Improving human capital through knowledge management practices in knowledge-intensive business services

This article studies how knowledge management (KM) practices improve human capital. We conceptualize KM practices through six dimensions and test the relationship between each dimension and human capital. The empirical study which was carried out in Spanish firms belonging to the biotechnology and telecommunications industries shows that introducing KM practices has a positive impact on the improvement of human capital. In fact, firms that introduce practices related to continuous learning and the development of an innovative culture that encourages R&D projects improve the skills or abilities of their human capital.     

Regional relationships between inherent coffee quality and growing environment for denomination of origin labels in Nariño and Cauca,Colombia

International markets are increasingly signaling demand for quality-differentiated coffee, which the Colombian Coffee Growers Federation (FNC) proposed to exploit to identify those regional coffees that would fulfill the requirements to be classified as denomination of origin. The objective of this study was to develop and implement a sound, robust and repeatable approach with and for the FNC to identify regional causal relationships between coffee quality and environmental characteristics as bases for labels of denomination of origin. Environmental differences between coffee-growing areas in the departments of Cauca and Nariño were statistically significant for several characteristics, including the number of dry months, annual precipitation and diurnal temperature range. The dominant varieties (Caturra and Colombia) did not show major differences in quality attributes, and were pooled for the analyses with the environmental data. There are significant differences in biochemical and sensorial product characteristics between the two departments. The spatial patterns in product characteristics exhibit a non-random, regionally-changing structure that is related to those in the environmental data. The generated results provided ample evidence to support the application for regionally-based denominations of origin. Recommendations were derived to help mainstreaming the developed approach and thereby facilitate policy decisions for its use in other geographies and with other crops. Furthermore, the importance of systematic interdisciplinary institutional collaboration for large-scale denomination of origin projects was corroborated for food policy dialogue and decision making. It seems plausible that producers of high-quality products within other commodities are likely to follow the FNC in seeking denomination of origin for their goods. The presented approach is crucial to facilitate policy.     

Price setting in forward-looking customer markets

If consumers form habits in individual goods, firms face a time-inconsistency problem. Low prices in the future help attract customers in the present. Firms, therefore, have an incentive to promise low prices in the future, but price gouge when the future arrives. In this setting, firms benefit from “committing to a sticky price.” If consumers have incomplete information about costs and demand, the firm-preferred equilibrium has the firm price at or below a “price cap.” The model therefore provides an explanation for the simultaneous existence of a rigid regular price and frequent “sales”.     

The international transmission of monetary shocks across developed countries: The role of imported raw materials

This paper analyzes the implications of a production technology in developed countries (DC) characterized by the share of imported raw materials coming from the less developed countries (LDC). We focus on the question of how this richer productive structure affects the international transmission of a monetary shock across developed countries. In this context, it is shown that (i) the share of raw materials and/or its low substitutability is a source of exchange rate volatility. (ii) Welfare transmission depends critically on the extent of their share in production. (iii) Sufficiently high shares of imported raw materials in the DC production functions explain better positive co-movements between DC outputs.     

Deregulation, liberalization and consolidation of the Mexican banking system: Effects on competition

This paper analyzes the evolution of competition in the Mexican banking system in the period 1993-2005, a period of deregulation, liberalization and consolidation of the sector. For this purpose we use two indicators of competition from the theory of industrial organization (the Lerner index and the Panzar and Rosse’s H-statistic). The empirical evidence does not permit us to reject the existence of monopolistic competition. The Lerner index shows a decrease in competitive rivalry in the deposit market and an increase in the loan market, a cross subsidization strategy being observed. The results obtained call into question the effectiveness of the measures implemented hitherto, aimed at increasing the competition of the Mexican banking system.     

Extension services,product quality and yields: the case of grapes in Argentina

This article studies the impact of publicly subsidized agricultural extension services on yields and product quality. We use panel data from grape producers in Mendoza, Argentina to estimate the impacts of farmer trainings. We find a negative overall impact on yields and evidence of a positive average impact on the adoption of higher‐quality grape varieties. By analyzing the dynamic pattern of the estimated effects, we find evidence of a temporary decrease in yields suggesting the existence of an adjustment process following the introduction of higher‐quality grapes. The overall negative effect on yield is driven by a sharp drop in the year of participation. This fades after year one, and two to three years after treatment we observe increases in higher‐quality grape production. Findings reinforce the importance of temporal dimension of extension services.     

The Economic Impact of Marena’s Investments on Sustainable Agricultural Systems in Honduras

This study examines the economic impact of sustainable agricultural production systems in Central America. In particular, we investigate the impact of investments promoted by the MARENA Programme in Honduras on the total value of agricultural production (TVAP) of its beneficiaries. Propensity Score Matching techniques along with the Difference‐in‐Differences framework are used to mitigate biases stemming from differences in observed as well as unobserved (time‐invariant) characteristics between beneficiaries and a control group. The econometric estimates suggest that MARENA has had a positive and significant effect on the TVAP of beneficiaries. In addition, the analysis shows that, under alternative scenarios, MARENA yielded higher than expected internal rates of return. The results of this study shed light on the response of small‐scale hillside farmers to economic incentives and lend support to the role of natural resource management projects in Central America as a tool to increase household income while also promoting the conservation of natural resources.     

