The Ignored Performance Measure

This paper studies a setting in which a risk-averse agent must be motivated to work on two tasks: evaluating a potential project and, if the project is adopted, implementing it. Although a performance measure that is informative of an agent's action is typically valuable because it can be used to improve the risk sharing of the contract, this is not necessarily the case in this two-task setting. I provide a sufficient condition under which a performance measure that is informative of the agent's implementation effort is worthless for contracting despite the agent being risk averse. This shows that information content is a necessary but not a sufficient condition for a performance measure to be valuable.     

World economy,level development and income distribution: An integration of different approaches to the explanation of income inequality

The paper briefly outlines explanations of international differences in personal income distribution that have been formulated within the ‘world economy’ and the ‘level of development’ paradigm. The predictive power of the central variables of the paradigms are tested in a cross-national regression analysis with 72 countries. The regression results suggest support for hypotheses from both paradigms, but also suggest a partial integration of theoretical elements from both paradigms. The outcome of the proposed theoretical integration offers a new interpretation of the well-known curvilinear relationship between level of development and income inequality. This new view on the curvature of the relationship expects the integration into the world economy to result in increased income inequality in peripheral countries. But different from other views it is not implied that inequality is substantially reduced in development. The core and periphery position of countries in the world economy is seen to stabilize income inequality differences between these groups of countries. Under these circumstances, developing countries generally cannot be expected to reduce substantially their income inequality in the course of economic growth.     

Should continued family firms face lower taxes than other estates?

Taxes on estates and inheritances may induce heirs to discontinue family firms. Because firm dissolution incurs transaction costs, a preferential tax treatment of transferred family businesses seems to be desirable from a macroeconomic viewpoint. The support of dynastic succession, however, entails also a cost on the economy if firm continuation by less able heirs prevents entry into entrepreneurship. Here, we investigate analytically and quantitatively the trade-off between transaction costs saved and creative destruction prevented. We find that a unique general equilibrium exists at which, depending on the institutional setup, low-ability heirs either abandon (Type 1) or continue (Type 2) a family business. A calibration of the model with German data suggests that preferential tax treatment of family firms has severe negative consequences on macroeconomic performance if it causes a threshold crossing from Type 1 to Type 2 equilibrium. It also reveals that the descendants of less able entrepreneurs who were caused by continuation-friendly tax policy to keep a family business always lose relative to their status in an economy without such a policy.     

Does High‐skilled Migration Affect Publicly Financed Investments?

This paper analyzes the interaction between migration of high‐skilled labor and publicly financed investment. We develop a theoretical model with multiple, ex ante identical jurisdictions where individuals decide on education and subsequent emigration. Migration decisions are based on differences in net income across jurisdictions which may occur endogenously. The interaction between income differences and migration flows gives rise to the potential of multiple equilibria: a symmetric equilibrium without migration and an asymmetric equilibrium in which net income levels differ among jurisdictions and trigger migration flows. In the former equilibrium, all jurisdictions have the same public investment level. In the latter one, public investment is high in host economies of skilled expatriates and low in source economies. We empirically test the hypothesis that emigration rates are negatively associated with publicly financed investment levels for OECD countries.     

Mitigating climate change – how do corporate strategies differ?

Many companies are facing increasing pressure by governments, shareholders and other stakeholders to reduce their CO₂ emissions in order to mitigate climate change. The importance of managing CO₂ emissions and crafting adequate CO₂ strategies has increased for those companies affected. We present a framework that conceptualizes a company's CO₂ strategy as the focus on one or a combination of several strategic objectives: CO₂ compensation, CO₂ reduction and carbon independence. In order to investigate the CO₂ strategies of a worldwide sample of 91 electricity producers we perform a content analysis of their answers to the Carbon Disclosure Project (CDP). We demonstrate the measures the companies take to manage their emissions, the CO₂ strategies they adopt and antecedents that influence these strategies. We find that half of the companies take parallel emission management measures that aim at all three strategic objectives, while the other half pursue selected objectives only. We also find that companies with different CO₂ strategies significantly differ in terms of regional affiliation, company size and absolute amount of CO₂ emissions, while we could not identify a significant difference in relative CO₂ emissions. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.     

Gespräche über Medien unter veränderten medialen Bedingungen

Media and media content affect the conversations that we have with other people. In which context do these conversations take place? And how have they changed in the last ten years? On the basis of a selection of theoretical approaches to the interplay between media information and spoken language, a repeated survey from the years 1996/97 and 2007 shows that about half of the talks about media deal with television content. The importance of the Internet as a source for conversation has increased. Most talks take place in a private setting. The subjects of the talks have become more heterogeneous, as media types as well as the media themselves have moved more into the focus of conversations. The results are a motivation for (re-)considering more strongly the factor of interpersonal communication when measuring media effects.     

Nachrichtenwert und Gespr?che über Medienthemen

The paper extends the theory of news values by examining interpersonal communication about television news. It investigates whether recipients refer to news factors when talking about the news, and how these news factors possibly influence the selection of specific news issues for personal conversations. Based upon a function modelling the selection probability of news issues, direct and indirect influences of news factors on conversations are discussed and tested in three empirical studies. Specifically, continuous news topics and issues that are presented prominently in the news are referred to in conversations. Negativity, however, is mostly avoided. Whereas news factors can be understood as criteria of relevance for journalistic selection processes, they seem to be indicators of shared knowledge in interpersonal communication. In conclusion, implications for the general selective mechanisms in the communication of events are discussed.     

Aid,spending strategies and productivity effects: A multi-sectoral CGE analysis for Zambia

Numerous econometric studies fail to detect a significant and robust relationship between international aid and economic growth in the recipient countries. Dutch Disease effects might be responsible for this result. This paper examines the relation between aid and its effectiveness in a multi-sector multi-household Computable General Equilibrium (CGE)-framework. Given that international transfers to African countries increasingly take the form of general financial support to the government, different spending strategies and their macroeconomic, sectoral and distributional effects are evaluated in a two-stage simulation making a distinction between immediate direct effects and possible long-run effects from increased productivity. The presence of sector-specific factors weakens Dutch Disease effects and shifts the burden of adjustment primarily to other exporting sectors. While the model simulates the effects of additional aid in Zambia it can be used as a blueprint for other African countries.     

Governing Entrepreneurial Opportunity Recognition in MNEs: Aligning Interests and Cognition Under Uncertainty*

abstract Entrepreneurial activities contribute to the innovativeness and performance of subsidiaries and their parent multinational enterprises (MNEs). Though a strong multinational presence can spur the discovery and exploitation of entrepreneurial opportunities, it also creates uncertainty that complicates the alignment of cognition and interest in the governance of MNEs' multi‐level entrepreneurial activities. We integrate economic and behavioural approaches to identify communicative, behavioural, and value uncertainties encountered in the MNEs' opportunity recognition phase. In addition, we discuss key contingencies that influence solutions to these uncertainties through delegation of authority, provision of incentives, promotion rules, and use of clan structures.