Citizen Participation in Governance

The existence of an effective means of citizen participation within public service decision-making forums will be one of the biggest challenges for public mangers in 2010. The establishment of systems which bring citizen representatives into the polity can provide unique opportunities for citizen inputs-one such system is the school governing body, made up of citizen, professional and political representatives. This article reports on an investigation into citizen participation within the governance of schools. It finds that while governing bodies provide the opportunity for citizen participation, citizens are not actively involved in school governance. A number of measures are recommended which may assist in enhancing the citizen governance role.     

Boards of Directors’ Self Interest: Expanding for Pay in Corporate Acquisitions?

Director compensation can potentially represent an ethical minefield. When faced with supporting strategic decisions that can lead to an increase in director pay, directors may consider their own interests and not solely those of the shareholders to whom they are legally bound to represent. In such cases, directors essentially become agents, rather than those installed to protect principals (shareholders) from agents. Using acquisitions as a study context, we employ a matched-pair design and find a statistically significant difference in outside director compensation between acquiring and control firms. Outside directors of acquiring firms earn more than twice as much as their counterparts in the matched-sample. S. Trevis Certo is an associate professor and Mays Research Fellow in the Mays Business School at Texas A&M University. He received his Ph.D. in Strategic Management from the Kelley School of Business at Indiana University. His research focuses on corporate governance (boards of directors, ownership structure, and CEO compensation), top management teams, initial public offerings (IPOs), and research methodology. Richard H. Lester is a clinical associate professor and Director of Academic Entrepreneurship Programs in the Mays Business School at Texas A&M University. He received his Ph.D. degree in Strategic Management from the Mays Business School at Texas A&M University. His current research interests focus on corporate governance, upper echelons and entrepreneurship. Catherine M. Dalton holds the David H. Jacobs Chair of Strategic Management in the Kelley School of Business, Indiana University. She also serves as Editor of Business Horizons, as Research Director of the Institute for Corporate Governance, and as a Fellow in the Randall L. Tobias Center for Leadership Excellence. She received her Ph.D. degree in Strategic Management from the Kelley School of Business, Indiana University. Professor Dalton's research is in corporate governance, with particular expertise in board composition, board leadership structure, executive and director compensation, and firms' ownership structures. Her research spans all types of organizations, including entrepreneurial firms, small businesses, large public corporations, and private organizations. Dan R. Dalton is the founding Director of the Institute for Corporate Governance, Dean Emeritus, and the Harold A. Poling Chair of Strategic Management in the Kelley School of Business, Indiana University. He is a Fellow of the Management in the Kelley School of Business, Indiana University. He is a fellow of the Academy of Management and an inaugural member of its Journals Hall of Fame. Professor Dalton is widely published, with over 280 articles in corporate governance, business strategy, law, and ethics. Additionally, his work has been frequently featured in the business and financial press including, Business Week, Wall Street Journal, Fortune, Economist, Financial Times, Boston Globe, Chicago Tribune, Los Angeles Times, New York Times, and the Washington Post. Professor Dalton regularly addresses public, corporate, and industry groups on corporate governance issues.     

Selective Acceptance and Inefficiency in a Two-Issue Complete Information Bargaining Game

This paper explores the effects of a “selective acceptance” rule on the outcome of two-issue negotiations. The alternating-offer game introduced here allows for the possibility that settlement may be reached on one issue while negotiation continues about the other. This model captures features of laws that are generally believed to increase efficiency. The analysis shows that if one issue is indivisible, there are inefficient subgame perfect equilibria with no Pareto-improving alternative equilibria. With opposing valuations, rapid communication guarantees inefficiency. These are unique examples of this strong form of inefficiency in an alternating-offer bargaining game with complete (and perfect) information. Journal of Economic Literature Classification Numbers: C72, J30.     

Labour Demand Adjustment: Does Foreign Ownership Matter?

