Institutional investors,corporate governance and the performance of the corporate sector

Proportions of equity held by institutional investors—pension funds, insurance companies and mutual funds—are rising across all OECD countries. Meanwhile institutions are becoming more influential in corporate governance, even in bank-dominated countries, inter alia due to international investment, pension reform and EMU. We provide two forms of evidence on the effects of institutional corporate governance on corporate performance. First we offer a literature survey on micro evidence, the outcome of which is mixed, but on balance suggesting a positive effect on equity returns. We contend that these micro studies face a difficulty that they cannot capture effects of governance initiatives whose effects go wider than “target firms”. Accordingly, we present results for the reduced form empirical relationship between institutional share holding and corporate sector performance at an economy-wide level. These are consistent with significant effects which differ between “Anglo-Saxon” and “relationship banking” countries. For example, institutions appear to accompany lower investment and higher dividends in the former.     

Modern pandemic crises and default risk: Worldwide evidence

This article examines the relationship between modern health pandemic crises and financial stability. Specifically, it collects data on 250,223 firms in 43 countries (or regions) during five modern pandemic crises, SARS (2003), H1N1 (2009), MERS (2012), Ebola (2014), and Zika (2016), and finds that pandemic crises significantly increase the default risk of enterprises. Further analysis shows that formal and informal institutions acted as a “cushion” against the pandemic crisis. The earlier a country adopts IFRS, the more unimpeded access to information, and the more stable religious and ethnic relations within the country can reduce the negative impact of a pandemic on financial stability. This article addresses the hitherto inadequacy of COVID-related data. In addition, this article argues that governments should build sound state institutions to withstand macroeconomic shocks and highlights the heterogeneity of default risk for enterprises operating in countries with different institutions.     

Self-renewal of the Japanese firm and the human resource strategy

Traditional “Japanese personnel management” that has long been considered as the key for Japan's competitive success now needs fundamental restructuring in order to meet the challenges of a stagnant economy, matured domestic market, and the rise of NICs (Newly Industrialized Countries) in international markets. The self-renewal of Japanese firms can be achieved by a paradigm shift at the corporate strategy level: from a production orientation to a product orientation. In accordance with this paradigm shift, leading Japanese firms have started reforming their Human Resource Management (HRM) function from a productivity-centered to a creativity-centered one— creative HRM. Creative HRM has three pillars: (1) the creation of the strategic vision through commitment of the employees, (2) an entrepreneurial middle management as a key strategic node, and (3) multi-dimensional personnel management. Creation and realization of the strategic vision through the active commitment of an entrepreneurial middle management is necessary for the self-renewal of the firm. “Japanese Personnel Management” that might have been overadapted to the traditional strategic paradigm is now transforming itself from a “group-centered” personnel administration to an “individual-centered” one. While Western companies have been adopting Japanese “groupism” to reconstruct their production systems, Japanese companies have started introducing Western “individualism” to encourage creative self-transformation. But no system or technique is truly effective without human commitment, and this requires a fundamental paradigm shift for Japanese firms.     

Go Global,Innovate! Training Social Entrepreneurial Leaders

Problems associated with poverty, education, healthcare, and the environment are grand challenges shared by all nations. For example, poverty in one country may lead to immigration and limitations on exports for another. Similarly, as the Ebola crisis demonstrated, one country's healthcare challenges can quickly turn into a problem for all. The global interconnectedness of social problems necessitates the development of solutions by entrepreneurial leaders trained to adopt a global perspective. The questions explored in the current article are: (a) what does it take to be a global entrepreneurial leader and a social entrepreneur, and (b) how can we prepare students to succeed as global entrepreneurial leaders?     

