Wars and capital destruction

In this paper, we propose a theoretical framework to investigate the impact of conflicts and wars on key macroeconomic aggregates and welfare. Using a panel data with 9 countries from 1870 onwards, we first show that the consumption-to-output ratio is minimal during WWII for participants. While this can be explained by an increase in public spending in the USA, this cannot be the case in other countries that participated in WWII, as they experience a large fall in output during wartime. To account for this, we build a variation of a Real Business Cycle model first proposed by Hercowitz and Sampson (1991). We extend the initial model to account for specific shocks that destroy private and public capital stocks – as conflicts do – by assuming an (exogenously) time-varying parameter in the law of capital accumulation. In addition, the model imbeds generalized TFP shocks capturing standard technological factors as well as the potential effects of war on the labor force. The model is estimated and used (i) to assess the importance of capital shocks during war episodes, and (ii) to quantify the welfare effects of conflicts. We show that capital shocks are crucial to account for the macroeconomic dynamics of countries that have experienced large war-related destruction, and that the welfare losses from fluctuations can be quite large when considering data samples that include major war episodes.     

Inflation tax in the lab: a theoretical and experimental study of competitive search equilibrium with inflation

In this paper we measure the effect of the inflation tax on economic activity and welfare within a controlled setting. To do so, we develop a model of price posting and monetary exchange with inflation and finite populations. The model, which provides a game–theoretic foundation to Rocheteau and Wright (2005)׳s competitive search monetary equilibrium, is used to derive theoretical propositions regarding the effects of inflation in this environment, which we test with a laboratory experiment that closely implements the theoretical framework. We find that the inflation tax is harmful – with cash holdings, production and welfare all falling as inflation rises – and that its effect is relatively larger at low inflation rates than at higher rates. For instance, for inflation rates between 0% and 5%, welfare in the two markets we consider (2[seller]×2[buyer] and 3×2) falls by roughly 1 percent for each percentage–point rise in inflation, compared with 0.4 percent over the range from 5% to 30%. Our findings lead us to conclude that the impact of the inflation tax should not be underestimated, even under low inflation.     

Estimating the distribution of welfare effects using quantiles

This paper proposes a framework to model welfare effects that are associated with a price change in a population of heterogeneous consumers. The framework is similar to that of Hausman and Newey (Econometrica, 1995, 63, 1445–1476), but allows for more general forms of heterogeneity. Individual demands are characterized by a general model that is nonparametric in the regressors, as well as monotonic in unobserved heterogeneity, allowing us to identify the distribution of welfare effects. We first argue why a decision maker should care about this distribution. Then we establish constructive identification, propose a sample counterparts estimator, and analyze its large‐sample properties. Finally, we apply all concepts to measuring the heterogeneous effect of a change of gasoline price using US consumer data and find very substantial differences in individual effects across quantiles.     

A global perspective on diversity and inclusion in work organisations

This Academy of Management, Human Resources Division, Ambassadors' Programme special issue presents a collection of empirical papers examining workplace diversity and inclusion in a global context. We introduce this topic raising three overarching challenges: to develop more context-specific definitions of diversity and inclusion; to include dimensions pertinent to a global context in the definition of diversity and inclusion; and to consider the impact of diversity and inclusion practices on performance outcomes across countries as well as within multinational corporations. We explore these challenges through three diversity and inclusion lenses – gender, age and nationality – exploring global perspectives at the national, organisational and team levels of analysis. In conclusion, we present an agenda for future research.     

Partial Horizontal Inequity Orderings: A Non‐parametric Approach*

We provide a partial ordering view of horizontal inequity (HI), based on the Lorenz criterion, associated with different post‐tax income distributions and a (bistochastic) non‐parametric estimated benchmark distribution. As a consequence, several measures consistent with the Lorenz criterion can be rationalized. In addition, we establish the so‐called HI transfer principle, which imposes a normative minimum requirement that any HI measure must satisfy. Our proposed HI ordering is consistent with this principle. Moreover, we adopt a cardinal view to decompose the total effect of a tax system into a welfare gain caused by HI‐free income redistribution and a welfare loss caused by HI, without any additive decomposable restriction on the indices. Hence, more robust tests can be applied. Other decompositions in the literature are seen as particular cases.     

