Inequality and Income Distribution in Global Value Chains

Global value chains (GVCs), led by transnational corporations (TNCs), have reshaped the world division of labor over the past two decades. GVCs are pervasive in low technology manufacturing, such as textile and apparel, as well as in more advanced industries like automobiles, electronics, and machines. This hierarchical division of labor generates wild competition at the lower value-added stages of production, where low wages and low profit margins prevail for workers and contract manufacturers in developing countries. At the top of the hierarchy another kind of competition prevails, centered on the ability to monitor and control intellectual property rights related to innovation, finance, and marketing. We argue that GVCs have had crucial effects on income inequality and the appropriation of rents in modern capitalism.     

Simultaneous Estimation of Legal and Illegal Supply and Demand: The Case of Motion Pictures

Prior research into illegal goods has typically looked at one-way effects, such as illegal demand on legal demand. This research investigates a previously unexamined component of the market, illegal supply. The authors examine the supply and demand of legal goods and their illegal counterparts as a market system of four interdependent components. This research makes theoretical and empirical contributions by evaluating illegal supply in this system. Simultaneous equations estimate each market component on the others using data from the motion picture industry. The results find illegal supply has no effect on legal supply (movie screens), positive effects on illegal demand (piracy downloads), and some effect on legal demand (box office revenues). Timing effects highlight this: illegal supply has a positive effect on legal demand during a film’s opening week, but no effect post-launch. The other market components have positive effects on illegal supply (except legal supply, which is negative in the opening week). Additionally, illegal demand has a negative effect on legal demand during the opening week of release, but not in the subsequent weeks. This finding alleviates prior research tension as to whether piracy helps or hurts legal sales, as omitting illegal supply could result in biased estimates.     

Extending the enterprise evolution contextualisation model

Enterprise engineering (EE) emerged as a new discipline to encourage comprehensive and consistent enterprise design. Since EE is multidisciplinary, various researchers study enterprises from different perspectives, which resulted in a plethora of applicable literature and terminology, but without shared meaning. Previous research specifically focused on the fragmentation of knowledge for designing and aligning the information and communication technology (ICT) subsystem of the enterprise in order to support the business organisation subsystem of the enterprise. As a solution for this fragmented landscape, a business-IT alignment model (BIAM) was developed inductively from existing business-IT alignment approaches. Since most of the existing alignment frameworks addressed the alignment between the ICT subsystem and the business organisation subsystem, BIAM also focused on the alignment between these two subsystems. Yet, the emerging EE discipline intends to address a broader scope of design, evident in the existing approaches that incorporate a broader scope of design/alignment/governance. A need was identified to address the knowledge fragmentation of the EE knowledge base by adapting BIAM to an enterprise evolution contextualisation model (EECM), to contextualise a broader set of approaches, as identified by Lapalme. The main contribution of this article is the incremental development and evaluation of EECM. We also present guiding indicators/prerequisites for applying EECM as a contextualisation tool.     

ECONOMIC RECESSIONS,BANKING REFORM AND THE FUTURE OF CAPITALISM1

In the 2010 London School of Economics and Political Science Hayek Memorial Lecture, the author argues that flaws in the design of the monetary and financial system were responsible for the global financial crisis and the subsequent recession. The crash reflected the unsustainable nature of the bubble induced by artificial credit expansion created by fractional‐reserve banking under the direction of central banks. Such boom–bust cycles will continue until radical reforms are implemented, including a 100% reserve requirement for demand deposits.     

On Emissions Trading and Market Structure: Cap-and-Trade versus Intensity Standards

This paper examines the interdependence between imperfect competition and emissions trading. We particularly analyze the long run equilibrium in a two-sector (‘clean’ and ‘dirty’) model with Cournot competition among firms who face a fixed cost of production. The clean sector is defined as the sector with the highest long run cost margin on emissions. We compare the welfare implications of a cap-and-trade scheme with an emissions trading scheme based on relative intensity standards. It is shown that a firm’s long run equilibrium output in the clean or dirty sector does not depend on the emissions trading format, but only depends on the fixed cost of producing in the respective sector. Intensity standards can result in clean firms selling allowances to dirty firms, or dirty firms selling to clean firms. The former outcome yields higher welfare. It is demonstrated that cap-and-trade outperforms the intensity-based trading scheme in terms of long run welfare with free entry and exit. With intensity standards the size of the clean sector is too large.     

Sense and sensibility: Testing an attention-based view of organizational responses to social issues

According to attention-based theories, to explain organizational attention is to explain organizational behavior. In our study, we test the model of situated attention and firm behavior by examining the effects of attention structures and allocation of attention on organizational outcomes. We hypothesize a positive relationship between attention structures and the allocation of organizational attention that, in turn, has an effect on financial performance. Using a unique data set composed of indicators of social responsibility published by 338 Brazilian organizations between 2001 and 2007, we find support for our hypotheses. Our findings suggest that organizational attention to social issues fully mediates the relationship between attention structures and financial performance.