PRIMARY VERSUS SECONDARY PRODUCTION TECHNIQUES IN U.S. MANUFACTURING

In this paper we analyze the determinants of material inputs into individual production activities as a function of their outputs. We use observations on a large cross-section of U.S. manufacturing plants from the Census of Manufactures, including those that make goods primary to other industries, to study differences in production techniques. We find that in most cases material requirements do not depend on whether goods are made as primary products or as secondary products. We thus elucidate support for the commodity technology model as a useful working hypothesis.     

How Do Franchisees Assess Franchisor Trustworthiness?

This study investigates the antecedents of franchisees’ assessments of franchisor trustworthiness. It combines multiple theoretical perspectives to develop a framework that is empirically tested with survey data from 128 franchisees of a Dutch franchise system. The results show that franchisees’ perceptions of a franchisor's fulfillment of its functional duties on proactive and reactive quality assurance and strategic management positively influence franchisees’ assessments of franchisor trustworthiness. Moreover, the results show that the impact of the antecedents on franchisees’ trustworthiness assessments varies across franchisees: market competition attenuates the influence of strategic management and reactive quality assurance. Unit performance does not moderate the importance of the antecedents.     

Debreu’s coefficient of resource utilization, the Solow residual, and TFP: the connection by Leontief preferences

Debreu’s coefficient of resource utilization is freed from individual data requirements. The procedure is shown to be equivalent to the imposition of Leontief preferences. The rate of growth of the modified Debreu coefficient and the Solow residual are shown to add up to TFP growth. This decomposition is the neoclassical counterpart to the frontier analytic decomposition of productivity growth into technical change and efficiency change. The terms can now be broken down by sector as well as by factor input.

OPEC's Response to International Climate Agreements

This paper studies a game between a group of countries that have agreed to participate in an international climate agreement (the signatories) and OPEC. The purpose of the signatories is to design carbon taxes that maximize their total net income, given a goal on global carbon emissions. As a response to the climate agreement, OPEC imposes an oil tax on its member states that maximizes OPEC's profits. Within a numerical model we find the subgame-perfect equilibrium of a game in which each player chooses when to fix his decision variables. It is shown that in equilibrium the group of signatories chooses to be the leader and OPEC chooses to be the follower. It is demonstrated, however, that for both agents the order of move is of minor (numerical) importance. Hence, the players have limited incentives for strategic behaviour.     

Managerial Bonus Systems in a Differentiated Duopoly: A Comment

A differentiated Cournot duopoly is considered where firm owners delegate the output decision to a manager, who is rewarded on the basis of his performance. If this performance is measured in terms of (i) pure profits, (ii) a combination of profits and sales, (iii) a combination of profits and market share or (iv) relative profits, the latter option strictly dominates the others if the products are perfect substitutes. Recently it was claimed that this result does not hold for all levels of product substitutability. In this comment, we show however that this result is robust against the introduction of product differentiation. Copyright © 2011 John Wiley & Sons, Ltd.     

Collegiality under pressure: the effects of family demands and flexible work arrangements in the Netherlands

Collegial relationships at work have become more important now that organizations increasingly use team-based work processes. Collegiality is also facing new challenges, however: more employees are meeting heavy demands beyond the workplace and making more frequent use of flexible work arrangements. This study seeks to explain the effect of employees’ family demands on collegiality and evaluates whether the use of flexible work arrangements improves or impedes collegial behaviour. Moreover, we aim to investigate collegial behaviour as an exchange process between co-workers, and therefore also take family demands and the use of flexible work arrangements by co-workers into account as predictors of employee collegiality. Based on a sample of 1114 employees from 30 organizations, the results show that when used by the employee and co-workers, flexitime decreases collegiality. Collegiality is decreased when the employee has young children, but increased when co-workers have older children. The implications of these findings for HR practices are discussed.     

Outsourcing of Services and the Productivity Recovery in U.S. Manufacturing in the 1980s and 1990s

Manufacturing productivity growth recovered during the 1980s and 1990s, while other sectors, particularly services, did not. In the same period U.S. manufacturing has engaged in the “outsourcing” or “contracting-out” of service functions. Has the recovery of manufacturing been accomplished by industrial reorganization--sloughing off sluggish services--rather than technical progress? We analyze this question by reducing service inputs to their consituent elements of material inputs. Service productivity growth is thus imputed to the goods sectors, reducing the recovery of manufacturing productivity growth in the 1980s by one fifth. The recovery lasted through the 1990s, when high productivity performers in manufacturing have been relatively successful at outsourcing sluggishservices.

     

The Location of Comparative Advantages on the Basis of Fundamentals Only

We propose a new way to locate the comparative advantages of two economies linked by international trade. We construct a competitive benchmark based only on the fundamentals of the two economies: endowments, preferences and technologies. The direction of trade is endogenously determined by a linear program with an input-output core. The factor contents of that trade are compared with factor endowments to test the Heckscher-Ohlin model in the presence of different technologies and preferences. We can also evaluate the gains of free bilateral trade. The model is applied to a customs union between Europe and Canada. The Heckscher-Ohlin factor abundance specialization hypothesis is supported by the data.     

The consumer's index

Consumer's surplus measures the area under the demand curve between two prices, but is path dependent. There exists a path such that consumer's surplus tracks utility and an explicit formula is known for CES utilities. This paper shows that the CES‐based formula holds for any homothetic utility, and I call it the consumer's index. The index modifies consumer's surplus in two ways: the change in income is measured by its growth factor and the area under the demand curve is normalized by income.