Parallel Neutrality

This paper develops the notion of parallel-neutral technical change for inputs and outputs. It is shown that parallel-neutral technical change generalizes existing radial notions of neutral technical change. A taxonomy of the structural consequences of parallel-neutral technical change is developed.     

Dynamic yardstick mechanisms

This paper shows that the inability of principals to commit to long-term contracts is irrelevant when dealing with several agents whose private information is correlated. This sharply contrasts with the dynamics of contracting without such correlation. The paper also explores what limitations on yardstick mechanisms can justify the use of long-term contracts. We found that the inability of a principal to commit not to renegotiate long-term contracts is without consequence even if there is a bound on transfers that an agent can be asked to pay. In contrast, short-term contracting fails to implement the commitment solution with constraints on transfers. Second, absent current yardstick, the possibility of using correlated mechanisms in the future allows the principal to implement the first-best with a renegotiation-proof long-term contract whereas this cannot be achieved with short-term contracting.     

Environmental Appraisal and Environmental Policy in the European Union

Revisions to the European Treaty of Union require some form of environmental appraisal – primarily risk assessment and cost-benefit analysis – of regulatory initiatives by the European Commission. A retrospective look at the emergence of environmental appraisal also shows that, while the Commission has made great advances in introducing cost-benefit or cost-effectiveness appraisals in recent years, past environmental decisions and overall environmental policy have not been informed by systematic appraisal techniques. Nor is it clear what role is now being played by risk assessments. While it is impossible to gauge the extent to which systematic appraisal procedures will save on regulatory and compliance expenditures, some indications are provided of the costs of past neglect of these procedures.     

State income tax policy and geographic labour force mobility in the United States

"This study empirically investigates the impact of state income tax policy on U.S. interstate migration [of the labor force] for the period 1985-89. It finds that people vote with their feet and prefer to move so as to minimize their state income tax liabilities."     

From the blogosphere into the parliament: The role of digital technologies in organizing social movements

In this paper, we present a process model exploring the roles played by digital technologies (DTs) in the organization of collective action (CA) of social movements (SMs) at different points in their lifecycles. The process model, which is based on an exploratory case study of the Italian Five Star Movement, relates the environmental conditions to the working logic, structure and use of DTs at three different stages of the SMs. We explain how these choices are adopted at each stage to address internal and environmental challenges and how they create further challenges to be addressed to pass to the next stage. We further explore the dynamics between the logic of connective and collective action and reflect on the growing need for structures and control. By so doing, our work addresses the need for a better understanding of the coevolution between DTs and organizational structures and of the ways in which DTs are used to mobilize people to sustain CA along the SM lifecycle.     

Subsidiary staffing,cultural friction,and subsidiary performance: Evidence from Korean subsidiaries in 63 countries

Drawing from the notion of cultural friction and based on the agency theory rationalization of multinational enterprise (MNE) headquarter–subsidiary relationship, we examine the impact of cultural friction in foreign subsidiaries on subsidiary performance. We argue that cultural friction, arising due to a high presence of parent country nationals (PCNs) in culturally distant locations, has a detrimental effect on subsidiary performance. This effect is the strongest when the cultural friction is at the top management team (TMT) level and the weakest when friction is at the regular employee level. However, this relationship is contingent on factors that work as drags or lubricants for cultural friction between PCNs and host country nationals (HCNs). We identify governance mode and language differences between home and host countries as drag parameters and host country experience and subsidiary interdependence as lubricants that condition the effect of cultural friction on subsidiary performance. Empirical findings based on a longitudinal sample of 7,495 foreign subsidiary observations of 467 Korean MNEs in 63 countries during 1990–2014 provide robust support for our theoretical predictions.     

The economics of markets and platforms

Advances in the study of both markets and platforms contribute to economics. Platforms are typically digital markets, although platforms can designate markets generally. So, the economics of markets and the economics of platforms are one and the same. Platforms show the critical role of intermediaries in endogenous price adjustment and market clearing. The platform model remedies problems with general equilibrium analysis by combining and extending the basic Walrasian and Marshalian market models. The analysis of platforms provides explanations for the bid–ask spread, including market power, search costs, matching costs, adverse selection, and moral hazard. The study of platforms demonstrates the importance of participation and coordination in the formation of markets. The discussion emphasizes that platforms have significant implications for the theory of the firm. The analysis further considers how platforms affect innovation and entrepreneurship.