Scaling of HIS in a global context: Same,same, but different

Scaling of information systems is a field of research with growing importance. This paper presents the story of scaling of an artifact (called District Health Information Software — DHIS) and associated principles and practices around a health information system that has taken place over 15 years, both within and between multiple developing countries. Through the lens of the story of the artifact over its trajectory of development and implementation in multiple contexts and time, we develop insights that challenge traditional thinking around scaling. Scaling is not about constant gains and expansion, as is often assumed, but involves a dichotomy of losses and gains, associated with each step or translation in its process of movement. We draw upon Latour's insights on circulating references to analyze this dichotomy of loss and gains, conceptualizing the process as circulating translations. We contribute to the technology transfer literature in arguing that the process of transfer is not about a “parachuting” from point A to B, or a “design from nowhere” but something which occurs in a series of small steps, where with each step new socio-technical configurations are created which not only shape subsequent steps, but also redefine the content of the artifact. In this way, we are in line with findings from the social studies of technology, but differ in that our artifact of study – software – is more “virtually immaterial” than machines which had been primarily earlier objects of study. This property of software, coupled with growth of web-based and mobile infrastructure, allows relative ease of circulation across contexts, where it gets redefined and embedded at the same time at the interconnected levels of the global and local. We conceptualize this process of global scaling as being “same, same, but different”. We discuss both the characteristics of this process of global scaling, and the channels and mechanisms through which it takes place. Four overlapping conditions that shape this process include the software itself, the infrastructure, institutional practices, and ideas — these form the basis for a general framework to understand global scaling of health information systems. Empirically, the story of DHIS is told from its birth in the mid-nineties in South Africa developed on a Microsoft platform to its transformation to a web-based platform, built using Java based open-source frameworks, and now moving through multiple countries. We focus on these dynamics primarily within three countries namely India, Sierra Leone and Kenya.     

盖茨的“遗产”

中国企业界人士集体回忆比尔·盖茨，感念他对中国商业和慈善的影响——他的遗产并不是为人们留下了什么，而是尚未完成的伟大事业     

1. Globalization and Violence: The Challenge to Ethics

Despite its many benefits, globalization has proven to harbor a good deal of violence. This is not only a matter of the proliferation of weapons of mass destruction inaugurated by the atomic bombing of Hiroshima, but includes many forms of indirect or “structural violence” resulting from the routine of economic and political institutions on the global scale. In this essay, the multifaceted phenomena of violence are approached from the standpoint of ethics. The prevailing political thinking associated with “realism” fails to address the problems of militarism and of hegemonic unilateralism. In contrast, many philosophers are critically rethinking the problem of global violence from different ethical perspectives. Despite sharing similar concerns, philosophers nevertheless differ over the role of philosophical reflection and the potentials of reason. These differences appear in two contrasting approaches associated with postmodern philosophy and discourse ethics. In the analysis of discourse ethics, attention is paid to Karl‐Otto Apel's attempt of philosophically grounding a macroethics of planetary co‐responsibility. At the heart of the essay is the analysis of the problem of violence, including terrorism, by Jürgen Habermas, who explains the phenomenon of violence in terms of the theory of communicative action as the breakdown of communication. Jacques Derrida's deconstruction of the notion of “terrorism” also is analyzed. According to the principle of discourse ethics, all conflicts between human beings ought to be settled in a way free of violence, through discourses and negotiations. These philosophers conclude that the reliance on force does not solve social and global problems, including those that are the source of violence. The only viable alternative is the “dialogical” multilateral relations of peaceful coexistence and cooperation among the nations for solving social and global problems. They emphasize the necessity of strengthening the international rule of law and institutions, such as a reformed United Nations.     

Coming unstuck? In search of the “corporate glue” in an international professional service firm

Much has been made of “networks” and corporate “culture” as sources of cohesion in increasingly loosely structured international firms. But how strong is the “corporate glue”? Using a case study of human resource management (HRM) in an international accounting firm, this article shows that growth and internationalization may themselves weaken the corporate glue, just as the need for global integration of activities increases. The resulting stresses lead to a greater emphasis on formal bureaucratic structures and processes, further calling into question the role of traditional culture. Alternative strategies for managing these tensions are proposed. © 1995 by John Wiley & Sons, Inc.     

