does child labor decline with improving economic status between 1993 and 1997 child labor in vietnam declined by nearly 30 percent while the country s gdp grew by nearly 9 percent per year on average using a simple nonparametric decomposition i investigate the relationship between improvements in per capita expenditure and child labor with a panel data set that spans this episode of growth in vietnam improvements in per capita expenditure can explain 80 percent of the decline in child labor that occurs in households whose expenditures improve enough to move out of poverty this finding suggests a previously undocumented role for economic growth in the amelioration of child labor

education and invention abstract modern growth theory puts invention on the center stage inventions are created by individuals raising the question of whether we can increase the number of inventors to answer this question we study the causal effect of msc engineering education on invention using data on u s patents finnish inventors and the distance to the nearest technical university as an instrument we find a positive effect of engineering education on the propensity to patent and a negative ols bias our counterfactual calculation suggests that establishing three new technical universities resulted in a 20 increase in the number of uspto patents by finnish inventors

res and risk renewable energy s contribution to energy security a portfolio based approach abstract during the first decade of the 21st century renewable energy sources res had been gaining momentum due to environmental issues concerns about pollution and climate change have raised public awareness encouraging governments to adopt policies to preserve and protect the environment regarding energy res promotion together with energy efficiency measures has been the main policy response to address such concerns as a consequence res development during the first decade of the 21st century has been remarkable although res deployment has been mainly focused on achieving environmental goals its potential contribution to energy security went not unnoticed however it is worth noting that while the trade off between environmental goals and the use of res to accomplish them and competitiveness has been widely explored the relationship between energy security and res has received less attention both at the conceptual and energy policy levels this article tries to address such a relationship the present article focuses on renewable electricity imports as illustrated by the case of the mediterranean solar plan after introducing the energy security energy risk concept and its dimensions the article focuses on the contribution of res in terms of security of supply for a given energy mix using the portfolio theory most of the analyses of the interactions between res and energy security focus on the national level with res being mainly conceived as a substitute for fuel imports to produce electricity and reduce so called energy dependence however new transmission technologies allow the import of electricity directly from neighbouring countries far out of the range of regular electricity lines therefore this article tries to broaden the analysis of energy security to international res trade flows applying the previous discussion to the main project involving significant international green electricity trade the mediterranean solar plan

governments as owners state owned multinational companies the globalization of state owned multinational companies somncs has become an important phenomenon in international business ib yet it has received scant attention in the literature we explain how the analysis of somncs can help advance the literature by extending our understanding of state owned firms soes and multinational companies mncs in at least two ways first we cross fertilize the ib and soes literatures in their analysis of foreign investment behavior and introduce two arguments the extraterritoriality argument which helps explain how the mnc dimension of somncs extends the soe literature and the non business internationalization argument which helps explain how the soe dimension of somncs extends the mnc literature second we analyze how the study of somncs can help develop new insights of theories of firm behavior in this respect we introduce five arguments the triple agency conflict argument in agency theory the owner risk argument in transaction costs economics the advantage and disadvantage of ownership argument in the resource based view rbv the power escape argument in resource dependence theory and the illegitimate ownership argument in neo institutional theory after our analysis we introduce the papers in the special issue that collectively reflect diverse and sophisticated research interest in the topic of somncs

a behavioral theory of r d expenditures and innovations evidence from shipbuilding i base an integrated model of innovation development and launch on the behavioral theory of the firm this model specifies that research and development expenses are increased when low performance causes problemistic search and when excess resources cause slack search innovations generated by search are launched if low performance gives managers high risk tolerance using data from shipbuilding firms i show that high performance reduces r d intensity and innovation launches and high slack increases r d intensity as predicted

how and when should companies retain their human capital contracts incentives and human resource implications the increasing competition in the labor market for human capital pushes firms to create better incentives to manage talented individuals in this article we model the optimal employment contract when two features of human capital are present i private information of the employee about his skills and ii the inability to contract on the output of the employment activity our model shows how firms can use delegation i e the employee s job autonomy to provide the incentives to a privately informed employee the model novelty resides in turning a classic source of potential inefficiency like asymmetric information into a factor that firms can use to design incentives our model provides a new explanation of why in technologically dynamic environments one observes more intense formations of start ups and a greater inter firm mobility of human capital our setting also suggests how established companies can use their complementary assets to provide better incentives to their skilled employees copyright 2010 the author 2009 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

the economics of child labor if child labor as a mass phenomenon occurs not because of parental selfishness but because of the parents concern for the household s survival the popular argument for banning child labor loses much of its force however this assumption about parental decision making coupled with the assumption of substitutability in production between child and adult labor could result in multiple equilibria in the labor market with one equilibrium where children work and another where adult wage is high and children do not work the paper establishes this result and discusses its policy implications copyright 1998 by american economic association

