Corporate Governance, Opaque Bank Activities, and Risk/Return Efficiency: Pre- and Post-Crisis Evidence from Turkey

Does better corporate governance unambiguously improve the risk/return efficiency of banks? Or does either a re-orientation of banks’ revenue mix towards more opaque products, an economic downturn, or tighter supervision create off-setting or reinforcing effects? The authors relate bank efficiency to shortfalls from a stochastic risk/return frontier. They analyze how internal governance mechanisms (CEO duality, board experience, political connections, and education profile) and external governance mechanisms (discipline exerted by shareholders, depositors, or skilled employees) determine efficiency in a sample of Turkish banks. The 2000 financial crisis was a wake-up call for bank efficiency and corporate governance. As a result, better corporate governance mechanisms have been able to improve risk/return efficiency when the economic, regulatory, and supervisory environments are more stable and bank products are more complex.     

On the proportionality of EU spatial ex ante coexistence regulations

The EU is currently struggling to implement coherent coexistence regulations on genetically modified (GM) and non-GM crops in all member states. While it stresses that any approach needs to be “proportionate to the aim of achieving coexistence”, very few studies have actually attempted to assess whether the proposed spatial ex ante coexistence regulations (SEACERs) satisfy this proportionality condition. In this article, we propose a spatial framework based on an existing landscape and introduce the concept of shadow factor as a measure for the opportunity costs induced by SEACERs. Our empirical findings led us to advance the proposition that flexible SEACERs based on pollen barriers are more likely to respect the proportionality condition than rigid SEACERs based on isolation distances. Particularly in early adoption stages, imposing rigid SEACERs may substantially slow down GM crop adoption. Our findings argue for incorporating a certain degree of flexibility into SEACERs by advising pollen barrier agreements between farmers rather than imposing rigid isolation distances on GM farmers. The empirical questions of proportionality and flexibility have been largely ignored in the literature on coexistence and provide timely information for EU policy makers.     

Entrepreneurship in the Street Food Sector of Vietnam—Assessment of Psychological Success and Failure Factors

We tested the hypothesis that process characteristics of action strategies were related to entrepreneurial success in microbusinesses in the urban informal sector of Vietnam. The process characteristics were divided into four strategies: critical point planning, complete planning, opportunistic, and reactive. Success was defined as a combination of economic and subjective measures. A survey was done in Hue and Hanoi (Vietnam) among 102 street food vendors. With 62 vendors of this sample, we held in-depth interviews, which were used to test our hypotheses. The results showed that seventy percent of the business owners did not plan much. Opportunistic and planning strategies were most highly related to success, and a reactive strategy was related to failure. The latter replicates other studies in other developing countries.     

Multiplicative-error models with sample selection

This paper presents a simple approach to deal with sample selection in models with multiplicative errors. Models for non-negative limited dependent variables such as counts fit this framework. The approach builds on a specification of the conditional mean of the outcome only and is, therefore, semiparametric in nature. GMM estimators are constructed for both cross-section data and for panel data. We derive distribution theory and present Monte Carlo evidence on the finite-sample performance of the estimators.     

On the proportionality of EU spatial ex ante coexistence regulations: Reply

Desquilbet and Bullock (2010) criticize some aspects of our analysis of the European Union’s (EU) spatial ex ante coexistence regulations (SEACERs) of genetically modified (GM) and non-GM crops presented in Demont et al. (2009). We argue that, besides misinterpreting some of our original arguments, the authors propose a policy analysis framework which is inconsistent with the main goal of the EU’s SEACERs. Their example incorrectly suggests that SEACERs play an additional role of regulating non-GM crop supply on the market. This would be inefficient from a policy economics perspective, especially in an open economy where global trade is taken into account. Therefore, we argue that analyzing flexibility of SEACERs in a market framework could lead to erroneous conclusions and in that case a simple farm level analysis such as presented in Demont et al. (2009) is preferred.     

Communities of Practice versus Organizational Climate: Which One Matters More to Dispersed Collaboration in the Front End of Innovation?*

Dispersed collaboration provides many benefits such as members' closeness to local cultures and markets and reachability of talent worldwide. Hence, it is no surprise that dispersed collaboration is frequently being used by product development teams. A necessary but not sufficient condition for innovation performance is the sharing of tacit, non‐codified and explicit, codified knowledge by the team. Situated learning theory, however, predicts that tacit knowledge sharing will be largely prevented by “decontextualization.” Therefore, increasing usage of dispersed collaboration will decrease levels of tacit knowledge—crucial to innovation and organizational performance—in the business unit. This research investigates the moderating role of mechanisms believed to enable tacit knowledge transfer in the front end of innovation. Using data from 116 business units, the moderating role of communities of practice and organizational climate on the relationship between the proficiency of dispersed collaboration and front end of innovation performance is investigated. Encouragement of communities of practice is found to moderate the relationship between proficiency of dispersed collaboration and front end of innovation performance on the business unit level. More specifically, proficiency of dispersed collaboration is not related at all to front end of innovation performance in business units with low support for communities of practice; but a positive relationship exists in business units with high support for communities of practice. This study does not provide support for the moderating effect of organizational climate on the relationship between proficiency in dispersed collaboration and front end of innovation performance. However, supportiveness of climate has a significant direct effect on front end of innovation performance. The findings of this study suggest that managers should simultaneously invest in increasing proficiency in dispersed collaboration and supporting communities of practice. Either one by itself is insufficient. Because of its significant direct effect, managers should also nurture an open climate favoring risk taking, trust, and open interaction.     

Travelling risks: How did nanotechnology become a risk in India and South Africa?

India and South Africa have invested in nanotechnology since the early 2000s and have identified risks to human health and the environment as an important issue for governance. This is exemplary for a wider trend in which ‘developing countries’ play an increasingly prominent role in the development, production and use of emerging technologies. This validates the claim of the world risk society thesis that countries around the world are now confronted with the risks of emerging technologies. Little is known, however, about the way developing countries deal with the potential risks of emerging technologies. Starting from the observation that the risk colonization of nanotechnology in developing countries cannot be taken for granted, this article draws upon the relational theory of risk in order to investigate how nanotechnology became understood as an object of risk in South Africa and India. The article shows that nanotechnology was constituted as an object of risk in rather different ways in India and South Africa, demonstrating that the spread of risk discourses – and the emergence of a world risk society – cannot be understood without attending to the local context. The article shows that way risk is understood and dealt with changes as risk discourses travel around the world, giving many different faces to the world risk society.     

Leisure and Social Capital: An Analysis of Types of Company and Activities

The relation between leisure activities and social capital is examined in this paper. The focus is on two dimensions: the company in which the activities were performed (household members versus friends and acquaintances) and the nature of the activities (productive versus consumptive). Data are employed from a time-use survey conducted in the United Kingdom in 2000. Productive activities are positively related to the social capital indicators of civic engagement and helping, while consumptive activities are not. The type of activity matters more than the type of company. Leisure activities especially further people's social capital among groups that are already gifted with high levels of civic engagement and helping.