Flexible specialization, new technologies and future industrialization in developing countries

Developing countries increasingly recognize that in the future far more attention will need to be paid to firms located outside the modern or formal sector. In this context, the complex of recent microelectronics and organizational innovations seems highly attractive for these are often said to be capable of facilitating a pattern of industrialization based on flexible, small-scale production, rather than on the more typical large-scale technology of mass production. This article, accordingly, seeks to evaluate the various mechanisms through which the new technologies—and the more general possibilities implied by the various definitions of ‘flexible specialization’—may in fact contribute to such an alternative model of industrialization.     

Credit policy and its heterogeneous effects on green innovations

We use the issuance of a new credit policy in China—the Green Credit Guideline (Guideline)—as a unique event and investigate its heterogenous effects on various green technology innovations for different firms in the world’s largest emerging economy. We find that all firms experience a significant increase in green technology innovations after the issuance of the Guideline. Companies with more considerable legitimacy deficiency in environmental compliance are more responsive to the Guideline. The larger increase in green technology innovations for companies with more legitimacy deficiency in environmental compliance is mainly driven by their higher productivity in applicational technology innovations after the Guideline was issued. All firms experience significant improvements in the effectiveness of investments, which is an important channel for increasing green technology innovations. Local legal system development and law enforcement efforts, firms’ political connections, and state ownership are essential mediating factors for green technology innovations, especially for firms with more legitimacy deficiency in environmental compliance. The Guideline positively affects both firm value and reputation, indicating that the new credit policy promotes impact investing.     

Diversity and social progress in the next millennium: an evolutionary perspective

An evolutionary framework for speculating about some of the socio-cultural and genetic diversity issues of the next millennium is developed. Human populations (societies) are basic biological and socio-cultural units. The nature of human societies is shaped by two kinds of linked evolutionary process: biological and socio-cultural. These evolutionary processes, in turn, are driven by human interactions with the physical environment, microorganisms, other species, other human populations, and by technological innovations. Preservation of genetic and socio-cultural diversity is identified as a crucial aspect of social progress over the next millennium. The impact of these ecological and technological ‘drivers of change’ on future evolutionary processes is discussed. While the world's affluent societies will be increasingly liberated from nature's constraints and enriched by technological innovations, it is questionable, given historical experience, whether poorer ones will share in the prosperity. Significant innovations in socio-cultural evolution, including new forms of governance, will be required to harness the accelerating forces of change and to ensure future social progress for all peoples.     

Enablers of top management team support for integrated management control systems innovations

Top management team (TMT) support has been identified as one of the most important critical factors to the success of management control systems (MCS) innovations. However, prior studies have taken TMT support for MCS innovations as a given rather than considering the factors that determine whether that support will actually exist and the extent thereof. Prior studies also follow a monolithic approach and treat TMT support for MCS innovations as a black box rather than a combination of processes and stages that develop sequentially over time. We conceptualise TMT support for MCS innovations as consisting of two stages (TMT belief and participation in MCS innovations). We draw on Upper Echelon and knowledge creation theories to motivate and test four enablers of TMT support for an integrated MCS innovation. We theorize the four enablers as TMT's strategic IT knowledge, TMT knowledge creation processes, CIO's strategic business and IT knowledge, and the interaction between TMT and the CIO. We test the research model using survey data that was collected from 347 Australian organisations. The results from the data analyses confirm the hypothesised relationships, supporting the theorized synergies among the four antecedents to TMT support. There are several implications for theory and practice that should be considered in future studies examining the role of TMT in supporting new MCS innovations.     

News and the cross-section of expected corporate bond returns

We study the cross-section of expected corporate bond returns using an inter-temporal CAPM (ICAPM) with three-factors: innovations in future excess bond returns, future real interest rates and future expected inflation. Our test assets are a broad range of corporate bond market index portfolios. We find that two factors – innovations about future inflation and innovations about future real interest rates – explain the cross-section of expected corporate bond returns in our sample. Our model provides an alternative to the ad hoc risk factor models used, for example, in evaluating the performance of bond mutual funds.     

Do the Investment and Return‐on‐Equity Factors Proxy for Economic Risks?

We study the information content of two new return factors, the investment factor (IA) and the return‐on‐equity factor (ROE), as proposed by Chen, Novy‐Marx, and Zhang in 2011. First, IA is a strong predictor for future gross domestic product (GDP) growth despite the presence of other financial and economic variables. IA subsumes the pricing power of the GDP factor for the cross section of asset returns. Second, ROE is closely related to innovations in dividend yield and term spread. When modeled together with innovations in state variables that forecast future investment opportunities, IA and ROE lose their explanatory power.     

