an analysis of interfirm cooperation theory and evidence from electric power pools this paper develops and tests a model for analyzing the extent to which an individual utility participates in a power pool it incorporates the benefits and costs of pool membership in a profit maximization model of an individual utility the study finds that coordination reflects the benefits and costs the degree to which other utilities are committed to the pool and the utility s behavior toward other utilities the results show that large firms are reluctant to pool with small firms and the us pools tend to be loosely coordinated policy implications are that regulatory commissions can be instrumental in coordination efforts and that interstate cooperation among regulatory authorities is needed to encourage pooling and obtain regional solutions to regional problems it is also important to reduce the transactional costs of pooling wherever possible 37 references 3 figures 1 table

language friction and partner selection in cross border r d alliance formation how does language friction affect alliance formation language friction is a form of cultural friction arising from structural differences in the respective languages used by potential partners to reason and solve problems together a little language friction may prompt partners to rethink solutions thereby enhancing collaboration but excessive friction may impede collaboration we develop a language friction index lfi to quantify relative differences in linguistic structure for any language pair utilizing a unique data set of semiconductor design activities 1988 2001 our empirical analysis finds an inverted u shaped relationship between partners lfi and the likelihood of cross border research and development rd 2 the effects of language friction are economically significant and strategically consequential 3 certain aspects of language friction occur independent of language proficiency and persist despite the use of lingua franca to reduce language barriers 4 linguistic diversity is an indirect marker of cognitive diversity which is useful in boosting creativity especially in first time collaborations 5 beyond r d alliances language friction may also influence other types of strategic interactions and organizational processes

a managerial decision model of international cooperative venture formation this paper develops a model of international cooperative venture formation that is centered on the decisionmaking process of mne executives central issues for managerial decisions are developed from the organizational studies literature a framework delineating the sequence and criteria used in the decision to form international cooperative ventures is developed from these defined issues and from existing models propositions pertaining to the venture formation decision process are outlined

linguistic gender marking and its international business ramifications darwin 1859 considered language a form of memory that stores information in a genome like mode grammar according to cognitive science research boroditsky schmidt phillips 2003 impacts a speakers cognitive framework and mental representation of social reality gender is among the most stable grammatical features wichmann holman 2009 and comparing languages is valuable for understanding their social role corbett 2011 such research should have significant value for international business ib where national variations are of focal interest but where the study of linguistics has mostly been relegated to a subset of culture culture based research currently relies on aggregate values based measures of culture e g hofstede 1980 1998 hofstede hofstede minkov 2010 house hanges javidan dorfman gupta 2004 making it susceptible to endogeneity problems and contemporaneous to gender outcomes in contrast a language s grammatical structure is a stable feature inherited from the distant past unbiased by present social political and economic forces

control and coordination in multinational corporations the integration of french and british subsidiaries into u s based multinationals is examined a theory linking the use of control and coordination mechanisms to the need for predictability flexibility and the cost of achieving them is investigated by relating organizational structure technology foreign commitment financial performance and nationality to the use of coordination and control

mixed forests and finance methodological approaches abstract mixed forest ecosystems show effects of risk compensation similar to diversified portfolios of stocks other than portfolios of stocks the composition of long lived forests cannot be adjusted at short notice to current market developments thus the financial robustness of tree species portfolios is very important however it is still an open question which financial approaches are appropriate to evaluate the financial robustness of mixed forests compared to single species forests this paper analysed various possibilities to assess portfolios of tree species namely the mean variance mv approach applied for the selection of optimal portfolios the second order stochastic dominance ssd criterion and the information gap approach for the numerical analysis existing financial data on norway spruce picea abies l karst and european beech fagus sylvatica l were used which were generated by monte carlo simulations mcs under risk regardless of the analysed approach in all cases pure forests did not outperform mixed forests the mv approach was restricted by the assumption of normally distributed financial returns it had the tendency to favour larger proportions of the high risk species norway spruce ssd was only able to distinguish between the efficient and the inefficient portfolios it showed that forests with less than 20 financial returns generated by mcs or less than 30 normally distributed financial returns of norway spruce were inefficient under information gap modelling the advantages of risk compensation in mixed forests became clearest under the given assumptions the financial robustness of a mixed forest 50 european beech and 50 norway spruce was between 4 and 18 times greater than that of pure norway spruce modern information gap modelling is very similar to the well known safety first rules and as such it is not that novel to financial optimisation as it seems at the first glance although the information gap theory resulted in the same rankings as the minimisation of the estimated probability of failure it nevertheless proved to be useful as a supplement to the other methods against the background of severe uncertainty inherent in long term decision making in forestry information gap modelling is based on appropriate assumptions it favours a decision which promises the greatest tolerance to possible errors in the available information while still guaranteeing a minimal acceptable financial result in principle classical safety first rules do the same however the information gap model is able to quantify the immunity of a decision against errors in the estimated financial data from a theoretical point of view this approach provides a supplementary and methodologically sound opportunity to incorporate severe uncertainty in decision making

why and how does shared language affect subsidiary knowledge inflows a social identity perspective extending existing international business ib research we conceptualize shared social identity as an outcome rather than only an antecedent of multinational enterprise knowledge flows to provide an alternative reason for why such knowledge flows occur we further argue that shared language among subsidiary and headquarters hq managers is an insufficient condition for subsidiary knowledge receipt accordingly we develop a moderated mediation model at the subsidiary level to examine how shared language affects subsidiaries tacit knowledge inflows from hq specifically we study 1 whether this relationship is mediated by the extent to which subsidiary managers share hq goals and vision and the extent to which human resources decisions are centralized at hq and 2 whether subsidiary type greenfields vs acquisitions moderates these mediated relationships such that in both cases the mediation will be stronger in foreign acquisitions compared with foreign greenfields building on a sample of 817 subsidiaries in 9 countries regions and a novel subjective measure of shared language we find support for our model implications for research on hq subsidiary knowledge flows social identity theory and the literature on sociolinguistics and international human resource management are discussed and managerial implications outlined

info gap economics an operational introduction yakov ben haim palgrave macmillan 2010 isbn 978 0 230 22804 7 245 pp

