Monetary policy under flexible exchange rates: When is expansion contractionary?

This paper studies whether the observed instability in the effects of monetary policy could be due to the way in which the behavior functions have been specified in an open economy context. Accordingly, special emphasis is on the specification of the behavior functions to correspond to their foundations in closedeconomy macrotheory. The demand for real money balances, in terms of the expenditure basket of goods, is specified as a function of income in terms of the same basket. Imports are specified as a function of expenditures, being functionally part of expenditures. The supply of labor is specified as a function of the expenditure price.It is shown that the exchange rate overshoots but output declines, to eventually rise above its original level in response to monetary expansion in the real wage model. In the money wage model, output and the exchange rate overshoot their steady-state levels if the expansion eventually leads to an increase in nominal wealth. If it leads to a decrease, both variables undershoot. However, if interest payments on foreign securities are not small relative to the trade balance, many of the effects are reversed. Thus the overshooting result is far from robust even in a standard model with an exogenous money supply.     

Elasticities of derived demand under different objectives of the firm

Conclusions We have reconciled and generalized earlier comparisons of input demand elasticities under different objective functions of the firm. In general little can be said of the relative magnitudes of the elasticities under different objectives, since different goals usually imply different levels of production and input demand. With some simplifying assumptions about the technology we can conclude that a profit-constrained, utility-maximizing firm tends to have higher input demand elasticities than a profit-maximizing firm facing the same cost and demand functions. This tendency is reinforced by a high profit requirement, decreasing returns to scale and slowly falling demand elasticity for the output. The results may help to explain differences in the stability of employment between industries,. Scherer [1980, pp. 365–67] reports that some studies have found an inverse relation between market concentration and stability of employment, which is contrary to the expected result. One may argue that in concentrated industries the firms are likely to have organizational slack or to face an inelastic product demand curve. Hence demand for factors of production should be less elastic than in more competitive industries. We have shown, however, that deviations from profit maximization may lead to higher input demand elasticities. Since non-profit-maximizing goals are likely to be more common in concentrated industries, the observed instability of employment may be partly due to the high elasticity of derived demand. Although the type of alternative goals studied in this paper may not be realistic in practice, the analysis shows nevertheless that goals of the firm may be one factor in explaining differences in the stability of employment.     

The Social‐Cognitive Underpinnings of Employees’ Ambidextrous Behaviour and the Supportive Role of Group Managers’ Leadership

Although research on organizational ambidexterity has exploded in the past several years, the determinants of individual‐level ambidexterity have received little scholarly attention. This is surprising given that management scholars increasingly highlight the benefits of combining explorative and exploitative activities in individual employees’ work roles. Using data collected by a two‐wave survey of 638 employees nested in 173 groups across 34 organizations, our research demonstrates that both psychological factors and leadership predict employees’ ambidextrous behaviour. Our results demonstrate that general self‐efficacy positively predicts ambidextrous behaviour through learning orientation. In addition, we show that employees exhibit higher ambidexterity when their group managers demonstrate paradoxical leadership; that is, a leadership style that couples strong managerial support with high performance expectations. Paradoxical leadership also moderates the relationship between learning orientation and individual ambidexterity such that employees’ ambidextrous behaviour is highest when paradoxical leadership and employee learning orientation are simultaneously at high levels.     

Does party identification associate with consumer preferences? Analyzing Finnish consumers in 2009 and 2014

This article examines the association between Finn's political orientation and preferences regarding hedonistic and mundane consumer activities. Data derived from national‐level surveys collected in Finland in 2009 (n=1,202) and 2014 (n=1,351) suggests that political party identification is an important predictor of perceived consumption, even after controlling for the effects of key socio‐demographic factors. In general, supporters of the right‐wing National Coalition Party consider themselves as high‐level consumers more often than the supporters of other political parties do. The results also show that there have been very few temporal changes in the association between party identification and consumption preferences. The effect of party identification is stronger for hedonistic activities than for mundane activities. It is argued that political party identification has similar impact on individual's consumer preferences as other lifestyle and social network factors have. The findings offer us new possibilities for further research addressing consumer activities, and other behavioural correlates of political orientation.     

