Cost-reduction innovation under mixed economy

This paper analyzes the innovation strategies of mixed duopoly with a (semi-) public firm and a private firm, and the welfare effects of public ownership are captured. The findings indicate that the private firm is more active in research and development activities than the (semi-) public firm. Meanwhile, the total production increases with the degree of public ownership, and both firms have to suffer losses in profits. From the viewpoint of social welfare, partial nationalization is the optimal strategy. The policy implication of the findings highlights that partial nationalization should be encouraged under mixed economy.     

Reverse logistics capabilities and firm performance: the mediating role of business strategy

This study aims to examine the impact of reverse logistics capabilities on firm performance and mediating role of logistics strategies. We reviewed three theories of reverse logistics capabilities: (a) resource-based view of the firm, (b) transaction cost economics, and (c) institutional theory. We examined six reverse logistics capabilities: logistics information management, close-loop capability, supply chain integration, supply chain coordination, conformity capability, and institutional incentives. We examined three reverse logistics strategies: joint reverse logistics, manufacturer reverse logistics, and third-party reverse logistics. We conducted a survey of Chinese mobile phone companies out of which we received 125 usable questionnaires with a response rate of 80%. The results of mediated hierarchical regression support the hypothesis that reverse logistics capabilities influence firm performance. Institutional factors were more significant than supply chain factors. Close-loop capability was the most significant factor. We provide managerial implications and suggestions for future research.     

The Role of Public Information in Corporate Social Responsibility

Many of the attributes that make a good “socially responsible” (SR) are credence attributes that cannot be learned by consumers either through search or experience. Consumers, then, use for their purchasing decisions “noisy” information about these attributes obtained from potentially contradictory channels (media, advertisement, NGOs). In this paper we model such informational framework and show the positive relationship between the accuracy of the information transmitted to consumers and corporate social responsibility. We also show that a firm may be tempted to add noise to the information channel (through lobbying of the media), which might reduce the supply of the SR attributes and even harm the firm itself (with lower profits). It might then be profitable to the firm to commit ex ante to not manipulate the information regarding the firm's business practices (e.g., with a partnership with an NGO). Finally, we extend our model to a competition framework endogenizing the number of firms active in the SR segment. We show both that in more transparent markets a larger number of firms will be SR, and that in a market with more intense competition, a higher degree of transparency is required in order to sustain a given number of SR firms.     

Applying the reduce,reuse, and recycle principle in the hospitality sector: Its antecedents and performance implications

Although the literature on eco-friendly strategies followed by firms is abundant, the focus on the reduce, reuse, and recycle (3Rs) policies as the cornerstone of environmental sustainability is scarce. This study examines the 3Rs environmental strategy among 143 large organizations in the hospitality industry. We use the resource-based view (RBV) of the firm theory to test the strategy's determinants and its impact on business performance on a suggested conceptualization level. As hypothesized, green corporate governance and environmental management systems, along with slack financial resources, were found to positively influence the adoption of a 3Rs environmental strategy. In turn, the implementation of the latter leads to superior business performance, measured in terms of operating profits and Tobin's Q. The study has several implications on a theoretical, managerial, and public policy level where intriguing directions for future research are provided.     

EPA enforcement,firm response strategies,and stockholder wealth: an empirical examination

We investigate the effect of EPA pollution control enforcement activities and firm response strategies on stockholders' wealth. We find that the market reacts negatively upon learning that the firm has been targeted, and that losing a contest with the EPA is very costly to stockholders. Apparently firms are not expected to recover a significant part of pollution control costs from their customers. Somewhat surprisingly, losses are only weakly related to the presence of (unregulated) foreign competition, suggesting that untargeted domestic competitors may restrain cost recovery. Our analysis also indicates that firms may benefit by cooperating with the EPA; i.e., compliant strategies reduce (but don't avoid) wealth losses. The losses of firms that settle are about 40% less than those of firms that fight and lose, and we find no evidence of value gains for firms that fight and win. © 1998 John Wiley & Sons, Ltd.     

