regional diversification and firm performance this study examines how regional diversification affects firm performance the results indicate that regional diversification has linear and curvilinear effects on firm performance regional diversification enhances firm performance linearly up to a certain threshold and then its impact becomes negative the results also show that firms of developed countries maximize their performance when they operate across a moderate number of developed regions and a strictly limited number of developing regions this explains why internationalization by most international firms is regional rather than global

a market performance comparison of u s firms active in domestic developed and developing countries direct foreign investment dfi may benefit investors through superior cash flows or lower risk relative to purely domestic firms this paper considers three groups of u s firms those without significant international operations those with international operations in developed countries and those with international operations in developing countries after performing risk return performance analysis on the three groups the findings show developing country dfi results in inferior performance but that there are no statistically significant differences in market performance among the three

product and international diversification among japanese multinational firms this paper examines the relationship of performance with product and international diversification on japanese multinational firms from 1977 to 1993 we show the relationships between diversification and performance change over time through the use of multiple time periods and accounting for keiretsu membership results show that while diversity strategies vary between keiretsu and non keiretsu firms performance is not much different across time periods performance varies considerably but strategies are less variable product diversity has weak effects on firm performance only in one time period while international diversification has negative profitability and positive growth consequences in in some periods these results suggest first that diversification strategies and their effects on performance vary across time periods and generally produce some unexpected findings we do not find strong interactive diversity effects copyright 2000 john wiley sons ltd

explaining regional autonomy differences in decentralized countries why do groups want to secede and where is demand for self determination most likely to arise we argue self determination demand is moderated by the projected economic costs of policy autonomy the trade off between income and sovereignty implies that other things being equal richer regions are more likely to demand more autonomy this trade off suggests that relative regional income is a key predictor of autonomy demands we show evidence of this using new data collected at the level of second tier administrative sub divisions in 48 decentralized countries consistent with a demand and supply model of self determination we find that levels of policy autonomy are positively correlated with relative regional income regional population share natural resource endowment and regional inter personal inequality ethnically distinct regions have lower sovereignty which could explain higher levels of conflict in these regions but this association is conditional on controlling for the interactive effects be

new venture internationalization strategic change and performance a follow up study abstract although many scholars business experts and government agencies enthusiastically advise all firms including new and small ventures to internationalize such advice does not appear to be based on empirical evidence few researchers have empirically examined the link between new venture performance and the internationalization of new ventures at best the evidence suggests that there is no significant relationship we used a sample of 62 u s new venture manufacturers in the computer and communications equipment industries during the late 1980s these industries were purportedly globalizing and may have been leading other industries into increased international operations we found that higher levels of internationalization percentage of foreign sales to total venture sales were associated with higher relative market share two years later however there was no significant direct relationship between percentage of international sales and subsequent return on investment roi perhaps international operations simply cost more than expected or perhaps as macmillan and day 1987 found in their study of corporate ventures over a 4 year time period increases in market share may be a prelude to higher roi as scale benefits translate into higher profitability however the 2 year time period of our study may simply not be long enough for investments in higher market shares to produce improved profits during the 2 year study period many of the ventures changed their level of internationalization of the 36 ventures who were domestic no international sales in the prior study 10 expanded into international markets over the 2 years of the 26 originally international ventures international sales of at least 5 half increased their percentage of international sales nine reduced it and four stayed the same whereas the average change in international sales percentage of the ventures was only 2 9 percentage points the large standard deviation of 13 0 percentage points and the leptokurtic distribution 9 2 reflected the dramatic changes made by some of the ventures using subgroup analysis we examined these changes in percentage of international sales in conjunction with changes in strategies and performance ventures that had increased international sales relative to those that had not exhibited more positive associations between the degree of strategic change and performance as measured in terms of both relative market share and roi increased international sales in technology based new ventures seems to require simultaneous strategic changes in order to positively impact venture performance this study is a follow up to mcdougall s 1989 finding that technology based new ventures that had sales in foreign markets had significantly different strategies than similar ventures that sold their products only domestically the current study enriches the previous findings by adding consideration of 1 changes in degree of internationalization 2 changes in strategy and 3 venture performance although we found no performance penalty associated with increasing international sales alone indiscriminant advice for new ventures to sell in foreign markets without other supporting strategic actions is inconsistent with our findings internationalization alone did not lead to increased profitability entrepreneurs of young technology based firms who are considering internationalization should take heed of our results internationalization of sales does not appear to be a simple matter of applying established strategies and procedures developed for a domestic arena successful internationalization appears to require changes in the venture s strategy as well

