was the sarbanes oxley act of 2002 really this costly a discussion of evidence from event returns and going private decisions abstract this paper discusses evidence on the costs of the sarbanes oxley act sox from stock returns and going private decisions zhang 2007 economic consequences of the sarbanes oxley act of 2002 journal of accounting and economics doi 10 1016 j jacceco 2006 07 002 analyzes returns around legislative events and concludes that sox imposes significant costs on firms engel et al 2007 the sarbanes oxley act and firms going private decisions journal of accounting and economics doi 10 1016 j jacceco 2007 02 002 examine going private decisions and point to unintended consequences both studies are carefully conducted and deserve praise for tackling an important issue however as my discussion highlights several key findings may not be attributable to sox and we should exercise caution in interpreting the evidence while it is not implausible that one size fits all regulation imposes substantial costs on firms we presently do not have much sox related evidence to support this conclusion

of networks and markets the rise and rise of a south indian town the example of tiruppur s cotton knitwear industry abstract tiruppur town is the center of a tightly clustered range of activities related to the cotton knitwear industry the successful and dramatic expansion which has taken place over the last 15 years has meant many more jobs limited technological improvement improved quality in yarn and fabric and an increasingly diverse range of garments for the larger firms in the industry access to export markets has been the driving force to improving their competitiveness wages remain low and working conditions poor however perhaps partly because capital concentration has not on the whole been accompanied by centralized vertically integrated production nevertheless clustering and dense interfirm networks provide advantages for firms of all sizes since process specialization is spatially divisible

cartoon planet worlds of production and global production networks in the animation industry as more animated films are produced new worlds of production have emerged the animation production system is distinct from film production relying on different technologies and labor skills its globalization therefore has taken place differently although both are structured by the global production networks of the media conglomerates we present a framework for understanding the animation industry its international division of labor and its diverse markets enabled by pools of artistic labor growing demand and the diffusion of production skills copyright 2010 the author 2009 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

the public capital stock needs trends and performance the condition of america s roads bridges mass transit systems and water and sewer facilities has become an issue of increasing controversy one view holds that deterioration of this public infrastructure capital has reached alarming proportions and that a significant fraction of future national savings will be needed to reverse the damage of past neglect another view argues that there has been no sudden acceleration of decay in capital stock performance that better facility management can often substitute for capital investment and that attempts to greatly increase the size and condition of the public capital stock would place unsustainable pressure on financial markets state and local government budgets and the federal system of grants in aid how extensive is the capital infrastructure problem how did it arise given the many federal government subsidies available for state local capital expenditure how much of the national capacity for capital formation should be allocated to solving the problem if there is a divergence between actual and desired infrastructure capital can the gap be closed without disrupting the growth of other sectors and governmental objectives these questions are unfortunately much easier to pose than to answer there is only limited information about the size and condition of the stock of public infrastructure capital and much of the available information has been assembled from the perspective of engineering or planning needs standards needs assessments typically indicate the fraction of the infrastructure stock that falls below a specified and somewhat arbitrary level of performance or indicate how much spending would be required to bring the existing stock up to the specified standard while sometimes appropriate as a management tool infrastructure needs estimates are formulated in isolation from other public and private capital needs and are thus ill suited to the policy debate over national priorities despite significant data problems some general conclusions about the infrastructure dilemma are possible as a backdrop for these conclusions the first section of this paper presents an overview of the historical trends in public sector capital formation and infrastructure condition the following section discusses the factors shaping these trends with particular attention to the supply and demand components of the capital spending decision we then consider the question of whether existing trends will insure an adequate supply of public capital and address the issue of whether a reduced quantity and quality of infrastructure capital may be expected to reduce private sector productivity growth

does wto accession matter for the chinese textile and clothing industry based on field surveys conducted in guangdong zhejiang and beijing in 2000 and 2001 this paper argues that accession to the world trade organisation wto by china will create a new competitive arena for different categories of textile and clothing firms located in that country partly dependent on the size and ownership of the firm from the perspectives of reducing import tariffs eliminating export quotas and the regulations on trade disputes wto accession does matter for the majority of chinese firms in this win lose game from the perspective of compliance with international standards this paper argues that accession to the wto does not really matter for some chinese firms as they may not survive the intense competition prior to 2005 when the effects of the agreement on textiles and clothing materialise

upgrading primary production a global commodity chain approach abstract global commodity chain gcc analysis has been concerned mainly with examining power relations in global manufacturing industries although it has been preoccupied increasingly by the question of how developing country dc producers can upgrade this paper extends gcc analysis to traditional primary commodities where international traders exercise the driving role and suggests a new agenda for their upgrading in dcs based upon public action