Reputation When Threats and Transfers Are Available

We present a model where a long run player is allowed to use both money transfers and threats to influence the decisions of a sequence of short run players. We show that threats might be used credibly (even in arbitrarily short repeated games) by a long-lived player who gains by developing a reputation of carrying out punishments. Particular cases of the model are a long-lived pressure group offering rewards and punishments to a series of targets (public or corporate officials) in exchange for policy favors, or that of a long-lived extorter who demands money in order not to punish. We use the model to analyze the "convicted nonpayor" debate around judicial corruption. The model highlights formal similarities between lobbying and extortion.     

The political bottom line: the emerging dimension to corporate responsibility for sustainable development

This paper explores the idea that businesses are being moved to proactively manage their political activities and influence in relation to their often‐expressed responsibility for promoting sustainable development, which we define as managing the ‘political bottom line’. We argue that three key drivers account for this shift: first, the growing criticism of voluntary corporate responsibility initiatives; second, the increasing awareness and targeting of corporate political activities, and third, a realization among certain corporate executives and financiers that, without changes to public policies, an individual company's own voluntary responsibility may not deliver sufficient commercial returns. We describe several initiatives on public policy dimensions of sustainable development, which indicate that some companies are beginning to manage their political power in light of societal concerns. In conclusion, we discuss the potential and limits of a ‘political bottom line’ concept by critiquing the mainstream triple bottom line discourse.Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.     

Components of CEO Transformational Leadership and Corporate Social Responsibility*

abstract We use transformational leadership theory to explore the role of CEOs in determining the extent to which their firms engage in corporate social responsibility (CSR). We test this theory using data from 56 US and Canadian firms. CEO intellectual stimulation (but not CEO charismatic leadership) is found to be significantly associated with the propensity of the firm to engage in ‘strategic’ CSR, or those CSR activities that are most likely to be related to the firm's corporate and business‐level strategies. Thus, studies that ignore the role of leadership in CSR may yield imprecise conclusions regarding the antecedents and consequences of these activities. We also critique transformational leadership theory, in terms of its overemphasis on charismatic forms of leadership. This leads to a reconceptualization of transformational leadership, which emphasizes the intellectual stimulation component in the context of CSR.     

万科企业品牌的营销沟通策略

文中从广告沟通、公关活动沟通、企业CEO营销沟通、绿色营销沟通等几个方面,对万科企业品牌的营销沟通策略行研究与分析。认为,万科在选择不同的沟通手段去提升品牌形象和影响品牌资产的动作中有三个方面值得肯定:一是强调信息的一致性,所有沟通手段和目标始终正确传递品牌定位;二是对不同营销沟通手段进行科学组合,努力做到整体大于部分之和;三是不断推进营销沟通内容的深入和营销手段的创新,最大化营销沟通效果。     

Cost Accounting for War: Contracting Procedures and Cost-plus Pricing in WWI Industrial Mobilization in Italy

The aim of this paper is to explore the role played by cost accounting in Italy's Industrial Mobilization system and in the largest firm manufacturing weaponry, Ansaldo of Genoa, during WWI. While in other countries such as the UK and the USA, efficiency in buying and managing war material was an important part of military strategy, in Italy, various factors impeded it. This paper focuses on contracting procedures adopted by the Ministry of War and Ministry of Munitions and looks at the cost accounting practices in Ansaldo to see how costs were determined and how prices were set. We found a paradox. On the one hand, despite knowledge of costing, the government did not impose cost controls on the producers of war material, nor on their profit rates. On the other hand, examining Ansaldo's cost sheets we discover they underestimated their production costs leading the firm to losses despite its favorable political position. This paper contributes to the theoretical debate about the relationships between accounting and war in the Italian context where lobbying, collusion, bribery and private interests dominated the administrative behavior of public and private actors instead of efficiency, accountability and honesty.     

Value Relevance of Multinationality: Evidence from Korean Firms

The purpose of this study is to examine the valuation effects of multinationality in Korean firms and to identify the role of multinationality in internalization theory. We hypothesize that the market positively values the multinational activities of Korean firms, which are operating in a small open economy in which firms have strong motivations for internationalization. We use Ohlson's (1995, Contemporary Accounting Research, 11, 661) value model and document the positive effect for multinational firms compared to domestic firms, as well as the positive effect of multinationality on firm value. These results are robust across studies, as indicated by Tobin's q measure, as well as across years. We also hypothesize that multinationality mediates or moderates the relationship between intangibility and firm value that is proposed in internalization theory. We do not find supporting evidence for a mediated influence of intangibility through multinationality on firm value nor for a moderated influence of intangibility on firm value. We find that multinationality and intangibility directly and independently influence firm value, without any interference from each other. These results are also robust across studies, as indicated by Tobin's q measure. Finally, we find that multinationality in Korean firms has never lost its importance, even during the global financial crisis in the year 2008.     

