institutional pressures and ethical reckoning by business corporations prior studies have provided explanations for the presence use and dissemination of codes of corporate ethics or codes of corporate conduct of business corporations most such explanations are functional in nature and are descriptive as they are derived from the codes and their associated documents we search for more underlying explanations using two complementary theories first social contract theories explaining the exogenous and endogenous reasons of organizational behavior and then institutional theory explaining why organizations take similar measures in response to institutional pressures based on our explanations we contend that the codes and their use and dissemination are arising from underlying social and institutional pressures for firms to continuously validate their existence in the face of increasing changes and recurrent uncertainties

lumpy consumer durables market power and endogenous business cycles in this paper we show that lumpy consumer durables and market power can generate endogenous cycles consistent with the facts past sales determine the current market size of durable goods larger past sales ceteris paribus thus naturally result in a smaller current market size and income in this manner the seeds of a downturn are sown in an upturn jel classification e32 e13 biens de consommation durables en gros morceaux pouvoir de marche et cycles d affaires endogenes ce memoire montre que des biens de consommation durables en gros morceaux et du pouvoir de marche peuvent engendrer des cycles endogenes qui se calquent sur les chroniques observees les ventes passees determinent la taille du marche present pour les biens durables de plus grandes ventes dans le passe toutes choses etant egales par ailleurs resultent naturellement en un marche present plus petit et des revenus moindres de cette maniere le germe du declin est deja contenu dans l expansion

cross border mergers and acquisitions by oil and gas multinational enterprises geography based view of energy strategy abstract given that global crude oil prices are significantly dropped and business consolidation transactions are markedly increased in recent years this paper to date is the first to examine the cross border merger and acquisition strategy of oil and gas multinational enterprises using a fine tuned sample of 150 large scale oil acquisition transactions us 535 billion announced by oil and gas enterprises from over 50 countries during the period 2005 2015 we endeavor to answer four fundamental research questions who is where what for who is there why who is where and there and who is a serial acquirer to do so we propose an integrated framework of geography based view of energy strategy by leveraging theoretical insights from the energy economic geography international business strategy and corporate finance literature on top of that we discuss the dynamics of the oil and gas industry and show the remarkable trends in the crude oil prices over the past three decades 1990 2016 our geographic analyses highlight that state owned oil companies from asia and a less extent europe have rapidly expanded into resource rich countries such as canada and the us to secure oil reserves as well as acquire industry specific strategic assets this research contributes to the geography based view of energy strategy and discusses policy and managerial implications to sustain the world oil and gas industry

codes of ethics as contractarian constraints on the abuse of authority within hierarchies a perspective from the theory of the firm abuse of authority is an unsolved problem in the new institutional theory of the firm this paper attempts a double attack to this problem by developing a contractarian view of corporate codes of ethics from the ex ante standpoint the paper elaborates on the idea of a social contract based on co operative bargaining games and deduces from it the fair efficient constitution of the firm endorsed by means of a well devised corporate code of ethics from the ex post standpoint codes of ethics are proved to be self enforcing norms by showing how they put at work the mechanism of a repeated game of reputation within hierarchical transactions firms characterised by incomplete contracts and unforeseen events to accomplish this task a theory of rationality in the face of unforeseen contingencies is sketched by working out the idea that the domain of a principle of ethics defines a fuzzy event i e an event to which also the ex ante unforeseen unimaginable states of the world belong to a certain degree

the stability of american markets much of the evidence of coordination between corporations and their markets comes from cross sectional conducted within portions of the american economy during the past two decades we know especially for manufacturing during the late 1960s that certain structural qualities of markets predict profits and the organization of large firms but this evidence is open to an uncomfortable empirical question to what extent did the social structural qualities determining resource dependence in american markets change during the 1960s and 1970s so as to limit the generalizability of cross sectional evidence the analysis here shows that markets were dramatically stable in he social structure of production relations known to predict the structure of large firms relying principally on department of commerce data the article traces the american economy through the 1960s and 1970s in terms of 77 broadly defined markets describing the stability of market boundaries and patterns of transactions with suppliers and c

explaining ijv survival in a transitional economy through social exchange and knowledge based perspectives in this study we combine social exchange and knowledge based perspectives to develop a general path model of ijv survival we further refine our expectations by considering the transitional economic context of our study and the somewhat unique managerial values resulting from the legacy of marxist ideology results from structural equation modeling suggest that an imbalance in the management control structure between the parents leads to parental conflict and an increased likelihood of ijv failure an imbalance in the ownership control structure however had no influence on conflict or survival in general support from the foreign parent is positively related to ijv learning and ijv survival however higher levels of technical support provided by the foreign parent to the ijv reduced the level of parental conflict whereas management support had no effect on conflict our results suggest some dilemmas for firms pursuing ijvs in transitional economies although the foreign parent often contributes critical resources to the ijv providing it with bargaining power and a high level of influence an imbalance in management control between the partners may ultimately be detrimental to ijv survival copyright 2000 john wiley sons ltd

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

supply chain perspective on competitive strategies and green supply chain management strategies due to strategic motivations and pressures from various stakeholders firms are adopting green supply chain management gscm practices to extend environmental sustainability objectives to suppliers although it seems that an increasing number of firms is seeing environmental sustainability as a source of competitive advantage there is a large gap of research focusing explicitly on the connection between competitive strategy and gscm it is also necessary to examine gscm practices in several operational contexts this article refines the competitive strategy approach and examines external gscm strategies along the tiers of supply chain from the perspective of logistics users and providers using a dataset of 128 manufacturing 110 trading and 144 logistics firms operating in finland the results reveal a connection between competitive strategy and gscm strategy marketing differentiators and firms pursuing hybrid strategies tend to use more advanced gscm strategies to manage the environmental performance of their suppliers for them gscm seems to be a way to differentiate products and services and to minimise the risk of potential losses resulting from poor environmental performance by suppliers the results highlight the need to understand the role of competitive strategy in gscm adoption both in academia and in business

capital market development and firm restructuring during an economic shock we conceptualize capital markets in terms of resource access and governance and argue that more developed capital markets facilitate firm restructuring through more effective provision of capital and governance of transactions we then develop a contingency model that specifies that the effects of capital market development on restructuring vary by 1 types of restructuring 2 the nature of the economic environments and 3 firms access to resources we evaluate a broad range of restructuring actions among independent firms and business group affiliates in singapore and south korea before and during the economic shock of 1998 1999 results support our predictions of the impact of capital market development and of contingencies and highlight the value of incorporating an external capital markets perspective to complement internally focused theoretical explanations for firm restructuring

the economics of organization the transaction cost approach the transaction cost approach to the study of economic organization regards the transaction as the basic unit of analysis and holds that an understanding of transaction cost economizing is central to the study of organizations applications of this approach require that transactions be dimensionalized and that alternative governance structures be described economizing is accomplished by assigning transactions to governance structures in a discriminating way the approach applies both to the determination of efficient boundaries as between firms and markets and to the organization of internal transactions including the design of employment relations the approach is compared and contrasted with selected parts of the organization theory literature

equity joint ventures and theory of the multinational enterprise this paper extends the internalization approach to the theory of the multinational enterprise mne to include an expanded role for equity joint ventures using the transaction cost paradigm of williamson this paper explains why joint ventures may sometimes be preferred over wholly owned subsidiaries also presented is empirical work on joint venture performance in developing countries which demonstrates that under certain conditions joint ventures can be the optimal mode of foreign direct investment 1987 jibs journal of international business studies 1987 18 1 16

