Music Piracy on the Web – How Effective are Anti-Piracy Arguments? Evidence from the Theory of Planned Behaviour

This article presents the results of an experiment in which three different types of anti-piracy arguments were tested among 139 young adult consumers susceptible to engage in swapping music over the Internet: (1) stressing the negative personal consequences of pirating music, (2) stressing the negative consequences for the artists, and (3) stressing the unethical nature of this behaviour. The psychological determinants of music piracy behaviour were modeled in part with (1991) Ajzen’s theory of planned behaviour. The results show that the intention to swap music on-line depended on one’s attitude toward music piracy, one’s perception that important others want that this behaviour be performed, and one’s perceived competency in doing so. In addition, having swapped music on-line in the past had a strong influence on one’s intention to do it again. Contrary to expectations, the anti-piracy arguments had no significant impact on the behavioural dynamics underlying on-line music piracy.     

Doha Development Round Perspectives

The Doha round got back on track in the summer of 2004. Where does it stand today? Has market access policy gained predominance over market regulation policy? Is the promotion of economic and social development becoming the “mainstream” of negotiations? What role does trade facilitation in developing countries play in this context? Is multilateral liberalisation compatible with the regional and bilateral opening of markets? Is further institutional reform of the WTO beyond the Doha agenda necessary? If so, what form could this take?*This article is based on a contribution made by the author to the International Policy Dialogue “Doha Development Round: Status and Prospects for Success” organised by the InWEnt gGmbH’s Development Policy Forum (Entwicklungspolitisches Forum, EF) in Berlin on 7/8 June 2005.     

Consumption-Leisure Preference Structure: A New Explanation of the Evans-Jovanovic Results for Entrepreneurial Choice

This paper extends Evans and Jovanovic’s (1989) (EJ) model to explicitly consider the latent entrepreneur’s consumption-leisure preference structure, and shows that an increase in his or her assets encourages entrepreneurial activity. This result indicates that EJ’s finding may hold without the assumption of liquidity constraints.     

Unerwünschte Veränderungen der realen Finanzkraftreihenfolge im Länderfinanzausgleich

Given that the current fiscal equalisation scheme needs to be changed by 2019, this paper looks at reform proposals for the fiscal transfer system in Germany to take account of differences in regional purchasing power across states, i.e. differences in the costs of providing public goods and services. Two different reform proposals for a modified transfer system are examined. The first one extends the current fiscal transfer system by additionally allowing for disparities in regional purchasing power across states; the second one links fiscal transfer payments entirely to disparities in regional purchasing power across states. The results show that a transfer system that explicitly accounts for differences in regional purchasing power across states would noticeably reduce the actual volume of redistribution.     

Employee Loyalty: An Examination

This article presents and examines four different reconstructions of Ronald Duska’s argument for the thesis that employees’ loyalty to their employers is misguided. One of them is the reconstruction presented by John Corvino in this journal. The remaining three revolve around, respectively, employers’ failure to reciprocate employees’ (attempts at) loyalty, the commercial character of employment, and the instrumental character of employment. The result of the examination is that the argument does not withstand scrutiny in any of the four reconstructions. The failure of Duska’s argument, however, does not mean that employee loyalty is justified, because the burden of proof is on the defenders of the loyalty. Moreover, a different argument, which is also presented in the article, shows that the loyalty of most present-day employees to their employers is bound to be significantly limited, because of the radical changeability of corporations with publicly traded stock.     

The Chinese RMB: Its Value,Its Peg,and Its Future

The valuation of the Chinese renminbi (RMB) has drawn lots of attention lately and a great deal of pressure on the part of developed nations for revaluation. In addressing the issue of valuation, this paper develops a new purchasing power parity (PPP) index of China’s exchange rate and finds that the while undervalued, the undervaluation is neither unusual nor bad policy. Moreover, China’s overall external trade balance does not seem to be that far out of equilibrium. China’s desire to join the G-7 club is likely to result in abandoning its peg, however, despite the increased risk to its economic development.JEL Classification F310     

Beta adjustment methods

This study is an analysis of the forecasting ability of adjusted and unadjusted betas. Based on the Canadian data for 252 stocks, random errors in betas are the most important reason for the poor predictive ability of individual security betas. Most of this random error is eliminated if securities are grouped into portfolios. However, further improvements in forecasting ability are gained by adjusting the security betas for bias and inefficiency. Five methods of adjusting the naive beta estimates have been tried, including two methods not tested before. These two, Vasicek's two-stage method and order-bias adjustment method, gave results generally superior to others.     

