Outsourcing and trade in a spatial world

This paper provides an analysis of outsourcing and trade in a spatial model à la Hotelling. In this setting, we discuss the trade-off between transport-cost-related disadvantages and outsourcing-related production cost advantages of a large economy and we investigate how the existence of national transport costs influences both the structure of industrial production and the pattern of final goods trade. In addition, the model gives a rich picture of the possible welfare effects of trade liberalization. In particular, we show that a final goods exporting country definitely gains from economic integration, while a final goods importing country may lose. Finally, when lowering domestic outsourcing activities, trade liberalization may reduce world welfare, even if pro-competitive effects lead to a decline in consumer prices.     

Strategic profiles and performance: An empirical test of select key propositions

Competing theories on internal orientation versus external orientation are examined. The relevant theories are amalgamated and condensed into a number of competing propositions that are empirically tested. The findings suggest that the internally oriented businesses as well as the externally oriented businesses underperform the efficient, marketing oriented businesses.     

Correction to: Earnings announcement return extrapolation

Review of Accounting Studies - A Correction to this paper has been published: https://doi.org/10.1007/s11142-021-09605-9     

Poverty in Palanpur

The meaning and identification of poverty are examined usingthree indicators of standard of living in the North Indian villageof Palanpur. The first is intended as a measure of "apparentprosperity" based on the personal assessments of investigatorsafter intensive field work in the village over the full agriculturalyear 1983–84. The other two are income in 1983–84,and a measure of permanent income obtained by averaging incomesfrom four surveys conducted over a twenty-six-year interval.A comparison of these three indicators shows that income measuredin any one year may give a misleading impression of the incidenceof poverty. The risk of poverty for households is calculated.Vulnerability is high among low-caste households and those whichare involved in agricultural labor. Categories, however, arenot homogeneous; for example, whereas the landless and widowsare more likely to be poor, some of such households are quitewell off. It is argued that poverty in a good agricultural yearis a better indicator of sustained poverty than poverty in abad year. Occupational mobility out of agricultural labor islow, and changes in the distribution of land are largely accountedfor by demographic processes such as household splits.     

The New Comparative Political Economy

With the collapse of communism in the late 1980s the field of comparative political economy has undergone major revision. Socialism is no longer considered the viable alternative to capitalism it once was. We now recognize that the choice is between alternative institutional arrangements of capitalism. Progress in the field of comparative political economy is achieved by examining how different legal, political and social institutions shape economic behavior and impact economic performance. In this paper we survey the new learning in comparative political economy and suggest how this learning should redirect our attention in economic development.JEL classification: B53, O10, O20, P0     

Characterizing Pareto Improvements in an Interdependent Demand System

Interdependent preferences generally imply Pareto inefficiency. For a general demand system, we provide a characterization of Pareto improvements. For a prominent parametric specification, the Linear Expenditure System, we characterize in detail the welfare loss associated with interdependent preferences. Using an estimated empirical model of this kind, we calculate the compensating variation corresponding to the welfare loss.     

The Zilcha criterion for dynamic inefficiency

Summary. This paper reexamines the condition (1 + n), which Zilcha (1991) presents as a necessary and sufficient condition for dynamic inefficiency of stationary allocations in overlapping generation models with stochastic production. We show that this condition is necessary but not sufficient for a stationary allocation to be dynamically inefficient by Zilchas definition. We also show that there is a narrow but widely studied class of specifications in which the Zilcha test is both necessary and sufficient for dynamic inefficiency of stationary competitive equilibrium allocations. Outside this class, however, counterexamples can be constructed relatively easily.Received: 30 September 2002, Revised: 13 August 2004, JEL Classification Numbers: D51, D90, E13, E22. Correspondence to: Steven RussellWe thank Jon Burke, Subir Chakrabarti, Itzhak Zilcha and an anonymous referee for helpful conversations and/or comments.     

Environmental technology foresight: New horizons for technology management

Decision-making in corporate technology management and government technology policy is increasingly influenced by the environmental impact of technologies. Technology foresight (TF) and environmental impact assessment (EIA) are analyzed with regard to the roles they can play in developing long-term strategies and policies for reducing the environmental impact of technologies. The methods for TF and EIA are quite well developed, but remain within a tradition of rational decision-making. However, recent studies of tecnology management and innovation have shown that technology development can be explained only to a certain degree by rational decision-making. EIA is usually presented as an objective and scientific method, based on normative underpinnings that usually remain hidden. Thus, systematic information-providing instruments such as TF and EIA can play only a limited role. We propose a procedure for environmental technology foresight. The case is made that environmental technology management will be most helped by a 'constructive' approach in order to stimulate incorporation of long-term environmental objectives.     

Subjective recursive expected utility

We axiomatize a subjective version of the recursive expected utility model. This development extends the seminal results of Kreps and Porteus (Econometrica 46:185–200 (1978)) to a subjective framework and provides foundations that are easy to relate to axioms familiar from timeless models of decision making under uncertainty. Our analysis also clarifies what is needed in going from a represention that applies within a single filtration to an across filtration representation.Part of this research was conducted when Ozdenoren visited MEDS in Fall 2003. We thank Tapas Kundu, Costis Skiadas, Jean-Marc Tallon and Tan Wang for helpful discussions and also thank audiences at Koc University, Northwestern University, the CERMSEM conference “ Mathematical Models in Decision Theory” at Universite Paris I, and the FUR XI conference on foundations and applications of utility, risk and decision theory     

An Austrian Theory of the Firm

The modern Theory of the Firm uses the concept of rent and makes implicit assumptions about equilibrium. An Austrian (Market Process) Theory of the Firm should have something to say about each of these. Two strategic perspectives are analyzed, the neoclassical microeconomic perspective (using the Ricardo-Marshall approach to rent) and the Market Process perspective (using the Fetter approach to rent). In a neoclassical world, rents indicate unsolved or unexploited inefficiencies as every hypothetical outcome is viewed against the standard of perfect competition. By contrast, in the Market Process world there is no single ideal standard by which to measure any particular outcome. All action takes place in an open ended universe in which the future is continually being created, in which competition is a discovery process.