Kafkaesque institutions at the base of the pyramid

Impelled by neo-liberal ideology, base-of-the-pyramid (BOP) and subsistence market discourses have put emphases on markets, profits and entrepreneurialism. Because of this ideological mooring, there is a marginal understanding of the role of the State and its impact on the poor in these discourses. Franz Kafka’s work provides a critical perspective on the role of the State in BOP or subsistence settings. This ethnographic study in India examines transactions related to land and highlights the Kafkaesque nature of the State. The institutional setting is fraught with Kafkaesque elements such as inaccessible and indecipherable legality, abusive power relations and alienation of subaltern subjects. It further shows that the illicit character of the State is an important reason for illegal practices in subaltern settings.     

Strategic motivations and choice in subsistence markets

This paper examines the different motivations behind strategic choice in base of the pyramid or subsistence markets. Two strategies are examined through comparative analysis: market extension and strategic intent. Using two commercial bank's micro-lending business strategies in Sri Lanka, a comparative case study suggests that strategic intent is motivated by building capabilities over time that results in successful poverty alleviation, whereas market expansion is motivated by an immediate desire to expand overall sales revenue. This conclusion may help reframe subsistence market or BoP arguments away from such false choices as appropriate size (e.g., multinational corporations versus small and medium size enterprises) toward more useful discussion on understanding why firms participate in subsistence markets and what is the motivation behind their strategic choice. By considering more than just size and scope and studying the motivations behind long-term solutions to poverty alleviation, firm success can be better understood and achieved.     

What the subsistence marketplaces stream is really about: Beginning with micro-level understanding and being bottom-up

This commentary reiterates the essence of the subsistence marketplaces stream in light of the focal paper. The subsistence marketplaces stream provides a granular, micro-level understanding of the intersection of poverty and marketplaces. The term ‘subsistence marketplaces’ was deliberately coined to keep the focus on preexisting marketplaces to learn from in order to design solutions for all contexts. Such marketplaces should be studied in their own right, and not as a means to a preconceived end, whether it be for outside companies or government policy and so forth. We study subsistence marketplaces inside-out rather than outside-in – beginning at the micro level and being bottom-up in deriving implications for many sectors of society. We traverse a journey which is in the opposite direction to beginning with ideological lenses, wherein we have developed an ecosystem of research, forums, curricular innovations and community outreach.     

Identifying Key Success Factors for Social Enterprises Serving Base‐of‐Pyramid Markets through Analysis of Value Chain Complexities

There are people in this world who have little or no access to basic needs and they struggle financially, living on less than a handful of dollars a day. A better understanding of how to supply/serve the world's poor is needed. In this paper, through the lens of Porter's value chain framework we investigate the challenges and opportunities social enterprises face in base‐of‐pyramid (BoP) markets based on secondary data on 23 organizations. Our contribution is twofold: First, we analyze value chain complexities for the social enterprise based on the value creation role (consumer, coproducer) and income level (poverty, extreme poverty) of the local population. We find that nature of customers’ requirements varies across customer segments in the BoP markets and social enterprises face unique challenges in fulfilling such differentiated demand patterns. Second, we develop an affordability–accessibility framework that helps to identify the situations that may be favorable/unfavorable for social enterprises to meet the challenges in BoP markets. We make four propositions that social enterprises may use to cope with difficulties in affordability and accessibility. Our findings will be useful for such organizations to understand and design better supply chains for the base of pyramid.     

The trilogy of China cotton markets: The lead–lag relationship among spot,forward, and futures markets

China is a leading participant in the world cotton market. China’s distinctive regulatory structure and procedures and business environment provide an opportunity to explore some unique market dynamics. This study investigates the interrelationship among the spot, futures, and forward cotton markets in China over a period of a major policy change: A temporary State reserve program for cotton that was established in 2011 and ended in 2014. This government intervention significantly distorted the way farmers, manufacturers, and speculators interacted and was not sustainable. Overall, our results support futures market’s dominant role in the price discovery process.     