capture and ideology in the economic theory of politics the economic theory of regulation long ago put public interest theories of politics to rest these theories have correctly been viewed as normative wishings rather than explanations of real world phenomena they have been replaced by models of political behavior that are consistent with the rest of microeconomics anthony downs 1957 james buchanan and gordon tullock 1965 george stigler 1971 sam peltzman 1976 recently however debate has arisen over whether some version of a public interest theory of regulation will have to be readmitted to our thinking about actions and results in the political arena what is at issue is the empirical importance of the altruistic publicly interested goals of rational actors in determining legislative and regulatory outcomes james kau and paul rubin 1979 kalt 1981 peltzman 1982 this study assesses the nature and significance of publicly interested objectives in a particular instance of economic policymaking u s senate voting on coal strip mining regulations the existence of such objectives is of course no contradiction of the economic view of human behavior kenneth arrow 1972 gary becker 1974 and may well be rooted in genetic biological history becker 1976 jack hirshleifer 1978 generally however individuals altruistic publicly interested goals have been given little attention this reflects the judgment that such goals are so empirically unimportant as to allow the use of occam s razor in positive models or well founded apprehensions that these goals are unusually difficult to identify measure and analyze notwithstanding the latter problem we find that approaches which confine themselves to a view of political actors as narrowly egocentric maximizers explain and predict legislative outcomes poorly the tracking and dissecting of the determinants of voting on coal strip mining policy suggest that the economic theory of politics has been prematurely closed to a broader conception of political behavior

what can we learn from the grand policy experiment lessons from so2 allowance trading stable url http links jstor org sici sici 0895 3309 28199822 2912 3a3 3c69 3awcwlft 3e2 0 co 3b2 tthe journal of economic perspectives is currently published by american economic association your use of the jstor archive indicates your acceptance of jstor s terms and conditions of use available athttp www jstor org about terms html jstor s terms and conditions of use provides in part that unless you have obtainedprior permission you may not download an entire issue of a journal or multiple copies of articles and you may use content inthe jstor archive only for your personal non commercial use please contact the publisher regarding any further use of this work publisher contact information may be obtained athttp www jstor org journals aea html each copy of any part of a jstor transmission must contain the same copyright notice that appears on the screen or printedpage of such transmission the jstor archive is a trusted digital repository providing for long term preservation and access to leading academicjournals and scholarly literature from around the world the archive is supported by libraries scholarly societies publishers and foundations it is an initiative of jstor a not for profit organization with a mission to help the scholarly community takeadvantage of advances in technology for more information regarding jstor please contact support jstor org http www jstor orgtue jun 26 16 25 17 2007

cultural influence on the development of accounting systems internationally a test of gray s 1988 theory this paper attempts to test the theory developed by gray 1988 linking accounting values and systems with hofstede s 1980 cultural constructs based on data from twenty nine countries it finds that while gray s 1988 model has statistically significant explanatory power it is best at explaining actual financial reporting practices and is relatively weak in explaining extant professional and regulatory structures from a cultural base this paper further finds that both the development of financial markets and levels of taxation enhance the explanations offered by gray 1988

building professional discourse in emerging markets language context and the challenge of sensemaking using ethnographic evidence from the former soviet republics this paper examines a relatively new and mainly unobserved concept in international business literature the phenomenon of communication disengagement that manifests itself in many emerging markets we link it to the deficiencies of the local professional business discourse rooted in language limitations which reflects a lack of experience with the market economy this hampers cognitive coherence between foreign and local business entities adding to the liability of foreignness as certain instances of professional experience fail to find adequate linguistic expression and complicates cross cultural adjustments causing multinational companies mncs financial losses we contribute to the ib literature by examining cross border semantic sensemaking through a retrospectively constructed observational study we argue that a relative inadequacy of the national professional idiom is likely to remain a feature of the business environment in post communist economies for some time and therefore should be factored into business strategies of mncs consequently we recommend including discursive hazards in the risk evaluation of international projects

foreign earnings management of us multinational companies the role of decision rights us multinational corporations mncs need to allocate decision rights between parent companies and subsidiaries to manage global operations this article examines how the allocation of decision rights affects foreign earnings management of mncs i find that the extent of foreign earnings management increases when parents retain centralized decision rights but internal cross border frictions between parents and their foreign subsidiaries and the external local legal environment in which foreign subsidiaries operate can mitigate foreign earnings management despite parents having centralized decision rights this study provides evidence on how the decision structures of mncs affect where earnings are managed

the multifaceted role of language in international business unpacking the forms functions and features of a critical challenge to mnc theory and performance language lies at the heart of international business ib activities yet language as a key construct in the field of ib has not been sufficiently articulated or theorized language presents itself in forms such as national corporate technical or electronic in functions in terms of defining hierarchies exercising power or facilitating integration and in features such as the use of mixed syntax or gender marking understanding the complex interplay between the multiple facets of language and how they affect day to day operations is becoming increasingly critical to global business effectiveness the purpose of this special issue is therefore to catalyze and set a course for the development of a new domain in ib scholarship originating from an explicit focus on language

cultural friction in leadership beliefs and foreign invested enterprise survival cultural friction posits that cultural differences may be either synergistic or disruptive but does not specify when or how synergies or disruptions emerge we theorize that synergies will emerge in foreign invested enterprises fies when cultural differences in leadership beliefs are less central to the host nation s cultural identity while disruption will occur when differences are in more culturally central leadership beliefs analyzing survival data from 274 fies in china we found support for these hypotheses with five of the six globe leadership dimensions as predicted differences in the participative and team oriented dimensions were associated with higher firm death while differences in the charismatic autonomous and self protective dimensions were associated with firm survival our results indicate that while there are areas where differences may indeed need to be accepted or minimized there are other areas where differences can be beneficial this requires that managers identify more central aspects of local culture to determine whether to minimize differences or to leverage their synergistic potential

how non native english speaking staff are evaluated in linguistically diverse organizations a sociolinguistic perspective the aim of this paper is to examine the effects of evaluations of non native speaking staff s spoken english in international business settings we adopt a sociolinguistic perspective on power and inequalities in linguistically diverse organizations in an anglophone environment the interpretive qualitative study draws on 54 interviews with non native english speaking staff in 19 uk business schools we analyze along the dimensions of status solidarity and dynamism the ways in which non native speakers on the basis of their spoken english are evaluated by themselves and by listeners we show how such evaluations refer to issues beyond the speaker s linguistic fluency and have consequences for her or his actions the study contributes to the literature on language and power in international business through offering fine grained insights into and elucidating how the interconnected evaluative processes impact the formation and perpetuation of organizational power relations and inequalities it also puts forward implications for managing the officially monolingual yet linguistically diverse organizations

