proprietary public finance and economic welfare abstract we develop a positive theory of public finance in which the objective of tax and spending policy is to extract rents for the incumbent ruler the analysis shows how dependence of the incumbent ruler s survival probability on his tax and spending policy can lower the equilibrium tax rate and increase the equilibrium amount of spending on productive public services but only until the minimum credible tax rate which depends on the ruler s endogenous survival probability becomes a binding constraint the central result of the analysis is that if a relatively benevolent tax and spending policy is both necessary and sufficient for a high survival probability then the ruler s equilibrium policy is relatively benevolent

innovation organizational capabilities and the born global firm we investigate born global firms as early adopters of internationalization that is companies that expand into foreign markets and exhibit international business prowess and superior performance from or near their founding our explication highlights the critical role of innovative culture as well as knowledge and capabilities in this unique breed of international entrepreneurial firm case studies are analyzed to better understand the early internationalization phenomenon and reveal key orientations and strategies that engender international success among these innovative firms case findings are then validated in a survey based study despite the scarce resources typical of young firms our findings reveal that born global firms leverage a distinctive mix of orientations and strategies that allow them to succeed in diverse international markets findings have important implications for the internationalization of contemporary firms

a contractarian theory of property rights and crime as was noted long ago war like distributional squabbles which divert resources from socially productive uses will persist in a world without government in this paper we show that all agents can gain ex ante from the institution of a social contract which establishes property rights and levies a tax in order to finance a criminal justice system where punishment is threatened for violations of property rights these ex ante gains hold even for individuals who may be harshly punished ex post the optimal social contract i e the optimal level of enforcement of property rights is also characterized

international orientation as a precondition for export success every country particularly if it depends on foreign trade to such a high degree as the federal republic of germany has a vital interest in exploiting all its export opportunities the authors have developed a measurement concept focusing on the foreign orientation of business managers their empirical research suggests that as many as one third of the small and medium sized firms with a primarily domestic focus in their country could be turned into successful exporters the paper not only reveals obstacles to exporting as perceived by the managers of these companies but also points to specific measures to improve the efficiency of existing export promotion programs

on doctors mechanics and computer specialists the economics of credence goods most of us need the services of an expert when our apartment s heating or our washing machine breaks down or when our car starts to make strange noises and for most of us commissioning an expert to solve the problem causes concern this concern does not disappear even after repair and payment of the bill on the contrary one worries about paying for a service that was not provided or receiving some unnecessary treatment this article studies the economics underlying these worries under which conditions do experts have an incentive to exploit the informational problems associated with markets for diagnosis and treatment what types of fraud exist what are the methods and institutions for dealing with these informational problems under which conditions does the market provide incentives to deter fraudulent behavior and what happens if all or some of those conditions are violated

does self regulation work experimental evidence of the reputational incentives of self regulatory organizations self regulation sr is a common way of enforcing quality in markets such as banking financial services and several professions and in a variety of public and private organizations we provide experimental evidence of the reputational incentives of self regulatory organizations sros to publicly disclose versus cover up fraud in an incomplete information environment we find that observed behaviour is generally consistent with bayesian equilibrium when subjects are informed about the relative likelihood of fraud detection by a vigilant versus a lax sro type in particular a fraud disclosure equilibrium is supported when subjects are informed that the vigilant sro is more likely to detect fraud otherwise a cover up equilibrium is supported however when subjects are not informed about the relative likelihood of fraud detection by the sro types as expected in real sr situations no equilibrium is strongly supported our results suggest that in practice the reputation based incentives for ef

the eclectic paradigm of international production a restatement and some possible extensions this article reviews some of the criticisms directed towards the eclectic paradigm of international production over the past decade and restates its main tenets the second part of the article considers a number of possible extensions of the paradigm and concludes by asserting that it remains a robust general framework for explaining and analysing not only the economic rationale of economic production but many organisational and impact issues in relation to mne activity as well

the economics of breakdowns checkups and cures a market in which the owner of a durable good x contracts with an expert for diagnostic and treatment services is studied good x may be in one of three states health disease or failure only experts can determine whether x is healthy or diseased and perform treatment the owner cannot tell whether recommended treatment is really needed this creates an information based demand for health insurance by risk neutral consumers imperfections in the market for spot insurance may give rise to free diagnostic checks strategic procrastination and long term health maintenance agreements

