Skill Loss, Ranking of Job Applicants and the Dynamics of Unemployment

Abstract. This paper investigates the consequences of skill loss as a result of unemployment in an efficiency wage model with turnover costs and on-the-job search. Firms are unable to differentiate wages and therefore prefer to hire employed searchers or unemployed workers who have not lost human capital. It is shown that if some fundamental factor in the economy changes, this will result in a lengthy adjustment process with substantial long-run unemployment effects. Moreover, the model is capable of generating persistence, but the amount depends on the duration of the shock itself.     

Business communities in the European confectionery sector: A U.K.-Finland comparison

This paper is based on the early stages of an international collaborative project investigating the structural changes of the confectionery sectors in Finland and the U.K. over the past two decades. An institutional perspective is used to extend conventional understandings of industries via the development of the sector concept. The network and community constructs are shown to be important devices for understanding the institutional character of a sector. Accordingly, the paper reveals the similarities and differences between the two national examples. An explanation is offered of the way domestic networks persist in both countries while contrasting community profiles are apparent.     

The long-term unemployed,informal economic activity and the ‘underclass’ in Belfast: rejecting or reinstating the work ethic

The notion of an ‘underclass’ existing outside the realm of mainstream society continues to hold sway among journalists and policy-makers. While there are many new contenders for inclusion among the underclass, one of the most enduring group of participants is the long-term unemployed. Work-shy individuals, seemingly content to live on welfare benefits, are regarded as placing themselves outside the boundaries of mainstream economic and social life and passing a host of negative characteristics on to their children. The possibility that some of this group might defraud the welfare benefit system through working while claiming benefits adds further weight to negative images about the characteristics of ‘underclass’ members. The aim of this paper is to challenge some of these common assumptions by examining the ways in which unemployed people in an economically depressed locality in West Belfast relied on informal economic activity to help meet their material needs. Such activity has implications for the underclass debate because, rather than demonstrating commitment to some alternative set of values, informal economic activity drew participants into the wider economy and demonstrated adherence to mainstream values. Moreover, often the debate on social security abuse focuses on the supply side of the issue and is remarkably silent about the demand side of the equation. ‘Doing-the-double’ (working while claiming benefits) was not simply an individual response to unemployment and inadequate welfare benefits but was linked to changes in the labour needs of employers in the wider economy.     

A matrix-based industrial location model

Experience with earlier interview-type location studies is employed as a basis for an ‘improved’ matrix model for the external location factors affecting industrial undertakings. The model enables the relative advantage of potential locations for industry to be determined, and the most appropriate branches of industry to be assigned to each region.     

Ambidexterity under digitalization: A tale of two decades of new media at a Swedish newspaper

The digitalization of the newspaper industry represents a significant challenge for incumbent companies to engage new technologies. Many companies in the industry have had to seek new markets through digital technologies to survive. This paper explores how one of the largest Swedish newspapers, Aftonbladet, has strategically embraced new media and new markets. We report a decade of engaged scholarship based on interviews and archival analysis that covers 20 years of strategic acts at the company. We consider this effort as a case of organizational ambidexterity under digitalization. The analysis seeks to extend theoretical understanding of the interrelationships between strategic intent and technological choice. The paper contributes to the understanding of ambidexterity under digitalization by theoretically framing it in terms of strategic acts. The research suggests that digitalization implies a more complex ambidexterity interrelationship between old and new markets and technologies. As digitalization enables the loosening of previously tight couplings, the clear theoretical distinction between old and new, and critically, the unproblematic transition, is brought into question. The paper suggests replacing the notion of an orderly shift from the old to the new with ambidexterity under digitalization as a duality of both old and new undergoing continual reconfiguration.     

Exploring customer online reviews for new product development: The case of identifying reinforcers in the cosmetic industry

This study analyzes online customer reviews in order to investigate customers' preferences regarding cosmetic products. Based on the marketing firm theory, this research explores the possibility of enhancing the bilateral contingent relationships between the customer and the marketing firm within the cosmetics domain. Hence, this study applies market-search concepts by extracting customer reviews and employing text analytics to identify reinforcers and factors in cosmetic products, which customers are expecting, and their sentiments towards them. Our results suggest that some reinforcers are shared among all customers, but some vary among the different customer segments based on their age and skin tone.     

Transaction services and SME internationalization: The effect of home and host country bank relationships on international investment and growth

Building on the argument put forward by North and Wallis (1994) that the transaction sector enables economic growth by lowering the costs of transacting, we investigate how internationalizing firms’ host and home country bank relationships affect their international specific investments and growth. Banks provide payment, liquidity, and risk management services, which are essential to international business relationships, yet little is known about how banks affect international business relationships. In a sample of 255 small and medium-sized enterprises (SMEs), we find that host and home country bank relationships affect the dependent variables differently. We contribute to the literature by explicating the role and effects of banks in international business relationships. Our findings have implications for understanding transaction services in international business as well as the choices made by their customers.     

What are the determinants of hiring? The importance of product market demand and search frictions

In this article, we study the importance of product market demand and search frictions for hiring. We use a search-matching model with imperfect competition in the product market to derive an equation for total hiring in a local labour market, and estimate it on Swedish panel data. If product markets are imperfectly competitive, product demand shocks should have a direct effect on employment for given levels of prices and wages. Our main finding is that product demand has such a direct effect on hiring. This highlights the importance of taking imperfect competition in the product market into account in studies of employment dynamics and hiring. We also find that, for given levels of prices, wages, and product demand, the number of unemployed workers in a local labour market has a positive effect on hiring, suggesting that search frictions matter. Quantitatively, product demand shocks seem to be more important for understanding the variation in hiring than shocks to the number of unemployed workers.     

Knowledge of Inter-customer Relations as a Source of Value Creation and Commitment in Financial Service Firm's Intermediation

This paper develops a knowledge perspective on value creation in organisations that employ mediating technology to facilitate inter-customer relations. Mediators, individually and collectively, build networks of customers between whom linking can take place, and they provide services that facilitate inter-customer exchanges. Earlier research has shown the importance of size and standardisation in mediation. A different stream of research has shown that contextual knowledge is important for problem solving and innovation in organisations. Combining theories of mediating technology and situated problem solving, the paper posits that inter-customer relations constitute the fundamental context for value creation of firms using the mediating technology. LISREL is used to test relationship-level, cross-sectional hypotheses that link knowledge of inter-customer relationships, added value, and customer commitment to bank services for small firms. This work extends Thompson's work on mediating technology with implications for organisation action by demonstrating that mediators' knowledge of inter-customer relationships is an important resource in intermediation. Three contributions are made to strategic management and organisation theory. First, the paper provides a deeper understanding of the relationship between knowledge and committed customers. Second, fundamental resources are developed for firms using mediating technology. Finally, the use of the situated knowledge concept is extended to inter-customer relations, thus explaining performance beyond the contexts to which the concept has previously been applied. The findings have implications for segmentation practices, organisation domain decisions and the corresponding organisational structures, and practices that can provide effective service to inter-customer relations rather than to atomistic independent customers.