new human resource management practices complementarities and the impact on innovation performance in this paper we take our theoretical point of departure in recent work in organisational economics on systems of human resource management hrm practices we develop the argument that just as complementarities between new hrm practices influence financial performance positively there are theoretical reasons for expecting them also to influence innovation performance positively we examine this overall hypothesis by estimating an empirical model of innovation performance using data from a danish survey of 1 900 business firms using principal component analysis we identify two hrm systems which are conducive to innovation in the first one seven of our nine hrm variables matter almost equally for the ability to innovate the second system is dominated by firm internal and firm external training of the total of nine sectors that we consider we find that the four manufacturing sectors correlate with the first system firms belonging to wholesale trade and to the ict intensive service sectors tend to be associated with the second system

the scope nature and effects of employee stock ownership plans in japan using data for various years including new data for 1973 84 the authors examine the scope nature determinants and effects of japanese employee stock ownership plans esops in 1988 of firms listed on japan s eight stock exchange markets 91 had an esop and the average non executive employee plan participant owned stock worth about 14 000 probit estimates for a sample of manufacturing firms show that firms were more likely to adopt esops when recent business performance was below average the capital labor ratio was relatively low and employment growth was relatively fast evidence is also found that esops enhanced enterprise productivity the authors argue that esops have played an important and largely overlooked role in the success of the japanese economy over the past two decades

organisational and spatial determinants of the multi unit firm evidence from the french industry galliano d and soulie n organizational and spatial determinants of the multi unit firm evidence from french industry regional studies this article aims to analyse the factors internal characteristics spatial and industrial environments that determine the existence of multi unit firms and the intensity of their organizational fragmentation at a national scale the empirical models are based on individual data on all french industrial firms collected by the french national institute of statistics the results show the importance of internal characteristics scale economies specific assets as research and development and advertising skill level etc in organizational choice they also highlight the major role played by multi location and by the spatial profile of the firms on the intensity of their fragmentation galliano d and soulie n

markets hierarchies and information on a paradox in the economics of organization abstract the literature on the economics of organization presents the following paradox on the one hand firms are said to be repositories of superior information about input characteristics on the other hand markets are said to be superior to hierarchies in coordinating resource allocation because hierarchies are forced to aggregate heterogeneous inputs into homogeneous categories this paper suggests reasons for the association of firms with refined input information and argues that it is not their hierarchical features but their provision of an appropriate framework for rent sharing that is responsible for this association

essays on duopoly competition with asymmetric firms is profit maximization always an evolutionary stable strategy abstract we propose both a well mixed and spatially structured evolutionary game to analyze the competitive behavior of retail firms in duopolistic markets firms from two different populations high low efficiency compete and the available strategies are i profit or ii revenue maximization under bounded rationality assumptions firms can update their behavior through dynamic learning mechanisms in addition to a replicator dynamics approach we develop an agent based model to increase realism and to capture possible spatial effects on firms strategic behavior a convergence between the methods is observed and given specific conditions revenue maximization may corresponds to an evolutionary stable strategy ess

stochastic modelling of renewable energy sources from operators point of view a survey abstract high penetration of renewable energy sources especially weather dependent sources has increased the power systems uncertainties for any analysis in power systems such as planning and operation it is essential to confront the stochastic nature of these sources in order to get much more precise results since operators need proper strategies and methods to decline negative effects of the stochastic behaviour of renewable power generators such as total operation cost growth this paper provides a review of different state of the art approaches from the operator s viewpoint for handling the stochastic behaviour of renewable sources hence in this paper three different strategies are categorized for stochastic analysis of these sources the first strategy is mathematical modelling including stochastic dependency and independency multi dimensional dependence forecast and scenarios afterwards demand side management which is one of the other approaches for dealing with these uncertainties is investigated and different demand response programs and some methods to model them are presented finally the effect of different electricity market schemes and relevant optimization methods to mitigate the variations of renewable energy sources are discussed the study demonstrates that an operator should choose one or a combination of these three approaches based on its requirements

beyond privatization institutional innovation and growth in china s large state owned enterprises abstract this article demonstrates that china s large state owned enterprises soes are not stagnant fossils waiting to die under economic reform policies this sector has undergone large change due to enhanced enterprise autonomy the impact of market forces rapid growth of domestic demand for upstream products strategic integration with the world economy and the state s policy to promote large businesses china s large soes are developing new institutional forms that do not neatly fit into existing patterns china is experimentally changing its institutions through a combination of central policy local initiative and interaction with international investment this presents a challenge to the transitional orthodoxy and to ideas concerning property rights in development economics there is not a universal model of property rights and government action that works best in all circumstances china s experience with the reform of large soes shows the diverse possibilities for effective industrial institutions

the ethical challenges of the un s clean development mechanism this paper examines the ethical implications of the clean development mechanism cdm the united nation s climate change initiative that provides incentives to countries and firms in developed countries to motivate investments in greenhouse gas reduction projects in developing countries using the tenets of agency theory we present a solid waste management project in el salvador as an illustrative example of how the cdm can produce a disproportionately high social cost for the most marginalized populations in the developing world we suggest that the un needs to reformulate the cdm so that it more effectively aligns the divergent goals of multiple actors and upholds the un s principles for sustainable development including ethical firm level behavior by providing incentives for environmental economic and social value creation the cdm would not only promote ethical norms for profit seeking firms that participate in the program but also reinforce the un s twin pro poor and environmental objectives