the welfare analysis of product innovations with an application to computed tomography scanners the main goal of this paper is to put forward a methodology for the measurement of product innovations using a value metric that is equating the magnitude of innovations with the welfare gains they generate this research design is applied to the case of computed tomography scanners a revolutionary innovation in medical technology the econometric procedure centers on the estimation of a discrete choice model the nested multinominal logit which yields the parameters of a utility function defined over the changing quality dimensions of the innovative product the estimated flow of social gains from innovation is used to compute a social rate of return to r d to explore the interrelation between innovation and diffusion and to trace the time profile of benefits and costs the latter suggesting the possible occurrence of technological cycles

optimal wind power deployment in europe a portfolio approach geographic diversification of wind farms can smooth out the fluctuations in wind power generation and reduce the associated system balancing and reliability costs the paper uses historical wind production data from five european countries austria denmark france germany and spain and applies the mean variance portfolio theory to identify cross country portfolios that minimise the total variance of wind production for a given level of production theoretical unconstrained portfolios show that countries spain and denmark with the best wind resource or whose size contributes to smoothing out the country output variability dominate optimal portfolios the methodology is then elaborated to derive optimal constrained portfolios taking into account national wind resource potential and transmission constraints and compare them with the projected portfolios for 2020 such constraints limit the theoretical potential efficiency gains from geographical diversification but there is still considerable room to improve performance from actual or projected portfolios these results highlight the need for more cross border interconnection capacity for greater coordination of european renewable support policies and for renewable support mechanisms and electricity market designs providing locational incentives under these conditions a mechanism for renewables credits trading could help aligning wind power portfolios with the theoretically efficient geographic dispersion 2009 elsevier ltd

note performance evaluation of state owned enterprises a process perspective state owned enterprises soes have become important instruments of social and economic policy in industrialized mixed economies and in developing countries the use of soes as instruments of public policy and the resulting clashes between these enterprises and private firms on the one hand and government and other controllers on the other are causing concern public committees in different countries as well as international organizations have been searching for positive theory for guidance in handling the multitude of problems related to these enterprises theoretical models have made important contributions to the formalization of certain problems and the classification of the information needed to solve them unfortunately these theoretical models have had little relevance for the solution of important real problems much of the research on soes is concerned with how these enterprises should behave and what should be the product of their operations almost no research has been done on why soes function as they do the paucity of knowledge about the operation of soes stems both from insufficient research effort and from the concern of researchers with formal structures and products of these organizations and not with management behavior or with decision processes the purpose of this paper is to call for research beyond the confines of traditional economics using the tools of management science to obtain insights into the difficult but salient problems of soes

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

sectoral patterns of technical change towards a taxonomy and a theory abstract the purpose of the paper is to describe and explain sectoral patterns of technical change as revealed by data on about 2000 significant innovations in britain since 1945 most technological knowledge turns out not to be information that is generally applicable and easily reproducible but specific to firms and applications cumulative in development and varied amongst sectors in source and direction innovating firms principally in electronics and chemicals are relatively big and they develop innovations over a wide range of specific product groups within their principal sector but relatively few outside firms principally in mechanical and instrument engineering are relatively small and specialised and they exist in symbiosis with large firms in scale intensive sectors like metal manufacture and vehicles who make a significant contribution to their own process technology in textile firms on the other hand most process innovations come from suppliers these characteristics and variations can be classified in a three part taxonomy based on firms 1 supplier dominated 2 production intensive 3 science based they can be explained by sources of technology requirements of users and possibilities for appropriation this explanation has implications for our understanding of the sources and directions of technical change firms diversification behaviour the dynamic relationship between technology and industrial structure and the formation of technological skills and advantages at the level of the firm the region and the country

optimal investment portfolio in renewable energy the spanish case abstract this article presents a model for investing in renewable energies in the framework of the spanish electricity market in a way that risk is minimised for the investor while returns are maximised the model outlined here is based on an economic model for calculating cash flows intended to obtain the internal rate of return irr of the different energies being studied wind photovoltaic mini hydro and thermo electrical the irrs obtained are considered the returns on investments while their standard deviations are considered associated risks in order to minimise risk a comprehensive portfolio of investments is created that includes all of the available energies by means of a system of linear equations the solution of the linear system is graphically checked using the efficient frontier method for the different financing options several case studies within the renewable energies plan per is its spanish abbreviation that is in force in spain in the period 2005 2010 are analysed in order to illustrate the method as are other case studies using different types of financing helping us to reach the pertinent conclusions

child labor cause consequence and cure with remarks on international labor standards although the literature on child labor is enormous it lacks a common theoretical foundation in this paper analytical survey of this field is provided keeping in mind that this is an area where the primary reason for theorizing is ultimately to influence policy overall it is noted that the literature on child labor is an illustration of abundance and anarchy although empirical writings on child labor are numerous they are not usually founded on theory it is argued that there is much that can be done in curbing the issue of child labor several theories were studied in this paper including collaborative intervention such efforts include public action which alters the economic environment such that the parents of their own accord prefer to withdraw the child from labor force another strategy involves the government a legal intervention is enforcing a total ban on the subject although such interventions have good intentions some of them may not be feasible in general it is better to take economy wide measures against child labor and if there is to be a sector specific ban it should be based on the working conditions of that sector rather than the destination of the goods