Mechanisms for sharing knowledge in project-based organizations

Organizations need to effectively combine and utilize knowledge resources that are distributed amongst the employees and groups in the firm. This paper examines the use of knowledge-sharing mechanisms to leverage the learning, experience and expertise of employees accumulated across projects. I specify a framework that classifies the knowledge-sharing mechanisms used by project-based organizations. Prior research tends to examine only one dimension of knowledge-sharing mechanisms – personalization versus codification. Personalization mechanisms are often assumed to be more ad hoc and informal, and codification mechanisms are assumed to be formal and involve the use of electronic databases. In this paper, personalization versus codification and individualization versus institutionalization are highlighted as two distinct dimensions of knowledge-sharing mechanisms. Individualized knowledge-sharing mechanisms are informal and unstructured, while institutionalized knowledge-sharing mechanisms are formal and embedded in organizational routines and structure. A framework is presented to show how the two dimensions interact. Based on empirical case studies in two project-based organizations, the paper examines if there are suitable configurations of knowledge-sharing mechanisms for organizations with different characteristics. The study contributes to research by providing a more nuanced classification of knowledge-sharing mechanisms, and provides guidance to managers about the types of knowledge-sharing mechanisms that should be adopted based on the size, geographical dispersion and task nature of organizations.     

On the welfare costs of business-cycle fluctuations and economic-growth variation in the 20th century and beyond

The main objective of this paper is to propose a novel setup that allows estimating separately the welfare costs of the uncertainty stemming from business-cycle fluctuations and from economic-growth variation, when the two types of shocks associated with them (respectively, transitory and permanent shocks) hit consumption simultaneously. Separating these welfare costs requires dealing with degenerate bivariate distributions. Levi's Continuity Theorem and the Disintegration Theorem allow us to adequately define the one-dimensional limiting marginal distributions. Under Normality, we show that the parameters of the original marginal distributions are not affected, providing the means for calculating separately the welfare costs of business-cycle fluctuations and of economic-growth variation.Our empirical results show that, if we consider only transitory shocks, the welfare cost of business cycles is much smaller than previously thought. Indeed, we found it to be negative – −0.03% of per-capita consumption! On the other hand, we found that the welfare cost of economic-growth variation is relatively large. Our estimate for reasonable preference-parameter values shows that it is 0.71% of consumption – US$ 208.98 per person, per year.     

The political intergenerational welfare state

Using a three-period overlapping generations economy framework, we characterize an intergenerational welfare state with endogenous education and pension under voting. We show that although politically establishing Pay-As-You-Go (PAYG) social security in isolation in a dynamically efficient economy will always reduce the capital investment and therefore the social welfare as expected, in contrast politically implementing education-pension policy package instead can improve both human and physical capital accumulation and social welfare over laissez faire. However for this the political influence of the old has to be small thus limiting the size of the PAYG social security program.     

Family Business Restructuring: A Review and Research Agenda

Although business restructuring occurs frequently and it is important for the prosperity of family firms across generations, research on family firms has largely evolved separately from research on business restructuring. This is a missed opportunity, since the two domains are complementary, and understanding the context, process, content, and outcome dimensions is relevant to both research streams. We address this by examining the intersection between research on business restructuring and family firms to improve our knowledge of each area and inform future research. To achieve this goal, we review and organize research across different dimensions to create an integrative framework. Building on current research, we focus on 88 studies at the intersection of family firm and business restructuring research to develop a model that identifies research needs and suggests directions for future research.     