Trade Liberalisation,Economic Development and Poverty Alleviation

In a distinguished career spanning more than four decades, Jagdish Bhagwati has made numerous contributions to both trade theory and trade policy analysis. The current paper focuses on Bhagwati's major contribution to the ongoing debate surrounding the influence of trade liberalisation upon economic development and its potential to alleviate poverty in the world's poorest economies. In order to highlight Bhagwati's contributions in these fields we focus on the arguments developed in two of his numerous landmark publications; first his seminal 1964 paper on the Pure Theory of International Trade and, second, his 2004 book entitled In Defense of Globalization. Although separated in time by some four decades we argue that these two publications, despite their very different characters, each demonstrate beyond doubt the significance of Bhagwati's work in improving our understanding of the true nature of international trade and its potential to address questions of global poverty.     

低保制度是近贫人口的福利悬崖吗?——基于贫困脆弱性视角的实证研究

未能获得低保救助但贫困脆弱性较强的近贫人口,未来陷入贫困的可能性较大,且与低保家庭相比,还可能存在救助性福利缺失的悬崖效应。本文使用2014年中国家庭追踪调查数据,基于贫困脆弱性视角测量近贫人口的贫困程度,采用倾向得分匹配法探究低保制度是否对低保家庭与近贫人口的贫困脆弱性产生悬崖效应,并分析由悬崖效应引起的救助性福利缺失是否造成近贫人口对低保制度参与权与福利加成的不平等。结果显示:以各地区低保线为基点,近贫人口家庭人均收入高于低保线的部分累加至最低工资线与低保线差值的0.2至0.25倍的区间时,存在显著的悬崖效应与救助性福利缺失,参与权与福利加成方面存在不平等。因此,应将贫困脆弱性纳入到现行低保救助判别机制之中,以此完善对未来陷入贫困可能性的测量与识别;同时将存在救助性福利缺失的近贫人口纳入到低保制度,以此化解悬崖效应引起的不平等。     

Quality‐of‐life as chronotopefication and futurization: Subsistence consumer experiences in India

In the poverty‐ridden settings in neo‐liberal India, we explore how subsistence consumers construct their quality‐of‐life (QOL). Drawing on the concepts of chronotope and futurization, we posit two additional dimensions of subsistence consumers' construction of QOL namely, chronotopefication and futurization. Our findings suggest that chronotopefication and futurization are defining processes of subsistence consumers' construction of QOL perceptions; their sacrifices, efforts, and costs, however painful they may be, would be perceived as QOL enhancing from the prism of chronotopefication and futurization; and subsistence consumers chronotopize and futurize QOL for the whole extended household within the intergenerational temporal space by focusing on stable input–outcome pathways. Based on the evidence, we propose QOL as chronotopefication and futurization framework (QOL‐CFF). The framework suggests that subsistence consumers construct QOL as chronotope building, futurized and having a symbolic effect. They consider current agonies as a foundation for future building.     

When Do State-Owned Firms Crowd Out Private Investment?

This paper examines the conditions under which a state-owned firm with a political agenda strategically crowds out investment by a private firm. Employing reduced-form analysis, we show that strategic crowding out occurs if (i) the private firm regards investments as strategic substitutes, and (ii) private investment is undesirable from the state-owned firm’s perspective. We discuss how our analysis applies to real-world markets and argue that it provides an explanation for the ambivalent evidence on the effect of public on private investment: State ownership is neither necessary nor sufficient for crowding out to occur.     

Systemic small-player market exclusion in an east African context

ABSTRACT

Producer–consumers in Kenya and Uganda face challenges in meeting their subsistence goals. They face a paradoxical inclusion and exclusion from the contemporary market system that the solutions proposed in the agriculture development, subsistence markets and BOP perspectives cannot address because of faults in the pervasive marketing ecosystem perspective. In this article, we go beyond the traditional discussion of producer–consumers’ market access, to include upstream as well as downstream challenges. We introduce the concept of integration gaps to markets as a counterpoint to typical measures of market access. We show the integration gap is a systematic neocolonialist exclusion of producer–consumers that international aid agencies exhorting greater market engagement may worsen. We offer suggestions for improvement from a marketing ecosystem perspective.     