the agrarian origins of the knitwear industrial cluster in tiruppur india abstract the reorganization of work in tiruppur into small firm networks has propelled it to the center of india s cotton knitwear exports industrial studies explanations remain unresolved in reconciling informalized insecure labor alongside the possibility of an innovative industrial district an analysis of the industrial present reveals that not only are the majority of owners of the agrarian gounder caste but they are also predominantly ex industrial workers this paper investigates the regional and agrarian processes through which gounders of worker peasant origins forged their class mobility through their toil while also remaking the knitwear industrial cluster into dynamic small firm networks

the electoral budget cycle on municipal waste collection expenditure abstractthis article analyses the determinants of municipal waste collection expenditure specifically the effects of electoral cycles on municipal waste collection expenditure we use a database with information on spanish municipalities with more than 1000 inhabitants for the period 2002 2011 our results reveal that incumbents adopt an opportunistic behaviour increasing spending on waste in the preelection year and reducing it in the election and post election years therefore we confirm an electoral budget cycle on waste collection expenditures in spain additionally we find that the levels of income unemployment and upper level governments transfers have a positive impact on waste collection spending finally population density level of urbanization average age of the population of the municipality and less fragmented governments negatively influence waste collection spending

the changing global geography of low technology labor intensive industry clothing footwear and furniture summary a basic approach to the geographic investigation of low technology labor intensive industries is sketched out by invoking notions of industrial organization locational agglomeration and spatial divisions of labor the distribution of the clothing footwear and furniture industries across the contemporary world is described on the basis of detailed published statistics special emphasis is accorded to similarities and contrasts in the geography of production between more developed and less developed countries i show that no matter what the level of development agglomeration tends to be a pervasive though not universal feature of these three industries global trading patterns in the three industries are subjected to extended investigation i examine international flows of finished products as well as production sharing activities involving various kinds of subcontracting arrangements between high wage and low wage countries i then attempt to demonstrate in theory how spatial agglomeration and international commodity flows function as mutually reinforcing phenomena via the play of increasing returns effects the significance of low wage low technology industries for processes of economic development is also stressed in the conclusion i suggest that the global geography of production is tending more and more to assume the form of a far flung mosaic of competing and collaborating agglomerations at various levels of productive capability and development

the semiconductor industry in south east asia organization location and the international division of labour 1 scott a j 1987 the semiconductor industry in south east asia organization location and the international division of labour reg studies 21 143 160 the paper deals with the functional and geographical organization of the semiconductor industry in south east asia the discussion opens with a broad description of the growth of us owned assembly plants in the region this is followed by an account of the current geographical distribution in south east asia of 1 us owned assembly plants 2 locally owned diffusion facilities and 3 locally owned subcontract assembly houses the internal functional characteristics of assembly plants are examined it is then shown that there is an emerging international division of labour in the semiconductor industry within south east asia the growth of localized semiconductor production complexes is analysed the theory of the new international division of labour is briefly reconsidered in the light of all this scott a j 1987 l industrie des semi conducte

exports of manufactures by developing countries emerging patterns of trade and location developing countries are rapidly increasing their shares of manufactured trade not just in labour intensive products but also in capital and skill intensive ones their shares are rising particularly rapidly in the high technology area however manufactured exports remain highly concentrated in the developing world with a few countries dominating all forms of export within the successful exporting countries there are significant differences in the technology content of exports these trends are difficult to explain with received trade theory even taking human capital into account or with reference to broad economic policies it is useful to bring in learning along with scale economies increasing returns and agglomeration as determinants of comparative advantage these factors imply market failures and so a role for policy in developing genuine comparative advantages this article suggests that emerging trade and location patterns in the developing work are explained by market imperfections and government policies to overcome them

