the consequences of doubling the minimum wage the case of indonesia minimum wages in indonesia were tripled in nominal terms and doubled in real terms in the first half of the 1990s the author evaluates the effects of this hike on wage earnings wage employment and investment after describing indonesia s minimum wage policy and surveying the literature on the effects of minimum wages the author applies relatively simple statistical tools to individual and aggregate data he visually inspects the wage distribution for full time laborers and employees to assess the extent of compliance with minimum wages he uses regression analysis involving minimalist specifications and data aggregated by province to estimate the elasticity of wage earnings wage employment and investment with respect to the minimum wage a wide dispersion in the ratio of minimum wages to labor productivity across the 27 indonesian provinces can be used to identify the effects of the minimum wage the results suggest that minimum wages have a moderate effect on outcomes in indonesia s labor market taken at face value these results imply that doubling the minimum wage led to a 10 percent increase in average wages a 2 percent decrease in wage employment and a 5 percent decrease in investment the disemployment effect appears to be considerable in small firms but employment may actually increase in large firms

watchdogs of the invisible hand ngo monitoring and industry equilibrium globalization has been accompanied by rising pressure from advocacy non governmental organizations ngos on multinational firms to act in socially responsible manner we analyze how ngo pressure interacts with industry structure using a simple model of ngo firm interaction embedded in an industry environment with endogenous markups and entry we explain three key empirical patterns in developing country industries under activist pressure the degree of exit under more intense activist pressure the differential response of industries to ngo activism and the general rise of ngo activism following globalization

partial fiscal decentralization and demand responsiveness of the local public sector theory and evidence from norway this paper provides an empirical test of a principal tenet of fiscal federalism that spending discretion when granted to localities allows public good levels to adjust to suit local demands the test is based on a simple model of partial fiscal decentralization under which earmarking of central transfers for particular uses is eliminated allowing funds to be spent according to local tastes the greater role of local demand determinants following partial decentralization is confirmed by the paper s empirical results which show the effects of the 1986 norwegian reform

the dark side of buyer power supplier exploitation and the role of ethical climates media increasingly accuse firms of exploiting suppliers and these allegations often result in lurid headlines that threaten the reputations and therefore business successes of these firms neither has the phenomenon of supplier exploitation been investigated from a rigorous ethical standpoint nor have answers been provided regarding why some firms pursue exploitative approaches by systemically contrasting economic liberalism and just prices as two divergent perspectives on supplier exploitation we introduce a distinction of common business practice and unethical supplier exploitation since supplier exploitation is based on power we elucidate several levels of power as antecedents and investigate the role of ethical climate as a moderator this study extends victor and cullen s 1988 ethical climate matrix according to a supply chain dimension and is summarized in an integrated conceptual model of five propositions for future theory testing results provide a frame of reference for executives and scholars who can now delineate unethical exploitation and understand important antecedents of the phenomenon better

on the equilibrium properties of locational sorting models abstract important to many models of location choice is the role of local interactions or spillovers whereby the payoffs from choosing a location depend in part on the number or attributes of other individuals or firms that choose the same or nearby locations in equilibrium this paper develops the equilibrium properties of a broadly applicable and readily estimable class of sorting models that allow location decisions to depend on both fixed local attributes including unobserved attributes and local interactions describes the conditions under which equilibria exist and are unique and provides a test for uniqueness in empirical analyses of sorting equilibrium

mortality inequality the good news from a county level approach in this essay we ask whether the distributions of life expectancy and mortality have become generally more unequal as many seem to believe and we report some good news focusing on groups of counties ranked by their poverty rates we show that gains in life expectancy at birth have actually been relatively equally distributed between rich and poor areas analysts who have concluded that inequality in life expectancy is increasing have generally focused on life expectancy at age 40 to 50 this observation suggests that it is important to examine trends in mortality for younger and older ages separately turning to an analysis of age specific mortality rates we show that among adults age 50 and over mortality has declined more quickly in richer areas than in poorer ones resulting in increased inequality in mortality this finding is consistent with previous research on the subject however among children mortality has been falling more quickly in poorer areas with the result that inequality in mortality has fallen substantially over time we also show that there have been stunning declines in mortality rates for african americans between 1990 and 2010 especially for black men finally we offer some hypotheses about causes for the results we see including a discussion of differential smoking patterns by age and socioeconomic status

the ethical and economic case for sweatshop regulation three types of objections have been raised against sweatshops according to their critics sweatshops are 1 exploitative 2 coercive and 3 harmful to workers in the ethical and economic case against sweatshop labor a critical assessment powell and zwolinski critique all three objections and thereby offer what is arguably the most powerful defense of sweatshops in the philosophical literature to date this article demonstrates that whether or not unregulated sweatshops are exploitative or coercive they are pace powell and zwolinski harmful to workers

the effect of wage subsidies on piece rate workers evidence from the penny per pound program in florida abstract this paper studies a fair trade program in which consumers provide a wage subsidy bonus to piece rate tomato pickers the total subsidy determined by sales to participating buyers is divided among workers based on their relative output a worker who produces more gets a larger share of the bonus although seemingly mimicking the existing piece rate pay scheme the mechanism associated with the bonus payment is really a relative performance evaluation as the size of total bonus is exogenous and invariant to workers effort therefore for a given sized subsidy the combined total or per worker average utility gains would become the largest if the workers keep their efforts at the pre program level empirical analysis shows that worker effort and hence productivity increases substantially in response to the program suggesting that currently workers combined gains per dollar of subsidy are not being maximized

