Convergence in Transition Countries – Focus on Investment: Central and Eastern Europe, 1970–1996

Our data on investment in Central and Eastern European economies reveal that, though investment rates were typically high in the 1970s, the marginal efficiency of investment was low. Investment shares begun to decline in the 1980s, before the collapse of the communist system, but there was some recovery in most countries after transition. We use the Kalman filter framework to test for convergence in investment rates. We find some evidence of convergence in Central European countries – former Czechoslovakia, Poland and the countries of the former Yugoslavia. For the remainder of the socialist bloc, however, we were unable to isolate convergence in investment shares. This revised version was published online in July 2006 with corrections to the Cover Date.     

Regulating Audit in Europe: The Case of the Implementation of the EU Eighth Directive in Denmark 1984–2006

This paper examines the extent of financial information disclosure on the Internet by the largest companies in the UK in 1998. Companies were surveyed to establish whether they had a website and if so whether financial information was available. We also investigated whether that information was in summary form or whether the full annual report was available. This study finds a statistically significant positive relationship between the size of a company and the use and extent of disclosure on the Internet. There was no significant association between industry type and disclosure.     

Effect of supervisor–subordinate guanxi on supervisory decisions in China: an empirical investigation

As China is becoming an important market and there are a lot of foreign ventures operating there, different lines of research have been providing useful information for foreign ventures to manage effectively in China. In this paper, we discuss one of the critical factors leading to successful management of Chinese subordinates, i.e. building and maintaining good guanxi (i.e., interpersonal connection) with them. We conducted an empirical investigation to illustrate (1) the supervisor-subordinate guanxi concept is different and unique when compared to other similar concepts in the Western literature such as leader-member exchange (LMX) and commitment to supervisor; (2) the supervisor-subordinate guanxi will affect the Chinese supervisor's administrative decisions; (3) guanxi can be measured by concrete behaviour/activities. Data on 189 supervisor-subordinate dyads were collected in the People's Republic of China (PRC). Results indicated that supervisor-subordinate guanxi is a distinct concept from LMX and commitment to supervisor. It also has additional explanatory power over supervisory decisions on promotion and bonus allocation after controlling for performance. Implications for foreign ventures and expatriates are discussed.     

Reforms and agricultural productivity in Central and Eastern Europe and the Former Soviet Republics: 1989–2005

This paper analyses the changes in agricultural performance in Central and Eastern Europe and the Former Soviet republics since the start of the transition process. We provide a conceptual framework for the evolution of productivity and efficiency measures and link this evolution to the issue of factor abundance taking into account specific transition characteristics. We document the changes in agricultural performance using empirical data on the evolution of partial productivity and total factor productivity estimates and we illustrate how productivity varies between countries at various stages of the transition process. Over the past twenty years, virtually all transition countries witnessed an initial decline in productivity, and virtually all countries currently witness an increase in productivity. However, the depth and length of the initial decline differs enormously between countries. Our analysis indicates that the productivity changes were related to the extent of the pre-reform distortions, initial resource endowments and technology use, and the reform implementation in the countries.     

The effect of unethical behavior on trust in a buyer–supplier relationship: The mediating role of psychological contract violation

Research on trust in buyer–supplier relationships has tended to focus on the performance outcomes of a trusting relationship, as well as the processes that serve to build trust. Largely absent from the buyer–supplier literature is an in-depth examination of activities that break down trust, and the resulting effect on supplier trust in the buyer. The authors propose and test a model that evaluates psychological contract violations between a buyer and a supplier as a mediating variable of the effect of unethical activities on trust within a partnership. Survey data was collected from 110 tier one suppliers of major corporations in the state of Ohio. Our results show how a supplier's perception of a violation of the psychological contract either partially mediates or fully mediates the relationship between the buyers unethical activity and the suppliers trust in that buyer. We discuss how suppliers may demonstrate bounded ethicality when they overlook perceived unethical behaviors by the buyer.     

