regulatory reform in britain regulatory reform in britain john kay and john vickers major sectors of the british economy are currently undergoing far reaching regulatory reform deregulation removal of barriers to competition and the introduction of new methods of regulation are occurring notably in financial services some of the professions and in utility industries such as telecommunications gas and electricity this paper gives an economic assessment of these developments the authors examine the root causes of market failure that call for regulation externalities monopoly and information problems and the pros and cons of various regulatory responses a broad distinction is drawn between structural regulation the determination of which firms or types of firms can engage in which activities and conduct regulation the control of how firms behave in their chosen activities recent examples of deregulation plus re regulation in britain are seen in part as a shift from structural to conduct regulation the relative merits of the two modes of regulation are complex to assess but it is argued that some recent regulatory reforms are placing undue reliance on conduct regulation as well as assessing individual industries the authors draw general conclusions about the desirability of regulatory solutions that make full use of market forces

bureaucratic minimal squawk behavior theory and evidence from regulatory agencies this paper develops a model in which a desire to avoid criticism prompts otherwise public spirited bureaucrats to behave inefficiently decisions are taken to keep interest groups quiet and to keep mistakes out of the public eye the policy implications of this minimal squawk behavior are at odds with the view that agencies should be structured to minimize the threat of capture an empirical test using data from us state public utility commissions rejects the capture hypothesis and is consistent with the squawk hypothesis longer puc terms of office are associated with a higher incidence of rate reviews and lower household electricity bills jel d73 l51 l97 l98

angel investors around the world we document that the choice between disintermediated individual angel investments and intermediated private equity and venture capital investments depends on legal economic and cultural differences we find evidence of this using pitchbook s comprehensive data on more than 5000 angel and 80 000 private equity and venture capital investments in 96 countries from 1977 to 2012 the data further indicate that investee firms funded by angels are less likely to successfully exit through either an ipo or an acquisition these findings are robust to propensity score matching methods as well as to clustering standard errors and excluding u s observations among other approaches

an overview of hofstede inspired country level culture research in international business since 2006 kirkman lowe gibson s 2006 jibs article summarized and critiqued international business research inspired by the most cited book in the field hofstede s 1980 culture s consequences international differences in work related values hofstede 1980 2001 they identified a number of issues in this research and offered several recommendations for improving it in the future thus laying a strong foundation for hofstede related work since 2006 in this commentary we assess kirkman et al s 2006 impact on the field our review shows that their ideas have informed and inspired their own and other scholars work and have led to significant progress in the way in which hofstede s framework has been used in international business in the last decade here we specifically focus on the country level culture studies and assess how research has implemented kirkman et al s three main recommendations to explore cultural dimensions beyond those introduced by hofstede to distinguish between country effects and cultural effects and to show not only if culture matters but also how much it matters in addition to the overview we provide a comprehensive test of these recommendations showing how they can be put into research practice underscoring the theoretical and empirical relevance of the original 2006 article our commentary concludes with additional ideas on further strengthening hofstede inspired research at the country level of analysis

the impact of agricultural and household technologies on women a conceptual and quantitative analysis in burkina faso abstract agricultural technologies new cultivars inorganic fertilizers soil and water conservation techniques in sub saharan africa have been primarily introduced to male farmers by male dominated extension services on the family plots these yield increasing input intensive technologies increase the demand for farm labor so not only do men obtain most of the direct benefits from the introduction of technology but this labor intensive technology also increases the demands on women s time for additional labor this raises the question are the combined effects of agricultural technologies beneficial or detrimental to women we first develop a labor market model that examines the impact of agricultural and household technologies on labor allocation and income determination within the household we then discuss the important issue of how household labor allocation decisions and division of income are made within the family in sub saharan africa we use a programming model to estimate the effects of these technologies on household incomes and the income of women the results indicate that the impact of agricultural technologies depends on the type of decision making prevailing in the household in contrast household technologies increase the welfare of women regardless of the type of decision making however with bargaining behavior agricultural technologies do benefit women and there is some empirical support for this type of household behavior in sub saharan african households

foreign locals a cautionary tale on the culture of mnc local employees multinational corporations mncs rely heavily on local employees when conducting their international operations yet the international business literature provides few instances of true focus on these employees the commonly used label host country nationals hcns confers them an identity strongly related to the culture of their country prompting both researchers and practitioners to know them through the knowledge about the local culture this paper provides evidence that a more sophisticated view of the culture of hcns is needed through an ethnographic exploration of hcns working in local subsidiaries of american mncs in romania i reveal that hcns are not always culturally interchangeable with the rest of the host country population hcns can display a variety of cultural profiles more or less reflective of the national culture depending on their enacted stance towards the native culture and the cultural landscape of the mncs themselves the findings call for further specification of theories relying on the assumed localness of hcns and should contribute to the ongoing conversation on the interplay between the cultures specific to the mnc and its host countries