firm size and executive compensation using several data sets the relationship between executive income and firm size is shown to be relatively stable over time and in different countries the elasticity of executive earnings to firm size is about the same today as it was in the 1930s with evidence of a decline in the earnings of top executives controlling for firm size in addition to the effects of size and other firm and industry characteristics there are returns to age and experience there is also substantial variability in the level of compensation among firms of comparable size indicating that there may be impediments to mobility

confronting price endogeneity in a duration model of residential subdivision development summary spatial equilibrium implies that distant factors are correlated with local prices through market mechanisms using this logic we develop a novel approach for handling price endogeneity in land use models we combine a control function approach with a duration model to identify the impact of prices in influencing land conversion we find that failure to control for endogeneity results in large differences in elasticities specifically we find an elasticity of 2 06 compared to 0 67 in a model without instrumentation this difference is significant as it suggests that price based policies such as green taxes are likely more effective in altering development patterns than would be expected from a naive estimation that ignores price endogeneity copyright 2016 john wiley sons ltd

minimum wages and compliance the case of trinidad and tobago explores compliance to the national minimum wage in trinidad and tobago potential costs associated with the national minimum wage actual incidence of compliance in terms of employment and wage distribution nature of labor market this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from an this abstract was borrowed from another version of this item

estimating ethnic preferences using ethnic housing quotas in singapore there are many policies around the world aimed at integrating groups gender ethnic national in education employment immigration and housing in the case of housing since prices may not internalize externalities in residential location choices we need to know preferences for welfare analysis this paper estimates people s taste for living with own ethnic groups ethnic preferences using unique policy variation from the ethnic housing quotas in singapore my approach combines policy induced variation commonly used in reduced form settings with a non parametric identi cation strategy in a structural demand estimation framework a la berry levinsohn and pakes 1995 i nd that all groups have strong preferences to live with at least some other

estimating the general equilibrium benefits of large changes in spatially delineated public goods the purpose of this article is to report a new approach for measuring the general equilibrium willingness to pay for large changes in spatially delineated public goods such as air quality we estimate the parameters of a locational equilibrium model and compute equilibria for alternative scenarios characterizing the availability of public goods within a system of communities welfare measures take into consideration the adjustments of households in equilibrium to nonmarginal changes in public goods the framework is used to analyze willingness to pay for reductions in ozone concentrations in southern california between 1990 and 1995

greenwash vs brownwash exaggeration and undue modesty in corporate sustainability disclosure corporate greenwashing has accelerated in recent years bringing in its wake growing skepticism about corporate green claims although a theory of the drivers and deterrents of greenwashing has begun to emerge it is static in nature and does not incorporate the full range of ways in which firms can misrepresent their environmental performance our contribution is threefold first we extend the theory of organizational information disclosure to incorporate the possibility of undue modesty about a firm s environmental social and governance practices second we hypothesize about the drivers of exaggeration and undue modesty based on which of a firm s stakeholders are salient at a given point in time to do so we place the firm within a dynamic context that has largely been missing in the prior literature third we test our hypotheses using a data set that allows us to directly compare corporate green claims against actual performance results reveal that corporate output growth deregulation and low profits under deregulation significantly affect the choice between greenwashing and brownwashing the effects of growth and profits are mitigated by external scrutiny

an analysis of the use of accounting and market measures of performance in executive compensation contracts prior research has provided useful insights into the structure of compensation plans and their incentive effects however one important limitation of these studies is the virtual absence of any cross sectional analyses of the attributes of compensation contracts 2 this absence is related in part to the problems associated with controlling for other factors that affect compensation that is compensation contracts are

influences upon organizational ethical subclimates a replication study of a single firm at two points in time this research replicates weber s 1995 study of a large financial services firm that found that ethical subclimates exist within multi departmental organizations are influenced by the function of the department and the stakeholders served and are relatively stable over time relying upon theoretical models developed by thompson 1967 and victor and cullen 1998 hypotheses are developed that predict the ethical subclimate decision making dimensions and type for diverse departments within a large steel manufacturing firm and that these ethical subclimate types will be stable across the two periods of time when the data were collected employees were surveyed in 1995 and again in 1999 using victor and cullen s ethical climate questionnaire response rates of 88 and 94 percent were achieved contrary to weber s findings our results imply that in both samples ethical subclimates may be determined by the strength of an organization s overall ethical climate rather than the department s function however we did find support for weber s earlier contention that these subclimates are relatively stable our results also suggest that differences may exist across industries that is when comparing a large steel manufacturer as we did in our study with a large financial services organization as weber did in his 1995 study

households willingness to pay for public housing in the presence of price controls nonmarket housing allocation mechanisms such as queueing prevent households from revealing their marginal willingness to pay for housing through market prices we derive the households marginal willingness to pay using the intuitive idea that the length of the queue for a specific house reflects the households willingness to pay for housing characteristics we apply our methodology to public housing in the amsterdam metropolitan area and show that on average the households marginal willingness to pay for a unit of public housing is close to its marginal costs this suggests that the welfare loss of public housing through distortions in housing supply is rather limited and is mainly through distortions in housing demand we provide indirect evidence of the latter by showing that queueing induces inefficient matching of households and housing

