Factual and modal notions in social research

The article discusses a distinction between factual and modal notions, and corresponding generalizations, in social research. The discussion starts from the suggestion, made by Charles Ragin, that theoretical statements in social research most often can be formulated as statements about sets of cases and relations between such sets. In contrast to this view, it is argued that theoretical statements in social research often require modal notions referring to possibilities and probabilities which cannot be formulated as statements about sets of cases. In order to show this, the article reformulates Ragin’s set-theoretic approach in the conceptual framework of statistical variables. It is shown that this can be done for both crisp and fuzzy set versions of Ragin’s approach. The article then goes on to argue that social research is often interested in modal generalizations (probabilistic and deterministic rules) which require a fundamentally different conceptual framework. The article shows how such a framework can be defined, and finally indicates its usage for causal interpretations.     

Good Cop–Bad Cop: Trust,Control, and the Lure of Integration

Based on a longitudinal case study of four interorganizational product development collaborations, this paper identifies a lure to cross‐functional integration that has hereto been neglected. In particular, findings suggest that when the buyer firm separates the Research and Development (R&D) Department from the Procurement Department, the two departments play a good cop–bad cop strategy toward the supplier. Thereby, they are able to foster a high level of goodwill trust between R&D personnel of the collaborating firms, while procurement personnel maintain a high level of formal control. Using an intricate sample design with polar cases, the study shows that cross‐functional integration of the two departments hampers interorganizational goodwill trust at the benefit of formal control. The findings offer a way forward for managers seeking to reap the benefits of collaboration, while limiting their exposure to the associated risks.     

Restricted Hodrick–Prescott filtering in a state-space framework

The current paper extends previous results on Hodrick–Prescott (HP) filtering and shows that it is possible to implement the judgement-augmented, or restricted, HP filter within the state-space framework. The implementation entails augmenting the vector of measurements and altering one of the system matrices of the state-space model for the HP filter. Restrictions can thereby be incorporated in the HP filter, making, e.g., estimation more accessible. An application to US GDP gap estimation illustrates how the restricted filter could be usefully applied in an empirical macroeconomic setting.     

Towards a ‘new normal’ growth strategy: China in comparative perspective

China’s move towards a new normal has been motivated by domestic factors and accelerated by the decline in export opportunities to developed countries. This decline, combined with the knock-on effects of China’s growth adjustments, is disrupting the favourable external environment that made developing countries’ export-led development strategies viable. This paper concentrates on a rebalancing of developing countries’ growth strategies towards a greater weight of household consumption as a potential alternative and discusses three challenges – market size, domestic purchasing power and balance-of-payments constraints. Concentrating on the latter, it analyses changes in sectoral compositions of consumer demand and patterns of international trade. Results point to the risk that a shift in growth strategy causes an import surge. The paper’s findings indicate the scope and speed of required product innovation that would prevent a rebalancing of growth strategies towards a greater role of consumption from running into balance-of-payments constraints.     

How young firms achieve growth: reconciling the roles of growth motivation and innovative activities

This special issue focuses on entrepreneurship, innovation and enterprise dynamics, as these key components of any prospering economy are at the heart of the current policy discussion. It gathers the latest national and comparative cross-country evidence about: new business venture formation and the role of framework conditions in fostering entrepreneurial activities; the determinants and outcomes of firms’ innovative activities and, more generally, of business and innovation dynamics; and the determinants and patterns of post-entry firm growth performance. The contributions synthesised in this introductory piece all rely on sound micro-level data and robust econometrics and propose novel findings that are relevant for policy making. Among them, that risk aversion encourages individuals to invest in balanced skill profiles, making them more likely to become entrepreneurs; and that while micro firms may grow when they are young, they are less likely to do so when old.     

Foreign banks,financial crises and macroeconomic fluctuations

Understanding the implications of increased foreign bank presence is especially compelling in periods of financial crisis. In this paper, we explore this issue by examining the relationship between the involvement of foreign banks in the banking systems and the volatility of key macroeconomic variables in normal and crisis periods. Using a sample of 20 Emerging European countries from 1998 to 2013, we find that an increase in the assets of foreign banks in the banking system reduces output and consumption growth volatility in general but does not significantly affect the volatility of investments. However, these banks were found to play a significant role in increasing output, consumption and investment volatility in 2009. Our findings suggest that foreign banks’ harmful impact during the global crisis was only temporary and that they seem to help Emerging European countries stabilize macroeconomic volatility in normal times and after the global crisis.     

Job Polarization and Task‐Biased Technological Change: Evidence from Sweden, 1975–2005

In this paper, we show that between 1975 and 2005, Sweden exhibited a pattern of job polarization with expansions of the highest‐ and lowest‐paid jobs compared to middle‐wage jobs. The most popular explanation for such a pattern is the hypothesis of task‐biased technological change, where technological progress reduces the demand for routine middle‐wage jobs but increases the demand for non‐routine jobs located at the tails of the job–wage distribution. However, our estimates do not support this explanation for the 1970s and 1980s. Stronger evidence for task‐biased technological change, albeit not conclusive, is found for the 1990s and 2000s. In particular, there is both a statistically and economically significant growth of non‐routine jobs and a decline of routine jobs. However, results for wages are mixed; while task‐biased technological change cannot explain changes in between‐occupation wage differentials, it does have considerable explanatory power for changes in within‐occupation wage differentials.