The “Machine contribution” in the European scene

The long-term financing of social security faces considerable problems which give rise to the question whether wages can and should continue to serve as the only assessment basis for social security contributions. The calculation of, at least, the employers’ contributions on a broader value added based foundation seems to offer a plausible alternative: human labour is being replaced more and more by technology: its value added could be used for financing social security. What would be the economic effects of such a “machine contribution” on employment, competitiveness and growth?     

Satisfying convex risk limits by trading

A random variable, representing the final position of a trading strategy, is deemed acceptable if under each of a variety of probability measures its expectation dominates a floor associated with the measure. The set of random variables representing pre-final positions from which it is possible to trade to final acceptability is characterized. In particular, the set of initial capitals from which one can trade to final acceptability is shown to be a closed half-line . Methods for computing are provided, and the application of these ideas to derivative security pricing is developed.Received: May 2004, Mathematics Subject Classification (2000): 91B30, 60H30, 60G44JEL Classification: G10Steven E. Shreve: Work supported by the National Science Foundation under grants DMS-0103814 and DMS-0139911.Reha Tütüncü: Work supported by National Science Foundation under grants CCR-9875559 and DMS-0139911.     

Innovation strategy and the patenting behavior of firms

This paper investigates whether firms’ innovation strategies affect their patenting behavior, as measured by both the probability of having a patent portfolio and the number of active patents held. Three main dimensions of an innovation strategy are taken into account: the relative importance of basic research, applied research and development work in total R&D activities, the product or process orientation of innovation efforts, and the extent to which firms enter into collaborative R&D with other institutions. The major findings can be summarized as follows: (1) taking into account the various dimensions of an innovation strategy turns out to approximate the patenting behavior of firms better than the traditional Schumpeterian hypotheses related to firm size and market power; (2) there is a positive relationship between the patent portfolio of firms and an outward-oriented innovation strategy characterized by R&D partnerships with external organizations - scientific institutions and competitors in particular; (3) process-oriented innovators patent less than product-oriented innovators; (4) a stronger focus on basic and applied research is associated with a more active patenting behavior; (5) firms that perceive high barriers to innovation (internal, risk-related or external barriers) have smaller patent portfolios; (6) the perceived limitations of the patent system do not significantly influence the patenting behavior, suggesting that firms patent for other strategic reasons than merely protecting innovation rents.     

The value of independent directors: Evidence from sudden deaths

We investigate contributions of independent directors to shareholder value by examining stock price reactions to sudden deaths in the US from 1994 to 2007. We find, first, that following director death stock prices drop by 0.85% on average. Second, the degree of independence and board structure determine the marginal value of independent directors. Third, independence is more valuable in crucial board functions. Finally, controlling for director-invariant heterogeneity using a fixed effect approach, we identify the value of independence over and above the value of individual skills and competences. Overall, our results suggest that independent directors provide a valuable service to shareholders.     

Not all international assignments are created equal: HQ-subsidiary knowledge transfer patterns across types of assignments and types of knowledge

Drawing on 50 semi-structured interviews in a case study of a Belgian multinational and its foreign subsidiary in Poland, we develop new insights into how using different types of international assignments (long-term expatriation, short-term expatriation, short-term inpatriation) allows a HQ-subsidiary dyad to transfer different types of knowledge (declarative, procedural, axiomatic, relational), both from and to HQ, during and after the assignment. We show how each type of assignment acts as a unique knowledge transfer channel, and why it is critical that HQ-subsidiary dyads use an appropriate combination and sequence of international assignments reflecting their specific knowledge transfer needs.