bluuebunny/crossref_metadata_2025 huggingface dataset:
Models of Corporate Governance for Chinese Companies
Authors: Tam On Kit
Published: March 2003

This paper examines China’s recent approach to the development of corporate governance and discusses some major corporate governance issues that need to be resolved. It focuses on the corporate governance issues of China’s larger state owned enterprises that have been corporatised and partially privatised. While the state enterprise sector has been on decline in terms of its contribution to industrial output, its dominance in urban employment, key industries and access to bank finance continues. The publicly listed and partially privatised enterprises portends in many ways the future path in corporate governance arrangements for all other kinds of enterprises in China. The study is based on results of survey data collected by the author on Shanghai’s publicly listed companies. An attempt is also made in this paper to outline a new corporate governance model that may be more appropriate for China’s social and economic conditions. The paper is organised as follows. Section 2 outlines the way the Chinese government has approached the development of corporate governance structures in China in recent years. Section 3 examines some major issues for corporate governance development in China. Section 4 outlines a new corporate governance model that may be better suited to China for the near future. Section 5 provides some conclusions.
Corporate Governance in Germany: the move to shareholder value
Authors: Schilling Florian
Published: March 2003

The paper offers an inside view of the German corporate governance model, based on interviews with over 100 members of supervisory‐ (Aufsichtsrat) and executive‐boards (Vorstand) of major German corporations. The traditional supervisory board with its large size of 20 members, one half elected by the employees, reflects the strong consensus orientation of the German corporate world. This system worked well in times of long innovation cycles and largely separate, national capital markets. It is coming under increasing pressure to adapt to the demands of a fast changing globalised capital market.Keywords: Corporate governance in Germany, supervisory board, codetermination, board composition, professionalisation of boards
A Boardroom Revolution? The impact of the Cadbury nexus on the work of non‐executive directors of FTSE 350 companies
Authors: Gay Keith
Published: March 2003

This paper examines how the work of non‐executive directors of large UK public companies has changed since the publication of the Cadbury Report in 1992. It reports the views of a unique group of non‐executive directors who, in 1999, were still on the boards of companies they had joined during, or prior to, 1992. In the first, quantitative phase of the reported research, respondents were asked to assess the changes in the level of involvement of their boards in 22 defined activities relating to the organising and running of the board. In the second, qualitative phase, research propositions relating to the changing pattern of work in the boardroom were tested. During interviews the respondents were asked to comment on a series of questions designed to explore the propositions. The paper reports on the responses to two of the research propositions tested in this way.
The Role of the Venture Capitalist as Monitor of the Company: a corporate governance perspective
Authors: Van den Berghe L.A.A. , Levrau Abigail
Published: March 2003

The monitoring and stewardship role of the owner is an important corporate governance issue that deserves far more attention. Our analysis focuses on the role of the venture capitalist (VC) as monitor of high–tech venture–backed companies. We provide evidence from the literature as well as a qualitative descriptive view of the experiences of Belgian VCs. The position of the VC sheds more light on the plenitude of roles an active owner can play. Furthermore, our findings highlight the need for a better understanding of the governance structure and processes of high–tech companies.
Sustainable Product Design — Is there more to it than Science, Systems and Computers?1
Authors: Støren Sigurd
Published: March 2003

The conditions are examined through which a company can take an active part in the evolutionary process towards ecologically sustainable societies. Productivity measures, quality perceptions, ecological performance and critical contradictions between business targets have to be identified, based on systematic retrieval and structuring of information of product, processes and practices. It is important that the company selects ecological performance parameters and sets performance targets which show the way towards ecologically sound products, processes and practices and at the same time secure its competitiveness in today's market. It is suggested that an extended quality function deployment process (QFD) can be used for this purpose. By combining this information structure with the modelling possibilities of products, processes and practices that are available in modern computer assisted engineering software (CAE), consequences and feasibilities of new ideas and creative solutions can be checked out continuously. New ideas and creative solutions that really will lead the way towards ecologically sustainable societies, seem to require development‐ and design‐teams that are getting inspiration, visions and wisdom from other areas than the conventional business and university environment. Close cooperation should be encouraged between industry and the universities for building up such inspired environments.
Creative Problem Solving as a Technology of Expert Behaviour within Marketing Management
Authors: Hackley Christopher , Kitchen Philip J.
Published: March 2003

This paper presents a case based on the notion that rule based systems or ‘technologies’ designed to promote creativity may be seen as a way of short‐cutting the training route to domain specific cognitive expertise in Marketing Management. The paper draws on multi‐disciplinary research from different but thematically parallel research programmes in expertise and cognitive science, creativity, and problem solving. The argument proceeds with an examination of the construct of ‘creativity’ and its role in management domains in general and the marketing domain in particular. A review of psychological findings concerning expertise is then undertaken to draw out the common features between creativity in problem solving and high level expertise. Finally, these common features are synthesised in a speculative model which describes the complex of cognitive strategies and beliefs about problem solving which may characterise expert problem solvers in marketing management—a move towards a potentially testable ‘metacognition’ of expertise in marketing.
Individuals’ Responses to Change: The Relationship Between Learning and Knowledge
Authors: Antonacopoulou Elena
Published: March 2003