disclosure strategies for pollution control disclosure strategies which involve public and or private attempts to increase the availability of information on pollution form the basis for what some have called the third wave in pollution control policy after legal regulation the first wave and market based instruments the second wave while these strategies have become common in natural resource settings forest certification and organic farming for example they are less familiar in a pollution control context yet the number of applications in that context is now growing in both oecd and developing countries this survey will review what we know and don t know about the use of disclosure strategies to control pollution and conclude with the author s sense of where further research would be particularly helpful

an empirical examination of multinational corporate capital structure this paper examines whether there are systematic differences in the traditional capital structure determinants between mncs and dcs and if there are additional uniquely international factors that may help explain the capital structure choice of multinational corporations the results suggest that specific international factors such as political risk and exchange rate risk are relevant to the multinational capital structure decision that multinationals have higher agency costs than purely domestic firms and that international diversification does not lower earnings volatility for multinational corporations

mne subsidiaries versus domestic enterprises an analysis of their ownership and location specific advantages this paper compares the ownership advantages of multinational enterprises mnes subsidiaries and domestic enterprises dmes in greece previous studies have tested the hypothesis that ownership specific advantages oa are a major source of firm differences this study analyses the processed food sector sic 20 the leading industrial sector in greece with the highest inward and outward internationalization degree using a panel data set of 75 firms and 5 years the findings of a probabilistic regression analysis indicate that there are significant differences between the two groups of firms in the degree of possession of observed ownership advantages mne subsidiaries have higher market shares use multiplant operations and have higher advertising and r d to sales ratios compared to dmes dmes use their well established position knowledge of domestic and regional market conditions and size economies in order to compete effectively with mne subsidiaries it is inferred that pursuit of domestic ma

stakeholder pressures as determinants of csr strategic choice why do firms choose symbolic versus substantive self regulatory codes of conduct to encourage corporations to contribute positively to the environment in which they operate voluntary self regulatory codes src have been enacted and refined over the past 15 years two of the most prominent are the united nations global compact and the global reporting initiative in this paper we explore the impact of different stakeholders pressures on the selection of strategic choices to join srcs our results show that corporations react differently to different sets of stakeholder pressures and that the src selection depends on the type and intensiveness of the stakeholder pressures as well as the resources at hand to respond to those pressures our contribution offers a more specific and finely variegated analysis of firm stakeholder interactions

inequality and the territorial fragmentation of solidarity a long tradition of research has shown decentralized political struc tures as an important cause behind lower levels of redistribution and higher levels of inequality this article offers an alternative interpretation of the association between fragmented fiscal structures and higher levels of inequality i argue that the distribu tive effects of decentralization depend on the preexisting territorial patterns of inequal ity therefore the political choice between alternative fiscal structures is largely driven by their expected distributive consequences as a result the territorial structure of inequality becomes an important factor to explain why some fiscal structures are more integrated than others two mechanisms link regional income distributions and preferences about the decentralization of redistributive policy differences in the demand for redistribution associated with interregional income differences and dif ferences in the demand for social insurance associated with the incidence of labor market risks i test the argument using a data set of fourteen countries in the orga nization for economic cooperation and development oecd over the period 1980 2000 in addition i illustrate the potential of the approach by analyzing why social solidarity remains territorially fragmented in the european union despite the fact that it has a common currency and a common market

social identification and redistribution in heterogeneous federations evidence from germany and belgium recent evidence of increasing income heterogeneity within developed countries has reignited debates concerning the redistribution of income and wealth in this article we contribute to this debate

biased perceptions of income distribution and preferences for redistribution evidence from a survey experiment abstract individual perceptions of income distribution play a vital role in political economy and public finance models yet there is little evidence regarding their origins or accuracy this study examines how individuals form these perceptions and explores their potential impact on preferences for redistribution a tailored household survey provides original evidence on systematic biases in individuals evaluations of their own relative position in the income distribution the study discusses one of the mechanisms that may generate such biases based on the extrapolation of information from endogenous reference groups and presents some suggestive evidence that this mechanism has significant explanatory power the impact of these biased perceptions on attitudes toward redistributive policies is studied by means of an experimental design that was incorporated into the survey which provided consistent information on the own ranking within the income distribution to a randomly selected group of respondents the evidence suggests that those who had overestimated their relative position and thought that they were relatively richer than they were tend to demand higher levels of redistribution when informed of their true ranking

