Entrepreneurship: Origins and returns

We examine the origins and outcome of entrepreneurship on the basis of exceptionally comprehensive Norwegian matched worker-firm-owner data. In contrast to most existing studies, our notion of entrepreneurship not only comprises self-employment, but also employment in partly self-owned limited liability companies. Based on this extended entrepreneurship concept, we find that entrepreneurship tends to be profitable. It also raises income variability, but the most successful quartile gains much more than the least successful quartile loses. Key determinants of the decision to become an entrepreneur are occupational qualifications, family resources, gender, and work environments. Individual unemployment encourages, while aggregate unemployment discourages, entrepreneurship.     

Poetic Economics and Experiential Knowledge,or How the Economist K. William Kapp Was Inspired by the Poet Ernst Wiechert

In the first part of this article, I analyze the phenomenon of the “double truth” in economics, which suppresses experiential knowledge and leads to the destruction of the natural environment, community, and human civility. Subsequently, I explore the positive effects of opening economics to the creative, esthetic, and ethical potential of experiential knowledge, including works of art. In the second part of the article, I showcase the way the economist K. William Kapp was inspired by the renowned German novelist, poet, educator, intellectual, and concentration-camp survivor Ernst Wiechert. Wiechert was Kapp’s teacher in high school, the Hufgymnasium in Königsberg, during the Weimar Republic. I investigate the unpublished and unexplored Kapp-Wiechert correspondence, as well as analyze some (published and unpublished) foreign language essays written by Kapp and his wife Lore Kapp. This analysis reveals how Kapp’s economics drew lasting inspiration from Wiechert’s art philosophy, pedagogy, novels, and poetry. This is a case study of a poetic economics that is open to experiential knowledge, which makes it more humane, edifying, serene, and sensitive to the natural and social environment.     

Further Evidence on the Link between Finance and Growth: An International Analysis of Community Banking and Economic Performance

We try to contribute to both the finance-growth literature and the community banking literature by testing the effects of the relative health of community banks on economic growth, and investigating potential transmission mechanisms for these effects using data from 1993 to 2000 on 49 nations. Data from both developed and developing nations suggest that greater market shares and efficiency ranks of small, private, domestically owned banks are associated with better economic performance, and that the marginal benefits of higher shares are greater when these banks are more efficient. Only mixed support is found for hypothesized transmission mechanisms through improved financing for small and medium enterprises or greater overall bank credit flows. Data from developing nations are also consistent with favorable economic effects of foreign-owned banks, but unfavorable effects from state-owned banks.     

The impact of direct marketing appeals on charitable marketing effectiveness

Building on behavioral decision research, this article provides guidelines to charitable marketing managers regarding the effect of charitable direct marketing appeals on donor decision judgments. Several charitable direct mail appeals (factors) were empirically tested simultaneously in a factorial experimental design involving 18,144 potential donors to determine how donor decision strategies influenced choice judgments about whether to give and estimation judgments about how much to give. The results indicate that suggested anchors and framing influence response rate (choice) but not size of gift. Reference information (factual/statistical and narrative/experiential) influences size of gift (estimation) but not response rate. Implications for charitable marketing managers are discussed. He received his D.B.A. from Boston University, M.B.A. from Harvard University, and B.A. from Brandeis University. His research interests include managerial pricing, marketing communication strategies, and customer value. His work has been published in theCalifornia Management Review, Sloan Management Review, Pricing Strategy and Practice, Journal of Retailing, Journal of Marketing Communication, Journal of Business and Industrial Marketing, andJournal of Promotion Management, among others. He earned his S.B., S.M., and Ph.D. degrees from the Massachusetts Institute of Technology Sloan School of Management. He is coauthor ofDirect Marketing Management (Prentice Hall) andCases in Business Statistics (Allyn & Bacon). He has published a variety of articles in journals such asManagement Science, Journal of Marketing Research, Journal of Direct Marketing, Harvard Business Review, Sloan Management Review, Journal of Business Forecasting, American Statistician, andJournal of Finance.     

