Comparing region-specific sustainability assessments through indicator systems: Feasible or not?

Numerous indices help us to compare country and local performance in the field of human development, globalization and sustainable development. Obvious problems arise, such as data availability and data quality. A less obvious issue is that such sets and indices do not permit the inclusion of specific characteristics or discourses that are important in a country or region. This paper investigates the possibility of comparing regional sustainability assessments in four case studies, where the indicators vary from region to region, but the method of making the assessment is similar. The concepts of weak and strong comparability were used in this analysis. Comparability of sustainable development between different regions is not an issue of rigid comparison of indicator by indicator. It should take into account regional specifics. The resulting shift from strong to weak comparability should not be seen as a lessening of the quality of the assessment and decreasing comparability. Rather than focusing on individual indicators within frameworks that do not permit inclusion of regional developments, this approach allows to look at the broader picture of regional dynamics. It reveals specific regional weaknesses that need attention, and possible areas for building alliances between regions, thus creating a more sustainable Europe.     

Co-ordination and integration mechanisms to manage logistics processes across supply networks

Literature on supply chain management (SCM) emphasises the importance of co-ordination and integration mechanisms to manage logistics processes successfully across supply networks. This requires managers to (1) know the driver variables that must be addressed, since they determine how such processes can be designed and managed; and (2) understand how co-ordination and integration mechanisms interact with such variables and—as a consequence—with logistics processes. The paper addresses the second issue, as it tries to explain how logistics processes can be structured and controlled across supply networks by leveraging co-ordination and integration mechanisms, with consequences for strategic and operational choices for both the individual companies and the whole supply network. This issue has been investigated by analysing three case-studies of SCM interventions on logistics processes across different supply networks, involving central firms as well as several suppliers and customers.     

Endogenous fertility, international migration and growth

An endogenous growth model with heterogeneous agents and endogenous rates of fertility is developed to study the relationships between population growth, human capital, migration and economic development. A variety of patterns of migration, from the migration of the unskilled to the brain drain is considered, where the decision to migrate reflects the agents’ optimising behaviour. The analysis yields implications which accord with the empirical evidence on the relationships between demography and development. Macroeconomic policy can foster growth by influencing labour mobility through taxation and the provision of public goods such as social infrastructure, sanitation, environmental control and medical research that affect locational preferences and child quality. The author is grateful for the comments of an anonymous referee on an earlier version of the paper. The usual disclaimer applies.     

Optimal debt contracts and moral hazard along the business cycle

Summary. We analyze the Pareto optimal contracts between lenders and borrowers in a model with asymmetric information. The model generalizes the Rothschild-Stiglitz pure adverse selection problem by including moral hazard. Entrepreneurs with unequal abilities borrow to finance alternative investment projects which differ in degree of risk and productivity. We determine the endogenous distribution of projects as functions of the amount of loanable funds, when lenders have no information about borrowers ability and technological choices. Then, we embed these results in a dynamic competitive economy and show that the average quality of the selected projects in equilibrium may be high in recessions and low in booms. This phenomenon may generate (a) multiple steady states, (b) a smaller impact of exogenous shocks on output relative to the full information case, (c) endogenous fluctuations.Received: 11 June 2001, Revised: 17 June 2003, JEL Classification Numbers: A10, G14, G20, E32.Correspondence to: Pietro ReichlinPietro Reichlin acknowledges financial support from MURST and Paolo Siconolfi acknowledges financial support from the GSB of Columbia University.     

Social welfare,parental altruism,and inequality

When individuals have heterogeneous and persistent degrees of one‐sided parental altruism, inequality may grow large and standard social welfare criteria are problematic. If the planner selects Pareto optimal allocations based on some target level of consumption inequality, the solution implies an aggregation of individuals' utilities that is strongly asymmetric and biased toward the less altruistic dynasties. If instead, the planner uses a symmetric utilitarian criterion, the solution is likely to generate a large degree of long‐run inequality (even relative to laissez‐faire competitive equilibria), it can only be decentralized with negative estate taxes or lower bounds on bequests, and it is time‐inconsistent.     

