INFORMATION THEORETIC APPROACHES IN ECONOMICS

Economics has seen a recent rise in interest in information theory as an alternative framework to the conventional notion of equilibrium as a fixed state, such as Walrasian market‐clearing general equilibrium. The information theoretic approach is predicated on the notion of statistical equilibrium (SE) that takes a distribution over all possible states as an equilibrium, and therefore predicts the endogenous fluctuations of the system along with its central tendency simultaneously. For this reason, SE approaches can explain the observed data without relying on arbitrary assumptions about random noise and provide useful insights for many interesting economic problems that conventional methods have not been able to satisfactorily deal with. In this paper, we review the key elements of information theory focusing on the notions and applications of entropy and SE in economics, particularly paying attention to how entropy concepts open up a new frontline of economic research.     

Important Coefficients and Structural Change: A Multi-layer Approach

Important coefficients within input–output matrices have been defined in terms of their so-called ‘tolerable limits’. Such coefficients have been utilized as a means to study economic structures. Important coefficients can also be useful for finding the characteristic production structure, based on endogenous information only. Graph theory provides the analytical methods to interpret the results. By applying the method to a series of matrices for one economy, it is possible to establish the structural evolution of that system.     

Decomposing random mechanisms

Random mechanisms have been used in real-life situations for reasons such as fairness. Voting and matching are two examples of such situations. We investigate whether the desirable properties of a random mechanism survive decomposition of the mechanism as a lottery over deterministic mechanisms that also hold such properties. To this end, we represent properties of mechanisms–such as ordinal strategy-proofness or individual rationality–using linear constraints. Using the theory of totally unimodular matrices from combinatorial integer programming, we show that total unimodularity is a sufficient condition for the decomposability of linear constraints on random mechanisms. As two illustrative examples we show that individual rationality is totally unimodular in general, and that strategy-proofness is totally unimodular in some individual choice models. We also introduce a second, more constructive approach to decomposition problems, and prove that feasibility, strategy-proofness, and unanimity, with and without anonymity, are decomposable in non-dictatorial single-peaked voting domains. Just importantly, we establish that strategy-proofness is not decomposable in some natural problems.     

Theories from the Lab: How Research on Science Commercialization can Contribute to Management Studies

Universities and research centres have long been used to study management issues. A growing body of research has focused on how science can be effectively commercialized, emphasizing technology commercialization activities, university–industry collaborations, and academic entrepreneurship. While much of this work has documented empirical relationships, our aim in this introductory article of the special issue is to show how research on science commercialization may yield conceptual contributions to the field of management. Hence, we first discuss the importance of context for theory development. We then review how the science commercialization context has been used for theory development, identifying two facets used to conceptualize science commercialization (i.e., managing the transition between institutional contexts, and the multiple goals and impacts of actors engaging in science commercialization). This forms the basis for discussing what makes this context suited for theory development in general management and for outlining a future research agenda. We conclude by summarizing the papers in the special issue.     

An optimisation method for complex product design

Designing a complex product such as an aircraft usually requires both qualitative and quantitative data and reasoning. To assist the design process, a critical issue is how to represent qualitative data and utilise it in the optimisation. In this study, a new method is proposed for the optimal design of complex products: to make the full use of available data, information and knowledge, qualitative reasoning is integrated into the optimisation process. The transformation and fusion of qualitative and qualitative data are achieved via the fuzzy sets theory and a cloud model. To shorten the design process, parallel computing is implemented to solve the formulated optimisation problems. A parallel adaptive hybrid algorithm (PAHA) has been proposed. The performance of the new algorithm has been verified by a comparison with the results from PAHA and two other existing algorithms. Further, PAHA has been applied to determine the shape parameters of an aircraft model for aerodynamic optimisation purpose.     

审计本质的“经济评价论”

关于审计本质,其演变的观点主要有“查账论”、“过程论”、“经济监督论”、“经济控制论”等,这些观点都有其产生和存在的背景。但只从一个侧面回答了审计的一些作用和职能,没有突出现代审计的全面本质特征。本文提出了审计本质应该是“经济评价论”,以此才能深入全面地反映审计的本质。     

The use of imagery in statistical reasoning by university undergraduate students: a preliminary study

Many students have difficulty in grasping several concepts that are related to the solution of statistical problems. The bibliography reports how the ability of students to solve problems can be affected by the mode of the statistical problem presentation: verbal–numerical and pictorial–graphical. The dual-coding theory predicts that the graphical representation mode should enhance students’ statistical reasoning. Solving these problems requires the building, by the subjects, of a mental model, which in turn relies on visuo-spatial processing. To test this hypothesis we analysed how the ability to solve problems of 473 undergraduate students is affected by the mode of the statistical problem presentation. The study used a quasi-experimental mixed design to explore how the student’s performance is related to visuo-spatial and numerical abilities, statistical expertise, time pressure and problem representation mode (verbal/pictorial). Data analysis, based on the Hierarchical Loglinear Model and then the Logit Model, highlighted that the effect of facilitation, induced by the graphical presentation mode, would seem more likely to occur in inexperienced subjects with high visuo-spatial competence.     

