Development of Trust: A Study of Interfirm Relationships in Vietnam

The radical political and economic reforms sweeping through former socialist countries during the last decade have opened rich opportunities for privately owned businesses to emerge and develop. Since the market institutions and infrastructures in these countries are largely underdeveloped, private firms in transition economies rely extensively on interfirm partnerships. This raises the question of how—in the absence of institutions that legitimate markets, contracts, and private property—managers of new business ventures develop new relationships. This paper addresses this issue through analysis of multiple subcontracting relationships formed at a private garment company in Vietnam. This analysis suggests that firms in transition economies develop interfirm trust in ways that are quite different from their counterparts in more highly developed economies.     

Zombie firms and economic stagnation in Japan

It is often claimed that one contributing factor to Japan's weak economic performance over the past decade is that Japanese banks have continued to provide financial support for highly inefficient, debt-ridden companies, commonly referred to as ‘zombie’ firms. Such poor banking practices in turn prevent more productive companies from gaining market share, strangling a potentially important source of productivity gains for the overall economy. To explore further the zombie-firm hypothesis, we use industry- and firm-level Japanese data and find evidence that productivity growth is low in industries reputed to have heavy concentrations of zombie firms. We also find that the reallocation of market share is going in the wrong direction in these industries, adding to already weak productivity performance. In addition, we find evidence that financial support from Japanese banks may have played a role in sustaining this perverse reallocation of market share.

The implications of direct participation for organisational commitment,job satisfaction and affective psychological well‐being: a longitudinal analysis

The article examines the implications of direct participation for employees' organisational commitment, job satisfaction and affective psychological well‐being. It focuses on both task discretion and organisational participation. Applying fixed effect models to nationally representative longitudinal data, the study provides a more rigorous assessment of the conflicting claims for the effects of participation that have hitherto been based primarily on cross‐sectional evidence. Further, it tests a range of mechanisms by which direct participation leads to improved employee outcomes. Contrary to the critical literature, it shows that even after controlling for unobserved individual heterogeneity, both forms of direct participation have positive effects for employees' organisational commitment and well‐being. The effects of task discretion are primarily direct, reflecting the intrinsic importance of personal control over the job task; in contrast, those of organisational participation derive to a greater extent from its indirect effect on the quality of working conditions.     

COMMENTS ON: "SELECTED PROBLEMS OF INTERCOUNTRY COMPARISONS ON THE BASIS OF THE EXPERIENCE OF THE EEC"

The paper by Gerardi covers considerable ground, touching on a wide variety of issues in the area of international comparisons of product and purchasing power. Since our views on most of these subjects have been expounded in one or another of the International Comparison Project volumes and we will concentrate mainly on the central issue raised by Gerardi of the selection of an aggregation process that must somehow take account of the tastes of all the people who are the subject of an international comparison inquiry. In addition, we comment on some other points including the notion of special purpose PPPs. Finally, we make a brief statement about where we think future research will be most useful in improving international comparisons.     

Choosing the Technical Efficiency Orientation to Analyze Firms' Technology: A Model Selection Test Approach

We focus on the importance of the assumptions regarding how inefficiency should be incorporated into the specification of the data generating process in an examination of a sector's production or efficiency. Drawing on the literature on non-nested hypothesis testing, we find that the model selection approach of Vuong (1989) is a potentially useful tool for identifying the best specification before carrying out such studies. We include an empirical application using panel data on Spanish dairy farms where we estimate cost frontiers under different specifications of how inefficiency enters the data generating process (in particular, efficiency is introduced as an input-oriented, output-oriented and hyperbolic parameter). Our results show that the different models yield very different pictures of the technology and the efficiency levels of the sector, illustrating the importance of choosing the most correct model before carrying out production and efficiency analyses. The Vuong test shows that the input-oriented model is the best among the models we use, whereas the output-oriented model is the worst. This is consistent with the fact that the input- and output-oriented models provide the most and least credible estimates of scale economies given the structure of the sector.     

Internal labour market processes

This article focuses upon internal labour market processes and reviews current theoretical and empirical material. In reporting two recent studies which indicate the variety of internal processes the authors offer some explanations for such developments, in particular their relevance to issues of managerial control.