a theoretical analysis connecting conservative accounting to the cost of capital abstract we connect conservative accounting to the cost of capital by developing an accounting model within an asset pricing framework the model has three distinctive features 1 transaction cycle conformity where the book value equals the value of cash at the beginning and the end of a cash to cash transaction cycle 2 a revenue recognition principle where uncertainty affects the amount of revenues recognized 3 a matching principle where expenses are matched with revenue with a conservative bias due to uncertainty we demonstrate how the growth rate of expected earnings the accruals to cash ratio and the expected earnings yield relate to the expected stock return

p e forwards and their orbits from a theoretical viewpoint earnings growth that follows the consensus should all else being equal result in rising or falling p es that provide the equity investor with the price appreciation needed to just meet the market s total return expectation for a given earnings growth rate this expectational equilibrium should move a fairly priced p e toward a sequence of forward values that ultimately trace out an implied p e orbit for two phase models with the typically higher level of first phase growth the p e orbit will trace a smooth year by year descent from the starting p e to the terminal second phase p e these descending forward p es provide a baseline that represents the inertial pricing paths implied by an unaltered consensus analysts who assign p e estimates that diverge from this baseline path presumably believe that they have special insights that justify such a departure from the consensus implied level awareness of the p e orbit concept should help analysts avoid falling for the cl

foreign direct investment mode choice entry and establishment modes in transition economies in this study we bridge two streams of foreign direct investment literature specifically studies on establishment mode choice i e the choice between an acquisition and a greenfield establishment and studies on entry mode choice i e the choice between a wholly owned outlet and a subsidiary with shared ownership we arrive at a conceptual synthesis for an examination of the effects of the same predictors on the dual entry establishment mode choice made in the context of a single foreign investment we demonstrate that a parent firm s technological intensity international strategy and experience determine both establishment and entry mode choices moreover we apply williamson s new institutional economics to investigate the influence of institution building on multinational enterprises dual investment choice in the context of transition economies we test empirically the possible moderating effect of a host country s institutional environment we conclude that the degree of the host country s institutional advancement moderates the effect of both technological intensity and international strategy on the establishment and entry mode choice

the new institutional economics this outstanding book presents new original contributions from some of the world s leading economists including ronald coase douglass c north masahiko aoki oliver e williamson and harold demsetz it demonstrates the extent and depth of the new institutional economics research programme which is having a worldwide impact on the economics profession

creation adoption and diffusion of innovations by subsidiaries of multinational corporations this paper reports some of the findings of a multi phased and multi method study on the organizational attributes that facilitate creation adoption and diffusion of innovations by subsidiaries of multinational companies comparison of results obtained through case research in nine companies multiple respondent questionnaire surveys in three companies and a single respondent survey in 66 north american and european multinationals reveal unambiguous and positive impacts of normative integration through organizational socialization and dense intra and inter unit communication on an mnc subsidiary s ability to contribute to the different innovation tasks the findings are less consistent with regard to the effects of local resources and autonomy and it appears that the influences of these two attributes are strongly mediated by the levels of normative integration and organizational communication

on implicit forms of multiproduct multifactor production functions a quest for generality in economic analysis appears to underlie the long tradition of the use of implicit functions however insufficient attention is given to weaknesses and limitations of implicit functions as they are traditionally used e g cohen and cyert hadar henderson and quandt malinvaud naylor naylor and vernon and samuelson among others careless use of implicit functions can result in faulty analysis in particular clarification of these limitations is needed especially as they pertain to the study of multiproduct multifactor mp mf production processes this paper is a rigorous examination of certain issues regarding implicit functions and mp mf production processes because any relation that explicitly determines one argument as a function of the remaining arguments can be written in implicit function form our results also apply to explicit function representations of mp mf production the functions examined here are continuously differentiable and can be used as production feasibility constraints in a lagrangian or kuhn tucker analysis of the mp mf firm the theory of mp mf production is relevant in the conceptualization of resource allocation problems throughout agriculture for example few important real world analyses of agricultural production or marketing operations are single product in nature in fact in his extensive literature review on production efficiency in agricultural processing and marketing french states multiple outputs are effectively the rule rather than the exception similarly mp mf theory is prominent in the study of environmental and natural resource problems involving technological externalities despite the importance of the theory it appears that work to date is a collection of special cases of a potentially more general theory it is our hope that this paper will stimulate a reexamination of mp mf production theory

capital ideas from the past to the future modern finance theory modern portfolio theory neoclassical economics the ideas bestowed on us in 1952 1973 by the giants in our field are alive and well challenges to the efficient market theory the capital asset pricing model and mean variance efficiency have been raised but while recognizing that the assumptions of the theories do not hold up empirically we still lean on the ideas and develop them in new directions to say that this body of work is obsolete is to say that aristotle and euclid are obsolete