can multinational enterprises light up developing countries evidences from the access to electricity in sub saharan africa summary this paper examines the role that multinational enterprises mnes and foreign direct investments fdi can have in enhancing the access to electricity for local communities in developing countries based on the quality of home and host institutions access to electricity is a marker for development but it is far from being universal in developing countries the shortage of electricity is mainly the consequence of inability of governments in planning financing and developing necessary electricity infrastructure in this context investments from other actors can be essential particularly we focus on the role of fdi and mnes we claim that when mnes invest in developing countries they are incentivized to solve the lack of electricity infrastructure mainly for two reasons to guarantee their business activities and to gain legitimacy with their local stakeholders in addition we argue that mnes and fdi from institutionally underdeveloped countries will be more prone to develop infrastructure for the provision of electricity to local population as generally they suffer from a negative stereotype for this study we rely on 1 547 observations composed of pairs of 83 home countries and 15 host countries in sub saharan africa observed from 2005 to 2011 due to the nature of the database we adopt panel data techniques i e system gmm and corrected least square dummy variable estimators we find that fdi promotes access to electricity in developing countries with weak institutions and this is more likely true when fdi come from institutionally underdeveloped countries these results are far from obvious as they controvert common idea among institutional scholars that a regulatory authority is essential in the provision of infrastructure in conclusion with this paper we partially rehabilitate the image of mnes investing in developing countries by demonstrating that under certain conditions they could contribute to energy poverty alleviation of local population

conceptualizing and measuring cultures and their consequences a comparative review of globe s and hofstede s approaches this paper explains why globe used a set of cultural values and practices to measure national cultures we show why there is no theoretical or empirical basis for hofstede s criticism that globe measures of values are too abstract or for his contention that national and organizational cultures are phenomena of different order we also show why hofstede has a limited understanding of the relationship between national wealth and culture furthermore we explain why hofstede s reanalysis of the globe data is inappropriate and produces incomprehensible results we also show the validity of managerial samples in studying leadership finally we explain why hofstede s claim that globe instruments reflect researchers psycho logic reveals ignorance of psychometric methodologies designed to ensure scale reliability and construct validity

high performance work systems and organizational performance across societal cultures this paper assesses whether societal culture moderates the relationship between human resource management hrm practices and organizational performance drawing on matched employer employee data from 387 organizations and 7187 employees in 14 countries our findings show a positive relationship between hrm practices combined in high performance work systems hpws and organizational performance across societal cultures three dimensions of societal culture assessed power distance in group collectivism and institutional collectivism did not moderate this relationship drawing on the ability motivation opportunity amo model we further consider the effectiveness of three bundles of hrm practices skill enhancing motivation enhancing and opportunity enhancing practices this analysis shows opportunity enhancing practices e g participative work design and decision making are less effective in high power distance cultures nevertheless in markedly different countries we find combinations of complementary hpws and bundles of amo practices appear to outweigh the influence of societal culture and enhance organizational performance

interpreting societal culture value dimensions societal cultural value dimension scholarship can both learn from and inform the family of interrelated approaches to culture research in ib that appear in recent commentaries it can exchange insights about societal values and meaning systems with neo institutional and institutional logics research it can also exchange insights with dual processing cognition theories that are used to understand individuals in an international context by treating societal culture values and institutional characteristics as essential to interpreting personal values and attitudes rather than merging them integrating culture related specialties by exchanging insights can promote the further development of research in each of these societal and individual level fields

is ecommerce boundary less effects of individualism collectivism and uncertainty avoidance on internet shopping from publicly available data we identified two national culture dimensions individualism collectivism and uncertainty avoidance and their interaction that influences internet shopping rates across a wide spectrum of countries together these factors accounted for 14 of the explained variance on top of the combined variance of 63 explained by national income level educational level economic growth rate unemployment rate and crime rate in predicting internet shopping rates for countries lower in uncertainty avoidance individualist cultures show higher internet shopping rates than do collectivist cultures implications for national and internet firm level web design strategies are discussed

collusion under asymmetric information when applied to groups the revelation principle postulates a bayesian nash behavior between agents their binding agreements are unenforceable or the principal can prevent them at no cost we analyze instead a mechanism design problem in which the agents can communicate between themselves and collude under asymmetric information we characterize the set of implementable collusion proof contracts both when the principal offers anonymous and nonanonymous contracts after having isolated the nexi and the stakes of collusion we proceed to a normative analysis perform some comparative statics discuss our concept of collusion proofness and provide some insights about transaction costs in side contracting

delegation of monitoring in a principal agent relationship this paper studies a principal agent relationship with moral hazard in which the principal or the supervisor can monitor the agent s hidden action by using identical monitoring technologies the paper shows that delegation of monitoring to the supervisor is profitable because of two effects with delegation the principal can better regulate the incentives incentive effect and can commit to wage structures to which she could not commit without delegation commitment effect as a logical step collusion is introduced and it is shown that even with the possibility of collusion delegation is an optimal strategy