towards a re interpretation of the economics of feasible socialism this paper re examines the debate on whether socialism is feasible from the perspective of the literature on the division of labour and organisational forms the central argument is twofold first each of the major protagonists in the debate provide a partial explanation as to when market socialism planned socialism and participatory socialism are feasible second the different perspectives on when socialism is feasible can be reconciled through seeing the arguments in terms of specific techno economic paradigms which are underpinned by their own concepts of the division of labour and efficiency attributes the authors show that theories on the economics of socialism reflect different techno economic paradigms and that when and whether the various views on socialism are appropriate depend on the prevailing external conditions economic growth path and mode of institutional arrangement copyright 2004 oxford university press

risk neutral and risk averse approaches to multistage renewable investment planning under uncertainty abstract strategies for investing in renewable energy projects present high risks associated with generation and price volatility and dynamics existing approaches for determining optimal strategies are based on real options theory that often simplify the uncertainty process or on stochastic programming approaches that simplify the dynamic aspects in this paper we bridge the gap between these approaches by developing a multistage stochastic programming approach that includes real options such as postponing hedging with fixed forward contracts and combination with other sources the proposed model is solved by a procedure based on the stochastic dual dynamic programming sddp method the framework is extended to the risk averse setting a specific case study in investment in hydro and wind projects in the brazilian market is used to illustrate that the investment strategies generated by the proposed approach are efficient

innovation and bureaucracy under soft and hard budget constraints because of the inherent uncertainty promotion of innovation critically depends on screening mechanisms to select projects this paper studies the relationship between bureaucracy and financial constraints as two such mechanisms the lack of commitment to hard financial constraints interferes with its ex post screening capability ex ante bureaucratic screening is optimally chosen as a substitute however bureaucracy makes mistakes by rejecting promising projects and delays innovation and the efficiency loss due to soft financial constraints increases as prior knowledge becomes worse and as research stage investment requirements become lower in a centralized economy bureaucracy may reduce the number of parallel projects particularly for projects with higher uncertainties and less research stage requirements this theory fits much of the evidence and in particular it explains why the computer industry but not the nuclear or aerospace industries has fared so poorly in centralized economies the fundamental importance of innovation to the survival and evolution of economic systems and organizations has long been recognized marx 1978 schumpeter 1950 innovation is characterized by its inherent uncertainty because it is a process whose every element takes considerable time in revealing its true features and ultimate effects schumpeter 1950 p 83 and people are unable to anticipate the future impact of successful innovations even after their technical feasibility has been established rosenberg 1994 an understanding of how different systems and organizations deal with the uncertainties associated with innovation and the resultant consequences is crucial for understanding alternative economic systems and organizations in this paper we provide a theory to analyse how different systems screen uncertain innovative projects and the impact of the various screening mechanisms on those systems we distinguish two alternative screening mechanisms the bureaucratic screening mechanism vs the market screening mechanism the latter is directly linked to financial constraints with this perspective our theory explains why centralized economies did well in certain areas of innovation but fared poorly in others for instance in the early 1960s the west was frightened by the ussr s great success in launching the first unmanned satellite and the first manned space capsule while in the 1980s in contrast the centralized system

long term employment and job security over the past 25 years a comparative study of japan and the united states the authors document and contrast changes or lack thereof in job stability over the past 25 years between japan and the united states prime age male workers with at least five years of tenure in japan continued to enjoy much higher job stability than did their u s counterparts most remarkably japan s lost decade had little discernible adverse effect on the job stability of this group of japanese employees by contrast job stability for mid career hires and youth workers deteriorated in japan the authors cross national regression analysis of job loss confirms the consistently more important role that seniority plays in protecting workers from job loss in japan than in the united states and reveals that this gap in seniority s influence on job stability between the two countries widened overall it is the u s economy with the longest economic expansion not the japanese economy with the longest economic stagnation that experienced deteriorating job stability pointing to the absence of converg

moral hazard with several agents abstract we consider a situation in which a principal hires two agents whose cooperation is technically profitable and study three models that incorporate different assumptions about the agents cooperative behavior we find a close relationship between the agents commitment capacity and the characteristics of the optimal contract a greater capacity to cooperate leads to more efficient outcomes we also show that unless agents form a team the efficient level of mutual help is not achieved in equilibrium

risk constrained portfolio selection of renewable sources in hydrothermal electricity markets renewable sources have recently emerged as a generation option for many countries in order to promote clean energy development in the case of brazil small hydro plants and cogeneration from sugarcane waste bagasse have been attractive alternatives during the past years with hundreds of mw installed since 2004 despite their advantages both alternatives are hindered by seasonal yet complementary availability this forces producers to discount or price the risks faced when selling firm energy contracts and may ultimately lead to projects being commercially unattractive we propose a stochastic optimization model that defines the optimal composition of a portfolio based on these two renewable sources in order to maximize the revenue of an energy trading company at the same time this model mitigates hydrological and fuel unavailability risks thus allowing the participation of both sources in the forward market environment in a competitive manner a case study is presented based on data from the brazilian system