Emerging organizations' characteristics as predictors of human capital employment mode: A theoretical perspective

Entrepreneurship is important to capitalistic economies, and in management studies. Additionally, organizations recognize that human resources are imperative to survival. Although human resources is an important field, sparse theory has been applied to human resources in emerging organizations. Recognizing that emerging organizations are different from established organizations, we expand prior work in human resources and emerging organizations to introduce a human resource architecture of emerging organizations. We introduce a model for the employment mode of emerging organizations based on intentionality, resources, boundary, and exchange. We present propositions drawn from our theory, and conclude with implications and suggestions for research.     

小议会计目标的定位方法

众所周知,会计是一个以提供财务信息为主的经济信息系统,整个系统的运行必须服从系统的目标,再按目标展示会计理论体系的研究,因此会计目标成为会计理论研究的逻辑起点,是连接会计理论与实务的桥梁,是会计理论结构的最高层次,对会计系统运行起导向作用。本文首先阐述了会计目标的一些基本理论,而后又对会计目标的定位进行了研究。     

概率论在几个经济生活问题上的应用

在经济生活中概率论的运用范围很广,作用效果显著。本文通过运用概率论的基本思想和研究方法针对三个经济问题方面给予一定的解答,为我们做出正确理智的判断提供更具权威性的意见。     

Integrating sustainable development in the supply chain: The case of life cycle assessment in oil and gas and agricultural biotechnology

It is widely accepted that firms play an important stewardship role in addressing sustainable development concerns. A key challenge in this role is to balance the often conflicting pressures created by sustainable development—firm-level economic performance versus environmental degradation and social disruption. Drawing on complexity theory, risk management, stakeholder theory and the innovation dynamics literature, we discuss the problems of integrating sustainable development concerns in the supply chain, specifically the applicability of life cycle assessment (LCA). Many authors have emphasized the importance of the “cradle to grave” approach of LCA in optimizing closed-loop supply chains, improving product design and stewardship. Based on two case studies (an agricultural biotechnology and an oil and gas company) with supporting data collected from key stakeholders, we argue that sustainable development pressures have increased complexities and presented ambiguous challenges that many current environmental management techniques cannot adequately address. We provide a framework that addresses these deficiencies and discuss implications for practitioners and management theory.     

Moving Forward: Developing Theoretical Contributions in Management Studies

How do we, as management researchers, develop novel theoretical contributions and, thereby, potentially break new ground in management studies? To address this question, we review previous methodological work on theorizing and advance a typology of the reasoning processes that underlie theoretical contributions and significant advances in management studies. This typology consists of various types of analogical and counterfactual reasoning, ranging from focused thought experiments aimed at prodding existing theory in the direction of alternative assumptions, constructs, and hypotheses to more expansive efforts for inducing new theoretical models and alternative explanations. Applying this typology, we detail the mechanisms behind the formation of novel theoretical contributions and illustrate the currency of our typology through a review of 24 major theoretical breakthroughs in management studies. We conclude the paper by discussing the implications of this typology for our collective efforts in building, elaborating, and expanding theory in management studies.     

Wage–hours contracts,overtime working and premium pay

This paper offers a contract-based theory to explain the determination of standard hours, overtime hours and overtime premium pay. We expand on the wage contract literature that emphasises the role of firm-specific human capital and that explores problems of contract efficiency in the face of information asymmetries between the firm and the worker. We first explore a simple wage–hours contract without overtime and show that incorporating hours into the contract may itself produce efficiency gains. We then show how the introduction of overtime hours, remunerated at premium rates, can further improve contract efficiency. Our modelling outcomes in respect of the relationship between the overtime premium and the standard wage rate relate closely to earlier developments in hedonic wage theory. Throughout, we emphasise the intuitive reasoning behind the theory and we also supply relevant empirical evidence. Mathematical derivations are provided in an Appendix.     

知识经济时代传统分配理论的局限与实践探索

知识经济时代智力资本成为企业发展和经济增长的原动力,成为对社会财富创造具有首要贡献的要素。而传统的利益分配理论对智力资本的贡献与收益难以进行合理确定,制约了企业激励和约束机制的建立和经济的有序发展。本文探索了现阶段在智力资本的量化及其参与分配的实践过程中面对的新问题,为我国企业建立新型企业分配制度提供了理论基础和实践指导。     

Transaction cost economics and business administration

This paper traces the origins of transaction cost economics to three seminal people who had an intense interest in business: Ronald Coase, Chester Barnard, and Herbert Simon. By contrast with the neoclassical theory of the firm, which is a top-down construction, the transaction cost economics theory of the firm is a bottom-up construction—which is to say that it is much more microanalytic (the transaction is made the basic unit of analysis) and is comparative in its mode of analysis. Several top-down maxims that have their origins in economic theory are examined in a bottom-up way, which serves to uncover conceptual and/or implementation problems with each. I furthermore examine growing applications of transaction cost reasoning to business administration and within the social sciences.     

