Environmental policy and lobbying in small open economies

This paper analyzes consequences of lobby group activity for policy outcomes in economies with transboundary pollution and international environmental policies. International environmental policies are here characterized as pollution taxes determined in a negotiation between two countries. The optimal pollution taxes are characterized and comparative statics are carried out to increase the understanding of mechanisms underlying pollution taxes in the specified setup. It is found, among other things, that the presence of local lobbying may decrease, as well as increase pollution taxes - depending on, e.g. an assumption of symmetry.     

Bridging the transatlantic publishing gap: How North American reviewers evaluate European idiographic research

To a large extent there exists a gap between European and American management research reflecting the differences between nomothetic and idiographic research approaches. The paper investigates the logic used by North American reviewers when evaluating European papers based on an idiographic case study approach. Our analysis enables us to uncover the criteria used by North American reviewers and to relate them to the criteria suggested for idiographic research. We also discuss the role of writing style and structure in the North American reviewers' assessment of idiographic papers. Based on our analysis we make suggestions to editors, reviewers, and authors of idiographic papers, in order to enhance the probability for publication of idiographic, qualitative and processual research and thus to bridge the transatlantic gap.     

Happiness of economists

We study the importance of economists’ professional situation towards their life satisfaction based on a unique survey of mostly academic economists. On average, economists report to be highly happy with life. Satisfaction is positively related to spending more time on doing research. The lack of a tenured position decreases satisfaction. However, the extent to which the uncertainty created by the tenure system affects satisfaction varies with the contract terms. The effect is stronger if the contract expires in the near future or cannot be extended. Publication success has no effect if it is controlled for academic rank and the contract duration. The finding suggests that publications are rather a means to an end, for example, to acquire a tenured position. While the perceived level of external pressure also has no impact, the perceived change of pressure in recent years is positively related to economists’ life satisfaction. An explanation is that economists have accepted a high level of pressure when entering academia but are not willing to cope with the recent increase.     

Cooperation or competition in R&D when innovation and absorption are costly

This article analyzes cost-reducing R&D investments by firms that behave non-cooperatively or cooperatively. Firms face a trade-off between allocating their R&D investments to innovate or to imitate (absorb). We find that the non-cooperative behavior not only induces more imitation (absorption) but also, for the most part, more innovation investments. Only the cooperative behavior, however, ensures that R&D investments are allocated efficiently to innovation and to imitation (absorption) in the sense that any given amount of industry-wide cost reduction is obtained for the minimum overall R&D costs.     

Segmented labour markets and the estimation of wage functions

This paper uses a stratified random sample of private sector employees to estimate wage equations for both the male labour market as a whole and six ‘segments’ of the labour market, segement which are defined with respect to the industry and size characteristics of the employing establishmen. Highly conventional results are obtained when wage equations are estimated for the male labour market as a whole, or within two segements, comprising almost half the survey population. However, one can reject conclusively the hypothesis that the same estimating equation is appropriate for modelling wage determination in all segments and if a ‘human capital’ (HK) model is, within segements, tested against more appropriate alternative hypotheses for wage determination using the Davidson and Mackinnon (1981) methodology for the testing of non-nested hypotheses, the conclusion is that one should reject the HK specification and not reject the alternative.

It is therefore argued that the disaggregation of labour market data reveals differences in the wage determination process that are not consistent with the view that labour markets are ‘dualistic’ but are consistent with the view that are segmented.     

Hedonic price equilibria, stable matching, and optimal transport: equivalence, topology, and uniqueness

Hedonic pricing with quasi-linear preferences is shown to be equivalent to stable matching with transferable utilities and a participation constraint, and to an optimal transportation (Monge–Kantorovich) linear programming problem. Optimal assignments in the latter correspond to stable matchings, and to hedonic equilibria. These assignments are shown to exist in great generality; their marginal indirect payoffs with respect to agent type are shown to be unique whenever direct payoffs vary smoothly with type. Under a generalized Spence-Mirrlees condition (also known as a twist condition) the assignments are shown to be unique and to be pure, meaning the matching is one-to-one outside a negligible set. For smooth problems set on compact, connected type spaces such as the circle, there is a topological obstruction to purity, but we give a weaker condition still guaranteeing uniqueness of the stable match.     

