Book Reviews

Geoffrey Jones. The Evolution of International Business. An Introduction.
Hugo Armstron and Dick Gross. Tricontinental: The Rise and Fall of a Merchant Bank.
Bob Catley. Globalising Australian Capitalism.
Peter Groenewegen. A Soaring Eagle: Alfred Marshall 1842–1924.
Michael Schneider. J. A. Hobson.
Roy MacLeod and Deepar Kumar (eds). Technology and the Raj: Western Technology and Technical Transfers to India 1700–1947.
Tirthankar Roy (ed.). Cloth and Commerce. Textiles in Colonial India.
Deborah Oxley. Convict Maids.     

Diversity in foresight: Insights from the fostering of innovation ideas

Foresight activities have often provided support for objectives such as priority-setting, networking and consensual vision-building. In this paper, we draw upon complementary evolutionary perspectives and discuss these objectives from the viewpoint of diversity which may be vital in contexts characterized by technological discontinuities and high uncertainties. We also argue that although the scanning of weak signals has been widely advocated in such contexts, the solicitation of ideas for prospective innovations may provide more focused, action-oriented, and comparable reflections of future developments. For the analysis of such ideas, we develop a collaborative foresight method RPM Screening which consists of phases for the generation, revision, multi-criteria evaluation, and portfolio analysis of innovation ideas. We also report experiences from a pilot project where this method was employed to enhance the work of the Foresight Forum of the Ministry of Trade and Industry in Finland. Encouraging results from this project and other recent applications suggest that RPM Screening can be helpful in foresight processes and the development of shared research agendas.     

GDP growth in Russia: different capital stock series and the terms of trade

There are different academic assessments of the principal forces behind Russia’s GDP growth. Studies that reconstruct capital stocks using gross fixed capital formation and the perpetual inventory method find that total factor productivity growth has been paramount to GDP growth. On the other hand, capital services datasets that have recently been made available find that capital developments have been instrumental in driving economic growth. We reconstruct a capital stock series for Russia for 1995–2013 and compare the results to two capital services time series using the Solow growth model. We also take into account terms of trade developments that have lent strong support to Russia’s economy. The terms of trade is shown to have been an important factor behind the development of gross fixed capital formation and thus GDP growth.     

The Performance of Trading Firms in the Services Sectors – Comparable Evidence from Four EU Countries

We examine trade complexity and the implications of adding additional dimensions of trade for firm performance among services producers. We use unique firm‐level data to compare these patterns across four EU countries. Overall, services firms are relatively less engaged in trade than manufacturing firms; they mostly trade goods and are more likely to import than to export. Trade in services is quite rare; services are more likely to be traded by firms already trading goods. Trading firms in the services sectors are significantly larger, more productive and pay higher wages than non‐traders. Two‐way traders outperform one‐way traders. Changes in trading status by either adding another dimension of trade (imports, exports) or another type of product (goods, services) are infrequent and are associated with significant preswitching premia. In contrast, learning effects from switching trading status are uncommon. This points to significant fixed cost of being engaged in trade and confirms some previous findings that trading services firms have similar traits as their manufacturing counterparts. Apart from greater trade participation in smaller countries, we do not observe systematic differences in terms of trade or switching premia between the four countries that might be attributable to differences in country characteristics.     

The effect of concentration and market power on food prices: evidence from Finland

This research examines empirically the relationship between economies of scale, concentration, and market power in food retailing. With unique, local market data available Finland, the analysis could investigate the impact of both local concentration and industry-wide concentration (which can be interpreted as multimarket contact) are taken into account in the evaluation of grocery retail competitiveness. The results show that the main factor affecting market power is the size of the retail firm. Larger share grocery retailers, for both the local and the national markets, carried higher mark-ups. At the same time, no firm-level scale economies were found from these larger firms. I conclude from these findings that the main purpose of large grocery retail mergers is to gain market power not efficiency.     

Blanket guarantee,deposit insurance and restructuring decisions for multinational banks

This paper examines blanket guarantee, deposit insurance and restructuring decisions with respect to a multinational bank (MNB) using Nash bargaining when the threat of a bank panic motivates countries to make decisions quickly. Failure of the bank would unevenly distribute externalities across countries, influencing the restructuring incentives. In equilibrium, the bank is either liquidated or one of the countries – or both – recapitalizes it. A partition of the recapitalization costs is sensitive to the country-specific benefits and costs from recapitalization, panic and liquidation. The home regulator benefits from the advantage that it is the only entity that can legally liquidate the MNB. Rational expectations regarding the bargaining result affect the incentives to declare a blanket guarantee.     

Ranking and clustering of the faculties of commerce research performance in Australia

There is a growing policy focus in Australian higher education on quantitative research performance assessment. However, most of the analysis has addressed aggregate performance at the institutional level, an approach inconsistent with recent policy emphasis on diversity among universities and one that ignores performance variations across disciplines. Using averaged and all available data for 2000–2004, cluster analysis is used to classify Australian Commerce Faculties into groups that exhibit similar research performance, measured by publication, PhD completion and secured competitive research grant funding. We also use factor analysis to generate full-multidimensional rankings within the resulting two or three clusters. It is found that in terms of total research output, with the exception of Adelaide all the Group of 8 (Go8) members plus University of Technology, Sydney and Griffith always belong to ‘Clusters A’. However, when research performance is expressed in per academic staff terms, an additional 11 universities join this same cluster. Our results additionally show that eight Australian faculties of Commerce not only possess low total research output but their per capita performance is also poor.     

Assessing the Normative Legitimacy of Investment Arbitration: The EU’s Investment Court System

The inclusion of an investment chapter in the Comprehensive Economic and Trade Agreement (CETA) and the Transatlantic Trade and Investment Partnership (TTIP) has encountered significant opposition, especially in relation to Investor-State Dispute Settlement (ISDS). In this context, the EU has proposed several changes to the traditional procedures, including the creation of an investment court. The need to reform ISDS has long been recognised, but the key question remains: What is required for such a dispute settlement mechanism to have legitimate authority? Drawing from insights in legal theory and political philosophy, we examine what could be adequate criteria for the normative legitimacy of ISDS. We argue that ISDS can only be minimally legitimate if there are sufficient procedural safeguards to ensure fair access to the proceedings and equal consideration of their interest for all those affected by investment tribunals’ or courts’ decisions. Furthermore, we emphasize the need to look beyond what potential beneficial and adverse consequences of ISDS are, and explain that the appointment of the judges by the state parties and the reintroduction of some control of the state parties over dispute settlement outcomes are not sufficient to guarantee the normative legitimacy of ISDS.