translating theoretical logics across borders organizational characteristics structural mechanisms and contextual factors in international alliances in this essay i critically review the 2006 jibs decade award article by lyles and salk knowledge acquisition from foreign parents in international joint ventures ijvs an empirical examination in the hungarian context this article develops theoretical arguments and empirically tests a two stage research question 1 what are the organizational characteristics and structural mechanisms between ijv parents that influence knowledge acquisition from the foreign parent and 2 what is the relationship between knowledge acquisition and performance in hungarian ijvs the most important contribution is the focus on both the antecedents and the consequences of knowledge acquisition in ijvs i also discuss subsequent research that draws heavily on the conceptual or empirical findings of the 2006 jibs decade award paper i conclude by suggesting areas of future research in the field of knowledge transfer organizational learning and international strategic alliances

international joint venture partner selection the role of the host country legal environment this study attempts to enhance our understanding of how a host country s legal environment influences international joint venture ijv partner selection criteria empirical results based on survey data collected on 169 ijvs revealed that host country rule of law perceptions negatively influence appropriation and coordination cost concerns which positively influence partner related criteria furthermore these concerns mediate the relationship between perceptions of host country rule of law and partner related criteria

should buyers or sellers organize trade in a frictional market to answer the question in the title this article characterizes the socially efficient organization of the market with search frictions the efficient organization depends on the relative elasticity in the supply between the two sides of the market the costs of participating in the market and organizing trade and the a symmetry in matching we also show that the social optimum can be implemented by a realistic market equilibrium where the organizers set up trading sites to direct the other side s search the results provide a unified explanation for why trade has often been organized by sellers in the goods market by buyers firms in the labor market and by both sides in the asset market the analysis also sheds light on how the efficient market organization can change with innovations such as e commerce and just in time production

does inequality lead to a financial crisis abstract the recent global crisis has sparked interest in the relationship between income inequality credit booms and financial crises rajan 2010 and kumhof and ranciere 2011 propose that rising inequality led to a credit boom and eventually to a financial crisis in the us in the first decade of the 21st century as it did in the 1920s data from 14 advanced countries between 1920 and 2000 suggest these are not general relationships credit booms heighten the probability of a banking crisis but we find no evidence that a rise in top income shares leads to credit booms instead low interest rates and economic expansions are the only two robust determinants of credit booms in our data set anecdotal evidence from us experience in the 1920s and in the years up to 2007 and from other countries does not support the inequality credit crisis nexus rather it points back to a familiar boom bust pattern of declines in interest rates strong growth rising credit asset price booms and crises

social contract i harsanyi and rawls this paper analyzes the bargaining problem faced by two individuals in the rawlsian original position along strictly rawlsian lines the resulting model closely resembles that used by j harsanyi in defending utilitarianism three difficulties with harsanyi s version of the model are identified these concern the underlying symmetry assumption the origin of the necessary interpersonal comparison of utility and the reasons why individuals should be regarded as committed to the social contract negotiated in the original position the paper seeks to resolve the first two difficulties by supposing that the extended sympathy preferences required in harsanyi s model are chosen strategically by evolutionary forces

the textile and clothing industries under the fifth kondratieff wave some insights from the case of hong kong abstract this paper proposes that the world s textile and clothing industries have become increasing vertically disintegrated with a few flexible production regions the cream portion engaging in creative innovative dynamic and high value added activities and an expanding number and spatial extent of regions the cake portion taking part in low value added activities in between is an artificial layer protected by the international regulatory framework this layer has characteristics of both the cream and cake layers on the one hand the labor force in this layer suffers from low job mobility and low paid blue collar work of the cake portion and is dominated by female semi skilled workers on the other hand industrialists and governments in this layer enjoy the profits and high export values of the cream portion under the fifth kondratieff wave the textile and clothing industries have become increasingly coordinated and controlled by a thinner cream layer over time regions in the cake portion will find it increasingly difficult to transform themselves into cream because of deep seated structural and geographic differences

the road taken origins and evolution of employment systems in emerging companies excerpt drawing on a unique archive of qualitative and quantitative data describing 100 bay area high technology firms within their first decade this paper examines the models of employment relations espoused by company founders and bow those models shaped the evolution of human resource management within their organizations information gleaned from interviews suggests that founders and others involved in designing and launching these companies had blueprints for the employment relation that varied along three key dimensions the primary basis of employee attachment and motivation the primary means for controlling and coordinating work and the primary criterion emphasized in selection based on combinations of these three dimensions firms in our sample cluster fall into one of four distinct types which we label the star factory engineering and commitment models multivariate statistical analyses document how the founder s employment model shaped the subsequent adoption and timing of various human resource policies and documents over these companies early histories as well as the speed with which the first full time human resource manager was appointed the findings are strongly suggestive of complementarities and a tendency toward internal consistency among dimensions of human resource management and of strong path dependence in the evolution of employment systems in organizations some implications of these findings for transactions cost perspectives on the employment relationship are discussed

control and performance of international joint ventures control is a critical concept for successful management and performance of international joint ventures ijvs this paper reviews and synthesizes prior studies addressing the conceptualization and operationalization of control within ijvs as well as the ijv control performance relationship the paper also presents a new conceptualization of ijv control as well as a conceptual frame work for studying control of ijvs

the influence of parent control structure on parent conflict in vietnamese international joint ventures an organizational justice based contingency approach there has been significant interest in understanding how the distribution of parental control over international joint ventures ijv influences ijv outcomes e g parent conflict survival performance yet the accumulation of research on the relationship between control structure and ijv outcomes has been somewhat inconclusive and even contradictory we contribute to this research stream by developing an organizational justice based contingency model relating parental control structure to parent conflict we suggest that the level of conflict between ijv parents will depend on the consistencies between the control structure and parents contribution of proprietary resources and between control structure and the parents abilities to effectively monitor operations our analysis of vietnamese joint ventures provides some support for our model and suggests that the relationship between parent control structure and ijv outcomes is perhaps more complex than previously thought

