Announced layoffs: Their effect on corporate financial performance

Conventional wisdom holds that when a firm gets into trouble due to lagging sales and rising costs, cutting the size of the organization to reduce fat and waste is a normal and effective response. In this study, evidence was found to suggest that just the opposite might be true. The financial performance of Fortune 100 companies was tracked over a five-year period—two years prior to the announced layoff, the year of the layoff announcement, and two years following it. Contrary to expectations, the results indicate that financial performance worsened, rather than improved, following announced layoffs. Strategic and human resource implications for the management of corporate downsizing are provided.     

Lone Mothers: What is to be done?

This Dialogue presents the views of four authors, from the US, the UK, and Norway, on the best policies to help lone mothers. Lone mothers face an inevitable dilemma in allocating their time between earning income and caring for their children. The low-earning capacity of women in an unequal labor market exacerbates the problem, causing material hardship for many lone mothers and their families. The policy solutions proposed lie along a spectrum, ranging from those that seek to enable all lone mothers to take employment to those that aim to let mothers choose whether to take employment or care for their children themselves. Other policies discussed concern ways to value and support caregiving, improve the low-wage labor market for women, and provide a set of income supports that would both boost income and provide time to care for children.     

Need for modernizing financial institutions

As the flow of financial aid from the industrial countries may be expected to shrink rapidly as a consequence of their economic difficulties, the developing countries will have to find out possibilities of using their own financial resources more effectively. In this connection the task of modernizing their financial institutions should not be neglected.     

The continuing need for affirmative action

Affirmative action is defined as the steps taken to end the absence in jobs, schools, and honored positions of members of groups that have been subordinated. Its purpose is to reduce discrimination, to reduce income disparities between groups, and to promote diversity by gender and race in every role and activity. The persistence of occupational segregation by sex and race to a degree that cannot be explained by differences in qualifications or voluntary behavior testifies to the need for further action. Alternatives to affirmative action, such as helping people regardless of race or sex from disadvantaged backgrounds, “just enforcing the law against discrimination”, or waiting for educational improvements to bring groups better qualifications would not do the job affirmative action is designed to do.     

Determinants of export performance

Comparative advantage, government incentives and entrepreneurial dynamics as determinants of a country’s export performance are discussed in this article. The author’s particular attention is focussed on the present situation and future perspectives of the less developed countries.     

Weltweiter Globalisierungsprozeß erfordert gestaltende Eingriffe der Politik

In der Januarausgabe 2007 des WIRTSCHAFTSDIENST ver?ffentlichten wir einen Aufsatz von Professor Thomas Apolte mit dem Titel „Warum die Politik die Globalisierung nicht liebt“. Hierzu eine Replik von Professor Heiko K?rner und Professor Gisela Kubon-Gilke sowie eine Erwiderung von Professor Thomas Apolte.     

Patent pools,litigation, and innovation

This article analyzes patent pools and their effects on litigation incentives, overall royalty rates, and social welfare when patent rights are probabilistic and can be invalidated in court. With probabilistic patents, the license fees reflect the strength of the patents. We show that patent pools of complementary patents can be used to discourage infringement by depriving potential licensees of the ability to selectively challenge patents and making them committed to a proposition of all‐or‐nothing in patent litigation. If patents are sufficiently weak, patent pools with complementary patents reduce social welfare as they charge higher licensing fees and chill subsequent innovation incentives.     

Rising Income Inequality: Do Not Draw the Obvious Conclusions

Inequality is dominating the political debate in various countries still characterised by sluggish economic recovery and high unemployment. The drivers of higher income inequality since 1995 have been globalisation, technological change and migration. At the same time, these factors have had an undeniably positive impact on aggregate income. While populist parties advocate more nationalistic-oriented approaches, we argue that the appropriate policy response to this dilemma is to alleviate the social costs of globalisation rather than rejecting the aggregate economic benefit.