The emphasis on learning and knowledge as key mechanisms for responding to the uncertainties of the business environment has been a central theme in much current thinking. Despite the interest in both concepts there appears to be little discussion of the relationship between learning and knowledge. More specifically there is currently limited research, which examines how learning and knowledge affect individuals’ responses to organisational changes. This paper makes a contribution to this debate by exploring the relationship between learning and knowledge with the individual manager as the unit of analysis. The paper presents recent empirical findings from a study of managers in the Financial Services Sector in the UK to demonstrate how individuals formulate their understanding about organisational changes. Moreover, the paper examines individuals’ responses to change in relation to the implicit and explicit messages of the organisation which have an impact on the way learning informs knowledge, as well as the way knowledge fuels learning.
What Blocks Creativity? A Managerial Perspective
Authors: Groth John , Peters John
Published: March 2003

Barriers and inhibitors block creativity and suppress or drive into hiding the creative talents of individuals and limit or destroy “creative willingness.” The paper reports on perceived blocks to creativity based on “face to face” input from over 1700 people, 67 groups, over a ten‐year period.
The Development of Technological Creativity through Project Work
Authors: Hong Jon‐Chao , Sheu Shu‐Wu
Published: March 2003

Working in research and development groups and development groups and using actual materials, the learners acquire the abilities of systematic thinking and problem solving in completing the multifunction robot project. Moreover, the learners keep a record of data and messages collected in various stages of robot design and production. They also have to use thinking skills to locate problems and keep looking for better ways to modify and improve on their ideas until the robot function as it is originally intended to.

A creativity‐developing, and learning experiment is described involving the design of a multi‐function robot. We conclude that the development of creative capabilities is enhanced when the design processes are accompanied by reflection and reporting procedures.
Brainstorming Products for the Long‐term Future
Authors: Hollins Bill
Published: March 2003

Research has recently been completed to determine how innovative organisations manage innovation over an extended period into the future. The purpose of the research was to determine what companies active in this area, were doing and, from the results, write the new standard BS 7000 part 1 ‘Guide to Innovation Management’. This paper considers one of the findings that organisations can extend the use of brainstorming as a means for: developing the organisational structure for planning the long‐term, and envisaging the types of products and services that may be developed up to three generations ahead – typically ten years in many organisations.
How to Develop More Creative Strategic Plans: Results from an Empirical Study
Authors: Riquelme Hernan
Published: March 2003

What factors help and hinder creativity within the strategic planning process? An exploratory study examined the strategic plans of groups of graduates for their own business school. The students were assessed for rigidity of cognitive orientation, and divided into open‐minded groups, and two other groups of more rigid orientation. Strategic plans were rated for originality and relevance. An open minded orientation affected the production of a strategic plan in a positive way. The productivity (quantity) of the more closed‐mind type of group was enhanced in the elaboration of a strategic plan through interventions introducing creativity. The quality of production was only marginally enhanced. We conclude that creativity‐enhancing techniques had a marginal direct effect on efforts to deal with ill‐defined problems such as a strategic plan. Additional indirect effects (by influencing rigid cognitive orientation) may be occurring.
The Weight of History: An Exploration of Resistance to Change in Vicars/Managers
Authors: Andersen Jon
Published: March 2003

What impact do managers have on successful implementation of organisational change? A model is suggested to assess the strength of managers to initiate and implement organisational change and development. The model rests on leadership theories and factors that describe and explain various change aspects of managers’ behaviour. It is assumed that managers who have a change‐centred leadership style, who are intuitive combined with power motivation and see urgent demands for change and development, have an optimal capacity for implementing major changes in their organisations. This model has been tested on a sample of 153 vicars, each facing a radically new situation. The Church of Sweden was disestablished this year breaking a structure, which has lasted for 500 years. As expected, very few of the vicars (as managers) exhibited change and development related behaviour described by the model. In fact, only one percent of the vicars appears to have maximum capacity to implement organisational changes. Whether the model can predict successful implementation of major organisational change remains to be tested.
Senior Management Support in the New Product Development Process
Authors: Gomes Jorge , De Weerd–Nederhof Petra C. , Pearson Alan , Fisscher Olaf A.M.
Published: March 2003