what makes management style similar and distinct across borders growth experience and culture in korean and japanese firms using a survey database of japanese and korean firms we compare the styles of two asian business systems with a japanese rather than an american mirror there are substantial differences in the two country styles we introduce two sources of convergence firm size as measured by sales and globalization as measured by export ratio and find that both of these factors reduce the difference with globalization the more significant of the two

shirking or work morale abstract standard economics assumes that rational agents shirk and that they have to be disciplined by monitoring and regulating however under specific circumstances regulating systematically worsens workers morale and thereby negatively affects their behavior when a principal attributes a lower work morale to the agents than they actually have an implicit contract is unilaterally violated and agents reduce their excess morale this reaction is theoretically and empirically well supported by the notions of reciprocity and of overjustification the theoretical propositions are applied to a specific employment relationship but hold more generally they are consistent with empirical observations

toward an economic model of the japanese firm i owe a great deal to professor moses abramovitz who suggested that i write this article i appreciate his constant encouragement and guidance which aided me throughout its preparation i am also indebted to three anonymous referees of the journal and to professors ryutaro komiya and michael riordan for their critical comments and helpful suggestions needless to say i am solely responsible for the views expressed in this paper

decentralization hierarchies and incentives a mechanism design perspective separation of ownership from management multidivisional firm organizations delegation of production decisions to worker teams delegation of pricing and advertising decisions to retail franchisers reliance on intermediaries in trade or finance and distribution of regulatory authority across different agencies represent examples of organizations that delegate and distribute decision making authority instead of centralizing it this paper reviews literature on costs and benefits of delegated decision making in hierarchical organizations or contracting networks with regard to problems of incentives and coordination it starts by describing incentive and coordination costs of delegation in simple canonical examples of hierarchies where both information and incentives of different decisionmakers differ one class of models pertain to contexts where the classical revelation principle applies i e where costs of contractual complexity information processing or communication are absent agents do not collude and the mechanism designer can commit to the mechanism delegation may conceivably entail a loss of control and coordination arising from the divergence of information and incentives sufficient and necessary conditions for this loss to be mitigated entirely include risk neutrality top down contracting and monitoring of transfers or production assignments between subordinates the next class of models introduces communication costs that restrict the performance of centralized arrangements relative to delegation owing to a resulting loss of flexibility which has to be traded off against possible control losses of delegation finally consequences of collusion among agents is discussed which typically enlarge the range of circumstances under which delegation can attain optimal second best outcomes the paper concludes with a discussion of the relevance of this theoretical literature to recently emerging empirical studies of industrial organizations where delegated decision making plays an important role adoption of innovative human resource management practices new information technologies and retail franchising

international trade and internal organization abstract informal discussions on international trade attribute much importance to organizational differences nevertheless economic theories of international trade have not been extended to incorporate this important element this paper integrates theories of internal organization with a model of international trade by adding another dimension how decisions regarding which ideas or projects to accept are made to the standard trade framework it is shown that asymmetry in the organization of economies per se can be a source of comparative advantage and two way trade implications for the pattern of trade are derived

main banks influence on financial reporting quality in japan abstractthis study investigated main banks influence on the quality of accounting firms audits and corporate firms earnings focusing on companies on japan s nikkei 500 index we posed three questions in this research study about main banks influence on corporate clients earnings management first does a weakened main bank relationship influence corporate clients financial reporting quality second does japan s firewall deregulation influence firms earnings quality finally does the relationship between accounting firms and main banks affect client firms earnings quality our main findings were that main banks are not related to client firms earnings management however main banks mitigate client firms earnings management after firewall deregulation on the other hand firewall deregulation does motivate firms to manipulate their earnings management finally using pong and kita s 2006 study as a framework we found that main banks and client firms using the same accounting firms had no in

industrial organisation the degree of monopoly and macroeconomic performance a perspective on the contribution of keith cowling 1936 2016 keith cowling became a pioneer and key figure in a number of areas in industrial economics including mergers and acquisitions advertising the theoretical determination of structure conduct performance scp relationships and the welfare losses of monopoly power he was informed and motivated by real life challenges of real life people and aimed to find solutions that fostered social welfare by leveraging the power of theory and evidence in mainstream io he was mostly famed for his work on scp and monopoly power building upon this contribution keith also became renowned for being critical of contemporary capitalism arguing that its concentration tendencies rendered it prone to abuse of corporate power and paved the way to stagnation and crises in doing so he provided an insight into how the micro firm and industry level foundations of the industrial economy impacted upon macro economic performance he cross fertilised mainstream and radical approaches to economics and was widely respected for his conceptual mathematical and empirical rigour in this paper we highlight his major contributions in the fields of io international political economy and public policy

capacity pricing and production under supply and demand uncertainties with an application in agriculture abstract we consider capacitated joint lot sizing and pricing problems when supply and a price sensitive demand are uncertain in cases where there is excess capacity the decision maker has the option to rent her capacity we model the case where price and production quantity are determined before the yield is realized joint decisions as well as the case where the price is determined after the yield is known sequential decisions in the joint decisions case we introduce the concept of expected demand fill rate elasticity and characterize the conditions in which a one sided production and pricing policy is optimal we extend the results to the case when there is a fixed production cost and show that a two sided production and pricing policy is optimal we also investigate the conditions under which it is optimal for the decision maker to rent her capacity in addition we look at the case in which the decision maker is risk averse and analyze the effect of the risk attitude on the optimal price and production quantity we extend our model to the multi period case and the case where there is a lead time to acquire new capacity we show that a one sided production pricing and capacity planning policy is optimal in this situation as well we apply our model to the agricultural sector and present numerical examples using data from the california almond industry