income uncertainty and the onset of the great depression income uncertainty and the onset of the great depression income uncertainty contributes substantially to explaining the fall in consumption that marks the onset of the great depression consistent estimates of the variance of income measure income uncertainty from 1921 30 and are produced using a linear moment model this series provides a statistical link between the large erratic swings in income uncertainty after september 1929 and the great crash in the stock market comparison of the behavior of income uncertainty in the 1920s to the pre world war i and post world war ii eras suggests that the experience after the great crash was historically unique i introduction the great depression of 1929 41 can be broken down into several phases i the initial recessionary phase from october 1929 to october 1930 ii the first two waves of bank failures between november 1930 and december 1931 iii the incipient recovery of late 1932 and the impending collapse in march 1933 iv the recovery of the financial system and the economy from the cyclical trough and v the recession of 1937 38 among others many researchers have presented well articulated theories and extensive empirical analyses for each phase of the depression friedman and schwartz 1963 hamilton 1987 gordon and wilcox 1981 and burbidge and harrison 1985 have examined the role of money and monetary policy during the depression brown 1956 examined the stance of fiscal policy during this period bernanke 1983b provided an explanation of the role of the financial crisis in the propagation of the great depression most of this research has focused on the events that turned a recession in 1929 30 that was not historically unprecedented that is it is comparable to the recession of 1920 22 into the deepest slide in the history of the american business cycle explanations of the depression s initial phase from late 1929 to october 1930 however are much less satisfactory meltzer 1976 and mishkin 1978 examined this period and concluded that the fall in output can be attributed largely to the stance of monetary policy and the stock market s impact on the household balance sheet respectively the remainder of the existing literature centers around a debate between temin 1976 1981 and schwartz 1981 that has produced no consensus about the role of monetary and nonmonetary factors in providing the impetus for the great depression hence the period sometimes called the mysterious first year 1 is the least understood of all the phases of the depression we think that recent advances in our understanding of the influence of income uncertainty on consumption expenditures may help explain the onset of the great depression the theoretical work of leland 1968 sandmo 1970 dreze and modigliani 1972 and others has shown that an increase in uncertainty about future income measured as the variance of income results in a reduction in current consumption expenditures under standard assumptions regarding risk preferences recently flacco and parker 1990 included an estimate of the standard deviation of income in a conventional specification of the consumption function from blinder and deaton 1985 and found that this measure of income uncertainty is indeed negatively related to consumption this result estimated using post world war ii data holds up to a number of statistical significance and specification tests romer 1990 examined the relationship between consumer expenditure proxied by various disaggregate spending series and stock market volatility during the first year and a half of the great depression expanding on bernanke s 1983a analysis of investment under uncertainty romer estimates a model of consumer spending on durable goods in the face of temporary uncertainty empirical evidence reveals that inclusion of the volatility of the stock market as a proxy for income uncertainty dramatically reduces forecast errors for consumption of durable goods in 1929 and 1930

inequality leverage and crises theory and evidence revisited rajan points to rising income inequality as a root cause of the recent financial crisis through high household leverage the rajan hypothesis has ignited debate over the relationship between inequality leverage and crises kumhof ranciere and winant prove the validity of this hypothesis with a theoretical formulation but empirical studies provide mixed evidence using different samples and estimators to clarify this controversy we re examine the issue by using the same data as in the literature and provide additional evidence after taking into account the role of asset bubbles and policy interventions our regression is based on a new tractable theoretical model that is supported by key stylised facts and all our analyses confirm the existence of the inequality leverage crisis nexus

inequality leverage and crises the paper studies how high leverage and crises can arise as a result of changes in the income distribution empirically the periods 1920 1929 and 1983 2007 both exhibited a large increase in the income share of the rich a large increase in leverage for the remainder and an eventual financial and real crisis the paper presents a theoretical model where these features arise endogenously as a result of a shift in bargaining powers over incomes a financial crisis can reduce leverage if it is very large and not accompanied by a real contraction but restoration of the lower income group s bargaining power is more effective

public versus private sector procurement ethics and strategy what each sector can learn from the other the government purchasing market constitutes the largest business sector in the world while marketers would benefit from a deep understanding of both sectors how the two sectors differ in terms of ethics and strategy largely remains unknown the purpose of this research therefore is to explore differences between the for profit and not for profit sectors on two critical aspects of business to business procurement ethics and strategy using survey data from a sample of 328 procurement professionals in the for profit and not for profit sectors key differences are explored findings suggest that buyers in the for profit sector are more likely to behave opportunistically conversely the buyers leaders in the not for profit sector behave more opportunistically and are more willing to turn a blind eye to their subordinate buyers opportunistic behaviors in addition key differences in procurement strategy are unveiled suggesting that not for profit procurement practices have some room for improvement based on the findings theoretical and managerial implications are drawn and a future research agenda is proposed

gratitude nostalgia and what now knowledge acquisition and learning a decade later we look at the development of absorptive capacity organizational learning and ijv research literatures since 1996 using our 1996 jibs paper as our centering point taking stock of the timing and patterns of citations to this paper opened up a unique window across time venues and topics this permitted us to more clearly position the paper vis a vis the contemporary corpus of the different literatures that provided the original context and impetus for us in the early 1990s the paper has been embraced and carried forward by the burgeoning community of international business ib scholars on transitional economies and on ijvs although the hungarian setting circa 1989 early 1990s was one we tended to view as a context to address and test theory based issues and assumptions from a broader management literature most indications of outward diffusion of our ideas beyond the ib community have been recent indeed over half the citations have occurred after 2003 we project our take on the current landscape toward the future providing suggestions about research opportunities

does being r d intensive still discourage outsourcing evidence from dutch manufacturing being r d intensive has traditionally been seen as an impediment to outsourcing this study confirms that empirically this was the case for a set of manufacturing industries in the netherlands in the early 1990s but also shows that r d intensity became a positive predictor for changes in outsourcing levels over the 1990s suggesting firms in r d intensive industries have increasingly started to rely on partnership relations with outside suppliers this confirms the need to move the analysis from scale opportunism and appropriation concerns to a relational perspective when studying outsourcing in r d intensive industries

global and local subcontracting space ethnicity and the organization of apparel production abstract labor intensive apparel production has shifted to low wage asian nations yet continues to flourish in the united states and other high wage areas this paper explains this apparent contradiction by concluding that in addition to labor costs firm size ethnicity market strategy and trade regulations powerfully affect the location of apparel production large firms are more able to disperse production globally than small firms us based firms owned by ethnic asians are more likely to produce in asian factories than firms of other ethnicities and firms producing for rapidly changing fashion markets are less likely to produce offshore than firms producing less fashion intensive products finally trade restrictions powerfully affect the location of production albeit in ways different than intended by policy makers

the missing transmission mechanism in the monetary explanation of the great depression for many friedman and schwartz s monetary history of the united states 1963 is synonymous with the notion that monetary contraction and errors by the federal reserve caused the great depression but this quick summary both sells the book short and oversells its findings about the 1930s it sells the book short because the contributions of the monetary history extend far beyond the depression friedman and schwartz use an extensive reading of the historical record over nearly a century to identify times when the money supply moved for reasons unrelated to current or prospective macroeconomic conditions that output moved in the same direction as money following these crucial experiments remains some of the strongest evidence we have that monetary shocks have real effects but saying the book proves that monetary shocks caused the depression is a stretch of the monetary shocks friedman and schwartz identify those early in the depression are arguably the most tenuous and crucially the book provides scant discussion of how monetary shocks affect the economy this weakness is most pressing in the analysis of the depression because nominal interest rates fell precipitously early in the depression and remained low throughout it is hard to appeal to the standard transmission mechanism operating through the nominal cost of credit this paper seeks to fill in the missing transmission mechanism in friedman and schwartz s explanation of the depression in section i we describe previous work showing that falling

offshoring and the global distribution of work implications for task interdependence theory and practice a recent offshoring research network orn global survey of offshoring shows that since 2004 management concerns about operational issues on achieving the benefits of offshoring have increased significantly in this paper we examine inter task interdependence a key operational determinant of inter site interaction and communications in offshoring we analyze existing theories of interdependence to examine the extent to which they provide guidance for understanding the interaction and communication requirements between work segments that are offshored and distributed across the globe using a series of mini cases on globally distributed work gdw we show how the traditional typology of interdependence developed in the 1960s and 1970s is no longer adequate for understanding and managing task interdependencies in gdw we propose three concepts to address this problem integration interdependence hand offs and information stickiness we then show how our revised typology of interdependence enables a better understanding of the interactions and communication requirements between sites using this revised theory we propose guidelines for work design and examine their implications for practical offshoring and work distribution decisions implications for theory and practice for mnes engaged in offshore relationships are discussed

