Generalized Forecast Error Variance Decomposition for Linear and Nonlinear Multivariate Models

We propose a new generalized forecast error variance decomposition with the attractive property that the proportions of the impact accounted for by innovations in each variable sum to unity. Our decomposition is based on the generalized impulse response function, and it can easily be obtained by simulation. The new decomposition is illustrated in an empirical application to US output growth and interest rate spread data.     

Trust and economic growth: a robustness analysis

This paper analyses the robustness of results on the relationshipbetween growth and trust previously derived by Knack and Keefer(1997) and Zak and Knack (2001) along several dimensions, acknowledgingthe complexity of the concept of robustness. Our results showthat the Knack and Keefer results are only limitedly robust,whereas the results found by Zak and Knack are highly robustin terms of significance of the estimated coefficients and reasonablyrobust in terms of the estimated effect size. The improvementin robustness is caused by the inclusion of countries with relativelylow scores on trust (most notably, the Philippines and Peru).Overall, our results point at a relatively important role fortrust. However, the answer to the question how large this payoffactually is depends on the set of conditioning variables controlledfor in the regression analysis and—to an even larger extent—onthe underlying sample.     

Delegating effectively across cultures

This article builds on the contingency approach to global leadership to examine empowerment in a cross-cultural context. Drawing upon ethnographic research on employees of a French NGO in Madagascar, our study demonstrates that effective empowerment is not dependent on the amount of delegation, but rather it is dependent on how delegation is performed. Understanding the cultural representations of formalization, skill development, collective work, and decision-making appeared to be crucial to effective delegation in Madagascar. This result suggests that managers should adapt the way that they empower their teams based on the conditions and forms of delegation prevailing in local cultures.     

Modeling the Impacts of Corporate Commitment on Climate Change

The aim of this paper is to propose an integrative framework for understanding the determinants of business strategies to reduce greenhouse gas emissions and the impact of these determinants on performance. The proposed structural equation model is based on a survey of 319 Canadian manufacturing firms. The study calls into question the traditionally positive relationship between a firm's environmental commitment and its economic motivations. However, the results also show a win–win relationship between the commitment to reduce greenhouse gas emissions and financial performance. This study contributes to the understanding of the motivations underlying the efforts manufacturers make to tackle climate change and their economic benefits. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

Macroeconomic Consequences of Outsourcing: An Analysis of Growth, Welfare, and Product Variety

Outsourcing of non-core activities is nowadays a common business strategy. Declining transaction and transportation costs caused by the advent of Information and Communication Technology are a potentially important driving force behind this development. This paper provides a theoretical framework for analysing a firm's incentive to follow such a strategy of outsourcing and its consequences for macroeconomic variables like growth and product variety. We divide production activities into core and non-core activities. Non-core activities can be performed within the firm or can be mediated by the market. We derive conditions under which outsourcing occurs, and under which outsourcing is socially desirable. These conditions do not necessarily coincide. Outsourcing may hence be a profitable strategy for firms, while it is socially suboptimal. Crucial parameters in the model are the relative scale of core versus non-core activities, management costs, transaction costs and love for variety of consumers.     

Globalization,Skill Accumulation and the Skill Premium

We analyze the impact of globalization upon the skill premium (inequality) in advanced countries from a two‐goods North–South model with skill accumulation. Globalization consists of an increase in the size of the South. Its impact on inequality depends on its intensity and on the pre‐globalization proportion of skilled workers. The post‐globalization inequality is a non‐monotonic function of the pre‐globalization proportion of skilled workers and of the globalization intensity. The impact is different for the generation in work and for the following generations. There is a threshold value of the skill endowment under (above) which inequality is lower (higher) after than before globalization.     

The kinetic quality of store design: An Exploration of its influence on shopping experience

Kinetic quality of store space is the appreciation of the store with regard to the movements and gestures that can be performed during the shopping trip. Few researches have studied this concept despite its potential influence on shopping outcomes. In this paper, we show that the kinetic quality of the store has an impact on hedonic and utilitarian shopping values and on purchase. The impact on shopping value is similar in magnitude to that of atmospheric quality. Music and visual esthetics positively influence kinetic quality.     

Spatial Evolution of Social Norms in a Common-Pool Resource Game

We study the conditions for the emergence of cooperation in a spatial common-pool resource (CPR) game. We consider three types of agents: cooperators, defectors and enforcers. The role of enforcers is to punish defectors for overharvesting the resource. Agents are located on a circle and they only observe the actions of their two nearest neighbors. Their payoffs are determined by both local and global interactions and they modify their actions by imitating the strategy in their neighborhood with the highest average payoffs on average. Using theoretical and numerical analysis, we find a large diversity of equilibria to be the outcome of the game. In particular, we find conditions for the occurrence of equilibria in which the three strategies coexist. We also derive the stability of these equilibria. Finally, we show that introducing resource dynamics in the system favors the occurrence of cooperative equilibria.      

Trends in the development of information technology and their effects on the production structure in Europe

In this paper, the authors have made an attempt to build a scenario of how technology can have an impact on the Production structure i n Europe, and how these changes will effect the international division of labour. The authors start from the premise that the applications of new product and process technologies are leading to stepwise changes in production structures. They borrow from economic and managerial theories, present a number of scenarios for two types of technologies (biotechnology and information technology). From these scenarios some implications are proposed.