japan s different trade regime an analysis with particular reference to keiretsu many claim that although formal trade barriers have been removed at the border japanese markets remain unusually closed because of non tariff barriers after describing japan s development strategy and the debate over the sources of japanese growth we consider current trade barriers recent research has made some headway investigating the impact of one of the alleged invisible barriers in particular efforts have been made to test if the behavior of japanese corporate groups known as keiretsu creates a barrier to trade finally we consider whether private sector trade restrictions warrant a public response what if anything should be done about keiretsu

top executive rewards and firm performance a comparison of japan and the united states this paper studies top executive turnover and compensation and their relation to firm performance in the largest japanese and u s companies japanese executive turnover and compensation are related to earnings stock returns and to a lesser extent sales performance measures the fortunes of japanese top executives therefore are positively correlated with stock performance and current cash flows or with factors contributing to such performance the relations for the japanese executives are generally economically and statistically similar to those for their u s counterparts there is some evidence however that the fortunes of japanese executives are more sensitive to low income but less sensitive to stock returns than those of u s executives

strategic generation investment under uncertainty via benders decomposition we address the generation investment problem faced by a strategic power producer and consider a detailed description of the uncertain parameters involved namely rival producer investment and market offering and demand growth to identify optimal investment decisions we consider a target year and propose a bilevel model whose upper level problem determines investment and offering decisions to maximize expected profit and whose many lower level problems represent market clearing conditions per demand block and scenario since the producer total expected profit is sufficiently convex with respect to investment decisions a benders decomposition approach is proposed that results in a tractable formulation even if hundred of scenarios are used to describe uncertain parameters extensive numerical simulations based on realistic case studies show the good performance of the proposed decomposition approach

toward a stakeholder theory of the firm the saturn partnership this paper seeks to engage the organization theory community in contemporary debates over the role of the corporation in american society by using the case of the saturn corporation to develop and illustrate a stakeholder theory of the firm one normative and three positive questions are posed for a stakeholder theory the normative question is why should stakeholder models be given serious consideration at this moment in history the positive questions are 1 under what conditions is a stakeholder firm likely to emerge in the united states 2 what are the critical determinants of performance in a stakeholder firm and 3 what will determine the sustainability and diffusion of this organizational form in the american environment the history design features and dynamics of the labormanagement partnership at saturn are used to illustrate and interpret a specific case of employees as stakeholders saturn s original mission governance structure and internal processes fit the characteristics of a stakeholder firm employees establish themselves as influential definitive stakeholders by using their knowledge to improve organizational performance the local union likewise contributes to firm performance by organizing workers into a dense social network that contributes to problem solving conflict resolution and quality improvement however the legal and political environment in which the firm operates produces considerable uncertainty over the sustainability and diffusion of saturn s features in particular and the stakeholder organizational form in general additional hypotheses and research questions are proposed to continue theory building around the more general model of the stakeholder firm researchers are encouraged to take up the analysis of stakeholder models and thereby contribute to the contemporary and future debates over the role of the corporation in american society

openness and the market friendly approach to development learning the right lessons from development experience abstract two central policy issues in economic development today are how open should a developing country be to the world economy and what should the government do or not do to promote rapid growth this paper examines these questions in relation to the highly successful east asian countries and contributes to the debate between world bank and heterodox economists the paper suggests that there has been significant convergence between the two schools on analytical and empirical issues but not on policy it takes this debate further by analyzing the principal issues still in contention

deregulation disintermediation and agency costs of debt evidence from japan abstract many japanese firms reduced dependence on banks following financial deregulation in the 1980s the financial architecture of japanese firms after liberalization provides an opportunity to investigate the choice of financing with public bonds versus monitored bank loans examination of accounting and stock price data for a sample of japanese firms in the late 1980s suggests that debt structure is related to variables that serve as proxies for agency costs of debt in particular we find that the proportion of bond debt is inversely related to growth opportunities while the proportion of bank debt is positively related to growth opportunities

south korean and taiwanese development and the new institutional economics the publication of books by both alice amsden and robert wade provide an opportune moment to reflect on the study of east asian development after an initial surge of interest beginning in the 1970s the field has reached a plateau and scholars recently have cast a wide net in searching for ways to extend the field in assessing the state of the art regarding the economic development of the east asian newly industrialized countries nics this review will treat three themes first i will argue that the focus on states versus markets is becoming stale and that much of the scholarly interest lies in the politics behind the economics second i argue that political scientists have underexplored the historical origins of korean and taiwanese capitalism and that such attention promises to strengthen both theories and explanations of development third i argue that the international system has been more important in promoting development in east asia than accounts in the first wave have recognized the purpose of this review is to assess the field reveal

financial intermediaries ownership structure and monitored finance evidence from japan this paper introduces new and unique data from 127 japanese private equity funds that enable a first ever direct comparison of individual owner manager structures versus financial intermediation structures in terms of the governance provided to investee companies through private equity funds the data indicate individual owner manager structures financial disintermediation give rise to much smaller portfolios of entrepreneurial firms and more advice to entrepreneurs across the scope of different financial intermediation structures including banks life insurance companies securities firms corporations and government bodies there are further differences in the provision of governance and value added advice provided to investees the data further indicate us affiliated funds in japan are more likely to have smaller portfolios and provide more advice to entrepreneurial companies possibly due to a greater skill set in providing advice to facilitate the development of small entrepreneurial firms