productivity change in state and local governments a model is developed in this paper which allows the growth rate of public sector productivity to be estimated without an explicit measure of sectoral output in this model communities are regarded as generalized households and the goods and services provided by the community s government are interpreted as internally produced household goods the model is then fitted to quarterly data from the u s national income and product accounts and the rate of productivity change is found to average 0 50 per year for the period 1959 1979 the sources of growth approach to productivity measurement distinguishes between the growth in real output due to the growth in factor inputs capital labor materials and the growth in output due to advances in technology managerial practice and other factors related to productive efficiency the former are collectively associated with the movement along an aggregate or sectoral production function while the latter are associated with the shift in that function 2 in practice the shift in the production function is measured by the residual real output not attributed to the growth of the share weighted inputs and termed total factor productivity the sources of growth model is based on the underlying assumption that real output and real input can be measured with a reasonable degree of accuracy while this presumption is correct for many types of economic activity it is essentially incorrect for those sectors which produce services as kendrick 1982 has recently noted approximately one third of the real gross product originating in the service sector of u s private business economy is estimated using employment manhours or labor earnings such procedures systematically misstate the true growth of real output and thus systematically bias the estimated growth in total factor productivity the situation is even worse in the public sector in the u s national income and product accounts the output of general government is defined to be equal to labor input implying that the growth of total factor productivity exactly offsets the effect of nonlabor inputs a model is developed in this paper which allows the growth rate of public sector productivity to be estimated without an explicit measure of sectoral output in this model communities are regarded as generalized households and the goods and services provided by the community s government are interpreted as internally produced household goods this interpretation allows us to appropriate the analytical apparatus of the household production model and thereby permits us to estimate the key parameters of the model including a government total factor productivity parameter without first having to measure the output of the govern

the goals and promise of the sarbanes oxley act the primary goal of the sarbanes oxley act was to fix auditing of u s public companies consistent with its full official name the public company accounting reform and investor protection act of 2002 by consensus auditing had been working poorly and increasingly so the most important and most promising part of sarbanes oxley was the creation of a unique quasi public institution to oversee and regulate auditing the public company accounting oversight board pcaob in controversial section 404 the law also created new disclosure based incentives for firms to spend money on internal controls above increases that would have occurred after the corporate scandals of the early 2000s in exchange for these higher costs which have already fallen substantially sarbanes oxley promises a variety of long term benefits investors will face a lower risk of losses from fraud and theft and benefit from more reliable financial reporting greater transparency and accountability public companies will pay a lower cost of capital and the economy will benefit because of a better allocation of resources and faster growth sarbanes oxley remains a work in progress section 404 in particular was implemented too aggressively but reformers should push for continued improvements in its implementation by pcaob rather than for repeal of the legislation itself

successful adjustment in indian industry the case of ludhiana s woolen knitwear cluster abstract this paper examines the case of adjustment in a labor intensive export industry woolen knitwear to understand how traditional sectors in developing regions cope with external crises and rise above them india s woolen knitwear industry concentrated in ludhiana recently survived two crises the collapse of its largest export market the former soviet union and the simultaneous opening up of the domestic market to freer trade after an unusually short downturn the cluster not only recovered rapidly but is increasingly diversifying into more demanding and competitive external markets four factors are key to explaining this surprisingly resilient recovery first the best performing firms had a strong and simultaneous presence in dynamic segments of the domestic market alongside exports this generated key organizational learning and built managerial and production capacities that helped firms adapt quickly to more demanding markets later second an important feature of the learning relationship between first time exporters and their foreign buyers was the small scale nature of contracts and a customization of fit between the producer and the feedback giving intermediary third better performing firms paid equal if not greater attention to making organizational changes in their work practices than to the purchase of new equipment fourth the embedded nature of production networks and the government s past programs to assist local firms have indirectly helped create a dynamic middle tier of locally rooted exporters who appear to be leading the cluster s transformation and modernization

production function with electricity consumption and its applications abstract researchers have tried to track the pattern of economy activities for decades cobb douglas production function has been adopted for almost one hundred years while modern economists tend to analyze the economy via the aspect of individual agents a different perspective of reviewing cobb douglas function is needed this paper finds a closer relationship between electricity consumption and economy which can be represented via a strong similarity between four characteristics of genes a second finding is that countries after post industrialization should enter the phase of up industrialization which largely focuses on technology accumulated value added for the secondary industry case study in this paper illustrates that the u s is entering the up industrialization period countries that deemphasize on technology innovations will sooner or later result in severe economic consequences or financial crisis this paper also initially encourages the wide application of smart meters and integration of smart grid to obtain timely and accurate data of electricity consumption to observe unusual economic activities

the messy reality of agglomeration economies in urban informality evidence from nairobi s handicraft industry summary this paper investigates intermediate input effects and labor pooling in the context of urban informality examining the handicraft industry of nairobi kenya the paper tests if conditions found in informality interfere with transition pathways in production clusters 102 semi structured interviews were conducted with industry participants including 69 production firms findings confirm the existence of important agglomeration economies but those benefits are curtailed due to constraints of informality on firms especially location constraints in urban space at the same time informality also introduces particular diseconomies of agglomeration that undermine the value of proximity of firms to each other particularly within clusters

