a simple choice experiment to elicit individual preferences over equity efficiency trade offs in the context of two environmental problems local air pollution and global climate change we find that equity matters to people as much as efficiency does in the design and delivery of environmental policy

quantifying the effects from horizontal mergers comments on the underlying assumptions in our paper published in this issue we measured the effects of the proposed volvo scania merger we first estimated an oligopoly model with product differentiation and then used the parameter estimates to compute the post merger equilibrium and the implied price and welfare changes under various alternative scenarios in section 4 4 of our paper we discussed what we view as the most important sources of concern regarding our empirical analysis in part based on the comments from the experts hired by volvo during the case the hausman leonard hl paper elaborates in more detail on the specific points raised by the experts during the case in this note we respond to these points

random fractal structures in north american energy markets this paper uses daily observations on west texas intermediate wti crude oil prices at chicago and henry hub natural gas prices at la over the deregulated period of the 1990s and various tests from statistics and dynamical systems theory to support a random fractal structure for north american energy markets in particular this evidence is supported by the vassilicos et al 1993 multifractal structure test and the ghashghaie et al nature 381 1996 767 turbulent behavior test

short waves in hungary 1923 and 1946 persistence chaos and lack of control abstract monetary policies follow a complex and chaotic process one that is enhanced when monetary growth is taken to the extreme as in hyperinflation while we have a basic understanding of the complex dynamics of hyperinflation a less explored phenomenon accompanying hyperinflationary episodes is the effect that they have on institutional development building on recent advances in economic history examining monetary policy and institutions this analysis uses more explicit recourse to complexity theory and in particular complex adaptive systems to examine two separate hyperinflationary episodes in hungary 1923 and 1946 delving into the institutional and cultural roots of the inflationary policies of the hungarian government and detailing the institutional effects which succeeded hyperinflation this paper shows that the twin experiences of hungary were both chaotic and created a chaotic and complex aftermath the results of which are still being felt indeed hungary s 1923 and especially its 1946 hyperinflation shows that some economic chaos cannot be restrained by political institutions and in fact the institutions themselves were changed when staring into the abyss hungary also found that the abyss stared back

some evidence concerning macroeconomic chaos abstract an empirical assessment of a linear stochastic perspective for canadian macroeconomic time series is presented the methods used are based on the mathematics of chaos present evidence suggests that low order deterministic chaos does not provide a satisfactory characterization of the data the absence of significant nonlinear structure for the investment and unemployment series is of particular note in light of past findings with american data the degree to which the use of a time trend can impose a pseudo structure on the data is illustrated

racial segregation and the black white test score gap abstract racial segregation is often blamed for some of the achievement gap between blacks and whites we study the effects of school and neighborhood segregation on the relative sat scores of black students across different metropolitan areas using large microdata samples for the 1998 2001 test cohorts our models include detailed controls for the family background of individual test takers school level controls for selective participation in the test and city level controls for racial composition income and region we find robust evidence that the black white test score gap is higher in more segregated cities holding constant family background and other factors a shift from a highly segregated city to a nearly integrated city closes about one quarter of the raw black white gap in sat scores specifications that distinguish between school and neighborhood segregation suggest that neighborhood segregation has a consistently negative impact while school segregation has no independent effect though we cannot reject equality of the two effects additional tests indicate that much of the effect of neighborhood segregation operates through neighbors incomes not through race per se data on enrollment in honors courses suggest that within school segregation increases when schools are more highly integrated potentially offsetting the benefits of school desegregation and accounting for our findings

e business usage across and within firms in the uk profitability externalities and policy using data from the third uk community innovation survey we model the usage of e business across and within firms in the uk in the year 2000 as a single observation upon an integrated process of inter and intra firm diffusion the intra firm dimension is a significant extension to standard analysis the model estimates indicate that the pattern of e business usage reflects the heterogeneity of firms in terms of size other innovative activity and labour force skills generating differences in the payoffs to use as well as market and non market intermediated externalities the policy implications of the findings are discussed c 2008 elsevier b v all rights reserved