This paper studies the relationship between senior management support to new product development activities by means of a quantitative and qualitative analysis of questionnaire and interview data collected in the United Kingdom and the Netherlands. The quantitative analysis showed that there is a small to medium association between senior management support to new product development and project performance in the dimensions of time, cost, and end product quality. The qualitative analysis suggests that these weak links could be explained by separating the influence of senior management support on new product development activities into direct and indirect effects. Direct effects include issues such as the use of multifunctional senior teams and process champions, whereas indirect effects include issues such as organization mission and goals, and learning and knowledge management systems.
Sustainable Development and the Sustainability of Competitive Advantage: A Dynamic and Sustainable View of the Firm
Authors: Rodriguez Miguel A. , Ricart Joan E. , Sanchez Pablo
Published: March 2003

Does the need for sustainable development hinder businesses’ ability to create value? Is a firm’s competitiveness negatively affected by considering that need? After quickly reviewing the main literature contributions on the relationship between business and society, and drawing from resource‐based view of the firm and sustainable development literature, this paper presents a proposal for a dynamic and sustainable view of the firm. It shows how considering the changes introduced into the competitive landscape by sustainable development influences the way in which companies develop their resources, capabilities and activities, fostering the persistence of competitive advantages based on knowledge and innovation.
The Confidence of Eyewitnesses in Their Identifications From Lineups
Authors: Wells Gary L. , Olson Elizabeth A. , Charman Steve D.
Published: March 2003

The confidence that eyewitnesses express in their lineup identifications of criminal suspects has a large impact on criminal proceedings. Many convictions of innocent people can be attributed in large part to confident but mistaken eyewitnesses. Although reasonable correlations between confidence and accuracy can be obtained under certain conditions, confidence is governed by some factors that are unrelated to accuracy. An understanding of these confidence factors helps establish the conditions under which confidence and accuracy are related and leads to important practical recommendations for criminal justice proceedings.
The monetary reforms of Charlemagne and the circulation of money in early medieval Campania
Authors: Day William R.
Published: March 2003

The article examines the degree to which Charlemagne's conquest of Lombardy extended the domain of the Carolingian silver denarius into Italy, and argues that the changeover from gold to silver was markedly gradual and ultimately temporary in the south of Italy, especially in Campania. In the economic sphere at least, southern Italy was never fully integrated into the Carolingian sphere, but looked rather to the central and eastern Mediterranean.
Slavs in Fredegar and Paul the Deacon: medieval gens or ‘scourge of God’?
Authors: Curta Florin
Published: March 2003

This article presents a new interpretation of the accounts of Slavs given by two early medieval Latin narrative sources. The first section discusses Fredegar's Wendish account, while the second section considers Paul the Deacon's view of the Slavs in his Historia Langobardorum. The instrumental use of the Slavs in the domestic affairs of the Frankish and Lombard kingdoms constitutes the emphasis of the last section, in which the author compares Fredegar's and Paul the Deacon's historiographical perspectives.
Lands of women? Writing the history of early medieval women in Ireland and Europe
Authors: Peyroux Catherine
Published: March 2003

Lisa M. Bitel Land of Women: Tales of Sex and Gender from Early Ireland.

Edited by Christine Meek and Katharine Simms ‘The Fragility of Her Sex’? Medieval Irish Women in their European Context.
Review article: Property, ideology and the territorial power of the papacy in the early Middle Ages
Authors: Costambeys Marios
Published: March 2003

Books reviewed in this article:

F. Marazzi,I Patrimonia Sanctae Romanae Ecclesiae nel Lazio (secoli IV–X). Struttura amministrativa e prassi gestionali.

C. Azzara, L'ideologia del potere regio nel papato altomedievale (secoli VI–VIII).
Between court and counts: Carolingian Catalonia and the aprisio grant, 778–897
Authors: Chandler Cullen J.
Published: March 2003

In the late eighth century, Charlemagne issued a new kind of land grant in Septimania and the Spanish March to refugees fleeing Muslim Spain. This grant, the aprisio, was made from fiscal land in deserted areas and included special rights and immunities. Previous scholars have interpreted the aprisio in economic and military terms as a mechanism to entice settlers to the region in order to make the land productive and to provide warriors to defend the Frankish frontier. This article suggests that political concerns also may have played an important role, arguing that the aprisio grant was an attempt by Carolingian kings to limit the power exercised by very powerful marcher counts.
The legal framework of the EC single market
Authors: QC Martin Howe
Published: March 2003

The European single market is underpinned by Community law, which is supreme and directly applicable in national courts. But the UK loses out because of disparities between national legal systems, and because Community law is interpreted to serve the political objective of European unity. There are several possible intermediates between full EU membership and complete withdrawal.