What You Should Know About Megaprojects and Why: An Overview

This paper takes stock of megaproject management, an emerging and hugely costly field of study, by first answering the question of how large megaprojects are by measuring them in the units of mega, giga, and tera, and concluding with how we are presently entering a new “tera era” of trillion‐dollar projects. Second, total global megaproject spending is assessed, at US$6 to US$9 trillion annually, or 8% of the total global gross domestic product (GDP), which denotes the biggest investment boom in human history. Third, four “sublimes”—political, technological, economic, and aesthetic—are identified and used to explain the increased size and frequency of megaprojects. Fourth, the “iron law of megaprojects” is laid out and documented: Over budget, over time, over and over again. Moreover, the “break–fix model” of megaproject management is introduced as an explanation of the iron law. Fifth, Albert O. Hirschman's theory of the “Hiding Hand” is revisited and critiqued as unfounded and corrupting for megaproject thinking in both the academy and policy. Sixth, it is shown how megaprojects are systematically subject to “survival of the unfittest,” which explains why the worst projects get built rather than the best. Finally, it is argued that the conventional way of managing megaprojects has reached a “tension point,” in which tradition is being challenged and reform is emerging.     

Collective Acceptance, Social Institutions, and Social Reality

ABSTRACT . The paper presents an account of social institutions on the basis of collective acceptance. Basically, collective acceptance by some members of a group involves the members’ collectively coming to hold and holding a relevant social attitude (a “we‐attitude”), viz. either one in the intention family of concepts or one in the belief family. In standard cases the collective acceptance must be in the “we‐mode,” viz. performed as a group member, and involve that it be meant for the group. The participants must be collectively committed to what they have accepted. Social institutions are taken to be norm‐governed social practices introducing a new social and conceptual status on the practices or some elements involved in those practices. This requires that some of the involved norms be constitutive norms as opposed to merely “accidentally” regulating ones. A classification of social institutions is presented. The account is broader in scope than is Searle’s.     

Wages Councils,retail distribution and the concept of the “cut-off”

If proposed amendments to the Industrial Relations Bill remove protection afforded to some groups of workers by the Wages Councils system, an alternative will have to be found. In retail distribution a case can be made out for operating a bipartite system with voluntary negotiation above, and statutory wage protection below, a “cut-off” point determined on the basis of turnover.     

An evolutionary complex systems perspective on urban health

Deliberations about how to govern complex problems of urban health and wellbeing sustainably have often been implicitly biased by ideas such as being ‘human-scale’ or ‘people-centered.’ With increasing urban populations and increasing urban system interconnectivity, many cities have transformed into city regions or clusters, and the external effects of urban growth are carried mainly by the marginalized and the environment putting urban health increasingly at risk. Here we address the question of why human societies have not been better at collectively adapting to the challenges of urbanization and global environmental change? We build a theoretical framework of multi-level selection, complex systems evolution, and governance, following which we then present ‘human-scale’ and ‘people-centered’ ideas of urban development as expressions of two types of socio-political organization with different degrees of self-organization. We found several reasons for which the maladies of current urban development emerged and the seeming inability to resolve them. First, urban systems became increasingly interconnected and evolved into ultrasocial superorganisms, displaying preference to sustain themselves as a whole rather than their subordinates. Second, the difference in scaling effects between the biological and the social network contributed to the mismatch between rapid urban growth and slow adaptation. Furthermore, institutions of decreased variety reinforce themselves and become dominant, creating a positive feedback mechanism and promoting invasive and exploitative exponential growth, but they also reduce the creativity and resilience of urban systems. We also found that both the “human-scale” and the “people-centered” approaches acknowledge the exponential growth and decreasing variety in urban systems, and advocate for correcting the mismatches. To incorporate people's needs and values for long-term, truly sustainable urban health governance, we recommend combining the self-organizing, evolutionary feature of “human-scale” and the coordinative, political feature of “people-centeredness.”     

The Dark Side of Urban Informality in the Global North: Housing Illegality and Organized Crime in Northern Italy

This article deals with housing illegality/informality in Italy, where it represents an established aspect of urban development. It presents a case study focused on Desio, a town close to Milan in northern Italy. Here housing illegality occurs by virtue of the well‐established presence of a mafia‐type criminal organization (the ‘Ndrangheta). Three examples of illegal construction in Desio are analysed, forming the basis for a discussion on the distinctive features of illegal house‐building in Italy. In particular, institutional incentives encouraging illegal housing are investigated, with reference to both formal institutions (e.g. planning laws, rules preventing unauthorized housing and building amnesties) and informal institutions (e.g. organized crime). The case of illegal housing in Italy contributes significantly to the wider international debate on urban informality, highlighting the critical need for research along avenues as yet only partially explored (e.g. informal housing in Western countries and the role of criminal activities and actors in the spread of informality) and challenging some common assumptions such as the geographical dualism (‘global North’ versus ‘global South’) which, implicitly, results from the international literature.     

