factors influencing the incidence of bribery payouts by firms a cross country analysis this article explores micro and macro level variables that influence the incidence of bribery payouts by firms a rich data set with information from 55 countries was utilized to achieve this objective results of logit regression models indicate that there are a number of micro and macro level factors that significantly affect the incidence of bribery payouts this suggests that it is not only the characteristics of a firm but also the environment of doing business that affect the firm s bribery decision the results of this study provides information that may help firms develop strategies to reduce corruption in their respective industries and thereby improve their image of corporate social responsibility the analysis also points to possible policy directions that governments could undertake in order to reduce the incidence of bribery in their country

bribes lobbying and development paign contributions or influence buying through other means as an activity that is aimed at changing existing rules or policies we view bribery in contrast as an attempt to bend or get around existing rules or policies the analysis contrasts these two means of influencing politics we use the labels lobbying and bribery for convenience and not because they are perfect defini tions for the two rent seeking activities we study in reality bribery and lobbying differ in several di mensions first lobbying is a legal and regulated activ ity in many countries whereas bribery is not second a change in the rules as a result of lobbying often af fects an entire industry whereas the return to bribery is more firm specific third a government that ponders a change in the rules might have quite different concerns than a bureaucrat considering a bribe our model cap tures all these differences possibly the most important difference however and the driving assumption in the model is that bending the rules is only temporary bu reaucrats can seldom commit to not asking for bribes in the future because corrupt deals are not enforceable in courts and because firms deal with different officials over time a legislative change on the other hand al ters the status quo and is therefore likely to last longer although policies and politicians also change over time our key assumption is that changing the rules is long lasting relative to bending them 2

are corruption and taxation really harmful to growth firm level evidence exploiting a unique data set containing information about the estimated bribe payments of ugandan firms the authors study the relationship between bribe payments taxes and firm growth in uganda for the period 1995 97 using industry location averages to circumvent the potential problem of endogeneity and to deal with issues of measurement error they find that both the rate of taxation and the rate of bribery are negatively correlated with firm growth for the full data set a one percentage point increase in the bribery rate is associated with three percentage point reduction in firm growth an effect about three times that of taxation moreover after excluding outliers the authors find that bribery has a much greater negative impact on growth and taxation a considerably smaller one this provides some validation of firm level theories of corruption which posit that corruption retards development even more than taxation does

research advances in environmentally and socially sustainable operations abstract consumers and governments are pressuring firms to strike a balance between profitability and sustainability however this balance can only be maintained in the long run if the firm can take a holistic approach to sustain the financial flow profit resource flow planet and development flow people for the entire ecosystem comprising poor producers in emerging developing markets global supply chain partners consumers in developed countries and the planet by considering the flows associated with different entities within the ecosystem we classify and summarize recent operations research management science or ms research developments also we identify several gaps for future research in this important area

exploring the determinants of emerging bioenergy market participation abstract individual biomass producers will play a strong role in the emergence of robust and sustainable bioenergy markets research on what drives their participation however is substantial but fragmented despite a recognition of producer heterogeneity there have also been few comparative analyses of drivers of bioenergy market participation across feedstock types producer groups and geographic regions through narrative review and network analysis the following review of the bioenergy market participation literature generates both an increased appreciation of how bioenergy market participation is assessed in existing research and how social network analysis may be further employed as a tool for literature review across 41 studies selected for qualitative review and a subset of 22 selected for quantitative review the analysis reaches two central conclusions the first pertains to the findings of the literature itself suggesting that a variety of non production objectives structural and social constraints and market related attributes influence bioenergy market participation decisions a second conclusion is that the assessment of these factors varies significantly across the literature for both user group and feedstock type further examination of the individual variables within these segments of the literature as well as of authorship patterns across them suggests that this variation may rise from differences in the subject matter itself and not from differing perspectives of the researchers undertaking the work should disparities in the literature be reflective of actual socio economic differences in their respective markets policies or programs targeted to individual feedstock types or user groups may be more effective in encouraging participation than uniform national policy initiatives