when is traditionalism an asset and when is it a liability for team innovation a two study empirical examination team innovation requires idea generating and idea implementing in two studies we examine how these team activities are affected by the extent to which members value traditionalism that is placing importance on preserving old ways of doing things over breaking precedent and forging new approaches we proposed that higher average levels of team traditionalism would be negatively associated with idea generating but positively associated with idea implementing conversely we proposed the opposite effects for diversity on team traditionalism further we argued that these effects would be mediated by team process conflict because diversity on team traditionalism might make it more likely that members will debate what to retain versus newly adopt and team agreement is more likely to occur when team members values are shared rather than discrepant with one another supporting our assertions we found that whether traditionalism is an asset or liability for team innovation depends on whether 1 the average level versus diversity of team traditionalism is examined and 2 idea generating versus idea implementing is of primary importance specifically idea generating benefits from higher diversity on team traditionalism whereas idea implementing benefits from higher average levels of team traditionalism we discuss theoretical and practical implications

optimal regulation of network expansion we model the optimal regulation of continuous irreversible capacity expansion where a regulated firm has private information about capacity costs investments are financed from the firm s cash flows and demand is stochastic the optimal mechanism can be implemented as a revenue tax that increases with the level of the price cap if the asymmetric information has large support then the optimal mechanism consists of a laissez faire regime for low cost firms that is the firm s price cap corresponds to that of an unregulated monopolist and it is not taxed this maximal distortion at the top is necessary to provide information rents as direct subsidies are not feasible

managerial metric use in marketing decisions across 16 countries a cultural perspective research on metrics is consistently designated a priority by academics and practitioners however less is known about how culture and cross national differences can potentially impact metric use which is theoretically and managerially limiting this work develops a model that examines national and organizational cultural antecedents while controlling for the decision setting testing the model on data collected from 4384 managerial decisions from 1637 firms in 16 countries reveals that both levels of culture are associated with metric use but each has varying effects our results enable multinational executives to better understand and increase managerial metric use across different cultures and settings

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

essential facility financing and market structure abstract the paper analyzes the funding of an infrastructure project when an incumbent operator has private information about market profitability and the regulator does not have access to taxpayers money an open access policy raises welfare but may make the project non viable since funding must be provided by operators capital contributions we characterize the optimal market structure the regulator can ask the incumbent to bear a higher share of investment cost if the latter insists on an exclusive use yet the incumbent is willing to pay more for exclusivity the higher the demand that is precisely when competition yields the highest benefits at the optimum the incumbent s information is not used to determine market structure we further investigate the implications of this basic result in a dynamic context we show that the monopoly franchise policy is time consistent while an open access policy is not we also demonstrate that a threat of regulatory capture creates an open access presumption last we show that when the decision involves multiple projects monopoly segments should cross subsidize open access ones

the tortuous evolution of the role of culture in ib research what we know what we don t know and where we are headed this paper takes stock of the literature on culture in international business by looking back in terms of evaluating what we know and what we do not know and looking forward by identifying emerging trends and outlining avenues for future research unresolved issues gaps and limitations include 1 narrow conceptualization of culture and fragmented approach to the study of culture 2 failure to adopt a multilevel approach and insufficient attention to level of analysis 3 insufficient attention to context and process 4 failure to adopt a more dynamic view of culture 5 tendency to equate country with culture and failure to explore other national differentiators and 6 western centric approach to the study of culture suggestions on redressing the unresolved issues include 1 broadening the definition of culture and transcending the values based approach to include schemas norms and memes 2 paying more attention to process context by exploring the situation dependent and dynamic nature of culture and 3 entertaining alternative research designs methods such as emic approaches qualitative methods experimental designs neuroscience based methods and replication studies while these may represent a major departure from methodologies popular in our field their use can hopefully help us overcome the fragmented discipline based approach which has contributed to the persistent problems that have plagued the study of culture in ib in the past

industrial policy in an imperfect world theoretical analyses of industrial policy normally restrict the range of possible outcomes by abstracting from either market or government failures this paper thus studies industrial policy and its effectiveness in a model that includes both market and government imperfections we introduce a public agency responsible for industrial policy into the model of hausmann and rodrik 2003 and assume that this agency has limited information and is partly politically motivated we further extend the model to allow the public agency to communicate with entrepreneurs and the entrepreneurs to engage in rent seeking we find that industrial policies are ineffective if the public agency is poorly informed but that they are not necessarily ineffective if the public agency is highly politically motivated given a highly politically motivated public agency industrial policies are effective if and only if the institutional setting ensures that such policies are modest e g by restricting the public agency s budget moreover our model helps us to understand why the same industrial policies that have failed elsewhere have been relatively successful in south korea and taiwan

individualism and stock price crash risk employing a sample of 26 473 firms across 42 countries from 1990 to 2013 we find that firms located in countries with higher individualism have higher stock price crash risk furthermore individualism can be transmitted by foreign investors from overseas markets to influence local firms crash risk and can exacerbate the impact of firm risk taking and earnings management on crash risk moreover the positive relation between individualism and crash risk is amplified during the global financial crisis and attenuated by enhanced country level financial information transparency and the adoption of international financial reporting standards

a retrospective on culture s consequences the 35 year journey abstract our 2006 journal of international business studies article a quarter century of culture s consequences a review of the empirical research incorporating hofstede s cultural values framework provided a comprehensive review of 180 empirical journal articles and edited volume chapters published between 1980 and june 2002 that incorporated hofstede s cross cultural values framework we examined empirical research that positioned culture as either a main or moderating effect the review attempted to make sense of the almost quarter century of research examining the impact of culture at the individual group organization and country levels in the present commentary we provide a a summary of the progress that has been made in the intervening decade and most importantly b a new set of recommendations for the next decade to guide those wishing to study the role of national culture in organizations

