THIS IS NOT A CREDIT CRISIS – IT IS A DEBT CRISIS

Using an analogy with ancient Babylonia as its leading theme, this viewpoint argues that the credit crisis is the symptom of an underlying problem. Fuelled by government policies, unprecedented debt levels were run up in industrialised countries over the last quarter century. Present policies of financial sector bailouts are not only an unwise use of taxpayers' money; they maintain economic structures opposed to what classical liberals such as J. S. Mill envisaged as a free-market economy.     

Location: A Neglected Determinant of Firm Growth

This paper links the performance of new technology firms, measured in terms of employment growth, to geographic location. We introduce a model of firm growth that is specific to characteristics of the location as well as the firm and industry. The model is estimated using a unique data set identifying the growth performance of small technology-based firms in Germany. We find that firm performance, as measured by employment growth, does appear to be influenced by locational characteristics as well as characteristics specific to the firm and the industry. In particular, the empirical evidence suggests that being located in an agglomeration rich in knowledge resources is more conducive to firm growth than being located in a region that is less endowed with knowledge resources. These results suggest the economic value of location as a conduit for accessing external knowledge resources, which in turn, manifests itself in higher rates of growth. JEL no. L10, R11, O12, O30     

Estimating International Interindustry Linkages: Non-survey Simulations of the Asian-Pacific Economy

This paper evaluates a recently published semi-survey international input–output table for nine East-Asian countries and the USA with four non-survey estimation alternatives. A new generalized RAS procedure is used with stepwise increasing information from both import and export statistics as optimisation constraints on the four non-survey tables. The results show that the estimated table improves when increasing information from both sources is used, despite the well known inconsistencies between import and export data in trade statistics. It is concluded that the new procedure can be useful as a critical analysis of newly published (semi-)survey international tables and/or as an early updating tool during the construction process.     

Structural and relational influences on the role of reward interdependence in product innovation

This study examines the relationship between reward interdependence, or the extent to which managers' rewards are tied to the performance of colleagues in other functions, and product innovation. It also considers how structural and relational features of the organizational context might moderate this relationship. Our analysis of a sample of Canadian‐based firms reveals a positive relationship between reward interdependence and product innovation that is invigorated at higher levels of job rotation, social interaction, and interactional fairness, but we find no evidence of a moderating effect of decision autonomy. Consistent with a systems approach to organizational contingencies, we also find that the reward interdependence–product innovation relationship is stronger when the organization's context comes closer to an ‘ideal’ holistic configuration that is most conducive to knowledge exchange within the organization, with a more prominent role played by the relational sub‐context (social interaction and interactional fairness) than the structural sub‐context (job rotation and decision autonomy). The findings have important implications for innovation research as they shed light on how the extent to which individual rewards are tied to collective performance can be channeled to enhance innovation pursuits.     

The Internationalization of Small and Medium-Sized Firms

This paper contributes to the existing research by integrating the notions of organizational learning and entrepreneurial orientation into the body of international entrepreneurship. Our primary framework combines learning theory and the new venture theory of internationalization to study the extent to which small and medium-sized companies engage in international activities. We found that the firms’ international learning effort and entrepreneurial orientation are positively associated with internationalization intent whereas domestic learning effort is negatively related with internationalization intent. Overall, our results suggest (1) that intensive knowledge renewal and exploitation regarding foreign markets and the internationalization process itself may increase internationalization by affecting the perceptions of opportunities offered by further international expansion, and (2) that firms with an entrepreneurial mindset may be more likely to develop a long-term, substantial presence in the international arena, compared to firms that are more reactive or conservative.