The joint impact of labour policies and the “Great Recession” on unemployment in Europe

The paper consists of an empirical analysis of the separate as well as joint impacts on total and youth unemployment of indicators of labour market policies on the one hand, and the financial crisis associated with the “Great Recession” on the other. In particular, we investigate labour market data in the past two decades for the Enlarged Europe and adopt a variable accounting for the idiosyncratic severity shock of the crisis. This time-varying and country-specific crisis variable enables us to test empirically and in a novel way the joint impact of labour market policies and the economic crisis on labour market dynamics even when accounting for common macro shocks.     

The impact of innovation training on successful outcomes in public–private partnerships

Public–private partnerships (PPPs) are increasingly seen as a way of innovating the production and management of public services. However, the question of what drives innovation in partnerships has so far received only limited attention. Drawing on network governance and collaborative innovation literature, this article presents the findings from a survey among 260 Danish PPPs. The study shows that while innovation training has a significant effect on achieving innovation in PPPs, factors such as trust and institutional support only affect some innovation types. The findings demonstrate the importance of individual innovation skills and a differentiated understanding of innovation outcomes in PPPs.     

The Productivity of Government Spending in Asia: 1983–2000

Leightner [The Changing Effectiveness of Key Policy Tools in Thailand. Institute of Southeast Asian Studies for East Asian Development Network, EAON Working Paper 19(2002)x0219-6417] develops a new analytical technique, named Reiterative Truncated Projected Least Squares (RTPLS), which produces 1/2 the error of OLS when omitted variables interact with the included independent variable. In this paper, RTPLS is applied to annual panel data on government spending and GDP from 1983 to 2000 for 23 developing Asian and Pacific countries. RTPLS produces estimates for the government spending multiplier for these countries and shows how omitted variables have affected these multipliers across countries and over time.JEL Classification: C13, E62, O23     

The role of financial development on the underground economy in regards to Europe’s 2020 strategy

This paper attempts to investigate the relationships between development in the financial sector and the size of the underground economy in European Union countries. Our aim is to investigate the role of financial sector development when it comes to the size of the underground economy, as well as how financial development aids in meeting the growth objectives of the ‘Europe 2020 Strategy’. Panel data analysis will be conducted for the period 2004–2017 in order to examine the effects of financial sector development on the size of the underground economy. The main findings of this paper suggest that financial development has a significantly reducing effect on the size of the underground economy. In conclusion, development within the financial sector significantly lessens underground economic activity in the European Union. With further development of the financial sector, underground economies will not be an obstacle for the fulfilment of the cohesion and growth objectives of the Europe 2020 strategy.     

Variations in adoption of workplace work–family arrangements in Europe: the influence of welfare-state regime and organizational characteristics

Using a unique data set of more than 2800 organizations in 19 countries, this article investigated the variations in adoption of workplace work–family arrangements and whether this variation can be explained either by differences in welfare-state contexts or by organization-related factors. Although the welfare-state context contributed significantly to the explanation of workplace work–family arrangements, the adoption of workplace arrangements was more strongly related to organizational conditions and characteristics. However, the results also show that when the development of work–family arrangements is mainly left to the market, as in the liberal context, employers do not fully make up for the absence of public provisions. The findings support the institutional argument that public provisions help to create a normative climate that gives rise to new social expectations and ‘a sense of entitlement’ regarding work–family support. The study supports the rational choice perspective where both employers' institutional environments and organizational factors are viewed as resources and constraints influencing employers' decision to adopt work–family arrangements.     

Aspects of complexity in citizen–bureaucrat corruption: an agent-based simulation model

In this paper, the complexity-based approach is used to analyse corruption and its internal economics and dynamics. To better understand the drivers of corruption, we employ an agent-based model with heterogeneous agents (bureaucrats and citizens), the interactions of which determine the level of corruption in a society. The emergence of a prevailing social norm of corruption is shown to be significantly influenced by the initial conditions (i.e., history and habits). A cost analysis demonstrates that a relatively limited financial investment is required for the phase transition from the corrupt to the non-corrupt state. The concept of opportunity costs is used to express the value of information shared within an agent’s social group that improves agent decision-making. Incomplete information and uncertainty in the legal system help to reduce corruption by promoting a fear of engaging in corruption in a society. The results of this research may offer useful insights for informing an effective anti-corruption policy.