There is no legal barrier to the UK's exit from the EU should it wish to take that step.
The rugby revolution: new horizons or false dawn?
Authors: Thomas Dennis
Published: March 2003

Recent developments have transformed the nature of, and relationships between, the two sports of Rugby League and Rugby Union. This paper examines the changes in the organisation and structure of Rugby League in Britain, together with the implications of the professionalisation of Rugby Union. The various developments are related to well‐established debates in the economics of sport. With the circumstances of both sports remaining volatile, the conclusion briefly speculates on future prospects.
The future of Nato
Authors: Sandler Todd
Published: March 2003

This article reviews some of the significant changes that have influenced NATO in the last decade. In addition, changes on the horizon ‐ in terms of membership and the implementation of NATO's new strategic doctrine ‐ are investigated. NATO's future is also assessed in terms of the threat of terrorism, peacekeeping activities and defence burden sharing.
Meeting supply: the role of the Environment Agency
Authors: Sherriff Jerry
Published: March 2003

The Environment Agency plays a vital role in authorising how much water resource can be made available for supply and in the way it is managed and developed. The Agency's focus is on the protection and improvement of the environment and as such it strives to ensure the best use of the limited resource available. This requires not only that existing water resources are used effectively and efficiently but also that future plans do not place an unnecessary burden on the environment.
Water meters: an incentive to conserve and a signal to the market
Authors: Bohanna David
Published: March 2003

The paper discusses Anglian Water's approach to charging for water services, drawing on its experience of implementing a metering programme for its domestic customers. It highlights the challenges faced, how they were overcome, and summarises the benefits delivered by metering.
The saleability of urban road pricing
Authors: Ison Stephen
Published: March 2003

The key issues concerning road pricing are now well understood, and they must be addressed at local level if the policy is to be saleable.

This means that objections to pricing need to be addressed at local level.

Experience abroad suggests that equity and the use of the resulting cash flow are likely to be the most significant points that would need to be addressed.
Britain at the crossroads: the single currency
Authors: Ball Sir James
Published: March 2003

The concept of the single currency, to be adopted by the majority of the members of the European Union, is difficult for the general public to understand because of the lack of coherence of the objectives of its advocates (bureaucrats, ex‐bureaucrats, academics, labour leaders, multinational business, and politicians). The general economic arguments for the single currency do not add up. Europe is not an ‘optimal currency area.’ A one‐size‐fits‐all monetary policy will impose great strains. It is not necessary for Britain to participate in this enterprise. Britain does not need the euro, any more than Canada needs the US dollar. The ideal role for Britain is to be at the margin of Europe as the interface between Europe and North America
Monetary targets: an unfinished experiment?
Authors: Pepper Gordon , Oliver Michael J.
Published: March 2003

The memoirs of Chancellors of the Exchequer and the retirement speeches of officials indicate that monetary targets were adopted in the second half of the 1970s and the first half of the 1980s primarily in an attempt to manage expectations in financial markets, to stop them from behaving in an undesirable way, and not as an intermediate target to control nominal GDP, as monetarists advocated.

Gordon Pepper is Honorary Visiting Professor, City University Business School, and Michael J. Oliver is Senior Lecturer in Economics and Economic History, Sunderland Business School.
Fashions and continuity in British fiscal policy
Authors: Congdon Tim
Published: March 2003

Fiscal policy in the UK has reflected changing intellectual influences from Keynesianism in the 1960s to monetarism in the 1970s and early 1980s. New Labour's rules hark back to pre‐war Treasury orthodoxies, despite their claims to modernity.
The New Europe
Authors: Owen Lord
Published: March 2003

British people are right in wanting a ‘wait and see’ approach to the euro.

It carries potential dangers of increasing federalism. With the future path of the EU so unclear, Britain should be confident in her ability to adopt a cautious approach and, if necessary, to opt‐out of the euro without jeopardising either her EU membership or international standing.
Britain, the EU and the global economy
Authors: Portillo Michael
Published: March 2003

Britain should retain a global outlook in its political and economic affairs. Whilst recognising her proximity to and trade relations with Europe, it is argued that in order to compete on the world stage Britain should adopt a more flexible economy along American lines as a contrast to the European model. Importantly, this means retaining economic and political sovereignty.
Europe in the year 2000: three pitfalls ahead
Authors: Vaubel Roland
Published: March 2003

This paper analyses three problems facing the EU in the near future: (1) A move towards majority decision‐making would impose costs upon the minority and restrict freedom. (2) A European Bill of Rights would give the European Court more centralising power. (3) European determination to strengthen and separate its own military forces within NATO bodes badly for the future of the Organisation.
The Monetary Policy Committee: an end‐of‐term evaluation
Authors: Matthews Kent
Published: March 2003

The Bank of England's Monetary Policy Committee has controlled interest rates since June 1997. By comparing the MPC's record with that of the Shadow Monetary Policy Committee (SMPC) and evaluating the degree of volatility in the financial markets, this paper concludes that in many respects the MPC succeeded in its task. However, whilst the lack of ‘groupthink’ and the record compared with the SMPC are commendable, increased financial market volatility suggests the MPC could have done better.
Price‐level targeting ‐the next objective for monetary policy?
Authors: Lilico Andrew
Published: March 2003