transaction cost economics in global sourcing assessing regional differences and implications for performance this paper addresses two gaps in current research on transaction cost economics tce first the fundamental claim suggesting that firms that align their governance structure to transactions according to tce perform better than those that do not and second the application of tce to global sourcing transactions a research model is presented and evaluated using a set of 150 relationships between swiss buyers and foreign suppliers the findings suggest that there are significant differences in how transactions and governance structures are aligned with varying performance and with suppliers from western europe as compared to suppliers from other regions

consumption commitments and habit formation we analyze the implications of household level adjustment costs for the dynamics of aggregate consumption we show that an economy in which agents have consumption commitments is approximately equivalent to a habit formation model in which the habit stock is a weighted average of past consumption if idiosyncratic risk is large relative to aggregate risk consumption commitments can thus explain the empirical regularity that consumption is excessively sensitive and excessively smooth findings that are typically attributed to habit formation unlike habit formation and other theories but consistent with empirical evidence the consumption commitments model also predicts that excess sensitivity and smoothness vanish for large shocks these results suggest that behavior previously attributed to habit formation may be better explained by adjustment costs we develop additional testable predictions to further distinguish the commitment and habit models and show that the two models have different welfare implications

measuring performance of international joint ventures international joint ventures ijvs are increasing in frequency and strategic importance however efforts to identify variables associated with ijv performance have been constrained by disagreements regarding the comparability and reliability of alternative performance measures and methods this study tests several hypotheses regarding the reliability and comparability of a range of objective and subjective measures of ijv performance as well as evaluating the relative utility of different data collection approaches

stakeholder s preference and rational compliance a comment on sacconi s csr as a model for extended corporate governance ii compliance reputation and reciprocity lorenzo sacconi s recent re statement of his social contract account of business ethics is a major contribution to our understanding of the normative nature of csr as the expression of a fair multi party agreement supported by the economic rationality of each participant however at one crucial point in his theory sacconi introduces the concept of stakeholders conformist preferences their disposition to punish the firm if it defects from the agreement refusing to abide by its own explicit csr policies and norms we take issue with him over this concept we show that the assumption of conformist preferences is a moral premise and it arguably weakens the normativity of the theory as a whole as an alternative we propose an evolutionary game theoretic approach we draw upon recent applications of evolutionary game theory to moral philosophy skyrms danielson and we use a computer simulation of the trust game according to this approach the failure of the logic of reputation which is the problem conformist preferences were introduced to solve is overcome through the dynamics of interaction

a memoir and reflection knowledge and an evolutionary theory of the multinational firm 10 years later the production of the 1993 article awarded the jibs decade award was written during a time when ideas regarding knowledge and the international expansion of the firm confronted a hostile audience the sources of these ideas were directly related in winter s and roger s prior work but also to a broader literature on category errors and technology transfer the theory of the firm as a social community is a distinctly sociological theory and though sharing many key ideas with the resource based view that developed at the same time is deeply opposed to engineering conceptions of firms as legomodular pieces that can be easily shifted bought and sold we describe our individual biographies and the subsequent intellectual development of the

developed country mnes investing in developing economies progress and prospect this study reviews research from 1970 through 2016 on developed country multinational enterprises dmnes entering and competing in developing economies to identify the current state of knowledge of this research and push it further we review the literature using bibliometric and qualitative content analyses covering leading journals and books we articulate frontier issues that are understudied yet critical to both theorization and practice of dmnes in developing economies we discuss the findings and conclusions from prior research along five key areas 1 entering developing economies 2 organizing local activities 3 managing alliances and joint ventures 4 competing in dynamic environments and 5 dealing with institutions governments and society we offer prospective insights into future agenda that have important implications for mne strategies and decisions and propose frontier directions that encompass strategic localization reverse transfer and adaptation co evolution with local business ecosystems reorganizing and restructuring and strategic responses to institutional and market complexity

shareholder theory and kant s duty of beneficence this article draws on the moral philosophy of immanuel kant to explore whether a corporate duty of beneficence to non shareholders is consistent with the orthodox shareholder theory of the firm it examines the ethical framework of milton friedman s argument and asks whether it necessarily rules out the well being of non shareholders as a corporate objective the article examines kant s distinction between duties of right and duties of virtue the latter including the duty of beneficence and investigates their consistency with the shareholder theory the article concludes that it is possible within the ethical framework of shareholder theory for managers to pursue directly the happiness of non shareholders furthermore shareholders have a duty to hold management to account for the moral consequences of the firm s activities on non shareholding stakeholders

offshoring innovation to emerging markets organizational control and informal institutional distance the literature on innovation offshoring has focused on the dichotomous choice between two distinct investment strategies captive offshoring and outsourced offshoring we use the concept of organizational control to investigate how differences in the informal institutions that prevail in the home and host countries influence multinational enterprise mne strategy or the organizational control decision with respect to subsidiaries established to offshore innovation while the relationship between formal institutions and mne strategy has been the subject of considerable academic scrutiny less is known about the role of informal institutions we propose that the type of uncertainty precipitated by informal institutions is critical to understanding the strategic behavior of foreign investing mnes we hypothesize that an mne s organizational control over a subsidiary will be contingent upon the type of informal institutional uncertainty encountered by the subsidiary more specifically we disaggregate the informal institutions construct and develop three new more explicit latent constructs behaviorally oriented informal institutions boii technology oriented informal institutions toii and demand oriented informal institutions doii our theory posits that while an increase in boii distance will precipitate a preference for greater organizational control heightened toii and doii distances will induce the opposite outcome a preference for lower levels of organizational control

distributed energy infrastructure paradigm community microgrids in a new institutional economics context abstract this paper provides a theoretical framework based on new institutional economics nie concepts to guide the development of community microgrids given limited application thus far of such energy systems this paper also draws on empirical studies and experiences from the planning and development of other public community infrastructure and utility services in the development of this framework it links an efficient ownership and governance structure with transactional characteristics such as asset idiosyncrasy frequency and uncertainty defined in section 3 1 the key role of the customers and the microgrid service provider and more specifically their bilateral monopoly relationship and its effects on the choice of institutional structure is highlighted the paper examines the optimum conditions for public private or hybrid financial ownership and for unified or network governance through long term contracting this allows ex ante investment uncertainty and ex post appropriation risks to be efficiently managed the analysis suggests that long term contract completeness future demand for electricity and level of uncertainty are the determining factors in the selection of institutional structure this has significant real world implications for the communities seeking to achieve electricity self sufficiency and environmental benefits through community microgrids service providers and other private or public actors

effect sizes and the interpretation of research results in international business journal editors and academy presidents are increasingly calling on researchers to evaluate the substantive as opposed to the statistical significance of their results to measure the extent to which these calls have been heeded i aggregated the meta analytically derived effect size estimates obtained from 965 individual samples i then surveyed 204 studies published in the journal of international business studies i found that the average effect size in international business research is small and that most published studies lack the statistical power to detect such effects reliably i also found that many authors confuse statistical with substantive significance when interpreting their research results these practices have likely led to unacceptably high type ii error rates and invalid inferences regarding real world effects by emphasizing p values over their effect size estimates researchers are under selling their results and settling for contributions that are less than what they really have to offer in view of this i offer four recommendations for improving research and reporting practices

