Home Employment Effects of EU Firms’ Activities in Central and Eastern European Countries

We examine whether or not affiliate production in Central and Eastern Europe (CEEC) affects factor demand in the EU, at the investing firm and sector levels. Using firm level data, we estimate parent labor demand elasticities for a number of manufacturing sectors, following a flexible cost function approach. We find evidence of inter-sector heterogeneity, but not of a substantially greater impact in low-skilled intensive sectors. Labor demand in the EU is affected by FDI in the CEEC, both at the investing firm and sector levels. It has a significant sector and non-sector component.     

CONGREGATE CONGNITIVE MAPS: A UNIFIED DYNAMIC THEORY OF ORGANIZATION AND STRATEGY

Recently and independently, two dynamic approaches to organization and strategy have emerged in fields traditionally confined to static methods. One approach uses the cybernetic properties of collective cognitive maps to create a dynamic theory of organization and social system change. The other approach uses the hierarchic properties of collective cognitive maps to create a dynamic theory of strategy. This article discusses how a dynamic cognitive approach makes organization theory and strategy theory inseparable. The approach distinguishes between aggregate and congregate collective cognitive maps. The approach creates a unified dynamic theory of organization and strategy. In this unified theory, the hierarchic and cybernetic aspects of collective cognitive maps combine with the cryptic aspect of concepts and connections present in maps to further explicate the association between organization and strategy. In practice, the cryptic character of many concepts - especially those responsible for the congregation of individual cognitive maps - is exploited to generate both a potent interview technique and a powerful method for facilitating the initiation and development of strategy workshops.     

Economic Sociology

A bstract . Economic sociology covers the gray area between the disciplines of economics and sociology brings scholars from both disciplines together to communicate over topics of interest. This communication provides debate that stimulates and strengthens social theory , which in turn, allows for better policy recommendations. A major area for concern in the development of economic sociology has been the presence of economic imperialism combined with economic bubris , the effects of which could suffocate economic sociology. These phenomena arc examined along with the trends over the past twenty years in the development of economic sociology and the relative impact that "economic sociologists" from both disciplines are having on their respective fields. Observing these trends will allow for an analysis of the developments in economic sociology and a assessment of where It is going in the future.     

Monitoring, Implicit Contracting, and the Lack of Permanence of Leveraged Buyouts

We present a possible explanation for the lack of permanenceof the very high levels of concentration of ownership that accompanyleveraged buyouts. We first argue that some diffusion of ownershipcan be beneficial to the shareholders of a firm by encouragingthe employees of the firm to enter into implicit contracts withthe firm. The level of concentration of ownership that maximizesfirm value is therefore that which trades off the well-knowngains from monitoring with the gains from implicit contracting.We then argue that, in the process of concentrating the ownershipof a firm that has excessively diffuse ownership to a levelthat maximizes firm value, investors in leveraged buyouts willchoose an initial level of concentration of ownership that isvery high. They will do so in order to put pressure on managersto breach existing implicit contracts. Following the breachof these contracts, investors will decrease the level of concentrationof ownership to the level that maximizes firm value. There willbe no further breach of implicit contracts, for such breachis incidental to the transformation of the firm from one thathas excessively diffuse ownership to one that has the optimallevel of diffusion of ownership. No change in the concentrationof ownership therefore occurs once the level of diffusion ofownership that maximizes firm value has been attained. JEL Classification:G30.     

Planning with great uncertainty: A review and case study of the safe drinking water controversy

Since 1974, monitoring the water for dangerous contaminants and judging the impact of low levels of contamination on human health have become highly controversial environmental planning issues in the United States. This paper overviews the chemical, ecological correlation, and case control literatures to establish a baseline and then focuses on New Jersey, the state with the highest cancer mortality rates in the United States from 1950 to 1969, for a case study. While estimates of cancer incidence from consuming contaminated water are made, the scientific results are inconclusive. When combined with economic and political questions, the overall result is to highlight an issue frought with uncertainty presenting serious dilemmas for scientific planning.     

Democracy and dynamic welfare optima

We show that there exists a rule of deciding on random election dates, such that the solution of a welfare optimum computed on an infinite horizon, coincides with short-run economic policies chosen by a democratically elected government.