sweatshops economic analysis and exploitation as unfairness the economic and moral defense of sweatshops given by powell and zwolinski j bus ethics 107 449 472 2012 has been criticized in two recent papers coakley and kates j bus ethics 117 553 558 2013 focus on putative weaknesses in the logic of powell s and zwolinski s argument preiss bus ethics quart 24 1 55 82 2014 argues that even granting the validity of their economic argument powell s and zwolinski s defense is without force when viewed from a kantian republican viewpoint we are concerned that sweatshop critics have misinterpreted the economic literature and overstated the conclusions that follow from their ethical premises we show that the best understanding of the current economic literature supports powell s and zwolinski s conclusions about the negative effects of sweatshop wage regulation and that it is unreasonable to reject economic analysis in moral argument against sweatshops even from a kantian perspective additionally we defend the theory of exploitation as unfairness given by wertheimer exploitation 1996 and show how economic analysis can be applied to that theory to identify cases of sweatshop exploitation

global apparel production and sweatshop labour can raising retail prices finance living wages this paper provides some empirical evidence on issues raised by the global antisweatshop movement we first consider the relationship between wage and employment growth finding no consistent trade off between them we then measure the share of labour costs in the production of garments in the us and mexico we find that the retail price increases necessary to absorb the costs of raising wages substantially are small well within the range of price increases that polls suggest us consumers are willing to pay we close by considering some implications of these results copyright 2004 oxford university press

on measuring the effects of fiscal policy in recessions we do not have a good measure of the effects of fiscal policy in a recession because the methods that we use to estimate the effects of fiscal policy both those using the observed outcomes following different policies in aggregate data and those studying counterfactuals in fitted model economies almost entirely ignore the state of the economy and estimate the government multiplier which is presumably a weighted average of the one we care about the multiplier in a recession and one we care less about the multiplier in an expansion notable exceptions to this general claim sug gest this difference is potentially large our lack of knowledge stems significantly from the focus on linear dynamics vector autoregressions and linearized or close to linear dynamic stochastic general equilibrium dsge models our lack of knowledge also reflects a lack of data deep recessions are few and nonlinearities hard to measure the lack of statistical power in the estimation of nonlinear models using aggregate data can be addressed by exploiting estimates of partial equilibrium responses in disaggregated data microeconomic estimates of the partial equilibrium causal effects of a policy can discipline the causal channels inherent in any dsge model of the general equilibrium effects of policy microeconomic studies can also provide measures of the dependence of the effects of a policy on the states of different agents which is a key component of the dependence of the general equilibrium effects of fiscal policy on the state of the

exploiting injustice in mutually beneficial market exchange the case of sweatshop labor mutually beneficial exchanges in markets can be exploitative because one party takes advantage of an underlying injustice for instance employers of sweatshop workers are often accused of exploiting the desperate conditions of their employees although the latter accept the terms of their employment voluntarily a weakness of this account of exploitation is its tendency for over inclusiveness certainly given the prevalence of global and domestic socioeconomic inequalities not all exchanges that take place against background injustices should be considered exploitative this paper offers a framework to identify exploitation in mutually beneficial exchange focusing on the case of sweatshop labor it argues that an employer can be viewed as taking unfair advantage of an underlying injustice if and only if the employer s surplus from the exchange in the unjust state of affairs exceeds the surplus it could maximally obtain in a just state of affairs the paper illustrates the applicability of this framework using three different conceptions of justice and argues that it is superior to microlevel accounts of exploitation that regard background justice as irrelevant the paper concludes by describing some normative implications that follow from judging an exchange exploitative

non price equilibria for non marketed goods abstract as part of the resources for the future frontiers of environmental economics collection of papers we consider the problem of general equilibrium feedback effects in non price space as they relate to non market valuation our overall objective is to examine the extent to which non price equilibria arising from both simple and complex sorting behavior can be empirically modeled and the resulting differences in partial and general equilibrium welfare measures quantified after motivating the problem in general we consider the specific context of congestion in recreation demand applications which we classify as the outcome of a simple sorting equilibrium using both econometric and computable general equilibrium cge models we examine the conceptual and computational challenges associated with this class of problems and present findings on promising solution avenues we demonstrate the relevance of accounting for congestion effects in recreation demand with an application to lake visits in iowa our econometric and cge results confirm that for some plausible counterfactual scenarios substantial differences exist between partial and general equilibrium welfare estimates we conclude the paper by describing tasks that are needed to move forward research in this area

the impact of minimum wages in mexico and colombia there are diverging views about how minimum wages affect labor markets in developing countries advocates of minimum wages hold that they redistribute resources in a welfare enhancing way and can thus reduce poverty improve productivity and foster growth opponents on the other hand contend that minimum wage interventions result in a misallocation of labor and lead to depressed wages in the very sectors the rural and informal urban sectors where most of the poor are found with the effect of wasting resources and reducing the growth rate data from colombia and mexico for the 1980s provide an opportunity to evaluate the impact of minimum wages in mexico in the 1980s the minimum wage fell in real terms roughly 45 percent by 1990 mexico s minimum wage was about 13 percent of the average unskilled manufacturing wage during the same period the minimum wage in colombia increased at nearly the same rate reaching roughly 53 percent of the average unskilled wage the author charts how the mandated minimum wage affected the demand for skilled and unskilled labor in both countries during that decade findings are as follows in mexico minimum wages have had virtually no effect on wages or employment in the formal sector the main reason the minimum wage is not an effective wage for most firms or workers in the informal sector in turn there is considerable noncompliance with the mandated minimum wage especially among part time and female workers as a result significant numbers of workers are paid at or below minimum wages in colombia minimum wages have a much stronger impact on wages judging from their proximity to the average wage and both cross section and time series estimates the estimates imply that the elasticity of low paid unskilled employment with respect to minimum wages is in the range of 2 to 12 percent