mergers acquisitions and innovation performance in the telecommunications equipment industry the worldwide telecommunications equipment industry has experienced an enormous number of mergers and acquisitions m a this article examines the innovation determinants of m a activity a

what or who started the great depression abstract herbert hoover i develop a theory of labor market failure for the depression based on hoover s industrial labor program that provided industry with protection from unions in return for keeping nominal wages fixed i find that the theory accounts for much of the depth of the depression and for the asymmetry of the depression across sectors the theory also can reconcile why deflation low nominal spending apparently had such large real effects during the 1930s but not during other periods of significant deflation

fiscal policy and economic recovery the case of the 1936 veterans bonus conventional wisdom has it that in the 1930s scal policy did not work because it was not tried this paper shows that scal policy though inadvertent was tried in 1936 and a variety of evidence suggests that it worked a decit nanced veterans bonus provided 3 2 million world war i veterans with cash and bond payments totaling 2 percent of gdp the typical veteran received a payment equal to annual per capita personal income this paper uses time series and cross sectional data to identify the eects of the bonus i exploit four sources of quantitative evidence a detailed household consumption survey cross state and cross city regressions aggregate time series and a previously unused american legion survey of veterans the evidence paints a consistent picture in which veterans quickly spent the majority of their bonus spending was concentrated on cars and housing in particular narrative accounts support these quantitative results a simple calculation suggests that the bonus added 2 5 to 3 percentage points to 1936 gdp growth

a social contract account for csr as an extended model of corporate governance ii compliance reputation and reciprocity this essay seeks to give a contractarian foundation to the concept of corporate social responsibility csr meant as an extended model of corporate governance of the firm whereas justificatory issues have been discussed in a related paper sacconi l 2006b this journal in this essay i focus on the implementation of and compliance with this normative model the theory of reputation games with reference to the basic game of trust is introduced in order to make sense of self regulation as a way to implement the social contract on the multi fiduciary model of corporate governance this affords understanding of why self regulation meant as mere recourse to a long run strategy in a repeated trust game fails two basic problems for the functioning of the reputation mechanism are examined the cognitive fragility problem and the motivational problem as regards the cognitive fragilities of reputation which result from the impact of unforeseen contingencies and from bounded rationality the paper develops the logic and the structure that self regulatory norms must satisfy if they are to serve as gap filling tools with which to remedy cognitive limitations in the reputation mechanism the motivation problem then arises from the possibility of sophisticated abuse by the firm developed in this case is an entirely new application of the theory of conformism and reciprocity based preferences the result of which is that the stakeholders refuse to acquiesce to sophisticated abuse on the part of the firm

did inequality cause the u s financial crisis in his widely discussed book fault lines 2010 raghuram rajan argues that many low and middle income consumers have reduced their saving and increased debt since income inequality started to soar in the united states in the early 1980s this has temporarily kept private consumption and employment high but it also contributed to the creation of a credit bubble this surge in household indebtedness turned out to be unsustainable in the financial crisis starting in 2007 although rajan and others emphasize the role of government in promoting credit to those households with declining relative permanent incomes other strands of the literature have focused more explicitly on the implications of rising inequality for aggregate demand and households demand for credit these differences in emphasis may explain why the literature on the inequality crisis nexus appears somewhat disparate even though the various strands are far from mutually exclusive but rather complement each other we therefore place the rajan hypothesis in the context of competing theories of consumption and survey the empirical literature on the effects of inequality on household behaviour we conclude that the empirical evidence calls for a renaissance of the relative income hypothesis of consumption

contextualising organisational learning lyles and salk in the context of their research hungary has been the focus of lyles and salk 1996 because their research interest organisational learning was of particular concern in joint ventures in that country at that time this allowed them to investigate in greater depth what drives knowledge acquisition and how it influences the performance of joint ventures this commentary reviews the contribution by lyles and salk as reflected in the subsequent literature the setting of the study in hungary 1993 raises the challenging question of how this particular context may have influenced the research outcomes i argue that the national context of radical environmental change and the organisational context of joint ventures incorporating privatised state firms crucially influence processes of organisational learning the importance of context suggests modifying future research agendas in international business and in organisational learning in particular i thus suggest that future research should incorporate context more explicitly to establish boundary conditions for theory and to develop managerially relevant insights

historical method in marketing research with new evidence on long term market share stability abstract several researchers have advocated historical or longitudinal approaches to study marketing phenomena although some have applied this approach more often it has been overlooked or denigrated the author argues that historical method is capable of producing scientific knowledge that is currently useful rather than simply a remembrance of the past the author presents a complete description of the historical method so researchers can use this article as a guide when applying this method the value of the method is illustrated by examining the prevailing finding in the marketing literature that market shares are stable over time although this finding is considered an empirical generalization an analysis of more than 650 brands in 100 categories raises doubts about the longevity of market share stability

is environmental governance substantive or symbolic an empirical investigation the emergence of environmental governance practices raises a fundamental question as to whether they are substantive or symbolic toward that end we analyze the relationship between a firm s environmental governance and its environmental management as reflected in its ultimate outcome environmental performance we posit that substantive practices would bring changes in organizations most notably in terms of improved environmental performance whereas symbolic practices would portray organizations as environmentally committed without making meaningful changes to their operations focusing on a sample of environmentally sensitive firms results are consistent with environmental governance mechanisms being predominantly part of a symbolic approach to manage stakeholder perceptions on environmental management having little substantial impact on organizations statistical analyses show mostly that there is no relation between environmental governance mechanisms and environmental performance measured in terms of regulatory compliance pollution prevention and environmental capital expenditures however there is some indication that environmental incentives are associated with pollution prevention interviews with corporate directors shed further light on these results by underlining that environmental governance mechanisms are employed at the board level to protect the organization from reputational and or regulatory harm but are not necessarily intended to proactively improve environmental performance

costly information and the evolution of self organization in a small complex economy abstract the core idea of evolution is that order in living systems emerges from a simple process of variation and selection in biological systems we usually understand the source of variation as best described by the mechanisms of genetics if human social systems are evolutionary systems however it would seem the variation that most explains the sources of change in these systems occurs not from a genetic mechanism but from individual learning we use an evolutionary computational methodology to explore the way individual learning and adaptation lead to the evolution of persistent self organized social and economic activity the basic idea behind these explorations is that the character and extent of self organizing social and economic activity depends upon the way the environment frames the costs of individual learning and adaptation we consider three different kinds of costs affecting learning and adaptation the costs of autonomous searching of communicating and of deciding individuals respond to these costs by carefully i e economically choosing to learn about and interact with familiar agents in familiar arenas in which they have relatively secure expectations about the outcome of their actions emerging from these choices are persistent relationships among agents that lead to social and economic structure and to the imperfect coordination of aggregate production the character and the extent of each are a function of the way the costs of information change with changing natural and human system conditions we use a learning classifier system lcs to model learning the logic of an lcs closely mimics the mechanisms of darwinian evolution but is applied to the evolution of an agent s decision rules we describe the environmental context necessary for an lcs to produce economizing behavior and apply the method to a multi agent simulation of the maine lobster fishery which we treat as a metaphor for competition based on the search for useful knowledge the structure and method of the model is similar to a conventional agent based model except we use lcs to evolve decision rules for each agent rather than supplying those rules ourselves this allows agents to change their behavior i e to learn and adapt as their environment changes modeling learning and adaptation as the source of behavioral variation makes it possible to use evolutionary theory to address important questions of social and economic emergence not possible with current methods