Chamberlinian Spatial Computable General Equilibrium Modelling: A Theoretical Framework

In this paper, a multi-regional multi-sectoral computable general equilibrium model is developed by bringing together different strands of theoretical reasoning. These are as follows: input–output analysis, gravity modelling, the theory of intra-industry trade and the theory of general equilibrium under conditions of monopolistic competition. The innovation in this approach is the assumption that, within each sector, a large number of different brands of output are produced. Households like diversity of consumption and diversity of inputs is a productive factor for firms. The number of brands produced in each sector and region is endogenous. A certain amount of fixed costs per brand imposes an upper bound on the number of available brands. Factor markets are perfectly competitive, while monopolistic competition prevails on goods markets. The equilibrium solution of the model closely resembles models which have been applied on an ad hoc basis in regional science before, but it is well founded in modern economic theory now. In particular, trade flows obey a gravity law in equilibrium.     

Alternative Approaches of Physical Input–Output Analysis to Estimate Primary Material Inputs of Production and Consumption Activities

In the last few years, a number of studies have been presented that link material flow accounting and input–output analysis (based on monetary input–output tables) for the calculation of direct and indirect resource inputs for production and consumption activities. The compilation of the first physical input–output tables for some European countries in the 1990s opened new possibilities for linking physical accounting and input– output analysis. Physical input–output analysis has so far only been applied for selected materials, but it has not been used for comprehensive assessments of material requirements of economic activities. In this paper, possibilities and limits of this new input–output approach are clarified. We present and discuss a procedure similar to monetary input– output analysis and develop an alternative approach to account for primary inputs and waste otherwise not included in the analysis. Based on aggregated input–output tables for Germany, we present numerical examples intended to compare the alternative approaches of physical input–output analysis.     

Detecting Financial Collapse and Ballooning Sovereign Risk

This paper proposes a new model for capturing discontinuities in the underlying financial environment that can lead to abrupt falls, but not necessarily sustained monotonic falls, in asset prices. This notion of price dynamics is consistent with existing understanding of market crashes, which allows for a mix of market responses that are not universally negative. The model may be interpreted as a martingale composed with a randomized drift process that is designed to capture various asymmetric drivers of market sentiment. In particular, the model is capable of generating realistic patterns of price meltdowns and bond yield inflations that constitute major market reversals while not necessarily being always monotonic in form. The recursive and moving window methods developed in Phillips, Shi and Yu (2015a,b; PSY), which were designed to detect exuberance in financial and economic data, are shown to have detective capacity for such meltdowns and expansions. This characteristic of the PSY tests has been noted in earlier empirical studies by the present authors and other researchers but no analytic reasoning has yet been given to explain why methods intended to capture the expansionary phase of a bubble may also detect abrupt and broadly sustained collapses. The model and asymptotic theory developed in the present paper together explain this property of the PSY procedures. The methods are applied to analyse S&P 500 stock prices and sovereign risk in European Union countries over 2001–16 using government bond yields and credit default swap (CDS) premia. A pseudo real‐time empirical analysis of these data shows the effectiveness of the monitoring strategy in capturing key events and turning points in market risk assessment.     

Does direct experience matter? Examining the consequences of current entrepreneurial behavior on entrepreneurial intention

Entrepreneurial behavior research has used intention models to explain how an individual’s beliefs shape the attitudes and motivations that influence entrepreneurial intention. Nevertheless, as entrepreneurship promotion initiatives become global, it becomes relevant to explore the consequences of being engaged in entrepreneurial behavior on entrepreneurial intention. We aim to shed light on whether the direct experience reinforces an individual’s entrepreneurial intention or reduces it. Building on an extended version of the planned behavior theory, we use the behavioral reasoning theory to propose a research design to study the influence of being currently engaged in entrepreneurial behavior on entrepreneurial intention. We introduce individual’s age as an additional moderator of the effects of directly experiencing entrepreneurial behavior. We use PLS-MGA to complete a multi-group SEM analysis for different groups of individuals (from a sample of 430), comparing groups based on their entrepreneurial activity and age group. Results of this research work evidence that current engagement in entrepreneurship activities produces significant differences in the intention to start a new venture between older and younger participants. The results suggest that engagement in entrepreneurial activity modifies entrepreneurial intention and that these effects are contingent to the individual’s age. This research work contributes to the extant call to explore reverse causality between actual behavior and an individual’s intention by introducing behavioral reasoning theory. These results provide support to initiatives to adapt entrepreneurship promotion efforts to the specific characteristics of the participants.