corporate environmental and resource management in search of a new managerial paradigm abstract sustainable development is close to becoming the catchword of the 1990s but it is still far from being an operational concept for individual companies this paper attempts to transform the brundtlandian contradictory of sustainable development into a corporate and more operational concept as it is argued economists interest in the environment is not new whether to implement sustainable corporate environmental and resource management practices or not is no longer a real choice for industrialists today given the ultimate limitations of nature limitations that are close to being reached the implications of such a new corporate development philosophy will be far reaching however the new managerial paradigm which is outlined here challenges not only the way in which industry is run today but attacks the very bedrock on which mainstream economics is based

empirical research in international marketing 1976 1982 this paper reviews empirical research in international marketing published during the period 1976 82 the review focuses on what has been researched and how the research has been conducted this research is evaluated a cooperative multidisciplinary empirical research program in international marketing is then proposed

economics of sustainability or the sustainability of economics different paradigms this article reviews different views of neo classical and ecological economics on the sustainability of economic growth and welfare neo classical economics concludes that due to substitution and technical progress consumption can be sustained even if production depends on a natural resource that is being depleted if production depends on an essential renewable resource there is a level of consumption that can be sustained forever pollution lowers the level of consumption that can be sustained if production depends on an exhaustible resource recycling of waste is insufficient for sustaining consumption unless 100 recycling is possible sustainable economic development is possible if the resource growth potential exceeds the sum of the discount rate minus the rate of exogenous technical progress and if resource productivity is sufficiently high in addition intial levels of environmental quality a composite of pollution and natural resources and man made capital influence the possibilities for sustainable economic development if the resource stock itself affects utility or if irreversibilities occur optimal consumption and extraction are lowered ecological economics states that substitution possibilities are restricted full recycling of waste is impossible and the limited influx of solar energy poses an additional constraint on the level of production that can be sustained since the functions of the environment production factor consumer good and waste sink are intertwined this life support function poses a restriction on economic growth as well in ecological economics development is viewed as an evolutionary process with continuous feedbacks between a changing economy and environment welfare is not merely the sum of discounted individual preferences but requires environmental compatibility and the explicit collective formulation of policies regarding the conservation of species ecosystems and natural resources

the other half of the picture antecedents of spouse cross cultural adjustment scholars have argued that the adjustment of the expatriate s spouse is an important factor in the success or failure of expatriates in overseas assignments however they have not empirically examined which factors are related to spouse adjustment this study is the first to systematically examine the antecedents of spouse cross cultural adjustment to interacting with host country nationals and to coping with the general foreign environment the results indicate that firms seeking the spouse s opinion about the international assignment the spouse s self initiated predeparture training and social support from family and host country nationals during the overseas assignment have a positive relationship with spouse interaction adjustment additionally firms seeking the spouse s opinion about the international assignment and standard of living have a positive relationship with spouse general adjustment while firm provided training and culture novelty have negative relationships with spouse general adjustment several important research and practical implications are explored

bias and precision in the dea two stage method in data envelopment analysis dea the two stage method is a popular procedure for accounting for exogenous influences on efficiency with the conventional two stage method a dea is first conducted using only traditional endogenous inputs and outputs then the first stage dea scores are regressed on the environmental contextual exogenous inputs of interest the regression outcomes are used to identify exogenous inputs that influence the first stage dea scores to a statistically significant degree and to adjust dea scores to account for these influences herein it is demonstrated empirically that the conventional method exhibits substantial bias and low precision with the degree of bias and precision affected by input variance and correlation a reverse two stage procedure that yields estimates without the bias and precision problems that compromise the validity of the conventional method s estimates is suggested

commensuration and theories of value in ecological economics abstract without a theory of value price in ecological economics the valuation of ecosystem and economic resources cannot be rigorously defended at the crux of the matter is the valuation or mixed units problem of commensurating biophysical inputs outputs which are different this paper critically reviews candidate theories of value which have emerged in the ecological economics literature for dealing with this problem first of all the neo ricardian approach using sraffa type systems is discussed in particular judson s assertion that the sraffa system is suitable for ecological economics is questioned as it is based on circular flow generation of a surplus and exchange values none of these ideas are consistent with a biophysical characterisation of an economic system which is paramount in ecological economics a more fruitful avenue for establishing a biophysical theory of value based on ecological and thermodynamic principles is to extend patterson s quality equivalent methodology qem to explicitly include mass flows in addition to energy at this point a model close to costanza and hannon s biosphere model of price determination emerges the extended qem model however has a number of important advantages over the costanza hannon model because it has a more generalised formulation and is not reliant on necessarily using solar energy as the numeraire the paper concludes with a discussion of some outstanding issues that need to be resolved before a biophysical theory of value can be properly established in ecological economics

an experimental investigation into cross national mail survey response rates this study investigates the effects of foreign and domestic source manipulations on cross national response rates of business people in two countries the united states and britain the hypothesis that managers from the u s a are more likely to respond than those from britain is also tested results suggest that foreign source effects do not raise response rates for british managers findings suggest that higher compliance results from the domestic source responses from usa managers were no higher than from their british counterparts the implications of these findings for cross national mail surveys are discussed