Reputation-based pricing and price improvements

Dealers often offer price improvements, relative to posted quotes, to their clients. In this paper, we propose an explanation to this practice. We also analyze its effects on market liquidity and traders’ welfare. Enduring relationships allow dealers to avoid informed trades by offering price improvements to clients who do not trade with the dealer when they are informed. A dealer never observes whether a specific client is informed or not but he can avoid informed orders by conditioning his offers on past trading profits. Cream-skimming of uninformed order-flow increases the risk of informed trading for dealers without a relationship. Thus, authorizing price improvements increases bid-ask spreads and impairs the welfare of investors without a relationship. It may even decrease the welfare of investors who develop a relationship as they sometimes need to trade at posted quotes. The model predicts a positive relationship between (a) the price improvements granted to a specific investor and past trading profits with this investor or (b) the frequency of price improvements and bid-ask spreads.     

The Nature of Managerial Work in Small Growth-Orientated Businesses

In this study we explore the daily managerial behaviour of managers of small growth-orientated businesses and contrast it to previous research of managers in large organisations. We also investigate if one background characteristic, the owner–managers functional experience, is related to daily managerial activity. More specifically, we seek to strengthen the ‘managerial work’ tradition through a replication of Mintzberg’s work (The Nature of Managerial Work, New York: Harper and Row 1973) and an extension of the ‘managerial work’ tradition to another contingency, that of small growth- oriented businesses. The study is based on direct observations of ten CEOs of small growth-orientated businesses. The research provides evidence that organisational size is an important determinant of the nature of managerial work. However, in exploring the variability that may occur in managerial work within a given size context, we failed to establish a relationship between the owner–manager’s functional experiences and daily functional work orientation. The article concludes by speculating why the nature of managerial work in small growth-orientated businesses may provide a template for management in larger (more bureaucratic) organisations.     

Outcome quality of small- to medium- sized enterprise–based alliances: The role of perceived partner behaviors

Proponents of transaction cost theory have assumed that alliance formation is motivated by environmental uncertainty, with the structure and outcomes of alliance relationships being determined by the costs versus benefits of opportunism on the part of alliance participants (Williamson 1985; Zaheer and Venkatraman 1995). Williamson argued that cooperative relationships driven by perceived efficiency are inherently prone to opportunism or “self-interest seeking with guile” (1975, p. 6). In alliance relationships, opportunism generally takes the form of negative departures from the behavioral norms established for the alliance and is usually motivated by the firm leader’s desire to improve the firm’s position, regardless of the cost to the alliance (Parkhe 1993a). The traditional focus of transaction cost theory has been on the norms established by the formal alliance relationship. These contractual mandates encompass both goal-based and relationship-based expectations. Failure to meet these types of expectations significantly, but not completely, explains the quality of outcomes for alliance relationships.A growing body of research on social control theory suggests that the social embeddedness of the alliance relationship may also establish behavioral norms against which opportunistic departures may be judged (Ouchi and Parkhe). Such norms are extracontractual or taken-for-granted expectations established by both the prior experience of the firms’ leaders and the placement of the firms’ alliance relationships within the network of interpersonal relationships maintained by the firms’ leaders. This study explores the relative impact of negative departures from both contractual and extracontractual behavioral norms on the quality of alliance outcomes, while controlling for a wide range of environmental and firm-specific factors suggested to have an impact on alliance outcome quality.Norwegian manufacturing firms that met the study’s size criteria and belonged to any one of 10 industry types were surveyed. From a list of over 7,000 small- to medium-sized enterprises (SMEs), we randomly selected and mailed surveys to the key decision leaders of over 2,500 firms, ultimately identifying, of the 433 (17.6%) owners and general managers responding, 252 (58%) that maintained alliance relationships.The results of this study challenge several assumptions regarding the determinants of alliance outcomes. A number of resource- and environment-based factors, including the firm’s industry, size, and financial strength, are not found to significantly influence alliance outcomes. The financial return provided by the SME’s alliance relationships, as an indicator of goal-based determinants, was found to be the most important factor related to outcome quality, but the results also suggested that contract noncompliance and the perceived behaviors of the SME’s alliance partners are significant as well. Additionally, the notion that SME-based alliance relationships are generally marked by assumptions of trust rather than opportunism was supported. When partner behaviors are seen or perceived to be inconsistent with either contractually mandated or socially obligated expectations, the outcomes of those relationships are negatively effected, even when the financial goals have been met. An additional finding of this study was that firm leaders make judgments regarding the quality of alliance outcomes in light of their cumulative experience with alliance relationships.     