preferences for inter regional redistribution what explains individual support for inter regional redistribution few studies examine support for regional redistribution even though such issues are politically salient in many democracies we test models that hypothesize that such preferences are affected by regional and individual income as well as other arguments beyond the traditional political economy framework we focus on informational assumptions and implications of these models with an experiment embedded in a nationally representative survey in spain we randomly inform some citizens of the true relative income of their region to assess the impact of this information on regional redistribution preferences we find that citizens learning about their region s relative position affects these preferences in a manner consistent with some of the political economy models we also find some support for out group concerns as an important factor the findings have implications for the applicability of economic models to explaining support for region

optimal regional redistribution under asymmetric information this paper studies optimal redistribution among two different regions in a federal state regional governments supply local public goods financed with distorting local taxes they have better information on their tax bases than the federal government we model this both as an adverse selection problem on the size of local tax bases and or as moral hazard problem on local tax enforcement moral hazard alone does not affect the first best redistribution rule which is a lump sum transfer from the rich to the poor region in all other cases the optimal transfer rule involves a lump sum tax on the rich regions and a premium for fiscal effort by the poor regions with the transfer falling short of the first best level in the equilibrium with moral hazard and adverse selection tax evasion occurs only in the poor region even though the possibility of lax tax enforcement benefits the rich and harms the poor region because it reduces equilibrium redistribution this abstract was borrowed from another version of this item

does environmental information disclosure benefit waste discharge reduction evidence from china as a tool for regulating the environment in china does environmental information disclosure reduce pollutant discharge to answer this question we empirically analyzed the emission data of the three wastes i e waste gas wastewater and solid waste in unit industrial gdp in 31 provincial units as a measure to reduce institutional emission environmental information disclosure only slightly influenced waste discharge reduction in the implementation period of the eleventh five year plan of china instead command control and market based tools significantly affected waste discharge reduction representative measures included penalties and charges with the continuously enhanced pressure of control environmental information disclosure facilitates the effects of command control tools on waste discharge reduction content analysis of environmental information disclosed by sample listed companies in jiangsu province was conducted the disclosure of insufficient environmental information on emission reduction can be attributed to adverse selection in system performance i e the selective disclosure trend considering greenwashing in the listed companies and to the limited quality of overall environmental information disclosure this study provides empirical evidence for chinese policy makers to improve the system for environmental information disclosure of listed companies

multinational corporations vs domestic corporations financial performance and characteristics the analysis in this paper is composed of two segments first the financial performance of a sample of multinational corporations mncs is compared with that derived for a control group of domestic corporations dmcs using market based performance measures then the paper presents a comparison of selected financial characteristics of the firms in the two groups the results suggest the dmcs appear to have a significantly superior risk adjusted market based performance are significantly less capitalized and have higher total risk as well as higher systematic risk the fact that mncs are substantially larger than dmcs is not found to be a significant factor in explaining the observed difference between the two groups performance

a three stage theory of international expansion the link between multinationality and performance in the service sector it is generally assumed that the performance of a firm improves with greater multinationality yet recent empirical studies have shown both a u shaped relationship which suggests an initially negative effect of international expansion on performance before the positive returns of international expansion are realized and an inverted u shaped relationship which suggests that international expansion beyond an optimal level is again detrimental to performance and results in a negative slope this paper proposes a new unified three stage theory of international expansion that incorporates both concepts in a sigmoid hypothesis it then tests this on data from 11 service industries highlighting the difference between knowledge based and capital intensive service sectors