Early internationalization and subsequent geographic expansion: An extended Penrosean perspective

Internationalization is, by nature, a dynamic and continuous process that unfolds over time. However, the extant literature on international entrepreneurship primarily focuses on the antecedents that influence the initiation of internationalization and downplays its post-entry process. Specifically, little research has examined how early internationalization relates to subsequent geographic expansion. To bridge this gap, we draw upon Penrose’s theory of firm growth and a judgment-based view of entrepreneurship. We posit that earlier resource commitment to foreign countries enables entrepreneurs to quickly start managerial learning based on their experience of experimentation activities in foreign markets, facilitating entry into new foreign markets. Especially, we hypothesize that the operational experience acquired through earlier foreign direct investment is positively associated with subsequent geographic expansion, and the location where to accumulate operational experience moderates the association. The results of our longitudinal 19-year (2000–2018) study on 75 Japanese early internationalizing firms provide evidence for our hypotheses.     

Policy‐related implementational fluidity in subsistence marketplaces

This paper sheds light on policy‐related implementational fluidity—a context‐dependent adaptation of policies—adopted by policy implementers to address heterogeneous needs of subsistence consumer‐merchants (SCMs). In subsistence research, despite the emphasis on bottom‐up policymaking, implementational fluidity persists because of institutional and sociocultural factors that hinder policy implementers’ from effectively and accurately implementing the policies. To enrich the current bottom‐up policy process, this paper shares insights from an ethnographic study of Fijian market traders and marketplace personnel (policy implementers) and shares insights on how implementational fluidity manifests in subsistence marketplaces. Analysis reveals the interplay amongst sociohistorical context, marketplace relational dynamics and policies leading to policy adjustments and re‐negotiation by marketplace personnel and perceived injustices amongst the SCMs. The paper provides policy recommendations and practice ideas for subsistence researchers and policy practitioners to examine policy implementation gaps and the role of policy implementers in subsistence marketplaces.     

Competent consumers? Consumer competence profiles in Norway

Consumer competence is increasingly important in today’s commercialized society. This paper refers to some main findings from a national representative survey on consumer competences and practices in Norway. To be a competent consumer, it is decisive to be informed about products and to be familiar with how markets function. In this paper, consumers’ self‐reported efforts to keep themselves informed about specific markets is treated as an indicator of consumer competence. First, the results indicate that Norwegian consumers’ competence, according to their own judgement, is rather mediocre. Second, different groups of consumers seem to have different consumer competence profiles. Accordingly, we find that some consumers are price‐conscious in their daily purchases, others are price‐conscious when they make their yearly dispositions in the financial markets, while a third group is community‐oriented and active in the environmentally friendly and ethical product markets. Third, the analysis indicates that consumer competence is an important indicator of how market‐rational and reflective consumers’ choices and practices are.     

Retailer selection compulsion in the subsistence markets

Although enduring relationships between buyers and sellers encourage subsistence market consumers to shop at a particular retailer, these relationships have a negative side. This study focuses on the issue of ‘retailer selection compulsion’ existing in the subsistence market, which refers to the negative side of these relationships. The purpose of this study is to investigate the factors driving the retailer selection compulsion in the subsistence market. This study adopted a qualitative phenomenological approach. Sixty interviews were conducted with subsistence consumers in two areas: Kolkata and Kharagpur, in the Indian state of West Bengal. The findings have demonstrated that subsistence consumers are compelled to stick to their neighbourhood retailers due to convenience, social capital, and obligations, as well as social identities resulting from a sense of social compulsion, and the value-added services provided by retailers that help overcome the consumers' financial and cognitive constraints. This study contributes to the literature on customer behaviour and retailing. These findings deepen the current understanding of the social capital theory, social identity theory, and bounded rationality theory in the context of subsistence marketplaces. Practically, the findings of this study will contribute to the practice of marketers who target subsistence markets. The findings will also help further entrepreneurial activities in subsistence areas, improve the retailing operations of subsistence retailers, and address exploitative practices of subsistence retailers on poor customers.     