Sources of sectoral fluctuations in business fixed investment

A model of macroeconomic complementarity is used to assess causes of comovement in investment spending across nine sectors of the U.S. economy. It is hypothesized that the irreversibility and uncertainty of investment spending imply a greater role for investment linkages and aggregate factors in investment fluctuations compared with estimates for employment and output. For the average sector, past investment growth across all sectors, changes in aggregate demand, and a common factor account for two-thirds of the variance of investment growth. After accounting for aggregate demand, sectoral shocks explain 70% of the average sector’s innovations to investment growth.     

The effect of experience and absorptive capacity on foreign market knowledge

Learning about foreign markets often occurs through collaboration with other firms who have this knowledge. In this paper, we focus on one aspect of foreign market knowledge, which is the knowledge a partner in a dyadic relationship, has of the other partner and of their respective business network relationships. The concept ‘absorptive capacity’ [Admin. Sci. Q. 35 (1990) 128] is used to describe the firm’s ability to use its prior related knowledge and diverse background to identify the value of new information and to develop this into something creative. We develop and empirically test a model of how depth and diversity of experience affect absorptive capacity, and how this absorptive capacity affects the way a lack of foreign market knowledge is perceived as an obstacle in carrying out the ongoing business activity.The results show that the lack of foreign market knowledge in the ongoing business is determined both by the firm’s absorptive capacity generated in dyadic relationships with foreign customers and the customer’s network. The dyadic and network absorptive capacities, however, appear to be used differently in the ongoing business. Dyadic absorptive capacity seems to decrease the lack of foreign market knowledge, whereas customer network absorptive capacity seems to increase it.     

The role of interdependent self-construal in consumers’ susceptibility to retail salespersons’ influence: A hierarchical approach

Based on a sample of 300 consumers, this paper develops and tests a hierarchical model that examines the effect of interdependent self-construal on consumers’ susceptibility to salespersons’ influence. Structural equation modeling shows that the relationship between the two constructs is mediated by several situational factors via two prediction paths. Along one path, interdependent self-construal positively affects consumers’ susceptibility to interpersonal influence, which is positively connected to consumers’ susceptibility to salespersons’ influence through the mediation of consumers’ susceptibility to store atmosphere influence. Along the other path, interdependent self-construal is positively correlated with public self-consciousness, which is then positively associated with consumers’ susceptibility to salespersons’ influence. Discussions on theoretical, practical and future research implications are provided.     

Ethical Entrepreneurship and Fair Trade

Due to several recent scandals, Business Ethics is now firmly embraced. Whereas in the 1980s and early 1990s there were serious doubts expressed about combining ethics and business, the link now seems to have become self-evident. Fundamental questions about the tensions between business and ethics however continue to receive little attention. In this paper, based upon a debate concerning the Fair Trade company, the strains between business and ethics are analyzed. The article shows how several great thinkers have already considered this tension. Three ways to conceptualize the tension between business and ethics have been distinguished, and these are outlined in the paper. In one approach, ethical entrepreneurship, value tensions are perceived as a source for entrepreneurship. However, this approach presupposes pluralistic ethics. Thinking only in terms of black and white is seen as blocking the ability to adequately handle the tension between business and ethics. Opting for ‘‘ethical entrepreneurship’’, as by Fair Trade, has fundamental and important consequences for the company’s communication policy.     