do codes of conduct improve worker rights in supply chains a study of fair wear foundation the rise of private regulation of sustainability in global production networks has led to intensive debates about the impact of this regulation at the point of production yet few empirical studies have systematically examined this impact in practice based on multiple factory audits of 43 garment factories conducted by the multi stakeholder initiative fair wear foundation we show that codes of conduct improve although marginally worker rights on an overall level but that few significant results are found for specific worker rights our findings also lend support to the widespread argument that codes have uneven impact furthermore we show that even rigorous multi stakeholder factory audits seldom are able to identify process rights violations such as those affecting freedom of association and discrimination and that auditing is thus is more fundamentally flawed than assumed in previous research given companies extensive investments in private regulation of worker rights the findings have important implications for both scholars and managers

efficient power generating portfolio in brazil conciliating cost emissions and risk the main purpose of this paper is to assess efficiency of the brazilian electricity generation mix proposed in the 2020 decennial plan for energy expansion dpee 2020 it evaluates estimated costs risks and co2 emissions following the mean variance portfolio theory the efficiency frontier is estimated for three co2 prices scenarios no co2 prices low co2 price and high co2 price the planned portfolio in brazil presented in the dpee 2020 is relatively close to the efficient frontier however there is still room for risk mitigation by diversifying the energy portfolio as there is currently no co2 price in brazil the tendency is that diversification increases fossil fuel share in the energy mix but the introduction of a co2 price can be an option to promote renewables this type of large general market framework can contribute to reduce market uncertainties by reducing the level of government s discretionary activism

a note on multiple general equilibria with child labor abstract it has been conjectured that the child labor market may exhibit multiple equilibria this paper develops the concept of a wage bill curve and establishes the multiple equilibrium result in a general equilibrium model thereby clarifying the circumstances where child labor should be banned

patents learning by doing and market structure in the chemical processing industries for a sample of 24 chemical products count data models are used to evaluate firms propensity to patent and the link between patented process innovations and output prices the results show that process patenting was largely an outgrowth of learning by doing propensity to patent increased with firm size but decreased with market concentration reductions in output prices were strongly linked to learning by doing and more weakly to the rate of patenting producer firms appear to have been more successful than non producers in appropriating the value of patented process innovations

state owned and privately owned firms an empirical analysis of profitability leverage and labor intensity for some it is an article of faith that governmentowned firms must be less efficient or at least less profitable than privately owned firms maxim boycko et al 1996 argue that politicians cause government owned firms to employ excess labor inputs anne o krueger 1990 suggests that such firms may be pressured to hire politically connected people rather than those best qualified to perform desired tasks more generally government owned firms are thought to forgo maximum profit in the pursuit of social and political objectives such as wealth redistribution in addition the residual cash flow claims of these firms are not readily transferable like the shares of a private corporation this impairs residual claimant incentives to monitor managers and ultimately degrades firm performance as a consequence one expects government owned firms to be technically less efficient and therefore less profitable than private firms the implication is that in competitive markets without significant externalities private ownership is the superior organizational form the view that government firms are inherently less efficient than private ones however remains controversial among economists john vickers and george yarrow 1991 among others point out that agency problems arise in private firms as well as public ones in most large private corporations managers own little of the stock because monitoring managers is costly a divergence arises between their objectives and those of private shareholders private shareholders typically hold a small stake in any one firm and it may not pay any shareholder to bear the cost of monitoring management it follows from this discussion that whether government firms are more or less efficient than private firms is primarily an empirical issue to date the body of empirical evidence is mixed in this paper we report further empirical evidence on the relative efficiency of public and private enterprises we build on previous work by studying larger samples over longer time periods and by allowing for additional factors that influence firm performance in particular our analysis controls for time series variation in the general level of economic activity that may otherwise confound performance comparisons between government and private firms 2 we approach the issue in two different ways first using accounting numbers we conduct a large sample cross sectional comparison of government owned and privately owned corporations this comparison is similar in design to that of boardman and vining 1989 but our sample is three times the size of theirs and includes three

revisiting supplier compliance with mnc codes of conduct recoupling policy and practice at chinese toy suppliers does private regulation of workers rights in global value chains improve working conditions on the factory floor drawing on one of the first systematic longitudinal studies of supplier compliance with multinational corporation mnc codes of conduct this paper finds in contrast to previous research substantial improvements over time while in 2004 the four examined chinese toy suppliers violated most of the evaluated code of conduct criteria and consciously decoupled the code of conduct policy from actual practices by 2009 they had recoupled policy and practice and complied with nearly all examined criteria except working hours the paper contributes to the private regulation literature by challenging previous research claims identifying factors that could make private regulation effective and outlining a research method for empirically studying the effects of codes of conduct over time the paper also contributes to new institutional theory by discussing how recoupling could be influenced by two factors not identified in previous research i trusting relationships between the organization and the stakeholder exerting pressure and ii factors unrelated to main external pressures leading to accidental recoupling

