Grime and Punishment: Job Insecurity and Wage Arrears in the Russian Federation

Using information from two complementary household survey data sets, we show that the dominant form of labor market adjustment in the Russian transition process has been the delayed receipt of wages. More than half the work force is experiencing some form of disruption of their pay. Wage arrears are found across the private, state, and budgetary sectors. Workers in the metropolitan center are less affected by delayed and incomplete wage payments than are workers in the provinces. There is less evidence that individual characteristics contribute much toward the incidence of wage arrears, but the persistence of arrears is concentrated on a subset of the working population. We show that workers can only exercise the exit option of a job quit from a firm not paying wages in full or on time if the outside labor market is sufficiently dynamic. J. Comp. Econom., December 1999, 27(4), pp. 595–617. Heriot-Watt University, Edinburgh EH14 4AS, United Kingdom, IZA, Bonn, Germany, and WDI, Ann Arbor, Michigan; Centre for Economic Performance, London School of Economics, London WC2AE 2AE, England, and Royal Holloway College, University of London, Egham, TW20 1TQ, England; School of Information Management and Systems, University of California, 102 South Hall, Berkeley, California 94720-4600.     

Market Structures with Multi-product Firms: Welfare Analysis and Policy Implications

In the real world firms operate in more than one market and consequently can exploit scope economies and/or demand complementarities. Introducing multi-product firms in the picture makes the standard assumption that more competition is always beneficial for social welfare less clear-cut. In this paper we show that a concentrated structure can be socially preferable in the presence of scope economies, whereas a fragmented structure has to be preferred when products are close substitutes. We also identify either analytically or numerically the socially optimal market structure when aggregate output (and then consumer surplus) or total welfare are used as ranking criteria. The analysis is useful for discussing which market structure should be favored by policy makers aimed at introducing competition in sectors which were previously monopolized by state-owned firms. To that respect, our findings point out that not only the level (number of firms) but also the form (type of firms) of competition matters.     

Academics' organizational characteristics and the generation of successful business ideas

This paper deals with the generation of Business Ideas (BI) by academics. It investigates organizational factors affecting the process through which new ventures are established by academics and are likely to affect their performance. The BI Market Attractiveness and the BI Articulation are addressed as two characteristics of academic spin-off companies which are likely to lead to their success. Two research hypotheses are formulated: (a) that the BI Market Attractiveness at the time of establishment of the new venture is positively influenced by the market orientation of the academic founders, and by their frequency of interaction with external agents; (b) that the BI Articulation at the time of establishment of the new venture is positively affected by the articulation of roles, and by the degree of prior joint experience of the academic founders. We test our hypotheses on a sample of 42 Italian academic start-ups. Implications for both universities and academic entrepreneurs are discussed.     

The economic valuation of natural hazards in mountain forests: An approach based on the replacement cost method

Protection from natural hazards is the most important function of mountain forests from an ecological, economic and social point of view. This assertion has been widely debated in recent years by a number of authors. In this paper we focus on the economic aspects of the protective function of forests, developing a quick and simple estimation method that can be applied on a local scale. We present the results of its application in an Italian Alpine forest. After having identified the main forest attributes directly or indirectly involved in protection, the economic value of the protective function for homogeneous zones was estimated by applying the replacement cost method. This value enables environmental concerns to be included in forest planning and political decision-making.     

The cyclical behaviour of inventories: European cross-country evidence from the early 1990s recession

This paper employs data for a panel of firms from France, Italy and the UK to study the effect of the recession of the early 1990s on inventory investment, controlling for cyclical fluctuations at the firm level. The results clearly show some common patterns across countries, pointing to the relevance of financial factors (namely, the level of leverage) in propagating initial recessionary shocks. Moreover, Italian firms, especially if ‘small and young’, seem more likely to suffer from a reduction in the value of collateralizable assets possibly originated by restrictive policy actions.     

IPSAS and local government consolidated financial statements—proposal for a territorial consolidation method

This paper presents a new consolidation method to improve local government accountability. After a brief review of consolidated financial statements in the public sector, the International Public Sector Accounting Standards approach to consolidation is described. The authors explain why this approach does not adequately consider the distinctive features of local governments. A case study is presented to illustrate the principles underlying the new method.     

Localized competitive advantage and price reactions to entry: Full-service vs. low-cost airlines in recently liberalized emerging markets

This paper empirically investigates price reactions to the entry of the low-cost carrier Gol Airlines in the Brazilian domestic market in 2001. Given the substantial reduction in unconditional yields of the incumbent airlines on routes actually entered by Gol, we perform an econometric analysis of the determinants of pricing power along with the analysis of the pattern of price reactions by incumbent legacy carriers. Using data from a panel of routes disaggregated at the airline level, we obtain that (i) both airport and route presence are relevant at explaining pricing behavior; (ii) price responses vary significantly according to flight distance and the amount of seats supplied by the entrant, in the sense that the shorter the route, and the more the seats offered by the newcomer, the stronger the price reactions from the incumbents, with significant point estimates in the range 22–26% in yield reduction for routes as short as 350 km (approx. 195 miles). More generally, the results shed light on the impacts of airline deregulation in emerging markets and the issue of localized competitive advantage due to product differentiation in the industry.     

The role of relational capabilities in the organization of international sourcing activities: A literature review

Multinational companies (MNCs) establish subsidiaries in various countries, spreading the value chain internationally and fostering the involvement of external partners. The global supply network has become a major source of the total value generated by MNCs, which are pushed to develop “relational capabilities” to interact with their suppliers. The main objective of this article is to assess the current understanding in the academic literature of the intra-organisational dimension of relational capabilities, focussing on the adoption of internal mechanisms supporting international sourcing activities. A total of 47 articles are identified and assessed. The literature review shows that thus far fragmented and in some areas limited research has been conducted on the development of relational capabilities by MNCs within international sourcing activities. Research efforts have been placed mainly on the examination of organisational units active in international sourcing and on control and management processes, while less attention has been paid to knowledge management solutions.     

Public debt indexation and denomination with an independent central bank

This paper examines the interaction between public debt management and the design of monetary institutions. The analysis shows that delegation of monetary policy to an independent central bank is more effective in containing inflationary expectations than the use of foreign currency or inflation-indexed debt. If delegation of monetary policy is viable, the optimal policy is to issue nominal debt. This increases the sensitivity of taxes and output to unexpected inflation, thus minimizing the inflation needed to offset supply shocks. Evidence on central bank independence, debt composition and output variability suggests that the normative argument has some positive content.