do capitalization effects for public goods reveal the public s willingness to pay this article develops a welfare theoretic framework for interpreting evidence on the impacts of public programs on housing markets we extend rosen s hedonic model to explain how housing prices capitalize exogenous shocks to public goods and externalities the model predicts that trading between heterogeneous buyers and sellers will drive a wedge between these capitalization effects and welfare changes we test this hypothesis in the context of changes in measures of school quality in five metropolitan areas results from boundary discontinuity designs suggest that capitalization effects understate parents willingness to pay for public school improvements by as much as 75

the interactive effects of human capital and quality of life on economic growth abstractto bridge the gap in the quality of life qol and economic growth literature and understand the reinforcing effects of qol and human capital on economic development we examine the interactive effects of these two factors on wage growth from 2000 to 2007 at the county level across the united states first a rosen roback model is employed to estimate implicit values of amenities including climate clean air and other natural attributes which are used to generate qol indices second qol human capital represented by the share of college graduates and their interaction serve as key variables in the wage growth model an instrumental variable approach and location fixed effects are used to address endogeneity of human capital and control for location specific unobservable characteristics results suggest that human capital and qol significantly contribute to economic growth and the growth effects are even larger in nonmetropolitan counties importantly we find that the effect of human capital on

learning in a hedonic framework valuing brownfield remediation incomplete information in property value hedonic models can bias estimates of marginal willingness to pay mwtp using brownfield remediation as an application this article recovers hedonic values from a dynamic neighborhood choice framework that allows households to learn about brownfield contamination in a bayesian fashion before choosing where to live i find that ignoring learning yields nontrivial biases to the mwtp estimate this has important implications for hedonic valuation if agents are imperfectly informed estimates are used to calculate information s value had it been withheld from the public and to assess heterogeneity in information s value along site and homebuyer demographics

sweatshop regulation tradeoffs and welfare judgements the standard economic and ethical case in defense of sweatshops employs the standard of the welfare of their workers and potential workers to argue that sweatshop regulations harm the very people they intend to help scholars have recently contended that once the benefits and costs are balanced regulations do in fact raise worker welfare this paper describes the short and long run tradeoffs associated with sweatshop regulation and then examines how reasonable constructions of measures of worker welfare would evaluate these tradeoffs finding that the standard economic and ethical case against sweatshop regulations is well supported

wages and foreign ownership a comparative study of mexico venezuela and the united states abstract this paper explores the relationship between wages and foreign investment in mexico venezuela and the united states despite very different economic conditions and levels of development we find one fact that is robust across all three countries higher levels of foreign investment are associated with higher wages however in mexico and venezuela foreign investment is associated with higher wages only for foreign owned firms there is no evidence of wage spillovers leading to higher wages for domestic firms the lack of spillovers in mexico and venezuela is consistent with significant wage differentials between foreign and domestic enterprises in the united states where the evidence suggests some wage spillovers from foreign to domestic enterprises wage differentials are smaller

crime and social interactions the high variance of crime rates across time and space is one of the oldest puzzles in the social sciences this variance appears too high to be explained by changes in the exogenous costs and benefits of crime we present a model where social interactions create enough covariance across individuals to explain the high cross city variance of crime rates this model provides an index of social interactions which suggests that the amount of social interactions is highest in petty crimes moderate in more serious crimes and almost negligible in murder and rape

sorting over flood risk and implications for policy reform abstract do individuals sort across flood risk this paper applies a boundary discontinuity design to a residential sorting model to provide novel estimates of sorting across flood risk by race ethnicity and income we find clear evidence that low income and minority residents are more likely to move into high risk flood zones we then highlight the overall and distributional implications of proposed price and information reforms to the u s national flood insurance program while such reforms are likely welfare increasing overall heterogeneous behavioral responses yield significant distributive effects that also alter the composition of residents in harm s way

multinationals and anti sweatshop activism during the 1990s anti sweatshop activists campaigned to improve conditions for workers in developing countries this paper analyzes the impact of antisweatshop campaigns in indonesia on wages and employment identification is based on comparing the wage growth of workers in foreign owned and exporting firms in targeted regions or sectors before and after the initiation of antisweatshop campaigns we find the campaigns led to large real wage increases for targeted enterprises there were some costs in terms of reduced investment falling profits and increased probability of closure for smaller plants but we fail to find significant effects on employment jel f23 j31 j81 l67 o14 o15

does final market demand elasticity influence the location of export processing evidence from multinational decisions in china given the importance many developing countries attach to attracting foreign investors engaged in export processing activities surprisingly little is known about the sensitivity of these investors to local wage differences and the role played by final product market conditions using data on 2 884 foreign invested manufacturing projects in china we estimate the importance of host province wages to firm s location choice and investigate how this sensitivity varies with demand conditions facing the industry in china s largest export market the united states we use the profit function to show theoretically that firms ability to pass wage costs through to final markets matters for location choice and we test the implications of the theory using a control function technique for conditional logit developed by petrin and train as predicted we find that investors facing more elastic demand in the us market are more sensitive to wages across export processing locations taking both the factor intensity of the activity and final market demand elasticity into account we find that investors producing homogenous goods such as metals chemicals and food processing are more likely to be attracted by relatively low wages than those producing differentiated goods we also find that while oecd investors are more responsive to wage differences than are investors from hong kong taiwan and macau they are less likely to choose a location that has received a large share of prior foreign investment