     

The temporal variation of cost-efficiency in Switzerland’s hospitals: an application of mixed models

This paper uses a mixed effects model to examine the temporal variation of cost efficiency in Switzerland’s general hospitals. The variations in total costs, the number of empty beds and the length of hospital stays are analyzed using financial data from a sample of 168 hospitals operating from 1998 to 2003, as well as hospitalization records disaggregated to Diagnosis Related Groups. Individual intercepts and random coefficients are used to account for the unobserved time-invariant heterogeneity and the differences in temporal patterns across hospitals and DRG categories. The analysis illustrates the usefulness of mixed models to account for unobserved factors such as quality, with a relatively weak assumption that their temporal variations, rather than their initial levels, be uncorrelated with efficiency changes. The results indicate that hospitals have adopted measures to curtail hospitalizations and reduce empty beds. The extent and effectiveness of these measures vary significantly across individual hospitals. However, there is no evidence in favor of a particular ownership type or subsidization regime. While the link between reduction rates of empty beds and gains in cost-efficiency is statistically significant, the expected association between shortening hospital stays and cost-efficiency cannot be clearly established in the data.

The moderating effect of relationship conflict on the creative climate–innovation association: the case of traditional sectors in Spain

A good creative climate is considered one of the main capacities inherent in groups that establish innovation processes. Creative climate emerges from different forces interacting in a way that can be stimulated or inhibited. We identify six dimensions of creative climate. By analysing them jointly, we find that some are more relevant than others for the purposes of innovation. To test the model, we designed an empirical study based on a group of medium-sized firms in traditional sectors in Spain involved in non-high technology innovation. The results show that trust and support are the dimensions that favour innovation and that the dimension of relationship conflict has neither a positive nor a negative effect on innovation. Nevertheless, relationship conflict has a significant positive effect on the autonomy–innovation association and a significant negative effect on the commitment–innovation association. We find synergistic effects between apparently contradictory forces with implications for change and thus for organizational flexibility.     

The effects of volume consolidation on buyer–supplier relationships: A study of Chinese firms

Volume consolidation is a major consequence of supply base reduction. This study explores the relationships between volume consolidation and supply chain outcomes such as buyer coordination costs, supplier performance, buyer environment learning ability, and buyer learning from the supplier. This study also examines the effects of these supply chain outcomes on buyer satisfaction. Based on results derived from an empirical study of 398 Chinese manufacturing companies, it is found that volume consolidation enhances supplier performance, buyer learning from the supplier, and its environment learning ability. It is also determined that coordination costs negatively affect supplier performance and buyer satisfaction. Environment learning ability does not affect buyer satisfaction, while supplier performance and buyer learning from the supplier positively affect buyer satisfaction. As such, the effects of volume consolidation are not limited to enhanced supply chain performance, but also to organizational learning in the supply chain.     

The impact of cultural differences on buyer–supplier negotiations: An experimental study

In today's global economy, an ever-increasing number of companies are dealing with international partners, instigating a need to understand the impact of cultural differences on business interactions. Using Hall's distinction of high- and low-context culture, this study investigates the direct and moderating effects of cultural differences in dyadic buyer–supplier negotiations. Theory is developed regarding the impact of culture on joint profits, juxtaposing Transaction Cost Economics and the Relational View. The theory is tested with a negotiation experiment. Participants, classified by their country of origin, negotiate prices and quality levels for three products. This study finds that cultural differences within the negotiation dyad reduce joint profits when compared to dyads of participants with similar cultural backgrounds. Cultural differences also moderate the impact of trust and bargaining strategy on joint profits. Overall, this study concludes that cultural differences, as encountered in day-to-day business interactions in global supply chains, significantly impact negotiation outcomes.     

