Centralization of intragroup equity ties and performance of business group affiliates

Research summary : Although prior research has suggested that equity ties are important for business groups, less attention has been paid to the specific mechanisms through which equity ties create value. We develop a framework that specifies how centralization of intragroup equity ties affects the performance of group affiliates. We use the exogenous shock of the 2008 financial crisis and a difference‐in‐differences analysis of 51,730 observations of business group affiliates in Taiwan to show that centralization of equity ties enhances affiliate performance, but such effects weaken when the environment becomes turbulent. Moreover, we find that listed affiliates obtain fewer benefits from centralization than unlisted affiliates. Overall, our study deepens scholarly understanding of not only how groups create value, but also how value is differentially appropriated among affiliates. Managerial summary : Our research speaks directly to owner‐managers of business groups with respect to creating an optimal equity network structure that binds the affiliated firms of the group. Our findings suggest to managers that the overall structure of equity ties in a business group has major implications for the performance of the affiliate firms of the group, and the network structure within the group should be designed deliberately and thoughtfully on an on‐going basis. In particular, control through centralized equity ties is performance‐enhancing in normal periods, but such control may be counterproductive as turbulence increases in business environments, or as the number of listed group firms increases. Hence, owner‐managers may consider optimizing the network structure by lowering the degree of centralized equity ties under such circumstances, or at a minimum, lowering centralized control. Copyright © 2016 John Wiley & Sons, Ltd.     

Evolución de la reglamentación laboral y de las condiciones de trabajo en China. Visión retrospectiva y retos

La fuerza económica mundial de China reside en su capacidad manufacturera, gracias a una mano de obra disciplinada y calificada, cuya remuneración es, sin embargo, relativamente baja. Esto explica tanto los crecientes conflictos laborales como las iniciativas normativas estatales en respuesta. En la presente introducción, los coordinadores de este número monográfico contextualizan los demás artículos respecto de los debates generales sobre reglamentación laboral de la producción mundial –concretamente sobre la regulación vinculante y no vinculante–, y de la evolución del mercado de trabajo, la reglamentación laboral, las condiciones de trabajo y las relaciones laborales en China en el último decenio. Concluyen con propuestas para futuras investigaciones.     

Export–led growth and structural change: evidence from Malaysia

Many studies have tried to establish the causal link between export expansion and economic growth. This contribution is to recognize that structural changes will change the sources of growth and this will affect the export-growth relationship. A country case study approach is used focusing on Malaysia, a country with one of the world's highest sustained growth rates and a long history of commodity trade. We use VAR analysis of Malaysian quarterly trade and GDP growth from 1965 to 1996. Trade data are disaggregated into primary and manufactures exports and causality tests are applied to the entire period as well as two subperiods #150 the 1965 #1501980 period when policy emphasis was on import substitution and the 1981#1501996 period when policies favoured export-led growth. Statistical tests confirm export-led growth for the full period and for the period to 1980 but tests on the 1981#1501996 period show growth causing exports. Primary exports had a stronger direct impact on economic growth than manufactures. The weakening support for export-led growth after Malaysia shifted to an export-oriented development strategy is associated with structural changes associated with industrialization. Interaction among trade and growth variables becomes more complex with a broadening export base and more diverse sources of growth.     

Measuring Electronic Commerce Technology–Enabled Business Value: An Empirical Investigation

This research investigates whether firms using e-commerce technologies are successful in generating business value and, if so, which e-commerce drivers determine this success and how firms should use these drivers. There is no systematic empirical evidence in the IT productivity and business value literature regarding the payoffs a business receives from its e-business initiatives. The current research contributes to the literature in the e-commerce area by identifying a set of e-business value constructs, incorporating these constructs in a model in a manner not done before, and empirically validating the model using an Analysis of MOment Structures (AMOS)/?Structural Equation Modeling (SEM) analysis. The present research also contributes to the e-business value literature by providing insights into causal relationships among Rogers' innovation and diffusion theory (IDT) factors. This is the first time a research study has empirically established comprehensive causal relationships among these factors. The SEM analysis of the model indicates that the proposed model is able to explain e-commerce success utilizing the constructs identified and grounded using IT business value literature and Rogers' IDT. We conclude by summarizing its contributions to the IT literature, in general, and the e-business literature, in particular, and by providing insights for practice and suggestions for future research.     