does the japanese governance system enhance shareholder wealth evidence from the stock price effects of top management turnover this article examines the stock price effects of top management turnover announcements for 432 japanese corporations from 1985 to 1990 we find that these announcements are associated with significantly positive abnormal returns the returns are greater when turnover is forced than when turnover represents normal succession the stock price effects are also significantly positive when turnover is forced and the successor is appointed from outside the firm we find that large shareholders play an important role during outside succession this evidence suggests that the disciplinary decisions of japanese governance mechanisms are consistent with shareholder wealth maximization article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

managerial objectives capital structure and the provision of worker incentives worker incentive schemes are invariably assumed to be administered by an owner entrepreneur who has an incentive to understate worker performance after the event while tournaments can overcome this problem they discourage cooperation between workers we show that a professional manager concerned with equality between workers and with avoiding bankruptcy rather than maximizing shareholder wealth will conduct a tournament that preserves individual effort incentives while promoting cooperation between workers the theory predicts lower debt levels and more compressed pay scales as cooperation becomes more important in the limit this becomes a group bonus scheme supported by blue chip debt

estimating the performance effects of business groups in emerging markets business groups confederations of legally independent firms are ubiquitous in emerging economies yet very little is known about their effects on the performance of affiliated firms we conceive of business groups as responses to market failures and high transaction costs in doing so we develop hypotheses about the effects of group affiliation on firm profitability affiliation could either boost or depress firm profitability and members of a group are likely to earn rates of return similar to other members of the same group using a unique data set compiled largely from local sources we test for these effects in 14 emerging markets argentina brazil chile india indonesia israel mexico peru the philippines south africa south korea taiwan thailand and turkey we find evidence that business groups indeed affect the broad patterns of economic performance in 12 of the markets we examine group affiliation appears to have as profound an effect on profitability as does industry membership yet strategy scholars have a much clearer grasp of industries than of groups moreover membership in a group raises the profitability of the average group member in several of the markets we examine this runs contrary to the wisdom conventional in advanced economies that unrelated diversification depresses profitability overall our findings suggest that the roots of sustained differences in profitability may vary across institutional contexts conclusions drawn in one context may well not apply to another copyright 2001 john wiley sons ltd

global technology development by colocating r d and manufacturing the case of swedish manufacturing mnes in this study we analyze the role of colocation between research and development r d and manufacturing for global technology development by multinational enterprises mnes the extant literature suggests that the main strategic role of colocated r d units is to locally adapt existing products and processes however data from 146 foreign r d units of sweden s 17 largest manufacturing mnes in 2013 show that they instead mainly develop new technology not only for the local and regional markets but to a large extent for the global market a likely explanation is that colocation positively contributes to joint problem solving and transfer of tacit knowledge between production and r d personnel all of which is necessary in new product development especially in industries characterized by complex products and systems and rapid technological change a theoretical implication is that depending on industry characteristics internal cross functional linkages between r d and manufacturing can be more critical than external supply and demand side factors when it comes to influence where r d units are located globally

unions and cooperative behavior the effect of discounting using union contract and industry wage survey data this article examines the effect of discounting on cooperative bargaining behavior by unions and firms game theory predicts that higher discount rates raise the temptation to defect from cooperation measures of cooperative behavior included the presence of merit pay incentive pay wage employment guarantees or labor management study committees discount rates were proxied by the relevant industry s failure rate failure rates generally had negative effects on cooperation industry wage survey results showed larger effects for union than non union establishments providing support for the union bargaining framework

the japanese crisis a case of strategic failure this paper provides an alternative insight into japan s current economic problems we concentrate upon the role played by the economy s central actors namely japan s transnational corporations since the early 1980 s japan s transnationals have become dominant players in the global economy and now have a higher rate of physical investment in new overseas greenfield sites than their competitors this has had detrimental consequences for japan s domestic economy particularly for small firms who operate in keiretsu networks this has led to concerns about the hollowing out of japan s domestic industry raising the possibility of long term industrial decline and strategic failure

renewable energy investments under different support schemes a real options approach abstract this paper adopts a real options approach to analyze investment timing and capacity choice for renewable energy projects under different support schemes the main purpose is to examine investment behavior under the most extensively employed support schemes namely feed in tariffs and renewable energy certificate trading we consider both multiple sources of uncertainty under each support scheme and uncertainty with respect to any change of support scheme and we obtain both analytical when possible and numerical solutions in a nordic case study based on wind power we find that the feed in tariff encourages earlier investment nevertheless as investment has been undertaken renewable energy certificate trading creates incentives for larger projects in our baseline scenario and taking the fixed feed in tariff as a base the revenue required to trigger investments is 61 higher with renewable certificates at the same time investment capacity is 61 higher