the effect of foreign aid on corruption a quantile regression approach abstract this paper investigates the effect of foreign aid on corruption using a quantile regression method we show that foreign aid generally reduces corruption and its reduction effect is greater in less corrupt countries moreover this effect is different by different donor countries

sustainable allocation of greenhouse gas emission permits for firms with leontief technologies abstract in this paper we deal with production situations where a cap or limit to the amount of greenhouse gas emissions permitted is imposed fixing a tax for each ton of pollutant emitted is also considered we use bankruptcy rules to define cooperative games with externalities associated with these situations and analyze the existence of coalitionally stable allocations of the emission permits we prove that the constrained equal awards cea rule provides stable allocations and as a direct mechanism it is incentive compatible these two facts have interesting managerial implications to control pollution emissions

corruption and development new initiatives in economic openness and strengthened rule of law corruption is a major problem in many of the world s developing economies today world bank studies put bribery at over 1 trillion per year accounting for up to 12 of the gdp of nations like nigeria kenya and venezuela though largely ignored for many years interest in world wide corruption has been rekindled by recent corporate scandals in the us and europe corruption in the developing nations is said to result from a number of factors mass poverty has been cited as a facilitating condition for corruption just as an inability to manage a sudden upsurge in mineral revenues has been credited with breeding corruption and adventurous government procurement among public officials in countries like nigeria and venezuela virtually all developing nations that have serious corruption problems also have very limited economic freedom and a very weak enforcement of the rule of law in such nations corruption represents a regressive taxation that bears hard on the poor it has a dampening effect on development and it could result in the production of inferior goods as companies find ways to accommodate under the table payments finally corruption is a dangerous threat to the legitimacy of the governments of some of the developing nations themselves it is suggested that new urgent initiatives are needed to deal with the dangers posed by corruption in the developing economies they include making the economies of these nations more open by the withdrawal of the government from the productive sector and by the abolition of unnecessarily stringent restrictions on business conduct the rule of law needs to be strengthened in these nations and those countries like nigeria and venezuela should ignore scruples over sovereignty and seek foreign assistance in the management of their oil wealth finally multinationals should be made to disclose all the payments they make in developing nations to such organizations like international chamber of commerce or transparency international where they can be reviewed by anyone interested

a game theoretical approach to sharing penalties and rewards in projects this paper analyzes situations in which a project consisting of several activities is not realized according to plan if the project is expedited a reward arises analogously a penalty arises if the project is delayed this paper considers the case of arbitrary nondecreasing reward and penalty functions on the total expedition and delay respectively attention is focused on how to divide the total reward penalty among the activities the core of a corresponding cooperative project game determines a set of stable allocations of the total reward penalty in the definition of project games surplus cost sharing mechanisms are used to take into account the specific characteristics of the reward penalty function at hand it turns out that project games are related to bankruptcy and taxation games this relation allows us to establish nonemptiness of the core of project games

carbon dioxide emissions allocation a review carbon dioxide co2 emissions allocation plays a fundamental role in determining reduction responsibility at economy level or emission permits at firm level past decades have seen the development and applications of various methods for co2 emissions allocation this paper provides a literature review of co2 emissions allocation with emphasis on the evolution of allocation methods used it begins with a summary of the most popular allocation principles and criteria that lay a foundation for the development of allocation methods we then classify the existing allocation methods into four groups namely indicator optimization game theoretic and hybrid approaches the main features and findings of past studies are identified and summarized while the fairness principle prevails in earlier studies the efficiency principle has been found to receive increasing attention recently we also present a comparison of the empirical results based on ten popular indicator methods to show how indicator choice affects the allocation results issues related to selecting appropriate methods in co2 emissions allocation are finally discussed further research may be carried out to strike a balance between fairness and efficiency so that the allocation results become more widely acceptable and economically feasible