The effect of ethical leadership on purchasers’ unethical behavior in China: The moderating role of ethical ideology

This paper examines the role of ethical leadership in managing purchasing agents’ unethical practices. By focusing on the manager-purchasing agent relationship within a firm's purchasing function, we investigate the effect of the manager's ethical leadership on purchasing agents’ unethical behaviors, and explore the moderating role of purchasing agents’ ethical ideology in this relationship. Our scenario-based experiment and survey-based empirical study show that a manager's ethical leadership in a purchasing team plays a critical role in reducing purchasing agents’ unethical behaviors. More importantly, the results reveal that the negative impact of ethical leadership on unethical behaviors is strengthened when the level of purchasing agents’ idealism or relativism is high. In addition, we found that ethical leadership has the strongest negative effect on the unethical behavior of purchasing agents when the agents have high levels of both idealism and relativism.     

Employment protection reforms,employment and the incidence of temporary jobs in Europe: 1996–2001

This paper uses longitudinal data on individuals from the European Community Household Panel over the 1996–2001 period to investigate the impact of reforms of employment protection systems in nine countries on the incidence of employment and of temporary jobs for wage and salary workers. Important features of the research design include the use of individual fixed effects models as well as the inclusion of country-specific trends in the dependent variable. A robust finding is that policies making it easier to create temporary jobs on average raise the likelihood that wage and salary workers will be in temporary jobs. This effect is felt primarily when the regional unemployment rate is relatively high. However, there is no evidence that such reforms raise employment. Thus, these reforms, while touted as a way of jump-starting individuals' careers in the job market, appear rather to encourage a substitution of temporary for permanent work.     

Financing buyer–supplier dyads: an empirical analysis on financial collaboration in the supply chain

Awareness of capital commitment in the context of supply management has increased tremendously in recent years. However, researchers often only consider the intra-organisational perspective of financing. Consequently, a great optimisation potential, especially in globally dispersed supply chains, remains unlocked. To address this research gap, this paper presents a conceptual research model with hypotheses derived from principal–agent theory to explain the role of collaboration in the context of financing a buyer–supplier dyad and its effect on the resulting financing performance. A cross-industry survey yielding 145 responses was used to empirically test the hypotheses. The results indicate that both strategy alignment between purchasing and finance departments (intra-firm financial collaboration) as well as in the buyer–supplier dyad (inter-organisational financial collaboration) have a significant positive effect on the overall financing performance. These findings provide researchers and practitioners with a clearer understanding of upstream-oriented supply chain finance and the possibilities and constraints in its implementation.     

The effects of health transformation program on patient–healthcare personnel communication and interaction in Turkey

The structure of the Turkish healthcare system is being reorganized under Health Transformation Program (HTP) and some serious changes in healthcare system are being carried out. Effective healthcare personnel and patient communication has a significant impact on patients’ health behaviors and health outcomes. The purpose of this study is to examine the effect of communication dimensions and HTP on patient and healthcare personnel communication and interaction. The survey was conducted with simple random sampling to 9,089 patients in Turkey. Exploratory factor analysis showed three dimensions of communication which are in positive and strong relationship: building relationship, process of physical examination and ending communication. Hierarchical multiple regression was performed to measure the effect of communication dimensions and HTP to patient–healthcare personnel communication and interaction. According to the first step, communication dimensions have a statistically significant effect on patient–healthcare personnel communication and interaction. Introduction of HTP to hierarchical multiple regression explained additional meaningful variance in patient–healthcare personnel communication and interaction, after controlling communication dimensions. It is revealed that, HTP has an important role on communication and interaction. This study has a macro approach and it is limited with the patients’ point of view.     

The monetary policy strategy of the Bank of England in 2020–21: An assessment

Excessive money creation during the Covid pandemic has resulted in Britain's worst episode of inflation since 1990–91. The backdrop to this failure of monetary policy is the Bank of England's aggregate demand/aggregate supply framework together with the Monetary Policy Committee's neglect of broad money. An alternative way to operate monetary policy is urgently needed. A significantly improved monetary policy outcome could be achieved by shifting from trying to steer the economy using interest rates and quantitative easing or quantitative tightening to reliance on the relative stability of income velocity (the ratio of nominal GDP to broad money) as a means of managing aggregate demand.