Dynamic institutional analysis: measuring corporatist intermediation

In this paper a framework for empirical analysis is introduced that allows for a dynamic analysis of the interactions between different types of actors and institutions. We elaborate our argument by focusing on a complex phenomenon—corporatism—to show how this concept can be developed into a measure that travels across nations and time. The heuristic framework we developed adequately captures the interactive behaviour of the relevant actors within a corporatist institutional context. We demonstrate the usefulness of this framework for the analysis of policy formation by applying it to Dutch incomes policy. We contend that this heuristic framework contributes to alleviating the often discussed methodological trade-off between single case studies and cross-national comparisons. We also argue that it can bridge the gap between qualitative and quantitative approaches. Lastly, we propose that it can be used for empirical analysis of policy-making processes in other policy areas.     

Energy balance climate models and general equilibrium optimal mitigation policies

In a general equilibrium model of the world economy, we develop a two-dimensional energy balance climate model featuring heat diffusion and anthropogenic forcing driven by global fossil fuel use across the sphere of the Earth. This introduces an endogenous location dependent temperature function, driving spatial characteristics, in terms of location dependent damages resulting from local temperature anomalies into the standard climate-economy framework. We solve the social planner's problem and characterize the competitive equilibrium for two polar cases differentiated by the degree of market integration. We define optimal taxes on fossil fuel use and how they may implement the planning solution. Our results suggest that if the implementation of international transfers across latitudes is not possible then optimal taxes are in general spatially non-homogeneous and may be lower at poorer latitudes. The degree of spatial differentiation of optimal taxes depends on heat transportation. By employing the properties of the spatial model, we show by numerical simulations how the impact of thermal transport across latitudes on welfare can be studied.     

Human Resource Management and the Permeable Organization: The Case of the Multi‐Client Call Centre*

ABSTRACT Despite the interest over recent years in the fragmentation of organizations and the development of contracting, little attention has been paid to the impact of the associated inter‐organizational relationships on the internal organization of employment. Inter‐organizational relations have been introduced primarily as a means of externalizing – and potentially rendering invisible – employment issues and employment relations. In a context where inter‐organizational relationships appear to be growing in volume and diversity, this constitutes a significant gap in the literature that this paper in part aims to fill. The purpose of the paper is two‐fold: to develop a framework for considering the internal and external organizational influences on employment and to apply this framework within a case study of a multi‐client outsourcing call centre. We explore the interactions between internal objectives, client demands and the use of external contracting in relation to three dimensions of employment policy: managing the wage‐effort bargain, managing flexibility and managing commitment and performance. It is the interplay between these factors in a dynamic context that provides, we suggest, the basis for a more general framework for considering human resource policy in permeable organizations.     

Imperfect Behavior‐Based Price Discrimination

In this article, we develop a model encompassing behavior‐based discriminatory pricing as a limit case of a more general framework where firms have incomplete information about consumers’ purchase histories. We show that information accuracy has a nonmonotonic impact on profits and the worst situation for firms is when information accuracy is intermediate. We also discuss welfare and consumer surplus implications of information accuracy. Although welfare monotonically decreases with the level of information accuracy, there is an inverse U‐shape relationship between consumers surplus and information accuracy.     

Supply chain quality management practices and performance: An empirical study

This study proposed a conceptual framework to study the relationships among three dimensions of supply chain quality management (SCQM) – in-house quality management practices (internal QM), interaction for quality with suppliers on the upstream side of supply chain (upstream QM), and interaction for quality with customers on the downstream side of supply chain (downstream QM) – and their impact on two types of quality performance (conformance quality, and customer satisfaction). Survey data were collected from 238 plants in three industries across eight countries and structural equation modeling was used to test this framework. The results indicate a dominant role of the internal QM in SCQM which has a positive impact on the other SCQM dimensions and two types of quality performance. Downstream QM is found to mediate the relationship between internal QM and customer satisfaction, while there is a lack of direct impact of upstream QM on either type of quality performance.     