enlargement and the textiles clothing and footwear industry the textiles clothing and footwear tcf industry is a labour intensive industry strongly determined by globalization and easy relocation to low cost countries hence also in the european union this industry is relatively more important in the low wage regions of the eu southern periphery with the envisaged enlargement however these countries fear a further shift of the sector to central and eastern europe as these countries still have a comparative advantage in terms of low labour costs the present article investigates whether this fear is justified looking at three main aspects first at the position and history of the tcf sector in the european union and its role in the eu periphery second at the sector in the central and eastern accession countries and third at gobalization issues the second aspect is dealt with in great detail as development trends in the central and east european countries are important and telling much has happened during the 15 year and more period between the collapse of communism and the eu membership in this region most important the integration to the eu by the means of trade in particular outward processing trade these developments mainly seem to determine future trends in an enlarged europe overall however future prospects have to be seen in a global context strongly influencing the sector via changes in global trade policies

municipal capital maintenance and fiscal distress this paper formalizes and empirically tests the hypothesis that the deficient maintenance of public infrastructure is caused by fiscal distress the authors utilize a production decision framework in which public officials combine maintenance and new capital to produce a desired level of capital services the behavior implied in the fiscal distress hypothesis is treated as perverse deviations from the optimal production path the empirical findings from cross sectional expenditures data give support to the fiscal distress hypothesis copyright 1991 by mit press

aggregate local public sector investment and shocks norway 1946 1990 local public sector investment is determined in an environment of shifting economic conditions investments are investigated using an intertemporal decision model allowing for tests of forward looking behaviour and adjustments to expected and unexpected shocks the econometric analysis of the aggregate local public sector over the period 1946 1990 indicates that local and county governments are forward looking and have small adjustment costs to investment in a full investment demand model only unexpected changes of gross domestic product and unemployment are shown to be important in the short run the central government has arranged stable revenue growth of the local public sector but greater volatility in macroeconomic conditions has led to fluctuations in local public investment

firm and group dynamics in the small and medium enterprise sector in indonesia this paper discusses the role of clusters and subcontracting as factors in the evolution of small and medium firms in indonesia during the last quarter century it is argued that a number of such firms have become successful exporters of rattan furniture wood furniture and garments on the strength of subcontracting relationships with foreign investors and buyers as well as agglomeration economies achieved by clustering in selected locations examples are provided to show that clustered enterprises are more likely to be in the exports business and to adopt product and process innovations as compared to more dispersed firms public policy support for fostering subcontracting links and cluster formation is also discussed

marketing barriers facing developing country manufactured exporters a conceptual note conventional analysis of exporting by ignoring information gaps and transaction costs of various kinds neglects the role of marketing barriers to new entrants the nature of the barriers vary by industry and a variety of institutional mechanisms exists for overcoming them the appropriateness of the mechanism depends on the capabilities and dynamism of the exporter as well as the nature of information required the role of foreign buyers has received some attention in recent research in the export of simple consumer goods this note attempts to develop a more general conceptual framework for marketing barriers

the globalization of product markets and immiserizing growth lessons from the south african furniture industry the central issue addressed in this paper is whether some developing countries will find it difficult to compete effectively in global product markets and will therefore be locked into processes of immiserizing growth it focuses on the role of south african producers in the global furniture value chain analyzing the factors affecting firm upgrading particularly the role of global buyers the paper observes a global industry characterized by increased competition and falling unit prices with local firms dependent on a falling exchange rate it concludes with implications for policy and future research including generalizing the findings to other sectors and countries

impacts of business environment changes on global manufacturing in the chinese greater pearl river delta a supply chain perspective business operating conditions have changed substantially in the chinese greater pearl river delta gprd due to the chinese currency appreciation rising labour costs highly volatile oil prices and new processing trade policies such changes have triggered manufacturers to rethink their global operations this article studies potential global manufacturing trends from a supply chain perspective a mixed integer programming model suggests that these changes have negatively affected the region s competitive advantages as its labour intensive production mainly targets at the mass market and competes on low costs three production relocation trends are affirmed i e the relocation to lower cost areas within china lower cost asian countries and areas near end markets however it is also discovered that the gprd region still attracts businesses with its formation of industrial clusters the enhanced comparative advantage against competing regions in inland china or asian lower cost countries under high oil