x inefficiency and interfirm rivalry evidence from the electric utility industry competition from the natural gas industry is shown to increase the efficiency of the work force of electric power utilities this conclusion is qualified to the extent that duopoly rivalry does not represent perfect competition in a free market as natural gas reserves decline however the impetus to improve efficiency will diminish but this will be offset by technological advances in both power generation and power transmission if regulators develop policies to encourage competitive interplay utility performance is more likely to improve 38 references 3 tables dck

accounting for endogeneity when assessing strategy performance does entry mode choice affect fdi survival firms choose strategies based on their attributes and industry conditions therefore strategy choice is endogenous and self selected empirical models that do not account for this and regress performance measures on strategy choice variables are potentially misspecified and their conclusions incorrect i highlight how self selection on hard to measure or unobservable characteristics can bias strategy performance estimates and recommend an econometric technique that has been developed to account for this effect although this concern applies to a wide range of strategy questions to demonstrate its effect i empirically examine if entry mode choice acquisition versus greenfield influences foreign direct investment survival in specifications that do not account for self selection i find that greenfield entries have survival advantages compared to acquisitions this confirms previous findings however the significance of this effect disappears once i account for self selection of entry mode in the empirical estimates the results confirm that estimates from models that do not account for self selection of strategy choice can lead to incorrect or misleading conclusions

regulator selection methods and electricity prices proponents of regulator change argue that elected utility commissions would perform better than appointed commissions but an unresolved issue is whether the method of regulator selection influences rate levels and rate structures this analysis presumes that regulators are more than mediators between producers and consumers i e that they act in their self interest to maximize their preference functions the authors hypothesize that directly elected regulators reflecting relatively higher voter input to regulatory decisionmaking permit lower electricity prices and that elected regulators will reflect strong opposition to rate increases economic analysis of the relevance of regulatory arrangement finds that this hypothesis is not valid although the direction in the movement of relative rates through time is consistent with their expectations 23 references 7 tables

brain drain the cognitive neuroscience of foreign language processing in multinational corporations this article adopts a cognitive neuroscience perspective to develop theory about the consequences of foreign language use in organizational settings in contrast to previous work that has focused on the interpersonal effects of foreign language use we focus on intra personal cognitive processes that affect employee performance our model delineates how foreign language processing depletes cognitive resources which can ultimately result in biased decision making and reduced self regulation we discuss theoretical and practical implications of our model for international business research in the context of an increasing number of organizations that have adopted a common corporate language

internationalization of the firm a discourse based view while internationalization process theory has deepened our understanding of international expansion it and many other international business ib theories have largely neglected the underlying managerial processes and decision making contexts of internationalization in response we articulate a model that accounts for both the external context and the internal processes leading to internationalization decisions we argue that internationalization decisions are grounded in contestation and struggle for control eventually leading to a dominant discourse consensus and performativity we illustrate our model through two contrasting cases of internationalization and we show how contemporary ib theories can be enhanced by adding a discourse approach

global strategy and multinationals entry mode choice this paper makes a case directed towards establishing the importance of global strategic considerations in choosing multinationals entry mode specifically it is our contention that beyond the environmental and transaction specific factors well established in the literature to affect the entry mode decision we should also consider the strategic relationship a multinational envisages between its operations across borders in reaching this decision after incorporating various global strategic variables into an eclectic framework of the factors influencing the entry mode choice this paper tests both the validity of the overall framework and the importance of each entry mode determinant in differ entiating among entry modes this is done based on ninety six multinational managers responses to a survey questionnaire concerning their entry mode decision experiences the results suggest that an express incorporation of global strategic variables into an analysis of the entry mode decision is warranted

employees willingness to adopt a foreign functional language in multilingual organizations the role of linguistic identity language holds a central role in sustainable international expansion for multinationals the choice of the functional language can facilitate or hinder communication between headquarters and subsidiary locations in order to communicate effectively with the parent organization host country employees often have to adopt a language that is not native to the subsidiary region we take a subsidiary employee perspective in presenting an interdisciplinary theoretical model of host country employees willingness to adopt a foreign language in multinational organizations the construct of linguistic identity shaped by the linguistic landscape of the host location is introduced as an important determinant in this process specifically the foreign functional language may pose a threat to the employees existing linguistic identity willingness to adopt the foreign functional language may depend upon the extent of this perceived threat we incorporate the effects of foreign language proficiency and individuals motivation for enhancement in the theoretical model both high proficiency in a foreign language and need for social economic and career enhancements can increase individuals willingness to adopt the foreign functional language finally we develop and present implications of the linguistic identity processes for entry mode location and language strategies

a typology of management studies involving culture as a methodological review this paper delineates 6 approaches to researching cross cultural management issues parochial ethnocentric polycentric comparative geocentric and synergistic for each approach assumptions are discussed concerning the similarity and difference across cultures and the extent to which management phenomena are or are not universal the primary types of management questions which can be addressed using each approach are clarified main methodological issues which must be addressed are listed

englishization in offshore call centers a postcolonial perspective the spread and use of english as the lingua franca of international business ib corporate englishization has received increasing scholarly attention in recent years but the focus has mostly been on the communication benefits and challenges of using english as a shared language inside multinationals in this article we examine how english is used externally in the provision of business services and apply a postcolonial perspective to frame our analysis drawing on fieldwork in india within the call center units of two outsourcing organizations serving anglo american firms we show how corporate englishization 1 relies on and contributes to producing comprador managerial cadres 2 serves to construct a transnational intra linguistic hierarchy of power and privilege and 3 undercuts its own effectiveness by simultaneously eliminating and maintaining the alterity of the other through processes of mimicry we thus show how corporate englishization does not merely overcome or conversely worsen transnational communication problems it also re produces colonial style power relations between the anglosphere and the rest our analysis deepens our understanding of corporate englishization and opens a new avenue for postcolonial research on the role of language in ib our analysis also advances the field of postcolonial organization studies and has implications for ib scholarship more generally

the multinational corporation as a multilingual community language and organization in a global context this paper develops a framework for analyzing the multinational corporation mnc as a multilingual community in which parent functional language and subunit functional languages are concurrently used and recursively linked through an intra corporate communication network the unit breadth and intensity of an mnc s language system are designed to apply global strategies within the context of evolving environmental and organizational realities to the extent that language design is the product of deliberate choice we suggest that headquarters functional language is determined by the mnc s international strategy organizational structure and transnationality while subunit functional language is designed in accordance with organizational form strategic role and expatriate deployment aligning language systems with organizational strategy and dynamics improves mnc communication coordination and knowledge sharing

