Pollution Externalities in a Model of Endogenous Fertility and Growth

An endogenous growth model with human capital formation, pollution caused by production of consumption goods, and endogenous fertility decisions made by altruistic agents with infinite horizons is presented. Consequences for optimal policy of modelling fertility as an explicit decision variable are examined. Because ordinary lump-sum transfers to individuals are no longer neutral, either revenue from a pollution tax must be redistributed to dynasties (working as an implicit tax on child births), or lump-sum transfers must be supplemented with an explicit fertility tax. Alternatively, the government can avoid distortions of the fertility decisions by maintaining an appropriate public debt. When abatement is highly productive, it can be optimal to subsidize fertility in order to increase total production.     

On Conformity Testing and the Use of two Stage Procedures

Conformity testing is a systematic examination of the extent to which an entity conforms to specified requirements. Such testing is performed in industry as well as in regulatory agencies in a variety of fields. In this paper we discuss conformity testing under measurement or sampling uncertainty. Although the situation has many analogies to statistical testing of a hypothesis concerning the unknown value of the measurand there are no generally accepted rules for handling measurement uncertainty when testing for conformity. Usually the objective of a test for conformity is to provide assurance of conformity. We therefore suggest that an appropriate statistical test for conformity should be devised such that there is only a small probability of declaring conformity when in fact the entity does not conform. An operational way of formulating this principle is to require that whenever an entity has been declared to be conforming, it should not be possible to alter that declaration, even if the entity was investigated with better (more precise) measuring instruments, or measurement procedures. Some industries and agencies designate specification limits under consideration of the measurement uncertainty. This practice is not invariant under changes of measurement procedure. We therefore suggest that conformity testing should be based upon a comparison of a confidence interval for the value of the measurand with some limiting values that have been designated without regard to the measurement uncertainty. Such a procedure is in line with the recently established practice of reporting measurement uncertainty as “an interval of values that could reasonably be attributed to the measurand”. The price to be paid for a reliable assurance of conformity is a relatively large risk that the procedure will fail to establish conformity for entities that only marginally conform. We suggest a two‐stage procedure that may improve this situation and provide a better discriminatory ability. In an example we illustrate the determination of the power function of such a two‐stage procedure.     

Sense and sensibility: Two approaches for using existing theory in theory-building qualitative research

The paper addresses the role and use of theory in theory-building case research. How to use existing theory in theory-building efforts is a crucial, yet somewhat overlooked challenge within qualitative research. On that background, the purpose of the paper is to explore, compare and discuss two distinct approaches for using existing theory and developing theoretical awareness in theory-building case studies. Upon discussing the role and use of theory in case study research in general, we identify two approaches for drawing on pre-existing theory, labeled the in vivo approach and the ex ante approach. The in vivo approach takes departure in a single theoretical framework, anchored in a single paradigm, and the aim of theory-building is to gradually deepen, refine and complement this framework. The ex ante approach suggests that researchers should look for paradox in the form of theoretical tensions and use these to develop theory, meaning that researchers should develop an elaborate theoretical understanding of meta-theoretical stances and use these to generate different readings of the case material, subsequently prioritizing and integrating them into a coherent pattern.     

Diverging expectations in buyer-seller relationships: Institutional contexts and relationship norms

Many firms assume that outsourcing partnerships may allow them to strengthen their overall competitiveness. Lured by its intuitive appeal, several enter into such partnerships, only to realize that they represent a marginal rather than a magical solution to their quest for increasing market performance. An important reason for this is the diverging beliefs and expectations held by both parties in the buyer-seller dyad. The purpose of this contribution is to develop a framework for understanding the divergences in expectations and relationship norms in cross-cultural business relationships among SMEs. We discuss four relational expectations derived from the B2B literature on relational norms for addressing these divergences: Quality, frequency and scope of communication, role specifications and coordination of work nature of planning horizons, and trustworthiness and link these to relationship performance. We explore the proposed impact of diverging relationship norms on relationship expectations using data from an ongoing field study of Danish buyers and Chinese suppliers. We link these diverging expectations to the business practices of Danish buyers and Chinese and their institutional contexts. In the concluding part of the paper, we discuss our findings and outline implications for management and academia.     

Organizational interfaces and innovation: The challenge of integrating supplier knowledge in LEGO systems

Suppliers have become increasingly important as partners in firms' innovation efforts. Reaping potential collaboration benefits is complex due to challenges in combining internal and external knowledge. The paper explores how various types of organizational interfaces between buyer and supplier create both opportunities and problems for their joint actions. The paper is based on a longitudinal case study of attempts to develop an innovative packaging solution for the toy manufacturer LEGO systems. The study shows that buying firms need to carefully analyse what form of organizational interface access to prioritize since each type offers its specific possibilities and drawbacks. Furthermore, the feasibility of organizational interfaces may change over time due to mutual organizational learning.     

Contested land tenure reform in South Africa: experiences from Namaqualand

In South Africa the distribution of land rights remains a major manifestation and cause of injustice, only slowly affected by the constitutionally mandated programme of land restitution, redistribution and tenure reform. The Transformation of Certain Rural Areas Act 94, 1998 (Trancraa) is the first post-apartheid legislation to reform ‘communal’ land tenure. It applies to 23 former ‘coloured rural areas’ and was introduced in six areas in Namaqualand in the Northern Cape Province during 2001–2. In a different, contested process a Communal Land Rights Bill for the former ‘homelands’ was published in August 2002, adopted by Cabinet in 2003 and signed into law in July 2004. While the Communal Land Rights Act relies on ‘traditional councils’ with a majority of non-elected members, Trancraa was enacted in the context of the 1997 White Paper of South African Land Policy and focused on community choice and the role of municipalities. The consultative process in Namaqualand was driven by civil society organisations and community actors, but did not include the training, finance and development support needed to transform rural relations among people affected by unemployment, land scarcity and weak local organisations. To promote procedural and substantive justice, tenure reform must honour the human rights of equality, redress and land development support articulated in land policy and the Constitution.     

When Environmental Policy is Superfluous: Growth and Polluting Resources

In a research–driven endogenous growth model, a non–renewable resource gives rise to pollution. Consumption may either grow or decline along the optimal balanced growth path, but the (flow) pollution level necessarily diminishes continuously. Any positive balanced growth path is sustainable. Utility may improve, even though consumption declines. Although positive growth is optimal, the market economy may nevertheless result in permanently declining consumption possibilities. At the same time, a growth–enhancing government policy may improve long–run environmental conditions. The pollution externality does not distort the decisions of the market economy, so that a specific environmental policy is superfluous.
JEL classification : O 41; Q 20; Q 28; Q 32     

Emotions, trust and relationship development in business relationships: A conceptual model for buyer-seller dyads

Existing research on buyer-seller relationships has focused on the role played by trust in shaping the dynamics of interpersonal interaction between the buyer and the seller. While this is undoubtedly an important variable in governing the interactional dynamics it is by no means the only variable. The paper begins by reviewing the existing literature on buyer-seller relationships. The role played by emotions is articulated. Finally, it is recognized that the emotions that emerge in a buyer-seller relationship do so at multiple levels. A model and propositions highlighting the impact of emotions on interpersonal relationships are developed. Illustrative cases are used to ground the propositions empirically.