Who Captures Value in Global Supply Chains? Case Nokia N95 Smartphone

Available statistics reveal little about the economic consequences of the increasing global dispersion of production processes. To investigate the issue, we perform grass-roots investigative work to uncover the geography of the value added for a Nokia N95 smartphone circa 2007. The phone was assembled in Finland and China. When the device was assembled and sold in Europe, the value-added share of Europe (EU-27) rose to 68%. Even when it was assembled in China and sold in the United States, Europe captured as much as 51% of the value added, despite of the fact that it played little role in supplying the physical components. Our analysis illustrates that international trade statistics can be misleading; the capture of value added is largely detached from the flow of physical goods. Instead, services and other intangible aspects of the supply chain dominate. While final assembly—commanding 2% of the value added in our case—has increasingly moved offshore, the developed countries continue to capture most of the value added generated by global supply chains.     

New insights into online consumption communities and netnography

This study provides new insights to online consumption communities by questioning the currently dominant view of communities being structured by subcultural capital and meanings pertinent to a specific field of consumption, such as one brand or consumption interest. This study argues for more sensitivity in recognizing increasing delocalization, which manifests itself in significant overlap between communities and consequently freer movement of participants between them. This study draws from a longitudinal and introspective netnographic research project in what was originally an electronic music community to discuss the consequences of this development. The study finds that delocalization manifests itself through situated individualism and delocalized performances within online consumption communities, and offers implications for future netnographic inquiry.     

Economic and normative pressures as drivers for the adoption of International Accounting Standards in Finland since 1976

Abstract

This paper deals with the internationalisation of Finnish business life and the attempts to introduce and apply international accounting standards (IASs) in Finnish accounting practice before the latest developments at the EU level in 2002. The internationalisation of business life creating economic pressures for changes is illustrated. Analysis of four accounting issues is made in order to exemplify how IASs have affected Finnish accounting legislation and practice. The results of the analysis indicate that the effect of IASs has been notable but secondary because of the implementation of the EU Directives in Finnish accounting legislation in the 1990s. IASs have not caused any drastic changes in accounting practice as their requirements have been written as alternatives in legislation. This approach has provided a possibility to large, listed companies to produce financial accounting information in line with the principles of IASs. In the introduction of IASs there have been political aspects when justifications for the national model and for the international orientation have been presented.     

STRATEGIC R&D AND NETWORK COMPATIBILITY

We analyse the effects of network externalities in strategic R&D competition. We present a model of two firms competing with R&D investments and prices in a differentiated consumer market. Buyers form firm-specific networks which can be compatible. A high degree of compatibility and large spillovers moderate price competition due to weak strategic value of firm-specific networks and R&D investments, respectively. Asymmetry in product qualities brings out network effects that cancel out in conventional symmetric settings. The lower quality firm increases R&D and decreases its price as spillovers or network compatibility is increased. This happens when R&D and firm-specific network size have high strategic value.     

Narrative attributions of entrepreneurial failure

We examine how organizational stakeholders use narratives in their psychological processing of venture failure. We identify a range of “narrative attributions”, alternative accounts of failure that actors draw on to process the failure and their role in it. Our analysis provides a view of entrepreneurial failure as a complex social construction, as entrepreneurs, hired executives, employees and the media construct failure in distinctively different ways. Narratives provide means for both cognitive and emotional processing of failure through grief recovery and self-justification.     

Technology,Labour Characteristics and Wage‐productivity Gaps*

We use plant‐level employer–employee data in production functions and wage equations to examine whether wages are based on productivity. We use a stepwise procedure to find out how the results are influenced by the kind of data that is available. The models include shares of employee groups based on age, level and field of education, and sex. The gap between the age‐related wage and productivity effects increases with age. Education increases productivity, but wage under‐compensates productivity especially for those with the highest level of non‐technical education. For women the results depend greatly on the specification and method used.