hierarchies markets and power in the economy an economic perspective this paper adopts the transaction cost economics perspective for purposes of examining hierarchies markets and power in the economy transaction cost economics works out of an economizing perspective in which markets and hierarchies are alternative modes of governance and the object is to ascertain which transactions go where and why the role of power in this setup is strictly limited partly because power tends to be myopic transactions are not examined in their entirety and partly because it is tautological power needs to be operationalized whereupon the refutable implications that accrue to this perspective can be derived copyright 1995 by oxford university press

competition between networks a study of the market for yellow pages this paper estimates the importance of network effects in the market for yellow pages i estimate three simultaneous equations consumer demand for usage of a directory advertiser demand for advertising and a publisher s first order condition derived from profit maximizing behaviour estimation shows that advertisers value consumer usage and that consumers value advertising implying a network effect i find that internalizing network effects would significantly increase surplus as an application i consider whether the market benefits from monopoly which takes advantage of network effects or oligopoly which reduces market power i find that a more competitive market is preferable copyright 2004 wiley blackwell

declining mortality inequality within cities during the health transition in the united states in the late 19th and early 20th century large cities had extremely high death rates from infectious disease within major cities such as new york city and philadelphia there was significant variation at any point in time in the mortality rate across neighborhoods between 1900 and 1930 neighborhood mortality convergence took place in new york city and philadelphia we document these trends and discuss their consequences for neighborhood quality of life dynamics and the economic incidence of who gains from effective public health interventions

discrete choice with social interactions this paper provides an analysis of aggregate behavioural outcomes when individual utility exhibits social interaction effects we study generalized logistic models of individual choice which incorporate terms reflecting the desire of individuals to conform to the behaviour of others in an environment of noncooperative decisionmaking laws of large numbers are generated in such environments multiplicity of equilibria in these models which are equivalent to the existence of multiple self consistent means for average choice behaviour will exist when the social interactions exceed a particular threshold local stability of these multiple equilibria is also studied the properties of the noncooperative economy are contrasted with the properties of an economy in which a social planner determines the set of individual choices finally a likelihood function based on the theoretical model is given and conditions for the econometric identifiability of the model are established

sewers diffusion and the decline of mortality the case of paris 1880 1914 it is common to argue that water infrastructure innovations improve life expectancy yet the benefits of clean water depend on a mechanism to dispose of waste water we draw on the historical experience of a large industrial city to estimate the impact of the spread of the sewer system using a longitudinal data set on mortality and rents for each of paris 80 neighborhoods we show that sanitation contributed several years to life expectancy these results point out the multiplicity of infrastructure needed to help decrease mortality

purchasing ethics and inter organizational buyer supplier relational determinants a conceptual framework this study examines unethical purchasing practices from the perspective of buyer supplier relationships based on a review of the inter organizational literature and qualitative data from in depth interviews with purchase managers from diverse industries a conceptual framework is proposed and theoretical arguments leading to propositions are presented taking into consideration the presence or absence of an explicit or implicit company policy sanctioning ethically questionable activities unethical purchasing practices are conceptualized as a three tiered set three broad themes emerge from the analysis toward explaining purchasing ethics from a buyer seller perspective a inter organizational power issues inter organizational power and idiosyncratic investments b inter organizational relational issues long term orientation and satisfaction and c interpersonal relational issues interpersonal ties and trust theoretical and managerial implications of the conceptual framework are discussed

the agent ss ethics in the principal agent model this paper evaluates the current use of the principal agent model pam in accounting and finance focusing on the agent ss use of private information the agent ss behavioral norms in the the pam deviate from commonly held ethical values in society from models of man in conventional economic theory and also from behavioral foundations of related business school fields like corporate strategy business ethics and human resource management still it would be unwise to reject the pam solely because of its distasteful ethical assumptions the model does appear to have predictive power but its descriptive or normative qualities remain unexplored the popularity of the pam with its extreme model of man raises fundamental questions about the impact of this model on business school stakeholders and society at large

a virtue ethics analysis of supply chain collaboration technological advancements in information systems over the past few decades have enabled firms to work with the major suppliers and customers in their supply chain in order to improve the performance of the entire channel tremendous benefits for all parties can be realized by sharing information and coordinating operations to reduce inventory requirements improve quality and increase customer satisfaction but the companies must collaborate effectively to bring these gains to fruition we consider two alternative methods of managing these interfirm supply chain relationships in this article the first which we have named dictatorial collaboration occurs when a dominant supply chain entity assumes control of the channel and forces the other firms to follow its edicts we compare and contrast this method with sustainable collaboration in which the parties share resources and engage in joint problem solving to improve the performance of the system as a whole we use a virtue ethics lens to describe these methods of relationship management to suggest that sustainable collaboration is preferable to dictatorial collaboration both operationally and ethically in the long run

the compensation of spanish executives a test of a managerial talent allocation model abstract this paper provides empirical evidence in support of the theory on how managerial capabilities are allocated in hierarchical organizations developed by rosen bell journal of economics 1982 autumn 311 323 the evidence is obtained from a sample of spanish firms and covers managers at the top and middle positions in the hierarchy most previous empirical work has related rosen s model to the elasticity of compensation to size obtained estimating a structural model that explains the salary of the managers as a function of the size of the firm but since compensation and size are both endogenous variables the elasticity estimated by this way will be inconsistent using human capital variables as proxies of managerial talent we estimate the reduced form of the model and therefore the inconsistency problem is overcome