Cultural values and public policy: The case of international development aid

This paper investigates whether the quantity and character of aggregate expenditures on foreign aid by donor governments are related to the cultural values held by the people of the donor countries. In particular, we study whether any association exists between three measures of donors’ foreign aid expenditures and two dimensions of culture. We find that the shares of national income governments spend on aid, the proportion of total aid provided in the form of grants, and the proportion of aid directed to humanitarian relief are all related in statistically significant and quantitatively important ways to the location of the cultural values of people in the donor countries on two continua, one from “traditional” to “rational” beliefs about social organization and authority, and the other from “survival” to “self-expression” as the focus of individual aspirations. These results contribute to our understanding of the political economy of aid, and to a growing literature on how culture shapes economic policies, institutions, and performance.     

Making Distribution Markets: Market‐Wide Institutions in French and American Bicycle Distribution, 1865–1914

Scholars usually analyze market‐making within specific parameters. Market sociologists analyze institutions primarily between competitors; global value chain scholars study institutional innovation along exchange sequences; and varieties of capitalism scholars examine national institutional frameworks. I analyze how entrepreneurs and trade associations used “market‐wide” institutions such as exhibitions and publications in French and American bicycle distribution systems between 1865 and 1914 to improve exchange efficiencies and to influence other market actors and the markets' environments. I argue that market‐makers adjusted these institutions to market conditions, and also to national institutional frameworks. The findings present opportunities for further research in competition and exchange institutions.     

On the design and efficiency of a participating growth bill

A Participating Growth Bill (PGB) is an innovative hybrid financial vehicle employed by Western institutions and governments in lieu of short-term debt instruments. This study proposes PGB to be considered as an alternative way of raising funds for open market operations by the governments of Muslim countries constrained by religious regulations against fixed-interest debt (ribawi) financing. The security (PGB) is developed using partial equilibrium analysis under the assumption that the assets backing the financial package do not trade in a secondary market—a situation which invalidates the risk-neutral pricing of the well-known Black and Scholes (1973) model. The study finally demonstrates the efficiency of a PGB over a conventional (ribawi) debt vehicle thereby providing results contrary to assertions of the (i) Capital Structure Irrelevance Theorem (see Modigliani and Miller, 1958) and (ii) Capital Asset Pricing Model (CAPM) (see Sharpe, 1964).     

Including the Feedback of Local Health Improvement in Assessing Costs and Benefits of GHG Reduction

Ancillary benefits of greenhouse gas (GHG) mitigation refer to benefits from GHG mitigation in addition to lowered adverse impacts of global climate change. A major ancillary benefit of GHG mitigation is reduced local air toxins, which improves health. The purpose of the study is not to determine whether ancillary benefits of GHG mitigation can or cannot justify GHG mitigation. Rather, we discuss how an important benefit of addressing GHG emission — the local health effects — should and can be incorporated using the approaches put forth. A CGE model is used for simulating a carbon tax policy. A health effects submodel takes the local air emissions output from the CGE model and assesses the implications for ambient air concentration, health, and labor supply. Labor and medical expenditure changes are fed back into the economy. Applying this approach to Thailand, when health feedback is included we find that: (1) negative impact on GDP under a carbon tax drops by 45%, and (2) welfare improves for households and cleaner producers.     