Collaboration risk management in IT-enabled asymmetric partnerships: Evidence from telestroke networks

Information technology (IT)-enabled partnerships can unlock previously unattainable value propositions between organizations that have resource, capability, and other asymmetries by allowing larger organizations access to niche and local resources while providing smaller organizations access to enhanced resources and capabilities. However, recent studies have shown that many IT-enabled asymmetric partnerships often fail because the organizations do not effectively manage the involved collaboration risks. Most organizations focus on the strategic aspect of whether partners behave cooperatively or competitively, while paying scant attention to the operational aspect of bringing together partner contributions through coordination. To examine this problem, we report on a case study of two hub-spoke networks that used telemedicine to facilitate expertise sharing and decision making about stroke treatment at emergency departments in rural hospitals (spokes) based on information exchanges with remote neurologists at academic medical centers (hubs). As a result, we contribute to the inter-organizational information systems literature by explaining how organizations in IT-enabled asymmetric partnerships manage collaboration risks. We demonstrate how partners in such relationships perceive and approach strategic cooperation and operational coordination risks differently. We also explain how collaboration interactions change over time as the partners manage risks based on needs and resource endowments. Drawing on these findings, we provide guidance to organizations on how to manage sustainable IT-enabled asymmetric partnerships in general, and telestroke networks in particular.     

Predation and mergers: Is merger law counterproductive?

This paper extends the literature on predation and mergers to a multi-firm setting. Two new arguments why predation is rational when a merger is an alternative are provided. First, predation is less prone to the free-rider problem, since mergers concentrate the costs of eliminating a rival with one firm, whereas predation allows the costs to be spread out. Second, predation can be profitable since it limits the negative effects of the bidding competition for the prey. It is also shown that a restrictive merger policy might be counterproductive by “helping” predators avoid the disadvantageous bidding competition for the prey.     

HOW TO VALUE THE POORER PROSPECTS OF YOUTH IN THE EARLY 1990s?

Young workers in the 1990s can expect greater economic insecurity, as well as lower average earnings, compared to older workers, or compared to the youth of previous decades. The cost of greater insecurity depends upon an individual's probability of unemployment, marginal utility of income gains/losses and the extent to which individuals can smooth consumption over time by borrowing and drawing down assets. Since unemployment insurance cutbacks and higher unemployment have increased the risk exposure of youth, changes in the expected value of their income may understate utility losses as measured by the change in certainty equivalent income.
This paper uses a behavioural microsimulation model to compare the impacts of 1971 and 1994 unemployment insurance legislation and unemployment rates in Canada. It calculates both the expected value of income changes and, using a Stone-Geary utility function, the change in inequality of well-being (as measured by certainty equivalent income) for youth and for prime age workers. Both calculations reveal that youth were disproportionately affected by Canada's changing labour market environment. Very few youth have enough assets to finance consumption during spells of unemployment.     

Cross-border acquisitions and taxes: efficiency and tax revenues

Abstract .  We develop a theoretical oligopoly model to study how international differences in profit and capital gains taxes affect foreign acquisitions. Reductions in foreign profit taxes tend to trigger inefficient foreign acquisitions, while reductions in foreign capital gains taxes may trigger efficient foreign acquisitions. Foreign acquisitions can increase domestic tax revenues even when profit taxes are evaded. The reason is that bidding competition between foreign firms ensures that all benefits from the acquisition, including tax advantages, are captured by a domestic seller paying capital gains taxes. Tax code issues, such as the treatment of goodwill, are shown to affect the pattern of foreign acquisitions.