Inflation‐targeting monetary policy is compared with price‐level targeting. It is argued that price‐level targeting offers greater certainty about the long‐term inflation rate, greater economic growth, a superior response to a deflationary depression, and other advantages.
Natural Monopoly and Yardstick Competition
Authors: Shew William B.
Published: March 2003

There is a renaissance of interest in yardstick competition as an aid to regulators. It can work well when the only source of inter‐firm cost differences is efficiency. However, when cost differences arise from other factors, yardstick competition must rely on statistical analyses which have so far not been very successful in determining the effect on distribution cost of the cost environment, scale and service quality.
Towards an Historical Model of Services Innovation: The Case of the Insurance Industry, 1700–1914
Authors: Pearson Robin
Published: March 2003

There has been a recent shift in the historiography of the modern British economy towards an emphasis on the success of the service sector. This article examines one criterion of success, namely innovation, in British insurance between 1700 and 1914. Factors determining innovation are surveyed and comparisons drawn with European insurance. The relevance of existing models of industrial innovation is challenged and a new model is constructed for insurance. This model suggests that insurance innovation ran broadly counter‐cyclical to innovation in industry during this period, and was relatively undynamic. The article concludes by speculating about the relationship between industrial growth, liquidity constraints, and innovation in insurance.
Employers, labour, and the state in industrial relations history: a reply to Gospel
Authors: Adams Tony
Published: March 2003

abstract
Growth and recession in the fifteenth‐century economy: the Wiltshire textile industry and the countryside
Authors: Hare J. N.
Published: March 2003

This study explores regional and chronological variations within the later medieval economy. In the later fourteenth century, the cloth industry grew rapidly in Salisbury and neighbouring Somerset, where it was beginning to break out from an urban core. In the first half of the fifteenth century it grew rapidly in west Wiltshire, until hit by the great slump from c.1450, and revived in the later part of the century. Industrial growth and recession affected the agricultural hinterland, where farming and the demand for land became dependent on the demands of a flourishing industry.
From fascism to communism: continuity and development of collectivist economic policy in North Korea
Authors: Kimura Mitsuhiko
Published: March 2003

On the basis of new archival evidence and a reading of other materials, this article demonstrates that economic policies in North Korea after 1945 very closely resembled those implemented by the Japanese towards the end of their colonial rule. This resemblance was a natural consequence of the collectivist spirit dominating both regimes. This conclusion challenges the standard interpretation of formation of the North Korean regime, which asserts discontinuity of the regime with the colonial one.
Merchants and planters revisited
Authors: Smith S. D.
Published: March 2003

This article's principal source is a database of loans granted by the merchant Henry Lascelles (1690–1753) to clients in the West Indies. Lascelles’ long–term lending in the Caribbean is compared with his English loans, his investment in securities, his purchases of English real estate, and short–term credits granted to planters by the London commission house of Lascelles and Maxwell. The data indicate that lending on mortgage grew in importance from c. 1740 in Lascelles’ financial dealings. The article supports the view that the development of the West Indies was dependent on imports of British capital during the eighteenth century.
Acceptance of innovations in early twentieth–century Indian weaving
Authors: Roy Tirthankar
Published: March 2003

The experience of the handloom weaver has been seen either as an example of the destruction of traditional industry in response to competition from mechanized industry, or as one of survival. The significance of technology in these debates has been under–explored. The article argues that technological change in weaving was significant, and was not a response to declining competitiveness, but part of a transition in markets and organizations that the surviving handlooms experienced. The extent of technological change was uneven between places and groups. The technological map was shaped mainly by institutions and institutional change.
The financial health of voluntary hospitals in interwar Britain
Authors: Gorsky Martin , Mohan John , Powell Martin
Published: March 2003

This article re–evaluates the gravity of the financial problems facing British voluntary hospitals in the interwar period. A relational database of statistics on hospital provision, finance (at both current and constant prices), and activity is used to derive consistent sets of hospitals for reporting purposes. The article presents novel analyses of the extent and pattern of hospital surpluses and deficits; of the capital accounts of selected individual hospitals; of trends in hospital expenditure; of the diversification of hospital income, emphasizing the declining importance of traditional philanthropy; and of the effect of these changes on hospital provision and utilization.
Baltic iron and the British iron industry in the eighteenth century
Authors: Evans Chris , Jackson Owen , Rydén Göran
Published: March 2003

