Price Rigidity in Turkey: Evidence from Micro Data

In this study we investigate the duration of consumer price spells and price change patterns for Turkey by employing a comprehensive micro price data covering around 6,000 items over four years. In detail, we analyze how long typical price spell lasts and we investigate the size, frequency, distribution and synchronization of price changes. Compared to advanced economies, a higher frequency of price changes is estimated. Findings suggest substantial heterogeneity among sub-groups in terms of frequency and synchronization indicators. The mixed evidence of both state and time-dependent pricing is also relevant for Turkey, an emerging market economy.     

Knowledge of campaign finance regulation reduces perceptions of corruption

We use an experimental survey design to measure how campaign finance regulation influences perceptions of political corruption and trust in politicians when citizens are exposed to information about regulation. Unlike most observational studies, results of this experimental study suggest that knowledge of campaign finance regulation substantially reduces citizens’ perceptions of corruption but has only limited effect on trust in politicians. Findings have crucial implications for public policy. At a time when public cynicism about politics is high, a significant reduction in perceptions of political corruption through successful dissemination of campaign finance regulation would be a boost to the legitimacy of democracies.     

When Feedback Interventions Backfire: Why Higher Performance Feedback May Result in Lower Self‐Perceived Competence and Satisfaction with Performance

In relative performance evaluation systems, appraisers may choose to adopt stricter or laxer evaluation criteria. When laxer (vs. stricter) criteria are used, higher absolute performance evaluations become easier (vs. harder) to achieve. Thus, each appraisee's absolute performance feedback and the mean of the distribution of absolute performance feedback are shifted upward (vs. downward). Yet, relative performance remains constant. When evaluation outcomes depend solely on relative performance, can the adoption of laxer (vs. stricter) criteria—leading to higher absolute performance feedback but no change in relative performance—influence appraisees’ satisfaction with performance? Despite the ubiquity of such systems in organizations, research has not addressed this question. This article points to an important gap between practitioners’ beliefs and research findings. We show that while most appraisers believe that higher absolute performance feedback will automatically result in more satisfaction with performance, the opposite may also happen. Specifically, we find that appraisees with a stronger (vs. weaker) chronic or contextual need to engage in social comparison are more satisfied with lower (vs. higher) absolute performance feedback. Overall, we demonstrate why and how feedback interventions in relative performance evaluation systems may backfire, and suggest a set of practical guidelines for maximizing appraisees’ satisfaction with performance in such systems. © 2015 Wiley Periodicals, Inc.     

Patent Breadth, Patent Life, and the Pace of Technological Progress

In active investment climates where firms sequentially improve each other's products, a patent can terminate either because it expires or because a non-infringing innovation displaces its product in the market. We define the length of time until one of these happens as the effective patent life, and show how it depends on patent breadth. We distinguish lagging breadth, which protects against imitation, from leading breadth, which protects against new improved products. We compare two types of patent policy with leading breadth: (1) patents are finite but very broad, so that the effective life of a patent coincides with its statutory life, and (2) patents are long but narrow, so that the effective life of a patent ends when a better product replaces it. The former policy improves the diffusion of new products, but the latter has lower R&D costs.     

Spirituality,Moral Identity,and Consumer Ethics: A Multi-cultural Study

Competitor pressure is one of the major reasons that a SME engages in environmentally friendly or damaging activities. Extant research has argued that environmental strengths and concerns have mirror opposite relationships with stakeholder antecedents as well as with performance outcomes. We suggest this argument does not reflect the reality. Building on stakeholder management and Red Queen theories, we hypothesize that environmental strengths and concerns have differential relationships with competitors–firm power exchange and financial performance for Chinese SMEs. Results of ten interviews, a pretest, and a large-scale field study indicate that competitors–firm power divergence has a positive relationship with environmental strengths, yet the link between this divergence and environmental concerns does not exist. Further, environmental strengths mediate the relationship between competitors–firm power divergence and financial performance of Chinese SMEs.     

A league of their own: services exporters – a developing country perspective

This paper provides a firm-level portrait of services exporters along with goods exporters in a developing country. Current findings of firm-level services trade literature suggest that the stylized facts of goods trade apply to services trade as well for a set of developed countries. This paper investigates if similar results hold for a developing country, Turkey, for the period 2003–2008. Most results lend support to the evidence found in the previous literature. However, the analysis of Turkish data shows that firms that export both goods and services are larger than those exporting goods or services only while multinationals that sell only goods are bigger than multinationals exporting both goods and services or those exporting only services.     

Determinants of hierarchical structure in industrial firms: an empirical study

The paper investigates implications of different theoretical models for hierarchical structure. A sample of 6,578 firms in the Brazilian manufacturing industry is considered and explanatory factors pertaining to structural characteristics, network technology, technological innovations, managerial innovations and incentive mechanisms are investigated. Important joint effects are detected for all groups of variables in partial contrast with the related previous literature. Moreover, one detects significant joint effect of the newly considered group of incentive variables. The evidence in terms of individual effects is largely consistent with the predicted effects from the theoretical literature.     

Heteroscedasticity of deviations in market bubble moments – how the goods and bads lead to the ugly

We conjecture that market bubbles may be the results of the interplay of Goods and Bads (toxic products) which develop through three interlocking moments – herding, swarming and stampeding, with deviations marked by heteroscedasticity. We use our stylized model of financial predation, the Consolidated Model of Financial Predation, and data we have accumulated through in-the-field eight-year research and the study of 30 years of U.S. market history in order to explore the foundations of market crises. We find that blind trust (or the positivity bias) and of the fear to miss out on an opportunity to enter/exit a market impacts the investors’ decisions to invest or retract. We show how markets are driven towards a make-or-break predatory dynamic that creates winners and losers due in part to weak regulations and identify a constant k that permeates market behaviours.     

Informality,public employment and employment protection in developing countries

This paper proposes an equilibrium matching model for developing countries’ labor markets where the interaction between public, formal private and informal private sectors are taken into account. Theoretical analysis shows that gains from reforms aiming at liberalizing formal labor markets can be annulled by shifts in the public sector employment and wage policies. Since the public sector accounts for a substantial share of employment in developing countries, this approach is crucial to understand the main labor market outcomes of such economies. Wages offered by the public sector increase the outside option value of the workers during the bargaining processes in the formal and informal sectors. It becomes more profitable for workers to search on-the-job, in order to move to these more attractive and more stable types of jobs. The public sector therefore acts as an additional tax for the formal private firms. Using data on workers’ flows from Egypt, we show empirically and theoretically that the liberalization of labor markets plays against informal employment by increasing the profitability, and hence job creations, of formal jobs. The latter effect is however dampened or even sometimes nullified by the increase of the offered wages in the public sector observed at the same time.