tracking global carbon revenues a survey of carbon taxes versus cap and trade in the real world abstract we investigate the current use of public revenues which are generated through both carbon taxes and cap and trade systems more than 28 3 billion in government carbon revenues are currently collected each year in 40 countries and another 16 states or provinces around the world of those revenues 27 7 8 billion are used to subsidize green spending in energy efficiency or renewable energy 26 7 4 billion go toward state general funds and 36 10 1 billion are returned to corporate or individual taxpayers through paired tax cuts or direct rebates cap and trade systems 6 57 billion in total public revenue earmark a larger share of revenues for green spending 70 while carbon tax systems 21 7 billion more commonly refund revenues or otherwise direct them towards government general funds 72 of revenues drawing from an empirical dataset we also identify various trends in systems use of carbon revenues in terms of the total revenues collected annually per capita in each jurisdiction and offer commensurate qualitative observations on carbon policy design choices

are foreign owned firms more likely to pay bribes than domestic ones evidence from emerging markets summary an extensive literature exists on the adverse effects of corruption on inward fdi and the impact this may have on economic development but the reverse causality has not been fully explored legislation in the us and the eu prohibits firms from engaging in corrupt practices in foreign countries and this suggests that foreign owned firms might be less likely to pay bribes however such legislation may be ineffective because foreign firms have to adapt to local market conditions or risk being uncompetitive using firm level data for 41 emerging countries a probit model estimates the probability that a firm pays bribes to allow for possible endogeneity this probit analysis is repeated with an instrument to proxy for endogenous foreign ownership then a propensity score matching technique tests for differences in the propensity to pay bribes by domestic and foreign firms the paper finds no difference in the behavior of foreign owned and domestic firms with respect to corrupt practices results are robust to different levels of foreign ownership and support the view that foreign owned firms adapt to local practices and are neither more nor less likely to pay bribes than comparable domestic firms the paper finds that other variables including bureaucracy government contracts and perceived difficulties with civil society legal and political do have statistically significant effects on increasing bribery and that some others such as per capita gdp tend to reduce bribery the study concludes that there is no evidence that foreign ownership after investment has occurred tends to reduce bribery but it does support the view that foreign owned firms adopt local behavioral norms

understanding corruption and firm responses in cross national firm level surveys the issue of corruption is important to politicians citizens and firms since the early 1990s a large number of studies have sought to understand the causes and consequences of corruption employing firm level survey data from various countries while insightful these analyses have largely ignored two important potential problems nonresponse and potential false response by the firms we argue that in politically repressive environments firms use nonresponse and potential false response as self protection mechanisms corruption is likely understated in such countries we test our argument using the world bank enterprise survey data of more than 44 000 firms in 72 countries for the period 2000 2005 we find that firms in countries with less press freedom are more likely to provide nonresponse and false response on the issue of corruption therefore ignoring these systematic biases in firms responses could result in serious underestimation of the severity of corruption in politically repressive countries more important these biases are a rich and underutilized source of information on the political constraints faced by the firms firm managers can better evaluate levels of corruption not only by truthful answers to corruption questions but also by nonresponses and false responses to such questions

the role of co opetition in low carbon manufacturing abstract low carbon manufacturing has become a strategic objective for many developed and developing economies this study examines the role of co opetition in achieving this objective we investigate the pricing and emissions reduction policies for two rival manufacturers with different emission reduction efficiencies under the cap and trade policy we assume that the product demand is price and emission sensitive based on non cooperative and cooperative games the optimal solutions for the two manufacturers are derived in the purely competitive and co opetitive market environments respectively through the discussion and numerical analysis we uncovered that in both pure competition and co opetition models the two manufacturers optimal prices depend on the unit price of carbon emission trading in addition higher emission reduction efficiency leads to lower optimal unit carbon emissions and higher profit in both the pure competition and co petition models interestingly compared to pure competition co opetition will lead to more profit and less total carbon emissions however the improvement in economic and environmental performance is based on higher product prices and unit carbon emissions

game theoretic analysis of a bankruptcy problem from the talmud abstract for three different bankruptcy problems the 2000 year old babylonian talmud prescribes solutions that equal precisely the nucleoli of the corresponding coalitional games a rationale for these solutions that is independent of game theory is given in terms of the talmudic principle of equal division of the contested amount this rationale leads to a unique solution for all bankruptcy problems which always coincides with the nucleolus two other rationales for the same rule are suggested in terms of other talmudic principles needless to say the rule in question is not proportional division

