Labour market implications of EU product market integration

European labour markets are in a state of flux due to the changing market situation induced by international integration. This process affects wage formation through more fierce product market competition and increased mobility of jobs. This development is by some observers taken to enforce labour market flexibility, while for others it signals an erosion of social standards and in turn possibly the welfare society. Since labour is not very mobile in Europe, the effects of international integration on labour markets are mostly indirect via product market integration. We review the channels through which product market integration affects labour markets and perform an empirical analysis of the convergence and interdependencies in wage formation among EU countries. We find that integration is changing labour market structures and inducing wage convergences as well as stronger wage interdependencies, but it is a gradual process. Moreover, the present study does not support the view that international integration will lead to a 'race to the bottom' and rapidly erode domestic labour markets standards, nor that it will relieve politicians of the need to consider labour market reforms to improve labour market performance.     

Media market concentration and pluralism

We study the relationship between market concentration and market variety, and thereby focus on two dimensions of variety, namely on internal variety and on external variety. In our setup, firms can expand their internal variety continuously around their focus point on a Salop‐circle. External variety then refers to the market supply of variety offered by all firms on the circle. We believe that this setting is particularly applicable to media. It turns out that in more concentrated markets, there is an incentive to provide more internal variety in order to compete for consumers. Then, the relationship between market concentration and external variety turns out to be ambiguous. There also exists no clear free market bias with respect to socially optimal internal and external variety.     

Post-acquisition performance in the short and long run. Evidence from the Copenhagen Stock Exchange 1993–1997

The paper investigates the short-run price adjustment around acquisition announcements and the long-run upward bias of cross-sectional average buy-and-hold returns. The geometric Brownian motion model is applied to decompose the cross-sectional average long-run returns into transformed mean and volatility components. The decomposition improves the interpretation of security performance. The methodology is demonstrated on the security performance of bidding firms listed on the Copenhagen Stock Exchange. The most surprising finding is that the long-run abnormal return after three years is not significantly different from zero. This implies that the bidding firms do not under-perform relative to the market. This result stands in contrast to findings in other studies and it may reflect that earlier studies do not adjust correctly for the volatility component. These current findings indicate that the market efficiency hypothesis is intact in the long run. It is only in the very short run, a few days around acquisition announcements, that the market makes a significant adjustment to uphold the efficiency hypothesis.     

Neuroeconomics and business psychology

To determine parameters of the frontal power of executive integration for application in business, this paper reviewed neuroeconomic neuroimaging research and discussion in relation to business psychology. The results are that limbic system （L） is a centre of primary consciousness based on a mesolimbic dopamine system serving the client in the brain stem with adaptive feedback as well as generating cognition and emotions towards Neocortex in a reciprocal autonomic balance. The power of concentration （C） is a tripartite executive integrating emotions and cognition： Prefrontal analysis by semantic recollection from temporal （R） lobe is based on episodic memories. Volition in the medial prefrontal cortex （c） controls both cognitive prediction （R＇c） and emotions （L/c） for a balanced integration as a neural root of economic reasoning. An intuitive visuospatial Parietal sketchpad （I） integrates hippocampal episodic memory mismatches complementary to the cognitive prediction function. Chronic stress limiting the capacity of C is indicated by baseline serum cortisol. The conclusion is that the neuroeconomic model enables （1） operation of the theorem of economic man as an economic-bio-educational complex. Other business applications comprise, （2） a neural foundation of transactional analysis （TA） to improve corporate collaboration and management, （3） a combined health promotion/human resource development program based on simple training techniques as physical exercise, medical meditation and neurolinguistic programming （NLP）, i.e., for weight regulation.     

State Dependent Unemployment Benefits

Optimal design of unemployment insurance is considered in a search setting where the state of nature (business cycle) affects the unemployment risk and thus the return to search. The incentive effects or distortions of individual job search arising due to the unemployment insurance scheme are crucial for optimal policies, so is the scope for risk diversification that depends critically on whether the balanced budget requirement applies to each state of nature or across states of nature. In the former case a basic budget effect tends to cause optimal benefits to be procyclical. If risk diversification across states of nature is possible, the fact that incentives are more distorted in good than bad states of nature tends to make both benefits and contribution rates countercyclical. It is shown that countercyclical benefits exacerbate employment fluctuations but increase average employment by aligning benefits more with states of nature where the incentive costs are small.     

Offshoring and international competitiveness: antecedents of offshoring advanced tasks

During the past decade, offshoring has become an established business practice. Yet it is still more common to offshore less advanced tasks compared with offshoring more advanced tasks, i.e., tasks closer to the core activities of the firm. The latter is a new phenomenon which raises many new issues on the boundaries of the firm. More or less advanced tasks can be found within all activities, e.g., in sales and marketing where telesales is on the less advanced end of the scale while branding and identity building are on the advanced end of the scale. This article focuses on the antecedents of advanced offshoring, exploring what causes firms to offshore some of their more advanced tasks. Our findings indicate that while the lower cost of unskilled, labor-intensive processes is the main driver for firms that offshore less advanced tasks, the offshoring of advanced tasks is part of firms’ strategy to achieve international competitiveness through access to cross-border knowledge flows and foreign knowledge resources. Furthermore, offshoring of advanced manufacturing tasks seems to be more widespread and experience-based than the offshoring of advanced service tasks.