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.     

Trade liberalisation and endogenous growth: A q-theory approach

This paper introduces a new approach to the analysis of endogenous growth effects and uses it to illustrate two novel trade-and-growth links. The approach’s simplicity allows us to introduce scale economies and imperfect competition into the R&D and financial intermediation sectors of a Romer–Grossman–Helpman endogenous growth model. We show that trade liberalisation can stimulate growth via a procompetitive effect in the R&D sector and/or financial sector.     

Multinationals, Endogenous Growth, and Technological Spillovers: Theory and Evidence*

FDI has received surprisingly little attention in theoretical and empirical work on openness and growth. This paper presents a theoretical growth model where MNCs directly affect the endogenous growth rate via technological spillovers. This is novel since other endogenous growth models with MNCs, e.g. the Grossman–Helpman model, assume away the knowledge‐spillovers aspect of FDI. We also present econometric evidence (using industry‐level data from seven OECD nations) that broadly supports the model. Specifically, we find industry‐level scale effects and international knowledge spillovers that are unrelated to FDI, but we also find that bilateral spillovers are boosted by bilateral FDI.     

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.     

The seasoned executive's decision-making style

Leaders make decisions every day of their lives, but how they do it changes dramatically over the course of their careers. At lower levels, the job is to get widgets out the door; action is at a premium. At higher levels, the job involves decisions about which widgets to offer and how to develop them. To climb the corporate ladder and be effective in new roles, managers need to change the way they use information and evaluate options. Based on a study of the decision-making profiles of more than 120,000 executives, the authors found that people make decisions very differently in public than they do in private and that the decision styles of successful managers evolve in highly predictable patterns. The most successful managers and executives become increasingly open and interactive in their leadership (or public) styles, and more analytic in their thinking (or private) styles, as they progress in their careers. The research shows that decision-making profiles do a complete flip over the course of a career; that is, the decision profile of a successful CEO is the opposite of a successful first-line supervisor's. When does the major change in focus occur? Somewhere between the manager level and the director level, executives find that formerly effective decision styles no longer work so well. At this point, decision styles fall into a "convergence zone", where managers use all styles more or less equally. From then on, the executives continue to evolve their styles. The most successful managers come to the convergence zone quickly and continue to adjust their styles as their careers progress. Low performers seem to stagnate once they hit the convergence zone; their styles do not evolve in new directions. Clearly, relying on past successes and habits is no guarantee of success-indeed, it may be the road to failure.     

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.