selection on observed and unobserved variables assessing the effectiveness of catholic schools in this paper we measure the effect of catholic high school attendance on educational attainment and test scores because we do not have a good instrumental variable for catholic school attendance we develop new estimation methods based on the idea that the amount of selection on the observed explanatory variables in a model provides a guide to the amount of selection on the unobservables we also propose an informal way to assess selectivity bias based on measuring the ratio of selection on unobservables to selection on observables that would be required if one is to attribute the entire effect of catholic school attendance to selection bias we use our methods to estimate the effect of attending a catholic high school on a variety of outcomes our main conclusion is that catholic high schools substantially increase the probability of graduating from high school and more tentatively attending college we find little evidence of an effect on test scores

food for thought the effects of school accountability plans on school nutrition abstract with the passage of the no child left behind act of 2001 school accountability is now federal law continuing the recent trend of states implementing significant accountability systems for schools this paper studies an unusual yet powerful school response to accountability systems using disaggregated school lunch menus from a random sample of school districts in virginia we find that schools threatened with accountability sanctions increase the caloric content of their lunches on testing days in an apparent attempt to boost short term student cognitive performance moreover we find that the schools that responded the most along these dimensions experienced the greatest improvements in standardized test scores

ownership and firm innovation in a transition economy evidence from china we examine innovation performance of firms in a transition economy from an ownership perspective we focus specifically on the relationship between ownership structures and firm innovation performance drawing on data from 548 chinese firms we find volume of patent registration to be most strongly influenced by foreign ownership in the firm along with firm affiliation within a business group the influence of state and institutional ownership on innovation performance is positive but lagged contrary to expectations insider ownership leads to lower innovation performance and concentrated ownership has no significant impact our study has two principal contributions firstly we utilize a comprehensive treatment of ownership characteristics overcoming weakness in previous studies that have used a more narrow focus on ownership type secondly we contribute to understanding of how firms in transition economies build indigenous capabilities for innovation by drawing attention to the interplay of foreign and domestic control of agents innovation

understanding the soft budget constraint we propose a clarification of the notion of a soft budget constraint a concept widely used in the analysis of socialist transitional and market economies our interpretation is broad enough to embrace most existing approaches to soft budget constraint phenomena and provides a classification of their causes and consequences in light of this interpretation we then review the theoretical literature on the subject and compare it with those on other dynamic commitment problems in economics

managerial autonomy of state owned enterprises determining factors the present paper reports on managerial autonomy of state owned enterprises soes or its reverse the control which is exerted by government and supervising public authorities on soes first it examines the types of control applied using evidence from a sample of 110 greek soes the paper identifies certain distinct dimensions of control related to strategic business boundary issues pricing decisions resource acquisition and mobilisation issues second environmental and organisational determinants of the control intensity are identified results broadly suggest that the intensity of control as perceived by enterprise managers is i positively related to dependence on the state for resources to enterprise size and to political visibility i e social orientation of product market strategy and ii negatively related to market competition and demand unpredictability an interpretation of the results is attempted drawing on wider organisational social and economic theories policy implications are discussed

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

quality signaling through certification in developing countries this paper studies how signaling the credence attributes of consumer goods distorts their market equilibrium in developing countries costs of certification sunk in order to achieve credibility play a key role in producing an oligopolistic market leading to high prices that form a barrier for consumers in the south to lower the cost certification is better achieved by a single independent body which can be financed either by end consumers through a fee or by public subsidies the paper identifies the conditions under which each funding mechanism is most efficient taking into account the government s budget constraint the theoretical analysis is motivated with reference to agricultural seed certification

managerial strategic behavior in state owned enterprises business and political orientations two different functions managing the business in the product or service markets and managing public support in the political markets must be performed by managers of state owned enterprises soes each organization has to strike a strategic balance between these two functions the way this is done is indicative of the organizational orientation and behavior the greater the relative emphasis on managing public support the stronger is the political orientation in our terminology the greater the relative emphasis on managing the business the stronger is the business orientation this paper proposes that explanation of behavior of soes can be improved by taking into account the orientation of management toward the mix of business and politics although the combination of business and political goals of soe has long been recognized the mix of business and political activities as a strategic variable was rarely distinguished this strategic variable is operationally defined measured and explained an insight into the purposes of business and political activities is gained through an analysis of the external and internal orientation of management the organization may concentrate internally on its own needs and goals or externally on the needs and goals of the outside publics this distinction can be useful in descriptive as well as normative research management orientation whether business or political is associated with a specific set of behavioral tendencies or implications these implications are expressed in propositions which state that an increase in the political and external orientation of management are related to an increased likelihood that 1 sales rather than profit goals would be emphasized 2 low prices relative to costs would be charged 3 goals would be relatively unstable 4 goals would be stated in unclear or vague terms 5 performance evaluation would be carried out on an irregular basis 6 public support would be sought prior to action 7 top management would be recruited from the public sector an exploratory survey of 50 executives of soes in fourteen latin american asian and african countries was used to test the propositions with few exceptions the empirical results support the above propositions further research which will include additional variables and a larger sample can increase the reliability of the findings and improve our understanding of the factors which influence management orientation

