The quality of accounting information in politically connected firms

We document that the quality of earnings reported by politically connected firms is significantly poorer than that of similar non-connected companies. Our results are not due to firms with ex-ante poor earnings quality establishing connections more often. Instead, our results suggest that, because of a lesser need to respond to market pressures to increase the quality of information, connected companies can afford disclosing lower quality accounting information. In particular, lower quality reported earnings is associated with a higher cost of debt only for the non-politically connected firms in the sample.     

Managing low‐skill workers: a study of small UK food manufacturing firms

Low‐wage work is of growing significance in the UK. This article tests the model of the low‐skills equilibrium (LSE) through a study of 27 small firms in a sector, food manufacturing, widely identified as being in an LSE. Three hypotheses are tested. (1) There will be a single, fixed equilibrium. We find more variety, reflecting the specific circumstances of firms. (2) An equilibrium is sustained by weak support institutions and a product market dominated by low value‐added goods. The expectation about institutions is supported, but the product market permitted some, albeit weak, opportunities to escape the LSE. (3) Skills will be low, and workplace regimes will be characterised by work intensification. Some firms were developing employee skills. Work intensification was rare, reflecting the absence of Taylorisation and the importance of face‐to‐face relationships. Overall, some firms had the will to escape the LSE, but weak institutional support and a ready supply of labour substantially reduced the incentives to do so.     

The organisation of urban agriculture in Cape Town,South Africa: A social capital perspective

This article explores urban agriculture in Cape Town and its organisational forms. Based on a literature review of peer-reviewed articles and grey literature, it examines the state of linkages among urban farmers and various supporting organisations of urban agriculture. Moreover, it examines the coordination of activities among key supporting organisations. By analysing the roles of state and non-state actors and linkages, the article discusses implications for the development of urban agriculture. This article suggests that a lack of effective coordination of initiatives among supporting actors presents a significant pitfall in the development of urban agriculture. Furthermore, the failure of farmers to self-organise is identified as equally detrimental. Therefore, it calls for improved synergies between state and non-state actors involved to ensure that the gains of urban agriculture are enhanced.     

Survey of recent developments

The Indonesian economy is maintaining its momentum at a time of ongoing uncertainty in the global economy and slowing economic growth in China. Strong domestic demand saw output grow by 6.4% over the year to June, despite a steep fall in net exports. Inflation is safely within Bank Indonesia's target range, although food prices have increased relatively quickly. The current account deficit widened to 3.1% of GDP in the June quarter due to continued growth in imports and falling prices for commodity exports. The trade environment has deteriorated in 2012, and new divestment and domestic processing requirements are likely to further reduce investor interest in the mining sector.

President Yudhoyono has recently made several speeches calling for a ‘green growth agenda’. Some progress has been seen in slowing deforestation and in establishing mechanisms for facilitating payments to reduce emissions from deforestation, but loss of natural forests remains rapid. Carbon dioxide emissions from energy are growing quickly, stoked by increasing use of coal. The proposed 2013 budget continues to be heavily burdened by energy subsidies, which encourage over-consumption of fossil fuels. In most respects, therefore, the business-asusual trajectory of the Indonesian economy is unlikely to be particularly green.

A barrier to subsidy reform is its perceived unpopularity, including the threat of public protests such as those witnessed in March. To gauge current opinion we carried out a survey of Jakarta-based university students. The results indicated majority support for the removal of fuel subsidies, but some respondents said they would protest against fuel subsidy reductions, highlighting the politically sensitive nature of the issue.

Indonesia has witnessed booms in the coal and palm oil sectors in recent years, becoming the world's largest exporter of both commodities. We review the benefits from these two booms and the tensions between the development of these sectors and environmental goals. We also review the tourism sector, which remains relatively under-developed outside Bali. Tourism is a potential source of long-run growth that may be aligned with a green economy. The development of the sector would be aided by infrastructure improvements and a renewed focus on the conservation of natural assets.     

Import Protection Bias

Rodrik (1995) notes that trade regimes tend to be biased towards import protection, while the standard political economy models either yield no prediction on the bias of the trade regime or predict, counterfactually, a bias towards the export sector. This constitutes an important shortcoming in the political economy of trade literature. In this paper, the Grossman and Helpman (1994 ) “Protection for Sale” model is extended by adding government expenditure. This expenditure may be financed via a combination of tariff revenue and a distorting wage tax. In addition to the government expenditure, export subsidies need to be financed either via tariff revenue or a distorting wage tax. With this addition, plausible values of the model's parameters yield import protection bias.     

Corporate Social Responsibility in Supply Chains of Global Brands: A Boundaryless Responsibility? <Emphasis Type=Italic>Clarifications,Exceptions and Implications</Emphasis>

Corporate social responsibility (CSR) is increasingly becoming a popular business concept in developed economies. As typical of other business concepts, it is on its way to globalization through practices and structures of the globalized capitalist world order, typified in Multinational Corporations (MNCs). However, CSR often sits uncomfortably in this capitalist world order, as MNCs are often challenged by the global reach of their supply chains and the possible irresponsible practices inherent along these chains. The possibility of irresponsible practices puts global firms under pressure to protect their brands even if it means assuming responsibilities for the practices of their suppliers. Pressure groups understand this burden on firms and try to take advantage of the situation. This article seeks to challenge the often taken-for-granted-assumption that firms should be accountable for the practices of their suppliers by espousing the moral (and sometimes legal) underpinnings of the concept of responsibility. Except where corporate control and or corporate grouping exist, it identifies the use of power as a critical factor to be considered in allocating responsibility in firm–supplier relationship; and suggests that the more powerful in this relationship has a responsibility to exert some moral influence on the weaker party. The article highlights the use of code of conducts, corporate culture, anti-pressure group campaigns, personnel training and value reorientation as possible sources of wielding positive moral influence along supply chains.