The effects of the Uruguay round: empirical evidence from U.S. industry

This article uses an event study to evaluate the anticipated results of the Uruguay Round on U.S. industry. Economists commonly use computable general equilibrium (CGE) models to predict the net economic efficiency effects of trade agreements. The event study method represents a complementary approach that relies on stock price movements to assess how investors predict that an event, in this case the conclusion of the Uruguay Round, will affect industry profitability. The empirical estimates indicate that U.S. industries with comparative advantage (disadvantage) experience positive (negative) stock price reactions, reflecting an increase (a decrease) in the industry trade and investment opportunities as well as an increased (decreased) return to existing tangible and intangible assets. For the market as a whole, the variation in stock prices does not differ significantly from zero, and the economic magnitude of industry gains and losses is small. These results are consistent with most CGE assessments and with the skeptical attitude that the real impact of the Uruguay Round Agreement remains uncertain.     

Consumption externalities and upward-sloping demand

The law of demand states that individual demand curves are negatively sloped. To date, the Giffen Paradox represents the only analytically valid exception to the law under standard assumptions. This article shows that if consumption externalities exist, it is possible for the individual's demand curve to slope upward. In particular, the condition under which demand becomes upward-sloping can be delineated in terms of measures of elasticity of demand. Research grants (Grant #2056/99H and Grant #FRG99-00/II-12) from the Research Grant Council of Hong Kong and the Hong Kong Baptist University are gratefully acknowledged.     

The Internationalization of Small and Medium-Sized Enterprises: A Policy Perspective

Small Business Economics - Small and medium sized firms play an important role in the process of creative destruction. The focus of the paper is on the international diffusion of small and medium...     

Does Greater Firm‐Specific Return Variation Mean More or Less Informed Stock Pricing?

Roll [1988] observes low R² statistics for common asset pricing models due to vigorous firm‐specific return variation not associated with public information. He concludes that this implies “either private information or else occasional frenzy unrelated to concrete information”[p. 56]. We show that firms and industries with lower market model R² statistics exhibit higher association between current returns and future earnings, indicating more information about future earnings in current stock returns. This supports Roll's first interpretation: higher firm‐specific return variation as a fraction of total variation signals more information‐laden stock prices and, therefore, more efficient stock markets.     

Big business with Chinese characteristics: two paths to growth of the firm in China under reform

This paper presents a case study of two large firms which emergedfrom among the ranks of traditional state-owned enterprisesand new entrants: Shougang (steel) and Sanjiu (pharmaceuticals).Rather than being irreconcilable with the market economy, theexperience of these two firms suggests that the Chinese CommunistParty and the People's Liberation Army possessed a rich legacyof organisational and motivational skills. Moreover, Shougangand Sanjiu both grew rapidly through mergers and acquisitionsin the absence of privatisation and a developed stock market.Furthermore, the main reason for Shougang and Sanjiu's successis not special help from the government or the army, but ratherthe fact that its leadership used their autonomy to constructa highly effective business organisation.     

OHSAS 18001 certification and operating performance: The role of complexity and coupling

Today, manufacturing firms encounter pressure from multiple stakeholders to manage occupational health and safety issues properly, systematically and transparently. While manufacturing firms commonly use internally developed Occupational Health and Safety Management Systems, there is growing pressure to adopt externally certified system such as OHSAS 18001. However, there are conflicting views and little empirical evidence that examines the linkage between OHSAS 18001 certification and operating performance. Hence, this paper examines the impact of OHSAS 18001 on operational performance through three theoretical lenses: Institutional Theory, Normal Accident Theory, and High Reliability Theory. We also investigate how complexity and coupling moderate the relationship between OHSAS 18001 and operational performance. Based on a sample of 211 U.S. listed manufacturing firms with OHSAS 18001 certification, we find that certification leads to significant increases in abnormal performance on safety, sales growth, labor productivity, and profitability and that these benefits increase as complexity and coupling increase.     

Bricolage,collaboration and mission drift in social enterprises

Abstract

Increasingly, social enterprises are relying on collaboration with partners to tackle the resource constraints that they face. In this research we focus on the strategy of bricolage to explore whether and how the different types of partner becoming involved may impact on the mission of social enterprises. Grounded in resource dependency and transaction cost theories, we explore how power asymmetry and the nature of involvement may impact on the outcomes of bricolage. Our findings demonstrate that in the more integrated relationships with high power asymmetry, more instances of mission drift might be observed compared to when social enterprises develop the more collaborative or complementary nature of partnerships with symmetrical power dependency, or when the partners’ involvements are mainly transaction-based.     

Ingratiation in the Workplace: The Role of Subordinate and Supervisor Political Skill

Over two decades, social influence researchers have called for a study that would examine how, why, and when influence tactics are effective. Informed by balance theory, the present study proposes that subordinate and supervisor political skill impacts the effectiveness of ingratiation attempts. The results from a survey of 228 supervisor–subordinate dyads in Chinese firms indicated that subordinates with high political skill are less likely to have their exhibited ingratiation behaviour perceived by their supervisors; however, supervisors with high political skill are likely to perceive ingratiation behaviour demonstrated by their subordinates. Moreover, the most successful condition for enabling subordinates to hide ingratiation from their supervisors is when the subordinates are politically astute and the supervisors are not. Furthermore, when supervisors perceive ingratiation behaviour, they rate low on the job performance and promotability of their subordinates; these low ratings are explained by the undermined personal reputation of the subordinates due to their ingratiation detected.     

The effect of major customer concentration on firm profitability: competitive or collaborative?

We test two potential hypotheses regarding the effects of major customer concentration on firm profitability. Under the collaboration hypothesis, customer power facilitates collaboration, and both the supplier firm and its major customers obtain benefits. Under the competition hypothesis, customer power results in rent extraction, and the major customers benefit at the expense of the supplier firm. We document that major customer concentration is negatively associated with the supplier firm’s profitability but positively associated with the major customers’ profitability. We demonstrate that these effects weaken as the supplier firm’s own power grows over its relationship with major customers, supporting the competition hypothesis. We carefully reconcile our results with prior studies’ findings that focus only on the supplier firm’s profitability and identify their research design and interpretation problems. We obtain similar inferences in a setting of major customers’ horizontal mergers and when we use an alternative measure of major customer power.