war and local collective action in sierra leone abstract we study the brutal 1991 2002 sierra leone civil war using nationally representative household data on conflict experiences postwar economic outcomes local politics and collective action individuals whose households directly experienced more intense war violence are robustly more likely to attend community meetings more likely to join local political and community groups and more likely to vote tests using prewar controls and alternative samples suggest that selection into victimization is unlikely to be driving the results more speculatively the findings could help partially explain the rapid postwar political and economic recoveries observed in sierra leone and after several other recent african civil wars

cognition capabilities and incentives assessing firm response to the fiber optic revolution this study examines how ceo cognition organizational capabilities and organizational incentives interacted to shape firm strategy during the fiber optic revolution i tested for these factors as

leviathan as an inventor an extended agency model of state owned versus private firm invention in emerging and developed economies we examine the relative merits of state soe and private poe ownership on firm invention output in emerging as well as developed economies firm soe affords a vehicle by which governments throughout the world encourage risky investment in new technological paths yet from a traditional agency theoretical standpoint soes are plagued by low powered incentives and dysfunctional involvement e g wasteful budgets and political meddling which reduces soe performance relative to poes to examine this paradox we build an extended agency model which rather than overlooking agency cost drivers entertains a more balanced view in which these so called agency liabilities in fact benefit soes particularly in the sphere of inventions we argue that given relatively higher levels of managerial autonomy soes may outperform poes in some types of inventive output we further propose that key boundary conditions operate to modify this base effect in that contexts lacking political constraints a condition found in most emerging economies increase the risk of political meddling reducing managerial autonomy so that any soe inventive advantages wane significantly we also hypothesize that this negative effect of weak institutions is attenuated in high invention productivity sectors empirically we track the frequency pioneerism and impact of patent inventions of 521 soes and matched poes for 16 years across 43 countries and 22 industries we find empirical support for our hypotheses based on a robust set of fixed effects regression analyses aided by a battery of checks to assess self selection and omitted variable bias

perspectives on multinational enterprises in emerging economies multinational enterprises mnes play a pivotal role in the development of many emerging economies in consequence they became the focus of scholarly research by economists and policy analysts in contrast international business scholars have been comparatively uninterested in analysing this role of mnes yet they could make important contributions to these debates first studies taking the individual firms as starting point would enhance understanding of the interaction between mnes and the local environment second theories and research methodologies developed in international business research could provide new insights into the dynamics of mnes in emerging economies the objective of this paper is to motivate more international business scholars to engage in research on positive and negative spillovers from foreign direct investment fdi in emerging economy societies to advance this research agenda scholars need to analyse the specific activities and capabilities of the firms involved and the impact of fdi on the broader social and environmental context for management this agenda raises the ethical question to what extent ought businesses to care about their local stakeholders

risk management and the stated investment costs by independent power producers abstract evidence presented in this article suggests that in less developed countries the independent power producers ipps have an incentive to overstate the investment cost as an instrument to mitigate the country risk in greenfield electricity generation projects this technique is an effective risk mitigation strategy under the conventional financing and contractual arrangements in such markets it however promotes the use of less efficient power plants the distortion in the choice of technology results in economic losses over the life of the plants the findings of this research have important policy implications that can assist regulatory bodies governments and international financing agencies to adopt a more informed approach to the integration of private investment into the electricity generation capacity of developing countries

trade openness foreign direct investment and child labor summary the skeptics of globalization argue that increased trade openness and foreign direct investment induce developing countries to keep labor costs low for example by letting children work this article argues that there are good theoretical reasons why globalization might actually have the opposite effect we test this with various measures of child labor and provide the first analysis of foreign investment in addition to trade we present evidence that countries that are more open to trade and or have a higher stock of foreign direct investment also have a lower incidence of child labor this holds for the labor force participation rate of 10 14 year old children the secondary school nonattendance rate and a count measure of economic sectors with child labor incidence as the dependent variables globalization is associated with less not more child labor

a simple test of the nutrition based efficiency wage model abstract in the nutrition based efficiency wage model wages in labor markets in developing countries are rigid because lowering them would reduce worker productivity and increase the cost per efficiency unit i evaluate this claim using data from rural india i find that contrary to what has been assumed in these models a wage cut should lower the cost per efficiency unit of labor

managing the financial risks of electricity producers using options abstract electricity producers participating in electricity markets face risks pertaining to both selling prices and the availability of the production units among electricity derivatives options represent an adequate instrument to manage these risks in this paper we propose a multi stage stochastic model to determine the optimal selling strategy of a risk averse electricity producer including options forward contracts and pool trading a detailed case study highlights the advantages of an option vs a forward contract to hedge against the financial risks related to pool prices and unexpected unit failures