the influence of culture on the process of business negotiations an exploratory study the processes of business negotiations in three countries the united states japan and brazil are compared and contrasted three dyads from each country were videotaped during a buyer seller negotiation simulation both verbal behaviors and nonverbal behaviors were observed and recorded observed differences provide the basis for hypothesized differences which might be tested in future work

effects of regulation on utility financing theory and evidence standing of these cross sectional variations might be afforded by the detailed examination of specific industry characteristics and their relationship to firms financing patterns the present study offers a methodology for approaching this issue the first step is to assemble joint theories of industry and financial structure in order to identify the ways in which changing industry conditions might be associated with changes in financing evidence on such simultaneous changes can then be examined in an attempt to identify the most plausible joint theory the methodology is used to investigate the effects of state commission regulation on the financing of electric utilities this is a natural candidate for study since regulation is such a salient feature of the industry in addition the regulatory system imparts some interesting special features to the very nature of utility capital structures inherent in all capital structures for example are opportunities for shifting wealth between bondholders and shareholders but under regulation these wealth shifting opportunities are expanded to encompass consumers as well finally the study of regulation has resulted in several relatively well specified theories of why regulation is imposed and what its observable effects should be in section i the different theories of capital structure and regulation are discussed and their joint implications are derived the capital structure theories include the perfect capital market theory the debt capacity theory and the financing hierarchy theory the regulatory theories include the public interest or market failure theory the political economy theory and the imperfect monitoring theory in section ii financing data from the early days of state commission utility regulation are used to try to distinguish

regulation of administered prices an empirical analysis of the microeconomics of price movement in finland 1972 77 curiously enough the concept of administered prices launched by gardiner means in his 1934 report to the u s secretary of agriculture still shows up in discussions on price policy and control today almost fifty years since it was coined and three decades after the discussion2 in which it should have been buried even more astonishing is the fact that its spin off administered inflation a term introduced by the kefauver committee in 1957 3 is still a part of economic language in some instances in the basic formulation that of means in 1935 administered prices are not assumed to be explicitly linked with market power but simply prices set by administrative action and held constant for a period of time means 12 p 78 although the hypothesis in this form was based on no economic reasoning of acceptable clarity it might still be accepted for the simple truism it is clearly some prices will change more seldom than others since for one thing costs of price changes will vary as is intuitively clear and as shown by sheshinski and weiss 17 pp 294 95 the optimal strategy of a firm in an inflationary environment will consist of longer intervals between successive price changes the higher the cost of such a change is under some very special assumptions risk aversion may also serve as an explanation to a decrease in the number of price changes relative to the number of changes in cost as indicated by the results of schramm and sherman 1 5 4 the administered inflation hypothesis as forwarded by means in his 1957 testimony before the kefauver committee means 12 pp 101 29 and by

nonmarket strategy performance evidence from u s electric utilities this paper develops and tests a theory of the performance determinants of a firm s nonmarket strategy in shaping public policy outcomes building on the concept of political market attractiveness we argue that nonmarket performance is influenced by both the characteristics of a firm s regulatory and political environment especially rivalry among interest groups or politicians and by internal capabilities that enable a firm to mitigate political transaction costs using data on regulatory filings for rate increases made by u s electric utilities over a 13 year period we find empirical support for our approach

understanding the words of relationships language as an essential tool to manage csr in communities of place multinational enterprises mnes encounter relentless stakeholder pressures when operating across linguistic cultural and institutional boundaries our aims are to examine whether and how acquisition of language resources may help mnes to bridge these boundaries and reduce pressures on mne legitimacy by improving their corporate social responsibility csr outcomes we propose an mne model of language resource acquisition policy based on three language orientations language as problem language as resource and language as right using sociolinguistic tools an ecological analysis of how language affects mne stakeholder relationships and surveying 15 mining mnes from australia canada china south africa switzerland and the united kingdom operating in east africa our research found some mnes employ regional lingua francas like swahili and local leadership practices to build sustainable relationships with local stakeholders these local stakeholders are members of communities of place cofp who steward the land their ancestors have inhabited for centuries and their voices have grown as to how that land is used as their voices have grown mnes should improve csr outcomes with cofp through better communications a well designed language acquisition policy may improve such communication and so fend off threats to mne legitimacy

behavior of the firm under regulatory constraint a recent article by akira takayama discusses an earlier paper by harvey averch and leland l johnson on fair rate of return regulation of public utilities although takayama p 255 agrees with averch and johnson s general conclusions that a firm will tend to increase its investment with the introduction of an active constraint on its rate of return he criticizes the a j argument as being confusing ambiguous and in error takayama then attempts a clarification and presents a new formulation which leads to the a j result quoted above this comment will discuss several of takayama s criticisms in addition to showing that the so called a j effect cannot be derived from the basic assumptions made by both averch and johnson and takayama 1 we will show that the very assumptions used to prove the a j effect by defining the region of x require an assumption that the a j effect exists in the first place

re considering language within a cosmopolitan understanding toward a multilingual franca approach in international business studies much of the literature on language in international business ib has sought either to lay out the advantages of a common language or lingua franca that crosses the linguistic boundaries of a multinational company mnc harzing koster magner 2011 luo shenkar 2006 or to identify the imperialistic and hegemonic effects of using such lingua franca which mostly turns out to be english on actors in local subsidiaries piekkari vaara tienari santti 2005 tietze 2008 in our view looking into the relationship between globalization and language s is more complex than simply pointing at the proliferation of english and the effects of its linguistic imperialism within one global market place actually there is within every process of globalization simultaneously a genuine concern about issues of localization and contextualization appadurai 1996 bauman 1998 also increased mobility has provided people access to very fragmented and incomplete language repertoires often consisting of spoken vernacular and accented varieties of different languages in which they have differentially developed literacy skills blommaert dong 2010 such complexities between globalization processes and linguistic repertoires raise the question of how until now studies on language in ib tend to approach the notion of language itself and how they often implicitly think about the relationship between universality and particularity when studying language within globalization processes