the regulation of multiproduct firms part i theory abstract this paper develops a normative model of the regulation of a multiproduct firm with private information about its technology and cost reducing activity it first characterizes the optimal regulatory scheme and illustrates it through examples it then derives necessary and sufficient conditions for the pricing incentive dichotomy to hold i e conditions under which the cost reimbursement rule but not pricing is used to provide incentives last the paper studies the regulation of the multiproduct firm in a general equilibrium framework both to assess the validity of the partial equilibrium approach and to formalize the notion of taxation by regulation

unraveling the mne wage premium whereas ib has extensively studied mnes generic positive impact on host economies but rarely on employee wages economics research has only shown an overall mne wage premium we unravel this premium considering multiple levels of analysis and accounting for host country contextual contingencies to unveil mnes different positive or negative distributional effects using unique micro level data from over 40 000 employees in 13 countries we examine mnes distributional effects for employees gender experience and immigrant status the influence of host country property rights protection and labor regulation and interplays with region and industry effects mnes distributional effects show marked differences that largely depend on the host country context and that are positive for experienced and foreign born employees in developed countries but negative for females working in developing countries whereas in developed countries the gender wage gap is smaller in mnes than in domestic firms as hypothesized we find evidence of a larger wage gap in developing countries the analysis also reveals that the higher host countries level of property rights protection the lower the mne wage premium our study points at the need to reassess statements about the generic positive impact of mnes in host countries particularly in developing countries and discusses further research implications

national culture and international business a path forward the anniversary of kogut and singh s construct of cultural distance is a good time to reflect on this immensely popular but flawed construct assess the efficacy of the remedies offered for its reform and refinement and chart an alternative approach that represents a departure from distance as the dominant paradigm with which to view and analyze the impact of national culture on cross border business the proposed alternative a contact based framework shifts attention from what sets cultures apart towards the actual cultural interface that firms and their executives experience when participating in an international transaction with this lens the cultural exchange is regarded as an evolving interactional process of engagement which commences prior to a transaction and proceeds through the life of the inter party arrangement and beyond and whose potential to yield negative or positive outcome is subject to specific contingencies implications for theory methodology and practice are delineated

a retrospective and agenda for future research on chinese outward foreign direct investment our original 2007 journal of international business studies article the determinants of chinese outward foreign direct investment was the first theoretically based empirical analysis of the phenomenon it utilised internalisation theory to explain the internationalisation of chinese state owned enterprises this paper showed that we had failed to ask sufficiently challenging questions about the effects of home country institutions on outward foreign direct investment ofdi this retrospective builds on the extensive subsequent research to show the importance of context in constructing satisfactory theoretical explanations of ofdi building on these foundations we propose research challenges for the next decade on chinese ofdi that transcend the chinese context and have wider theoretical applicability examining alternative forms of social and economic organisation allows the creation of special theories of foreign direct investment nested within the general theory following such a strategy would enable international business research to make a contribution across the social sciences

does organizational formalization facilitate voice and helping organizational citizenship behaviors it depends on national uncertainty norms prosocial work behaviors in a globalized environment do not operate in a cultural vacuum we assess to what extent voice and helping organizational citizenship behaviors ocbs vary across cultures depending on employees perceived level of organizational formalization and national uncertainty we predict that in contexts of uncertainty cognitive resources are engaged in coping with this uncertainty organizational formalization can provide structure that frees up cognitive resources to engage in ocb in contrast in contexts of low uncertainty organizational formalization is not necessary for providing structure and may increase constraints on discretionary behavior a three level hierarchical linear modeling analysis of data from 7 537 employees in 267 organizations across 17 countries provides broad support for our hypothesis perceived organizational formalization is weakly related to ocb but where uncertainty is high formalization facilitates voice significantly helping ocb to a lesser extent our findings contribute to clarifying the dynamics between perceptions of norms at organizational and national levels for understanding when employees may engage in helping and voice behaviors the key implication is that managers can foster ocb through organizational formalization interventions in uncertain environments that are cognitively demanding

sustaining long term supply chain partnerships using price only contracts abstract in this paper we study how an informal long term relationship between a manufacturer and a retailer performs in turbulent market environments characterized by uncertain demand we show that the long term partnership based on repeated interaction is sustainable under price only contracts when the supply chain partners are sufficiently patient that is the channel can be coordinated over a long time horizon when the factor whereby the members discount the future value of this trusting relationship is sufficiently high second above the minimum discount factor a range of wholesale prices exists that can sustain the long term partnership and there are different possible profit divisions between the two players third when the market is turbulent i e either the expected demand or the demand variance changes from period to period according to a probabilistic law it is typically less possible to sustain the long term partnership in a booming market or in a market with low demand variability finally obtaining more information about future market fluctuation may not help the supply chain to sustain the long term partnership due to partners strategic considerations with the availability of the market signal total supply chain profits increase but the retailer may even be worse off