Tracking innovation: The need for reliable measures of its presence and effects

It is generally accepted that innovation is an essential ingredient of corporate success and, when pervasive, strengthens the economy while warding off foreign competition. Many point to a perceived weakening of this process in U.S. firms as a contributing factor to the steady decline of productivity growth vital to our nation's stability. They clamor for government programs to encourage technical venturing, embracing the “R & D hypothesis” which declares that privately sponsored research is the wellspring of innovation, and thus the key to a producer's prosperity — leading to more vigorous industries.In response, Washington is seeking ways to spur private spending on R & D during this era of diminished Federal backing for research. Such initiatives are handicapped by a lack of data establishing the existence and extent of the apparent slump in industrial creativity. Also there is scant information available to management that demonstrates a close correlation between fortunes of the firm and activities characterized as innovations. Without such evidence, business appears reluctant to abandon its cautious attitude towards support of R & D that cannot be readily commercialized.Little is known about innovation's economic impact or bearing on the survival of an enterprise. The connection between industrial research and the launch of desirable products is too abstruse to permit the assumption that in-house R & D inevitably spawns viable innovations. We do not have data which permit rational decisions for the effective management of innovation by firms, or the design of a workable model for the process. This information gap has a deleterious effect in industries traditionally dependent upon research, and leads to strategies — aimed at fostering innovation — that are inadequate, badly timed or ill conceived.An innovation stems from a series of management decisions motivated by the quest for profits and tempered by industry conditions — government incentives notwithstanding. Companies pay for R & D which promises revenues that would not otherwise appear, and back a new product when the expected return is comparable to that from less risky alternative investments. They require an easily administered method for verifying, in accounting terms, the outcome of an innovation so its contribution to profits can be contrasted with the yield from product improvements or line extensions. Management could then weigh a proposed innovation the same way it evaluates other commitments.Authors of public policy need to monitor the pace of innovation on a regional or national scale so that they can determine when stimulants are called for — to restore this activity to the desired level. The traditional indices of innovation's intensity are imprecise, and misleading if the purpose be to identify a trend. “R & D expenditures” must be viewed with circumspection for they are not always incurred in pursuit of innovations, especially with increasing outlays for compliance with government regulations. “Patents awarded” or “technical articles published” are scant proof of seminal activity, and “government contracts awarded” is not a useful statistic. A true “index of innovation” is needed to guide public policy — one founded on data tied to the launching of products.In conclusion, this article suggests a technique for quantifying innovation inside the firm, as a planning tool of management and to provide the data base for a meaningful “index of innovation”. It describes the index, to be derived from data reported by a representative sample of geographically dispersed companies. A procedure is outlined for generating such data in firms, collecting it by a central authority, and calculating the index.     

Interfirm Channel Relationships,Influence Strategies and Performance in China

Abstract

This paper empirically examines the relationship between inter-firm channel relationships, influence strategies and suppliers' performance. A survey of 103 foreign partners from Sino-foreign joint ventures in the food industry in China shows that channel relationships have a major positive effect on supplier's channel performance. While the influence strategy of “threats” is negatively related to supplier's channel performance and channel relationships, “suggestive litigation” has a positive influence on performance, on the contrary to findings in Western countries. Although a business relationship with an emphasis on “legal effect” is not desired on the part of distributors, it enhances channel relationships. The influence strategy of “request” as a Western phenomenon does not work well in China, and has an inverse effect on channel relationships. Implications for practitioners and researchers are discussed.     

How Foundations Exercise Power

Foundations (and philanthropy in general) have great political power in the United States and worldwide, yet this is hardly noted by political analysts or journalists. Their power is exerted in many ways, such as by funding progressive organizations and movements; sponsoring policy “think tanks” and organizations of public officials; influencing the political culture through media, academic researchers, and university programs (including public interest law in law schools); and co‐opting activists and potential rebels among the rich and poor. Because of their resources and prestige, they are powerful members of coalitions and collaborations with overt and covert government departments, U.N. agencies, universities, and nongovernmental organizations. Foundations have been major actors in the “Cold War,” which continues as the attempt to deflect any movement towards socialism here or abroad. Globalization has amplified the power of foundations, for many of the global institutions were created by foundations and continue to be fostered by them. The sponsorship of civil society institutions worldwide by private foundations, now with additional billions from governments and international governmental institutions, supports U.S. hegemony: military, political, and economic. We cannot know what the world would have been like absent foundation activities, but the current one does not appear to have a democratic, peaceful, or sustainable future.