public capital maintenance and congestion long run growth and fiscal policies abstract in this paper we study an endogenous growth model in which public maintenance expenditures affect the depreciation rate of public capital and the latter is subject to congestion we find that economies with low congestion in public infrastructure will require a threshold level of public capital maintenance for ongoing growth we also examine the fiscal implications of public capital maintenance policies and we find that the composition of public capital expenditures under congestion is a crucial determinant of optimal and growth maximizing fiscal policies the government can affect the return of public capital by re allocating public expenditures between new public investment and maintenance and hence avoid excessive taxation that is required under increasing congestion

the impact of operating in multiple value chains for upgrading the case of the brazilian furniture and footwear industries summary exporting has been upheld as the golden standard for industrial upgrading however research using the value chain approach shows that upgrading for developing country firms is often limited to the lowest value added activities based on comparative research carried out in two brazilian clusters furniture and footwear industries this paper shows that domestic and regional value chains can offer greater upgrading opportunities providing space for activities of higher value added better remunerated and difficult to replicate notably design marketing and branding moreover this study highlights that many firms simultaneously serve multiple value chains multichain and that multichain firms have better upgrading prospects than those primarily exporting via global value chains

delocalization and persistence in the european clothing industry the reconfiguration of trade and production networks pickles j and smith a delocalization and persistence in the european clothing industry the reconfiguration of trade and production networks regional studies this paper examines processes of delocalization and the phenomenon of the spectre of china in the european clothing industry following the removal of quota constrained trade in 2005 it examines the changing geographies of trade and production in the european clothing industry with a specific focus on the patterns of delocalization and production resilience in east central europe through an analysis of trade flows to core european union markets it is shown how the articulation of sourcing strategies trade policies and locational decisions are producing distinctions in a more liberalized global trading environment between shifts towards the globalization of production networks alongside an intensification of the regionalization of clothing production in lower cost producing regions of east central europe and north africa that are proximat

outsourcing in a global economy we study the determinants of the location of subcontracted activity in a general equilibrium model of outsourcing and trade we model outsourcing as an activity that requires search for a partner and relationship specific investments that are governed by incomplete contracts the extent of international outsourcing depends inter alia on the thickness of the domestic and foreign market for input suppliers the relative cost of searching in each market the relative cost of customizing inputs and the nature of the contracting environment in each country

trading companies in taiwan s fashion shoe networks abstract the taiwanese export fashion shoe networks are composed of independent producers suppliers subcontractors and trading companies this paper explores the formation and governance of such networks the underlying social relationships among participants and the transformation of the networks as taiwanese shoe companies moved across the taiwan straits to southern china in the late 1980s the author argues for the key role of the trading companies in the work of the network trading companies function not only as marketing agents but also as information centers and coordinators of the highly decentralized network to achieve collective scale and scope economies among small sized shoe companies

recovery of a mexican cluster devaluation bonanza or collective efficiency abstract mexico as many other developing countries in latin america and elsewhere has been moving in the 1980s toward a liberalized trade regime after a long period of import substitution this paper analyzes the impact of trade liberalization on the cooperative behavior of shoe firms located in a cluster in guadalajara the empirical evidence shows that cooperation has increased it also suggests that cooperation positively influences firms performance and together with a favorable market environment contributes to the cluster s recovery the study is based on fieldwork carried out in guadalajara in 1996 qualitative information was collected through in depth interviews and quantified responses came from a questionnaire survey covering a sample of 63 shoe manufacturing enterprises

public capital and private productivity this paper uses three different approaches to investigate whether the declining provision of public capital is a major cause of declining labor productivity the juxtaposition of approaches removes

a comparison of clustered and dispersed firms in the small scale clothing industry of lima abstract this study provides empirical evidence on the strength and type of clustering advantages contrasting the performance of small clustered firms with several control groups of dispersed producers in the garment industry of lima peru repeated measurement facilitates an evaluation of the ability of clustered firms to respond to pressures arising from the swift trade liberalization carried out in peru after 1990 the evidence suggests that clustering advantages have been significant particularly for the smallest firms cost reductions and information spillovers are the dominant type of advantages these are however passive advantages of clustering they largely arise at the level of transactions in goods and services and to a lesser extent in the transformation of inputs into output while significant these advantages are insufficient for sustaining competitiveness in the liberalized markets the garment cluster runs the risk of entropic death if information spillovers remain limited in origin and diversity and if interfirm cooperation does not cross local borders

from ascribed to earned trust in exporting clusters abstract this paper is concerned with the role of trust in export manufacturing it asks how trust has developed in two industrial clusters which are located in developing countries and export most of their output to north america and europe the main conclusion is that trust was based initially on socio cultural ties between clustered firms and later on conscious investments in inter firm relationships