Measuring Human Development

The uneven distribution of resources, income and wealth in the world makes it desirable to devise a method for evaluating the relative levels of human development in different countries, but a satisfactory approach needs to go beyond calibration of output per head. This paper explores key issues concerning the measurement of human development and examines the UNDP's modified Human Development Index, assessing its potential usefulness and limitations in enabling comparisons across countries. The extent to which the approach can provide the basis for a profile of an individual country is also analysed, using Singapore as a case study.     

Book review

Corporate Technological Behaviour: Cooperation and Networks, H. Hakanson, Andover, Routledge, 1989, 210pp., $30.00.

Technology and Power, David Kipnis, Springer, New York, 1990, 150pp., DM50.

The Practical Guide to Joint Ventures and Corporate Alliances: How to Form,How to Organise, How to Operate, Robert Porter Lynch, New York, John Wiley and Sons Inc., 1989, 336pp., $44.00 hb.

In the Age of the Smart Machine: the Future of Work and Power Shoshana Zuboff Oxford, Heinemann Professional Publishing, 1988, 460pp., $17.00

Directory of American Research and Technology 1990: Organizations Active in Product Development for Business K. R. Bowker New York, 1990, 24th edition, 740pp., $215.     

Required Rates of Return for Corporate Investment Appraisal in the Presence of Growth Opportunities

Traditional methods of estimating required rates of return overstate hurdle rates in the presence of growth opportunities. We attempt to quantify this effect by developing a simple model which: (i) identifies those companies that have valuable growth opportunities; (ii) splits the value of shares into ‘assets‐in‐place’ and ‘growth opportunities’; and (iii) splits the equity β into β for ‘assets‐in‐place’ and ‘growth opportunities’. We find growth opportunities for UK companies over the 1990–2004 period to average 33% of equity value. Incorporating the effect of growth opportunities, the average cost of capital for investment purposes falls by 1.1 percentage points.     

Corporate Strategy, Corporate Culture and Conversion; Adjustment in the Defence Industry

The recent decline in military demand has prompted calls for government aid to help the arms manufacturers convert to civil production. The authors examine the shock that UK defence firms faced, the constraints their defence culture imposed and how they responded. They conclude that while the market solution, closure of defence plants and redundancy, may appear wasteful, in the longer run it is likely to be more productive than trying to convert defence plants.     

Deregulation and privatization of Britain's local bus industry

In 1986,the British government deregulated the majority of the local bus industry, cut the amount of subsidy, and privatized many public bus companies. Unit costs have declined significantly, cross-subsidies have been reduced, and there has been innovation in operating practices. However, mergers have increased concentration, and demand has declined due to the turmoil of service changes and the loss of network integration. In London an alternative policy has been adopted whereby there is Demsetz competition for short-term monopoly rights. The paper argues that this regime will lead to greater benefits in the long run.