optimizing the shares of native tree species in forest plantations with biased financial parameters abstract addressing uncertainty is a key requirement to follow the principle of precaution in sustainable ecosystem management the maximization of worst case outcomes according to the maximin decision rule based on the two parameters mean and variance of a financial indicator is a prominent approach to integrate uncertainty in decision making in forestry the problem of selecting the optimum tree species combination for a forest plantation investment can be seen as a problem of optimal portfolio selection to be solved according to the maximin decision rule yet it is well known that portfolios computed from expected means and variances are highly sensitive to changes in the estimated parameters the financial results may be poor if we rely too much on the historical data this paper tests an extended worst case model that considers a lower bound for the expected mean net present value npv of a tree species portfolio and an upper bound for its variance biased expected mean npvs variances and correlations for the tree species picea abies l karst spruce and fagus sylvatica l beech were used to test the variability of the resulting tree species portfolios 27 scenarios a comprehensive simulated data set which was adopted from an existing study and defined as the independent reference served to evaluate the financial performance of the tree species portfolios obtained from optimization with the biased data compared with the results of classical worst case optimization instances it was feasible to reduce the variability of tree species shares effectively when the optimization was carried out with the extended worst case approach furthermore the financial performance of this approach was better when tested with the independent data the worst case forest npvs achieved with the extended approach were on average 10 statistical confidence 0 95 or 147 statistical confidence 0 99 greater in comparison to the results of the classical approach the influence of the uncertainty parameter selection was tested and the results were discussed against the controversial viewpoints on the usefulness of the information gap decision theory finally the significance of our results for sustainable ecosystem management is pointed out

the influence of the economic approaches to regulation on banking regulations a short history of banking regulations this article highlights the theoretical foundations of the regulations at work in the banking sector and examines their responsibility in the onset of the 2007 2008 financial crisis drawing a parallel between the main changes in banking regulations since the 1960s and the evolutions in the economic analyses of regulation over the same period it shows that the shift from the public interest theory of regulation that prevailed until the late 1960s towards the private interest theory of regulation accounts for the substitution of micro prudential regulations for macro prudential ones and explains a paradigmatic change in the conception of the regulatory instruments of the banking authorities it also shows that although the outcome of several factors the 2007 2008 crisis was also a consequence of the fact that the economic analysis of banking regulations supported micro prudential regulations that fail to take the global features and impact of banking activities into account and have proved unable to recommend effective solutions in a context of crisis

role conflict and role ambiguity of chief executive officers in international joint ventures this study examines the organizational and personal correlates of role conflict and role ambiguity of chief executive officers heading international joint ventures role conflict was found to be lower when the number of parent firms was higher and when the ceo had spent more years with the organization role ambiguity was found to be lower when the ceo had more years of education when the power distance and masculinity femininity gap between parents were lower and when the individualism collectivism and uncertainty avoidance gaps were higher the implications of these findings for role theory and international management are discussed

implementing global strategy characteristics of global subsidiary mandates implementing a global strategy requires coordinating subsidiary activities across country locations the assumption often made is that such coordination must be managed at headquarters however an alternate approach is decentralized centralized responsibilities in which different subsidiaries within the multinational are given worldwide mandates to manage specific products or products lines this study identifies subsidiary characteristics that are associated with receiving a global mandate by examining foreign subsidiaries located in france germany japan u k u s and canada

the effect of national culture on the choice of entry mode characteristics of national cultures have frequently been claimed to influence the selection of entry modes this article investigates this claim by developing a theoretical argument for why culture should influence the choice of entry two hypotheses are derived which relate culture to entry mode choice one focusing on the cultural distance between countries the other on attitudes towards uncertainty avoidance using a multinomial logit model and controlling for other effects the hypotheses are tested by analysing data on 228 entries into the united states market by acquisition wholly owned greenfield and joint venture empirical support for the effect of national culture on entry choice is found

efficiency based rank assessment for electric power industry a combined use of data envelopment analysis dea and dea discriminant analysis da abstract this study discusses a combined use of dea data environment analysis and dea da discriminant analysis to determine the efficiency based rank of energy firms this type of performance evaluation is important because we often have a difficulty in accessing a large sample on energy firms to derive reliable empirical results the proposed approach is useful in dealing with such a limited number of energy firms often found in previous dea studies on energy industries in the world the proposed approach uses dea to classify energy firms into efficient and inefficient groups based upon their efficiency scores then it utilizes dea da to assess their efficiency scores and ranks in this stage we can find an adjusted efficiency score for each energy firm the proposed approach provides us with the following analytical capabilities all of which cannot be found in a conventional use of dea in assessing energy firms first the proposed dea approach can avoid zero in all multipliers on efficient energy firms by incorporating scsc strong complementary slackness condition so that it can handle an occurrence of multiple reference sets and multiple projections the dea result classifies all energy firms into efficient and inefficient groups second dea da applied to the two groups evaluates all energy firms by an industry wide evaluation not depending upon a limited number of efficient energy firms in a reference set as found in a conventional use of dea the analytical capability can reduce the number of efficient energy firms third the proposed approach can provide their efficiency based ranking scores finally we can conduct a rank sum test based upon their ranking scores to obtain a statistical inference as an application this study uses the proposed approach to examine the performance of japanese electric power industry we find two economic implications one of the two implications is that no major change has occurred in the operational performance of japanese electric power industry because of japanese sluggish economy from 2005 to 2009 the other implication indicates that there are strategic differences in the operation of japanese electric power firms after the liberalization

capital vintage time trends and technical change in the electric power industry beginning with tinbergen in 1942 economists have employed a time trend in cost or production functions to represent the rate at which new technology is introduced into the production unit in sufficiently flexible models of the production process the time trend may be used to obtain estimates of the rate as well as direction of technical change the use of the time trend is generally defended on pragmatic grounds as no theoretical justification exists for assuming that new technology is introduced at a steady rate that is independent of a firm s investment in r d education capital of a more recent vintage etc in recent years alternatives to the traditional time trend have been sought to represent the rate at which new technology is introduced research in this area has been concentrated in the telecommunications industry where the stock of r d or the percentage of calls completed by direct dialing or modern switching facilities have been employed as technological indices by nadiri and schankerman 32 denny et al 14 and christensen et al 7 the latter two studies indicate that explicit technological indices provide a better representation of the pace of innovation than the time trend this conclusion must remain tentative however as it is not possible to determine what is the true direction of technical change in these studies this shortcoming is overcome in a recent study by kopp and smith 24 who compare the performance of time trends and explicit technological indices in a study using pseudo data generated by process analysis models their results unambiguously support the use of technologically explicit indicators of technical change and indicate that the use of a time trend may not provide a consistent estimate of the direction of technical change this study does not however shed any light on the ability of a time trend to accurately reflect the rate of technical change the purpose of this study is to investigate the effects of alternative technological indices on the estimated rate and direction of technical change in the electric power industry the performance of a time trend is compared with that of a vintage index computed as the average age of a firm s steam generating capacity this latter index is consistent with the notion that new technology is embodied in newly constructed capital an assumption sup

