Cross-ownership as a hostage exchange to support collaboration

The impossibility of writing complete contracts causes loss of profitable transactions among firms, since their managers cannot ex ante bind themselves to future actions. We show how a reallocation of ownership rights into a network of mutual shareholdings among a coalition of firms produces an efficient enforcement mechanism. Co-operation is achieved by exchanging control rights until a mutual threat of capture of control is established. By making control over their firms vulnerable to a takeover by the other members of the coalition, each firm is able to make a credible commitment to future efficient actions. In equilibrium no punishment is administered, so that the arrangement achieves the outcome under complete contracts. More generally, it is proved that a mutual hostage exchange may dominate the threat of loss of reputation as an enforcement mechanism.     

The Moral Economy of Parallel Currencies

A bstract .   This article offers a monetary analysis of Local Exchange Trading Systems (LETS) and examines both their moral and economic significance as well as the way in which these two aspects may conflict. After considering LETS' principles and history, I review three monetary theories in order to ascertain how one might best explore these phenomena. By drawing on the "Chartalist" tradition in monetary theory, I show (1) how strongly oriented LETS are to the formal market economy, from which, it is held, they detach themselves, and (2) that they do not effect a return to barter or an abolition of money, as is sometimes claimed. Both points become clear when one pays due attention to the primary function of money as money-of-account. In the final section, I consider LETS empirically and compare their structural potentials with their concrete form. LETS' members are motivated less by pecuniary gain than by the desire to build community and realize certain values. Participants have little motivation to expand LETS, which are therefore destined to remain small and ineffectual in offering an alternative to the unemployed and less well-off. Indeed, were LETS to grow in size, the moral commitment required of members would come into conflict with the growing financial interests at stake.     

Enforcement of Optimal Disclosure Rules in the Presence of Moral Hazard

Abstract

This paper analyzes the role of disclosure enforcement mechanisms (such as SEC enforcement teams and corporate governance systems) in directing the disclosure practices of managers when the information is used by shareholders to monitor the manager. The paper establishes a role for a disclosure enforcement system by showing that in its absence it is impossible to simultaneously induce a manager to adopt the desirable disclosure strategy and use the disclosure efficiently to monitor him. The paper shows how the effectiveness of the disclosure enforcement system and the cost of disclosure influence (i) the economic viability of the disclosure enforcement system, (ii) the disclosure policy of the manager, and (iii) the value of including stock options in the manager's compensation package.     

Addict Death

A bstract .   The full implications of the problem of the death of addicts have been ignored in the economic analysis of policy toward drugs. This article argues that drug dealers can, in theory, play an important role in sustaining the lives of addicts. This needs to be taken into account in policy enforcement and could lead to some radical changes to conventional policy proposals.     

File Sharing,Network Architecture,and Copyright Enforcement: An Overview

This paper provides an overview of Internet file sharing networks and explores the relationship between technological, economic, and legal aspects of file sharing. I chronicle the evolution of content sharing technology since the 1990s and examine the role of network architecture in a copyright holder's choice of enforcement strategy. I also describe how users and developers of file sharing networks have responded to various enforcement tactics. The target audience of this survey consists of economists and legal scholars interested in the technology and economics of file sharing networks and the enforcement of intellectual property rights on these networks. Copyright © 2013 John Wiley & Sons, Ltd.     

企业社会责任、企业声誉对员工满意度影响的实证研究

构建了企业社会责任、企业声誉和员工满意度的关系模型,以西北工业大学深圳地区和西安地区MBA班工程硕士学员为调研对象,欲探讨现阶段企业员工对企业社会责任的认知状况。通过构建结构方程模型,实证分析发现:企业社会责任对企业声誉有显著正向影响;企业声誉对员工满意度有显著正向影响;企业社会责任不直接对员工满意度产生影响,而是通过影响企业声誉后对员工满意度产生作用。     

The Interaction of Top Management Group,Stakeholder, and Situational Factors on Certain Corporate Reputation Management Activities*

abstract This study examines when a firm's members are most likely to promote and defend its reputation. Building on past research in impression management theory and the upper‐echelons perspective, I argue that firms facing increased visibility among different stakeholder groups will increase corporate reputation management activities towards those groups and decrease activities towards other groups. I further argue that top management group characteristics will moderate these relationships, suggesting that certain top management groups are more attuned to the situational needs of reputation management. A set of hypotheses are tested using pooled cross‐sectional time‐series data on a set of Fortune 500 companies. Results indicate that firms generally directed reputation management activities towards their more visible stakeholders. However, the type and extent of reputation management behaviour varied. Specifically, for firms whose top management groups were more highly educated or output oriented, highly visible situations with the media were more likely to be associated with a higher use of press releases. Moreover, those same firms devoted more resources to mass media advertising under situations of high consumer visibility compared to firms whose top management groups were less educated or throughput oriented.     