control and performance in international joint ventures the authors examine the meaning of control in international joint ventures ijvs and the relationships of potential means of control in such organizations to the performance satisfaction of the foreign partner they propose a conceptual model that provides both a traditional ownership focused internalization perspective on those issues and an integrated approach combining a broader transaction cost interpretation of control with a resource input based bargaining power model a set of simultaneous structural equations with endogenous explanatory variables provides multiple possible paths from various resource and power inputs through different means of control to perceived performance satisfaction in such a model intermediate variables act both as dependent and independent variables thus the complex theoretical interactions of the variables are modeled more comprehensively and realistically than in single equation models to test the model and compare the theoretical relationships the authors used dat

justice and corporate governance new insights from rawlsian social contract and sen s capabilities approach by considering what we identify as a problem inherent in the nature of the firm the risk of abuse of authority we propound the conception of a social contract theory of the firm which is truly rawlsian in its inspiration hence we link the social contract theory of the firm justice at firm s level with the general theory of justice justice at society s level through this path we enter the debate about whether firms can be part of rawlsian theory of justice showing that corporate governance principles enter the basic structure finally we concur with sen s aim to broaden the realm of social justice beyond what he calls the transcendental institutional perfectionism of rawls theory we maintain the contractarian approach to justice but introduce sen s capability concept as an element of the constitutional and post constitutional contract model of institutions with special reference to corporate governance accordingly rights over primary goods and capabilities are constitutionally granted by the basic institutions of society but many capabilities have to be turned into the functionings of many stakeholders through the operation of firms understood as post constitutional institutional domains the constitutional contract on the distribution of primary goods and capabilities should then shape the principles of corporate governance so that at post constitutional level anyone may achieve her his functionings in the corporate domain by exercising such capabilities in the absence of such a condition post constitutional contracts would distort the process that descends from constitutional rights and capabilities toward social outcomes

a note on america s 1920 21 depression as an argument for austerity this note argues that recent interest in the 1920 21 depression in the usa as a historical precedent for austerity is inappropriate most of the austerity measures preceded the depression which had already begun receding by the time warren harding implemented the relatively modest spending and tax cuts that are cited by modern proponents of austerity the evidence suggests that the 1920 21 depression was the result of a variety of supply constraints rather than a deficiency of effective demand and is therefore a poor test of the efficacy of keynesian fiscal policy

equity joint ventures and the theory of the multinational enterprise this paper extends the internalization approach to the theory of the multinational enterprise mne to include an expanded role for equity joint ventures using the transaction cost paradigm of williamson this paper explains why joint ventures may sometimes be preferred over wholly owned subsidiaries also presented is empirical work on joint venture performance in developing countries which demonstrates that under certain conditions joint ventures can be the optimal mode of foreign direct investment

credit card debt and consumption evidence from household level data this research investigates the relationship between credit card debt and consumption using household level data this is a departure from the previous studies which have used aggregate measures of consumption and general debt such as the debt service ratio or total revolving credit we use a detailed monthly survey of credit card use to impute credit card debt to respondents from the consumer expenditure survey sample in contrast to some earlier studies using aggregate data we find a negative relationship between debt and consumption growth our work shows that a 1000 increase in credit card debt results in a decrease in quarterly consumption growth of almost 2 investigations are also made into effects of debt within different age categories and into the impact of expected income growth on the debt consumption relationship

bounded rationality lifecycle consumption and social security abstract this paper explores an overlapping generations model of bounded rationality in which consumers only foresee the future over a subset of their life span we focus in particular on whether the model can in general equilibrium produce a hump shaped lifecycle consumption profile with a peak that matches data for the average u s consumer for a simple four period model we show that an increasing income profile along with exogenously imposed retirement are sufficient to induce a hump with no other mechanism that can account for a hump besides bounded rationality the model best fits the salient features of consumption data with a planning horizon of 20 years which is well supported by the behavioral evidence found in surveys on retirement planning finally we show that the age of the consumption peak is robust to the introduction of social security mortality risk and another species of bounded rationality quasihyperbolic discounting moreover social security can be welfare improving with a short planning horizon we can calibrate the model to jointly explain the timing of the consumption hump and the optimality of the current social security system with quasihyperbolic discounting instead we can calibrate the model so the current social security system is optimal but we cannot also account for the timing of the consumption hump if we add quasihyperbolic discounting in addition to a short planning horizon the present bias has a negligible effect in equilibrium

small business owner managers perceptions of business ethics and csr related concepts recent academic articles point to an increased vagueness and overlap in concepts related to business ethics and corporate responsibility further the perception of these notions can differ in the small business world from the original academic definitions this article focuses on the cognition of small business owner managers given the impact of small business owner managers on their ventures corporate responsibility and ethical issues can take a different route in smes the small business owner manager is able to shape the corporate culture and to enact values other than profit adopting a cognitive perspective we have identified how the small business owner manager makes sense of notions linked to corporate social responsibility csr and business ethics the concept of sensemaking has recently been applied to csr basu and pallazzo 2008 cramer et al 2006 applying a cognitive perspective to small business owners may help in explaining specific phenomena found within small business ownership for this research the repertory grid technique rgt is used a method that has not previously been widely applied in the business and society field

social benefit certification as a game tourism ecocertification programs persist and proliferate despite low market penetration and apparent consumer indifference this has been viewed simply as an early adoption phase a two decade historical analysis of development patterns for 17 programs however suggests that they can be analysed as a multi move political game between corporate and civic advocates where neither can quit without losing the political game framework yields predictions which are testably different from a pure market early adopter framework it also draws a key distinction between consumer benefit and social benefit measures applicable to corporate social responsibility initiatives in many industry sectors

influences of transaction costs in environmental policy abstract there is a growing literature reporting the extent of transaction costs for environmental policies however understanding why transaction costs occur and why they are small or large is also important for efficient policy selection and evaluation following an analysis of the organisational economics literature and reports of the extent of transaction costs for a number of environmental policies three key influences to transaction costs in environmental policies are identified these are the following 1 the characteristics of the transaction for the environmental good 2 the nature of the transactors and 3 the current institutional environment and arrangements these affect transaction costs to the government and all other parties influenced by a policy transaction costs occur due to actions of information collection and policy design policy enactment and establishment implementation and contracting administration and monitoring and enforcement an interrogation of transaction cost influences reveals that 1 the influence varies between parties and is affected by the actions and interactions of and between all parties to a policy 2 how transaction costs are experienced varies across time and 3 who experiences transaction costs depends on the policy itself future policy selection and refinement will benefit from empirical analysis of the causes of transaction costs

coping with the upheavals of globalization in the shea value chain the maintenance and relevance of upstream shea nut supply chain organization in western burkina faso summary market globalization has had only a weak impact on the regional shea nut supply chain in western burkina faso despite the boom in the shea trade and the arrival of leading foreign firms we show that despite the fact that wholesalers have kept the shea chain locked in an oligarchic organization for the last 50 years they still play an important role in the smooth functioning of the chain and in profit sharing down the chain to the rural poor we suggest that development actors should consider shea traders and their role in the coordination of the chain more carefully 2014 the authors published by elsevier ltd this is an open access article under the cc by nc sa license http creativecommons org licenses by nc sa 3 0

