Are emerging economies less efficient? Performance persistence and the impact of business group affiliation

By drawing a theoretical distinction between the persistence of superior and poor performance, we reconcile the conflicting predictions of the ‘revisionist’ and accepted views on the persistence of firm performance in emerging economies. Using a sample of manufacturing firms in the United States and India, we show that superior firm performance in emerging economies persists only as much as developed economies in line with the revisionist argument. We also provide evidence consistent with the accepted view that poor firm performance persists longer in emerging economies compared to developed economies. Further exploration of the latter shows that, contrary to predictions of extant theories, firms in emerging economies that are affiliated with an MNC or a business group have a greater persistence of poor performance than firms that are unaffiliated with these intermediate governance structures, and hence would be better off operating at arm's length. Copyright © 2005 John Wiley & Sons, Ltd.     

The Effect of Risk Characteristics on the Willingness to Pay for Mortality Risk Reductions from Electric Power Generation

The objective of this study is to estimate willingness to pay (WTP) for the reduction of mortality risks caused by fossil fuel (natural gas, coal and oil) versus nuclear electric power generation systems and to examine the influence of risk characteristics involved with electric power generation on WTP. A choice experiment was conducted to achieve these objectives. The attributes for nuclear risks in the experiment included the probability of disasters and the expected losses if a disaster occurs. We find evidence of (i) a baseline effect (where WTP is sensitive to hypothetical versus actual baseline expected mortality); (ii) a ‘labeling effect,’ where, surprisingly, the term ‘nuclear’ has no effect on WTP, but the term ‘fossil-fueled power generation’ results in lower WTP; and (iii) disaster aversion, meaning that people focus on the conditional loss from a nuclear disaster, not the probability. We also find that the WTP for reducing deaths from a nuclear disaster is about 60 times the WTP for routine reducing fossil-fuel generation-related deaths.     

On the transferability of the Asian rice green revolution to rainfed areas in sub‐Saharan Africa: an assessment of technology intervention in Northern Ghana

This article investigates the impact of technical intervention on the adoption of a set of improved rice production technologies, as well as on productivity and profit for smallholders in rainfed lowland areas in Northern Ghana. The key finding is that productivity and profit are significantly enhanced when modern varieties (MVs) and chemical fertilizer are adopted, coupled with water control techniques. This is essentially the transfer of the Asian Green Revolution to sub‐Saharan Africa. Such transfer, however, is not truly successful unless information about the use of MVs and fertilizer is directly disseminated by extension activities.     

Cost-effectiveness of intravitreal aflibercept versus other treatments for wet age-related macular degeneration in Japan

Objective: This analysis estimated the cost-effectiveness of intravitreal aflibercept injection(s) (IAI) for wet age-related macular degeneration (wAMD) compared with other treatments in Japan.

Methods: This was a cost-utility analysis based on published data. A state-transition cohort model was constructed with six health states based on best-corrected visual acuity in the better-seeing eye. The cycle time was 4 weeks, and the time horizon was 12 years. The model compared IAI 2?mg every 8 weeks (2q8) for 2 years after three initial monthly injections, ranibizumab as needed, ranibizumab 0.5?mg every 4 weeks (0.5q4), pegaptanib sodium 0.3?mg every 6 weeks, verteporfin photodynamic therapy (PDT), and best supportive care, assumed to include medical management and monitoring, but no active therapy. Costs (expressed as Japanese yen [JPY]) and quality-adjusted life years (QALYs) gained were estimated for each treatment and discounted at 2.0%. Input data were obtained from clinical studies, the Japanese drug tariff and social insurance reimbursement schedule, and expert opinion. The analysis was conducted from the societal perspective, including medical costs as well as costs of blindness.

Results: IAI 2q8 was dominant (i.e. more effective in terms of QALYs and less costly) to all other comparators (ranibizumab as needed, ranibizumab 0.5q4, pegaptanib sodium, PDT, and best supportive care), as shown by the incremental cost-utility ratio (i.e. cost per QALY gained).

Limitations: The strengths of the analysis include the wide range of comparators evaluated and the use of Japanese-specific utility data. The limitations include the use of one eye, inclusion of published data up to 2 years only, and assumptions on disease course over 5 years.

Conclusions: IAI 2q8 was more effective in terms of QALYs and less costly compared with other treatments for wAMD in Japan.     

Optimal Investment in Transportation Infrastructure When Middlemen Have Market Power: A Developing-Country Analysis

Transportation costs and buyer market power reduce prices and income received by farmers in developing countries. Transportation costs directly affect the marketing margin and also exacerbate market power by limiting farmers' access to buyers. This article develops a multistage spatial model to determine optimal investment in transportation improvements, taking account of impacts on marketing costs and competition. The beneficial impact of investments from farmers' perspective is mainly through enhanced competition, meaning significant under-investment may occur if this effect is ignored. However, the optimal investment depends on the relative importance of transportation costs; in some settings, transportation improvements reduce farm prices because buyers rationally over-compensate farmers for these costs.     

Leveraging ties: the contingent value of entrepreneurial teams' external advice networks on Indian software venture performance

This study investigates the impact of entrepreneurial teams' external networks on their ventures' performance. We first argue that ventures whose entrepreneurial teams span many structural holes in their external advice networks experience higher performance. We then propose that network ties are not uniform in their effect, but rather are contingent on two distinct features of entrepreneurial teams: (i) their strategic consensus—extent of agreement on key goals and strategies within the team—and (ii) internal cohesion—extent of interpersonal friendships within the team. Finally, we propose that team demographics and team networks complement (rather than substitute) each other. Data from Indian software ventures provide support for these arguments. We extend entrepreneurship research by highlighting how venture teams' internal processes and external networks jointly shape performance outcomes. We also add to the literature on team networks by drawing attention to the role of strategic consensus as a distinct pathway through which teams can leverage their external networks.     

Change dynamics in institutional discontinuities: Do formal or informal institutions change first? Lessons from rule changes in professional American baseball

Abstract

Extant research presents a conflicting picture of change dynamics during institutional discontinuities. Some studies propose or depict formal rules as changing first. Others argue that norms need to change before formal rules can be revisited, let alone change. An examination of the literature suggests a contingency theory. In mature organisational fields with institutionalised informal rules, norms need to be questioned and changed before any change in formal rules can take place. On the other hand, in emergent organisational fields – where no particular rules of the game have been institutionalised ? change in higher-level institutions begins with a change in formal rules. The article also presents two historical cases of major institutional change in professional American baseball that illustrate the theory proposed.     

Reducing Agricultural Income Vulnerabilities through Agroforestry Training: Evidence from a Randomised Field Experiment in Indonesia

Although agroforestry is recognised as a means to stabilise farm income, little work has been done to differentiate farmers based on their incomes, their capacity to diversify crops, and the economic outcomes of agroforestry adoption. By distinguishing between high- and low-income farmers, this paper examines how agricultural training affects agroforestry promotion, and evaluates its relevance for the poor, the extent of its adoption, and its economic consequences. We found that although training generally increased participants’ knowledge of agroforestry, it increased crop diversity only for low-income participants. We also detected the presence of information spillovers from participants to non-participants, which may increase crop diversity among non-participants and consequently reduce the measurable impact of training. When income heterogeneity is considered, we found that the low-income participants benefited more from increasing their incomes and expanding their social networks than the higher-income participants. We also found that agroforestry adoption helped to reduce income volatility.