The Engines of Inequality

In Europe and in the United States, one of the legacies of the economic and financial crisis will no doubt be a high and particularly worrying level of economic inequality. Inequality has roots that go well beyond the 2008 collapse, but the stagnation that has followed it has made disparities in income and wealth more serious and more difficult to eradicate. The challenge now is to turn the injustice of current inequality into a theme of public mobilisation and political action.     

Capital structure： The Italian market perspective

This article first investigates the determinants of＂capital structure＂ and the extent to which financial structure policy contributes to the creation of shareholder value in Italian companies through a survey of 76 CFOs of Italian listed non-financial companies, and revealed that the key driver is the quest for financial flexibility, necessary to combine effectively capital structure policy with the other two levers of value creation, investment policy and payout policy. These three value creation drivers are autonomous, but this empirical study reveals a clear hierarchy that links liability policy （capital structure and payout） to asset policy （investments） leading companies to make sub-optimal financial structure decisions that may not minimize the weighted average cost of capital, though ensuring the financial flexibility necessary to activate their principal lever of value creation, investment policy, effectively and without excessive constraints. A major finding in a subsequent benchmarking exercise is that Italian ＂family capitalism＂ affects corporate governance and therefore capital structure decisions. This finding may not be restricted to the Italian market, but could apply to all countries in which ownership structures are centered on very few shareholders with weak financial market control and where banks often play a crucial role in the governance of companies.     

Continuity,Change, and New Product Performance: The Role of Stream Concentration*

Product development teams often face the challenge of designing radically new products that cater at the same time to the revealed tastes and expectations of existing customers. In new product development projects, this tension guides critical choices about continuity or change concerning product attributes and team composition. Research suggests these choices interact, but it is not clear whether they are complements or substitutes and if the level of change in one should match or not the level of change in the other. In this article, we examine the interaction between product attribute change, team change, and a new team-level factor, which we term stream concentration, as it captures differences among team members in terms of familiarity with the knowledge domain of the new product being developed. We measure stream concentration as team members’ prior NPD experience within a given set of products and assess its impacts on the management of change in new product development projects using longitudinal data from the music industry. We analyze 2621 new product development projects between 1962 and 2008 involving 34,265 distinct team members. Results show that stream concentration is a critical factor in new product development projects that, together with product attributes and team composition, affects new product performance. We discuss implications for research and practice.     

Anti‐dumping: What are the Numbers to Discuss at Doha?

While tariff barriers have decreased worldwide through various GATT rounds, anti‐dumping has surged to play a crucial role as the most important non‐tariff barrier. After much debate and opposition, anti‐dumping is on the agenda of the Doha round of multilateral trade negotiations and it is one of the most important issues, especially for developing countries as they are the main targets of this policy instrument. With this prospect, it is important to assess the relevance of anti‐dumping not only by focusing on traditional users but by analysing the experience of new users, which are now major players in the field. This paper improves upon existing studies by providing a comprehensive assessment on the use of anti‐dumping. First, data on the time pattern of worldwide implementations of anti‐dumping laws are presented. This time profile shows interesting relationships with legal developments in GATT and WTO dispositions. Second, usual sources of data are complemented with various other sources. This allows the inclusion of recent heavy users like China, Russia, Taiwan and Ukraine, which are ignored in similar studies but important for their trade volumes. This enlarged and updated dataset shows that new users are even more important than previously thought, with implications for the Doha negotiations.     

Technological progress and inequality: an ambiguous relationship

Faster technological change does not necessarily widen wage inequality. This occurs only if technical progress takes the form of product improvements. Conversely, cost-reducing innovation favors a reduction in inequality. This novel result is obtained in a theoretical framework in which individuals can choose both the quality of the equipment and the retooling time. The main implication of this work is that the rapid decline of the durable goods’ price documented in the postwar period, and especially since the 1970s, should have favored a reduction in income inequality. The popular view that attributes the rise in inequality to the spread of information technologies is questioned by this analysis.     

On competing theories of economic growth: cross-country evidence

In the recent literature on economic growth, four approaches compete to explain growth trends in per capita GDP of the world set of countries: (1) the Solovian approach; (2) the New Theory of Endogenous Growth; (3) the Abramovitz–Baumol ‘catching up’ approach; (4) the Kaldor approach of increasing returns and cumulative causation. Approaches (3) and (4) are formalized here in a single model and then tested against approaches (1) and (2) on a common database and sample of countries. The main conclusions are the following: that labour is not the limiting factor on growth, as implied by (1) and (2); that catching up is an important and a non-declining process; that increasing returns to output rather than to capital are very important and accelerate the catch-up with the US trend; that a lack of social capabilities and technological push may reverse catching up into falling behind with respect to the US productivity level; and that the pattern of growth changes between 1960–73 and 1973–88 because physical investment becomes less important while R&D becomes more important, and because cumulative causation through export growth ceases.     

Institutional changes and shifting ideas: a constitutional analysis of the Euro

This paper uses the logical tools of Constitutional Economics to analyze the creation of the Euro, considering the entire process as the outcome of a conflict between different rules or, if you will, between different monetary systems, moving from the system of flexible exchange rates to a system of fixed exchange rates and ultimately to the single currency. The conflict between monetary systems has been acted out according to the single states’ collective preference functions, with both full employment and price stability figuring among the weights of said preference functions. The “solution” of the single currency was conceived when the body of information available to the policymakers was “simplified” by the new classical macro-economy taking a hegemonic role.