Consumption risk and the cross-section of government bond returns

In this paper we provide a consumption-based explanation of risk in nominal US Treasury bond portfolios. We use a consumption-CAPM with Epstein–Zin–Weil recursive preferences. Our model introduces two sources of risk: uncertainty about current consumption (reflected in contemporaneous consumption growth) and uncertainty about prospects of consumption in a long run (reflected in innovations to expectations about future consumption growth). We use a novel approach to estimate pricing factors in our model: we employ a factor-augmented VAR model with common factors, extracted from a large panel of macroeconomic and financial data, as state variables. We find that the important source of risk in US bonds is related to uncertainty in prospects in future consumption and it induces a positive and significant risk premium. We find as well that covariance risk related to innovations in expectations about future consumption growth is greater for long term bond portfolios than for short term bond portfolios, which is consistent with a duration measure of risk and justifies why long term bonds require greater premium than short term bonds. Our model explains well the cross-sectional variation in average excess returns of bonds with different maturities over the period 1975–2011 and compares favorably with competing models.     

The future quantified

The results reported in this paper demonstrate that the qualitative (group) research and quantitative (individual) survey techniques that have been developed now offer a viable means for mapping current expectations and the possible future directions these will take. Sensible use of these should provide governments, and large organisations in general, with a powerful new set of tools for positively managing the future. In terms of the issues themselves, the group which emerged most strongly from the quantified responses of the individuals are those which might be seen as relating to the ‘green' environment. On the other hand, our qualitative groups looked upon these key issues as representing matters of survival for humanity as a whole. Such a focus on survival may seem selfish, but it can also be seen as altruistic not concerned with personal survival. It also represents a sound, rational approach to long-term planning, where the respondents focused instead on how governments might positively, and safely, manage all the long-term issues threatening the future of humankind. If we move away from ‘green' issues, it is also clear that even individuals recognize the globalisation of issues in particular the globalisation of business, the possibility of a global financial crash and the (threat of) domination by Pacific Rim countries. At the opposite end of the spectrum are worries about the significant problems faced by the underclasses—and, in turn, the significant threat these present to society as a whole. In general though, apart from technological issues, the emphasis was—across almost all areas—on survival in the face of events ranging down from catastrophes to mere crises and stresses!     

The long-term future of the great barrier reef

Long-term participative regional planning is a relatively new and developing field in Australia. To conduct a futures project that seeks to address the serious matters of reef-related food production, jobs, recreation, cultural heritage and the conservation of the Great Barrier Reef with over 60 organizations participating, is not without its challenges. This futures project—the 25-year Great Barrier Reef World Heritage Area Strategic Plan Development Project—has been described by the IUCN (The World Conservation Union) as having established a world model in participative regional planning for ecologically sustainable use of a natural resource. This article deals with the following questions: Why was the futures project needed? What was done? How was it achieved? What else needs to occur now and in the future? And, so what?     

Population decline and the new nature: Towards experimental “refactoring” in landscape development of post-industrial regions

From an everyday perspective, a consequence of population decline and de-industrialization is the growth of natural areas: less industry and less people means more nature in the future. In the real word, the situation is more complicated. Using the development of a new lake district as a successor of brown coal industry and strip mining in the southern parts of the city of Leipzig (Germany) as a touchstone, this paper will explore some of the challenges and future opportunities for the design of ‘new nature’ in post-industrial landscapes. To discuss how fields such as ecology and engineering can fulfill their role as innovative players in times of population decline, two seemingly contrasting strategies for making decisions under conditions of depopulation in landscape development—called here scientific non-knowledge—are introduced: refactoring and public experiments.     

Technological innovation and real investment booms and busts

We investigate why new, high-risk technologies can attract excessive and often unprofitable investment. We develop an equilibrium model in which rational, risk-averse agents overinvest in a risky technology, possibly to the point that its expected return is negative. Overinvestment results from relative wealth concerns which arise endogenously from the imperfect tradability of future endowments. Competition over future consumption leads to an indirect utility for wealth with “keeping up with the Joneses” properties that can induce herding. Because overinvestment increases with the risk of the technology, our model can explain why new, risky technological innovations may promote investment bubbles.     

Macro Liquidity Risk,Money Growth,and the Cross-Section of Stock Returns: The Case of Korea

According to the homogeneity of money holding purpose, we decompose the broad money M2 into an underlying and a non-underlying part and propose innovations in future non-underlying M2 growth as a proxy for macro liquidity. In both the cross-sectional regression tests and the GMM tests, we find that risk related to innovations in future non-underlying M2 growth is strongly significantly priced in Korea, after controlling for the well-known risk factors and other macroeconomic variables. Meanwhile, risk related to innovations in future aggregate or underlying M2 growth is insignificantly priced. These results indicate that non-underlying M2 growth more directly affects macro liquidity than does aggregate or underlying M2 growth.     