Before the revolution in coal technology that swept the British iron industry in the last years of the eighteenth century, native ironmasters were unable to meet the burgeoning demand for malleable bar iron. The shortfall was made good by imports of bar iron from the Baltic, first from Sweden, then from Russia. This article presents new empirical evidence on the role played by Baltic iron in the Georgian economy. It also considers the impact of Swedish and Russian iron on domestic ironmasters as they sought organizational, as well as technological, ways to overcome the energy constraints facing the industry.
Why Do Mortgage Markets Matter?
Authors: Meen Geoffrey
Published: March 2003

1999 saw the return of large scale mortgage equity ‐ ie mortgage borrowing to finance consumption rather than house purchase ‐ for the first time for a decade. Recent developments of the OEF macroeconometric model of the UK economy have focused on the determination of mortgage lending, looking in particular at the impact of downpayment constraints ‐ ie the deposit borrowers have to put down when they buy a house. In this article, Geoffrey Meen uses this model to analyse the effects of mortgages on: (i) the cycle in the UK housing market at a national level; (ii) regional house price differentials; and (iii) aggregate savings and consumer behaviour.
The Trade‐off Interpretation of Phillips’s Dynamic Stabilization Exercise
Authors: Leeson Robert
Published: March 2003

This paper, which examines Phillips’s famous curve, is based on Phillips’s private papers, and the London School of Economics Methodology, Measurement and Testing Seminar records (sources previously thought to be lost). These sources, plus Phillips’s theoretical work, suggest that the equilibrium ‘menu of choice’ is a misinterpretation of Phillips’s dynamic stabilization exercise. Phillips had a clearly articulated role for inflationary expectations in his model, and had no toleration for the notion that ongoing inflation could purchase sustainable reductions in the rate of unemployment. Evidence is cited which indicates that Milton Friedman was profoundly influenced by Phillips’s analysis of inflationary expectations.
Induced Preferences, Dynamic Consistency and Dutch Books
Authors: Kelsey David , Milne Frank
Published: March 2003

We assume that a decision‐maker has expected utility preferences over a large space which includes some variables not observable by the theorist. These will induce preferences over observable variables, which typically will not have the expected utility form. This paper focuses on implications for multi‐period decisions. We show that such preferences are not vulnerable to ‘Dutch books’. In particular, we consider preferences arising from non‐additive subjective probabilities and show how they can arise as induced preferences.
Population Increase and the End of Colonialism
Authors: Grossman Herschel I. , Iyigun Murat F.
Published: March 2003

Between 1946 and 1976, the European powers granted independence to all of their large colonies in Africa and Southeast Asia. This paper attempts to provide an economic explanation for this remarkable ending to the era of colonialism. The main theoretical innovation is to consider the effect of population increase on the allocation of time by the indigenous population between productive and subversive activities. The analysis suggests that the increase in population during the colonial period increased the potential private return to subversive activity until the colonies became a net burden on the metropolitan governments. It also suggests that there was less subversive activity in colonies in which the market for indigenous labour was monopsonized because monopsonistic employers internalized the potential negative effect of subversive activity on net profits.
Are Real Wages and Unemployment Related?
Authors: Jacobson Tor , Vredin Anders , Warne Anders
Published: March 2003

In this paper we propose an alternative method for investigating the sources behind the behaviour of real wages and unemployment. The model we study is a certain cointegrated VAR, a so‐called common trends model, which has become increasingly popular in the empirical growth/business cycle literature. This model leads us to emphasize the distinction between long‐run and short‐run relations. Using quarterly Swedish data (1965–90), we find only weak evidence of a short‐run relation between real wages and unemployment as reported in traditional single‐equation error correction models. There is even less evidence of a long‐run relation.
Dynamic Stability and International Trade under Uncertainty
Authors: Chau Nancy H.
Published: March 2003

In the presence of output or price uncertainty, the Heckscher‐Ohlin‐Samuelson (H‐O‐S) model with incomplete risk markets has been shown to exhibit a wide range of perverse comparative‐statics responses which contradict the predictions à la Stolper‐Samuelson and Rybczynski, and opens up the possibility of perverse price‐output responses. This paper revisits the question raised by Neary (1978) and examines the dynamic stability properties of an H‐O‐S model under uncertainty in relation to the conditions under which these perverse responses emerge. The findings suggest that, once the risk attitudes of the representative entrepreneur is appropriately accounted for in the specification of value factor intensities, dynamic stability with respect to a Marshallian adjustment process is necessary and sufficient for the normality of all of the standard comparative‐statics responses except for the Rybczynski result. The basic analytics are then applied to various existing setups of the H‐O‐S model under uncertainty. In each case, the applicability of the stability condition in precluding comparative‐static responses that violate standard predictions is examined.
Imperfect Information and Consumption in the United States and the United Kingdom
Authors: Demery David , Dick Nigel W.
Published: March 2003