The welfare cost of one-size-fits-all patent protection

To analyze the welfare gain from allowing for differentiated patent protection across sectors, this study develops a two-sector quality-ladder growth model in which patent breadth is a policy variable and derives optimal patent breadth under two patent regimes. We show that (a) uniform optimal patent breadth is a weighted average of sector-specific optimal patent breadth and (b) sector-specific optimal patent breadth is larger in the sector that has a larger market size and more technological opportunities. To derive the optimal policy, we allow for an arbitrary path of patent breadth and derive the optimal path by solving a Stackelberg differential game. We find that the optimal path of patent breadth under each patent regime is stationary, time-consistent and subgame perfect. Finally, we perform a numerical investigation and find that even a moderate degree of asymmetry across sectors can generate a significant welfare cost of uniform patent protection.     

Career success schemas and their contextual embeddedness: A comparative configurational perspective

We introduce career success schemas as critical for understanding how people in different contexts perceive and understand career success. Using a comparative configurational approach, we show, in a study of 13 countries, that two structural characteristics of career success schemas—complexity and convergence—differ across country contexts and are embedded in specific configurations of institutional factors. Adopting complexity and convergence as primary dimensions, we propose a taxonomy of career success schemas at the country level. Based on this taxonomy, we contribute to the understanding of subjective career success across countries, discuss the importance of schemas for organisational career systems in multinational enterprises, and propose specific guidelines for future comparative careers research.     

Perceived compensation discrimination against physically disabled people in Andalusia

This study proposes and tests a model that explains the job dissatisfaction of the physically disabled as a result of their general perception that they are treated inequitably by their employer, and their specific perception that they have experienced discrimination in compensation. These three variables have not previously been studied in combination. Using the theoretical framework of organisational justice, we apply structural equation models to test our hypotheses in a sample of 220 employed people with physical disabilities in Andalusia. We show that the perception of discrimination in compensation follows the perception of inequity and mediates the relationship between that perception and job dissatisfaction.     

Airline passenger traffic openness and the performance of Emirates Airline

This paper uses cross-sectional data for 155 routes connecting Dubai to various international destinations to assess the relationship between air travel openness, representing airline agreements and the framework governing airlines, and the economic performance of Emirates Airline. We find that increased openness is associated with higher enplanement and lower fares. We also find that code-sharing agreements are associated with higher enplanement and higher fares. Given the complementary nature of such agreements for Emirates, this suggests potential collusive behavior. While these findings are specific to Emirates, they are regionally relevant as most carriers in the Gulf operate in an environment that is similar to Emirates's. Thus, further liberalization of the passenger airline markets of UAE and other Gulf carriers – which includes the elimination of code-sharing-related collusive agreements – would likely result in increased expenditure on air travel and lower production costs (from ensuing competitive pressures). Such outcomes can potentially yield net welfare gains for the UAE and other Gulf countries.     

Heterogeneity in Professional Service Firms

Research on professional service firms emphasizes similarities in their organization and management and distinctiveness from other types of organization. In this paper we take a different tack and focus on the differences between professional service firms, that is, on heterogeneity across different professional sectors. We argue that differences between professions on a number of dimensions affect the nature of professionals' work and, in turn, the organization and management of firms across different professional sectors. Drawing on the sociology of professions literature we focus on three key dimensions of knowledge, jurisdictional control and client relationships to compare legal, auditing and engineering consulting firms. We consider how differences in these dimensions across the three professional services sectors impact upon the way firms are organized. We offer a number of propositions explicating how differences in the nature of knowledge, jurisdictional control and client relationships have implications for organizational form, team-working and pricing systems.     

Too big to fail? The dynamics of EU influence and fiscal consolidation in Italy and Spain (2008–2016)

ABSTRACT

The article studies the dynamics of fiscal consolidation and public sector reforms in Italy and Spain under the EU governance that took shape as a reaction to the Eurozone crisis. We show how three types of EU pressure – fiscal and economic coordination rules, conditionality, and back-room diplomacy have operated in conjunction. We also show that Italy was more willing than Spain to resist EU pressure. Based on a Two-Level Game framework, we argue that this can be explained by the greater opposition to European integration that has developed in Italy compared to Spain.