mobility and innovation a cross country comparison in the video games industry open labour markets are often seen as a precondition for innovation particularly for new industries however this view ignores two core findings of the economic systems literature first that mobility patterns are institutional microsystems that need to be complementary to other institutions in the labour market and second that new industries may be characterised by incremental and complex innovation based on these considerations we ask how mobility affects innovation in the video games industry in the us and japan we find that inter firm mobility is beneficial for innovation in the us but has negative effects in japan we further find that inter functional mobility is beneficial for innovation in both countries our analysis is based on career histories from the video games industry in the us and japan we present an empirical study based on the game development of 815 video games and the careers of 28 426 video game developers who were involved in the development of games released between 1999 and 2009

industrial strategy a missing link in british economic policy this paper critically analyzes the potential and limitations of economic instruments for environmental protection it presents a general framework for analyzing environmental issues along with a taxonomy for classifying different approaches to environmental protection a key contribution of the paper is to identify critical steps in marketing economic incentive approaches for environmental protection the challenge to researchers is to design tools that will help achieve environmental goals more effectively this means taking careful account of political technical and economic constraints in system design copyright 1993 by oxford university press

markets and organizations as coherent systems of innovation abstract the firm its tasks and the way in which it relates to the market appear in a different light with respect to the standard theory within the perspective of a process of innovation interpreted as a creation of resources the main problem with a similar process a learning process which essentially consists of the structuring of new and totally original productive options is to make it viable this implies that markets and organizations should not be looked at as distinct institutions whose respective efficiency must be tested with respect to a problem of allocation of given resources but rather considered as a system whose coherence depends on being able to render a process of creation of new specific resources viable

buyer supplier relations in industrial markets when do buyers risk making idiosyncratic investments it is well established that the existence of investments specific to a relationship influences the choice of governance structure including the use of contractual safeguards what is less well understood are the circumstances leading to the creation of those specific assets to begin with this paper explores the industrial buyer s motives to put itself at risk by making investments tangible and intangible which cannot be readily redeployed from one supplier to another using original data from a sample of 388 supply relationships involving all automakers in the u s and japan we examine features of the supply task the supplier and the supply environment which serve as motives to make supplier specific investments we also examine potential factors which facilitate the posting of specific assets as credible commitments to attenuate supplier opportunism we find that specific investments by buyers serve as a mechanism to 1 increase coordination when the manufacturing task is complex 2 buffer the buyer against technological uncertainty and 3 build close relationships when the requisite production skills are scarce the supply market is thin we find more specific investments in supply arrangements that are embedded in a broader business relationship we find fewer supplier specific investments in the japanese context finally we find that buyers focus their investments on lesser known low share component makers perhaps to capitalize on a unique focused supplier capability

post the washington consensus economic governance and industrial strategies for the twenty first century recent events in the global economy have led to a growing dissatisfaction with the neo liberal economic paradigm that has dominated economic policy over the last 30 years and the increasing concentration of and abuse of economic power within the corporate sector that has ensued however amidst calls for a new approach to economic management there is a danger that a new policy framework may overlook underlying economic governance structures that exist and may evolve within the economy such oversight has implications for development this paper seeks to demonstrate that the long run efficacy of industrial strategy depends upon designing appropriate economic governance structures that serve the wider public interest it does so by exploring past experiences of industrial strategy drawing lessons from the usa the uk japan the third italy and the emerging and transition economies we also offer some suggestions for ways forward

international trade and the internal organization of firms an evolutionary approach masahiko aoki and others have distinguished two alternative modes for a firm s internal organization we argue that the profitability of each mode depends on the distribution of firms across modes and on the general economic environment we characterize the evolutionary equilibria in both a parametric and a general model and argue that corner equilibria predominate we analyze the effects of trade between the two countries in a outputs only and b inputs factors as well as outputs our most striking conclusion is that in case b a less efficient mode can displace a more efficient mode when trade barriers are sufficiently low

organizational structure and expected output at nuclear power plants this paper examines the relationship between organizational structure and operation and outage durations at nuclear power plants in the united states it empirically examines aoki s 1990 proposition that 1 hierarchical control increases productivity in situations that are very stable or very uncertain and 2 horizontal coordination increases productivity in intermediate situations it describes a model of continuous production in which management chooses an organizational structure that minimizes the ratio of the hazard rates for operation and outage and proposes an index of hierarchy based on measures of plant level organization parameter estimates support the proposition that less hierarchy is associated with higher productivity through longer periods of operation copyright 1996 by mit press

macro determinants of fdi inflows to japan an analysis of source country characteristics this paper examines the source country determinants of fdi into japan the paper highlights certain methodological and theoretical weaknesses in the previous literature and offers some explanations for hitherto ambiguous results specifically the paper highlights the importance of panel data analysis and the identification of fixed effects in the analysis rather than simply pooling the data indeed we argue that many of the results reported elsewhere are a feature of this mis specification to this end pooled fixed effects and random effects estimates are compared the results suggest that fdi into japan is inversely related to trade flows such that trade and fdi are substitutes moreover the results also suggest that fdi increases with home country political and economic stability the paper also shows that previously reported results regarding the importance of exchange rates relative borrowing costs and labour costs in explaining fdi flows are sensitive to the econometric specification and estimation approach the paper also discusses the importance of these results within a policy context in recent years japan has sought to attract fdi though many firms still complain of barriers to inward investment penetration in japan the results show that cultural and geographic distance are only of marginal importance in explaining fdi and that the results are consistent with the market seeking explanation of fdi as such the attitude to risk in the source country is strongly related to the size of fdi flows to japan 2007 the authors journal compilation 2007 blackwell publishing ltd