higher wages for sustainable development employment and carbon effects of paying a living wage in global apparel supply chains abstract in this paper we explore how paying a living wage in global supply chains might affect employment and carbon emissions sustainable development goals 8 and 13 previous work has advocated using wage increases for poorer workers to increase prices for wealthier consumers thereby reducing consumption and associated environmental damage however the likely effects of such an approach remain unclear using an input output framework extended with income and demand elasticities we estimate the employment and carbon effects of paying a living wage to brazilian russian indian and chinese bric workers in the western european clothing supply chain we find negligible effects on carbon emissions but a substantial increase in bric employment under 3 scenarios of consumer behaviour changes in western european consumption lead to small decreases in global carbon emissions and bric employment however the increase in bric wages increases demand in bric this increased demand increases production which largely cancels out the carbon savings and generates net increases in bric employment we conclude by arguing that paying higher wages in global supply chains represents a good but not sufficient step toward achieving the sustainable development goals

network effects and welfare cultures we empirically examine the role of social networks in welfare participation using data on language spoken at home to better infer networks within an area our empirical strategy asks whether being surrounded by others who speak the same language increases welfare use more for those from high welfare using language groups this methodology allows us to include local area and language group fixed effects and to control for the direct effect of being surrounded by one s language group these controls eliminate many of the problems in previous studies the results strongly confirm the importance of networks in welfare participation

the demand side of social protection lessons from cambodia s labour rights experience summary in fragile states recent efforts to advance the social protection agenda have focused primarily on loosening supply side constraints but the resulting kaleidoscope of donor driven projects has often overlooked the need to create a sense of ownership by beneficiaries in part this is because it is unclear what political and social structures effectively facilitate activism in situations where state society relations are contentious we use cambodia s unusual success creating and sustaining a labor rights regime to illustrate the dynamics behind one type of social regime change that has opened up governance over worker protections in a sustainable and potentially replicable way

wealth and income inequality an economic and ethical analysis i perform an economic and ethical analysis on wealth and income inequality economists have performed many statistical studies that reveal a number of often contradictory findings in connection with the distribution of wealth and income hence the statistical findings leave us with no better knowledge of the effects that inequality has on economic progress at the same time the existing theoretical results have not provided us with a definitive answer concerning the effects of inequality on progress by gaining knowledge of the nature of inequality and bringing basic economic principles to bear on the subject we can come to an understanding of what the causal relationship is between inequality and economic progress furthermore i apply a new theory of ethics rational egoism to assess economic inequality i show that in the right context economic inequality is both economically and morally desirable

the strategic choice of managerial incentives do firms with separate owners and managers maximize profits we address this question for an oligopoly where managers compete in quantities or prices as in the cournot or bertrand models and owners choose their managers incentives we find that there is a strategic aspect in the problem of selecting incentives and that profit maximizing behavior does not result in particular in the oligopoly we study the behavior of firms competing in quantity price more closely resembles perfectly competitive collusive behavior than cournot bertrand behavior

social issues in supply chains capabilities link responsibility risk opportunity and performance abstract social issues in the supply chain are defined as product or process related aspects of operations that affect human safety welfare and community development drawing from related literatures basic constructs related to capabilities and risk are defined and used to underpin case research in five multinational firms this data extended our understanding of three key social management capabilities monitoring collaboration and innovation moreover the field research revealed four key linkages that detail how managers actively can work toward mitigating social risks creating new opportunities and improving firm performance collectively these capabilities and linkages establish the basis for an integrative framework and five research propositions

the un framework on business and human rights a workers rights critique the protect respect remedy framework along with the un guiding principles on business and human rights is the current global standard regarding corporate conduct this article analyses the un framework from the vantage point of labour rights in india by looking at the garment supply chain it argues that it can do little to induce states and businesses to bring substantive improvements to working conditions in a largely informal economy like india without the state performing its duty to protect human rights the secondary responsibility of corporations can do very little in realising the rights of workers nonetheless its tallest contribution is that it has given a platform for civil society to push for better conduct from all businesses and marks the beginning of a unified international business and human rights agenda

identifying demand parameters in the presence of unobservables a combined revealed and stated preference approach we develop a combined revealed and stated preference approach to identify discrete choice demand parameters in the presence of unobserved determinants of choice our approach overcomes difficulties associated with small choice sets multicollinearity and endogeneity that arise with revealed preference approaches to illustrate our framework we revisit two canadian moose hunting datasets our empirical results suggest the potential gains from fusing revealed and stated preference data but they also suggest its limitations when the data generating processes for the data sources differ

do schools matter for high math achievement evidence from the american mathematics competitions this paper uses data from the american mathematics competitions to examine the rates at which different high schools produce high achieving math students there are large differences in the frequency with which students from seemingly similar schools reach high achievement levels the distribution of unexplained school effects includes a thick tail of schools that produce many more high achieving students than is typical several additional analyses suggest that the differences are not primarily due to unobserved differences in student characteristics the differences are persistent across time suggesting that differences in the effectiveness of educational programs are not primarily due to direct peer effects

corporate performance and managerial remuneration an empirical analysis abstract economic theories of efficient compensation predict a positive relationship between executive pay and corporate performance and yet efforts to document this relationship have been largely unsuccessful in this paper we argue that previous cross sectional studies have omitted important variables which seriously bias their results using data that focus on individual executives over time we find that executive compensation is strongly positively related to corporate performance as measured by shareholder return and growth in firm sales the results are robust to the stock market performance measure utilized