large firms in the production of the world s technology an important case of non globalisation us patenting by 686 of the world s largest manufacturing firms shows that their share of the world s production of technology is less than their share of r d activities and varies greatly amongst sectors in most cases the technological activities of these large firms are concentrated in their home country the characteristics of which influence the volume and trends in their technological activities much more strongly then the international component of these activities at the same time these large firms are major elements in the volume and the pattern of sectoral specializations in their home countries technological activities

a social contract account for csr as an extended model of corporate governance i rational bargaining and justification this essay seeks to give a contractarian foundation to the concept of corporate social responsibility csr meant as an extended model of corporate governance of the firm it focuses on justification according to the contractarian point of view leaving compliance and implementation problems to a related article sacconi 2004b forthcoming in the journal of business ethics it begins by providing a definition of csr as an extended model of corporate governance based on the fiduciary duties owed to all the firm s stakeholders then by establishing the basic context of incompleteness of contracts and abuse of authority it analyses how the extended view of corporate governance arises directly from criticism of the contemporary neo institutional economic theory of the firm thereafter an application of the theory of bargaining games is used to deduce the structure of a multi stakeholder firm on the basis of the idea of a constitutional contract which satisfies basic requirements of impartial justification and accordance with intuitions of social justice this is a sequential model of constitutional bargaining whereby a constitution is first chosen and then a post constitutional coalition game is played on the basis of the unique solution given to each step in the bargaining model the quest for a prescriptive theory of governance and strategic management is accomplished so that i am able to define an objective function for the firm consistent with the idea of csr finally a contractarian potential explanation for the emergence of the multi fiduciary firm is provided

a dual parent perspective on control and performance in international joint ventures lessons from a developing economy this study compares the control performance relationship for foreign versus local parents in international joint ventures in china transaction cost analysis is found more applicable to foreign than to chinese parents both overall and specific controls are associated with performance for foreign parents while only specific control is for chinese parents under goal incongruity chinese parent control is associated with foreign parent dissatisfaction with venture performance but not vice versa having a majority stake improves performance from a foreign parent perspective but not from that of the chinese parent

how do people cope with natural disasters evidence from the great hanshin awaji kobe earthquake in 1995 this paper investigates the coping strategies employed by victims of the great hanshin awaji kobe earthquake in 1995 using a unique household data set we show that households that held a large amount of collateralizable assets before the catastrophe and were free from a binding borrowing constraint were able to maintain their consumption levels by borrowing in contrast households subject to a binding borrowing constraint before the disaster were unable to borrow to cope with the losses inflicted by the earthquake on the other hand both types of households relied on private transfers depending on the extent of the damage

learning from failure towards an evolutionary model of collaborative ventures this paper reports on a longitudinal case study of the interaction between two partners to a failed international joint venture we develop a model of the collaboration process in partnership and alliances based on earlier work by ring and van de ven 1994 and by doz 1996 we employ a series of events that occurred in the course of the relationship as the unit of analysis in order to trace the interactions between the partners and to explicate the impact that external shocks have on their perceptions of efficiency and equity the impact of these events as well as the responses they elicit on the quality of the relationship and vice versa are also considered we find that the partners assessments cause them to either engage in renegotiation of the terms of the contract or to modify their behavior unilaterally in an attempt to restore balance to the relationship the process feeds back until a new mutual understanding of equity is restored or else the relationship deteriorates gradually until a point when the venture is dissolved we conclude that positive feedback loops are critical in the evolutionary process that relationship quality is both an outcome and a mediating variable and that procedural issues are critical from the start in fostering a climate for positive reinforcement and the building of mutual trust and confidence in the relationship

toward a theory of conflict in the franchise system abstract a focused review of the literature is presented in support of a definition of franchising as an interorganizational form examined from the entrepreneurship perspective then microeconomic and relational exchange theories provide guidance within a transaction cost economics theoretical framework to begin the formulation of a theory of conflict in franchising the analysis provided in this article involves business format franchising we submit that the essential core and uniqueness of business format franchising is the relationship between the franchisee and franchisor our definition of franchising requires a review of individual franchisee and franchisor organizational structures therefore our theoretical analysis begins with a fundamental look at the economic structural differences of the average franchisor and franchisee firms using microeconomic theory this review points to the potential for conflict in profit maximizing behavior between franchisee and franchisor the likelihood is that the differences in behavior will manifest in pricing promotion and new store development next because most business format franchising is contractually based and long term we investigate the theoretical support for establishing and continuing a relationship with fundamental areas of conflict relational exchange theory is used for this analysis transaction cost economics provides a perspective on the governance of the interorganizational form and guides us in the investigation of the ongoing state of the relationship a key to transaction cost analysis is shared assets in the relationship and the degree of transferability of those assets therefore building and maintaining the franchise trademark becomes the theoretical focus for governance of the relationship we propose that franchisor provided services is the principal method of franchisor contract fulfillment and is the framework for informal governance of the relationship the importance and adequacy of the transactions between the franchisee and franchisor affect the perceived value of the trademark and are key to continuing the franchise relationship finally the conflict literature is briefly reviewed to provide a context for the discussion of conflict in franchising and to illustrate that conflict can have a positive or negative effect on the relationship

avoiding default the role of credit in the consumption collapse of 1930 high consumer indebtedness threatens future consumption spending if default is expensive consumer spending collapsed in 1930 turning a minor recession into the great depression households were shouldering an unprecedented burden of installment debt down payments were large contracts were short equity in durable goods was therefore acquired quickly missed installment payments triggered repossession reducing consumer wealth in 1930 because households lost all acquired equity cutting consumption was the only viable strategy in 1930 for avoiding default institutional changes lowered the cost of default by 1938 when recession began again indebted households chose to default rather than reduce consumption

did the financial crisis in japan affect household welfare seriously we investigate whether and how the credit crunch during the financial crisis in japan affected household welfare we estimate the consumption euler equation with endogenous credit constraints using household panel data for 1993i 1999 generating several findings first a small but non negligible portion of the households faced credit constraints during the crisis rejecting the standard consumption euler equation second the credit crunch affected household welfare negatively albeit not seriously the estimated welfare loss ranges between two to ten percent increases in marginal utility depending on income level finally our results corroborate that the credit crunch in japan was supply driven

continuous time methods in finance a review and an assessment i survey and assess the development of continuous time methods in finance during the last 30 years the subperiod 1969 to 1980 saw a dizzying pace of development with seminal ideas in derivatives securities pricing term structure theory asset pricing and optimal consumption and portfolio choices during the period 1981 to 1999 the theory has been extended and modified to better explain empirical regularities in various subfields of finance this latter subperiod has seen significant progress in econometric theory computational and estimation methods to test and implement continuous time models capital market frictions and bargaining issues are being increasingly incorporated in continuous time theory the roots of modern continuous time methods in finance can be traced back to the seminal contributions of merton 1969 1971 1973b in the late 1960s and early 1970s merton 1969 pioneered the use of continuous time modeling in financial economics by formulating the intertemporal consumption and portfolio choice problem of an investor in a stochastic dynamic programming setting merton 1973b also showed how such a framework can be used to develop equilibrium asset pricing implications thereby significantly extending the asset pricing theory to richer dynamic settings and expanding the scope of applications of continuous time methods to study problems in financial economics 1 within a span of about 30 years from the publication of merton s inf luential papers continuous time methods have become an integral part of financial economics indeed in certain core areas in finance such as e g asset pricing derivatives valuation term structure theory and portfolio selection continuoustime methods have proved to be the most attractive way to conduct research and gain economic intuition the continuous time approach in these areas has produced models with a rich variety of testable implications the econometric theory for testing continuous time models has made rapid strides in the last decade and has thus kept pace with the impressive progress on the theoretical front one hopes that the actual empirical investigations and estimation using the new procedures will follow suit soon