from the editors common method variance in international business research jibs receives many manuscripts that report findings from analyzing survey data based on same respondent replies this can be problematic since same respondent studies can suffer from common method variance cmv currently authors who submit manuscripts to jibs that appear to suffer from cmv are asked to perform validity checks and resubmit their manuscripts this letter from the editors is designed to outline the current state of best practice for handling cmv in international business research

the uppsala internationalization process model revisited from liability of foreignness to liability of outsidership the uppsala internationalization process model is revisited in the light of changes in business practices and theoretical advances that have been made since 1977 now the business environment is viewed as a web of relationships a network rather than as a neoclassical market with many independent suppliers and customers outsidership in relation to the relevant network more than psychic distance is the root of uncertainty the change mechanisms in the revised model are essentially the same as those in the original version although we add trust building and knowledge creation the latter to recognize the fact that new knowledge is developed in relationships

ready to export the role of export readiness for superior export performance of small and medium sized enterprises drawing on the entrepreneurship perspective and the network based view on internationalisation this exploratory study contributes to our understanding of why some exporters succeed while others do not through an empirical examination of export readiness factors the paper provides an operationalisation of export readiness for small and medium sized enterprises smes based on a sample of 96 new zealand smes we find that export readiness is a complex construct involving finance trade and exchange and marketing the study provides evidence that internal export stimuli are important antecedents of export readiness while factors traditionally assumed to be critical to export success such as importing and pre export domestic expansion may not be prerequisites to being export ready finally the study examines the link between export readiness and subsequent initial export performance and finds a strong positive relationship our study contributes to the export literature by providing a deeper and more integrated understanding of the antecedents of export readiness in a small open economy smopec and its implications for subsequent export performance

anarchy and its breakdown anarchy defined as a system in which participants can seize and defend resources without regulation from above is not chaos but rather a spontaneous order however anarchy is fragile and may dissolve either into formless amorphy or into a more organized system such as hierarchy under anarchy each contestant balances between productive exploitation of the current resource base and fighting to acquire or defend resources anarchy is sustainable only when there are strongly diminishing returns to fighting effort the decisiveness parameter is sufficiently low and incomes exceed the viability minimum these considerations explain many features of animal and human conflict

a relational model of export performance export performance models anchored in the industrial organization and resource based theories have previously been developed and tested thus far there have been no empirically tested export performance models that have reflected the core tenets of the relational or behavioral paradigm drawing from relational exchange theory a model that includes reciprocal perceptions that relate to both past and future exchanges is developed this model is tested with dyadic data from 125 west east australia thailand exporter importer partnerships reflecting the increasing importance of west east exchange relationships results support the theory s contention that commitment to future exchanges is associated with export performance and is itself driven by a reciprocal cycle of each partner s perception of the other s commitment relationship specific investments and dependence this cycle of commitment is in turn influenced by each partner s trust in the other from past exchanges with different types of trust linked to different types of commitment trust and commitment are then found to be related both to interpersonal factors i e effective communication cultural sensitivity and likeability of partner and to firm factors reputation and competencies of partner

the export development process an integrative review of empirical models despite widespread research on the export behavior of firms no integrative review of the empirical work in relation to export development models exists in the extant literature this article reviews the main models on the subject identifies their structural characteristics evaluates the methodologies used for their validation and analyzes the key conceptual issues emerging from their assessment while valuable inroads into the mechanics and constituent parts of the export development process have been made this avenue of empirical inquiry has attracted criticism on structural methodological and conceptual grounds future research in the field should harness the eclectic contribution afforded by existing theory and at the same time enhance its status with contributions from marketing business and other disciplines

self regulation and government oversight self regulation is a feature of a number of professions for example in the u s the government delegates aspects of financial market regulation to self regulatory organizations sros like the new york stock exchange and the national association of securities dealers we analyse one regulatory task of an sro enforcing antifraud rules so agents will not cheat customers specifically we model contracting enforcement as a two tier problem an sro chooses its enforcement policy the likelihood that an agent is investigated for fraud and a penalty schedule given an enforcement policy agents compete by offering contracts that maximize customers expected utility we assume that the sro s objective is to maximize the welfare of its members the agents we show that the sro chooses a more lax enforcement policy meaning less frequent investigations than what customers would choose a general conclusion is that control of the enforcement policy governing contracts confers substantial market power to a group of otherwise competitive agents we also investigate government oversight of the self regulatory process the threat of government enforcement leads to more enforcement by the sro just enough to pre empt any government enforcement copyright 2005 wiley blackwell