The land cost of agrarian sustainability. An assessment

Improving the sustainability of farms often incurs additional costs for farmers. These costs come from allocating land to the maintenance of the ecological processes (energy and material flows, natural population regulation) required for the agroecosystem to function. Since these costs are not recovered on the markets, farmers see a fall in profits, the financial viability of their farms is compromised, and they suffer the consequences of the environmental services they are providing. All this makes it essential to implement government policies designed to compensate farmers for their efforts. The issue of how to assess sustainability has generated widespread debate within ecological economics, specifically as to whether it is possible to place a monetary value on it and if so, how this should be done. In a previous article we showed that agrarian sustainability involves a land cost, therefore this cost can be translated into monetary values. The purpose of this study is to develop this concept in practical terms by applying it to organic farming. We calculated the land cost of agrarian sustainability (LACAS) in order to compare organic versus conventional management in olive farming, as this crop is grown extensively in Spain and other Mediterranean countries. The results show that the agro-environmental subsidy is not enough to encourage olive growers to make the conversion from conventional to organic methods, because the land cost of sustainability is not adequately offset. They also show that improving agroecosystems can allow the land to take on more functions without increasing the land cost. In our case, encouraging the multifunctionality of the land has permitted a reduction in this cost. The LACAS could be a useful tool, not only for drawing up government policies designed to support organic farming, but also for improving the sustainability of the agrarian sector.     

Labour market response to globalisation: Spain, 1880–1913

This paper analyses the impact of globalisation (trade and migration) on the Spanish labour market between 1880 and 1913 by examining the influence that globalisation factors had on agricultural and industrial wages. Our results show that the nineteenth century grain invasion had a negative impact on agricultural wages, whereas the fall in wheat prices did not benefit industry workers. We also found that migration pushed up real agricultural and industrial wages. As agriculture was the main sector in the economy, the final impact was a wage decrease. The negative impact of trade on agricultural and industrial labour markets partly explains the trade policy response of “integral protection”. However, other alternatives that would have been effective in raising living standards, such as migration policy, were not used.     

Editorial Environmental regulations in the Swedish forest industry. What is the real problem?

The Swedish forest industry faces many regulations. In many cases they are used to eliminate, or diminish, negative external effects on the environment. The aims of most regulations are well accepted among decisions makers in the industry and in society. However, in many cases the implementation can present problems, the reason being bureaucracy.The Ortviken paper mill is located just north of Sundsvall, which is a middle-sized town in the northern part of Sweden. SCA, one of the world's largest forest companies, owns and operates the mill. In the beginning of the 1990s, Ortviken planned for an expansion, which was considered necessary for the company's strategy and potentially profitable. But in order to build a larger plant, SCA first needed a licence from the local authorities which showed that conditions laid down in the Law of Planning and Building were met. After that, the project needed approval by the environmental authorities according to their specific laws and requirements.SCA finally succeeded in getting all the permissions needed. But the whole process took more than 10 years, despite the fact that it was carried out in close co-operation with the local authorities.While waiting for the final approvals, SCA applied for permission to expand production without changing the present emission levels. The existing permit also included a ceiling on production since emissions usually are proportional to production. However, in this case SCA wanted to increase production by only 5 %, and emissions would not exceed allowed levels. But the application was refused. The company was not allowed to increase production above the existing ceiling without a completely new application to the environmental board. The processing time for such an application would cover about two years and cost an unknown amount of money.Recently, the same company decided to analyse the possibilities of expanding production at the Tunadal sawmill, which is located in the same area. One of the alternatives was to build a completely new mill with new technology at a new and suitable site. However, a pilot study showed that the handling time just for the local planning process would be seven years and cost around 10-15 million SEK (approximately 1.5 million Euro).In addition, two years would be required for the environmental approval, so that the whole process from planning to actual start of the investment would require about 10 years.These long handling periods are of course an effective obstacle to investment. No board of directors dares to decide on an investment costing hundreds of millions of Euro if the time span of uncertainty from decision to actual start of the factory is 10-15 years.Not only has the time span necessary to fulfil the new requirements caused problems. An enormous amount of detail is needed to fulfil the requirements of an environmental impact assessment for an investment. For instance, a temporary pile of soil requires a separate analysis of the consequences for the environment, and companies are required to specify the kind of fuel used in trucks that (an unspecified number of years ahead) will drive the garbage from the building site. All these problems are particular troublesome for heavy industries like the forest industry and other industries (e. g. the steel industry and the chemical industry) that deal with material processing.What this Swedish example shows is that it is perhaps not environmental regulation per se that can make an obstacle to industrial expansion. There is no problem for the Swedish forest industry in fulfilling the technical conditions on emission levels. The crucial factor is time. The example also shows that it is not the core content of environmental regulations that is troublesome, but how these regulations are handled and formulated. It is not the environment that is the enemy, but the bureaucracy around it.Sören WibeSLUDepartment of Forest EconomicsSE-90183 UmeåOla CarlénSLUDepartment of Forest EconomicsSE-90183 Umeå