using panel data analysis to estimate confidence intervals for the dea efficiency of individual decision making units this article demonstrates a methodology using panel data analysis to estimate confidence intervals for the data envelopment analysis efficiency of individual decision making units dmus and the statistical significance of trends in individual dmu efficiency the procedure accounts for stochastic variations of the inputs and outputs of the target dmu as well as stochastic variations of the inputs and outputs of its efficient benchmark peers the procedure is demonstrated using 9 years of data from 34 canadian paratransit agencies

sustainable development challenges to profession of agricultural economics fundamentally sustainable development is a notion of discipline disciplining our current consumption this sense of intergenerational responsibility is a new political principle a virtue that must now guide economic growth the industrial world has already used so much of the planet s ecological capital that the sustainability of future life is in doubt that can t continue brundtland page 5

conducting international mail surveys the effect of incentives on response rates with an industry population mail surveys are one alternative for satisfying information needs about international markets to date minimal empirical research is available to inform academicians or practitioners of expected response rates or of the efficacy of incentives when undertaking mail surveys across disparate cultures the results from a study conducted in six countries suggests that an inexpensive and perhaps symbolic incentive such as a commemorative stamp can significantly increase response rates for academicians conducting cross cultural research the mail survey may be the most cost effective data collection method

the p b roe valuation model 1984 the p b roe valuation model financial analysts journal vol 40 no 1 pp 58 66

a note on the measurement of equity duration and convexity the appropriate measure of equity duration and by extension convexity is a controversial matter in 1986 leibowitz presented empirical duration measures that are considerably shorter than those derived from a traditional dividend discount model a class of dividend discount models developed by hurley and johnson is used to try to reconcile the difference the values derived for equity duration are intermediate between the leibowitz and traditional measures these models overcome the standard criticism of dividend discount models by allowing for realistic patterns of future dividend growth corresponding models of equity convexity developed by johnson are used to derive equity convexity

stock interest rate risk and inflation shocks abstract in this paper we proceed to estimate a measure of the flow through capability of the firms listed on the spanish stock exchange the flow through capability is defined as the ability of firms to transmit inflation shocks to the prices of the products and services sold by the company according to a strand of the literature this flow through capability can to some extent explain the so called stock duration paradox which is the difference between the theoretical stock duration derived from the ddm model and its empirical estimates the line of reasoning suggests that if a company can pass on inflation shocks to the prices of its own outputs and then to profits and dividends nominal interest rate changes due to variations in the expected inflation will have a limited impact on stock prices so in this paper we first estimate the flow through capability for different industries and find great differences among them then we analyse the link between flow through capability and stock duration and find a significant negative relationship between them as claimed by part of the literature

foreign mail surveys response rates using monetary incentives the cross national researcher is cautioned about the possible consequences of using monetary incentives in foreign mail surveys in this study a us 1 incentive increased the response rate from japanese business people but decreased the response from hong kong

data envelopment analysis on a relaxed set of assumptions data envelopment analysis is a procedure for evaluation of the relative efficiency of units in a production system dea involves construction of composite units as convex combinations of other units inputs and outputs under various conditions related to returns to scale the assumption of convexity is inconsistent with increasing returns to scale and not implied by constant or non increasing returns to scale an alternative dea approach which does not invoke the assumption of a convex production possibility set is developed in this paper it is implemented in two stages stage one is concerned with the spanning of isoquants and stage two with an evaluation of the position of an observed input output combination compared to the isoquants both stages involve linear programming techniques solely

the case for methodological pluralism abstract ecology and economics share the same greek root both address complex systems ecology consists of numerous approaches to understanding natural systems energetics population biology food web models hierarchy theory to mention just a few within ecology field knowledge and the reporting of new observations are well respected economics on the other hand is dominated by one pattern of thinking and standard of proof the market model and econometrics within economics field knowledge and observations per se are little valued agreement on a correct method is frequently taken as an indication of the maturity of a science the argument is developed in this paper that all the aspects of complex systems can only be understood through multiple methodologies the agreement on method within economics however seems to reflect stronger pressures within the discipline for conformity than for truth relative to ecology since ecological economics seeks to understand a larger system than either economics or ecology seeks to understand a diversity of methodologies is appropriate and pressures to eliminate methodologies for the sake of conformity should be avoided

the impact of managerial networking intensity and market based strategies on firm growth during institutional upheaval a study of small and medium sized enterprises in a transition economy varying institutional environments provide the foundation for a great deal of international business research yet relatively little empirical work has examined the determinants of small and medium sized enterprise sme growth during institutional upheaval although the importance of sme development for economic transition and growth is widely acknowledged our paper addresses this gap in the literature by examining how the competitive strategies of smes evolve during institutional transitions and assessing the implications for firm growth using data collected from 135 smes in 1993 and 200 smes in 2001 we find that managerial networking intensity i e developing and maintaining relationships that may be used for business purposes declines markedly over time whereas the importance of market based strategies increases managerial networking intensity is strongly associated with firm growth early in the institutional transition process but not later market based strategies are not associated with firm growth in either time period drawing on convergent insights from multiple theoretical perspectives we argue that changes in strategy are concurrently driven by socially constructed norms that legitimize new ways of competing and delegitimize old ones and by knowledge acquisition and learning which provide managers with a more diverse set of tools with which to exercise their strategic choices

