Proactive and reactive views in the transition towards circular business models. A grounded study in the plastic packaging industry

This article contributes to the studies on the transition towards circular business models in incumbent entrepreneurial firms. The focus of our research is the plastic packaging industry, a paradigmatic case of firms with a high environmental impact who are currently under pressure to change their business models. Following a grounded theory approach, we conducted an exploratory research on five case studies, longitudinally analyzed over two years. The results of our research suggest that the circularity challenge raises dilemmas about how to interpret the transition to sustainability. On one hand, the transition may be interpreted in a reactive way, based on compliance to the law and the highest possible levels of continuity. On the other hand, the transition may be interpreted in a proactive way, based on radical experimentation and openness to change. Our results highlight that the reactive-proactive dilemma unfolds at three interconnected levels: the firm’s network (including the customers), the entrepreneur, and the organization. Our study also suggests that the entrepreneur is in a position to play a pivotal role in the multi-level adoption of a proactive (or reactive) view. More specifically, our longitudinal analysis suggests that if the effectiveness and impact of transition to circularity is to be maximized, then a multi-level proactive view of the circularity transition is key to transforming the three interconnected levels (network, entrepreneur, organization) into a proper, sustainability-oriented innovation ecosystem.

     

Endogenous fertility, international migration and growth

An endogenous growth model with heterogeneous agents and endogenous rates of fertility is developed to study the relationships between population growth, human capital, migration and economic development. A variety of patterns of migration, from the migration of the unskilled to the brain drain is considered, where the decision to migrate reflects the agents’ optimising behaviour. The analysis yields implications which accord with the empirical evidence on the relationships between demography and development. Macroeconomic policy can foster growth by influencing labour mobility through taxation and the provision of public goods such as social infrastructure, sanitation, environmental control and medical research that affect locational preferences and child quality. The author is grateful for the comments of an anonymous referee on an earlier version of the paper. The usual disclaimer applies.     

Fragility of competitive equilibrium with risk of default

We study competitive equilibrium in sequential economies under limited commitment. Default induces permanent exclusion from financial markets and endogenously determined solvency constraints prevent debt repudiation. Our analysis shows that such an enforcement mechanism is essentially fragile, leading to equilibrium multiplicity. We accomplish this by establishing Welfare Theorems under a weaker notion of constrained efficiency, inspired by Malinvaud, corresponding to the absence of welfare improving feasible redistributions over finite (though indefinite) horizons. A Negishi?s Method permits to show that, for any arbitrary value of social welfare in between autarchy and constrained optimality, there exists an equilibrium attaining that value. Thus, competitive equilibria might differ dramatically in terms of volumes of trade, asset price volatility, individuals? ability to insure against idiosyncratic risk and consumption inequality.     

Comparing region-specific sustainability assessments through indicator systems: Feasible or not?

Numerous indices help us to compare country and local performance in the field of human development, globalization and sustainable development. Obvious problems arise, such as data availability and data quality. A less obvious issue is that such sets and indices do not permit the inclusion of specific characteristics or discourses that are important in a country or region. This paper investigates the possibility of comparing regional sustainability assessments in four case studies, where the indicators vary from region to region, but the method of making the assessment is similar. The concepts of weak and strong comparability were used in this analysis. Comparability of sustainable development between different regions is not an issue of rigid comparison of indicator by indicator. It should take into account regional specifics. The resulting shift from strong to weak comparability should not be seen as a lessening of the quality of the assessment and decreasing comparability. Rather than focusing on individual indicators within frameworks that do not permit inclusion of regional developments, this approach allows to look at the broader picture of regional dynamics. It reveals specific regional weaknesses that need attention, and possible areas for building alliances between regions, thus creating a more sustainable Europe.     

Transmitters and receivers' investment to avoid interference: Is there an optimal regime?