cost efficiency of electric grid utilities in china a comparison of estimates from sfa mle sfa bayes and stoned cnls with the purpose of estimating the range of cost efficiency levels of the power grid sector in china we assembled a data set including 23 provincial power grid companies spanning from 2005 to 2009 and conducted an empirical study based on the sfa mle sfa bayes and stoned cnls methodologies empirical results show that the average values of efficiency from different models vary from 0 85 to 0 92 depending especially on the assumptions underlying inefficiency content further results demonstrate that there is exogenous technical progress during the sample period and per capita gdp of the province is negatively related to the costs of the electric grid company located in the corresponding province we hope this empirical study will contribute to the debate on an efficiency based regulation scheme which was introduced to the chinese electric grid sector on a pilot base in 2014

service quality in the electricity industry the role of privatization and managerial behavior abstract this paper analyzes the relationship between privatization and service quality in the electricity industry and tests the hypothesis that managerial behavior is a significant intervening factor the sample includes 31 italian distributors over the period 1998 2004 their quality performance is represented by continuity of supply an aspect of quality that is both contractible and regulated results of the empirical analysis suggest that the transfer of shareholdings to private investors does not lead to quality degradation the results also suggest that managerial dominance translates into a reduction in supply quality this effect is likely to be particularly strong for public sector utilities

knowledge transfer in multinational corporations productive and counterproductive effects of language sensitive recruitment this paper focuses on the multifaceted role of language and language sensitive recruitment in knowledge transfer in multinational corporations mncs in particular we develop a framework that helps to better understand how language sensitive recruitment is related to competence networks identity and power we started by conducting a qualitative interview based study of 101 mnc subsidiaries this analysis elucidates the productive and counterproductive effects of language sensitive recruitment on knowledge transfer related to communication competence networks identity and power to further understand the productive and counterproductive effects we conducted a quantitative study in 285 mnc subsidiaries we found an inverted u shaped relationship between language sensitive recruitment and knowledge transfer together these two studies provide a better understanding of the multifaceted and at times counterintuitive implications of language sensitive recruitment on knowledge transfer in mncs by elucidating these effects this paper contributes to the stream of research examining the role of language in mncs and international business more generally it further adds to research on mnc knowledge transfer that to date has focused little attention on language by elaborating on the potential unintended consequences of language sensitive recruitment this paper also has implications for international human resource management research

behavior of the firm under regulatory constraint a recent article in this review by averch and johnson 3 on the fair rate of return regulation in public utilities industries or more generally regulated industries attracted the attention of many economists in essence averch johnson argues that the introduction of an active constraint of a fair rate of return type would induce the firm to invest more than the original profit maximizing value of capital and this would create an inefficient allocation of inputs in addition to frequent citations in verbal arguments it has invited some thieoretical extensions by economists such as wvestfield 8 and klevorick 5 all of the writers seem to accept the basic theoretical foundations set by averch and johnson for example klevorick 5 recently proposed that the fair rate of return should be inversely related to the size of the capital of a firm the intuitive basis for this is apparent for it in effect creates a penalty as the amount of capital used by the firm increases however it seems to me that averchjohnson s original arguments are sketchy and contain somewhat ambiguous logic at several important points although their conclusion for which they tried to find empirical support that a firm will tend to increase its investment with the introduction of an active constraint seems to be correct it does not follow from their arguments in particular there seems to be a serious error which arises from confusing movements along a curve and shifts of a curve in section ii we clarify those ambiguities and if necessary correct the mistakes in the third section of this paper we shall provide a new formulation of the problem we shall find that the new formulation will give the same answer as averchjohnson namely that a firm will tend to invest more with the iiltroductioin of an active constraint it should be noted however that while the conclusion happens to be the same this was not the necessity for we needed a completely new formulation to obtain the old conclusion

time of use pricing for load management programs in taiwan power company load management programs have been actively performed by the utilities to reduce peak demand and improve system load factor in recent years the time of use tou tariff based on the peak load pricing theory has been one of the most effective load management strategies proper tou rate structure can actually reflect the generation cost of electricity supplying and give a guideline for customers to modify the power consumption pattern so that the system load factor can be improved the inverse electricity pricing rule can be applied as the basis of tou pricing in this paper the price elasticities of industrial customers of taipower system are solved by the statistical regression model with 2620 data samples

regulated equity returns a puzzle abstract based on a database of u s electric utility rate cases spanning nearly four decades the returns on equity authorized by regulators have exhibited a large and growing premium over the riskless rate of return this growing premium does not appear to be explained by traditional asset pricing models often in direct contrast to regulators stated intent we suggest possible alternative explanations drawn from finance public policy public choice and the behavioral economics literature however absent some normative justification for this premium it would appear that regulators are authorizing excessive returns on equity to utility investors and that these excess returns translate into tangible profits for utility firms

the multiproduct firm quality choice and regulation a monopolist facing a market of heterogeneous consumers will distort the quality a rray this paper explores three regulatory remedies minimum quality s tandards mqs maximum price regulation mpr and rate of return re gulation rorr that can counteract this distortion mqs and mpr rais e the quality offered to consumers with a low willingness to pay for quality while mqs have no effect on the quality offered to consumers with a high willingness to pay mpr decreases the quality offered to this group if production of high low quality goods is capital i ntensive rorr increases decreases the quality offered to both grou ps copyright 1988 by blackwell publishing ltd

pricing efficiency under rate of return regulation some empirical evidence for the electric utility industry the authors test quasi optimal pricing rules for rate of return regulation for a sample of electric utilities they estimate the regulated cost function and demand equations by class of customer for the sample to yield the cost and demand parameters required to assess the utility rate structures the results indicate that the price structure of electricity by class of customer is not quasi optimal and that welfare improvement might be possible under alternative prices searching for the price structure which satisfies the criteria they find that commercial users rates have been too high relative to residential and to a lesser extent industrial rates they note that commercial uses tend to be less organized and more poorly represented in the rate making process 16 references 8 tables

