Extending the external validity of the FITD effect to the industrial marketplace

The foot-in-the-door (FITD) effect has been extensively researched in prosocial settings. Several researchers have advocated its use as an influence strategy in marketing settings although no empirical evidence has previously been published regarding its operation in industrial/economic settings. This study experimentally tests the effect in an actual industrial marketing setting. The organization in which the study was carried out markets telecommunications products and the study sample exposed to the influence strategies consisted of potential customers—general managers and marketing managers representing industrial firms in the wholesale trade sector.     

Strategy and Financial Policy in UK Small Firms

There is growing evidence that capital structure and firm strategy are linked but most studies to date have focused on large, publicly quoted firms, with little attention given to small and medium-sized enterprises (SMEs). A major proposition of the study is that both strategic and financial factors are necessary to explain chosen debt levels. The empirical question adopted for this work, given the best financial model of capital structure, is – does strategy provide any additional explanatory power? Hence strategy and financial variables are seen as complementary rather than competing determinants of capital structure. There appears to be strong evidence supporting the proposition that competitive strategy affects the capital structure of SMEs, but there is little evidence of any impact from corporate strategic factors. The study also supports the notion that there is a 'pecking order' in SME financing and that variability in profits results in 'distress' borrowing. This study provides important empirical evidence to support work on the capital structure puzzle and the funding problems of SMEs.     

Cost Uncertainty and Taxpayer Compliance

The existence of a private cost borne by audited taxpayers affects the tax enforcement policy. This is so because tax auditors will face now two sources of uncertainty, namely, the typical one associated with taxpayers’ income and that associated with the taxpayers’ idiosyncratic attitude towards tax compliance. Moreover, the inspection policy can be exposed to some randomness from the taxpayers’ viewpoint due to the uncertainty about the audit cost borne by the tax authority. In this paper we provide an unified framework to analyze the effects of all these sources of uncertainty in a model of tax compliance with strategic interaction between auditors and taxpayers. We show that more variance in the distribution of the taxpayers’ private cost of evading raises both tax compliance and the ex-ante welfare of taxpayers. The effects of the uncertainty about the audit cost faced by the tax authority are generally ambiguous. We also discuss the implications of our model for the regressive (or progressive) bias of the effective tax system.     

Valuation and management of wetland ecosystems

We recently completed a study of wetland values in coastal Louisiana that employed both willingness-to-pay and energy analysis-based methodologies and were able to bracket a range of values within which we feel fairly confident the true value lies. However, a large amount of uncertainty remains. Our current estimates of the total prsent value of an average acre of natural wetlands in Louisiana are US$2429–6400 per acre (assuming an 8% discount rate) to $8977–17000 per acre (assuming a 3% discount rate). At the lowest value, the current annual rate of loss of Louisiana wetlands (50 sq miles per year) is worth about $77 million. At the largest value it is worth about $544 million.In this paper we (a) discuss the fundamental theoretical and practical problems underlying natural resources valuation; (b) summarize our methods and findings for Louisiana wetlands; and (c) elaborate on some of the more recalcitrant problems attending applied natural resource valuation, including discounting and dealing with uncertainty and imprecision.The discount rate makes more difference in the final result than any other one factor, and yet there is much disagreement about the appropriate approach to discounting natural resources. We discuss the discounting problem as applied to natural resources and argue for lower discount rates for valuing renewable natural resources than apply for other aspects of the economy.It now seems clear that no reasonable amount of effort will produce very precise estimates of wetland values, and we suspect this is also the case for several other classes of natural resources. We elaborate a Wetlands Asurance Bonding System to address these problems.     

The employment effects of sustainable development policies

This paper argues that it is time for ecological economists to bring the employment impacts of sustainable development policies to the forefront of the research agenda. Important conservation efforts continue to founder because of their perceived employment effects. The paper examines the evidence on the employment impacts of sustainable development policies and argues that maintaining or even increasing employment depends critically on appropriate policy design and attention to the political economy of implementation of policies. The paper concludes that a better understanding of these issues, fair labour market and structural adjustment programs, and especially forward planning to anticipate problem areas, must replace the piecemeal, ‘knee-jerk’ reactions to environmental issues, such as were evident in Australia during the last federal election.     

Labour Markets form the Microeconomic perspective: Implicit Contract Theory

This paper deals with a recent development in labour economics - that of implicit contract theory. A major impetus to its development has been the existence of involuntary unemployment and wage rigidity. In reality, there have been two streams of development - one associated with the name of Okun which focusses on the fixed costs of employing labour and the importance of reputation for reliability on the part of employers. The other emphasises differences in risk-aversion between employers and workers, viewing the implicit contract as a form of risk shifting. Both theories provide insights into the workings of labour markets, in particular, the pervasiveness of long-term employment relations. although difficulties arise in terms of the enforceability of contracts. The broader literature on internal labour markets in useful in this context.     

Chinese multinationals’ approach to international human resource management: a longitudinal study

Abstract

This study explores how emerging market service firms, operating in developed markets, approach human resource management (HRM). Data analyzed in this article were drawn from a longitudinal case study of the Australian subsidiary of a Chinese multinational bank. We find that subsidiary HRM follows host country and global best practices. However, the way that this hybrid HRM system was implemented shows traces of Chinese origin. A key finding from this study is that although our case bank officially adopted a polycentric approach to subsidiary staffing, employing host country nationals, the subsidiary predominantly employed locals with a Chinese ethnic background. We also find the case bank’s strategy in international HRM has evolved from a focus on localization to global standardization. This global standardization, however, is shaped in line with global best practices rather than home country management model. These findings highlight the need for future studies to adopt a more nuanced approach to examining international HRM strategies, especially when analyzing host country effect or localization strategy.