The management of interference has been, and still is, the main concern in spectrum policy. Historically, interference has been dealt with by heavy regulation under an administrative control regime. Over the last decades, a new approach has been put forward based on users' property rights, better able to cope with a rapidly changing technological environment. The issue of dealing with interference across bands, however, remains crucial: What obligations should be put on users so as to keep interference at a socially acceptable level? Also, given that some unwanted emissions are bound to occur, how can private parties be provided with the right incentives to invest in high-quality reception technology? This paper assesses how well different regulatory regimes can lead to efficient outcomes. It develops an economic model of spectrum interference and identifies the efficient solution. A regime where spectrum users have the power to enjoin intruding emissions beyond a predefined level (property rights protection) is compared with a regime where users are forced to bear with intruding emissions, but are entitled to economic compensation for the harm suffered (liability rules protection). The analysis suggests that different regimes may perform differently under different circumstances depending on the cause of interference and, critically, on whether the services are organised as an open- or a close-architecture system. This suggests that regulators should pay more attention to the specific features of the different bands, and that the appropriate spectrum management regime should be designed to recognise these differences.     

News shocks and asset price volatility in general equilibrium

We study equity price volatility in general equilibrium with news shocks about future productivity and monetary policy. As West (1988) shows, in a partial equilibrium present discounted value model, news about the future cash flow reduces asset price volatility. We show that introducing news shocks in a canonical dynamic stochastic general equilibrium model may not reduce asset price volatility under plausible parameter assumptions. This is because, in general equilibrium, the asset cash flow itself may be affected by the introduction of news shocks. In addition, we show that neglecting to account for policy news shocks (e.g., policy announcements) can potentially bias empirical estimates of the impact of monetary policy shocks on asset prices.     

The process of supply network internationalisation

This paper explores the process that dynamically links the why's, how's and what's of supply network internationalisation. We propose a conceptual framework that adapts and extends the Uppsala internationalisation model and apply it to analyse nine case studies of Italian footwear and apparel companies involved in relocating some segments of their supply networks to Romania. Consistently with behavioural theories, our findings confirm that internationalisation is an incremental process in which firms gradually increase their international exposure and involvement. However, differently from the Uppsala establishment chain internationalisation model, our cross-case analysis suggests a different typology of supply network internationalisation processes: (1) traditional subcontracting, (2) co-ordinated subcontracting, and (3) supply system relocation. We discuss the theoretical and managerial implications of these findings and suggest directions for further research.     

Global Innovation in MNCs: The Effects of Subsidiary Self‐Determination and Teamwork*

The ability of multinational corporations (MNCs) to leverage their innovation competencies across globally dispersed subsidiaries is an increasingly valuable source of competitive advantage. As multinational enterprises turn to foreign subsidiaries for research and development (R&D) and product development, questions arise regarding the most effective organizational structures for global innovation. Although organizational conditions that satisfy the needs for self‐determination and teamwork have long been considered intrinsic motivators, past research has not analyzed the consequences of intrinsic motivators on global innovation. The basic research question is this: In globally dispersed subsidiary R&D units, what organizational conditions and motivators are associated with the highest knowledge output? A sample of 275 globally dispersed R&D subsidiaries were studied from 1995 to 2002. Data were collected from a postal survey, field and telephone interviews, and secondary sources. Subsidiary self‐determination and teamwork were found to have a significant effect on knowledge output, as objectively measured by patent citations. Subsidiary self‐determination on inputs such as sourcing and hiring, and self‐determination on outputs such as marketing and product development, emerged as positive determinants of knowledge generation in R&D subsidiaries. In addition, interteam cooperation and intrateam cooperation were significant determinants of knowledge generation by subsidiaries. These findings highlight the importance of self‐determination, teamwork, and cooperation to knowledge creation and innovations. Managers face the tough challenge of how to motivate globally dispersed knowledge workers to conduct research that will generate knowledge and will strengthen firm performance. The results provide theoretical and practical insights on how MNCs can leverage their innovation competencies across foreign R&D subsidiaries.     

THEORETICAL FOUNDATIONS OF EMPIRICAL MEASURES OF FREEDOM: A RESEARCH CHALLENGE TO LIBERAL ECONOMISTS

In this essay we ground the theoretical foundations of an empirical measure of the degree of freedom perceived by individuals on the Millian view of affirmation and development of individuality. We then discuss the implications of such a measure for policy and institutional design.