Economic integration and corruption

We study the link between corruption and economic integration. Integration is modeled by a common regulation for public procurement. We show that integration resolves a term of trade driven prisoner's dilemma and will always take place in the absence of corruption. Corruption may destroy the incentives for integration. If the propensities to corruption are too different, the more honest country, which benefits less from integration, will not be willing to join the union. This difference in corruption propensities can be offset by a difference in efficiency. We also show that integration has the positive effect of reducing corruption.     

e-Relationships for e-Readiness: Culture and corruption in international e-B2B

The role of electronic networks in B2B relationships has been growing exponentially. From massive internet B2B exchanges to tiny RFID chips, B2B is increasingly becoming e-B2B. Whilst e-B2B has been explored intra-nationally, its international counterpart is less well documented; as has been the role that culture might play in the development of international e-B2B relationships. In this paper we address this important issue of international e-business relationships. Specifically we explore the interconnection between national e-readiness and cultural values, and address the research question: How do cultural values impact a nation's readiness to engage in e-business? Drawing upon international surveys we link cultural values with national e-business infrastructure. Our findings suggest an intriguing link between cultural values and a nation's readiness for e-B2B. From these results we develop managerial recommendations and extrapolate research opportunities.     

Corruption and Organization in Asian Management Systems

From an organizational viewpoint, research on corruption is both a frontier and a challenging issue~in Asian management systems. Corruption is rampant in many Asian countries but organization theorists are surprisingly silent in addressing what impact corruption has on an organization and its operations. Contrary to the belief of some that corruption is necessary for business survival and growth in Asia, we argue that corruption is an evolutionary hazard, a strategic impediment, a competitive disadvantage, and an organizational deficiency. In this article we explain why an organizational perspective of corruption is an important research agenda in Asian management, outline how corruption differs from interpersonal business networking, and illustrate why corruption impedes organizational development.     

Corruption and change: the impact of foreign direct investment

This study examines influences on the level of corruption in countries from a strategic perspective. Corruption is one of the country‐level influences on market entry, investment, and other decisions fundamental to strategic management at the international level. The study examines the impact on corruption of change in levels of foreign direct investment (FDI). It uses the Corruption Perceptions Index (CPI) scores computed by Transparency International for 1999 and 2000. Results indicate that the more rapid the rate of change in FDI, the higher the level of corruption. Higher levels of perceived corruption are associated with each of two dimensions of national culture: uncertainty avoidance and masculinity. Research and managerial implications are also discussed. Copyright © 2004 John Wiley & Sons, Ltd.     

Corruption in PPPs,incentives and contract incompleteness

We analyze risk allocation and contractual choices when public procurement is plagued with moral hazard, private information on exogenous shocks, and threat of corruption. Complete contracts entail state-contingent clauses that compensate the contractor for shocks unrelated to his own effort. By improving insurance, those contracts reduce the agency cost of moral hazard. When the contractor has private information on revenues shocks, verifying messages on shocks realizations is costly. Incomplete contracts do not specify state-contingent clauses, thereby saving on verifiability costs. This makes incomplete contracts attractive even though they entail greater agency costs. Because of private information on contracting costs, a public official may have discretion to choose whether to procure under a complete or an incomplete contract. When the public official is corrupt, such delegation results in incomplete contracts being chosen too often. Empirical predictions on the use of incomplete contracts and policy implications on the benefits of standardized contracts are discussed.     

Evolving dairy markets in Asia: Recent findings and implications

This paper is an overview of important findings regarding the ongoing evolution of Asian dairy markets based on a series of new economic investigations. These investigations provide systematic empirical foundations to assess Asian dairy markets with their new consumption patterns, changing industries, and trade prospects under different domestic and trade policy regimes, with four case studies (China, India, Japan, and Korea), a prospective analysis of future regional patterns of consumption, and a policy analysis of trade liberalization of Asian dairy markets. The overview distills the findings of these new investigations and integrates them in the earlier economic literature; it draws policy implications, and identifies lessons for countries outside of Asia, especially for emerging exporters in Latin America.     

Executive compensation in Asia: A critical review and outlook

In this research we conduct a systematic and critical review of the literature on executive compensation in Asian countries. We discuss the particular characteristics of executive compensation in Asia in terms of pay criteria, contingency factors, and implications for performance and turnover. We thereby highlight the unique contributions of Asian studies to the mainstream Western research in executive compensation, and call for future research integrating agency theory and the institution-based view in examining pay variances across different institutions.     