the construct of institutional distance through the lens of different institutional perspectives review analysis and recommendations this paper presents a review and critique of the 20 year old literature on institutional distance which has greatly proliferated we start with a discussion of the three institutional perspectives that have served as a theoretical foundation for this construct organizational institutionalism institutional economics and comparative institutionalism we use this as an organizing framework to describe the different ways in which institutional distance has been conceptualized and measured and to analyze the most common organizational outcomes that have been linked to institutional distance as well as the proposed explanatory mechanisms of those effects we substantiate our qualitative review with a meta analysis which synthesizes the main findings in this area of research building on our review and previous critical work we note key ambiguities in the institutional distance literature related to underlying theoretical perspectives and associated mechanisms distance versus profile effects and measurement we conclude with actionable recommendations for improving institutional distance research

when ideas trump interests preferences world views and policy innovations the contemporary approach to political economy is built around vested interests elites lobbies and rent seeking groups which get their way at the expense of the general public the role of ideas in shaping those interests is typically ignored or downplayed yet each of the three components of the standard optimization problem in political economy preferences constraints and choice variables rely on an implicit set of ideas once the manner in which ideas enter these frameworks is made explicit a much richer and more convincing set of results can be obtained in particular new ideas about policy or policy entrepreneurship can exert an independent effect on equilibrium outcomes even in the absence of changes in the configuration of political power

the microeconomics of the developmental paradox on the political economy of food price policy abstract a longstanding puzzle in comparative economics is the developmental paradox the tendency for government support for agriculture to increase with national income and to decrease with the proportion of economic activity and of the population in agriculture this paper offers a microeconomic explanation for that puzzle it establishes analytically the microeconomic basis for coalition alignments with respect to food price policy then numerically simulates the comparative static effects of alternative food policies on coalition structure a parsimonious household model applied to a heterogeneously endowed society demonstrates how variation in individual welfare effects might beget distinct coalitions in the debate over food price policy and how those policies are inextricably linked to land population and technology policies in food agriculture moreover coalition alignments on particular policy debates are path dependent in particular food price policy creates its own political support

the congressional bureaucratic system a principal agent perspective with applications to the sec this paper provides the theoretical perspective and empirical support for congressional dominance of agency decisions my thesis is twofold first because much of the previous evidence on this question is not evidence at all many scholars intuition and conclusions are based on a logically flawed foundation second i have provided here and in previous work a look at a variety of different agencies and in each case have shown how the events can plausibly be interpreted as involving congress agency problems within the congressional bureaucratic system are real and substantial just as they are within corporations however as in the latter institutional forms develop within the congressional system to partially if not wholly mitigate these problems the logical perspective together with the evidence provide a strong case against the agency dominance hypothesis as typified by the early sections of niskanen 1971 and wilson 1980

welfare impacts of technological change on women in southern mali abstract it has often been hypothesized that new agricultural technologies could have an adverse impact on women because additional labor required of them reduces the time spent and therefore income earned from private field activities this study shows that the expansion of cotton cultivation on the household communal fields in southern mali associated with the introduction of new technologies results in increased payments to women for their increased labor on the cotton fields unfortunately these payments are small compared to the loss of revenue from private plot production thus the net effect of the expansion of household cotton cultivation is a reduction in incomes of women who cultivate private plots short run policy implications of this study are that improving women s income requires concern with their private plot earnings for example profitability of the private field crops could be increased with higher input use in the long run as land becomes even more constrained emphasis needs to be placed on institutional changes to increase women s bargaining power so that they obtain larger shares of the new income streams resulting from technological change on the communal field institutional changes already occurring in the region with the apparent objective of increasing women s and non household head men s bargaining power include organized work teams and the movement toward smaller nuclear families

the politics of government decision making a theory of regulatory capture the paper develops an agency theoretic approach to interest group politics and shows the following 1 the organizational response to the possibility of regulatory agency politics is to reduce the stakes interest groups have in regulation 2 the threat of producer protection leads to low powered incentive schemes for regulated firms 3 consumer politics may induce uniform pricing by a multiproduct firm 4 an interest group has more power when its interest lies in inefficient rather than efficient regulation where inefficiency is measured by the degree of informational asymmetry between the regulated industry and the political principal congress

accelerating food production in sub saharan africa in 1982 26 countries in africa faced acute food shortages and nutrition problems during the 1960s the continents food production per person fell 7 and during the 1970s it fell an additional 15 in only 8 countries which account for less than 15 of the regions population did per capita agricultural production actually increase in the 1970s in view of the expectation that the urban population will quadruple during the last quarter of this century present trends are intolerable and must be reversed another disturbing problem that needs urgent attention is the rapid depletion of vital topsoil estimated by the director general of the un food and agriculture organization to be a frightening 6 million hectares per annum this volume provides up to date definitions of the food and nutrition problems that face africa now and in the medium term future the book also deals with the policy needs for promoting growth of food production the concept of solving our food shortages by increasing production is the policy of the southern african development coordination conference sadcc the book also examines food policy in the context of national development strategies though potentially rich sub saharan africa is at present extremely poor in 1979 per capita gross national product gnp in the whole area was only 411 compare this with a gnp per capita of 9440 in the countries of the industrialized world the demand for improved living standards presses from virtually every quarter while available resources are extremely limited without exception each country of the region faces the problem of determining food policy in the context of its overall national development strategy several chapters in this volume by representatives from both sub saharan africa and donor countries and agencies analyze past experiences and suggest aid strategies for accelerating agricultural growth in the region several stress the point that the aid most urgently required is that which would assist our region in greater utilization of its agricultural base in order to increase overall production and lessen dependence on food aid