resource security competition for global resources strategic intent and governments as owners we develop a resource security theory by examining the intent of acquisitions of scarce resources by multinational firms results suggest that owners of firms can shape the intent of resource acquisitions specifically state owned enterprises soes tend to acquire and pay more for resources for exploration rather than exploitation this is because soes owners governments are most concerned with securing their country s future we contribute to the literature by suggesting that ownership influences resource acquisitions that resource security is of importance to multinational enterprises and that soes invest abroad to safeguard both their own and their home countries future

opening the black box of csr decision making a policy capturing study of charitable donation decisions in china this policy capturing study conducted in china investigated the cognitive basis of managerial decisions to make a corporate charitable donation a global issue in the context of corporate social responsibility csr research and practice participants n 376 responded to a series of scenarios manipulating pressure from the five stakeholders government customers competitors employees and shareholders most commonly addressed by csr research the independent variables examined included organizational factors industry ownership previous company donation firm size firm age and perceived ceo attitudes toward charity and the participants personal values results indicate a large positive effect of shareholder and governmental pressure on the decision with lesser positive effects from customers and competitors surprisingly employee pressure had a negative effect on the decision to make a charitable donation further personal values and perceived ceo attitudes toward charity were significantly related to the decisions participants made in line with our theorizing the findings indicate that a combination of personal organizational and institutional factors was salient in the minds of decision makers

a penny for your quotes patent citations and the value of innovations the use ofpatents in economic research has been seriously hindered by the fact that patents vary enormously in their importance or value and hence simple patent counts cannot be informative about innovative output the purpose of this article is to put forward patent counts weighted by citations as indicators of the value of innovations thereby overcoming the limitations of simple counts the empirical analysis of a particular innovation computed tomography scanners indeed shows a close association between citation based patent indices and independent measures of the social value of innovations in that field moreover the weighting scheme appears to be nonlinear increasing in the number of citations implying that the informational content of citations rises at the margin as in previous studies simple patent counts are found to be highly correlated with contemporaneous rd however here the association is within afield over time rather than cross sectional

the institutional environment for infrastructure investment the empirical evidence that links political institutions to economic outcomes has grown dramatically in recent years however virtually all of this analysis is undertaken using data from the past three decades this paper extends this empirical framework by performing a two century long historical analysis of the determinants of infrastructure investment in a panel of over 100 countries the results demonstrate that political environments that limit the feasibility of policy change are an important determinant of investment in infrastructure copyright 2002 oxford university press

takeover threats and managerial myopia this paper examines the familiar argument that takeover pressure can be damaging because it leads managers to sacrifice long term interests in order to boost current profits if stockholders are imperfectly informed temporarily low earnings may cause the stock to become undervalued increasing the likelihood of a takeover at an unfavorable price hence the managerial concern with current bottom line the magnitude of the problem depends on a variety of factors including the attitudes and beliefs of shareholders the extent to which corporate raiders have inside information and the degree to which managers are concerned with retaining control of their firms

nutritional efficiency wages and unemployment where s the beef we modify the standard nutritional efficiency wage model to allow for the fact that employers can directly provide calories to their workers rather than paying a higher wage to induce employees to spend more on their own caloric consumption we derive the various theoretical outcomes that are possible depending on the assumptions about the transaction costs of directly providing calories we argue that in most real world situations the ability of employers to directly provide calories undermines the traditional efficiency wage theory as a cause of equilibrium unemployment

location versus home country advantages in r d activities some further results on multinationals locational strategies abstract in this paper we study the question of the determinants of the foreign location of technological activities of multinational firms mnfs do they locate their knowledge activities as a consequence of their home country advantages or according to host country strengths we have defined four types of strategy learning according to revealed technological advantages our results based on the 345 mnfs with the greatest patenting activity in europe globally confirm the main findings of patel and vega research policy 28 2 3 1999 145 155 in a great majority of cases nearly 70 mnfs locate their activities abroad in technological areas or fields where they are strong at home strategies 2 and 3 moreover strategy 3 which corresponds with dynamic learning outclasses strategy 2 which corresponds with myopic learning and becomes increasingly important over time the strategy of japanese firms is very different from european and us mnfs in europe japanese firms seek out locations that have complementary strengths to their own strategy 2 in terms of policy implications it can be noted that the national system of innovation in particular the system of academic research should strengthen the technological advantages of local firms and enable them to successfully locate a part of their r d activities abroad

