Whole vs. shared ownership of foreign affiliates

This paper studies why multinational firms often share ownership of a foreign affiliate with a local partner even in the absence of government restrictions on ownership. We show that shared ownership may arise, if (i) the partner owns assets that are potentially important for the investment project, and (ii) the value of these assets is private information. In this context shared ownership acts as a screening device. Our model predicts that the multinational's ownership share is increasing in its productivity, with the most productive multinationals choosing not to rely on a foreign partner at all. This prediction is shown to be consistent with data on the ownership choices of Japanese multinationals.     

Plädoyer zur gesetzlichen Regelung des Streikrechts – eine Replik

In the recent past, Germany has experienced increasing strike activity by small trade unions. This became possible through a change in high-level legislation allowing competition between trade unions at the firm level. The German government has responded by implementing a new law, which restricts this competition, but many observers regard it as inappropriate. In a recent issue of this journal, the Scientific Advisory Board to the Federal Ministry of Transport and Digital Infrastructure proposes specific legal measures to be taken. The present paper comments on these proposals. It supports the claim for legal regulation of strike activities, but it deviates with regard to the scope of application. The point is made that striking is an activity that inherently requires legal regulation, and that legal regulation is only dispensable in sectors governed by strong competition.     

Estimating potential output for New Zealand

One of the main indicators of inflationary pressures used by the Reserve Bank of New Zealand is the output gap. An alternative to the Reserve Bank's incumbent measure of potential output is obtained using a structural vector autoregression (SVAR) methodology with long–run restrictions. The Reserve Bank's official measure of the output gap and the estimate obtained from the SVAR model tend to agree about the state of the cycle, especially during the 1970s and 1990s. However, during the 1980s, the period of economic reforms, they are more dissimilar.     

Learning from past experience: Footnotes on mindfulness and habitual entrepreneurship

Although scholars have long recognized that failure is endemic to entrepreneurial activity, they have implicitly argued that prior entrepreneurial experience positively affects opportunity discovery and opportunity exploitation. In contrast, I argue that the degree of mindfulness with which entrepreneurs use prior experience can both help and harm their ability to discover and exploit opportunities. I draw on several literatures, including studies of habitual entrepreneurship, behavioral learning theory, and theories of mindfulness, to develop a framework that yields insights about how, when and why habitual entrepreneurs’ use of past experience might improve the performance of their new ventures.     

Fixed price equilibria in a multifirm model

In a simple temperary equilibrium model with three commodities (labour, goods and money) and two sectors, there are different firms, each having its own production function. There now exist four types of fixed price equilibria (Keynesian, classical, repressed inflation, undercounsumption). In the last type, consumers are not rationed, some producers are rationed on the goods market, and other producers on the labour market. There exist three different aggregate production functions, that have to be applied in Keynesian, classical, and repressed inflation situations respectively. For the fourth case no aggregate production function exists.