power in a theory of the firm transactions take place in the firm rather than in the market because the firm offers power to agents who make specific investments past literature emphasizes the allocation of ownership as the primary mechanism by which the firm does this within the contractibility assumptions of this literature we identify a potentially superior mechanism the regulation of access to critical resources access can be better than ownership because i the power agents get from access is more contingent on their making the right investment and ii ownership has adverse effects on the incentive to specialize the theory explains the importance of internal organization and third party ownership

debt and the response to household income shocks validation and application of linked financial account data the increasing availability of data derived from linked consumer financial accounts has the potential to dramatically expand the potential for research examining the most comprehensive existing se

a framework to facilitate institutional arrangements for smallholder supply in developing countries an agribusiness perspective the industrialization of agriculture and the potential problem of small scale farmer marginalization calls for a fresh approach to the design of agribusiness supply chain arrangements in developing countries the objective of the paper is to contribute to a better understanding of institutional arrangements that can promote stable smallholder agribusiness contracting arrangements in a developing country context a case study approach incorporating a transaction cost framework is used to test whether trust can significantly change the contract characteristics of supply the results suggest that although the presence of trust can influence the contract characteristics of a supply arrangement it may not be significant because of other factors in a developing country context bearing this in mind a number of institutional arrangements are recommended in order to promote more stable contract conditions

investment and uncertainty precipitating the great depression in the united states a severe collapse of fixed capital formation distinguished the onset of the great depression from other investment downturns between the world wars using a model estimated for the years 1890 2000 we show that the expected profitability of capital measured by tobin s q and the uncertainty surrounding expected profits indicated by share price volatility were the chief influences on investment levels and that heightened share price volatility played the dominant role in the crucial investment collapse in 1930 investment did not simply follow the downward course of income at the onset of the depression rather its slump helped to propel the wider collapse

a bargaining model with incomplete information about time preferences etude d un jeu de negociation strategique sequentiel avec information incomplete caracterisation d une classe d equilibres sequentiels appeles equilibres sequentiels de negociation et demonstration de l unicite de cet equilibre

the great crash and the onset of the great depression this paper argues that the collapse of stock prices in october 1929 generated temporary uncertainty about future income which led consumers to forgo purchases of durable goods that the great crash generated uncertainty is evidenced by the decline in surety expressed by contemporary forecasters that this uncertainty affected consumer behavior is shown by the fact that spending on consumer durables declined drastically in late 1929 while spending on perishable goods rose slightly this effect is confirmed by the fact that there is a significant negative relationship between stock market variability and the production of consumer durables in the prewar era

knowledge acquisition from foreign parents in international joint ventures an empirical examination in the hungarian context in this paper we examine organizational characteristics structural mechanisms and contextual factors that influence knowledge acquisition from the foreign parent in international joint ventures ijvs we in turn relate assessments of knowledge acquisition to ijv performance the data come from a survey of ijvs in the hungarian context where learning and knowledge acquisition from the foreign parent is thought to be particularly critical adaptation mechanisms such as capacity to learn articulated goals and structural mechanisms such as the provision of training technology and managerial assistance by foreign parents all were positively associated with the degree to which ijvs reported acquiring knowledge from their foreign parents we also found limited support for the belief that cultural conflicts can impede knowledge acquisition but only for two party joint ventures with 50 50 equity arrangements we also looked at the relationship between knowledge acquisition and different dimensions for evaluating ijv performance the relationship between knowledge acquisition and performance was significant for all indicators of performance through knowledge acquisition from the foreign parent and the organizational characteristics hypothesized to enhance ijv knowledge acquisition affected assessments of some dimensions of performance more than others our findings contribute to advancing knowledge about the relationship between organizational characteristics and organizational knowledge acquisition in ijvs as well as the relationships between knowledge acquisition and different dimensions of ijv performance

who should control a corporation toward a contingency stakeholder model for allocating ownership rights a number of companies allocate ownership rights to stakeholders different from shareholders despite the fact that the law attributes these rights to the equity holders this article contributes to an understanding of this evidence by developing a contingency model for the allocation of ownership rights the model sheds light on why companies despite pressures from the law vary in their allocation of ownership rights the model is based on the assumption that corporations increase their chance to survive and prosper if the stakeholders supplying critical contributions receive the ownership rights according to the model critical contributions involve 1 contractual problems due to specific investments long term relationships and low measurability 2 the assumption of the uncertainty resting on the company and 3 the supply of scarce and valuable resources the model is dynamic because it also provides a basis for understanding why the allocation of ownership rights changes with time finally the article presents the strategies companies can use to realize an efficient distribution of ownership rights among their stakeholders

uncertainty irreversibility durable consumption and the great depression what was the role of uncertainty in the great depression this paper uses a calibrated general equilibrium model to show that in response to an increase in uncertainty agents increase expenditure on irreversible durable goods and reduce investment in irreversible physical capital these relative movements occur because durable goods provide a store of utility and are less irreversible than physical capital these substitutions are unclear at the start of the great depression but are clearly visible at the deep end of it in 1932 when the volatility of stock returns is consistently high coefficients on the variance which is consistent with the uncertainty hypothesis both the theoretical hypothesis and its empirical tests are of a partial equilibrium nature yet the great depression was a general equilibrium event this paper puts the uncertainty argument explicitly in a general equilibrium model with consumer durables and capital goods both subject to irreversibility constraints i associate income uncertainty with the stochastic process driving output fluctuations and an increase in uncertainty is modelled as a mean preserving spread on the distribution of this shock the general equilibrium setup also incorporates a specific notion of irreversibility namely that goods are irreversible if there are no buyers when one wants to sell the test of the uncertainty hypothesis in general equilibrium is a simulation of a calibrated version of the model what makes the reaction to a mean preserving spread nontrivial is the clash of the theoretical predictions of precautionary savings and irreversible investment in a general equilibrium context savings should increase and investment should fall to complicate matters durable goods have components of both consumption and investment so what was the role of uncertainty in the great depression in this setup a calibrated model provides a simple answer higher uncertainty makes agents cut capital investment and increase expenditure on durables there are two reasons for this the first is that durables are the least irreversible of the two assets in the model and the second is that durable goods act as a store of utility and thus as insurance the view of the uncertainty hypothesis that a cut in expenditure on durable goods is a key response to high uncertainty is not supported by a standard general equilibrium model there may however be some truth in itfbut for the wrong reasons and at the wrong time it is not a fall in durable expenditure per se but rather an increase relative to

structural stability and reconfiguration of international joint ventures previous research suggests that international joint ventures ijvs are inherently unstable and fragile this view has failed however to explain why many ijvs have an extended longevity and stability this paper draws on two contrasting perspectives from organization theory structural instability and structural inertia to trace both the destabilizing and stabilizing forces in ijvs and argues that a complete understanding of an ijv s dynamic evolution requires consideration of both forces