regulatory and life cycle influences on managerial incentives an important controversy persists in economics concerning the appropriateness of profit maximization as opposed to various competing nontraditional theories of the firm 13 of particular interest has been the comparative relevance of the sales maximization hypothesis suggested by baumol 4 and others a typical methodology employed to empirically analyze the profit versus sales maximization issue has been to question whether the financial rewards of top executives are more strongly influenced by corporate profit or sales performance it is implicitly assumed that the firm has a well defined set of organizational goals and that the structure of executive compensation is designed to provide executives with a consistent set of incentives therefore should profit performance constitute a significant determinant of executive compensation support for the profit maximization hypothesis would be gained on the other hand if executive compensation is closely related to firm sales then the nontraditional sales maximization hypothesis would be supported in an early empirical analysis of the issue mcguire chiu and elbing 14 found that sales and compensation were more highly correlated than were profits and compensation and therefore that the baumol hypothesis seemed most relevant lewellen and huntsman 12 pointed out however that mcguire et al had neglected to consider the deferred and contingent stock options etc elements of executive compensation and in so doing had perhaps biased their analysis against the profit maximization hypothesis by correctly considering the impact of corporate performance on the total compensation of top corporate executives lewellen and huntsman found strong support for the profit maximization hypothesis and no support for sales maximization in fact so convincing were the lewellen and huntsman results that they seemed to resolve the managerial motivation issue in favor of the traditional profit maximization model more recent empirical analyses however have tended to suggest that the issue is far from resolved baker 3 boyes and schlagenhauf 5 and ciscel and carroll 6 have all

media choice in multilingual virtual teams this study investigates the impact of language barriers on multilingual virtual teams members choice between different communication media in their inner team interactions through interviewing team leaders and members in both mono and multilingual virtual teams we discover discrepancies in media choice and media performance between these two settings and identify foreign language induced cognitive load as a key reason for these divergences our study advances research on communication and knowledge exchange in multilingual virtual collaboration by showing how language barriers alter the process of converging different viewpoints through team interaction by suggesting language related modifications to the seminal media synchronicity theory and by demonstrating the benefits of new media in multilingual settings it also broadens the disciplinary scope of language research in international business by introducing theories from communication studies and cognitive research in practical terms it highlights the benefits of redundant communication the need for an adequate media infrastructure in multinational corporations and the importance of motivating team members to use new media

the impact of language barriers on trust formation in multinational teams this study systematically investigates how language barriers influence trust formation in multinational teams mnts on the basis of 90 interviews with team members team leaders and senior managers in 15 mnts in 3 german automotive corporations the authors show how mnt members cognitive and emotional reactions to language barriers influence their perceived trustworthiness and intention to trust which in turn affect trust formation the authors contribute to diversity research by distinguishing the exclusively negative language effects from the more ambivalent effects of other diversity dimensions their findings also illustrate how surface level language diversity may create perceptions of deep level diversity furthermore their study advances mnt research by revealing the specific influences of language barriers on team trust an important mediator between team inputs and performance outcomes it thereby encourages the examination of other team processes through a language lens finally their study suggests that multilingual settings necessitate a reexamination and modification of the seminal trust theories by mayer davis and schoorman and by mcallister in terms of practical implications the authors outline how mnt leaders can manage their subordinates problematic reactions to language barriers and how mnt members can enhance their perceived trustworthiness in multilingual settings

the impact of consumer advocates on regulatory policy in the electric utility sector we examine the effect of consumer advocate participation in administrative procedures on regulatory policy we use a unique panel database of rate reviews conducted for us electric utilities from 1980 to 2007 to assess how state consumer advocates affect public utility commission decisions on utilities allowed financial returns and rate structures we find first that utilities experience fewer rate reviews in states with consumer advocates consistent with utilities strategically postponing requests for rate increases second after controlling for observed and unobserved state characteristics we find that pucs in states with consumer advocates permit returns on equity that are on average 0 45 percentage points lower than states without advocates equivalent to a 7 9 million 3 7 reduction in average utility operating income all else equal third consumer advocates are associated with lower residential rates relative to other customer classes our findings provide statistical support for the thesis that institutionalizing interest group representation in administrative procedures is one way for legislatures indirectly to influence agency determined policies

an institutional logics approach to liability of foreignness the case of mining mnes in sub saharan africa prior research on firms liability of foreignness lof has emphasized the role of isomorphic behavior in overcoming lof however the literature has not adequately considered how firms can overcome lof under conditions of institutional complexity when fundamental differences in firms home and host country values beliefs and rules may make isomorphic behaviors impossible or undesirable in this article we use the emerging research on institutional logics and institutional entrepreneurship to address this important issue by examining case studies of eight foreign mining mnes experiencing lof in sub saharan africa based upon our qualitative analysis we find that mnes can overcome lof by co creating new institutional logics rather than conforming to existing ones yet our data show that this is a difficult process one that may not be capable of being done unilaterally by the mne instead we find that local employees embedded in both sets of competing institutional logics acted as key intermediaries who facilitated institutional entrepreneurship moreover we found that firms implementation strategy matters as well in some cases institutional entrepreneurship mitigated lof in others friction returned to varying degrees

regulatory restructuring and incumbent price dynamics the case of u s local telephone markets prior to the telecommunications act of 1996 many u s states restructured their regulatory framework by replacing rate of return regulation with competition in both the local exchange service and local long distance markets and adopting price regulation price caps and price freezes using a panel data set of incumbent firm prices for three services i investigate whether price regulation and differences in entry conditions affect incumbent operators rate structures i find that competition has prompted a significant amount of rate rebalancing by reducing the amount of cross subsidization present in local telephone markets in addition the added flexibility of price cap regulation speeds the rate rebalance effects of competition

requiem for option value as freeman 1984 accurately notes a lot of ink has been spilled over the concept of option value during the last two decades graham in his seminal 1981 article outlined the specific conditions under which option price is and more significantly is not an appropriate and relevant measure of value under demand uncertainty while graham s article demonstrates that option value is relevant only under restrictive assumptions regarding preferences and the nature of the uncertainty both the tone and contents of recent articles on the

innovation in multinational corporations control and communication patterns in international r d operations this paper addresses issues of global innovation in multinational corporations by examining the patterns of communication and control in international rd 2 local and international adaptors both focus their communication on their internal corporate network and 3 international creators have strong internally and externally oriented networks of relationships the implications for the management of global innovation are discussed 1998 john wiley sons ltd