This paper examines whether multinationals differ in their employment adjustment from domestic companies, using a panel of 5,544 Belgian firms observed between 1998 and 2005. More precisely, we estimate labour adjustment costs by worker and firm types. We propose a new flexible specification that takes into account the role of firm size in adjustment costs. Our results indicate that adjusting white‐collar employment is around half as costly for multinational firms (MNFs) as for domestic firms of the same size. The remaining differential in adjustment costs between MNFs and domestic firms might result, among other things, from multinationals' stronger bargaining power.     

Trade Liberalisation: The Effects of Free Trade Agreements on the Competitiveness of the Dairy Sector

In recent years, preferential trade agreements (PTAs), free trade agreements (FTAs) in particular, have proliferated while WTO negotiations have stagnated. This paper contributes to the literature on trade liberalisation and the agricultural sector by analysing the effects of FTAs on the competitiveness of the dairy sector across 76 countries and over a 20‐year period from 1990 to 2009. With a longitudinal econometric model, the results demonstrate that when a country has a revealed comparative advantage in the dairy sector, FTAs positively influence several indicators of competitiveness in the dairy sector, such as production, market share and trade balance. The results also indicate that multilateral FTAs are more beneficial than bilateral FTAs. There is strong empirical evidence that FTAs are more beneficial to developed countries than to developing countries. There is no statistical evidence to support the hypothesis about a relationship between FTAs and farm‐gate price.     

The Chinese born globals of the Zhejiang Province: A study on the key factors for their rapid internationalization

With the increased participation of emerging economies in the global economy, born globals (BGs) in emerging countries become significant players. However, researches on Chinese BGs are still very limited. The aim of this paper is to explore the key factors that influence the rapid internationalization of Chinese BGs and examine how these factors can explain the successful and quick integration of Chinese BGs into global market. Based on an Anglo-Saxon literature review, we identified six major factors explaining BGs’ rapid internationalization and compared them on two groups of Chinese SMEs (BGs and non-BGs) in an exploratory study. Based on the analysis of the exploratory study, we identified two key factors for the rapid internationalization of Chinese BGs, namely managers and networks. Then, we select four Chinese BGs and conducted a comparative case study in order to examine and understand the role of these two factors in their internationalization process. We conclude this paper with the contribution, implication, and limitation of our study, as well as the perspective for our future research.     

Cost effectiveness of a 92-gene assay for the diagnosis of metastatic cancer

Objectives:

To estimate the clinical and economic trade-offs involved in using a molecular assay (92-gene assay, CancerTYPE ID) to aid in identifying the primary site of difficult-to-diagnose metastatic cancers and to explore whether the 92-gene assay can be used to standardize the diagnostic process and costs for clinicians, patients, and payers.

Methods:

Four decision-analytic models were developed to project the lifetime clinical and economic impact of incorporating the 92-gene assay compared with standard care alone. For each model, total and incremental costs, life-years, quality-adjusted life-years (QALYs), incremental cost–effectiveness ratios (ICERs), and the proportion of patients treated correctly versus incorrectly were projected from the payer perspective. Model inputs were based on published literature, analyses of SEER (Surveillance Epidemiology and End Results) data, publicly available data, and interviews with clinical experts.

Results:

In all four models, the 92-gene assay increased the proportion of patients treated correctly, decreased the proportion of patients treated with empiric therapy, and increased quality-adjusted survival. In the primary model, the ICER was $50,273/QALY; thus, the 92-gene assay is therefore cost effective when considering a societal willingness-to-pay threshold of $100,000/QALY. These findings were robust across sensitivity analyses.

Conclusions:

Use of the 92-gene assay for diagnosing metastatic tumors of uncertain origin is associated with reduced misdiagnoses, increased survival, and improved quality of life. Incorporating the assay into current practice is a cost-effective approach to standardizing diagnostic methods while improving patient care. Limitations of this analysis are the lack of data availability and resulting modeling simplifications, although sensitivity analyses showed these to not be key drivers of results.