comparative analysis of the foreign investment evaluation practices by u s based manufacturing multinational companies a large sample of u s based manufacturing multinational companies were surveyed regarding their investment valuation practices it was found that a foreign direct manufacturing investment fdmi is motivated primarily by profit rather than the recently proposed behavioral considerations b the majority of companies practice project by project analysis of the simple accept reject type rather than the comparative project analysis advocated by financial analysts c most of the companies utilized criteria for single investments cash flows and cost of capital that were in general agreement with the analytical literature d companies were concerned more with business risk than currency and political risks moreover all three types of risk were evaluated subjectively and accounted through adjustments in the required rates of return rather than the cash flows of the fdmi as specified in financial research e analysis of demographic and behavioral variables for possible relationships to fdmi evaluation practices yielded interesting but variable specific results the questionnaires were mailed in may 1979 and the personal interviews were conducted during december 1979 and the first six months of 1980

organizational entrainment and international new ventures from emerging markets organizational entrainment captures the temporal fit in the activity cycles between exchange partners we argue that organizational entrainment between international new ventures invs and their most important international customers positively moderates the relationship between the degree scope and speed of internationalization and performance of invs we test our hypotheses on invs from china india and south africa the results support the contingent role of entrainment for degree and scope of internationalization but not for speed findings suggest that when invs attain temporal fit with their most important international customers they can implement their strategic goals in international markets more effectively

self centered inequity aversion and the mass politics of taxation the politics of economic crises brings distributive economic conflict to the fore of national political debates how policy should be used to transfer resources between citizens becomes a central p

from m p to ma p multinationality alignment and performance rather than searching for a universal optimal level of multinationality for all firms we argue that firm specific attributes should result in firm specific optimal levels of multinationality specifically we draw upon transaction cost and internalization theory to argue that there will be different optimal levels of multinationality for individual firms and if firms internalize foreign operations to an extent less than or greater than their individual optimal levels transaction costs will increase and performance will decrease to test this idea we use transaction cost models in the context of large us law firms during the time period from 1986 through 2008 to estimate firm specific optimal multinationality next we test relationships between alignment with or deviations from firm specific optimal levels of multinationality and performance ma p consistent with the ma p hypothesis insufficient and excessive levels of multinationality are both negatively related to financial performance in addition excessive multinationality is positively associated with downside performance risk one key implication is that an ma p approach may offer greater theoretical validity and clarity than traditional multinationality and performance m p approaches

how elastic are preferences for redistribution evidence from randomized survey experiments we analyze randomized online survey experiments providing interactive customized information on us income inequality the link between top income tax rates and economic growth and the estate tax the treatment has large effects on views about inequality but only slightly moves tax and transfer policy preferences an exception is the estate tax informing respondents of the small share of decedents who pay it doubles support for it the small effects for all other policies can be partially explained by respondents low trust in government and a disconnect between concerns about social issues and the public policies meant to address them jel d31 d72 h23 h24

information as regulation the effect of community right to know laws on toxic emissions abstract there is growing academic and policy level interest in the use of information as quasi regulatory mechanisms such as toxic release inventory tri and green labels mandatory disclosure requirements have been touted as market based incentives that may affect firm behavior we provide new evidence on the effectiveness of disclosure requirements by examining firm behavior in response to disclosures of tri emissions we find that firms with the largest stock price decline on the day this information became public subsequently reduced emissions more than their industry peers this is consistent with the view that financial markets may provide strong incentives for firms to change their environmental behavior

ghg registries participation and performance under the canadian voluntary climate challenge program between 1994 and 2004 the voluntary challenge and registry vcr played an important role in canadian climate change policy in this paper we examine the decision of firms to participate in the vcr the extent of their involvement and then ask if greenhouse gas emissions are related to past vcr participation as an information provision program we find evidence that firms may participate in vcr to signal their environmental responsibility to regulators and to some extent investors but not to consumers we also find that past involvement in the vcr is a strong and significant determinant of current involvement in the registry greenhouse gas emissions reported to the mandatory greenhouse gas reporting program in 2004 however do not appear to be different between vcr reporters and non reporters ghg emissions are observed to be significantly lower among firms that are smaller emit fewer toxic releases use more renewable energy sources are intermediate good producers and are located in quebec ontario and manitoba

the measurement of the degree of foreign involvement this paper extends errunza and senber 1984 in assessing the relationship between alternative measures of the degree of foreign involvement dfi and the conditions under which the use of a specific measure will not affect the outcome of empirical studies on corporate international diversification the results suggest that among 21 pairs of seven most widely used series of dfi only three series foreign assets foreign earnings and foreign tax ratios in two pairs are equivalent evidence of constant returns to scale between the ratio of foreign to total assets and the ratio of foreign to total earnings is also discussed