income volatility of energy crops the case of rapeseed abstract the adoption of energy crops may generate significant benefits from reduced foreign energy dependence improved rural economies and achieved environmental goals nevertheless important issues arise as these crops are strongly competed by other presumably more standard uses of farmland and their choice will be restrictive unless profit becomes a powerful motive for farmers the abolishment of specific policies supporting first generation biofuels gives rise to the question whether the tactic of bioenergy land use change is just to be abandoned by european farmers the present paper endeavours to evaluate the reduction in income volatility in the case of the rapeseed energy crop a cultivation extensively used in biofuels in the european union employing the concept of entropy the results provide a vague picture regarding the limitations in rapeseed income volatility among the european member states consequently the issue of income uncertainties as a determinant of bioenergy cropland demand has been left pending the innovation of the study lies in the use of entropy concept and the kapetanios and shin unit root test in the case of income volatility for energy crops in the european context the estimation of the random components with the assistance of auto regressive integrated mean average models may provide a tool for confining income uncertainties with the assistance of other policy schemes including insurances within the common agricultural policy

is corruption an efficient grease this paper tests whether corruption may be an efficient grease in the wheels of an otherwise deficient institutional framework it analyzes the interaction between aggregate efficiency corruption and other dimensions of governance for a panel of 69 countries both developed and developing using two measures of corruption and two other aspects of governance we observe that corruption is less detrimental to efficiency in countries where institutions are less effective it may even be positively associated with efficiency in countries where institutions are extremely ineffective we thus find evidence for the grease the wheels hypothesis in its weak and strong forms

how petty is petty corruption evidence from firm surveys in africa summary evidence suggests that corruption is costly for african firms this paper however shows that a minor difference in the way the question on bribe payments is asked has a large effect on estimates of the size of the burden on average firms report payments that are between 4 and 15 times higher when they report them as a percent of sales than when they report them in monetary terms the paper discusses several possible reasons for this but none explain the difference one plausible remaining reason is that firm managers overestimate bribes when they report them in percentage terms

the relationship between r d collaboration subsidies and r d performance empirical evidence from finland and germany this study focuses on the impact of innovation policies and r d collaboration in germany and finland we consider collaboration and subsidies as heterogeneous treatments and perform an econometric matching to analyze r d and patent activity at the firm level in general we find that collaboration has positive effects in germany subsidies for individual research do neither exhibit a significant impact on r d nor on patenting but the innovative performance could be improved by additional incentives for collaboration for finnish companies public funding is an important source of finance for r d without subsidies recipients would show less r d and patenting activity whilst those firms not receiving subsidies would perform significantly better if they were publicly funded copyright 2007 john wiley sons ltd

japanese investors choice of joint ventures versus wholly owned subsidiaries in the us the role of market barriers and firm capabilities this study analyzes how market barriers and firm capabilities affect multinationals choice of joint ventures versus wholly owned subsidiaries abroad in the study we compile a vector of variables that distinguish between industry specific barriers and firm specific capabilities to analyze japanese investors ownership decisions in the us our results in general support the hypothesis that japanese investors facing high market barriers in the target industry are more likely to choose joint ventures while those possessing strong competitive capabilities are more likely to set up wholly owned subsidiaries specifically marketing variables are more influential than technological factors in determining the choice of partial versus full ownership these findings however vary across sub samples that represent low versus high tech industries and consumer versus industrial products

corruption institutions and economic development many scholarly articles on corruption give the impression that the world is populated by two types of people the sanders and the greasers the sanders believe that corruption is an obstacle to de velopment while the greasers believe that corruption can in some cases foster development this paper takes a critical look at these positions it concludes that the evidence supporting the greasing the wheels hypothesis is very weak and shows that there is no cor relation between a new measure of managers actual experience with corruption and gdp growth instead the paper uncovers a strong negative correlation between growth in genuine wealth per capita a direct measure of sustainable development and corruption while corruption may have little average eect on the growth rate of gdp per capita it is a likely source of unsustainable development