environmental economics an evolutionary critique and a plea for pluralism abstract environmental economics is a contradiction in terms the contradiction is intuitive to the puzzled lay person inquiring about the nature of our subdiscipline it is explicit to those who think of environmental systems in terms of complex evolving interconnectedness and identify the economic model with the atomistic and mechanistic assumptions of classical mechanics within the subdiscipline we try to resolve the contradiction by internalizing externalities by matching market feedbacks with environmental relations while acknowledging that insights can be drawn from the market view of environmental problems i argue in this essay that 1 the contradiction is nerver resolved 2 multiple incongruous perspectives are all we have for understanding the interface between economic and environmental systems and 3 environmental economics will thrive with a return to philosophical pluralism to the open acceptance of the contradiction

a total differential approach to equity duration most of the risk associated with fixed income price movements is accounted for by their duration that is their sensitivity to changes in the discount rate thus for bonds duration and interest rate sensitivity are virtually synonymous for equities however duration is only one of several factors describing risk a major source of confusion in evaluating equity duration is the definition of duration itself measured as a function of the sensitivity of stock price to the discount rate ignoring all links between the discount rate and the growth rate the traditional dividend discount model ddm duration is long 20 years or more but this measure of duration fails to take into account the offsetting effects of inflation induced rate increases on corporate profits a measure of the total sensitivity of stock prices to interest rate movements recognizes that the two components of nominal interest rates inflation and the real rate affect both the equity discount rate and the equity earnings growth rate but not necessarily in the same direction the stock market as a whole is less sensitive to changes in inflation expectations than to changes in real rates because most companies can raise prices hence nominal growth rates in times of inflation thus a measure of stock price total sensitivity to interest rates will generally be substantially shorter than the duration measure derived from the traditional ddm

a behavioral perspective on negotiating international alliance this study examines the influence tactics of senior u s executives in negotiating international business alliances the strategy literature on alliances and the behavioral literature on negotiations were incorporated into a behavioral model of alliance negotiations constructs identified from transaction cost power dependence and game theories were integrated and linked to hypotheses describing negotiators influence tactics in alliance negotiations in examining eighty three alliance negotiations negotiator trust perception of a partner firm s alternatives conflict frame time horizon and cultural distance were found to affect negotiators tactics

spread driven dividend discount models a key determinant of shareholder value is the franchise spread the company s incremental return on new investments over the cost of capital explicitly incorporating this spread into the valuation process paves the way for a more compact two parameter formulation of the standard three parameter dividend discount model this transformation leads to a number of interesting implications in particular the spread driven representation of the ddm 1 clarifies the role of growth driven roes versus the role of spread driven roes 2 facilitates the development of two phase models that reflect a typical company s earnings pattern 3 shows how earnings growth and franchise spreads can underpin a wide range of p e levels 4 addresses the problem of artificially high p es being forced by low estimates for the risk premium and or the inflation rate 5 provides a useful expression for the growth rate of shareholder value and 6 under certain stability conditions leads to a pro forma equity duration that i

franchise valuation under q type competition when considering a company s prospects analysts often segment the earnings progression either formally or intuitively into a series of growth phases followed by a relatively stable terminal phase this study focuses on the role of competition in the terminal phase in the simplified two phase model of a single product company the first phase earnings growth drives the company s overall return on equity toward the generally higher incremental roe on new investments the company then enters the terminal phase with a high roe that attracts the attention of a potential competitor that can replicate the company s production distribution capacity at some multiple q of the original capital cost this q type competition can lead to margin erosion and a reduction in earnings as the roe slides to more competitive levels the implication is that unless a company has either the diversity of product service cycles or other special ways to deflect competitive pressures the analyst should address the potentia

total portfolio duration a new perspective on asset allocation the concept of duration has proved to be a valuable tool for gauging the sensitivity of a bond portfolio to movements in interest rates by balancing the duration of a fixed income portfolio against the duration of the stream of liabilities it is funding one creates a portfolio that is immunized against interest rate changes but what if the portfolio contains stocks as well as bonds the interest rate risk of an equity portfolio can be estimated from a measure of the correlation between stock and bonds by using variance parameters routinely used in conventional asset allocation procedures the correlation is used in conjunction with a measure of bond market duration to derive an estimate of the duration of the stock market these durations together with a portfolio s allocations to stocks and bonds and the beta of the stock component may be used to obtain a measure of total portfolio duration what the duration measure tells us in general is that a total portfolio s sensitivity to interest rate mo

