The Significance of Customer Base in the New Economy: Satisfaction and Perceptions of Success among Small Suppliers and Small Nonsuppliers1

Outsourcing of operations from large businesses to small business suppliers has become a prominent feature of the new global economy. This paper compares the perceived success and work satisfaction of small businesses that supply goods and services to other businesses compared with other small businesses. Small business suppliers and their customers may be engaged in a mutually beneficial relationship, or small suppliers may be disadvantaged as a result of the relationship. Using data from interviews with 715 small business operators, partial support was provided for the disadvantaged position. Suppliers had lower perceived business success compared with other small businesses when other variables were controlled. However, there was no difference in job satisfaction.     

The Effect of Tick Size on Price Clustering and Trading Volume

Proposals have been made for some stock exchanges to reduce the size of their trading tick in order to lower transactions costs and, as a result, attract more trading volume and firm listings. We investigate the impact of tick size on price clustering and trading volume when the minimum price change varies with price level. Controlling the firm specific variables, we find that a smaller trading tick tends to exacerbate price clustering. Furthermore, a reduction in tick size is more likely to increase trading volume if the shares are heavily traded. These results suggest that previous studies on other stock markets may have overstated the benefits of a smaller trading tick to traders.     

The New History of the Russian Peasantry

Books reviewed in this article:
Stephen Frank, Crime, Cultural Conflict and Justice in Rural Russia, 1856–1914
Judith Pallot, Land Reform in Russia 1906–1917: Peasant Responses to Stolypin's Project of Rural Transformation
Yanni Kotsonis, Making Peasants Backward: Agricultural Cooperatives and the Agrarian Question in Russia, 1861–1914
David Moon, The Russian Peasantry 1600–1930: The World the Peasants Made
Judith Pallot (ed.), Transforming Peasants: Society, State and the Peasantry, 1861–1930
Since the end of the 1970s, there has been an upsurge in writing on the Russian peasantry during the late nineteenth and early twentieth centuries and some of the most recent examples are discussed here. The work is characterized by its richness of new information and an extension of scholarship into new aspects of peasant economy, society and culture of the period. Much of this new work avoids detailed theorizing, presenting itself as a more grounded and complex understanding than provided by earlier, 'ideologically driven' Marxist and neo–populist approaches, while at the same time drawing on concepts introduced by J.C. Scott and others. This essay offers an account of this body of research and explores its implications for an understanding of the period in terms of class analysis and capitalist development.     

Praktische Erfahrungen mit dem AGB-Gesetz

Zusammenfassung Der Verfasser berichtet über die Erfahrungen der Verbraucherzentrale Baden-Württemberg, Stuttgart, mit der Verbandsklage nach § 13 des Gesetzes zur Regelung des Rechts der Allgemeinen Geschäftsbedingungen bis einschließlich 1979. Er erörtert die Parallelen und Unterschiede zum UWG-Verfahren und gelangt zu dem Ergebnis, daß die Angleichung des Verfahrens nach dem AGB-Gesetz an den UWG-Prozeß vom Gesetzgeber nicht im wünschenswerten Umfang vorgenommen wurde. Dies kann im Einzelfall zu erheblicher Rechtsunsicherheit führen, z. T. auch zu sachlich nicht optimalen Ergebnissen. Trotz dieser Kritik zu einzelnen Punkten hält der Verfasser das Gesetz im ganzen für einen wichtigen Fortschritt zu Gunsten des Verbrauchers. Insbesondere stellt die Verbandsklage in ihrer Ausgestaltung ein besonders wirksames Mittel dar, um die Beachtung der Vorschriften des Gesetzes zu gewährleisten.

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Practical experiences with the German Act on Standard Contract Terms

The German Act on Standard Contract Terms, in force since April 4, 1977, restricts the use of preformulated contract terms far beyond civil law. The Act enables consumer associations to bring collective action against unfair terms and thus to ensure the implementation of the act.The author describes the experiences of a consumer association, the Verbraucherzentrale Stuttgart, in actively using the new legal instrument. The author explains some details of such legal action which, though in many respects resembling action against unfair trade practices which is permitted to consumer organizations since 1975, also has some peculiarities of its own.The author comments on some legal and factual problems of the collective action. Among other things, he criticizes the intention of the legislator to have the exact wording of the whole unfair term put into the court decision. This will lead to problems in cases where the judgment is pronounced without any argumentation, which is possible in some circumstances of German civil law procedure, since in these cases, it is extremely difficult to find out what it was in the term that was judged unfair.Even though criticizing some details of the legislative regulation the author is of the opinion that collective action is a considerable progress in consumer protection. Such action, actively used by consumer associations, is an effective means of putting the new act into practice and of getting business to use only such general contract conditions which are not unfair in the sense of the law.

