The effect of entry on R&D networks

We investigate the effect of potential entry on the formation and stability of R&D networks considering farsighted firms. The presence of a potential entrant often alters the incentives of incumbents to collaborate. Incumbent firms may form an otherwise undesirable collaboration to deter entry of a new firm. Moreover, an incumbent may refrain from establishing an otherwise desirable collaboration, expecting to form a more profitable link with the entrant. Finally, potential entry may lead an inefficient incumbent to exit the market. Welfare analysis shows market and social incentives to be often misaligned. We propose a subsidy scheme that encourages welfare‐improving entry.     

The Role of Institutional Uncertainty for Social Sustainability of Companies and Supply Chains

Global sourcing largely occurs from so-called emerging markets and developing economies (EMDEs). In these contexts, substantial leverage effects for sustainability in supply chains (SCs) can be expected by reducing adverse impacts on society and minimising related risks. For this ethical end, an adequate understanding of the respective sourcing contexts is fundamental. This case study of South Africa’s (SA) mining sector uses institutional theory and the notion of institutional uncertainty to empirically analyse the challenges associated with establishing social sustainability. The case study research is informed by 39 semi-structured interviews with top management representatives and various state and non-state decision makers in SA. Our findings suggest that (social) sustainability in the institutional field is mainly shaped by the Social and Labour Plan institution, induced by state actors and mining companies’ practices. However, four weakening factors were identified that adversely affect this regulative institution, drive institutional uncertainty and allow for mining companies’ gradual decoupling. Contrastingly, complementing pressures of non-state actors limit institutional uncertainty and push toward mainstreaming the stipulations of the institution. This study contributes to the business ethics literature by providing an in-depth exploration of institutional uncertainty’s drivers and barriers within an upstream SC setting and shedding light on multiple actors’ interplay and relevance in sector-wide sustainability. The findings are condensed into three main propositions as well as an analytical framework as a basis for follow-up research. This case study helps practitioners understand and manage complexity that results from actor plurality and institutional uncertainty in EMDEs.

     

Misreporting of Government Transfers: How Important Are Survey Design and Geography?

Recent studies linking household surveys to administrative records reveal high rates of misreporting of program receipt. We use the FoodAPS survey to examine whether the findings of these studies of general household surveys using one or two states generalize to a survey with a narrow focus and across many states. First, we study how reporting errors differ from other surveys. We find a lower rate of false negatives (failures to report true receipt) in FoodAPS, likely partly due to the shorter recall period of FoodAPS. Misreporting varies with household characteristics and between interviewers. Second, we examine geographic heterogeneity in survey error to assess whether we can extrapolate from linked data from a few states. We find systematic differences between states in unconditional error rates but no evidence of substantial differences conditional on common covariates. Thus, extrapolating error rates across states may yield more accurate receipt estimates than uncorrected survey estimates.     

Analysis of rural development policy networks in Greece: Is LEADER really different?

This paper presents an application of quantitative network analysis. It examines rural development projects with respect to their structural and politico-administrative dimensions, including power relations, conflicts, multifunctionality and intersectorality. The network structures and relations of comparable IPRD and LEADER projects are analyzed. The LEADER project network is shown to be less hierarchical than the IPRD project network, although the LEADER network is not characterized by significantly simpler procedures or clearer policy content than the IPRD network. Information and contact are significantly greater, and conflict density is significantly lower in the LEADER network. Administrative intersectorality is higher in the IPRD project, while the multidisciplinarity and the multifunctionality are higher in the LEADER project. However, the LEADER project is not perceived as delivering its objectives to a greater extent than the IPRD project. The implications for process-oriented evaluation are discussed.     

Boom‐and‐bust Cycles,External Imbalances and the Real Exchange Rate

When the current account balance and net capital outflows do not exactly offset each other, international payment flows arise. Payment flows into a country push the real exchange rate up, payment outflows push it down. This article uses a model of optimal consumption and portfolio choice to determine the factors that drive international payment flows during boom‐and‐bust cycles. It shows that during such episodes, capital inflows first exceed the deficit on current account, strengthening the currency. Later on, when the return on domestic capital reverts to its normal level, the current account recovers, yet the overall decline of the net foreign asset position provokes a fall of the real exchange rate even below its initial level. Case studies of countries experiencing rapid economic expansions followed by economic and financial meltdowns confirm the article's theoretical predictions.     

A new country risk index for emerging markets: A stochastic dominance approach

An optimal weighting scheme is proposed to construct economic, political and financial risk indices in emerging markets using an approach that relies on consistent tests for stochastic dominance efficiency. These tests are considered for a given risk index with respect to all possible indices constructed from a set of individual risk factors. The test statistics and the estimators are computed using mixed integer programming methods. We derive an economic, political and financial risk ranking of emerging countries. Finally, an overall risk index is constructed. One main result is that the financial risk is the leading contributor to sovereign risk in emerging markets followed by the economic and political risks.