franchise margins and the sales driven franchise value in a global environment any one company s cost advantage from geographical locale cheaper labor or more efficient production sites can always be replicated in time by a sufficiently strong competitor with access to today s free flowing financial markets thus the ultimate key to a superior margin will be price not cost high value firms will be those that can develop and or sustain a sales driven franchise with premium pricing across a range of product markets the incremental pricing margin beyond that available to a new commodity competitor one who would be content to earn only the cost of capital is the franchise margin a sales driven valuation model translates this pricing power into an estimate of capitalized firm value

a simple valuation model and growth expectations a simple valuation model is presented in which a firm can invest in projects with positive net present values for a limited number of years although prior models have made this assumption this model can be simplified to a concise easy to use form the model can facilitate a broad understanding of the expectations implied by a firm s stock price for example growth patterns consistent with a firm s p e which can guide in depth analysis of prices

individual organizational work and environmental influences on expatriate turnover tendencies an empirical study foreign postings for executives are costly undertakings for multinational corporations especially when they fail yet little research has been done on the causes of expatriate turnover this 155 expatriate survey assesses individual organizational work and environmental influences on both internal and external turnover tendencies it was found that job autonomy and material life satisfaction were key predictors for both internal and external turnover tendencies only for organizational turnover did job autonomy supersede material life satisfaction as the lead predictor of turnover tendencies american expatriates attach much importance to maintaining living standards in postings to foreign locations

intertemporal valuation in an unpredictable environment abstract the inherent unpredictability of ecological systems is a vital feature for the development of theories at the interface between economics and ecology such unpredictability is caused by instabilities that are intrinsic parts of ecosystem function succession and evolution the complexity of ecological dynamics undermines the simple probabilistic treatment of uncertainty based on the equilibrium paradigm common in traditional environmental economics we investigate an important alternative by representing the dynamics of the biogeophysical system as an infinite sequence of instabilities this leads to a stochastic process exhibiting an exponentially growing variance our analysis is carried out in a macroeconomic setting in a situation where the value system here formalized in terms of risk averse social welfare functions contains at least two distinct aspects consumption rate and the state of the environment the central variables for intertemporal valuation i e the time dependent expected values of the two welfare function components are calculated using the probability distribution describing the environmental dynamics one result is that if the unpredictability of the environmental dynamics is taken into account then the social discount rate for environmental existence values may well be negative

using data envelopment analysis to assess macroeconomic policy performance it is common practice to summarize the macroeconomic performance of countries in terms of the four well known dimensions captured by the magic diamond of the oecd this study provides a comparison of several synthetic indicators that merge the four separate indicators into one single statistic these indicators are inspired by data envelopment analysis dea based models which allow for unequal weighting of the different economic objectives the calculated weights then act as proxies for the true policy priorities comparison of the models focuses on the underlying assumptions as well as on the empirical results they generate

neoclassical and institutional approaches to development and the environment abstract institutional economics is suggested as a more fruitful approach to environmental problems than the now dominant neoclassical paradigm the historical background of institutionalism in the united states and europe is given as well as the main characteristics of this approach i e holism emphasis on institutional arrangements pattern modelling and emphasis on the political element of economics differences between neoclassical and institutional economics are elaborated with respect to the concept of economics reductionist versus holistic the approach to decision making aggregated versus highly disaggregated and the view of social and institutional change public choice versus actor network approach

the levered p e ratio a vast literature examines the role of debt in corporate valuation but most of these works proceed from the vantage point of corporate finance i e ascertaining the effects of adding debt to a previously unlevered company the investment analyst however confronts an already levered company with already levered return parameters the analyst s challenge is to estimate the stock s theoretical value by inferring the company s underlying structure of returns this shift in vantage point leads to results about the effect of leverage that are surprisingly different from the results of studies from the corporate finance angle whereas corporate finance studies find only a moderate effect of leverage when viewed from the analyst s perspective a company s value has such a high degree of sensitivity to the leverage ratio that it can significantly alter the theoretical p e valuation moreover from the analyst s vantage point leverage always moves the p e toward a lower value than that obtained from the sta

p es and pension funding ratios some evidence supports the intriguing conjecture that p es in the u s market may decline in times of both significantly lower as well as significantly higher real interest rates the p e response pattern would then resemble a tent that angles downward at both ends for pension liabilities defined in real terms very low real rates would then lead to a clifflike falloff in the funding ratio from the decline in equity valuations combined with surging liability costs this article explores the risk implications of such a low rate scenario and the equity valuations that could give rise to such a tent pattern

efficiency in the provision of public services a data envelopment analysis of uk public library systems this study assesses the relative efficiency of public library services by examining the relationship between library inputs and library outputs in multi outlet library systems differences in the size of the area and population served are reflected in differences in the number of outlets and mix of outlet types using a data envelopment analysis which controls for the accessibility of library resources this study derives technical and overall efficiency scores for 99 uk public library systems the data are survey observations for 1995 1996 over the decade leading up to the survey library services had been subject to a protracted period of budget restraint and contraction in most areas of activity the distribution of efficiency scores is skewed implying that although many library systems are efficient or near efficient there is a tail of inefficient operations inefficiency is mainly but not exclusively associated with over subscription to serial publications many library systems are scale ineffic