selecting permit allocation rules for agricultural pollution control a bargaining solution abstract one of the primary justifications for using transferable permits for pollution control is that they achieve a given level of emission reduction at the lowest cost although the initial allocation of pollution permits may have no impact in terms of efficiency it does have a significant impact on equity in this paper we examine a variety of permit allocation rules for a small catchment in south west england an asymmetric nash bargaining framework is employed to characterise agents co operative behaviour and to explain their likely preferences over permit allocation rules the results indicate that the preferred allocation scheme depends upon the relative bargaining power of the agents furthermore some potential links between ex ante and ex post equity criteria were also discussed

modelling farmer uptake of perennial energy crops in the uk abstract the uk biomass strategy suggests that to reach the technical potential of perennial energy crops such as short rotation coppice src willow and miscanthus by 2020 requires 350 000 hectares of land this represents a more than 20 fold increase on the current 15 546 hectares previous research has identified several barriers to adoption including concerns over security of income from contracts in addition farmers perceive returns from these crops to be lower than for conventional crops this paper uses a farm level linear programming model to investigate theoretical uptake of energy crops at different gross margins under the assumption of a profit maximising decision maker and in the absence of known barriers to adoption the findings suggest that while src willow at current prices remains less competitive returns to miscanthus should have encouraged adoption on a wider scale than at present this highlights the importance of the barriers to adoption recently announced contracts for miscanthus appear to offer a significant premium to farmers in order to encourage them to grow the crops this raises the question of whether a more cost effective approach would be for government to provide guarantees addressing farmers concerns including security of income from the contracts such an approach should encourage adoption at lower gross margins

national culture transaction costs and the choice between joint venture and wholly owned subsidiary transaction cost theory posits that culture plays a limited role in the choice between jv and wos in contrast research suggests that firms preferred level of ownership in their foreign subsidiaries is influenced primarily by cultural traits this study provides additional evidence in this ongoing debate by replicating hennart s transaction cost model of entry mode choice in two different national contexts japanese firms investing in the u s and the u s firms investing in japan the results suggest that the transaction cost explanation for the ownership choice holds in the both national contexts yet the propensity to choose jv or wos significantly varied between japanese and the u s firms

firm ownership preferences and host government restrictions an integrated approach two approaches may explain how multinational enterprises mnes select ownership structures for subsidiaries the first argues that mnes prefer structures that minimize that transaction costs of doing business abroad the second argues that ownership structures are determined by negotiations with host governments whose outcomes depend on the bargaining power of the firm this paper presents a framework integrating these two approaches and uses statistical methods to separate their effects empirically

weighted bankruptcy rules and the museum pass problem abstract in this paper we introduce and characterize some allocation rules for weighted bankruptcy problems we illustrate the relevancy of weighted bankruptcy by applying it to analyse the museum pass problem introduced by ginsburgh and zang 2003 this application is completed with the analysis of real data for the card musei of the municipality of genova

the allocation of co2 emissions as a claims problem abstract in the context of multilateral negotiations on climate change this paper proposes to use the claims approach as a reasonable and practicable alternative in order to allocate the admissible co2 emissions per region the proposed methodology entails analyze the application of a broad group of theoretical solutions through the establishment of equity and stability criteria to this regard the empirical analyzing combines several co2 world endowments from meinshausen et al 2009 together with claims forecasts associated with the rcp representative concentration pathways scenarios the results obtained indicate that the constrained equal awards and minimal solutions are clearly equity sensitive given that the co2 emission reduction imposed by the constrained equal awards solution on asia and the oecd are very important and considering the better balance between equity and proportionality associated with the min solution it could be that this latter solution would be the most practicable and acceptable

the mnc as an agent of change for host country institutions fdi and corruption most empirical research examines how the institutional environment of corruption shapes the behavior of multinational corporations mncs in this study we would like to highlight the other side of the picture how the presence of mncs may shape the institutional environment of corruption over time we propose three avenues through which the mncs may have an impact on its host institutions regulatory pressure effect demonstration effect and professionalization effect based on extensive data on foreign direct investment and corruption for a large sample of countries over the last 30 years the empirical results are generally consistent with our hypothesis such findings provide a glimmer of hope for the future of the host country where corruption is prevalent