Lobbying on Accounting Standards: Evidence from IFRS 2 on Share-Based Payments

Lobbying is an essential part of the International Accounting Standards Board (IASB) standard-setting process. There is still much to learn, however, about key aspects of the roles played and arguments employed by various constituents when lobbying practices do occur. This paper focuses on the regulation of share-based payments. As these transactions were under-regulated before International Financial Reporting Standard (IFRS) 2, we expect that the strong debate that occurred during the 1990s resulted in conflicting opinions when this standard was under discussion. To analyse lobbying behaviour and assess its influence on the IASB's decision-making, we conducted a content analysis of 539 letters addressing the documents issued by the G4+1 and the IASB preceding IFRS 2. Consistent with the rational-choice model, our analysis of lobbying activity shows that preparers constituted the most active group, particularly when the IASB started the project, whereas participation of standard-setters increased at the end, which is more consistent with institutional theory. A common strategy was to provide arguments merely on points of disagreement. Preparers and consultants constituted the only groups using economic-consequences arguments to disagree, but later enlisted conceptual arguments as well. The IASB considered only conceptual arguments, and no interested party had a dominant influence.     

The efficacy and efforts of interest groups in post elections policy formation

This paper presents a new model of interest groups and policy formation in the legislature. In our setting, the already given party ideological predispositions and power distribution determine the expected policy outcome. Our analysis applies to the case of un-enforced or enforced party discipline as well as to two-party and multi-party (proportional representation) electoral systems. The interest groups’ objective is to influence the outcome in their favor by engaging in a contest that determines the final decision in the legislature. Our first result clarifies how the success of an interest group hinges on the dominance of its ideologically closer party and, in general, the coalition/opposition blocks of parties under un-enforced party or coalition/opposition discipline. Such dominance is defined in terms of ideological inclination weighted by power. Our second result clarifies how the success of an interest group hinges on the dominance of its ideology in the ruling coalition (party) in a majoritarian system with enforced coalition (party) discipline. We then clarify under what condition an interest group prefers to direct its lobbying efforts to two parties or the two coalition and opposition blocks of parties under un-enforced discipline rather than to the members of the ruling coalition (party) under enforced discipline. The lobbying efforts under un-enforced and enforced party discipline are also compared. Finally, we clarify the effect of ideological predispositions and power on the efforts of the interest groups.     

STATIC COMMON AGENCY AND POLITICAL INFLUENCE: AN EVALUATIVE SURVEY

The common agency model is among the most productive economic frameworks of recent times, generating important results in the analysis of political influence, industrial organization and public goods provision. This paper presents a survey of the applications of the common agency model to issues of political influence, examining the applications and their results. It also discusses a number of the weaknesses of this literature, weaknesses that open up important avenues of further research in the directions of interest group formation, the nature of lobbying, the political system, behavioural demands and empirical analysis.     

Mafia risk perception: Evaluating the effect of organized crime on firm technical efficiency and investment proclivity

The presence of illegal organizations in economic development settings contributes to the Italian economy’s regional heterogeneity by exacerbating other inefficiencies. We aim to investigate how three indicators of awareness of criminal interest in a firm’s activities affect the latter’s efficiency, as well as examining a potential channel through which illegal activities could hinder firm performance, using a unique set of firm-level data. According to our findings, the presence of criminal network pressure in a firm’s environment reduces its technical efficiency and propensity to invest. This phenomenon is particularly strong in Italy’s underdeveloped regions, across all illicit considered and risk classes, with inefficiency doubling when the fear of crime becomes significant. A similar pattern emerges in terms of firm investment proclivity. The research findings are relevant for policymakers because they demonstrate that even the perception of a criminal threat has significant effects on a firm’s performance; consequently, enhancing legal protection could prevent significant economic and social costs.     