measuring the degree of internationalization of a firm in spite of both positivistic and instrumental research the reliability of measuring the degree of internationalization of a firm remains speculative we collected data on nine attributes of seventy four american manufacturing mncs alpha factor and frequency analyses revealed a linear combination of five variables with a reliability coefficient of 79 as a measure of the degree of internationalization of a firm we discuss the statistical and conceptual properties of the scale and their implications for content and construct validity

the breakup of nations a political economy analysis this paper develops a model of the breakup or unification of nations in each nation the decision to separate is taken by majority voting a basic trade off between the efficiency gains of unification and the costs in terms of loss of control on political decisions is highlighted the model emphasizes political conflicts over redistribution policies the main results of the paper are i when income distributions vary across regions and the efficiency gains from unification are small separation occurs in equilibrium and ii when all factors of production are perfectly mobile all incentives for separation disappear i introduction following the demise of communism the entire map of europe from the atlantic coast to the urals is being redrawn and issues of separation unification and the redrawing of borders are yet again at the forefront of european concerns many of the issues raised by this process are primarily of a political cultural or linguistic nature however there are also economic considerations that bear on this problem the objective of this paper is to analyze some important economic and political determinants of the process of unification and separation of democratic nations the starting point of our analysis is to suppose that from an economic efficiency point of view separation of nations is never desirable a unified nation is always more efficient since free trade among regions is guaranteed duplication costs in defense and law enforcement are avoided and local public goods provision such as transportation and communication networks or common standards can be coordinated furthermore any benefits of decentralization that might be obtained in a world with several nations may also be achieved within a unified nation by replicating the administrative structure of the world with several

belief in a just world and redistributive politics international surveys reveal wide differences between the views held in different countries concerning the causes of wealth or poverty and the extent to which people are responsible for their own fate at the same time social ethnographies and experiments by psychologists demonstrate individuals recurrent struggle with cognitive dissonance as they seek to maintain and pass on to their children a view of the world where effort ultimately pays off and everyone gets their just deserts this paper offers a model that helps explain i why most people feel such a need to believe in a just world ii why this need and therefore the prevalence of the belief varies considerably across countries iii the implications of this phenomenon for international differences in political ideology levels of redistribution labor supply aggregate income and popular perceptions of the poor the model shows in particular how complementarities arise endogenously between individuals desired beliefs or ideological choices resulting in two equilibria a first american equilibrium is characterized by a high prevalence of just world beliefs among the population and relatively laissez faire policies the other european equilibrium is characterized by more pessimism about the role of effort in economic outcomes and a more extensive welfare state more generally the paper develops a theory of collective beliefs and motivated cognitions including those concerning money consumption and happiness as well as religion

economic prescriptions for environmental problems how the patient followed the doctor s orders o ne of the dangers with ivory tower theorizing is that it is easy to lose sight of the actual set of problems which need to be solved and the range of potential solutions as one who frequently engages in this exercise i can attest to this fact in my view this loss of sight has become increasingly evident in the theoretical structure underlying environmental economics which often emphasizes elegance at the expense of realism in this paper i will argue that both normative and positive theorizing could greatly benefit from a careful examination of the results of recent innovative approaches to environmental management the particular set of policies examined here involves two tools which have received widespread support from the economics community marketable permits and emission charges pigou 1932 dales 1968 kneese and schultze 1975 both tools represent ways to induce businesses to search for lower cost methods of achieving environmental standards they stand in stark contrast to the predominant command and control approach in which a regulator specifies the technology a firm must use to comply with regulations under highly restrictive conditions it can be shown that both of the economic approaches share the desirable feature that any gains in environmental quality will be obtained at the lowest possible cost baumol and oates 1975 until the 1960s these tools only existed on blackboards and in academic journals as products of the fertile imaginations of academics however some countries have recently begun to explore using these tools as part of a broader strategy for managing environmental problems