compensation across executive labor markets what can we learn from cross listed firms there is wide consensus that chief executive officers ceos of us firms earn significantly more than their canadian counterparts using a matched sample we find that the majority of this difference is due to us ceos earning 50 more than ceos of canadian non cross listed firms we find no such us premium for canadian cross listed firms because the use of options allows the cross listed firms to keep pace with their neighbors to the south while firms that list only in canada compete in the labor market defined by their national boundary cross listed firms appear to be competing directly with their us counterparts for executive talent in investigating alternative explanations for the elimination of the compensation differential for canadian cross listed firms we find evidence consistent with both the bonding and the rent extraction hypotheses

school segregation and the identification of tipping behavior we develop a method to empirically implement the schelling model of segregation and use it to study racial segregation in los angeles schools from 1995 to 2012 our two step method combines the estimation of parents preferences for their children s peers with a counterfactual simulation analysis we find substantial heterogeneity in the existence and locations of tipping points and stable equilibria schools are observed on equilibrium trajectories but many remained out of equilibrium by 2012 we also introduce novel instrumental variables to identify preferences for endogenous peer groups that require no additional data and can be used in other educational settings

the role of spatial demand on outlet location and pricing abstract in this article the authors consider the problem of outlet pricing and location in the context of unobserved spatial demand the analysis constitutes a scenario in which capacity constrained firms set prices conditional on their location demand and costs this enables firms to develop maps of latent demand patterns across the market in which they compete the analysis further suggests locations for additional outlets and the resultant equilibrium effect on profits and prices using bayesian spatial statistics the authors apply their model to seven years of data on apartment location and prices in roanoke va they find that spatial covariation in demand is material in outlet choice the 95 spatial decay in demand extends 3 6 miles in a region that measures slightly more than 9 5 miles they also find that capacity constraints can cost complexes upward of 100 per apartment as they predict price elasticities and costs are biased downward when spatial covariance in demand is ignored costs a

estimation of an equilibrium model with externalities post disaster neighborhood rebuilding we study the optimal design of subsidies in an equilibrium setting where the decisions of individual recipients impose externalities on one another we apply the model to the case of post katrina rebuilding in new orleans under the louisiana road home rebuilding grant program rh we estimate the structural model via indirect inference exploiting a discontinuity in the formula for determining the size of grants which helps isolate the causal effect of neighbors rebuilding on one s own rebuilding choices we find that the additional rebuilding induced by rh generated positive externalities equivalent to 4950 to each inframarginal household whose rebuilding choice was not affected by the program counterfactual policy experiments find that optimal subsidy policies bias grant offers against relocation with an inverse u shaped relationship between the degree of bias and the severity of damages from the disaster

identifying spatial efficiency equity tradeoffs in territorial development policies evidence from uganda abstractwe contribute to the debate on the spatial allocation of infrastructure investments by examining where these investments generate the highest economic return spatial efficiency and identifying trade offs when infrastructure coverage is made more equitable across regions spatial equity we estimate models of firm location choice in uganda drawing on insights from the new economic geography literature the main findings show that manufacturing firms gain from being in areas that offer a diverse mix of economic activities public infrastructure investments in other locations are likely to attract fewer private investors and will pose a spatial efficiency equity trade off

estimating equilibrium models of sorting across locations while there is growing interest in measuring the size and scope of local spillovers it is well understood that such spillovers cannot be distinguished from unobservable local attributes using solely the observed location decisions of individuals or firms we propose an empirical strategy for recovering estimates of spillovers in the presence of unobserved local attributes for a broadly applicable class of equilibrium sorting models our approach relies on an iv strategy derived from the internal logic of the sorting model itself we show practically how the strategy is implemented provide intuition for our instruments discuss the role of effective choice set variation in identifying the model and carry out a series of monte carlo simulations to demonstrate performance in small samples

the consequences of increased enforcement of legal minimum wages in a developing country an evaluation of the impact of the campana nacional de salarios minimos in costa rica in august 2010 the costa rican government implemented a comprehensive program to increase compliance with legal minimum wages the campana nacional de salarios minimos national campaign for minimum wages to evaluate the impact of the campaign the authors use a regression discontinuity rd approach which compares what happened to workers who before the campaign had been earning below the minimum wage to those who before the campaign had been earning above the minimum wage they analyze a panel data set with information on workers from before the campaign began july 2010 and after the campaign had been in operation for some time july 2011 the evidence supports the conclusion that the campaign led to an increase in compliance with minimum wage laws in costa rica the mean earnings of those being paid less than the minimum wage in 2010 increased by approximately 10 more than the earnings of those being paid more than the minimum wage the campaign led to the largest increases in the wages of wome