p e p b and the present value of future dividends 1994 p e p b and the present value of future dividends financial analysts journal vol 50 no 4 pp 23 31

scientific methodology for ecological economics abstract positivist philosophy has dominated scientific research throughout most of the twentieth century positivism has been discredited within the philosophy of science but this has only had limited impact on research practices in the social and natural sciences economists have called for the adoption of positivism in economics however economic methodologists have noted that this application has not taken place and because of the limitations of positivism it is unlikely that it will take place ecological economists should learn from the methodological failures of economics and look for alternatives since the 1970s several alternative paradigms to positivism have emerged post normal science and constructivism are critically considered and their significance for the discipline of ecological economics is addressed in this paper i propose a modification of the paradigmatic basis of constructivism and suggest that the revised constructivist paradigm should be seriously considered for adoption by ecological economists i also point out that there are complementarities between post normal and constructivist methodologies that deserve further exploration this could enrich the methodological base of ecological economics

an essay on the foundations of friedman s methodology milton friedman s famous essay on methodology 1953 pp 3 43 has been presented as an instrumentalist argument for instrumentalism boland 1979 although friedman has stated that such characterization of his methodology is entirely correct he also says 1979 that his views on methods and the philosophy of economics can be aligned with those of the philosopher karl popper many students of the philosophy of science would be possibly shocked by such a claim since popper has so often criticized and rejected both instrumentalism and logical positivism 1965 thus against such background we present our examination of friedman s claim evidence which we gathered to determine the extent of the relationship between friedman s methodology and popper s view of science will be presented it will be argued that to a degree friedman s claim can be supported the major point is that friedman identifies with popper for two reasons 1 both friedman and popper reject positivism 2 friedman and his followers tend to argue indirectly in advancing a view by criticizing its alternatives presumably we either accept positivism for example paul samuelson carl hemple rudolph carnap among others or we do not obviously this line of argument considers only two among a possibly larger number of options a confrontation of competing views as it were as found in friedman s view of hypothesis testing a minor point is that friedman does not see popper dismissing instrumentalism completely in this he is correct since popper only criticizes instrumentalism as a philosophy of science while accepting it as a methodology for social policy except for a brief statement that factual evidence can never prove a hypothesis it can only disprove it 1953 p 9 nothing in friedman s essay seems to depend on popper s philosophy of science so if there is an alignment of friedman s view with popper s it will have to be found separately from the famous essay thus we examine the prospect with reference to his academic and research backgrounds including examples from his work and to his association with popper a corollary purpose of our essay is to indicate how friedman s view of the methodology of positive economics depends on his acceptance of some but perhaps not all of popper s philosophical discussions of the nature and purpose of science as we indicate friedman s early orientation in methods had no immediate background in established economics that the main and crucial elements of friedman s work came from outside may be gleaned from a review of these elements and their antecedents this emphasis reveals the following 1 that friedman has been incorrectly identified with logical positivism warren gramm pp 169 171 175 samuelson 1963 pp 82 83 a doctrine about the unity of science as formulated in vienna in the 1920 s and 2 that friedman is much less aligned than commonly presumed with the views of his chicago mentors in friedman s economics theories are partly arguments for alternative policies and or social reform an interdependent system of analytic constructions rather than isolated construction in economics is used to generate hypotheses and for predicting the effects of alternative policies contrary to the conventional views of statistical induction and logical deductions from known true assumptions as dealt with elsewhere boland 1979 pp 512 13 1981 the purpose of economic theory for friedman is prediction for purposes of testing and evaluating alternative policies these policies over friedman s career the university of florida and simon fraser university respectively we thank john chant stephen easton herbert grubel zane spindler and james f o conner for comments on an early draft milton friedman was cooperative in answering questions we raised we alone are responsible for the final product

alternative approaches to economic environmental interactions abstract the key questions raised by recent developments in resource and environmental economics have been what useful economic functions does the environment provide and how are these functions affected by the process of economic environmental interaction this paper distinguishes between two different formal approaches to answering these questions the more conventional approach which is concerned with the optimal allocation of economically valuable exhaustible resources and an alternative analysis that considers the trade off between on the one hand environmental quality and on the other resource depletion and waste generation by the economic process to illustrate and extend the latter approach a model is constructed to show how this trade off might lead to continuously declining environmental quality and a future ecological constraint society must therefore optimally allocate output between consumption and services to improve the environment and choose between increased capital accumulation and environmental degradation although strict application of such a model may be limited it has wider implications for the role of technological change and the value of the environment in any system experiencing deteriorating environmental quality

