Agriculture trade restrictiveness in Canada: How important are the cross effects?

A trade restrictiveness index (TRI) aggregates an entire protection structure into a single uniform measure that is consistent with trade theory and reflects the extent of policy interventions on trade or welfare. Although there are several variants of a TRI, all approaches aggregate protective measures using weights that depend on import demand and export supply elasticities; some studies ignore cross-price effects while others account for them. This study measures the degree of bias introduced by ignoring cross effects. It provides a practical approach to account for demand- and supply-side cross-price effects in a multi-commodity TRI setting. This approach is illustrated with a case study of distortions in the Canadian crop and livestock sector. Domestic demand and supply cross effects are approximated using a “constant differences of elasticities of substitution” functional form. On average, over the period 1996–2016, we find that cross-price effects do make a difference, and that including them makes the TRI 27% higher than an approach which ignores them. Furthermore, both TRI approaches produce indices that are higher and more variable than the OECD's percentage Producer Support Estimate (PSE) that measures policy transfers as a share of gross farm receipts. The fundamental differences between a TRI and PSE% is driven by market price support for milk.     

Practical methods for measuring and managing operational risk in the financial sector: A clinical study

This paper analyzes the implications of the advanced measurement approach (AMA) for the assessment of operational risk. Through a clinical case study on a matrix of two selected business lines and two event types of a large financial institution, we develop a procedure that addresses the major issues faced by banks in the implementation of the AMA. For each cell, we calibrate two truncated distributions functions, one for “normal” losses and the other for the “extreme” losses. In addition, we propose a method to include external data in the framework. We then estimate the impact of operational risk management on bank profitability, through an adapted measure of RAROC. The results suggest that substantial savings can be achieved through active management techniques.     

Identity narratives under threat: A study of former members of Arthur Andersen

This paper examines the processes by which individuals work their sense of organizational and professional identity in the aftermath of a professional failure. Drawing on twenty-five interviews carried out with former members of Arthur Andersen who mostly worked for the firm in Canada and the United Kingdom, we investigate interviewees’ identity work ensuing from the breakdown of the firm. Specifically, identity work comprises processes by which individuals reflectively seek to maintain or revise their sense of identification with the AA organization and also with the public accounting profession, along with developing self-understandings regarding causes and consequences ensuing from the firm’s collapse. Our analysis indicates that four interpretive schemes or patterns mainly characterize interviewees’ identity work: disillusion; resentfulness; rationalization; and hopefulness. Each of these patterns can be viewed as conveying a distinct representation of what “truly” happened within AA. In this sense, identity work, sense-making and truth contests are inextricably linked altogether. Moreover, the present paper underlines the pertinence of studying entangled processes of identity work and sense-making in order to better understand how broader social forces or discourses (e.g., commercialization and risk) are experienced and translated by the self in the context of identity-threatening events. That is, the identity work/sense-making nexus constitutes a relevant theoretical anchoring to study the circulation of discourses in society.     

The ABC of complementary products mergers

We present a simple model where mergers benefit consumers, harm outsiders and, depending on the shape of demand, can be profitable for insiders (and where mergers do not involve cost synergies).     

Understanding perpetual R&D races

This paper presents an experimental study of dynamic indefinite horizon R&D races with uncertainty and multiple prizes. The theoretical predictions are highly sensitive: small parameter changes determine if we should expect technological competition, and if so whether it is sustained, or if the market converges into one with entrenched leadership and lower aggregate R&D. The subjects’ strategies are far less sensitive. In most of the treatments, the R&D races tend to converge to entrenched leadership. We propose and apply a quantal response extension of Markov perfection that is qualitatively and largely quantitatively consistent with the experimental observations.     

Sustainability Ratings and the Disciplinary Power of the Ideology of Numbers

The main purpose of this paper is to better understand how sustainability rating agencies, through discourse, promote an “ideology of numbers” that ultimately aims to establish a regime of normalization governing social and environmental performance. Drawing on Thompson’s (Ideology and modern culture: Critical social theory in the era of mass communication, 1990) modes of operation of ideology, we examine the extent to which, and how, the ideology of numbers is reflected on websites and public documents published by a range of sustainability rating agencies. Our analysis indicates that the ideology of numbers promotes a relatively narrow vision of corporate social and environmental responsibility. That is, it establishes some areas of visibility while leaving in the shadow certain aspects of the ways in which companies fulfill, or fail to meet, their social and environmental responsibilities. The ideology of numbers also exerts power by identifying those companies that are deemed to be worthy of inclusion, or not, in a supposedly socially responsible corporate elite.     

Extrinsic uncertainty revisited

This paper is devoted to extending the concept of extrinsic uncertainty introduced by Cass and Shell for von Neumann-Morgenstern utility functions to a class of ordinal utility functions. It is shown that the important result that extrinsic uncertainty does not matter in a pure exchange economy extends to the more general framework.     

Accountants as “new guard dogs” of capitalism: Stereotype or research agenda?

Drawing inspiration from the theses of the regulation school, Gerard Hanlon analyses the socialisation process in the “big six”. For accountants are, according to him, the new “controllers” of “a process of flexible accumulation”, one that goes hand in hand with a heightened international division of labour. Unfortunately, his research site remains too limited to confirm—or disconfirm—his ambitious hypotheses. Moreover, the transposition of neo-marxist theories leads him to underestimate the whole work of construction of social credibility of accounting knowledge, as well as the complex play of interaction—and not only of opposition—between these “multinational service conglomerates” and the local or national dignitaries who continue to represent the core of the field of practice.     

Introduction to general equilibrium

This introduces the symposium on general equilibrium.