Trade Costs and Current Accounts

Are trade cost reductions a plausible explanation for growing global current account imbalances? I advocate that changes in trade costs affect trade and production structures, which is likely to affect national savings and investment. Explicitly adding trade costs à la Markusen and Venables into Jin's framework, this augmented model predicts that trade cost reductions affect the current account through changes in the industrial structure. Empirical evidence confirms that the interaction of trade costs and capital intensity drives current account balances. I also provide evidence that the response of current accounts to changes in trade costs depends on the capital intensity of production and on the depth of regional agreements on trade and factor mobility. Aside from the direct effect generally emphasised in standard macro‐level analysis, changes in production patterns could therefore be an additional channel of impact of regional integration on current accounts.     

Culture, entrepreneurial orientation, and global competitiveness

Based on Lumpkin and Dess’s conceptualization of entrepreneurial orientation (EO), this paper presents a cultural model of entrepreneurship. We propose that a society’s propensity to generate autonomous, risk-taking, innovative, competitively aggressive and proactive entrepreneurs and firms will depend on its cultural foundation. The role of economic, political/legal, and social factors as moderators of the relationship between culture and entrepreneurial orientation (EO) are also considered. Overall, it is proposed that only those countries with specific cultural tendencies will engender a strong EO, hence experiencing more entrepreneurship and global competitiveness. Specific country examples are discussed.     

Teaching Business Ethics: Targeted Outputs

Business ethics is once again a hot topic as examples of improper business practices that violate commonly accepted ethical norms are brought to our attention. With the increasing number of scandals business schools find themselves on the defensive in explaining what they are doing to help respond to the call to teach ‘‘more’’ business ethics. This paper focuses on two issues germane to business ethics teaching efforts: the ‘‘targeted output’’ goals of teaching business ethics and when in the curriculum business ethics should be taught.     

Different paths to economic reform in Russia and China: causes and consequences

Economic reform in Russia has been described as ‘shock therapy’ because rapid industrial privatization, price liberalization and democratic reforms of the political system were introduced simultaneously. However, shock therapy led to insider control of most manufacturing firms, with important consequences for foreign investment. In contrast, China’s ‘gradualist’ reforms, without privatization or significant democratization, facilitated foreign joint ventures as the dominant means of reforming State-owned enterprises incrementally. This paper proposes an explanation for these contrasting reform paths in Russia and China and then traces their consequences for inward foreign domestic investment (FDI), exporting and for corporate governance in the short and long term. The impact of national level policies on enterprises is demonstrated in a matched pair of cases in Russia and China. Conclusions are drawn for policy, for practice and for future research.     

An extension of Bale's labor displacement cost estimates

Bale (1976) failed to extend his labor displacement cost estimates to the more interesting question of whether these costs outweigh gains from trade liberalization. This note addresses that question by applying Bale's estimates to Magee's (1972) study of the welfare effects of U.S. trade restrictions. Our results indicate that gains far outweigh costs of tariff removal on imports directly competing with U.S. production.     

Targeting Firm Births and Economic Regeneration in a Lagging Region

This paper provides a critical evaluation of the practice of targeting the firm birth rate as part of a regional regeneration policy. It raises some fundamental questions about the appropriateness of such a practice and shows that different specifications of the birth rate generate very different implications for policy intervention, as measured by the number of births required. It also demonstrates that even when the specification is agreed, the translation of the target into actual numbers of births is far from straightforward, especially where the target aspires to match a region’s performance with what is going on elsewhere and where the survival rate of businesses is also being targeted in parallel. The North East of England is used as the particular context for the evaluation, although the discussion has much wider applicability.