gaming against managers in incentive systems experimental results with chinese students and chinese managers we examine strategic interactions between firms and planners in china comparing behavior between i students and managers with field experience with this situation ii standard versus increased monetary incentives and iii sessions conducted in context making explicit reference to interactions between planners and managers and those without any such references the dynamics of play are similar across treatments with play only gradually and incompletely converging on a pooling equilibrium a fivefold increase in incentives significantly increases initial levels of strategic play games played in context generated greater levels of strategic play for managers with minimal impact on students

signalling and adaptive learning in an entry limit pricing game in an experimental investigation of milgrom and roberts 1992 model play consistently converges to a unique equilibrium providing evidence of sophisticated strategic behavior that the theory predicts play starts with monopolists at their myopic maxima followed by an attempt to pool and then if no pooling equilibrium exists separation suggesting myopia rather than a forward looking process when both pure strategy equilibria and separating equilibria exist equilibrium selection is a function of the past history of play an adaptive learning model characterizes the major features of the data and provides predictions of intermediate term behavior that is otherwise lacking in the theory

endogenous authoritarian property rights abstract taxation and state enforcement of property rights share many common resources both are involved in determining the revenue of the state due to these interactions taxation and property rights enforcement of a proprietary state are complementary any change in the administrative capacity of the state that increases the taxation rate also increases the level of property rights enforcement and vice versa the capacity and incentive of the proprietary state to tax are also essentially the capacity and incentive to enforce property rights extra enforcement powers of the proprietary state might therefore increase rather than decrease production

adaptive learning vs equilibrium refinements in an entry limit pricing game signalling models are studied using experiments and adaptive learning models in an entry limit pricing game even though high cost monopolists never play dominated strategies the easier it is for other players to recognise that these strategies are dominated the more likely play is to converge to the undominated separating equilibrium and the more rapidly limit pricing develops this is inconsistent with the equilibrium refinements literature including cho kreps intuitive criterion and pure bayesian adaptive learning models an augmented adaptive learning model in which some players recognise the existence of dominated strategies and their consequences predicts these outcomes

building capabilities for international operations through networks a study of indian firms in this study we seek to explain how firms from emerging markets build capabilities to operate in international markets through learning from parental networks the building of these capabilities is of particular interest as firms from emerging markets may not necessarily possess the monopolistic advantages commonly referred to in ib literature which allow a firm to succeed in international markets using lagged cross sectional regression models on a sample of 794 indian firms we found that firms draw on the international experience of their parental and foreign networks to build such capabilities findings also indicate that network scope is beneficial for increasing exposure to international markets only in the case of networks that are either small or medium sized additionally we found that firms lacking market power in their home market benefit through foreign partnerships when internationalizing operations

swords or plowshares a theory of the security of claims to property this paper develops a general equilibrium model of the allocation of resources among appropriative and productive activities the model emphasizes the distinction between offensive weapons which are the instruments of predation and fortifications which provide defense against predation the analysis of this model shows how the equilibrium security of claims to property is determined the analysis focuses on the possibility of a nonaggressive equilibrium in which no resources are allocated to offensive weapons and claims to property are fully secure we also analyze the complex relation between economic welfare and the security of claims to property we find for example that a relatively poor agent could be better off in an equilibrium with less secure claims to property

information internalization and hurdle rates in small and medium enterprise internationalization we investigate the role of information in the internationalization of small and medium enterprises smes information internalization is fundamentally antecedent to sme internationalization and is being facilitated increasingly by recent important trends we offer a conceptual explanation and related propositions on information internalization emphasizing hurdle rate theory for ascertaining the acceptability of firms internationalization projects

the self regulating profession slayton and treblicock 1978 the formal analysis of the economics of the self regulating profession has received little attention from theorists if a profession is self regulating in the sense that its current members being the sole suppliers of a certain type of service are free to determine in one way or another whether or not to admit a potential recruit then it might seem prima facie that such a profession could simply be regarded as a monopolistic seller of the service in question so that the effects of self regulation would appear to involve an unambiguous welfare loss the whole rationale for self regulation however rests on the notion that it provides a vehicle through which the quality of the service may be maintained in markets where the consumer cannot readily measure this quality himself it is the analysis of the interplay of these two elements the enhanced price of such services associated with the monopolistic power of the profession and the improved quality of the service which may accompany a reduction in supply which forms the focus of the present paper it is tempting to begin the analysis of such a profession by first positing some particular