Income class, modal choice, and urban spatial structure

This paper analyzes the impacts of urban transportation system changes and income changes on the welfare of people and on the urban spatial structure, in a setting where the income level differs between two groups, and two transportation modes compete with each other in a city. It is demonstrated that an improvement in some transport facility will not necessarily increase the welfare level of every household, and, at times decreases the welfare of some households. It also is argued that under particular situations, an improvement in a particular transport mode may produce a contraction in the city size rather than an expansion. Similarly, an increase in income of one group might have an adverse effect on the welfare of another income group as a result of competition in the land market.     

Interdependence and Managing Conflict with Sub-Contractors in the Construction Industry in East Asia

In contrast to traditional assumptions about Asian conflict management, interdependence may induce cooperative approaches to conflict rather than avoidance or competition. Findings from supervisors on 216 subcontractors in Korea, Japan, and Hong Kong support the hypotheses that interdependence leads to cooperative conflict which results in constructive conflict which in turn helps the subcontractor contribute to the main contractor. However, competitive and avoiding conflict were found to be useful in Taiwan. Results were interpreted as suggesting that the theory of cooperation and competition offers the potential for strengthening conflict management in East Asia and that cooperative conflict, rather than avoiding, may reinforce feelings of interdependence in East Asia.     

Inertia in the key currency

This paper empirically analyzes inertia in the position of the dollar as the key currency. We extend a money-in-the-utility model to one with parallel international currencies. We use an extended model to estimate a parameter in the utility function. Also, given the estimated parameter, we simulate a relation between depreciation and share of the dollar. The result indicates that the share of the dollar will not decrease even if the dollar depreciates at a moderate rate. Thus the dollar will keep its position as the key currency – inertia works in the key currency.     

RJVs in product innovation and cartel stability

Abstract. We characterise the interplay between firms' decision in product development undertaken through a research joint venture (RJV), and the nature of their ensuing market behaviour. Participant firms in an RJV face a trade-off between saving the costs of product innovation by developing similar products to one another, e.g., by sharing most of the basic components of their products, and investing higher initial efforts in product innovation in order to develop more distinct products. We prove that the more the firms' products are distinct and thus less substitutable, the easier their collusion is to sustain in the marketing supergame, either in prices (Bertrand) or in quantities (Cournot). This gives rise to a non-monotone dependence of firms' product portfolio upon their intertemporal preferences. Received: 1 October 1998 / Accepted: 14 December 2002 We thank the seminar audience at Centre for Industrial Economics, University of Copenhagen, where all three authors were affiliated at the time we presented the first draft of this paper, and also the two anonymous referees for Review of Economic Design for their detailed comments. The usual disclaimer applies.     

The skewness risk premium in equilibrium and stock return predictability

In this study, we investigate the skewness risk premium in the financial market under a general equilibrium setting. Extending the long-run risks (LRR) model proposed by Bansal and Yaron (J Financ 59:1481–1509, 2004) by introducing a stochastic jump intensity for jumps in the LRR factor and the variance of consumption growth rate, we provide an explicit representation for the skewness risk premium, as well as the volatility risk premium, in equilibrium. On the basis of the representation for the skewness risk premium, we propose a possible reason for the empirical facts of time-varying and negative risk-neutral skewness. Moreover, we also provide an equity risk premium representation of a linear factor pricing model with the variance and skewness risk premiums. The empirical results imply that the skewness risk premium, as well as the variance risk premium, has superior predictive power for future aggregate stock market index returns, which are consistent with the theoretical implication derived by our model. Compared with the variance risk premium, the results show that the skewness risk premium plays an independent and essential role for predicting the market index returns.     

Total Factor Productivity of the Japanese Rice Industry

We calculate partial factor productivity and total factor productivity (TFP) indices for rice production using panel data across 42 Japanese prefectures from 1996 to 2006, and perform panel unit root tests of TFP convergence across prefectures. We find that during this period, the partial factor productivity growth rates for capital, land and materials stagnated at the aggregate national level, as did the TFP growth rate, despite a large increase in labor productivity. We also identify evidence of a convergence in TFP across Japanese prefectures.     

Conflict,growth, distribution,and employment: a long-run Kaleckian model

This paper presents a Kaleckian growth model in which (i) the rate of capacity utilization, the profit share, and the rate of employment are adjusted in the medium run, and (ii) the normal rate of capacity utilization and the expected rate of capital accumulation are adjusted in the long run. The long-run equilibrium is a continuum of equilibria and is characterized by hysteresis in that the long-run position of the economy depends on where it starts. An increase in the bargaining power of workers lowers the rate of unemployment in both the medium-run and the long-run equilibrium.     

Managing for customers and employees in Hong Kong: The quality and teamwork challenges

Service marketing, total quality management, and human resource management researchers have proposed that employee teamwork is a foundation for service quality. North American research suggests that developing cooperative relationships and constructive controversy among employees can empower employees to serve customers and to strengthen their work relationships and commitment to the organization. Chinese employees in an American-style restaurant in Hong Kong were interviewed on specific incidents that affected service quality. Correlational and structural equation results support the hypotheses that cooperative goals help employees discuss their diverse views open-mindedly and that this constructive controversy results in quality customer service. Competitive and independent goals were largely negatively correlated with dynamics and outcomes. Results were interpreted as suggesting that service teams should develop strong cooperative goals and the skills and procedures of constructive controversy. Deutsch's theory of cooperation and competition, although developed largely through North American research, seems useful for understanding and developing service quality teamwork in Asia.