Public versus private provision of liquidity: Is there a trade-off?

To what extent is public debt private liquidity? Much policy advice given in the aftermath of the financial crisis rests on the assumption that increasing public debt relaxes borrowing constraints of private households. This is the case for ad-hoc debt limits, which are exogenous to public policy. Instead, if debt limits are fully endogenous, as e.g. in the case of the natural borrowing limit, public debt has no impact. We assume that borrowing limits arise because of limited contract enforceability and are therefore determined as equilibrium outcomes. Using an incomplete markets economy in which households are subject to uninsurable earnings shocks, we show that public debt provides some liquidity, but less so than it would if constraints were imposed ad-hoc. We show that generating borrowing constraints as an equilibrium outcome substantially alters the answers to other important questions, such as for the welfare effects of government debt or its impact on real economic activity.     

The role of public intervention in R & D

The purpose of this paper is threefold: (1) we emphasize the rule of uncertainty in achieving an efficient allocation of resources to R & D activities; (2) we identify and discuss optional mechanisms that are directed at minimizing the role of uncertainty in determining R & D decisions; and (3) we analyze the role of public intervention in R & D via a formal structure. More specifically, we explain why and under what conditions a risk-averse decision-maker will invest less than a government in research and inventive activities. Sufficient conditions that lead to private underinvestment in these activities are established. Furthermore, if the option of buying information exists, then we identify a set of private governmental contracts that may lead to the acceptance of a research project that a priori is unfeasible.     

A political economy model of immigration quotas

The paper examines a model in which the number of immigrants allowed into a country is the outcome of a costly political lobbying contest between a firm and a union. The union and the firm bargain over the wage of natives after the number of immigrants that will be permitted is known. I assume that the lobbying contest is an all-pay auction (i.e., the lobbyist with the higher effort wins with certainty). Comparative statics results are derived to show how the reservation wage of immigrants, the price of the firms product, the size of the union and the cost of lobbying affect immigration quotas and the post-immigration wage of natives.Received: 4 June 2003, Accepted: 23 June 2004 JEL Classification: D72, D73, J5, J61I thank the editor, Amihai Glazer, Don Devoretz, Dan Usher, and three anonymous referees for helpful comments. My thanks are especially due to Doug Allen and Gordon Myers who supervised this work as part of my doctoral thesis at Simon Fraser University, Canada. An earlier version of this paper was circulated as RIIM working paper #00-01, Simon Fraser University, Canada and also presented at the 2001 meetings of the Canadian Public Economics Study Group in Montreal, Canada.     

PENSION REFORM,POLITICAL PRESSURE AND PUBLIC CHOICE – THE CASE OF FRANCE

An ageing population and generous public sector pensions have put significant pressure on the funding of the French pension system making a reduction in the scope of state pension schemes imperative. Yet, as public‐choice theory would predict, lobbying by interest groups has made reform difficult to achieve.     

Acquisition Strategy and Dominant Logic in an Engineering Firm

This paper presents a dynamic model of acquisition strategy and applies it to the case history of a large engineering firm. The paper uses the notion of 'dominant logic' first put forward by Prahalad and Bettis (1986) to explain how the firm's acquisition strategy and management approach evolved. It is suggested that the core activities and history of the firm led to the development of a management approach that emphasized individual autonomy and development, ad hoc structural arrangements, a short-term focus, and flexibility and opportunism. These characteristics persisted over time and tended to inhibit both commitment to intended strategies and extension of core competencies. At the same time, this logic encouraged opportunistic acquisitions which snowballed into a major new strategic thrust. It is concluded: (a) the firm's 'dominant logic' rooted in core activities and in the history of a firm can be used to explain its acquisition management behaviour; (b) the more malleable elements of a dominant logic can be somewhat extended under the thrust of key managers, but permanent change will not occur as long as these shifts conflict with more immutable elements; (c) in a process of growth by acquisition, a firm will tend to preserve its unique dominant logic until the inconsistencies it creates are revealed in a crisis or series of crises. One mode of adjustment may then be to operate under more than one dominant logic to accommodate the firm's heterogeneity.