OPTIMAL CONSUMPTION AND PORTFOLIO DECISIONS WITH PARTIALLY OBSERVED REAL PRICES

We consider optimal consumption and portfolio investment problems of an investor who is interested in maximizing his utilities from consumption and terminal wealth subject to a random inflation in the consumption basket price over time. We consider two cases: (i) when the investor observes the basket price and (ii) when he receives only noisy observations on the basket price. We derive the optimal policies and show that a modified Mutual Fund Theorem consisting of three funds holds in both cases. The compositions of the funds in the two cases are the same, but in general the investor's allocations of his wealth into these funds will differ. However, in the particular case when the investor has constant relative risk-aversion (CRRA) utility, his optimal investment allocations into these funds are also the same in both cases.     

GROWTH, POVERTY, AND INEQUALITY IN LATIN AMERICA: A CAUSAL ANALYSIS, 1970–94

Taking advantage of consistent poverty and income inequality data for 12 Latin American countries between 1970 and 1994, we analyze the determinants of changes in the incidence of urban and rural poverty and in Gini coefficients over spells of years, stressing in particular the role of aggregate income growth. We find that income growth reduces urban and rural poverty but not inequality. We also find that income growth is more effective in reducing urban poverty if the levels of inequality and poverty are lower, and the levels of secondary education higher. We show that there is an asymmetry in the impact of growth on poverty and inequality, with recession having strong negative effects on both poverty and inequality. Since growth does not reduce inequality, economic cycles create ratchet effects on the level of inequality. However, post-structural adjustment growth is quite effective at reducing poverty, particularly if inequality is low.     

Goal Multiplicity and Innovation: How Social and Economic Goals Affect Open Innovation and Innovation Performance

Integrating insights from the strategic goal literature and the knowledge‐based view of the firm, this article proposes that the pursuit of social and economic strategic goals by commercial firms affects their innovation performance through different knowledge sourcing activities. The strategic goals, knowledge sourcing practices, and innovation performance of 1257 Belgian firms are investigated. Results show that both social and economic strategic goals are associated with the use of external information sources, but only the pursuit of social goals inspires firms to engage in external collaboration. No evidence is found of an inherent conflict between social and economic strategic goals. Instead, the two types of goals are independent of each other, that is, an emphasis on social goals does not preclude an emphasis on economic goals and vice versa. Moreover, firms’ external knowledge sourcing and innovation performance benefit most when strongly held social goals align with strongly held economic goals. These findings offer new insight into the nature and the effects of goal multiplicity among commercial firms. They open up a new perspective on the potential positive effects of the joint pursuit of social and economic strategic goals instead of seeing them as inherently conflicting, as past research has typically done. We illustrate how social strategic goals can deliver unique benefits to a firm, independently of and in addition to economic strategic goals. Our findings also contribute to the open innovation literature by revealing strategic goals as a driver of firms’ knowledge sourcing practices. Our findings suggest that solely emphasizing economic goals may be one reason why firms struggle to implement open innovation practices and do not reap their full benefits. The practical implications of our research are discussed.     

Does organizational culture play a role in the development of psychological distress?

The aim of this article is to analyze the extent to which organizational culture contributes to the symptoms of psychological distress in the workforce. Integrating organizational culture and work organization conditions makes it possible to examine how culture is associated with the various components of work organization conditions, and how these conditions might relate to symptoms of psychological distress in employees. Data from the SALVEO study were collected in 2009–2012 from a sample of 1824 individuals nested in 60 Canadian workplaces. Multilevel regression models were used to analyze the data. After controlling for individual and family characteristics, only group and rational cultures were associated with psychological distress, but both type of organization cultures were mediated by work organization conditions. Group culture is indirectly associated with lower levels of psychological distress since it favors lower levels of psychological demands and job insecurity. Rational culture is indirectly associated with higher levels of psychological distress because it favors higher psychological demand levels. The results obtained highlighted the importance of including variables relating to broader organizational context in models examining stress in the workplace.     

Evaluating user-generated content in social media: an effective approach to encourage greater pro-environmental behavior in tourism?

Appealing to tourists’ intrinsic interest for high-quality tourism environments, and thus encouraging them to act with a greater sense of personal responsibility toward the environment, could be critical to promoting sustainable tourism. Proliferating media channels makes the choice, style and delivery of pro-environmental messages a key issue for tourism marketers and management. Social media has become a recognized important channel for tourism information, with user-generated content (UGC) being more trusted than official channels, yet there is little knowledge about its potential role in activating pro-environmental norms. This study investigates that issue. Focusing on the conjoining aspects of personal and social norms for the first time, we propose a hypothetical model to explain the direct and indirect effects of pro-environmental UGC in activating tourists’ pro-environmental behavioral intentions. Working in a Chinese context, where social media plays an increasing role, the research, using a web-based sample (N = 1043), UGC-linked pro-environmental knowledge and awareness, was found to have a strong role in activating pro-environmental norms, creating a pro-environment online community, and increasing tourists’ level of engagement in pro-environmental social media activity. The study highlights the effectiveness of social media channels with UGC providing persuasive communications able to impact sustainable behaviors.     

Industrial structure and international trade: An evolutionary perspective

The author wishes to thank E. Dalgaard for his comments on an earlier version. Helpful discussions with E. Helpman, A. Jacquemin, and L. Pasinetti are also acknowledged.     

Japanese joint ventures with western multinationals: Synthesising the economic and cultural explanations of failure

Many research studies have been done to explain the reasons for the tensions and failures observed in joint ventures between Japanese and Western multinational enterprises. These studies have identified, with various degrees of sophistication, the existence of cultural differences as a primary determinant of failure. Alternative explanations focus upon a transaction cost approach, emphasising opportunism and the danger of cheating in such strategic alliances. This paper synthesises the literature through the development of a new conceptual framework. This framework, which distinguishes between economic and cultural reasons for failure, provides a new lens to view the literature. It is demonstrated that the simple view of cultural incompatibility needs to be replaced by an awareness of the combined impact of cultural and economic forces on the viability of joint ventures between Japanese and Western firms.Lee T. Brown is a doctoral candidate in the Faculty of Management at the University of Toronto. Alan M. Rugman is Royal Bank Visiting Professor at the University of Alberta and Professor of International Business at the University of Toronto. Alain Verbeke is Assistant Professor of International Business at the University of Toronto. Helpful comments have been received from Nancy Adler, Mark Casson, Martin Evans, Tom Roehl, Mark Warner and Ken Watson.