using cost observation to regulate firms the paper emphasizes the use of accounting data in regulatory or procurement contracts when the supplier 1 has superior information about the cost of the project and 2 invests in cost reduction the main result states that under risk neutrality the supplier announces an expected cost and is given an incentive contract linear in cost overruns this optimal contract moves toward a fixed price contract as the announced cost decreases an investment choice is then introduced and the use of a rate of return regulation is studied

values schemas and norms in the culture behavior nexus a situated dynamics framework international business ib research has predominantly relied on value constructs to account for the influence of societal culture notably hofstede s cultural dimensions while parsimonious the value approach s assumptions about the consensus of values within nations and the generality and stability of cultural patterns of behavior are increasingly challenged we review two promising alternatives the constructivist approach centering on schemas and the intersubjectivist approach centering on norms and the evidence that demonstrates their usefulness in accounting for international differences in the behavior of managers employees and consumers we propose a situated dynamics framework specifying the role of values schemas and norms in accounting for cultural differences and delineating conditions under which each causal mechanism is operative values play a more important role in accounting for cultural differences in weak situations where fewer constraints are perceived schemas play a more important role when situational cues increase their accessibility and relevance and norms play a more important role when social evaluation is salient directions for future research based on this integrative framework and its implications for the measurement of culture and application in ib are discussed

the domestic politics of banking regulation this article seeks to ground financial regulatory choices in domestic politics based on evidence from twenty two industrialized countries we argue that electoral rules specifically the extent to which they are centrifugal or centripetal have a significant effect on whether the banks or their consumers pay for the security of the banking system moreover despite the homogenizing effects of global financial integration the political dynamics generated by these electoral rules continue to shape the nature and extent of prudential regulations that countries adopt in the place of banking cartels

european competition policy in manufacturing and services a two speed approach the paper examines whether differences in the nature of competition between manufacturing and service activities are reflected by similar differences in ec competition the two differences between manufacturing and services which are mainly emphasized are local versus global competition and regulatory controls the paper finds that the implementation of ec competition policy instruments has differed significantly between manufacturing and services in terms of both the time profile and the type of instrument it also finds that the conflicts between competition industrial and trade policies are generally far greater in manufacturing than in services because trade offs between competition and competitiveness are less likely in the latter copyright 1993 by oxford university press

unraveling the effects of cultural diversity in teams a meta analysis of research on multicultural work groups previous research on the role of cultural diversity in teams is equivocal suggesting that cultural diversity s effect on teams is mediated by specific team processes and moderated by contextual variables to reconcile conflicting perspectives and past results we propose that cultural diversity affects teams through process losses and gains associated with increased divergence and decreased convergence we examine whether the level surface level vs deep level and type cross national vs intra national of cultural diversity affect these processes differently we hypothesize that task complexity and structural aspects of the team such as team size team tenure and team dispersion moderate the effects of cultural diversity on teams we test the hypotheses with a meta analysis of 108 empirical studies on processes and performance in 10 632 teams results suggest that cultural diversity leads to process losses through task conflict and decreased social integration but to process gains through increased creativity and satisfaction the effects are almost identical for both levels and types of cultural diversity moderator analyses reveal that the effects of cultural diversity vary depending on contextual influences as well as on research design and sample characteristics we propose an agenda for future research and identify implications for managers

perceived organizational support pos across 54 nations a cross cultural meta analysis of pos effects the authors meta analyze relationships of perceived organizational support pos with attitudinal and behavioral outcomes in western i e horizontal individualistic and eastern i e vertical collectivistic cultures the social exchange perspective suggests that pos effects are stronger in western cultures because employees are more likely to see the self as independent and understand their relationship with the organization in terms of reciprocity however the social identity perspective suggests that pos effects are stronger in eastern cultures because employees are more likely to see the self as interdependent and are more attuned to organizational support as an identity related cue addressing these competing hypotheses meta analytic results from 827 independent samples n 332 277 across 54 countries show support for both perspectives in the west pos was more strongly associated with social exchange processes than organizational identification processes in contrast in the east pos was more strongly associated with organizational identification processes than social exchange processes overall pos was more strongly related to job attitudes and performance in the east than in the west cultural differences in pos effects on attitudinal outcomes were found to be increasing over time we discuss the implications of these findings for organizational support theory and research