the political economy of state level administrative procedure acts abstract one of the most important developments in theories of american bureaucracy has been the claim that organizational procedures that are enacted by public officials have a significant impact on the nature of both bureaucratic control and performance this development has been accompanied however by limited empirical investigation we address this gap by examining the conditions under which administrative procedure acts apas are adopted by the states in particular we test five hypotheses derived from the literature as to when a state level apa slapa will be adopted in general two conditions increase the likelihood that a slapa will be adopted 1 when democratic legislative supermajorities face a republican governor and 2 when democratic control is perceived to be temporary these results indicate that existing theories emphasizing agency and dynamic effects are empirically valid albeit with an important qualification there is a distinctive partisan bias in the usefulness of administra

product complementarities capabilities and governance a dynamic transaction cost perspective the organization and governance of the transactions that comprise a bundling arrangement depend on the distribution of capabilities among firms and the amount of time during which the window of opportunity for earning rents is expected to remain open firms engaged in inter firm collaboration must undertake support transactions related to billing marketing customer support and product repair these support transactions differ from the core transactions that have traditionally been perceived as sufficient to provide a product bundle since support transactions create costs of their own the market may turn out to be an expensive means of governing collaborative arrangements undertaken for bundling purposes the telecommunications service sector provides an illustration copyright 1997 by oxford university press

nationality cultural distance and expatriate status effects on the managerial network in a multinational enterprise we study the role of three characteristics of international managers nationality cultural distance and expatriate status for their network ties a network analysis of cross subsidiary interactions among 457 managers in an mne demonstrates that managers form strong expressive ties with peers with smaller cultural distance and from the same status group however managers form strong instrumental ties with peers who are different on these background characteristics the implications for international management theory and practice are discussed

language policies and practices in wholly owned foreign subsidiaries a recontextualization perspective this study adopts a recontextualization perspective on language policies and practices in wholly owned foreign subsidiaries drawing on a field study of 101 subsidiaries in japan we develop a contingency model that distinguishes between four different types of recontextualization with characteristic language policies and practices developing locally adaptive developing globally integrated established locally adaptive and established globally integrated our analysis shows how each of these four types is accompanied by specific problems and challenges in particular it elucidates five important aspects of language implementation 1 the emergence of language praxis from the interplay of headquarters strategies and local responses 2 the hybridization of language practices 3 the central role of key actors such as subsidiary presidents in recontextualization 4 the pervasive power implications of language policies and practices and 5 the multifaceted implications for strategic human resource management by so doing our analysis opens up new avenues for context specific and practice oriented studies of language in multinational companies

an examination of the effect of ownership on the relative efficiency of public and private water utilities the behavior of privately and publicly owned water utilities is examined by estimating a generalized variable cost function containing the regular characteristics of the neoclassical cost function without requiring that cost minimization subject to market prices be imposed as a maintained hypothesis assuming that unobserved shadow prices reflect the regulatory environment of the water industry tests for cost minimization are obtained by deriving shadow prices as functions of market prices the empirical results provide evidence that public water utilities are more efficient than private utilities on average but are more widely dispersed between best and worst practice

consumer capture of regulatory institutions the creation of public utility consumer advocates in the united states we examine the conditions under which state legislatures in the united states orga nized public utility consumers during the 1970s and 1980s by creating independent consumer advocates with resources and authority to intervene in public utility rate making procedures while economic factors notably utility fuel cost increases were important predictors state political conditions were estimated to have a larger impact on the probability of implemen tation we find that the pattern of adoption is consistent with the hypothesis that legislatures deploy institutions as a mechanism for insulating regulatory policies against future reform in general democrat controlled governments were significantly more likely to implement con sumer advocates when they were less certain about being re elected to office during this period we find also that the effect of political re election expectations was particularly acute for the creation of advocates representing solely residential consumers a relatively disorganized in terest group our results suggest that legislatures organize and publicly fund interest groups to protect supportive but vulnerable groups against adverse future political environments

regulating a monopolist with unknown costs we consider the problem of how to regulate a monopolistic firm whose costs are unknown to the regulator the regulator s objective is to maximize a linear social welfare function of the consumers surplus and the firm s profit in the optimal regulatory policy prices and subsidies are designed as functions of the firm s cost report so that expected social welfare is maximized subject to the constraints that the firm has nonnegative profit and has no incentive to misrepresent its costs we explicitly derive the optimal policy and analyze its properties in their classic papers dupuit 2 and hotelling 5 considered pricing policies for a bridge that had a fixed cost of construction and zero marginal cost they demonstrated that the pricing policy that maximizes consumer well being is to set price equal to marginal cost and to provide a subsidy to the supplier equal to the fixed cost so that a firm would be willing to provide the bridge this first best solution is based on a number of informational assumptions first the demand function is assumed to be known to both the regulator and to the firm while the assumption of complete information may be too strong the assumption that information about demand is as available to the regulator as it is to the firm does not seem unnatural a second informational assumption is that the regulator has complete information about the cost of the firm or at least has the same information about cost as does the firm this assumption is unlikely to be met in reality since the firm would be expected to have better information about costs than would the regulator as weitzman has stated an essential feature of the regulatory environment i am trying to describe is uncertainty about the exact specification of each firm s cost function in most cases even the managers and engineers most closely associated with production will be unable to precisely specify beforehand the cheapest way to generate various hypothetical output levels because they are yet removed from the production process the regulators are likely to be vaguer still about a firm s cost function 12 p 684 as this observation suggests it is natural to expect that a firm would have better information regarding its costs than would a regulator the purpose of this paper is to develop an optimal regulatory policy for the case in which the regulator does not know the costs of the firm one strategy that a regulator could use in the absence of full information about costs is to give the firm the title to the total social surplus and to delegate the pricing decision to the firm in pursuing its own interests which would then be to maximize the total social surplus the firm would adopt the same marginal cost pricing strategy that the regulator would have imposed if the regulator had

the heckman correction for sample selection and its critique this paper gives a short overview of monte carlo studies on the usefulness of heckman s 1976 1979 two step estimator for estimating selection models such models occur frequently in empirical work especially in microeconometrics when estimating wage equations or consumer expenditures it is shown that exploratory work to check for collinearity problems is strongly recommended before deciding on which estimator to apply in the absence of collinearity problems the full information maximum likelihood estimator is preferable to the limited information two step method of heckman although the latter also gives reasonable results if however collinearity problems prevail subsample ols or the two part model is the most robust amongst the simple to calculate estimators