Environmental Governance of Enterprises and their Economic Upshot through Corporate Reputation and Customer Satisfaction

Drawing on resource‐advantage and signalling theories, we investigate two mechanisms, namely corporate reputation and customer satisfaction, by which the environmental governance of enterprises can benefit their economic performance. Based on secondary data from the 500 largest US enterprises compiled from multiple sources, our findings contribute to the literature by establishing the link between corporate reputation and green reputation. We also establish the economic performance paths of environmental governance via corporate reputation and customer satisfaction. This study expounds on why ‘green’ matters and identifies the performance roles of two corporate strategic resources extractable from the environmental governance of enterprises. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment     

Theory, Reality, and Performativity in Markets

A bstract .   The purpose of this article is to analyze the relation between scientific knowledge in the form of theories and the world that such theories are about. The focus is on market theories. I argue that everyday knowledge, conceptualized using the notion of "lifeworld," is the bedrock of scientific knowledge. I also make two distinctions, one between types of markets and one between principles of order in markets. There are two different types of markets, fixed-role markets and switch-role markets, and no existing theory can be used to explain both of them. In fixed-role markets, such as a producer market of garments, actors are identified as either sellers or buyers. In switch-role markets, such as the stock exchange market or currency market, actors are not identified with one role. The other distinction is between standard and status markets. In a status market, order is maintained because the identities of actors on both sides of the market are ranked according to status, which is a more entrenched social construction than the commodity traded in the market. In a market characterized by standards, the situation is reversed: the commodity is a more entrenched social construction than the social status of actors in the market. These distinctions are the backdrop of my analysis of the idea that markets are performed. It is concluded that the performativity approach is useful today for analyzing switch-role markets. A further conclusion is that neoclassical economic theory can be used in understanding switch-role markets, but not fixed-role markets.     

Do Family Firms Have Better Reputations Than Non‐Family Firms? An Integration of Socioemotional Wealth and Social Identity Theories

We draw from socioemotional wealth and social identity research to develop a theory on reputational differences among family and non‐family firms. We propose that family members identify more strongly with their family firm than non‐family members do with either a family or non‐family firm. Heightened identification motivates family members to pursue a favourable reputation because it allows them to feel good about themselves, thus contributing to their socioemotional wealth. We hypothesize that when the family's name is part of the firm's name, the firm's reputation is higher because family members are particularly motivated for their firm to have a better reputation. Family members also need organizational power to pursue a favourable reputation; thus, we hypothesize that the level of family ownership and family board presence should be associated with more favourable reputations. We find support for our theory in a sample of large firms from eight countries with disparate governance systems and cultures.     

Economists' Opinions of Economists' Work

A bstract .   Economists' credibility has been waning in recent years. Critics usually cite the profession's preoccupation with abstract reasoning and its focus on seemingly irrelevant topics that hold little interest for individuals outside the discipline. While economic science has enormous potential for improving living standards, the profession's adverse reputation is indicative of a discipline seemingly void of any social contribution. This article presents the results of a recently conducted survey of professional economists. The survey was undertaken to ascertain economists' opinions of their own professional work, including the progress of economic research, its usefulness for society, and factors that determine the publication of that research.     

National Values and Economic Growth

A bstract    Using data on economic values and attitudes for various nations from the World Value Study, I show that the strength of values associated with market success does not appear to have a significant impact on the rate of economic growth in a sample of developing and developed market economies. I also show that such values do not seem related to the economic system and have an ambiguous relation to the overall level of economic development. These negative results suggest that, contrary to common belief, knowledge about such values does not seem very useful in helping us understand economic growth or differences in levels of economic development or economic systems in various countries.     

WHAT'S IN A SIGN ? TRADEMARK LAW AND ECONOMIC THEORY

Abstract.  The aim of this paper is to summarize the extant theory as it relates to the economics of trademark, and to give some suggestions for further research with reference to distinct streams of literature. The proposed line of study inevitably looks at the complex relationship between signs and economics.
Trademark is a sign introduced to remedy a market failure. It facilitates purchase decisions by indicating the provenance of the goods, so that consumers can identify specific quality attributes deriving from their own, or others', past experience. Trademark holders, on their part, have an incentive to invest in quality because they will be able to reap the benefits in terms of reputation.
In other words, trademark law becomes an economic device which, opportunely designed, can produce incentives for maximizing market efficiency. This role must, of course, be recognized, as a vast body of literature has done, with its many positive economic consequences.
Nevertheless, trademark appears to have additional economic effects that should be equally recognized: it can determine the promotion of market power and the emergence of rent-seeking behaviours. It gives birth to an idiosyncratic economics of signs where very strong protection tends to be assured, even though the welfare effects are as yet poorly understood. In this domain much remains to be done and the challenge to researchers is open.     