rethinking economic development i provide a summary reflection and assessment of the current state of economic development in both the policy and academic worlds in terms of development policy currently the primary focus is on policy interventions namely foreign aid aimed at fixing the deficiencies of developing countries academic research also has a similar focus except with an emphasis in rigorous evaluation of interventions to estimate causal effects a standard set of versatile quantitative tools is used e g experimental and quasi experimental methods which can be easily applied in a range of settings to estimate the causal effects of policies which are typically presumed to be similar across contexts in this article i take a step back and ask whether the current practices are the best that we can do are foreign aid and policy interventions the best options we have for poverty alleviation what else can be done is our current research strategy characterized by rigorous but a lack of context specific analysis the best method of analysis is there a role for other research methods for a deeper understanding of the local context and for more collaboration with local scholars repenser le developpement economiquee dans cet article je propose un apercu une reflexion et une evaluation de l etat actuel du developpement economique a la fois dans les spheres politiques et universitaires en matiere de developpement economique l attention est principalement portee sur l intervention politique c est a dire l aide exterieure visant a corriger les defaillances des pays en developpement les recherches universitaires y portent une attention similaire mais en mettant davantage l accent sur l evaluation rigoureuse de ces memes interventions pour en mesurer les effets de causalite a cette fin un ensemble d outils quantitatifs et modulables standard sont utilises notamment par l entremise de methodes experimentales et quasi experimentales pouvant facilement s appliquer a une vaste gamme de situations et ce aux fins d evaluations des liens de causalite engendres par ces politiques liens habituellement consideres comme similaires d un contexte a l autre dans cet article je prends un peu de recul pour m interroger sur la pertinence des pratiques actuelles les interventions politiques et l aide exterieure offrent elles les meilleures options pour reduire la pauvrete que pouvons nous faire d autre notre strategie de recherche actuelle caracterisee par des analyses rigoureuses mais peu adaptees a des contextes specifiques est elle la meilleure d autres methodes de recherche peuvent elles permettre de mieux comprendre les contextes regionaux et favoriser une meilleure collaboration avec les intellectuels locaux

offshoring with endogenous ngo activism the process of globalization is characterized by an impressive growth of global value chains as well as the proliferation of non governmental organizations ngos interacting with multinational firms this paper presents a model of offshoring and ngo firm interactions in which offshoring to a low regulation country allows a monopolist to implement a dirty technology undesired by consumers consumers can reduce the incentive for dirty production by financing an ngo monitoring the firm ngo emergence and offshoring can arise as joint and interacting outcomes for a range of trade costs ngo emergence allows firms to capture gains from globalization which would otherwise be unattainable somewhat paradoxically ngo emergence can be at the expense of consumers possibly leading to welfare losses through offshoring

conflict minerals and supply chain due diligence an exploratory study of multi tier supply chains as recently stakeholders complain about the use of conflict minerals in consumer products that are often invisible to them in final products firms across industries implement conflict mineral management practices conflict minerals are those whose systemic exploitation and trade contribute to human right violations in the country of extraction and surrounding areas particularly supply chain managers in the western world are challenged taking reasonable steps to identify and prevent risks associated with these resources due to the globally dispersed nature of supply chains and the opacity of the origin of commodities supply chain due diligence scdd represents a holistic concept to proactively manage supply chains reducing the likelihood of the use of conflict minerals effectively based on an exploratory study with 27 semi structured interviews within five european industries we provide insights into patterns of implementation key motivational factors barriers and enablers and impacts of scdd in mineral supply chains our results contribute to both theory and practice as we provide first insights to scdd practices and make recommendations for an industry wide implementation of scdd altogether this study provides the basis for future theory testing research in the context of scdd and conflict mineral management

heterogeneous firms and the organization of production firms in the same industry exhibit systematic differences in the organization of production and the structure of employment entrepreneurial ability is the specific scarce input that limits the size of a firm this input must be allocated to two activities coordinating production and monitoring workers able entrepreneurs can convert calendar time into larger supplies of coordinating effort that enable them to assemble large firms greater ability implies a higher shadow price of time which increases the implicit costs of monitoring a dispersion of entrepreneurial abilities generates an equilibrium size distribution of firms differences in monitoring costs affect the choice of worker productivities the design of products and the organization of production the monitoring cost hypothesis advanced in this paper goes a long way in explaining the equilibrium of an industry containing heterogeneous firms that differ in size and behavior

can minimum wages cause a big push evidence from indonesia big push models suggest that local product demand can create multiple labor market equilibria one featuring high wages formalization and high demand and one with low wages informality and low demand i demonstrate that minimum wages may coordinate development at the high wage equilibrium using data from 1990s indonesia where minimum wages increased in a varied way i develop a difference in spatial differences estimator which weakens the common trend assumption of difference in differences estimation reveals strong trends in support of a big push formal employment increases and informal employment decreases in response to the minimum wage local product demand also increases and this formalization occurs only in the non tradable industrializable industries suggested by the model while employment in tradable and non industrializable industries also conforms to model predictions

the nature of the firm agency theory and shareholder theory a critique from philosophical anthropology standard accounts on the nature of the firm are highly dependent on explanations by coase coupled with inputs from agency theory and shareholder theory this paper carries out their critique in light of personalist and common good postulates it shows how personalist and common good principles create a framework that not only accommodates business ethics better but also affords a more compelling understanding of business as a whole

reactions to perceived inequity in u s and dutch interorganizational relationships in an empirical examination of inequity in interorganizational relationships we found similarities and differences in dutch and u s automobile dealers reactions to inequity in their relationships with their automobile suppliers as predicted by equity theory both positive and negative inequity have detrimental effects on the reactions of dutch firms in contrast u s firms do not react negatively to positive inequity only negative inequity has deleterious effects

self disclosure at international cartels we study revelation behavior at illegal international cartels our hypotheses suggest that a resource advantage induces executives of large multinational enterprises mnes to be more likely to reveal the cartel and to cooperate with the antitrust agency during the prosecution stage moreover we expect the cultural background to influence the firm s inclination to reveal incriminating evidence empirical tests based on data about cartel breakdowns under the eu leniency program show that large mnes are indeed more likely to reveal the cartel however they largely fail to explain variation in legal actions along cultural dimensions