Pilferage from opaque food subsidy programs: Theory and evidence

Theft rates from subsidized food programs vary greatly and strongly influence program efficiency. Unfortunately, the determinants of these variations remain understudied because the agencies that run these programs seldom publicize the allocations of subsidized food to local markets. We develop a theoretical model of pilferage which predicts that: (i) pilferage from opaque programs is likely to rise more than proportionately with per capita food allocations; (ii) pilferage of inferior goods may be lower in poorer communities; (iii) pilferage rates need not rise as price subsidies are increased; and (iv) pilferage may rise as the relative quality of subsidized food is reduced. A comprehensive literature review and new estimates of pilferage across regions of the Philippines validates these predictions. Our finding, that around 48% of the subsidized rice went missing, is robust to new tests for sampling and recall error. Our policy discussion encourages geographic over administrative targeting, greater transparency in food allocations, and the use of realistic quotas.     

权力市场下的腐败机制和治理研究

本文首先介绍了在腐败研究领域具有代表性的寻租理论和制度经济学理论．总结了前人的研究成果。面对中国目前腐败形势日益严峻的现状，以往经济学家一般采用静态分析，较少能从经济学角度对此现状作出合理的解释，本文另辟途径，引用权力市场概念，建立动态模型进行分析，通过货币成本、资本边际效用、风险幻觉和道德成本四者相互作用导致腐败价格变化这一基础理论，对权力市场逐步递进研究，试图解释腐败日益猖獗的原因所在，并提出相应的治理措施。     

Business groups in East Asia: Post-crisis restructuring and new growth

Business groups played an important role in the economic development of East Asian countries. Yet business groups in East Asia face an uncertain future. Following the Asian Crisis, foreign creditors and investors have demanded that business groups have more transparent operations and stronger corporate governance. At the same time, as governments in East Asia have loosened trade barriers, business groups have become subject to intense competition in domestic markets. This paper argues that business groups can survive or even prosper by taking initiatives in corporate restructuring. This paper also highlights some areas for further research on business groups in this region.

Globalization and Industrial Relations in East Asia: A Three-Country Comparison

Globalization enhances competitiveness, both at the level of the firm and at the level of the nation. As observed in China, Malaysia, and Korea, this leads management and the state to adopt strategies designed to increase labor effectiveness to the benefit of capital. However, the effect of globalization on industrial relations procedures and substantive outcomes is contingent. Pressure for greater flexibility in the use of labor is ubiquitous, but the outcome is constrained by cultural norms valuing hierarchy and security. State strategies vary by historical circumstance, resource endowments, and internal political dynamics, including the influence of trade unions. While Malaysian industrial relations is heavily constrained by the discipline of high exposure to international capital, in China and Korea, major struggles are shaping the future of workplace and national labor market governance. Thus the extent and impact of globalization vary between countries, resulting in similar preoccupations by policymakers yet leading to variable responses and industrial relations outcomes.     

Commercial aquaculture in Southeast Asia: Some policy lessons

Globally aquaculture has been increasing rapidly and already accounts for nearly half of all food fish consumed. For developing countries, which produce 90% of the world’s output, aquaculture is a source of protein, employment, income and of foreign exchange. Southeast Asia is an area which has experienced this “blue revolution”. Total aquaculture output in the region increased from less than two million tonnes in 1990 to more than eight million tonnes in 2006. Moreover, the region’s pace of expansion has accelerated. Annual average growth rates in output from 2000 to 2006 were more than double those from 1990 to 2000. Already more than a quarter of food fish in Southeast Asia comes from aquaculture.     

Satellite TV in Asia: Forming a new ecology

This paper examines the development of satellite television in the Asian countries and their policy change. It is found that many countries initially tended to forbid the reception of satellite television but, with the growth of satellite television, liberalization is on the way. In response to competition posed by satellite television, policy makers generally choose to deregulate their local television market in the hope that the quality of local television will improve through competition. The authors suggest that satellite television in Asia is likely to agglomerate the diverse markets into bigger cultural markets to gain the economy of scale. Satellite television will bring about a regional capitalist culture. Professional journalism modelled after the West may also grow. The general trend for Asia is towards further deregulation and greater openness.