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Walter Stillner ist als Rechtsanwalt in D-7000 Stuttgart 1, Seestraße 104, von der Verbraucherzentrale Baden-Württemberg mit der Prozeßführung beauftragt.     

Random disturbances and the choice of exchange regimes in an intergenerational model

An overlapping generational model is used to derive the consumption demand for individuals of each generation under expected utility-maximizing behavior: these demand functions are used to derive macroeconomic equilibrium under fixed and flexible exchange rates. The standard aggregate results concerning the insulating role of flexible rates for real external disturbances and fixed rates for internal disturbances are shown. However, the variability of an individual's utility need not be the same as the variability of aggregate variables. It is shown that the form of the utility function and the sources of disturbances are crucial in determining which exchange regime is preferable.     

Investment Attractiveness of Afforestation in Canada Inclusive of Carbon Sequestration Benefits

Afforestation is one of several possible mechanisms available to sequester carbon and help reduce greenhouse gas concentrations. We have developed a spatial Monte Carlo-based simulation model, Canadian Forest Service—Afforestation Feasibility Model (CFS-AFM) to help assess the financial attractiveness of afforestation as a means of carbon storage in Canada. The model tracks five carbon pools and simulates costs and benefits of plantation investments. In this paper we simulate three afforestation scenarios that could be used in Canada; plantations using hybrid poplar, hardwoods, and softwoods with average growth rates of 14 and 6–7 m³/ha/year, respectively. The attractiveness of afforestation is driven by regional cost and plantation productivity variation and carbon price expectations. The results indicate that afforestation would be an attractive investment in many areas of the country at carbon prices of $10 per metric ton of CO₂ or higher. However, with a zero carbon price, very little afforestation would be financially viable. Thus, with low carbon price expectations, other co-benefits may be required to make afforestation more attractive to Canadian investors.     

Lessons from Japan: American and Japanese strategies and goals in the 1990s

This article recounts various Japanese business approaches touted in the 1980s as “Lessons from Japan” for U.S. managers. The logical expectation, given the sheer bulk of the literature, was that U.S. managers would become more “Japanese” in their business strategies and goals while the Japanese would have become more entrenched in their approaches. Questionnaire responses from 95 Japanese and 70 American firms suggest, however, that U.S. managers tend to make few shifts from the strategies and goals they emphasized in the 1980s. Meanwhile Japanese managers report that they expect to move toward more “American” business practices. © 1993 John Wiley & Sons, Inc.     

Protectionism and international banking : Sectorial efficiency, competitive structure and National policy

This paper deals with barriers to trade in services. More specifically, the paper deals with competition and its absence in the provision of international intermediation services by banks. Section 2 of the paper examines the substitutability of international trade and FDI (foreign direct investment) in the services sector as a basis for international competition. It also considers the overlap between commercial policy measures and regulations governing the entry and operations of foreign affiliates. Section 3 describes the types of restrictions imposed on foreign banks and evaluates their effects. Existing practices in some countries are outlined in the fourth section. The countries are the U.S., the U.K., Switzerland, Australia, Brazil and Taiwan. Section 5 evaluates competitive conditions in offshore banking centers, and compares them with conditions in onshore markets. The last section evaluates the costs and the benefits of an ‘open’ (free-trade) banking system. Such a system will tend to improve world welfare as well as the welfare of those countries who have a comparative advantage in international banking. The results are not clear with regard to the countries who have a comparative disadvantage in banking.     

CEO Power,Internal Control Quality,and Audit Committee Effectiveness in Substance Versus in Form

During the past decade, new regulations have been adopted to improve audit committee effectiveness. Prior research has generally provided evidence in support of these regulations and suggests that a more independent and expert audit committee is more effective. We posit that CEO power reduces or even eliminates the improvements in audit committee effectiveness resulting from independent and financially expert committee members. Thus, CEO power may result in an audit committee that appears effective in form but is not in substance. We construct a composite index for CEO power by combining ten CEO characteristics and employ the incidence of internal control weaknesses as a proxy for audit committee monitoring quality. Since all the firms in our sample have completely independent audit committees, we use financial expertise to examine the impact of CEO power on audit committee effectiveness. We find that, when CEO power is low, audit committee financial expertise is negatively associated with the incidence of internal control weaknesses. However, as CEO power increases, this association monotonically weakens. When CEO power reaches a sufficiently high level, this association is no longer negative. The moderating effect of CEO power on audit committee effectiveness is more prominent when the CEO extracts more rents from the firm through insider trading. Our results are not driven by the CEO's involvement in director selection. Our paper suggests that more expert audit committees in form do not automatically translate into more effective monitoring. Rather, the substantive monitoring effectiveness of audit committees is contingent on CEO power.