decoding the adaptability rigidity puzzle evidence from pharmaceutical incumbents pursuit of gene therapy and monoclonal antibodies the emergence of radical technologies presents a significant challenge to incumbent firms we study firms management of radical technological change by separating their actions into upstream research the r of r d and downstream development the d of r d we introduce two contingencies to explain when incumbents research investments in radical technologies translate into product development and when these upstream investments may get voided by organizational inertia downstream first radical technologies can differ in how they conform to incumbents existing business models impacting the extent to which the movement of research outputs toward development will be subject to inertial pressures second incumbents can invest in a radical technology through a variety of modes internal research external research contracts alliances acquisitions these modes represent unique combinations of who does research and who is involved in the decision for subsequent development and hence differ in the extent to which they are shielded from inertial pressures this difference helps explain why incumbents despite responding to radical technologies may still be unable to adapt as well as what types of investments will be more effective in helping firms navigate technological change evidence from pharmaceutical incumbents pursuit of monoclonal antibodies and gene therapy offers strong support for our arguments

absorptive capacity coauthoring behavior and the organization of research in drug discovery we examine the interface between for profit and publicly funded research in pharmaceuticals firms access upstream basic research through investments in absorptive capacity in the form of in house basic research and pro publication internal incentives some firms also maintain extensive connections to the wider scientific community which we measure using data on coauthorship of scientific papers between pharmaceutical company scientists and publicly funded researchers connectedness is significantly correlated with firms internal organization as well as their performance in drug discovery the estimated impact of connectedness on private research productivity implies a substantial return to public investments in basic research

power sector investment risk and renewable energy a japanese case study using portfolio risk optimization method the conventional pricing mechanism used for electricity systematically hides huge investment risks which are embedded in the overall cost of production although consumers are often unaware of these risks they present a large financial burden on the economy this study applies the portfolio optimization concepts from the field of finance to demonstrate the scope of greater utilization of renewable energies re while reducing the embedded investment risk in the conventional electricity sector and its related financial burden this study demonstrates that re investment can compensate for the risks associated with the total input costs such costs being external volatilities of fossil fuel prices capital costs operating and maintenance costs and the carbon costs by means of example this case study shows that japan could in theory obtain up to 9 of its electricity supply from green sources as compared to the present 1 37 based on the utilization of a portfolio risk analysis evaluation explicit comparison of the monetary values of the investment risks of conventional and renewable energy sources shows that renewable energies have high market competitiveness the study concludes with a recommendation that as a business objective investors would benefit by focusing on electricity supply portfolio risk minimization instead of cost this could also inherently increase the supply of renewable energy in the market

partnering with leviathan the politics of innovation in foreign host state joint ventures forming international joint ventures ijvs with political institutions in emerging economies involves both benefits and risks for multinational enterprises mnes while political partners can provide ijvs with various resources their political status equips them with a strong position to appropriate rents in ijvs we address this tension by examining how host state ownership affects both innovation inputs and outputs in china based ijvs over 2008 2013 despite the potential government opportunism we find more r d investment innovation inputs made in ijvs with state partners than in those with private ones thus r d investment can be politically motivated and symbolically managed to ensure continued resource exchanges with the host state this political pressure is mitigated when foreign parents directly transfer home country based technology to ijvs when the host market dependence of ijv is weak and when ijvs are located in a deregulated region moreover we find foreign host state jvs deliver fewer innovation outputs measured by patent data than foreign private jvs which implies the failure of state partners to adequately absorb foreign technologies these findings highlight both the state partners powerfulness to boost ijv innovation investment and their limits in shaping ijv innovation outcomes and bear rich implications for the management of mne host government relationships

patents as options some estimates of the value of holding european patent stocks in many countries holders of patents must pay an annual renewal fee in order to keep their patents in force this paper uses data on the proportion of patents renewed and the renewal fees faced by post world war ii cohorts of patents in france the united kingdom and germany in conjunction with a model of patent holders renewal decisions to estimate the returns earned from holding patents in these countries since patents are often applied for at a nearly stage in the innovation process the model allows agents to be uncertain about the sequence of returns that will be earned if the patent is kept inforce formally then the paper presents and solves a discrete choice optimal stochastic control model derives the implications of the model on aggregate behaviour and then estimates the parameters of the model from aggregate data the estimates enable a detailed description of the evolution of the distribution of returns earned from holding patents over their life spans and calculations of both the annual returns earned from holding the patents still in force or the patent stocks in the alternative countries and the distribution of the discounted value of returns earned from holding the patents in a cohort this abstract was borrowed from another version of this item

portfolio optimization of renewable energy assets hydro wind and photovoltaic energy in the regulated market in brazil abstract this study proposes a methodology for risk analysis and portfolio optimization of power generation assets with hydro wind and solar power considering the regulated contracting environment and the mechanism for reallocation of energy in brazil innovative stochastic models are used to generate synthetic time series for the random variables water inflow wind speed solar irradiance temperature of the photovoltaic panel and average generation capacity of the mechanism for reallocation of energy the simulation is implemented using the monte carlo method associated with a cholesky decomposition an economic approach is presented taking into account taxation and financing as well as the markowitz portfolio theory the results show that the initial correlation between the energy resources is altered by the cash flow model and mainly by the debt in the diversification process the complementarity between sources helps to reduce the economic risk the increase in debt increases the correlation decreases the return and risk and consequently affects the diversification process and economic results the mechanism for reallocation of energy significantly reduces the hydroelectric economic risk and increases the financial return which directly benefits the formation of portfolios