bringing institutions into performance persistence research exploring the impact of product financial and labor market institutions this study challenges the implicit assumption of homogeneity in national institutional environments made in past studies of firm performance persistence we propose that home country institutions matter we focus on the impact of formal institutions in the product financial and labor markets arguing that they affect the size of pools of exchange partners and the types of exchanges allowed and condoned ultimately these restrictions affect competitive intensity among firms and firm performance persistence using data for over 10 000 firms from 33 countries over a 10 year time frame we show that antitrust law strength a product market institution designed to prevent collusion among firms is associated with decreases in performance persistence unskilled labor market flexibility a labor market institution that reduces legal constraints imposed on residual claimants managers and owners to take necessary actions to maintain or enhance profitability is associated with increases in performance persistence product liability law effectiveness another product market institution and corporate control market development a financial market institution are positively associated with performance persistence only in the case of mnes the two remaining financial and labor market institutions public equity market development respectively skilled labor market availability have a positive respectively negative impact for domestic firms only

why the poor do not expropriate the rich an old argument in new garb we consider a political economy with two partisan parties each party represents a given constituency of voters if one party labour represents poor voters and the other christian democrats rich voters if a redistributive tax policy is the only issue and if there are no incentive considerations then in equilibrium the party representing the poor will propose a tax rate of unity if however there are two issues tax policy and religion for instance then this is not generally the case the analysis shows that if a simple condition on the distribution of voter preferences holds then as the salience of the non economic issue increases the tax rate proposed by labour in equilibrium will fall possibly even to zero even though a majority of the population may have an ideal tax rate of unity 1998 elsevier science s a all rights reserved

credence goods efficient labelling policies and regulatory enforcement we analyse the optimality of information revelation of hidden attributes of credence goods via alternative labelling procedures when consumers are heterogeneous in their willingness to pay for the hidden attribute producers can either self label their products or have them certified by a third party the government can impose self or third party labelling requirements on either the green or the brown producers our benchmark model develops a condition that links the optimal imposition of third party labelling to the relative market share of each type of the good under complete information we extend our analysis to incorporate asymmetric information and cheating by the producers when corrupt producers can affix spurious labels the government needs to supplement the labelling policy with costly monitoring activities we find that mandatory self labelling schemes generally dominate mandatory third party labelling unless the market share effect greatly exceeds the incentive to cheat effect

inequality social insurance and redistribution is the political support for welfare policy higher or lower in less egalitarian societies we answer the question using a model of welfare policy as publicly financed insurance that pays benefits in a redistributive manner when voters have both redistributive and insurance motives for supporting welfare spending the effect of inequality depends on how benefits are targeted greater inequality increases support for welfare expenditures when benefits are targeted to the employed but decreases support when benefits are targeted to those without earnings with endogenous targeting support for benefits to those without earnings declines as inequality increases whereas support for aggregate spending is a v shaped function of inequality statistical analysis of welfare expenditures in advanced industrial societies provides support for key empirical implications of the model

transparency and value chain sustainability the rise of transparency on the public and political agendas is not an accident or fad soon to be replaced by another timely topic in sustainability politics and governance transparency will remain a key topic in global value chains and will further develop as it piggy backs on wider social developments such as globalization the information age and the shifting role of states in environmental governance transparency in value chains is bound up with positive connotations the more transparency the better it is for the sustainability of chains and for the empowerment of consumers and civil society but an overall positive past assessment of value chain transparency does not automatically extend into the future as new challenges lie ahead this paper investigates the new challenges for value chain transparency and their consequences due to the growing importance attached to transparency in value chains it becomes a central object of power struggles with uncertain outcomes markets and states seek to capture transparency arrangements for their own goals which may not be in line with the assumed normative linkages between value chain transparency and increased power for consumers and civil society in that sense transparency is losing its innocence more transparency is no longer always the best for citizen consumer empowerment and for the sustainability of value chains but value chain secrecy is not an attractive alternative this opens a new research agenda on how transparency should be organized and arranged in value chains to live up to the promises of democracy and sustainability

the role of information and social interactions in retirement plan decisions evidence from a randomized experiment this paper analyzes a randomized experiment to shed light on the role of information and social interactions in employees decisions to enroll in a tax deferred account tda retirement plan within a large university the experiment encouraged a random sample of employees in a subset of departments to attend a benee ts information fair organized by the university by promising a monetary reward for attendance the experiment multiplied by more than e ve the attendance rate of these treated individuals relative to controls and tripled that of untreated individuals within departments where some individuals were treated tda enrollment e ve and eleven months after the fair was signie cantly higher in departments where some individuals were treated than in departments where nobody was treated however the effect on tda enrollment is almost as large for individuals in treated departments who did not receive the encouragement as for those who did we provide three interpretations differential treatment effects social network effects and motivational reward effects to account for these results