corruption and cross border investment in emerging markets firm level evidence abstract this paper studies the joint impact of corruption on the entry mode and volume of inward foreign direct investment fdi using a unique firm level data set we find that corruption not only reduces inward fdi but also shifts the ownership structure towards joint ventures the latter finding supports the view that corruption increases the value of using a local partner to cut through the bureaucratic maze however r d intensive firms are found to favor sole ownership

using micro surveys to measure and explain corruption summary this paper discusses survey techniques aimed at a better measurement of corruption at the micro level and argues that with appropriate survey methods and interview techniques it is possible to collect quantitative micro level data on corruption public expenditure tracking surveys service provider surveys and enterprise surveys are highlighted with several applications these surveys permit measurement of corruption at the level of individual agents such as schools health clinics or firms they also permit the study of mechanisms responsible for corruption including capture of public funds and bribery 2005 elsevier ltd all rights reserved

the willingness of farmers to engage with bioenergy and woody biomass production a regional case study from cumbria abstract in this paper we explore the willingness of cumbrian farmers to switch land use from food production to biomass production in a landscape where food production is both heavily subsidised and the area is a centre for tourism this is against a policy background of a switch of subsidies from food production to environmental benefits increased concerns about emissions from farming and an increased demand for renewable energy we identified an awareness of new markets for renewable energy alongside increasing volatility of other crops against a background of increasing demand for food from this our conclusions are that the main short term opportunities for increasing biomass production in this region are through intensifying management of existing woodlands in the medium term as the financial case for biomass crops becomes more certain we can envisage a tipping point which would favour a switch from marginal agricultural land to biomass

governance infrastructure and us foreign direct investment this paper examines the statistical importance of governance infrastructure as a determinant of us foreign direct investment fdi in broad terms governance infrastructure represents attributes of legislation regulation and legal systems that condition freedom of transacting security of property rights and transparency of government and legal processes our econometric analysis uses a two stage estimation procedure in the first stage the probability that a country is an fdi recipient is estimated the results indicate that countries that fail to achieve a minimum threshold of effective governance are unlikely to receive any us fdi countries that receive no us fdi are typically countries that do not promote free and transparent markets that have ineffective governments and that often have legal systems that are not rooted in english common law in the second stage the analysis is restricted to those countries that did receive fdi flows the estimated equations focus on the determinants of the amount of fdi received given that a country is a recipient of us fdi governance infrastructure including the nature of the legal system is an important determinant of the amount received

politics economics and investment abstract few economists or laypeople would deny that political events can have an important sometimes even overwhelming impact on economic decisions in general and investment decisions in particular the first goal of this paper is to integrate a number of political and non traditional economic variables into the standard theory of investment based on the maximization of the expected value of the firm the second goal is to test this generalized investment theory on a particularly fertile field for gauging the interaction of political and economic factors the plant and equipment spending of foreign manufacturing affiliates of us multinationals in argentina brazil and mexico the results of these tests show that the generalized theory is far superior to the traditional alternatives in explaining the real investment of the sample for the 1958 1989 period

global foreign direct investment flows the role of governance infrastructure abstract it is widely argued that a country s economic performance over time is determined to a great extent by its political institutional and legal environment we refer to these institutions and policies as the governance infrastructure of a country we utilize newly developed indices to examine the effects of governance infrastructure on both foreign direct investment fdi inflows and outflows for a broad sample of developed and developing countries over 1995 97 in addition we examine the role of other forms of infrastructure including human capital and the environment the results clearly indicate that governance infrastructure is an important determinant of both fdi inflows and outflows investments in governance infrastructure not only attract capital but also create the conditions under which domestic multinational corporations emerge and invest abroad it would appear that investments in governance infrastructure are subject to diminishing returns so that the benefits in terms of inflows are most pronounced for smaller and developing economies