productivity credit risk and the demand for weather index insurance in smallholder agriculture in ethiopia the article explores the relationship between fertilizer use and the demand for weather index insurance wii among smallholder farmers in ethiopia we examine whether fertilizer use is profitable under current smallholder production conditions whether risk related factors affect fertilizer use and we estimate the returns to inputs in the agricultural production function in the absence of insurance we then study how these primitives of agricultural production functions relate to insurance demand the study compares a survey based estimate of willingness to pay with actual uptake for the weather insurance finding the stated and actual demand to be almost completely uncorrelated while those with high marginal returns to inputs say they would purchase insurance only those with low marginal returns actually do consistent with the stated purpose of the product as input insurance insurance demand proves to be highly responsive to the existence and amount of randomly allocated insurance vouchers jel classifications c83 g22 q12

beyond national culture and culture centricism a reply to gould and grein 2009 leung bhagat buchan erez and gibson provide a review of several advances in research on culture and international business ib which is criticized by gould and grein as overemphasizing the national culture nc approach this reply clarifies the misinterpretation of leung et al by gould and grein and affirms its pluralistic and inclusive position in response to their critique we discuss the complex meaning of culture address the dynamic processes of culture change in a globalizing world and substantiate the pivotal role of nc in ib research we encourage diverse perspectives that complement rather than compete against each other and advocate a dual perspective approach that integrates positivist and interpretative frameworks for theoretical innovation

delegated monitoring versus arm s length contracting abstract this paper analyzes the optimal organization of input suppliers in a procurement context we discuss when a top firm chooses to induce information sharing and active coordination between its suppliers consolidation rather than having them contract at arm s length delegation in designing the organization the firm anticipates that different supplier networks have different costs of inducing information revelation from suppliers when the cost of information sharing varies the optimal organization exhibits various discrete degrees of consolidation there is excessive arm s length contracting compared to the case where the top firm controls this organizational choice itself the paper offers also a methodology to study in a unified framework various organizational forms separately analyzed in the literature

an empirical test of the resource based theory strategic regulation in the dutch audit industry the resource based view of the firm is a recent strategic management theory that seeks to identify the resources that may provide firms with a sustainable competitive advantage this paper has two purposes first the paper relates strategic management arguments to parallel lines of reasoning in industrial organization theory and argues that strategic regulation is a major source of sustainable competitive advantage the second purpose of the paper is to report the results of an empirical test of the resource based theory on the basis of a longitudinal data set on the postwar history of the dutch audit industry a key determinant of this history proves to be strategic regulation which stimulates demand for audit services and protects rent producing resources

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

contestable markets and the theory of industry structure alreview articleo phe new book by william j baumol john c panzar and robert d willig is the culmination of several years of research on the related problems of understanding multiproduct cost structures and their implications for competition and market performance it is a significant book for several reasons the empirical reality that forms the starting point for the theoretical work is i think widely recognized to be important cost structures constitute one of the foundations of competitive strategy and strongly influence industry structure notwithstanding this fact the amount of microeconomic theory directed toward competitively relevant attributes of costs has been if not minimal then certainly more limited than the subject deserves in fact prior to the work of our authors economists and business strategists did not have a language or a set of concepts with which to talk precisely about scale economies in a multiproduct setting we now have at least the beginnings of such a language and a body of theory that provides a grammar for using it the theory of contestable markets was the subject of baumol s presidential address at the american economic association meetings in washington in december 1981 both the theory and its presentation have generated controversy useful controversy i think because it helps clarify issues that need attention i shall have remarks to offer later in this review concerning the normative and descriptive relevance of the contestable markets hypothesis my plan for this review is as follows i begin by outlining some of the principal definitions and propositions of the theory this outline should not be mistaken for a complete summary of the book but the economist who has not yet read the book needs a reasonably detailed picture of the approach few of the propositions require long proofs in fact once they are stated the proofs are often simple exercises having outlined some of the principal concepts i comment upon their usefulness for understanding markets and finally i conclude by suggesting some ways in which the general subject may be pursued from this point forward

multiculturalism from a cognitive perspective patterns and implications multiculturalism the internal representation of multiple cultural meaning systems has critical implications for global managers and multinational corporations mncs understanding multiculturalism is becoming increasingly important given that the locations within which mnc activity resides and the composition of the workforce even within a given location are more diverse building on the connectionism perspective we offer a novel cognitive conceptualization of multiculturalism that incorporates the individual s multicultural cognitive content and structure based on that we explain how specific sociocultural experiences interact with existing individual cognitions to form different patterns of multiculturalism specifically we propose five stylized patterns compartmentalization integration inclusion convergence and generalization and explain how they are developed through specific sociocultural experiences we discuss how different patterns of multiculturalism influence specific capabilities of multicultural mnc managers and their effectiveness in a variety of critical mnc tasks we believe the cognitive connectionist perspective which has not been brought before into international business discussions of culture and cultural capabilities holds great promise for better understanding global managers capabilities and development

the market impact and the cost of environmental policy evidence from the swedish green car rebate we quantify the effects of the swedish gcr a program to reduce oil dependence and greenhouse gas emissions in the automobile industry we find the gcr to increase the market shares of green cars and its cost to be 109 tonco2 saved thus 5 times the price of an emission permit since the main green cars in sweden are ffvs flexible fuel vehicles which can switch between petrol gasoline and ethanol we also account for fuel choice which increases the cost of the program finally we show that consumers would have purchased ffvs regardless of the rebate provided by the gcr

