A better way to innovate

Harvard professor Henry Chesbrough takes a look at leading-edge companies' latest moves to harvest ideas from outside and to benefit from sharing their own R&D with others--even with competitors.     

Forecasting employment : The role of forward-looking behaviour

Manufacturing output per head rose at an unprecedented rate in the UK in 1981/2, and conventional econometric relationships failed to forecast the associated falls in employment. In this paper we estimate manufacturing employment equations in which output expectations play a central role. These compare fabourably with alternative models, and are able to predict most of the large falls in employment over this period.     

On the faustmann solution to the forest management problem

This paper is concerned with optimal solutions to the forest management problem when future utilities are undiscounted. By examining asymptotic properties of such solutions, we find that (i) if the utility function is linear, then the Faustmann periodic solution is optimal; (ii) if the utility function is increasing and strictly concave, an optimal solution converges to the maximum sustained yield solution, which we characterize as a golden rule. These results may be viewed as a possible resolution to the debate in forestry economics about what constitutes an optimal policy in forest management.     

Evaluating the London 2012 Games’ impact on sport participation in a non-hosting region: a practical application of realist evaluation

In the literature on Olympic legacies and impacts, there is a dearth of materials that specifically address the issue of Olympic impact for non-hosting regions. The literature tends to deal with impacts at a national level, or at a hosting-city region level, neglecting in large part the degree to which benefits can be leveraged by non-hosting regions. A further limitation identified in the literature is a failure to engage in detailed formal evaluation of policy implementation where assertions of potential policy impact are based on untested assumptions. This study is intended to address both of these concerns. It presents an empirical, ‘bottom-up’ application of a Realist Evaluation framework to assess the impact of a policy initiative – Workplace Challenge – aimed at leveraging enhanced sports participation in a non-hosting region – Leicestershire – in the period leading up to the 2012 Games. In doing so, it seeks to identify which causal mechanisms worked within this particular context to produce the observed outcomes. The evaluation results demonstrate that the programme represented a positive approach to fostering regular engagement with sport and physical activities for some groups in some types of organisations, and that awareness and motivational factors associated with the London 2012 Games are, in this case, linked (albeit weakly) to an increase in sport and physical activity participation for specific groups taking part in the programme in particular organisational contexts.     

Management Guidance Pre‐ and Post‐Restatement

We examine whether the quality of restating firms’ management guidance differs in periods before and after restatement announcements. While characteristics of restating firms and the consequences of restatement have been a central topic in accounting and auditing research, the quality of management guidance around restatements is less well understood. We consider two competing characterizations of the link between management forecast accuracy and bias and restatement (an event that tends to signal poor financial controls): “Forecast–Opportunism Explanation” and “Forecast–Ability Explanation”. Under the Forecast–Opportunism Explanation, pre‐restatement weaknesses in financial controls enable managers to manipulate earnings toward forecasts and to meet or exceed opportunistically biased forecasts, and the post‐restatement strengthening of financial controls constrains opportunistic behavior. Under the Forecast–Ability Explanation, pre‐restatement weaknesses in financial controls impede managers’ ability to issue accurate forecasts, and post‐restatement improvements remove impediments so that the accuracy of forecasts improves; forecast bias remains unaffected. Evidence indicates that before a restatement, restating firms’ forecasts are more accurate and relatively more downwardly biased than control firms’ forecasts. Post‐restatement, restating firms have less accurate and less downwardly biased management guidance. Our overall results are consistent with the Forecast–Opportunism Explanation.     

The innovating region: toward a theory of knowledge-based regional development

This paper sets forth a model of knowledge-based regional development conceived as a set of multi-linear dynamics, based on alternative technological paradigms. Utilizing longitudinal data from a Swedish region, and international comparisons, four stages of development are identified: Inception, Implementation, Consolidation and Renewal. Innovation policy is created 'bottom-up' as an outcome of 'collective entrepreneurship' through collaboration among business, government and academic actors – the 'triple helix'. The key event is the creation of an entrepreneurial university, whether from an existing academic base or a new foundation, which takes initiatives together with government and industry to create a support structure for firm formation and regional growth. The result of these initiatives is a self-sustaining dynamic in which the role of academia and government appears to recede as industrial actors come to the fore and a lineage of firms is created. Nevertheless, as one technological paradigm is exhausted and another one is needed as the base for new economic activity, the role of academia and government comes to the fore again in creating the conditions for the next wave of innovation.     

Firm-specific information and the efficiency of investment

In the three-year period following stock market liberalizations, the growth rate of the typical firm's capital stock exceeds its pre-liberalization mean by an average of 4.1 percentage points. Cross-sectional changes in investment are significantly correlated with the signals about fundamentals embedded in the stock price changes that occur upon liberalization. Panel-data estimations show that a 10-percentage point increase in a firm's expected future sales growth predicts a 2.9- to 3.5-percentage point increase in the growth rate of its capital stock. Country-specific changes in the cost of capital drive changes in investment but firm-specific changes in the cost of capital do not.     

Racial Discrimination and Mortgage Lending

Looking at a sample of conventional fixed-rate mortgages, this paper examines whether lending practices are consistent with the competitive hypothesis that the racial and ethnic composition of the borrower??s neighborhood affects the contract rate charged only to the extent that these characteristics objectively influence the probability of the loan defaulting or prepaying. Our results, however, reject this hypothesis, showing instead that borrowers in predominantly black neighborhoods pay a significantly higher contract rate than is consistent with evidence of their behavior.