Schumpeterian Growth with Productive Public Spending and Distortionary Taxation

Schumpeterian growth theory eliminates the scale effect by positing a process of development of new product lines that fragments the aggregate market in submarkets whose size does not increase with population or the size of the workforce. This entails the sterilization of the growth effects of selected fiscal variables. This insight is applied to shed new light on the role of distortionary taxes on consumption, household labor and assets income, corporate income, and of productive public spending. The framework allows the identification of which of these fiscal variables have permanent (steady‐state) growth effects, and which ones have only transitory effects. It also allows the transitional dynamics to be solved analytically and thus the analysis of the welfare effects of revenue‐neutral changes in tax structure. It is found that replacing taxes that distort labor supply with taxes that distort saving/investment choices raises welfare, and the intuition behind this surprising result is discussed.     

Fragility of competitive equilibrium with risk of default

We study competitive equilibrium in sequential economies under limited commitment. Default induces permanent exclusion from financial markets and endogenously determined solvency constraints prevent debt repudiation. Our analysis shows that such an enforcement mechanism is essentially fragile, leading to equilibrium multiplicity. We accomplish this by establishing Welfare Theorems under a weaker notion of constrained efficiency, inspired by Malinvaud, corresponding to the absence of welfare improving feasible redistributions over finite (though indefinite) horizons. A Negishi?s Method permits to show that, for any arbitrary value of social welfare in between autarchy and constrained optimality, there exists an equilibrium attaining that value. Thus, competitive equilibria might differ dramatically in terms of volumes of trade, asset price volatility, individuals? ability to insure against idiosyncratic risk and consumption inequality.     

Italian Consumers’ Preferences for Pasta and Consumption Trends: Tradition or Innovation?

Abstract

The aim of this study is to know Italian consumers’ preferences for Pasta and consumption habits. Food culture and concerns about food security and product innovation were investigated. A sample of Italian consumers was interviewed. Consumer’ profile, motivations and purchasing behavior were described. Relationships between observed variables and the latent constructs that explain the preferences were highlighted. There is asymmetric information between consumers and producers. Consumers believe Pasta is made with Italian grains, and therefore it is healthy and safe, although that’s not always the case. Intrinsic and extrinsic high quality, which derives from growing and production technologies, is required.     

Global Innovation in MNCs: The Effects of Subsidiary Self‐Determination and Teamwork*

The ability of multinational corporations (MNCs) to leverage their innovation competencies across globally dispersed subsidiaries is an increasingly valuable source of competitive advantage. As multinational enterprises turn to foreign subsidiaries for research and development (R&D) and product development, questions arise regarding the most effective organizational structures for global innovation. Although organizational conditions that satisfy the needs for self‐determination and teamwork have long been considered intrinsic motivators, past research has not analyzed the consequences of intrinsic motivators on global innovation. The basic research question is this: In globally dispersed subsidiary R&D units, what organizational conditions and motivators are associated with the highest knowledge output? A sample of 275 globally dispersed R&D subsidiaries were studied from 1995 to 2002. Data were collected from a postal survey, field and telephone interviews, and secondary sources. Subsidiary self‐determination and teamwork were found to have a significant effect on knowledge output, as objectively measured by patent citations. Subsidiary self‐determination on inputs such as sourcing and hiring, and self‐determination on outputs such as marketing and product development, emerged as positive determinants of knowledge generation in R&D subsidiaries. In addition, interteam cooperation and intrateam cooperation were significant determinants of knowledge generation by subsidiaries. These findings highlight the importance of self‐determination, teamwork, and cooperation to knowledge creation and innovations. Managers face the tough challenge of how to motivate globally dispersed knowledge workers to conduct research that will generate knowledge and will strengthen firm performance. The results provide theoretical and practical insights on how MNCs can leverage their innovation competencies across foreign R&D subsidiaries.