The Principle of Subsidiarity and the Ethical Factor in Giuseppe Toniolo’s Thought

In this work, we present some traits of the socio-political and economic thought of Giuseppe Toniolo, who lived in Italy at the turn of the XIX and XX century, with special reference to the contribution that the Italian economist and sociologist gave to the definition and implementation of the principle of subsidiarity and to the ethical foundation of economic science. After outlining the definition of the subsidiarity principle in the first paragraph, we sketch the historical background in which Toniolo lived and operated. We then focus on the ethical factor and on the concept of subsidiary State emerging from Toniolo’s writings. Finally, we present some of the main elements of Toniolo’s legacy with reference to the current economic and socio-political debate.     

Market openness and market quality in gold markets

This paper studies the impact of market openness on market quality in gold markets, by investigating the openness event that occurred when the Shanghai Gold Exchange (SGE) launched an international board (SGEI) for foreign investors in China. Investors prefer to trade on the SGE than the SGEI, probably due to the SGE’s higher liquidity. In addition, using the New York Mercantile Exchange (COMEX) gold futures as the benchmark, we show the SGE experiences a significant increase in liquidity without a concomitant increase in volatility. Moreover, the SGE’s contribution to international gold price discovery increases after the openness event.     

Does financial development reduce income inequality and poverty? Evidence from emerging countries

The objective of this paper is to examine whether bank and stock market development contributes to reducing income inequality and poverty in emerging countries. Using dynamic panel data methods with an updated dataset for the period 1987–2011, we assess the finance–inequality–poverty nexus by taking the separate and simultaneous impacts of banks and stock markets into account. Mixed explanatory findings on panel studies suggest that although financial development promotes economic growth, this does not necessarily benefit those on low-incomes in emerging countries. For the finance–poverty link, we find that neither banks nor stock markets play a significant role in poverty reduction.     

“One of these days,things are going to change!” How do you make sense of market disruption?

The significance of mindsets is apparent in everyday business life. As today’s managers and companies face uncertainty and disruptive change in the business environment and markets, there is a growing need to understand and strategically address such change. This becomes challenging when disruptive market forces confront the institutional logic or rules of the game based on collectively acquired experience of doing business in the given field. In overcoming such challenges, managers’ hidden reasoning remains an untapped potential while their existing mindset influences what they attend to and what they decide to do. This article elaborates a diagnostic framework, accompanied by a tool to help managers make sense of disruptive markets and reflect individually and collectively on possible courses of action. The framework has two principal dimensions—strategic scope and focus—that are further divided into three business elements of strategic market-oriented management: offering, customer, and market. The tool offers a practical means of profiling individuals’ mindsets. In increasingly dynamic business environments, reflection capabilities represent a new source of competitive advantage.     

Half-day trading and spillovers

This paper investigates the linkage of returns and volatilities between the United States and Chinese stock markets from January 2010 to March 2020. We use the dynamic conditional correlation (DCC) and asymmetric Baba–Engle–Kraft–Kroner (BEKK) GARCH models to calculate the time-varying correlations of these two markets and examine the return and volatility spillover effects between these two markets. The empirical results show that there are only unidirectional return spillovers from the U.S. stock market to the Chinese stock market. The U.S. stock market has a consistently positive spillover to China’s next day’s morning trading, but its impact on China’s next day’s afternoon trading appears to be insignificant. This finding implies that information in the U.S. stock market impacts the performance of the Chinese stock market differently in distinct semi-day trading. Moreover, with respect to the volatility, there are significant bidirectional spillover effects between these two markets.