Human Capital Intangibles and Performance of Franchise Networks: A Complementary View between Agency and Critical Resource Perspectives

This article examines the impact of human capital intangibles on the governance structure of franchise networks (i.e., proportion of franchised outlets) and the joint impact of human capital intangibles and governance on the performance of franchisors. Agency theory focuses on the free‐riding hazard and the costs associated with franchising in the context of high human capital intangibles. The critical resources theory highlights the weakness of company ownership and the advantages of using franchising in this context. Tests of the hypotheses derived from these theoretical frameworks indicate that these complementarily explain the governance structure and financial performance of franchise networks. Copyright © 2013 John Wiley & Sons, Ltd.     

Trade between symmetric countries,heterogeneous firms,and the skill premium

Abstract This paper examines the effects of trade liberalization between symmetric countries on the skill premium. I introduce skilled and unskilled labour in a model of trade with heterogeneous firms à la Melitz (2003) and assume a production technology such that more productive firms are more skill intensive. I show that the effects of trade liberalization on wage inequality crucially depend on the type of trade costs considered and on their initial size. While fixed costs of trade have a potentially non‐monotonic effect on the skill premium, a drop in variable trade costs unambiguously and substantially raises wage inequality.     

Governmental Control of Externalities,or the Prey Eats the Predator

This paper argues that Gunnar Myrdal's theory of the state fruitfully elucidates which set of factors contributed to the transformation of the Welfare State into what James K. Galbraith has described as the modern Predator State. Myrdal employs the circular cumulative causation hypothesis (Berger forthcoming; 2008; Berger and Eisner 2007) to explain the evolution of the state as the result of multiple interrelated factors. Myrdal's evolutionary-institutional analysis of the state is found to be compatible with Galbraith's (2008) recent Veblenian approach in that it highlights the role of corruption (pecuniary considerations) in the relationship between big business (the "organized sector") and government.     

Existence of solutions in continuous-time optimal growth models

This paper studies the existence of solutions in continuous time optimization problems. It provides a theorem whose conditions can be easily checked in most models of the optimal growth theory, including those with increasing returns and multi-sector economies.