Whose Human Capital? The Challenge of Value Capture When Capital is Embedded

abstract    Current approaches that position human capital as central to value generation in knowledge-based industries obscure the importance of the relational nature of knowledge production. That is, separable and embodied forms of capital are interdependent in value creation and capture processes. We identify a relational form of capital, embedded capital, which we argue is the critical resource in knowledge-based industries such as professional services firms, because it allows us to include agency and interdependency in the value capture process. These dimensions have previously been overlooked by the resource-based view of the firm. Examples of embedded capital include brand value, processes and procedures. The deployment of embedded capital is also not clearly controlled by either the firm or individual employees. A model is developed to illustrate the links between each form of capital, and the processes of value capture. This conceptual identification of the embedded form of capital is therefore of importance to future value creation and capture debates.     

Strategic Environmental Policy and International Trade in Asymmetric Oligopoly Markets

This paper examines optimal cooperative and non-cooperative environmental taxes for the case in which a polluting input is used to produce an internationally-traded finished product. The model allows for terms-of-trade effects under oligopoly and employs a general specification of the environmental damage function that encompasses special cases of local, global, and transboundary externalities. The model has several implications for public finance. For example, inefficiently high environmental taxes may be optimal for a net exporting country in non-cooperative circumstances, as the motive to shift rent by selecting an inefficiently low tax rate is countervailed by the incentive to shift the burden of the tax to foreign consumers. The findings identify the important role of asymmetric trade flows (denominated in both goods and pollution exchange) in determining optimal cooperative and non-cooperative tax policy under oligopoly.     

Indivisibilities and interplant transportation cost: Do they cause market breakdown?

This paper considers the ability of the land market to allocate space among activities when economic agents operate subject to scale economies, and when the agents trade with one another, thus incurring transport cost. The structure of the problem is that of Koopmans and Beckmann. The land market fails to clear properly only for certain parameter values. The inability of the land market to work properly is found to result from the failure of the market to properly price accessibility, or alternatively, from the failure to price congestion. It is a standard externality problem.     

The Power of Promoting Healthy Brands: Familiarity in Healthy Product Decision Making

This research investigates consumer decision making and brand commitment for brands promoted as “healthy.” The authors examine the relationship of brand familiarity to brand credibility, brand quality, purchase intentions, and brand commitment. The findings indicate that familiarity can help increase purchase intentions and brand commitment for healthy brands with low credibility. However, to go beyond a transactional exchange to one that is relational in nature, familiarity, credibility, and quality are all crucial for fostering brand commitment.     

Slotting Allowances as a Facilitating Practice by Food Processors in Wholesale Grocery Markets: Profitability and Welfare Effects

Slotting allowances, which are lump-sum transfers paid by food manufacturers to grocery retailers in return for various retail concessions, are becoming increasingly common in wholesale grocery markets. This article extends the literature on slotting allowances by considering two features that previously have been ignored: the role of food processors in determining these pricing arrangements, and the effect of slotting allowances on the size and distribution of economic surplus. Slotting allowances motivated by food processors increase procurement quantities and farm prices, and this raises farm surplus, increases total producer surplus, and improves consumer welfare in the food system.