创业投资声誉、创业板IPOs初始收益和长期业绩

以我国创业板市场IPOs为样本,引入创业投资声誉对IPO折抑价理论模型进行修正,采用多元回归和两阶段回归方法,实证检验创业投资声誉与创业板IPOs初始收益和长期业绩之间的关系后发现:我国创业板市场中创业投资核证监督作用微弱;创业投资声誉对IPOs初始收益无显著影响;创业投资声誉对IPO后企业长期业绩有显著正效应。本文的研究结论对创投声誉下的创业板发行制度建设有积极作用。     

Optimal law enforcement when victims are rational players

The economic analysis of crime usually views a victim as a passive party whose role is limited to suffering harm. In this paper, we extend the economic theory of law enforcement by modeling victims as an active party in criminal deterrence. First, they may take some precautions to avoid victimization. Second, they may or may not report their victimization. The lack of reporting weakens law enforcement and criminal deterrence by reducing detection rates. This suggests that victims could be encouraged to report by being paid a compensation. Nevertheless, compensating victims certainly reduces precaution. We argue that such effect never offsets the gains obtained in terms of criminal detection and apprehension. Received: December 1998 / Accepted: January 2000     

Licensing and innovation with imperfect contract enforcement

Licensing promotes technology transfer and innovation, but enforcement of licensing contracts is often imperfect. We model contract enforcement as a game with perfect information but probabilistic enforcement and explore the implications of weak enforcement on the design of licensing contracts, the conduct of firms, and market performance. An upstream firm develops a technology that it can license to downstream firms using a fixed fee and a per‐unit royalty. Strictly positive per‐unit royalties maximize the licensor's profit if competition among licensees limits joint profits. With imperfect enforcement, the licensor lowers variable royalties to avoid cheating. Although imperfect contract enforcement reduces the profits of the licensor, weak enforcement lowers prices, increases downstream innovation, and in some circumstances can increase total economic welfare.     

Conferences as Venues for the Configuration of Emerging Organizational Fields: The Case of Cochlear Implants

abstract    I examine how conferences can be occasions for the configuration of emerging organizational fields by describing three that I attended during the development and commercialization of cochlear implants. These conferences served as venues for a variety of activities to unfold, ranging from the exchange of information to the enactment of technological possibilities. A full appreciation of conferences as holistic events, I argue, offers us a particularly valuable entry point into gaining a deeper understanding of how new fields are assembled in real time.     

Surplus Seeking and Rent Seeking Through Back-Door Deals in Mainland China Price Control and Central Planning Fix Prices Below Market Clearance, Creating a Contrived Surplus

Abstract . When the selling price is set below the market-clearing level through government price control, the price gap represents a contrived surplus transferred from the producer to the buyer. But, due to incomplete assignment of property rights to this contrived surplus and/or high enforcement costs, contrived surplus is often a non exclusive income subject to competitive capture. Exchange of favors between buyers and sellers to gain preferential access to rationed goods has become a dominant method of surplus seeking (cf. rent seeking) in the People's Republic of China. But since only well-placed individuals in the distribution channels for such goods and officials who control access to positional goods have favors to exchange, these exchanges sabotage government efforts to achieve fairer access to scarce goods. And since favors involve illegally diverted resources, such back-door deals threaten the integrity of government. Furthermore, exchange of favors fosters particularistic values which hinder modern economic development.     

金融中介机构声誉对IPO公司财务报告舞弊的影响——以万福生科为例

随着承销商等金融中介机构的主体地位不断提高,金融中介机构声誉在IPO市场中的作用越来越重要。在金融市场财务报告舞弊案频出的背景下,本文以万福生科财务报告舞弊案为案例,归纳了相关金融中介机构的失职行为,分析了我国金融中介机构声誉机制在上市公司财务报告舞弊过程中监督约束作用的有效性,揭示了金融中介机构声誉机制失效的原因。研究发现,我国金融中介机构声誉机制发展得并不完全,即使有着较高声誉的金融中介机构在我国证券市场中仍没有足够的激励促进其产生较高质量的监管行为,难以利用声誉机制规范金融中介机构行为,提高公司财务信息质量。本文为如何提高金融中介机构声誉机制的有效性,并借助金融中介机构声誉规范和监督上市公司财务行为提供了参考与借鉴。     

Complexity, Identity and the Value of Knowledge-intensive Exchanges

ABSTRACT Researchers studying the structural embeddedness of firms in networks have focused on its effects on economic behaviour, strategic action and competitive behaviour, but network embeddedness as a source of firm value per se has been largely overlooked. I argue that neglecting the network context in which firms are embedded leads to an incomplete understanding of the value of the firm. I seek to understand how a focal firm's structural embeddedness network characteristics function as mechanisms that elucidate the value of its knowledge‐intensive exchanges. This paper presents a framework that identifies two processes of knowing exchange value, namely knowing through a learning bandwagon and knowing through a fad bandwagon. I argue that knowing value as a learning bandwagon is enabled by the normative and cognitive proximity of exchange partners, and that this is facilitated by the embeddedness of the focal firm in dense network structures. Knowing value as a fad bandwagon is based on a positional construction of the focal firm's status, which is determined by the centrality of the focal firm's network partners in their corresponding networks. This is a ranking system based on positional network data, whose efficacy stems from the inability of firms to manipulate their network positions.