the fable of fisher body abstract general motors s gm s acquisition of fisher body is the classic example of market failure in the literature on contracts and the theory of the firm according to the standard account in 1926 gm merged vertically with fisher body a maker of auto bodies because of concerns over transaction specific investment and contractual holdup that account exhibits errors of historical fact and interpretation general motors acquired a 60 percent interest in fisher body in 1919 moreover the contractual arrangements and working relationship prior to the 1926 merger exhibited trust rather than opportunism fisher body s production technology did not exhibit asset specificity the merger reflected economic considerations specific to that time not some immutable market failure we demonstrate that vertical integration was directed at improving coordination of production and inventories assuring gm of adequate supplies of auto bodies and providing gm with access to the executive talents of the fisher bro

a clash of capitalisms foreign shareholders and corporate restructuring in 1990s japan this article examines the clash between stakeholder and shareholder based business systems resulting from an increase in foreign portfolio investment in the japanese economy during the 1990s an analysis of 1 108 firms between 1991 and 2000 shows that as foreign institutional investors who were more interested in investment returns than in long term relationships replaced domestic shareholders one fundamental pillar of japan s stakeholder capitalism began to crack japanese firms began to adopt downsizing and asset divestiture practices more characteristic of anglo american shareholder economies the influence of foreigners however was weaker in firms more deeply embedded in the local system through close ties to domestic financial institutions and corporate groups thus foreign investors were influential primarily in firms less embedded in the existing stakeholder system this research contributes to debates on globalization and convergence of business systems institutional change and corporate

risk constrained multi stage wind power investment when deciding on wind power investments three major issues arise the production variability and uncertainty of wind facilities the eventual future decline in wind power investment costs and the significant financial risk involved in such investment decisions recognizing the above important issues this paper proposes a risk constrained multi stage stochastic programming model to make optimal investment decisions on wind power facilities along a multi stage horizon the proposed model is illustrated using a clarifying example and a case study

transmission expansion in an oligopoly considering generation investment equilibrium abstract transmission expansion planning tep is a sophisticated decision making problem especially in an oligopolistic electricity market in which a number of strategic price maker producers compete together a transmission system planner who is in charge of making tep decisions requires considering the future generation investment actions however in such an oligopolistic market each producer makes its own strategic generation investment decisions this motivates the transmission system planner to consider the generation investment decision making problem of all producers within its tep model the strategic generation investment problem of each producer can be represented by a complementarity bi level model the joint consideration of all bi level models one per producer characterizes the generation investment equilibrium that identifies the future evolution of generation investment in the market this paper proposes a tri level tep decision making model to be solved by the transmission system planner whose objective is to maximize the social welfare of the market minus the expansion costs and whose constraints are the transmission expansion limits as well as the generation investment equilibrium problem this model is then recast as a mixed integer linear programming problem and solved numerical results from an illustrative example and a case study based on the ieee 14 bus test system demonstrate the usefulness of the proposed approach

basic research inside the firm lessons from an in depth case study abstract the economic analysis of basic research in firms has been a growing concern but only a few attempts have been made to understand the realities which characterize the implementation of this activity in an in depth case study this paper considers the organisational specificities of basic research inside the firm and emphasizes the strategic role of human resources it shows that the process of innovation which was seen in the 1970s as a stock of information to be managed became during the 1980s a sequential learning process which covers a variety of different but complementary organizational designs in the basic research unit on this basis some analytical implications for technology and innovation processes are suggested as the production process is a sequential learning process an innovative firm strategy is defined as one which is able to balance short and long terms requirements with regard to profitability this appears as an out of equilibrium problem where the crucial determinant is the organizational design chosen by the firm in order to generate and implement new learning and skills

understanding the rise and decline of the japanese main bank system the changing effects of bank rent extraction this paper shows how main bank rent extraction affects corporate decisions about investment and financing during financial regulatory reform our model predicts that limited loanable funds can initially contain main bank controlled overinvestment even when new equity is available to the firm abundant funds facilitate overinvestment to the detriment of firm profitability a shift of control rights back to the firm due to financial deregulation produces an equity for upside potential and bank debt for downside risk bias against the banks a stock market and real estate boom in japan made it harder than ever for the banks to diversify risk the insights from this analysis help explain why japan s main bank system was beneficial in the capital constrained postwar period but became harmful during the capital abundant and even bubbly 1980s and why the adverse shocks of the post deregulation 1990s had such severe effects on the banking system

competitiveness and industrial policy from rationalities of failure towards the ability to evolve this article elaborates a dynamic rationale of industrial policy focusing on how to strengthen the socio economic system s ability to evolve i e how to achieve high real income together with qualitative change it highlights that the ubiquitous rationalities of failure be it of markets governments or systems are rooted in a peculiar habit of accepting hypothetical perfect states as normative benchmarks in contrast a dynamic logic of intervention should start from the question what the system aims to accomplish combining the structuralist ontology of micro meso and macro with the functional principles of evolutionary change the paper proposes a general typology of economic policies based on their respective contributions to the system s ability to evolve