Local Political Leadership: Nordic Style

In a context where changes brought about by globalization and Europeanization, and where local governments increasingly operate in a governance mode, different countries place increasing stress on the importance of strong local leadership. This article reviews local political leadership in Denmark, Finland, Norway and Sweden. Outside of a few major (mainly capital) cities, local government in the Nordic area remains small scale and frequently rural, is strongly partisan, yet relies on a strong tradition of consensual, corporatist style of decision‐making. Furthermore, this social democratic consensus places a stress on the continued production and delivery of high quality welfare state services. This domestic environment produces a style of local leadership which is essentially collective in nature and in which the strong mayor concept is alien. The article reviews the experience of local political leadership in the four Nordic countries and concludes that, though there is some small country variation and without many examples of strong mayors, local political leaders play an important role, especially in managing and maintaining the consensual style of politics. Mondialisation et européanisation créent des changements qui, à l'instar des gouvernements locaux, opèrent de plus en plus selon un mode de gouvernance, poussant plusieurs pays à faire une place plus importante à une forte autorité locale. L'article étudie l'autorité politique locale au Danemark, en Finlande, en Norvège et en Suède. A l'exception de quelques rares grandes villes (essentiellement les capitales), un gouvernement local dans les pays nordiques garde une échelle réduite et souvent un caractère rural, tout en étant fortement partisan même s'il s'appuie sur une solide tradition décisionnelle consensuelle de type syndical. Par ailleurs, ce consensus social démocratique agit sur la poursuite et la qualité de la fourniture de prestations dans le cadre de l'État‐providence. Cet environnement national génère un style d'autorité locale de nature principalement collective, qui exclut toute notion de pouvoir propre au maire. L'article étudie les formes d'autorité politique locale dans les quatre pays scandinaves concluant que, malgré quelques légères variations nationales et la quasi‐absence de maires puissants, les leaders politiques locaux jouent un rôle important, en particulier dans la gestion et la préservation d'un style politique consensuel.     

Max Weber

A bstract .   This paper argues that Weber's outline and research program is only of limited relevance for present-day economic sociology and heterodox economics because Weber had a rather narrow and static understanding of rationality and the economy. Uncertainty, both as a basic fact of economic life and in the interpretation of what rational action means in specific contexts, is missing in his approach. After a short discussion of the secondary literature on Weber's methodology, the paper focuses on the most important writings of Weber on methods and economics (e.g., his outline and some parts of Economy and Society ). The result of our investigation is that Weber shared a rather narrow, neoclassical understanding of the Austrian variant of economics. His important construction of goal-oriented behavior as the major methodological advice to analyze human action presupposes the idealized assumptions of perfect knowledge. His understanding of the market exchange process, price setting, and the functioning of full competition are rather conventional and elementary. Weber's genius did not materialize in the field of economics, but in his sociology of religion and law and in his sociology of domination.     

The institutional memory hypothesis and the procyclicality of bank lending behavior

We test a new hypothesis that may help explain the procyclicality of bank lending. The institutional memory hypothesis is driven by deterioration in the ability of loan officers over the bank's lending cycle that results in an easing of credit standards. We test this hypothesis using data from individual US banks over 1980–2000: over 200,000 bank-level observations on commercial loan growth, over 2,000,000 loan-level observations on interest rate premiums, and over 2000 bank-level observations on credit standards and loan spreads from bank management survey responses. The empirical analysis supports the hypothesis, although there are differences by bank size class.     

Is Publicity Always Better than Advertising? The Role of Brand Reputation in Communicating Corporate Social Responsibility

Previous studies on corporate social responsibility (CSR) communication suggest that firms’ social initiatives should be communicated through third-party, non-corporate sources because they are perceived as unbiased and therefore reduce consumer skepticism. In this article, we extend existing research by showing that source effects in the communication of social sponsorships are contingent on the brand’s pre-existing reputation. We argue that the congruence between the credibility and trustworthiness of the message source and the brand helps predict consumer responses to a social sponsorship. The results show that a non-corporate source (publicity) generates more positive brand evaluations than a corporate source (advertising) when the sponsor has a positive reputation. However, the converse effect occurs when brand reputation is low: when the sponsor has a poor reputation, a corporate source generates more positive brand evaluations than a non-corporate source. Mediation analyses show that the interaction effect between CSR information source and brand reputation can be explained by sponsorship attitude, persuasion knowledge, and perceived fit between the brand and the cause.