links between business strategy and human resource management strategy in u s based japanese subsidiaries an empirical investigation this study examines linkages between business strategy and human resource management hrm strategy in japanese subsidiaries in the u s it investigates whether or not fit between a subsidiary s business strategy and its hrm strategy is associated with higher performance the data show that subsidiaries with matched strategies performed better than unmatched ones in terms of hrm related performance measures such as rates of promotion and turnover japanese subsidiaries with a business strategy hrm strategy match were also more likely to experience better business performance versus competitors than were unmatched ones

economics of efficiency measurement by the dea approach three aspects of efficiency measurement by data envelopment analysis are discussed here analytically these aspects comprise output specific input allocations by each firm flexibility in the production process and the role of learning by doing in efficiency improvement

explaining efficiency differences among large german and austrian banks cost efficiency scale efficiency and productivity change are estimated by data envelopment analysis and cost efficiency is regressed on explanatory variables no evidence is found for average productivity responding to deregulation over the period studied state owned banks are found to be more cost efficient likely owing to cheaper funds and cooperative banks to be about as cost efficient as private banks increasing economies of scale but decreasing economies of scope provide rationale for m as among banks with similar product portfolios interbank and capital market funding is found to be more cost efficient than deposits when the cost of retail networks is controlled

a cross cultural comparative study of managerial job attitudes effective managerial performance is influenced by the types of rewards which managers seek in their work environment and by their perceptions of the degree to which their job expectations are being satisfied this research provides empirical evidence on the nature of job related values and outcomes in 4 countries canada france japan and the uk the survey data reveal that the types of job outcomes sought by managers differ significantly from one culture to another the results should be of practical value to companies seeking to develop more effective management motivational devices in the countries studied moreover the approach and methodology may provide a useful model for further cross cultural studies

national competitive advantage and the roles of economic and political freedom evidence from hong kong the equivocal interrelationships between economic performance and the institu tions of respectively economic and political freedom are examined using data from firms op erating in hong kong an economy where both an erstwhile paramount international business reputation for competitiveness and the institutional basis on which it was predicated have come into question in recent years it is hypothesized that i both economic and political freedom declines will be associated with a proxy for future economic performance competitiveness decline but that ii the correlation of economic freedom declines with competitiveness de cline will be mediated by political freedom declines hierarchical regression analyses tend to support these hypotheses although results vary by firm origin

a dynamic hierarchical approach to understanding and managing natural economic systems the study of economic systems and their guidance towards sustainability can be enhanced by understanding how natural systems use materials and energy at various levels of system organization how these levels interrelate and how interrelationships change towards this end the paper introduces natural economics as an approach to understanding the dynamics of hierarchical systems we define the concepts of natural economics to facilitate the description and assessment of system change and present dynamic modeling as a method for empirical research and as a tool for management decision making we illustrate with empirical applications the use of dynamic modeling at various levels of system organization empirical illustrations range from dynamic models of simple physical systems of material transport energy degradation and self organized criticality to models of complex industrial systems such as us iron ore mining and steel production the insights derived from the natural economics approach are used to draw conclusions for the study and management of economy environment interactions

relative and absolute scarcity of nature assessing the roles of economics and ecology for biodiversity conservation abstract our aim in this essay is to identify and analyze some of the difficulties with interdisciplinary integration of economic and ecological contributions to the study of biodiversity loss we develop our analysis from a widely accepted definition of economics which is based on the concept of scarcity taking a closer look at this notion we find that economics actually limits itself to a very particular aspect of scarcity which we denote as relative scarcity we describe in what respect the economic approach towards biodiversity is based on this notion and also reflect on the specific understanding of the relation of humans and nature behind the economic approach we then turn to absolute scarcity as another notion of scarcity and show that this is not within the scope of economics but has been a theme of ecology and ecological economics we describe in which way ecological and ecological economic approaches towards biodiversity are based on the idea of absolute scarcity and also reflect on the specific understanding of the human nature relationship behind this notion of scarcity against this background we discuss the roles of economics and ecology for nature conservation we conclude that the interdisciplinary integration of ecology and economics requires a philosophical underpinning and suggest a framework for further research

biases in technical efficiency scores caused by intra input aggregation mathematical analysis and a dea application using simulated data in data envelopment analysis dea applications involving multiple inputs and outputs inputs are aggregated into the total amounts of each type of input for example if input types labour and capital are used to produce multiple outputs the total amount of labour used to produce all outputs is treated as one aggregated input and the total amount of capital as another resources are not disaggregated into input variables measuring the amount of labour used to produce the first output the amount of labour used to produce the second output the amount of labour used to produce the third output and so on for both labour and capital it is shown that such intra input aggregation causes downward bias in reported technical efficiency scores with variations in bias unrelated to true technical efficiency therefore with few exceptions any technical efficiency comparisons among dmus are invalid the presence of intra input aggregation bias is demonstrated mathematically simulation is used to exhibit it