a model of redistribution under social identification in heterogeneous federations abstract redistribution of resources to accommodate income heterogeneity within a federation is often fiercely debated e g belgium germany or the european union to help elucidate potential drivers behind such debates this article builds on social identity theory to develop a theoretical framework linking jurisdictional identification and preferences towards intra federation redistributive financial flows we show that federal rather than local identification can lead individuals to shift their redistribution preferences against their narrowly defined personal economic interest in contrast to predictions of standard models the sign and strength of this effect depends crucially not only upon individuals characteristics but also upon the social groups i e regions to which they belong we furthermore illustrate that federal rather than regional identification should be more widespread in poorer and or more populous regions within a federation but less common in regions which are very homogeneous internally or very dissimilar from the rest of the federation

market seeking mnes in an emerging market how parent subsidiary links shape overseas success this study extends research on parent subsidiary links applying new theoretical perspectives those of resource dependence and dynamic capability to the new empirical setting of an emerging market we suggest that parent subsidiary links help to mitigate emerging market threats by reducing external dependence and help to capitalize on emerging market opportunities by enhancing local responsiveness

environmental auditing in management systems and public policy abstract new international standards for environmental auditing are now being actively promoted by public authorities and adopted by private firms one important feature of these standards is their emphasis on managerial systems and incentives that support a wiser use of environmental resources this paper studies such a system in which incentive compensation may be based in part on the results of an environmental audit it is found that optimal wages after an environmental audit is performed should have a greater range than wages paid when no audit has occurred it is also shown that the decision to conduct an environmental audit and the size of the expected wage in this case depend crucially on whether the agent s prudence or precautionary motives dominates his aversion to risk it is finally found that the insertion of environmental audits within current management systems would certainly induce a manager to care more about the environment although this may come at the expense of less concern for other activities we find plausible circumstances in which properly designed environmental audits overcome such a tradeoff and increase the manager s attention tobothenvironmental and traditional tasks some implications of the analysis for environmental public policy are also discussed briefly

political risk and dividend policy evidence from international political crises we examine the impact of political risk on firms payout policy using a large international sample across 35 countries over the period from 1990 to 2008 we find that global political crises raise the market perceived uncertainty and cost of external financing using crisis events as a proxy for political risk we document that past dividend payers are more likely to terminate dividends and that non payers are less likely to initiate dividends during periods of high political risk these findings suggest a precautionary incentive of managers in response to political shocks further analysis shows that the effect of political risk on payout policy is stronger for multinational corporations but can be attenuated by country specific institutional settings such as more stable political systems and stronger investor legal protection

private enforcement of federal environmental law while the role of nongovernmental organizations in environmental policy is growing rapidly our analytical understanding of the causes and consequences of this emerging role has not kept pace in the 1970s congress authorized private organizations to seek injunctions and in some cases penalties against firms violating the terms of their environmental operating permits the economic models in this paper show how the varying remedies limitations and reimbursement procedures can affect both the level and patterns of litigation activity as well as the compliance consequences a database containing information on 1 205 cases is used to infuse empirical content into the analysis

preferences for redistribution in the land of opportunities this paper explores how individual preferences for redistribution depend on future income prospects in addition to estimating the impact of individuals socioeconomic background and of their subjective perceptions of future mobility we employ panel data to construct dobjectivet measures of expected gains and losses from redistribution for different categories of individuals we find that such measures have considerable explanatory power and perform better than dgeneral mobilityt indexes we also find that preferences for redistribution respond to individual beliefs on what determines one s position in the social ladder ceteris paribus people who believe that the american society offers equal opportunities are more averse to redistribution d 2004 published by elsevier b v

