How and when is dual trading irrelevant?

Within a general model of speculative trade, we derive the aggregate consequences of dual traders who process retail liquidity trades and trade on their own account. We prove that dual trading reduces total expected speculator profits unless speculators process all liquidity trade and trade with the same intensity on liquidity trade. In contrast, dual trading does not affect the information content of prices. We show how results generalize when we endogenize (a) speculator information via costly information acquisition about fundamentals or costly processing of liquidity trade, and (b) liquidity trader motives and welfare via endowment shocks.     

Information technology,transaction costs and the decision to 'make or buy'

Information and communication technology (ICT) has a wide ranging impact on business. One of the effects is on the 'make or buy decision'. This is analysed from the perspective of transactzon cost economm (TCE). On the one hand ICT reduces transaction costs by reducing search costs, by facilitating monitoring and control of performance and by yielding a greater flexibility of production, which reduces the transaction specificity of assets. These efiects, favour the decision to 'buy'. On the other hand, ICT reduces economies of scale, in some areas of production, which makes outside production i n a specializedfirm less attractive. Also, ICT may be used to impose switching costs between suppliers and buyers, thereby miszng transaction costs. But such ploys appear to be feasible only temporarily, with a pressure from users and competitors towards standardization and open systems. Thus the effects of ICT are diverse, but on the whole it tends to favour the option to contract out.     

Income Level and the Value of Non-Wage Employee Benefits

With continuing increases in the cost of medical insurance and other “fringe” benefits, payroll cost for monetary and non-monetary aspects of compensation is a significant factor for most organizations. While this is not a new phenomenon, relatively few studies in the empirical literature have examined the role of fringe benefits in employee compensation plans. Especially in under researched areas, it is imperative that researchers utilize ideas and theories from other disciplines to further our knowledge. Accordingly, this paper borrows the concept of elasticity from the economic literature to help explain and understand employee perceptions of two of the most common, costly, and important benefits—medical insurance and retirement plans. Specifically, the relationship between the current income of employees is analyzed in relation to employee perceptions of the value and importance of benefits. Results suggest that employees do not value medical insurance and retirement plans in the same manner. This result is interpreted in terms of the change in the marginal utility of the specific benefit.     

Market Quality around Macroeconomic News Announcements: Evidence from the US and Canadian Markets

We investigate changes in market quality in the US and Canada during macroeconomic news announcements. We measure market quality in terms of returns dependence, the cost of trading, and pricing errors. Using a sample of cross‐listed stocks and macroeconomic news from both countries, we document that market quality is generally higher in the US than in Canada. The pattern of intraday serial dependence in returns reveals that it takes investors about 5 min less to react to order imbalances in the US than in Canada. We further observe that, around announcement periods, transaction costs increase more in Canada than in the US, suggesting that the US market offers better liquidity. More information is also incorporated into the US market. These results support the view that the US is a prime target for cross‐listing, and are robust to different types of assets and time specifications.     

«Flexiseguridad» en Bélgica. Una propuesta de reforma basada en principios económicos

El régimen de seguro de desempleo y la legislación protectora del empleo de Bélgica se establecieron con el telón de fondo de una relación clásica, de carácter estable y duradero, entre trabajadores y empresas. Sin embargo, la globalización de la economía y la rápida evolución de las tecnologías y los sistemas de organización exigen hoy en día más flexibilidad tanto a unos como a otras. De ahí que las instituciones del mercado laboral hayan de reformarse de manera urgente para conciliar esta mayor flexibilidad con una seguridad suficiente para los trabajadores. Aunque la idea de la «flexiseguridad» no es nueva, hay opiniones distintas sobre cuál es el modelo institucional que debe traer consigo. Los autores proponen una reforma guiada expresamente por los principios económicos.     

China's indigenous innovation approach: the emergence of Chinese innovation theory?

Theory-driven and theory-based studies on innovation in China are relatively scarce. Most innovation studies about Chinese business are based on Chinese policy and government programmes and their results. This special issue of Technology Analysis and Strategic Management explores China's indigenous innovation strategy and suggests a research agenda that focuses on Chinese innovation theory building that incorporates China's efforts to move towards an innovation-based economy. Currently, China is developing its indigenous innovation capabilities (The Chinese term is 自主创新, pronounced zizhu chuangxin). We suggest that innovation studies of Chinese business could focus on these indigenous innovation ambitions. In addition to this, it could adopt, and be embedded in a Chinese theory of innovation instead of a traditional Western-centric theory of innovation. Our proposition is that to better understand Chinese indigenous innovation, a new paradigm of Chinese innovation should be developed. We therefore present a research agenda that can be a starting point for the development of such a theory, and present seven papers in this special issue that give content to this idea. Obviously no theory will have a monopoly on exploring Chinese innovation phenomena, but it is interesting to add a Chinese-centric view into the Western-centric scholarly view. We hope that will be one of the contributions of this special issue on innovation in China.