The London Business School with Gower Publishing

Collapsing oil prices and a falling dollar set the background to a Budget in which the Chancellor, hamstrung by lower oil revenues, was seen as having little room for manoeuvre. In fact the sharp fall in the sterling price of oil has provided him with the perfect excuse for not making significant cuts in personal income tax that were largely irrelevant to the needs of the economy. Instead of a boost to household demand we have had, thanks to OPEC, a transfer to companies in the form of a reduction in costs. This should enable them to expand output against a background of falling inflation. Our post-Budget assessment of macroeconomic prospects (Section I), made on the Treasury's assumption of a $15 oil price, shows output growing by 2 1/2 per cent this year and inflation falling below 3 per cent in 1987. We are thus less optimistic than the Treasury about output but more optimistic about inflation. How was the Chancellor able, within the confines of the Medium-Term Financial Strategy, to give anything away having lost so much oil revenue? A detailed analysis of the PSBR forecast (Section II) reveals good reasons why non-oil tax revenues should be some £3 1/2n higher than forecast this time last year. But, because we still expect public spending to be above the official figures, our PSBR forecast is £1bn higher than the Treasury's. Although the macroeconomic impact of the Budget was small (especially in relation to that of the fall in oil prices which preceded it), it continued the process of tax reform. We focus, in Section III, on the new proposals to deal with the problem of the pension fund surpluses to which we drew attention in the November issue of Financial Outlook. We conclude that the proposed measures could have a larger effect on tax revenues in the longer term than is indicated by the Treasury's Budget estimates.     

Determinants of tax haven utilization: evidence from Australian firms

This paper examines the major determinants of tax haven utilization based on a sample of 200 publicly listed Australian firms, over the 2006–2010 period (1,000 firm‐years). Our regression results show that variables relating to transfer pricing, intangible assets, an interaction term between transfer pricing and intangible assets, withholding taxes, performance‐based management remuneration and multinationality are positively associated with tax haven utilization. We also find that corporate governance structures are negatively associated with tax haven utilization. The magnitude and significance of the regression coefficients indicate that transfer pricing, withholding taxes, intangible assets, an interaction term between transfer pricing and intangible assets, corporate governance and multinationality are the most important drivers of tax haven utilization.     

Market convergence and advertising standardization in the European Union

In this study, we draw on industrial organization and institutional research to explore the relationship between market convergence and standardization of advertising programs. We argue that environmental isomorphism, which maintains that the external market environment is a principal driver of firms’ institutional structures, places pressure on firms to adapt their organizational structures and strategies to changing institutional conditions. We propose that the convergence associated with European market integration will lead firms to emphasize three advertising strategies: creating a uniform brand image, appealing to cross-market segments, and increasing cost performance in advertising. Further, we hypothesize that these strategies will be associated with an overall tendency to standardize advertising strategy and execution. Results of a survey of managers of subsidiaries of Japanese and U.S. firms operating in the EU suggest that firms that believe the EU is converging are more likely to engage in these standardized advertising strategies. Additionally, our findings suggest that firms that seek to create a uniform brand image and appeal to cross-market segments are more likely to standardize their overall advertising programs. Finally, we find that firms’ desire to create a uniform brand image is a function of their goal of building brand equity, regardless of the level to which markets converge. We draw implications for research and practice regarding firm responses to market convergence.     

A moral basis for corporate philanthropy

The authors argue that corporate philanthropy is far too important as a social instrument for good to depend on ethical egoism for its support. They claim that rule utilitarianism provides a more compelling, though not exclusive, moral foundation. The authors cite empirical and legal evidence as additional support for their claim.Bill Shaw is the Woodson Centennial Professor in Business Administration at The University of Texas at Austin. He teaches courses in business ethics and in legal environment of business. Professor Shaw's articles have appeared in law and ethics journals, and he is co-author, with Art Wolfe, ofStructure of the Legal Environment (1991).Frederick R. Post is Assistant Professor of Business Law and Management at the College of Business Administration, University of Toledo, Toledo, Ohio. Professor Post teaches business law and labor policy courses. His research interests include business ethics and labor management relations. His publications have appeared inThe Journal of Business Ethics, The Mid-American Journal of Business andThe Journal of Legal Studies Education.     

Information,persuasion, and control in moral appraisal of advertising strategy

The formulation of moral issues surrounding consumer advertising tends to focus on the capacity to persuade or inform, and how these capabilities may be used to distort or fulfill needs and desires. Discussion of these issues abstracts from widespread advertising and marketing practices, by assuming that all advertising is mass advertising, broadcast indiscriminately over the entire market population. This assumption directs attention away from important issues stemming from actual advertising strategies, which involve campaigns designed for and conveyed to particular customer groups or segments within broader product market. Several cases are outlined to illustrate the class of practices considered to be important and usually ignored, and issues that they raise for moral appraisal are suggested.Taylor R. Durham is Assistant Professor of Communications (Visiting) at Hampshire College, School of Communications and Cognitive Science where he is concerned with information, decision-making, and regulation of advertising. He was previously Post-Doctoral Fellow at the Department of Social Relations, The Johns Hopkins University.     

Conceptual underpinnings for transformative research in a service ecosystems context to resolve social issues – framework foundations and extensions

ABSTRACT

A number of services within society are designed to improve the well-being of its members and transform lives. Some services focus on the protection and support of vulnerable members of society, for example, those suffering the effects of drug use, mental health conditions, violence or poverty. Clients of such social services may also come from minority or marginalised cultural backgrounds. Typically, social services aim to reduce disparities and enhance individual and population well-being. A major challenge for social policy-makers and social service providers is to establish and maintain constructive engagement between the social services and those they are intended to serve. Some of these vulnerable clients are deemed ‘hard-to-reach’ (HTR) by policy-makers and service providers. Yet, the transformation of lives requires the involvement of the focal actor (client) and their service or activity system, as well as the engagement of other actors, such as the social worker embedded in their service or activity system. This paper aims to further unpack a novel approach, called integrative transformative service framework. This contribution extends its conceptualisation which fuses mainly three different approaches, namely Transformative Service Research (TSR), (Cultural-Historical) Activity Theory (CHAT) and (Regulatory) Engagement Theory (RET).     

The growing dependence of Britain on trade during the Industrial Revolution

Many previous studies of the role of trade during the British Industrial Revolution have found little or no role for trade in explaining British living standards or growth rates. We construct a three-region model of the world in which Britain trades with North America and the Rest of the World, and calibrate the model to data from the 1760s and 1850s. We find that while trade had only a small impact on British welfare in the 1760s, it had a very large impact in the 1850s. This contrast is robust to a large range of parameter perturbations. Biased technological change and population growth were key in explaining Britain's growing dependence on trade during the Industrial Revolution.