A Review of: “THE STAGES OF ECONOMIC GROWTH” A Non-Communist Manifesto By W. W. Rostow Cambridge University Press,New York, 1960 179 pp. Cloth ed. $3.75; paper ed. $1.45

History records that political economy received at least perfunctory attention in what were then engineering schools, over one hundred and thirty years ago. In 1827, Valentine B. Horton, who was later to become a Whig congressman and to make and lose a fortune, became “a professor of Moral Philosophy and Political Economy” at the American Literary, Scientific and Military Academy, the forerunner of Norwich University.¹ During the 1840s and ′50s, many engineering schools included a few lectures in moral philosophy and political economy in their programs. More formal and more enthusiastic promotion of economics on engineering campuses was evident under the aegis of Francis Amasa Walker, a noted economist and statistician, who, after service at the Sheffield School at Yale, became president of Massachusetts Institute of Technology in the early l88Os. Under his guidance, and that of Davis R. Dewey, who became an assistant professor of Economics and Statistics at M.I.T. in 1888, economics began to flourish on at least one engineering campus.     

The economics of earnings manipulation and managerial compensation

This article examines managerial compensation in an environment where managers may take a hidden action that affects the actual earnings of the firm. When realized, these earnings constitute hidden information that is privately observed by the manager, who may expend resources to generate an inflated earnings report. We characterize the optimal managerial compensation contract in this setting, and demonstrate that contracts contingent on reported earnings cannot provide managers with the incentive both to maximize profits and to report those profits honestly. As a result, some degree of earnings management must be tolerated as a necessary part of an efficient agreement.     

THE LINKS BETWEEN TRADING TIME AND MARKET VOLATILITY

In this paper the impact of reduced New York Stock Exchange trading hours on stock return variance and trading volume is examined. Trading hours were reduced during the summers of 1945–52 by eliminating Saturday trading and in parts of 1968 by eliminating Wednesday trading. For the most part, these closings do not affect weekly volume or stock return variance. However, volume and variance are shifted from periods within the week with reduced trading hours to days following market closings. This is consistent with reduced trading temporarily reducing the transmission of private information into market prices.     

The impact of FDI through mergers and acquisitions on innovation in target firms

This paper analyzes the effects of cross-border mergers and acquisitions on innovation activities in target firms. The empirical analysis is based on survey and ownership data for a large sample of small- and medium-sized German firms. After controlling for endogeneity and selection bias, we find that foreign acquisitions have a large negative impact on the propensity to perform innovation activities and a negative impact on average R&D expenditures in innovative firms. Furthermore, innovation output, measured as product and process innovations, and the share of sales from product innovations, is not significantly affected by a foreign acquisition for a given amount of innovation efforts. Hence, the estimation results do not provide any evidence of significant technology transfer through foreign acquisitions in form of a higher innovation success.     

Antecedents of New Director Social Capital

Prior research shows that firms benefit from the social capital of their boards of directors but has not explored the antecedents of new director social capital. We argue that firms can attract directors with social capital by offering more compensation. We also argue that more complex firms (firms with a greater scale and scope of operations) are more attractive to such directors because of the greater experience and exposure that such directorships provide. Similarly, we argue that firms with high‐status directors on their current boards will be more attractive to directors with social capital. We analyse the social capital of new outside directors added to boards of semiconductor firms between 1993 and 2007. Surprisingly, we find no support for the hypothesis that higher compensation is associated with adding directors with high status or board ties. However, firm complexity is associated with the ability to add new directors who have social capital, and the status of current board members is associated with the ability to add new directors who also have high status.     

Do overweight and obese youth take longer to recover from injury?

The objective of the study was to examine the effects of overweight and obesity on times to recovery among Canadian youth who have suffered one or more types of injury. The data source was the 2002 Canadian Health Behaviour in School-Aged Children (HBSC) survey. The study population included 7266 youth in grades 6 through 10 sampled from all Canadian provinces and territories. Of these, 2831 students reported an injury event and were included in the analysis. Kaplan-Meier curves and hazard ratios (HR) were used to profile survival functions and estimate relative hazards for non-recovery from injury events among normal weight, overweight and obese youth. Youth who were obese and suffered a combined injury (broken bone and strain/sprain) took longer to recover (HR: 1.81, 95% CI 0.99-3.32) compared to normal weight youth. HR for injury recovery in obese youth were not significantly elevated for broken bones (1.15, 95% CI 0.61-2.19) and sprain/strains (1.17, 95% CI 0.73-1.85) in isolation. Obesity was associated with times for injury recovery among injured youth. If these findings are confirmed in other settings, clinicians providing an injury recovery prognosis may need to take into account BMI status and allow for extra recovery time for patients in this age range.     

Ecological services to and from rangelands of the United States

The over 300 million ha of public and private rangelands in the United States are characterized by low and variable precipitation, nutrient-poor soils, and high spatial and temporal variability in plant production. This land type has provided a variety of goods and services, with the provisioning of food and fiber dominating through much of the 20th century. More recently, food production from a rangeland-based livestock industry is often pressured for a variety of reasons, including poor economic returns, increased regulations, an aging rural population, and increasingly diverse interests of land owners. A shift to other provisioning, regulating, cultural, and supporting services is occurring with important implications for carbon sequestration, biodiversity, and conservation incentives. There are numerous goods and services possible from rangelands that can supply societal demands such as clean water and a safe food supply. The use of ecologically-based principles of land management remains at the core of the ability of private land owners and public land managers to provide these existing and emerging services. We suggest that expectations need to be based on a thorough understanding of the diverse potentials of these lands and their inherent limits. A critical provisioning service to rangelands will be management practices that either maintain ecological functions or that restore functions to systems that have been substantially degraded over past decades. With proper incentives and economic benefits, rangelands, in the U.S. or globally, can be expected to provide these historical and more unique goods and services in a sustainable fashion, albeit in different proportions than in the past.