the impact of standards and regulation on innovation in uncertain markets abstract this study analyses the impact of formal standards and regulation on firms innovation efficiency considering different levels of market uncertainty we argue that formal standards and regulation have different effects depending on the extent of market uncertainty derived from theoretical considerations about information asymmetry and regulatory capture our empirical analysis is based on the german community innovation survey cis the results show that formal standards lead to lower innovation efficiency in markets with low uncertainty while regulations have the opposite effect in cases of high market uncertainty we observe that regulation leads to lower innovation efficiency while formal standards have the reverse effect our results have important implications for the future application of both instruments showing that their benefits heavily depend on the market environment

conceptualizing and measuring culture in international business and management from challenges to potential solutions understanding the influence of culture on business operations has been one of the most enduring components of international business ib and international management im theorizing and empirical investigation while several critiques and debates questioned the significant progress made in this domain the special issue we introduce here is meant to demonstrate that further advancement on how we conceptualize and measure culture is not only needed but also possible we provide an overview of past and current approaches in the measurement of culture in ib im and the challenges associated with these approaches and emphasize the important yet insufficiently acknowledged link between the theoretical conceptualization of culture and its measurement we then introduce the four articles included in the special issue and highlight how they break away from the addiction to approaches that have been very useful in getting where we are today but that might not always be useful in advancing knowledge beyond what we already know last but not the least we offer our own perspective on promising directions in conceptually and methodologically rethinking the study of culture in ib and im

conceptualizing and measuring distance in international business research recurring questions and best practice guidelines distance is a central concept in international business research yet there is debate about the construct as well as its operationalization in this editorial we address three of the most important recurring questions posed by authors editors and reviewers by examining the theory methods and data of distance research we discuss 1 how to theorize on distance and 2 what method and 3 what data to use when constructing a distance index we develop practical recommendations grounded in theory illustrating and supporting them by calculating cross country distance indices for all available country pairs and two of the most used distance indices cultural and institutional we show that whereas a specific method to calculate distance may matter to some extent the choice for a specific cultural or institutional framework to measure cultural or institutional distance has a major impact on country pair distances overall this editorial highlights the importance of matching data and method to the theoretical argument

fiscal corruption a vice or a virtue abstract recent literature on tax administration in poor countries suggests there are virtues in allowing fiscal corruption by strengthening the bargaining power of corrupt tax officers it is argued that tax evasion may be reduced and tax revenues increased but does such an intriguing paradox justify policies that stimulate corruption our answer is no and this note puts forward three arguments to support our view first while an increase in corruption may raise revenues in the short run in general the opposite will be the case in the longer run second the instrumental value of reducing corruption goes far beyond its effects on tax evasion and tax revenues accepting corruption as a policy strategy to increase tax revenues may undermine values of democracy and good governance third eliminating corruption should be considered an end in itself thus contrary to recent suggestions on incentive reforms in tax administration the reasonable starting point for policy debates in this area should still be that an increase in fiscal corruption is not an appropriate instrument for raising tax revenues sustained development cannot occur in an institutional framework that fosters corruption and extra legal tax enforcement

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

tax competition rent seeking and fiscal decentralization abstract the present paper provides a basis for evaluating fiscal decentralization of expenditure and tax responsibilities by encompassing the literature on tax competition and rent seeking both tax and rent seeking competitions are conceived of as being wasteful and self defeating we find that rent seeking activities account for political distortions which may be mitigated in the process of fiscal decentralization while tax competition results in economic distortions associated with decentralization welfare evaluation should be based on the balance of the political gain and the economic cost

negative practice value correlations in the globe data unexpected findings questionnaire limitations and research directions the study of culture and cultural values continues to be hotly debated among cross cultural researchers worldwide starting with the seminal work of kluckhohn and strodtbeck and hofstede and continuing with more recent efforts researchers have continued to develop and empirically examine cultural value frameworks in an attempt to understand how cultural differences affect work related behaviors and attitudes the purpose of this commentary is to briefly describe the interesting and counterintuitive findings from the global leadership and organizational behavior effectiveness globe project summarize the different interpretations of these findings offered by maseland and van hoorn and by brewer and venaik provide a critique of their arguments and finally offer a list of possible alternative interpretations and explanations for the conflicting findings in the globe study

tranching in the syndicated loan market around the world loan tranching allows banks to manage risk and facilitate firm financing which may be essential for firms that cannot access investors from stock markets we analyze the determinants and benefits of loan tranching by pooling the tranches of individual loans to create the largest cross country sample of syndicated loans covering more than 150 000 loans from multinational and domestic firms we find that in addition to market deal and borrower characteristics legal and institutional differences impact loan tranching strong creditor protection and efficient debt collection increase the probability of tranching and reduce tranche spreads ultimately promoting firms access to debt we also find evidence that tranching facilitates the financing of multinational firms abroad due to the transfer of legal and cultural institutions to foreign subsidiaries overall our results suggest that tranching plays an important role in reducing a country s financial development gap and promotes firms access to debt