radical political economy and the economics of labor markets this essay is the result of a long process involving many drafts and revisions i am grateful to duncan foley for the careful and constructive criticisms offered throughout the project the following people read the manuscript at different stages and although they often disagreed with me they generously provided helpful comments two anonymous referees for this journal samuel bowles william dickens greg dow robert drago richard edwards kathleen engel richard freeman james galbraith herbert gintis jody hoffer gittel sandfordjacoby tom kochan david levine lisa lynch paul osterman michael piore bob rebitzer gil skilman dan slesnick robert thomas and tsuyoshi tsuru comments from participants in seminars at the massachusetts institute of technology university of massachusetts at amherst and hitotsubashi university are also gratefully acknowledged

on the costs of a bank centered financial system evidence from the changing main bank relations in japan we examine the effects of bank firm relationships on firm performance in japan when access to capital markets is limited close bank firm ties increase the availability of capital to borrowing firms but do not lead to higher profitability or growth the cost of capital of firms with close bank ties is higher than that of their peers this indicates that most of the benefits from these relationships are appropriated by the banks finally the slow growth rates of bank clients suggest that banks discourage firms from investing in risky profitable projects however liberalization of financial markets reduces the banks market power the close relationship between manufacturing firms and financial institutions in japan has recently been at the center of the debate on the appropriate financial system for the reforming economies of eastern europe as opposed to the anglo saxon separation of finance and industry long term ties between main banks and their client firms involving bank loans bank equity holding and some bank appointed personnel which are common in japan and germany have often been described as a growth oriented financial system that could serve the needs of developing and reformed economiies better than anonymous capital markets modeled after the arnerican and british financial systems the claim that close ties between investmentoriented banks and industrial firms could help overcome the difficulties of relative backwardness dates back to gerschenkron 1962 who investigates european development rosovsky 1961 applies gerschenkron s framework to the analysis of japanese growth more recently aoki patrick and sheard 1994 hoshi kashyap and loveman 1994 and teranishi 1993 among others portray the close ties between finance and industry in japan as an important factor in the international competitiveness of modern japanese

real option valuation in renewable energy literature research focus trends and design abstract in light of intensive development of the renewable energy re sector a growing number of academic papers address the complexity of re investment planning and valuation to take account of the high risk profile and irreversibility of re investments researchers have resorted to sophisticated real options ro approaches that enable flexibility to be incorporated into project design in the face of an uncertain environment the variety of different frameworks and models adopted as well as a lack of aggregated analysis of the field suggest a need for a critical review of ro methodology and design in re assessment this study describes the research focus trends and design found in contemporary academic literature devoted to re valuation with a ro approach particular attention is given to ro in project and policy design the results give a comprehensive picture of existing research on the topic thus providing researchers with a solid foundation for further study and indications of directions for future development furthermore the findings provide policymakers and project planners with valuable insights into key aspects of re project and policy design

flexibility trap a case analysis of u s and japanese technological choice in the digital watch industry abstract this paper examines the widely shared belief that a flexible system of transactions is faster in adapting to major technological change than an inflexible system borrowing some ideas from elster ulysses and the sirens 1979 explaining technical change 1983 nuts and bolts for social sciences 1989 cambridge university press cambridge this paper contends that the flexible system may lead to a myopic selection of technology because it delays the technological turning point if the important part of the technological evolution is generated by the aggregation of the choice patterns of firms this paper investigates the case history of technological choice in the u s and japanese digital watch industries in the 1970s the paper s conclusions beg a reconsideration of current and previous thinking on industrial policy and technology strategy

the productivity effects of employee stock ownership plans and bonuses evidence from japanese panel data the authors report the first results for japanese firms on the effects of employee stock ownership plans esops and bonuses by estimating production functions using new panel data they find that the introduction of an esop will lead to a 4 5 percent increase in productivity this productivity payoff takes three to four years there is a modest productivity gain from the bonus system the authors also find evidence that the productivity effect of bonuses is enhanced by the existence of esops suggesting that esops may create a climate conducive to profit sharing by enhancing long term commitment and peer monitoring copyright 1995 by american economic association

renewable generation expansion under different support schemes a stochastic equilibrium approach abstract following the deregulation of electricity markets a current challenge of policy makers is to facilitate the transition to a sustainable power system at the highest welfare for society in this paper we investigate the efficiency of different support schemes such as a feed in tariff a feed in premium and tradable green certificates with respect to incentivizing the required investments in renewable generation we consider a number of generation expansion problems and formulate stochastic equilibrium models that account for uncertainty in demand and renewable supply the risk aversion of investors and the competitiveness of the market the problem of the policy maker is formulated as a mathematical program with equilibrium constraints mpec and as a non linear complementarity problem ncp for the feed in schemes and the certificate market respectively our models are solved for a small illustrative example and a larger case study based on the danish power system the results confirm that the main driver for the optimal choice of renewable support scheme is the aversion of power producers towards price and volume risk while the competitiveness of the market rarely affects such choice

information and the division of labour implications for the firm s choice of organisation this paper provides a partial analysis of the organizational problem that arises from decentralized information within the firm firm members possessing different decision relevant information can communicate in different ways leading to a taxonomy of organizational structures with different effectiveness and costs it is shown that with usual assumptions about the form of the payoff function and the stochastic nature of information the decision functions and the expected profit for different organizations have a simple linear form comprising a small number of information value parameters copyright 1995 by royal economic society