Incentive compatible reward schemes for labour-managed firms

We consider a simple case of team production, where a set of workers have to contribute a single input (say labour) and then share the joint output amongst themselves. Different incentive issues arise when the skills as well as the levels of effort expended by workers are not publicly observable. We study one of these issues in terms of a very simple model in which two types of workers, skilled and unskilled, supply effort inelastically. Thus, we assume away the problem of moral hazard in order to focus on that of adverse selection. We also consider a hierarchical structure of production in which the workers need to be organised in two tiers. We look for reward schemes which specify higher payments to workers who have been assigned to the top-level jobs when the principal detects no lies, distribute the entire output in all circumstances, and induce workers to revel their true abilities. We contemplate two scenarios. In the first one, each individual worker knows only her own type, while in the second scenario each worker also knows the abilities of all other workers. Our general conclusion is that the adverse selection problem can be solved in our context. However, the range of satisfactory reward schemes depends on the informational framework.     

Constraints in acquiring and utilizing directors' experience: An empirical study of new‐market entry in the pharmaceutical industry

In this study we provide evidence that firms considering entering new markets are more likely to appoint directors with experience in those markets; and subsequently, we show that directors' market experience increases the likelihood of new‐market entry. Moreover, we explore the presence of constraints in both, acquiring experienced directors and utilizing their experience. Specifically, we find that experienced directors are less likely to join firms with financial restatements in the recent past as well as firms with a lower status than the firms where they currently serve. In addition, we find that interlocking directors' experience is less likely to lead to new‐market entry for firms that lack new‐product development experience and that exhibit a high level of market overlap with interlocked firms. Copyright © 2013 John Wiley & Sons, Ltd.     

Skilled-unskilled wage inequality and unemployment: A general equilibrium analysis

The paper develops a static three sector competitive general equilibrium model of a small open economy in which skilled labor is mobile between a traded good sector and the non-traded good sector and unskilled labor is specific to another traded good sector. Capital is perfectly mobile among all these three sectors. We introduce involuntary unemployment equilibrium in both the labor markets and explain unemployment using efficiency wage hypothesis. We examine the effects of change in different factor endowments and prices of traded goods on the unemployment rates and on the skilled-unskilled relative wage. Also, we introduce Gini-Coefficient of wage income distribution as a measure of wage income inequality; and show that a comparative static effect may force the skilled-unskilled relative wage and the Gini-Coefficient of wage income distribution to move in opposite directions in the presence of unemployment.     

Variations in the contractual terms of cooperative advertising contracts: An empirical investigation

Cooperative advertising arrangements between manufacturers and resellers contain two principal components in their payment schedules: a participation rate and an accrual rate. We analyze 2,156 cooperative advertising plans to see how they vary across consumer and industrial products, as well as between convenience and nonconvenience consumer products. We also study how participation and accrual rates vary by the level of manufacturer concentration across product categories. We find that both participation and accrual rates are higher for consumer products than for industrial products and within consumer products are higher for convenience products than for nonconvenience products. We find mixed results for the effect of manufacturer concentration on these rates. We discuss how these results are consistent with existing perspectives on cooperative advertising.     

Democracy comes to Europe: Franchise extension and fiscal outcomes 1830-1938

This paper examines the relation between public spending and the spread of democracy in Western Europe during the period 1830-1938. Our data set includes measures of the size of the electorate, the election rule, and electoral participation, as well as measures of the size and composition of central government expenditures for 12 countries. We estimate panel regressions, and find that (1) the gradual lifting of socio-economic restrictions on the voting franchise contributed to growth in government spending mainly by increasing spending on infrastructure and internal security; (2) the female suffrage had a weak positive effect, through spending on health, education and welfare; (3) the change from majority to proportional rule, which took place in 10 of the countries, did not contribute to growth in government spending, and held back spending on health, education and welfare; (4) there exists (weak) complementarity between economic development and the spread of democracy.     

Exploring the Effect of Store Characteristics and Interpersonal Trust on Purchase Intention in the Context of Online Social Media Marketing

This article explores the effect of store characteristics and interpersonal trust on formation of attitude and intention to purchase from online stores in the context of online social media marketing. Store Brand Knowledge, Store Reputation, Perceived Store Size, and Perceived Store Risk have been considered as antecedents of trust. Based on existing literature, a conceptual model is proposed and empirically tested with a sample (n = 424) of online social media users with the help of partial least square path modeling. This study is among the very few empirical investigations done in the context of trust in online social media marketing and focuses only on consumer-perceived store-controlled factors as antecedents of trust.     

Channel design,coordination, and performance: Future research directions

The marketing literature has made significant progress toward a better understanding of how firms can effectively design and manage their channels of distribution. However, the complexity of today’s channel systems raises additional issues that remain unaddressed. The purpose of this article is to suggest promising research directions in this domain. We suggest several possible avenues to relate multiple channel design and management to channel-system, channel-relationship, and customer-level outcomes. In particular, we see a great opportunity to integrate multichannel customer management and traditional channel design research. We argue that future research should account for cross-level effects and incorporate variables at more than one relationship level.     

Does cultural diversity increase the rate of entrepreneurship?

In the economic development literature, cultural diversity (for example, ethnolinguistic fractionalization) has been shown to have a negative impact on economic outcomes in many underdeveloped countries. We hypothesize that the impact of diversity on economic performance depends on the quality of a country's institutions. Under bad institutions diversity leads to conflict and expropriation, while under good institutions diversity leads to economic progress. A culturally diverse society or interaction among different cultures encourages exchange of, and competition between ideas and different world views. Under good institutions, this amalgamation of ideas and views leads to greater entrepreneurial initiatives. We show that higher levels of cultural diversity increase the rate of entrepreneurship in the presence of good institutions using evidence from the USA.