Science and Corporate Strategy: A Bibliometric Update of Hounshell and Smith

Hounshell and Smith's Science and Corporate Strategy: DuPont R&D, 1902- 1980 is one of the most comprehensive business history books ever written. In addition, it highlights the important relationship between corporate strategy and R&D activities. The purpose of this current paper is to update the information on DuPont's R&D activities using secondary data and bibliometrics. Our findings are that DuPont underwent a series of dramatic shifts in their R&D efforts during the 1980s and into the 1990s. For example, there was a focus on life sciences, a concerted attempt to reduce R&D, and an endeavour to align R&D more with core businesses. Beyond the bibliometrics, we found that corporate performance and changes in the top management team may have precipitated these changes in R&D. The implications of such relationships are also discussed.     

The power of asymmetric unit root tests under threshold and consistent-threshold estimation

The asymmetric unit root tests of Enders and Granger (Journal of Business and Economic Statistics, 16, 304–11, 1998) are examined using consistent threshold estimation and the original two-step procedure. In contrast to earlier studies, the ability of the tests to jointly reject the unit root and symmetry hypotheses is examined, thus permitting a fuller analysis of the tests' properties. Whilst the threshold autoregressive test is found to have little power in either its consistent or original forms, the consistent momentum-threshold autoregressive test is found to exhibit high power against a range of plausible alternatives when using newly derived critical values.     

Efficiency in the NFL betting market: modifying and consolidating research methods

Modifying and consolidating previous research methods to generate more reliable estimates, some fairly weak evidence is found of inefficiency in the NFL betting market resulting from a bias favouring home underdog (against away favourite) teams. In contrast to previous research, no evidence is found that ‘momentum strategies’ generate significant returns in this market.     

The NBA and the influx of international basketball players

The determinants of salaries for professional athletes in the National Basketball Association (NBA) are examined to investigate how international athletes have fared relative to athletes trained in the United States. It is found that international basketball players were paid a large premium above other players of similar skills and characteristics for the 1996–97 and 1997–98 seasons, after which the premium disappeared. This temporary premium is likely attributable to a?‘winner's curse’?experienced by NBA teams before investing significant resources in scouting and evaluating international players.     

Problems of Emergency Arbitration

This paper explores ethical burdens facing the economics profession which are associated with epistemic features of economic practice. Economists exert power over those they purport to serve by virtue of epistemic asymmetry between themselves and others, i.e., the intellectual monopoly they enjoy over a vitally important body of knowledge. But they also face the problem of epistemic insufficiency, which implies that they may do substantial harm as they try to do good. The paper explores the ethical entailments of the epistemic features of economics, and argues that managing the ethical challenges requires a new field of inquiry, the field of professional economic ethics, and not just a code of conduct.     

Information Disclosure as Environmental Regulation: A Theoretical Analysis

Governments around the world are beginning to embrace a new form of environmental regulation – mandatory disclosure of information. While information disclosure programs appear to have an impact on subsequent firm behavior – often resulting in lower levels of pollution – little is known about the costs and benefits of these programs and whether or not they enhance social welfare. This paper presents a simple bargaining model where mandatory information disclosure is used to overcome a lack of information on the part of the public. We characterize the conditions under which information disclosure will lead to a reduction in emissions, and ultimately, the conditions under which it will enhance social welfare. Several extensions of the model are briefly explored, including the effect of two sources of pollution – only one of which is subject to information disclosure. This paper was prepared while V. Santhakumar was a Visiting Scholar at the Vanderbilt Center for Environmental Management Studies, Vanderbilt University.     

Does Libertarian Paternalism Reconcile Merit Goods Theory with Mainstream Economics?

In the wake of Musgrave's move to question the absolute hegemony of individual preferences for normative economics in the 1950's by propounding the existence of merit goods, a recent book by Thaler and Sunstein is now making a similar claim under the label of ‘libertarian paternalism’. This paper tackles the question of why the framework of libertarian paternalism has received a so much more friendly reception among economists than the theory of merit goods. The main reason is a better foundation, not only for the conditions under which paternalism may be justified but also for the tools that should be applied, utilizing transaction cost theory.     

Changes in the fiscal stance and the composition of public spending

We consider the impact of both cyclical and structural changes in the fiscal stance on public spending composition for a panel of EU countries, including individual components of public investment. We find that both cyclically induced and structural changes in the fiscal stance affect the composition of public spending, with fiscal tightening of both types increasing the relative share of investment and loosening favouring consumption expenditure. Of the components of public investment, infrastructure and redistribution respond to cyclical changes in the fiscal stance, while investment in hospitals and schools responds most clearly to structural changes.