Hans Singer's model of the severity of recessions

This paper draws attention to the innovative but neglected workof Hans Singer on the dynamics of unemployment. Influenced byKeynes, in the late 1930s Singer enquired into the relationshipbetween the inflow into unemployment—resulting primarilyfrom (involuntary) separations from employment—and thesize of the resultant fluctuations in the level of unemployment.His focus was on the determinants of the severity—measuredin terms of how far unemployment rises—of recessions.We illustrate his approach by looking at quarterly data forthe claimant count and its associated inflow and outflow inthe UK over the period 1989–2003, a period which includesone major recession episode. In addition to drawing attentionto Singer's ideas, the paper also extends his model by takinginto account recent empirical evidence on the behaviour of oneof the key variables in his model. We argue that, with thisextension, Singer's elegant and parsimonious model of unemploymentdynamics is a useful complement to Keynes's ideas on the fluctuationsin aggregate demand and output, and is of contemporary relevance.     

Iraq’s budgetary practices post US invasion: a critical evaluation

ABSTRACT

Although the steep decline in oil prices has inflicted havoc on Iraq’s public finances, critical analyses of the budgetary decisions and processes post-US invasion have uncovered other factors that have impeded Iraq’s economic progress. The authors evaluate Iraq’s budgets for the period 2003 through 2012 from three perspectives: legislative framework, revenue and expenditure, and monitoring. One of their primary findings is that Iraq has been operating at a surplus in excess of $85 billion. This finding contradicts officials who claim that Iraq has been operating at a large deficit. The authors explain why Iraq’s current budgetary practices of preparing, ratifying, executing and monitoring the country’s federal budget is fundamentally deficient, and much work is needed to reform its public financial management (PFM) system to bring it up to best international practices.     

Where can capabilities come from? network ties and capability acquisition in business groups

While strategy researchers have devoted considerable attention to the role of firm‐specific capabilities in the pursuit of competitive advantage, less attention has been directed at how firms obtain these capabilities from outside their boundaries. In this study, we examine how firms' multiplex network ties in business groups represent one important source of capability acquisition. Our focus allows us to go beyond the traditional focus on network structure and offer a novel contingency model that specifies how different types of network ties (e.g., buyer‐supplier, equity, and director), individually and in complementary combination, will differentially affect the process of R&D capability acquisition. We also offer an original analysis of how other aspects of network structure (i.e., network density) in business groups affect the efficacy of network ties on R&D capability. Empirically, we provide an original contribution to the capabilities literature by utilizing a stochastic frontier estimation to rigorously measure firm capabilities, and we demonstrate the value of this approach using longitudinal data on business groups in emerging economies. We close by discussing the implications of our supportive results for future research on firm capabilities, organizational networks, and business groups. Copyright © 2010 John Wiley & Sons, Ltd.     

Public Subsidies to Business: An International Comparison

The paper compares the design and outcome of public subsidies to business across a number of industrialized countries. The comparison of the amount of subsidies shows that the share of GDP devoted to total public support is markedly lower in the USA than in Europe but the share of GDP devoted to support that improves economic performance is comparable. Implementing public support follows two models. The first model (Anglo-Saxon) model is primarily “soft” in nature and decentralized. The second model is more interventionist and centralized. The former model seems to perform better especially in term of science and technology. However, the impact of public support policies remains seriously under-researched and more research is crucially needed to draw firm conclusions.     

Introductory honors economics on the Web

Economics 304KH and 304LH at The University of Texas at Austin are introductory honors economics courses. Our goal was to provide students with more advanced material than available in introductory textbooks, such as a discussion of microeconomics based on one‐dimensional calculus and a survey of macroeconomics based on economic models. The supplemental material consists of Web course notes, on‐line quizzes, simulation and data modules and group interactive modules. This paper focuses on the development of Web economic course materials. We discuss the difficulties of programming mathematical instructional material in HTML and the coming solution in XML, JavaScript, and Java. The effectiveness of the on‐line course materials are also evaluated based on student responses. This revised version was published online in June 2006 with corrections to the Cover Date.