International capital mobility: net versus gross stocks and flows

Feldstein and Horioka (1980) observed that net capital flows have been small in relation to domestic saving and investment flows for OECD countries in the post-war period, which they interpreted as evidence of low capital mobility. This paper argues that the correlation between gross domestic and international financial flows can be a better indicator of capital mobilitythan net capital flows. Contrary to the conventional wisdom among international economists, gross flows have been small in relation to gross domestic asset creation for OECD countries, although by this measure the degree of capital mobility increased in the 1980s.     

Ethical guidelines for business and social marketing

The ethical sensitivity of all professionals has come under closer scrutiny recently. Within the business area, the ethics of marketing executives in particular has been viewed with skepticism. The growing use of “social marketing” also compounds the potential for ethical abuse. The ethical dimensions of both business and social marketing are examined in this paper. Four ethical guidelines-increased professionalism, ethical consultants, seminars and ethical cost-benefit analyses-are suggested as a means of improving the ethical standards of marketing decision-making.     

The range of strategic choice in Tanzanian industry

This paper reports the results of a strategic planning exercise carried out in Tanzania and shows that under actual planning conditions there can be a wide range of potential outcomes for decision-makers to consider. With a given output mix and the same level of investment over twenty years, employment creation could be 35 percent higher than the most capital-intensive alternatives would allow and incremental value added could be 5 percent higher. If different output mixes are introduced and a basic, heavy-industry strategy compared with one based strictly on economic efficiency, the most labor-intensive outcome would create 70 percent more jobs than the most capital intensive and produce 12 percent more incremental value added. A basic industry strategy can substantially reduce reliance on international trade, lowering the share of industrial value added due to trade-dependent industries from 47 percent to 11 percent, but may be more difficult to implement.     

Immiserizing growth in centrally planned economies

This paper proposes a theoretical model explaining the discrepancy between the reported growth rate and the improvement in living standards in centrally planned economies (CPEs ). It investigates the institutional arrangement in CPEs and suggests that distorted growth generally takes place as the CPEs' planners attempt to achieve rapid economic growth while prices are kept constant. This leads to an overestimation of the growth rate in terms of the actual economic welfare improvements in CPEs. It can result in immiserizing growth, wherein a rapid growth is accompanied by a deterioration in economic welfare.     

Capital in Disequilibrium: The Role of Capital in a Changing World by Peter Lewin

The Review of Austrian Economics -     

How Did the 2003 Dividend Tax Cut Affect Stock Prices?

We test the hypothesis that the 2003 dividend tax cut boosted US stock prices and thereby lowered the cost of equity capital. Using an event‐study methodology, we attempt to identify an aggregate stock market effect by comparing the behavior of US common stock prices with that of foreign equities and the equities of real estate investment trusts (REITs). We also examine the relative cross‐sectional response of prices of high‐ and low‐dividend‐paying stocks. We do not find any imprint of the dividend tax cut news on the value of the aggregate US stock market. On the other hand, high‐dividend stocks outperformed low‐dividend stocks by a few percentage points over the event windows, suggesting that the tax cut may have induced asset reallocation within equity portfolios. Finally, the positive abnormal return on nondividend paying US stocks in 2003 does not appear to be tied to tax cut news.     

Planning executive succession: The effect of recruitment source and organizational problems on anticipated tenure

This study examines the anticipated tenure of the chief executive officer (CEO) from the incumbent's point of view. An analysis of approximately 1500 questionnaires returned by corporate presidents reveals that anticipated tenure is generally little affected by whether the CEO is recruited from within or from outside the organization. However, under conditions of formalized succession planning and when confronted with specific problems, such as modernizing operations, mandates to increase sales and merger operations, there exist differences in anticipated tenure between inside and outside recruited CEOs. These differences are discussed in terms of their implications to corporate level succession planning.     

Judgment change during Delphi-like procedures: The role of majority influence, expertise, and confidence

This study investigates individual opinion change and judgmental accuracy in Delphi-like groups. Results reveal that the accuracy of judgmental probability forecasts increases over Delphi rounds (in terms of proportion correct and appropriateness of confidence) when statistical summaries or written rationales are provided from other members of an individual's nominal group, but does not increase in a control iteration condition (without feedback). Additionally, subjects who gave more appropriate probability forecasts on the first round exhibited least opinion change, although measures of confidence were unrelated to opinion change. Results also show that majority opinion exerts strong opinion pull on minority opinion even when the majority favours an incorrect answer (irrespective of the nature of feedback provided). The implications of these results for the utility and conduct of the Delphi technique are discussed, in particular, with respect to selecting panellists and choosing an appropriate feedback format.