incentives and response rates to cross national business surveys a logit model analysis an experiment was designed to assess the effects of an enclosed incentive bookmark a promised incentive offer of free copy of the survey results the target country and the nationality of the parent company on response from a sample of american and japanese owned foreign subsidiaries logit model analysis was used to identify main and interaction effects both the bookmark and nationality of parent company affected response rates while the offer of survey results and target country had no effect no interaction effects were found the implications for cross national mail survey research are discussed

testing for short termism in the uk stock market a comment in the november i 993 issue of thisjournal david miles estimates and tests for the presence of short termism in the united kingdom using data from i980 to i988 based on a sample of 477 non financial firms he modestly declines to claim that he has detected the presence of shorttermism but concludes that those who believe it does not exist do need to explain something about the operation of security markets which makes longerterm cash flow appear to be discounted at much higher rates than shorter term flows the purpose of this note is to provide a model which gives such an explanation we shall also show that such a model is consistent with the empirical realities of the early i980s j we believe that the miles paper has two serious defects the first is the assumption that the risk premia per unit time varies across firms but is constant through time over under discounting is then detected relative to this base to quote miles

on the in efficiency of swiss hospitals the efficiency of hospitals is of interest to health insurers government authorities and hospital management itself however econometric methods for determining in efficiency have severe drawbacks since hospitals are multiproduct firms and because the duality between production and cost functions cannot be assumed in this work non parametric deterministic data envelopment analysis dea is used to measure the relative inefficiency of 89 swiss hospitals covering the years 1993 1996 310 observations special attention is given to the role of patient days in the production of health the findings depend on whether patient days are viewed as an input of patient time or as an output as in previous studies while the probability of a unit being inefficient cannot be explained using the available data the degree of overall inefficiency is shown to significantly depend on the financial incentives faced by management in particular due to subsidization private hospitals do not seem to be less inefficien

the identity of ecological economics retrospects and prospects the paper first reveals the relevance of ecological economics in the time of a triple crisis ecological social and economic and promotes it as a distinct paradigm comprised of two interconnected and interdependent aspects the qualitative framework within which it operates and the quantitative models and techniques it uses to observe ecosystem resilience measure progress towards sustainability and evaluate policies while acknowledging the progress that has so far been made the paper argues that divergences in understanding the meaning and content of ecological economics hinder its effectiveness and influence on real world policy making and calls for a unified framework as a common ground that would strengthen the field and direct research the implication of this position then follows pointing out what has so far been missing from the ecological economics analysis and what should be done for it to become a more problem oriented and policy relevant alternative copyright oxford university press

foreign subsidiary and parents roles during strategic investment and divestment decisions empirical research is scarce to answer the concerns of governments unions and public opinion at large concerning how multinationals make decisions to restructure their international strategic portfolio or close plants overseas to ensure long run competitiveness based on three in depth analyses of different types of restructing decisions the author concludes that the foreign subsidiaries seem to carry most of the decisionmaking effort for their own plant closures while for strategic portfolio readjustments during which they change owners they are not consulted

environmental economics and ecological economics where they can converge abstract environmental economics and ecological economics share the common objective of understanding the human economy environment interaction in order to redirect the economies towards sustainability in pursuing this objective these two perspectives utilise different types of analytical framework and are opposed to each other on many of the fundamental theoretical and methodological issues while the environmental economics has progressed within a narrowly but sharply focused neoclassical analytical approach the ecological economics has expanded by adopting a diversified approach which led to widen the gap between the two this article makes an attempt to highlight the divergence between these two perspectives on different issues and identifies certain research avenues that would potentially bring convergence between these two perspectives

attitudes toward financial control systems in the united states and japan recently researchers have begun to investigate issues of differences in the use of managerial accounting tools across differing national environments much of this research is of the case study approach documenting actual practices for a small group of firms or a distillation from numerous observations but using anecdotal evidence to support various conjectures

determinants of technical efficiency of crop and livestock farms in poland la pologne est l un des pays d europe de l est candidats a une accession a l union europeenne qui rencontre de graves problemes de restructuration agricole l article etudie l efficacite technique en 2000 d exploitations agricoles individuelles polonaises specialisees en elevage et en grandes cultures l efficacite est estimee par la methode de frontiere stochastique et sa variabilite statistique evaluee par la construction d intervalles de confiance l article examine egalement les determinants de l efficacite les resultats obtenus pas la methode de frontiere stochastique sont compares avec ceux obtenus par la methode de data envelopment analysis dea en moyenne l efficacite technique des exploitations d elevage est superieure a celle des exploitations de grandes cultures pour les deux specialisations la relation entre l efficacite et la taille des exploitations est positive les grandes exploitations sont les plus efficaces les resultats obtenus par la methode de frontiere stochastique sont generalement confirmes par la methode dea la qualite de la terre et le degre d integration dans les marches d aval sont d importants determinants de l efficacite la faible education est un obstacle majeur a l efficacite en particulier pour les exploitations de grandes cultures de plus celles ci utilisent beaucoup les marches de facteurs terre et travail alors que les exploitations d elevage utilisent plutot leurs propres terres et le travail familial