Forecasting our environmental future

This series now comes to an appropriate end with the most menacing set of question marks ever raised about the future of the human race. During the past two decades—from the inauguration of the Club of Rome in 1967 to Margaret Thatcher's famous ‘green’ speech to the Royal Society in 1988—an ever growing volume of research has erased the old-time notion that we live out our lives in a steady-state world. As the bad news has spread—environmental pollution, acid rain, the warming of the oceans—a consensus of anxieties has found expression in a global fear for the future. Is there anyone who would gainsay the possibility that, as Mrs Thatcher put it, ‘with all these enormous changes—population, agriculture, use of fossil fuels—concentrated into such a short period of time, we have unwittingly begun a massive experiment with the system of the planet itself’? The scale of these changes and the measure of the dangers they bring—these provide the range of cause and effect in Dr Woodell's reflections on the great harm we have done to the human environment. This is the one occasion when an editor can truly say: Read on for the survival of our species.     

Information technology developments and implications for national policies

A review is made of the global status of information technology (IT) development and new opportunities identified for government IT policies. Despite operational problems, IT innovations continue apace. Poor human-computer interaction, user friendliness and lack of standardization are all key issues which must be addressed. Globalization trends, east-west politicomilitary changes and third world development, all have implications for government IT policies over the coming decade—and the right directions must be pursued now to derive real benefits from IT and move towards a true information economy.     

Cyberspace as product space Interactive learning about interactive media

A bewildering range of new interactive consumer media products are emerging, many of them under the label ‘Interactive Television’. This is the source of a great deal of industry excitement. The future of television is opened up beyond the vistas of countless new channels, to new or enhanced types of television service such as video on demand, surfing the Internet, and teleshopping. There is considerable uncertainty attached to market forecasts about them, to views as to which of the various products on offer will succeed in the mass market—even to notions of what exactly consumers might want to use these products for. Rather than offer a pat set of answers to these questions, the present paper approaches the matter of these new products through the perspectives provided by innovation studies and, in particular, new evolutionary economics. Drawing lessons from such products as videotex, audiotex, and optical disc multimedia, it outlines implications for interactive television.     

The comovement of US and German bond markets

We use a vector-autoregression, with parameter estimates corrected for small-sample bias, to decompose US and German unexpected bond returns into three ‘news’ components: news about future inflation, news about future real interest rates, and news about future excess bond returns (term premia). We then cross-country correlate these news components to see which component is responsible for the high degree of comovement of US and German bond markets. For the period 1975-2003 we find that inflation news is the main driving force behind this comovement. When news is coming to the US market that future US inflation will increase, there is a tendency that German inflation will also increase. This is regarded bad news for the bond market in both countries whereby bond prices are bid down leading to immediate negative return innovations and changing expectations of future excess bond returns. Thus, comovement in expected future inflation is the main reason for bond market comovement.     

Planning of strategic innovation aimed at environmental sustainability: actor-networks, scenario acceptance and backcasting analysis within a polymeric coating chain

This paper addresses a new way of influencing and stimulating technological innovations towards sustainability. Sustainability is operationalised as function fulfilment with a factor of 20 reduction on environmental burden over the entire lifecycle. The method, which is derived from the earlier developed sustainable technological development (STD) and SusHouse methods, includes future visioning together with stakeholder participation, followed by action planning. Future visioning has been carried out in workshops with all relevant stakeholders; action planning is also performed in workshops. As a case study a polymeric coatings chain in the Netherlands and in Portugal, has been chosen. Initially data has been gathered about production, environmental aspects, and technological innovations and applications; later interviews with stakeholders have been carried out followed by the visioning and action planning workshops. The paper shows that the methodology works in a situation in which innovative activity is already under way, identifying new and unexpected ways of making the polymeric coatings chain more sustainable. It discusses further implementation of new ideas of function fulfilment.     

Macroeconomic News in Asset Pricing and Reality

Revisions in successive Greenbook forecasts of quarterly real GDP growth proxy for news of current and expected future economic growth. In the sample 1975 through 2015, news of future growth is slightly negatively related to contemporaneous changes in Treasury bond yields, while news of current growth is strongly positively related to changes in these yields. Both results are difficult to reconcile with a representative agent's bondholding first-order condition. A continuous-time dynamic model of output attributes almost all of the covariation with yields to martingale innovations in log output and a minimal amount to innovations in the conditional drift of log output.     

Applying the biological evolution metaphor to technological innovation

A synthetic theory of evolution is taken as representing the metaphor for the process of innovation. The model is employed to highlight major characteristics of changes in technological innovation and in the time phasing of industrial inventions and innovations. Analysis at the level of the industrial sector is used as a heuristic example of the metaphor, with a focus on innovations in the car industry. Forecasting future products is seen as related to materials requirements, primary human needs and the role of the service sectors.