the vanishing hand the changing dynamics of industrial capitalism alfred chandler s portrayal of the managerial revolution of the late nineteenth and early twentieth centuries does not extend well into the late twentieth century when widespread vertical disintegration began replacing the classical multi unit managerial enterprise this paper attempts to explain the new economy in a manner consistent with chandler by providing an enlarged theoretical account of industrial evolution in this account clusters of chandlerian firms appeared as a temporary episode within a larger smithian process of the division of labor

technologies products and organization in the innovating firm what adam smith tells us and joseph schumpeter doesn t adam smith s insights into the increasingly specialized nature of knowledge production are crucially important in understanding the contemporary problems of managing innovating firms products and firms are based on an increasing range of fields of specialized technological understanding competition is not based on technological diversity but on diversity and experimentation in products etc firms rarely fail because of an inability to master a new field of technology but because they do not succeed in matching the firm s systems of coordination and control to the nature of the available technological opportunities copyright 1998 by oxford university press

nonlinear dynamics in real time equity market indices evidence from the united kingdom this paper tests for the presence of nonlinear dependence and chaos in real time returns on the u k ftse 100 index using a six month sample of about 60 000 observations since there is clear evidence of nonlinearity the authors follow other researchers in this field by applying the same tests to the residuals from a garch process fitted to the data in order to find out whether or not the nonlinearity can be explained by this type of model in the event their results suggest that garch can explain some but not all of the observed nonlinear dependence copyright 1995 by royal economic society

potential competition actual competition and economic welfare though the origins of anti trust legislation at least in the united states undoubtedly lie in late nineteenth century populist sentiments its current intellectual foundations rest on modern welfare economics these intellectual foundations provide more than just rhetoric as courts have increasingly relied on the testimony of economists to interpret and reinterpret the inevitably vague language of the legislation the reliance on modern welfare economics is somewhat paradoxical for the assumptions underlying the fundamental theorem of welfare economics are peculiarly ill suited to deal with competition in the central area to which anti trust is applied the industrial sectors of modern economies these sectors are characterized by important non convexities which admittedly present inherent problems for competition the competition that does take place is as likely to take the form of product and r d competition rather than price competition product competition plays no role in the conventional welfare paradigm which assumes a complete set of commodities and it is not that arrow and debreu simply forgot to include technical change in their formulations the natural assumptions underlying the analysis of the production marketing and utilization of knowledge are basically inconsistent with those underlying the arrow debreu model invited paper european economic association meetings copenhagen august 1987 financtal support from the national science foundation and the hoover institution is gratefully acknowledged the presence of non convexittes in production is central in explaining why only a ftnite subset of the set of possible commodities is in fact produced techmcal change is characterized by non convexities in its production radner and stiglitz 1984 if technology exhibits say constant returns to scale at a fixed technology when inputs devoted to r d are included it exhibits non convexities the value or information may increuse with the scale of production while conventional theory focuses on markets for homogeneous commodities each piece of new knowledge must be dinerent from previously produced knowledge knowledge has many of the properties of public goods it being both dificult and undesirable to exclude markets for knowledge are at best imperfect and as we have argued

technology strategy governance structure and interdivisional coordination abstract this paper studies how various organizational forms compare in their capacities to solve coordination problems created by technological interdependence between firms divisions i contrast the organizational mechanisms used by two firms ibm and general motors to address these problems while it is widely recognized that centralization distorts incentives facing division managers this paper highlights its benefits when there are large potential gains from agreement on technological standards the examples show how a centralized governance structure supported by lower powered incentives facilitates interdivisional coordination this suggests a refinement of the theory of organizational form based on how firms resolve the tensions between strategic planning and the measurement of organizational units performances

do two earner households base their choice of residential location on both incomes this article focuses on the role of individual incomes in the residential location decisions of two earner households conventional studies often treat households as a black box and describe them by a single utility function the article raises the question is the household utility paradigm an adequate framework for understanding the location decisions of two earner households it tests an implication of the household utility paradigm the income pooling hypothesis for location decisions the results provide evidence for rejecting the hypothesis among childless families but fail to provide evidence for rejecting it when children are present the results raise the need to address intrahousehold dynamics in modelling location decisions