Labor unemployment risk and firm risk

This paper examines the effect of labor unemployment risk on firm risk. Using unemployment insurance benefits as a proxy for unemployment risk, we find an economically significant positive relation between unemployment risk and firm risk. This positive relation is more pronounced for firms that are more labor-intensive, have a higher layoff propensity and are more financially constrained. While existing literature that employs corporate policy measures such as debt and cash holdings suggests an opposite relationship, our paper presents evidence that the effects stemming from earnings management, earnings quality and reporting quality appear to dominate.     

Modes of biotechnology assessment in the USA,Japan and Denmark

Since the 1970s technology assessment by public bodies has become generally accepted as necessary. Modes of technology assessment differ from country to country, in terms of degree of institutionalization, acceptance by policy makers and level of public involvement, and these in turn depend on the goals, methods and organizational framework of the particular technology assessment. The varying social and political roles of technology assessment arise out of national political traditions and differing cultural views of technology. This article compares modes of biotechnology assessment in the USA, Japan and Denmark, focusing on the role of public discussion in the policy-making process. By analysing these three different contexts, the article seeks to uncover ways in which the cultural conditioning of technology policy takes place.     

Freedom of Choice in Technology Strategy? An Analysis of Technology Strategy in the Large Commercial Aircraft Industry

Many companies experience difficult situations as a result of their selected strategy. Strategic management theories implicitly assume that companies have a free choice in setting their strategy. Hence, when companies experience difficult situations this is because of management inadequacy. It is questionable whether companies always have a free choice. This research examines this issue by examining the new product strategies of the two main competitors in the commercial aircraft industry. The development of the A380 aircraft was selected to determine to what extent the companies had a choice in setting their product development strategies. The conclusion is that neither has the alleged freedom for setting its strategy. Implications of this finding are that the strategy theory needs to be adjusted for this choice issue, and that management should not always be held fully responsible for the developing events.     

The Headmaster Ritual: The Importance of Management for School Outcomes

We estimate the impact of individual principals on school outcomes by using panel data that allow us to track principals over time. We find that individual principals have a substantive impact on school policies, working conditions, and student outcomes. In particular, students who attend a school that has a one standard deviation better principal improve their achievement by between 0.05 and 0.1 standard deviations. Despite rich background information on principals, it is difficult to characterize successful management, suggesting that innate skills are central. We find that the scope for discretion is larger among voucher schools and in areas with school competition.     

Information Exchange and Transnational Environmental Problems

This paper analyzes information exchange in a model of transnational pollution control in which countries use private information in independently determining their domestic environmental policies. We show that countries may not always have an incentive to exchange their private information. However, for a sufficiently high degree of predictability of domestic environmental policy processes, the expected welfare from sharing information is greater than the expected welfare from keeping it private. The minimum degree of policy predictability for which information sharing occurs increases with the level of environmental risk. Intuitively, information exchange can help mitigate the perception of global uncertainty (both political and scientific) that surrounds transnational environmental problems and potentially improve welfare if policymaking processes are sufficiently aligned with evidence-based approaches (predictable).     

The Non-Trivial Choice between Innovation Indicators

We discuss the strengths and weaknesses of five alternative innovation indicators: R&D, patent applications, total innovation expenditure and shares in sales taken by imitative and by innovative products as they were measured in the 1992 Community Innovation Survey (CIS) in the Netherlands. We conclude that the two most commonly used indicators (R&D and patent applications) have more (and more severe) weaknesses than is often assumed. Moreover, our factor analysis suggests that there is little correlation between the various indicators. This underlines the empirical relevance of various sources of bias of innovation indicators as discussed in this paper.     

Information Technology As A Factor Of Production: The Role Of Differences Among Firms

Despite evidence that information technology (IT) has recently become a productive investment for a large cross-section of firms, a number of questions remain. Some of these issues can be addressed by extending the basic production function approach that was applied in earlier work. Specifically, in this short paper we: 1) control for individual firm differences in productivity by employing a ‘firm effects’ specification, 2) consider the more flexible translog specification instead of only the Cobb-Douglas specification, and 3) allow all parameters to vary between various subsectors of the economy.

We find that while ‘firm effects’ may account for as much as half of the productivity benefits imputed to IT in earlier studies, the elasticity of IT remains positive and statistically significant. We also find that the estimates of IT elasticity and marginal product are little-changed when the less restrictive translog production function is employed. Finally, we find only limited evidence of differences in IT's marginal product between manufacturing and services and between the ‘measurable’ and ‘unmeasurable’ sectors of the economy. Surprisingly, we find that the marginal product of IT is at least as high in firms that did not grow during 1988–1992 sample period as it is in firms that grew.