the dynamics of innovation from national systems and mode 2 to a triple helix of university industry government relations abstract the triple helix of university industry government relations is compared with alternative models for explaining the current research system in its social contexts communications and negotiations between institutional partners generate an overlay that increasingly reorganizes the underlying arrangements the institutional layer can be considered as the retention mechanism of a developing system for example the national organization of the system of innovation has historically been important in determining competition reorganizations across industrial sectors and nation states however are induced by new technologies biotechnology ict the consequent transformations can be analyzed in terms of neo evolutionary mechanisms university research may function increasingly as a locus in the laboratory of such knowledge intensive network transitions

the demand for food and calories we investigate nutrition and expenditure in rural maharashtra in india we estimate that the elasticity of calorie consumption with respect to total expenditure is 0 3 0 5 a range that is in accord with conventional wisdom the elasticity declines only slowly with levels of living and is far from the value of zero suggested by a recent revisionist literature in these indian data the calories necessary for a day s activity cost less than 5 percent of the daily wage which makes it implausible that income is constrained by nutrition rather than the other way around

ceo hubris and firm risk taking in china the moderating role of managerial discretion this study linked ceo hubris to firm risk taking and examined the moderating role of managerial discretion in this relationship drawing on upper echelons theory and behavioral decision theory we

investment planning and arm s length control in a nationalised industry applying a relatively decentralised system of control which would keep state owned enterprises soe at arm s length from ministerial departments has been a stated policy for many governments around the world however the specific controls typically used for implementing this policy have seldom been successful the purpose of this paper is to review and evaluate certain of these controls drawing upon the british system of arm s length control of nationalised industries in order to delimit the problem the paper cuts across the government soe relationship from the perspective of investment planning using primary information from the capital investment process in a particular nationalised industry the paper searches for evidence on whether and in what ways existing controls have not been successful three types of controls are investigated 1 the economic and financial groundrules which are supposed to simulate a competitive business style efficiency these rules are often assumed to act as an invisible hand limiting direct government control 2 the direct investment review in the framework of the wider public sector expenditure survey in discussing the nature of this review the paper examines whether government approval of investment conforms to an incrementalist or muddling through model it further considers the role for incremental methods in controlling soe investment 3 the attempt to use corporate planning as a control instrument evidence from internal control processes within the enterprise and in particular the review of investment by a central executive is used in order to evaluate the above controls this serves to show the diffuse character of the planning process and the possibilities and limitations of using similar controls at the government level suggestions are put forward for strengthening these forms of control by modifying or reinforcing certain elements within the existing arm s length framework the paper would be useful for evaulating the difficulties involved in establishing some form of orderlines and formalisation in government soe relationships it shows some of the weaknesses associated with certain technocratic rules and solutions to public policy problems in this environment

child labor in carpet weaving impact of social labeling in india and nepal summary does the labeling of tradable products like carpets which have been produced without child labor increase the welfare of children and their families this paper presents results of surveys conducted in india and nepal the findings suggest a positive link between social labeling and the removal of child laborers for households above the subsistence level however for households below the subsistence level no significant influence has been found

performance evaluation of state owned enterprises in theory and practice this study explores the goal orientation of state owned enterprises soes with a view to develop a behavioral theory of soes it is set in india where as in many other countries the government expects soes to promote the public interest rather than maximize profits the research design consisted in searching for patterns in the subjective evaluations of a set of indian soes by critical environmental actors senior bureaucrats and influential journalists the study attempted to get at each respondent s espoused theory for performance evaluation as well as his or her theory in use and compared both with official goals as well as the prescriptions of welfare economists five models of performance evaluation varying in criteria and weighting schemes were considered the results showed with surprising consistency that commercial profitability was the most important criterion that explained bureaucrats subjective evaluations lack of comprehensive information seemed to accentuate their reliance on profitability but not by very much for a minority of bureaucrats type 1 the more important explanation seemed to be their incorrect belief that soes could be judged like private firms official policy notwithstanding for the majority type 2 who espoused views consistent with official policy the explanation seemed to be conceptual confusion or double standards both types also behaved as if they would like soes to maximize profitability rather than just break even or earn a reasonable return some of these findings were true for responding journalists as well given these results managers of indian soes can be expected to seek profits not only to reduce financial dependence on government but also to gain a measure of external legitimacy recognizing the importance of profitability as a criterion in use they can be expected to propose strategies that would increase their firm s profitability and resist those that would reduce it regardless of official goals where managers are free to act independently profitability may prevail as the dominant decision criterion but where they are not the outcome may depend on more complex factors more generally the profit motive in soes may be as strong or stronger than it appeared to be in india in countries with a less sophisticated administrative systems or personnel b an official ideology more to the right than in socialist india and c a higher proportion of mixed enterprises the paper concludes with the implications of these findings for the design of performance evaluation systems at the government soe interface