informal regulation of pollution in a developing country evidence from india abstract recent policy discussions recognise the limitations of formal regulations to stem pollution in developing countries as a result there is a growing interest in the potential of informal regulations to achieve environmental goals in india many polluting industries fall under the rubric of the unorganised sector in such a context localised pollution may be influenced by discussions and reports on pollution in the vernacular press this study attempts to test the hypothesis that the press can act as an informal agent of pollution control this hypothesis is tested using monthly water pollution data from four hot spots in the state of gujarat india for the period 1996 to 2000 the results show that the press can function as an informal regulator if there is sustained interest in news about pollution however not all pollution agents are affected by pollution news press coverage appears to mainly influence industrial estates with a mix of small medium and large industries

protecting the environment when costs and benefits are privately known in this survey i analyze different approaches for protecting the environment when stakeholders are privately informed about the costs and benefits of pollution reduction the presence of asymmetric information calls for some important departures from the textbook prescriptions of marketable permits and emission taxes for controlling pollution for instance it may no longer be optimal to equate the social marginal benefits to the marginal cost of cleanup in determining appropriate abatement levels i conclude this review with some suggestions for future research in this area

cultural diversity and the performance of multinational firms we test the hypothesis that culturally related international diversification will have a positive impact on firm performance and that the opposite will be true for culturally unrelated globalization cultural diversity for fortune 500 firms was used to predict performance over a ten year period 1985 1994 controlling for several organizational and industry characteristics regression tests using nine indicators of cultural diversity revealed no significant cultural effects alternate interpretations are offered

determinants of foreign direct investment a tale of nine theoretical models abstract this paper presents a review of nine theoretical models of foreign direct investment fdi discussed are early studies of determinants of fdi 1 as well as determinants of fdi based on the neoclassical trade theory 2 ownership advantages 3 aggregate variables 4 the ownership location and internalization advantage framework 5 horizontal and vertical fdi models 6 the knowledge capital model 7 diversified fdi and risk diversification models 8 and policy variables 9 from each of the nine theories the relevant determinants of fdi are derived empirical studies indicate the importance of these determinants in the real world the paper shows that there is not one single theory of fdi but a variety of theoretical models attempting to explain fdi and the location decision of multinational firms therefore any analysis of determinants of fdi should not be based on a single theoretical model instead fdi should be explained more broadly by a combination of factors from a variety of theoretical models such as ownership advantages or agglomeration economics market size and characteristics cost factors transport costs protection risk factors and policy variables

voluntary disclosure and investment in environmental technology abstract i examine the role of voluntary disclosure programs in creating market incentives for competing firms to invest in environmentally cleaner technology in an industry subject to environmental regulation such as emission taxes such programs may allow firms to credibly disclose their progress in achieving compliance cost reduction through investments in internal rd the outcome of the investment is private information i show that the ex ante incentive to invest is always higher in the presence of the voluntary disclosure program than without it in particular the opportunity to credibly disclose progress in cost reduction allows a successful firm to convey its true position of competitive advantage to the rival firm and realize higher market share and profit thus voluntary disclosure programs increase the efficacy of traditional forms of environmental regulation in creating incentives for green technological change even when buyers have no preference for greener technology i show that such programs generally increase social welfare

multinationality and performance among british manufacturing companies over the period 1972 84 profitability among 304 large british manufacturing companies was positively related to their degree of multinationality moreover increases in overseas production were strongly associated with increases in sales and profitability the profitability of multinational growth over the whole period was independent of its destination supporting the view that the primary source of the superior performance of multinationals was competitive advantage rather than the higher rate of profit in the industries of other countries

liability of foreignness natural disasters and corporate philanthropy this study examines how philanthropy can mitigate liability of foreignness lof in the aftermath of a national disaster a major disaster restructures the social landscape creating an avenue for corporate contributions to play a role in recovery and relief efforts this social restructuring offers a valuable opportunity for multinational enterprises mnes to establish strong local ties in turn mne contributions at such times have a stronger impact on their local acceptance thus mnes can use these events to strengthen their position in the community and mitigate lof using the context of a national disaster in india i test these arguments with a sample of 190 mnes and 660 domestic firms i found that in the aftermath of the disaster the increase in mne contributions was much larger and less strongly tied to promotional activities than the increase in contributions from domestic firms and this difference persisted over time moreover the performance implication of post disaster philanthropy was stronger for mnes than for domestic firms these findings suggest that philanthropy plays a more strategic role for mnes in the aftermath of a disaster and it has a pronounced effect on mitigating lof