Pischke (1995) has argued that imperfect information may account for the failure of Hall's permanent income hypothesis to explain the behaviour of aggregate consumption. We identify the restrictions that Pischke's theory places on the dynamics of aggregate consumption and test them using quarterly data for the United Kingdom and United States. Our results suggest that, while Pischke's model explains some features of the data which the Hall model cannot, it is formally rejected.
Procyclical Labour Productivity: A Closer Look at a Stylized Fact
Authors: Hart Robert A. , Malley James R.
Published: March 2003

At 4‐digit United States manufacturing industry level, we find evidence suggesting that the stylized fact of procyclical labour productivity should be treated with great caution. We use the NBER Manufacturing Productivity database to investigate the relationship between hourly labour productivity and real output for 450 industries for the years 1958–91. Labour productivity is significantly procyclical in 63% of industries and acyclical in 36%. In the latter respect, a high proportion of investment goods industries display acyclical productivity. Cross‐section regressions are carried out that seek to explain the interindustry distribution of cyclicality. The analysis attributes a significant role to variations in materials costs, as a proxy for fluctuations in factor utilization.
Scale, Congestion and Growth
Authors: Eicher Theo , Turnovsky Stephen J.
Published: March 2003

This paper explores the relationship between aggregate and relativecongestion, returns to scale and economic growth. Aggregate congestionreduces the effective productivity of capital; relative congestion reducesthe effective productivity of labour. Both forms of congestion adverselyaffect the equilibrium growth rate, although their relative effects dependupon aggregate returns to scale. The two forms of congestion havecontrasting effects on the transitional dynamics. Relative congestionretards the rate of adjustment; aggregate congestion accelerates it. Theexternalities generated by congestion and non‐optimal expenditure can befully corrected, both during the transition and in steady state, by atime‐invariant income tax.
Herding Behaviour and the Size of Customer Base as a Commitment to Quality
Authors: Choi Chong Ju , Dassiou Xeni , Gettings Stephen
Published: March 2003

This paper refers to herding behaviour as developed in Bikhchandani et al. (1992), Bannerjee (1992) and Choi and Scarpa (1994). We examine the behaviour of a potential customer who does not know how many of her predecessorsdecided not to purchase the product. We show that, ceteris paribus,a smaller (larger) customer base increases the likelihood of a positive(negative) cascade. Hence, a firm can signal its commitment to high quality(Schelling 1960) by choosing to develop a customer base that relies upon thecustomer's ‘private’ information rather than one that relies on an informational cascade.
The Independent Invention Defence in Intellectual Property
Authors: Maurer Stephen M. , Scotchmer Suzanne
Published: March 2003

Patents differ from other forms of intellectual property in that independent invention is not a defence to infringement. We argue that the patent rule is inferior in any industry where the cost of independently inventing a product is not too much less than (no less than half) the inventor’s cost. First, the threat of entry by independent invention would induce patent holders to license the technology, lowering the market price. Second, a defence of independent invention would reduce the wasteful duplication of R&D effort that occurs in patent races. In either case, the threat of independent invention creates a mechanism that limits patent‐holders’ profits to levels commensurate with their costs of R&D.
The Politics of Index‐Linked Bonds
Authors: Pecchi L. , Piga G.
Published: March 2003

In this paper we will seek to provide a political economy explanation for the government issuance of indexed bonds. We will show that the issuance of nominal bonds decreases inflation whenever the bondholders’ constituency is stronger than the taxpayers’ constituency. We then assume that public debt management is influenced by the Central Bank. Contrary to what is predicted by the traditional time‐inconsistency approach, we show that when the creditor constituency is more powerful than the taxpayers’ constituency, by offering inflation protection through the issuance of indexed bonds the Central Bank reduces the creditors’ efforts against inflation and thereby raises equilibrium inflation.
Interest Group Lobbying and the Delegation of Policy Authority
Authors: Sloof Randolph
Published: March 2003

In a signalling model of lobbying the politicians' decision whether to delegate policy authority and an interest group's choice between lobbying politicians or bureaucrats are investigated. Only bureaucrats are able to assess policy‐relevant information coming from the interest group, but their interests may differ from those of politicians. In equilibrium politicians weigh the benefits of an informed policy decision against bureaucratic drift. We obtain that delegation occurs only when the bureaucracy is not too much biased and when the stakes of the interest group are not too high. Still, politicians sometimes prefer a biased bureaucracy and the interest group to have a larger stake. The model also predicts that interest groups typically lobby politicians to further delegation.
Delays of Inflation Stabilizations
Authors: Veiga Francisco José
Published: March 2003

In some new political economic models, delays of stabilizations result from coordination problems caused by collective choice‐making mechanisms. Although several previous studies have tested the effects of political instability and fragmentation on seigniorage, deficits, or inflation, no direct tests of the influence of these factors on the delays of stabilizations have previously been undertaken. This paper reports the results of such tests. The degree of fragmentation of the political system and the level of inflation are identified as important determinants of the timing of inflation stabilizations.
Women’s unemployment during transition
Authors: Ham John C. , Svejnar Jan , Terrell Katherine
Published: March 2003

We analyse women’s weekly probabilities of leaving unemployment in the Czech and Slovak Republics (CR and SR) in order to investigate three questions: 1) Why are unemployment rates much lower in the CR than the SR?; 2) Does the unemployment compensation scheme (UCS) substantially lengthen unemploy‐mentspells?; and 3) Why are women’s unemployment rates higher than men’s? We find that differences in the behaviour of the individuals, employers and institutions in the SR and CR (as measured by differences in coefficients) play a larger role in determining the CR’s shorter female unemployment spells than do differences in measured demand and demographic variables. The UCS has only a moderate effect on duration and its impact is greater in the CR. The differences between men’s and women’s spells (in each republic) are explained more by differences in coefficients than by differences in observed characteristics.

JEL classification: C41, H53, J23, J64, O15, P2.
Enterprise restructuring and bank competition in transition economies
Authors: Schnitzer Monika
Published: March 2003

We investigate how bank competition affects the efficiency of credit allocation, using a model of spatial competition. Our analysis shows that bad loans are more likely the larger the number of banks competing for customers. We study further how many banks will be active if market entry is not regulated. Free entry can induce too much entry and thus too many bad loans compared to the social optimum. Finally we analyse how bank competition affects the restructuring efforts of firms. We find that restructuring has positive externalities which give rise to multiple equilibria, with either much or little restructuring activity.

JEL classification: D43, G21, G34, L13, P31, P34.
Book Review
Authors: Seifert Bruce
Published: March 2003

Oxelheim, L., Financial Markets in Transition—Globalization, Investment and Economic Growth
International working capital practices in the UK
Authors: Ricci Cecilia , Vito Nino
Published: March 2003

This paper reports the results of a survey on the international working capital management practices of the top 200 companies in the UK. The purpose of the survey was to obtain information on some international aspects of working capital management in major British firms.
Cross‐sectional analysis of Swedish stock returns with time‐varying beta: the Swedish stock market 1983–96
Authors: Asgharian Hossein , Hansson Björn
Published: March 2003

This paper analyses the ability of beta and other factors, like firm size and book‐to‐market, to explain cross‐sectional variation in average stock returns on the Swedish stock market for the period 1983–96. We use a bivariate GARCH(1,1) process to estimate time‐varying betas for asset returns. The estimated variances of these betas, derived from a Taylor series approximation, are used for correcting errors in variables. An extreme bound analysis is utilized for testing the sensitivity of the estimated coefficients to changes in the set of included explanatory variables.

Our results show that the estimated conditional beta is a more accurate measure of the true market beta than the beta estimated by OLS. The coefficient for beta is not significantly different from zero, while the variables book‐to‐market and leverage have significant coefficients, and the latter coefficients are also robust to model specification. Excluding the down turn 1990–92 from the sample shows that the significance of the risk premium for leverage might be considered as an industry effect during this extreme period. Finally, we find a close dependence between the risk premium for beta and that for size and book‐to‐market. The omission of each of these variables may cause statistical bias in the estimated coefficient for beta.
The Deterring Role of the Medium of Payment in Takeover Contests: Theory and Evidence from the UK
Authors: Cornu Philippe , Isakov* Dušan
Published: March 2003

The deterring role of the medium of payment in a takeover contest is analysed from the point of view of the bidder. Cash, debt and equity are considered as alternative mediums of payment, and the bidder equilibrium strategies are specified following the Perfect Bayesian Equilibrium requirements for a signalling game. The model predicts notably that cash offers signal a high‐valuing bidder, strongly determined to acquire the target firm. Moreover, cash offers deter competition better than debt or equity offers. The theoretical results are validated with data from the UK over 1995–96.
Share Holder Wealth Effects of Corporate Selloffs: Impact of Growth Opportunities, Economic Cycle and Bargaining Power
Authors: Alexandrou George , Sudarsanam Sudi
Published: March 2003

Most of the existing empirical evidence on corporate selloffs documents significant wealth gains for the seller’s shareholders. We investigate the sources of these wealth gains by examining the impact of business and financial strategy, the economic environment during selloff, and the bargaining advantages of the seller including information asymmetry. We find evidence that sellers with growth opportunities and financially strong sellers enjoy higher returns. Selloffs during recessions generate larger wealth gains than those during economic boom. Information asymmetry due to the buyer’s location being different from the purchased division’s gives the seller a bargaining advantage leading to larger wealth gains. Relatively large divestments are more beneficial to seller shareholders than small ones. The study highlights the importance of both firm specific and environmental factors in explaining the wealth gains associated with corporate selloffs.