GROWTH, POVERTY, AND INEQUALITY IN LATIN AMERICA: A CAUSAL ANALYSIS, 1970–94

Taking advantage of consistent poverty and income inequality data for 12 Latin American countries between 1970 and 1994, we analyze the determinants of changes in the incidence of urban and rural poverty and in Gini coefficients over spells of years, stressing in particular the role of aggregate income growth. We find that income growth reduces urban and rural poverty but not inequality. We also find that income growth is more effective in reducing urban poverty if the levels of inequality and poverty are lower, and the levels of secondary education higher. We show that there is an asymmetry in the impact of growth on poverty and inequality, with recession having strong negative effects on both poverty and inequality. Since growth does not reduce inequality, economic cycles create ratchet effects on the level of inequality. However, post-structural adjustment growth is quite effective at reducing poverty, particularly if inequality is low.     

Household Behavior with Imperfect Labor Markets

A household model with differential asset endowments and idiosyncratic transactions costs in accessing labor markets is developed to (1) explain membership of farm households to alternative labor regimes (sellers, employers, or self-sufficient in labor), (2) test for recursivity between production and consumption decisions selectively by labor regime, and (3) identify the determinants of differential labor productivity across labor regimes. The model is applied to a 1994 household survey of the Mexican land reform sector.     

Proposals for a Minimum Programme for Statistics in Developing Countries

Statistical offices in developing countries are confronted with the challenge of introducing, with limited means, methods and tools ensuring the production of durable statistics satisfying regional, national and international requirements. Taking into account the evolution, over the last years, in the attitude of national authorities, funding partners and statisticians themselves regarding the building up of relevant and durable statistics, the present paper's proposal is to have, in each developing country, a Minimum Programme for Statistics (MPS) and that this programme be centred on four domains: coordination, national accounts, economic and social short term analysis, and dissemination.     

Salespersons as Internal Knowledge Brokers and New Products Selling: Discovering the Link to Genetic Makeup

Managers increasingly realize the importance of involving the sales force in new product development. However, despite recent progress, research on the specific role of the sales force in product innovation‐related activities remains scarce. In particular, the importance of a salespersons' internal knowledge brokering has been neglected. This study develops and empirically validates the concept of internal knowledge brokering behavior and its effect on selling new products and developing new business, and explores whether a salesperson's internal brokering qualities are determined by biological traits. The findings reveal that salespeople with the DRD2 A1 gene variant engage at significant lower levels of internal knowledge‐brokering behavior than salespeople without this gene variant, and as a result are less likely to engage effectively in new product selling. The DRD4 gene variant had no effect on internal knowledge brokering. Management and future research implications are discussed.     

Goal Multiplicity and Innovation: How Social and Economic Goals Affect Open Innovation and Innovation Performance

Integrating insights from the strategic goal literature and the knowledge‐based view of the firm, this article proposes that the pursuit of social and economic strategic goals by commercial firms affects their innovation performance through different knowledge sourcing activities. The strategic goals, knowledge sourcing practices, and innovation performance of 1257 Belgian firms are investigated. Results show that both social and economic strategic goals are associated with the use of external information sources, but only the pursuit of social goals inspires firms to engage in external collaboration. No evidence is found of an inherent conflict between social and economic strategic goals. Instead, the two types of goals are independent of each other, that is, an emphasis on social goals does not preclude an emphasis on economic goals and vice versa. Moreover, firms’ external knowledge sourcing and innovation performance benefit most when strongly held social goals align with strongly held economic goals. These findings offer new insight into the nature and the effects of goal multiplicity among commercial firms. They open up a new perspective on the potential positive effects of the joint pursuit of social and economic strategic goals instead of seeing them as inherently conflicting, as past research has typically done. We illustrate how social strategic goals can deliver unique benefits to a firm, independently of and in addition to economic strategic goals. Our findings also contribute to the open innovation literature by revealing strategic goals as a driver of firms’ knowledge sourcing practices. Our findings suggest that solely emphasizing economic goals may be one reason why firms struggle to implement open innovation practices and do not reap their full benefits. The practical implications of our research are discussed.     

Voluntary firm restructuring: why do firms sell or liquidate their subsidiaries?

This paper examines why companies decide to divest a subsidiary in a corporate environment characterised by concentrated ownership, using a unique dataset of non-listed Belgian subsidiaries. The results of the binomial logit analyses are consistent with the idea that management will intervene in order to improve the controlling firm’s focus or when subsidiary performance imposes a burden on the group’s financial situation. Especially when blockholders hold more than 75% of the shares, these motives drive the divestiture decision. At lower levels of ownership concentration, these hypotheses cannot explain the higher divestiture likelihood, which supports the agency hypothesis. Once the divestment decision has been taken, the choice has to be made between a sale and liquidation. The logit analysis reveals that although selling a subsidiary seems the preferred option, liquidation is likely when the subsidiary is small, active in a sector with few competitors and when financial distress is eminent.     

Asset pricing models with errors-in-variables

This paper revisits Fama and French [Fama, Eugene F., French, Kenneth R., (1993) Common risk factors in the returns on stock and bonds. Journal of Financial Economics 33 (1), 3–56] and Carhart [Carhart, Mark M., 1997. On persistence in mutual fund performance. Journal of Finance 52 (1), 57–82] multifactor model taking into account the possibility of errors-in-variables. In their well known paper, Fama and French [Fama, Eugene F., French, Kenneth R., 1997. Industry costs of equity. Journal of Financial Economic 43 (2), 153–193] concluded that estimates of the cost of equity for the three-factor model of FF (1993) were imprecise. We argue that this imprecision is even more severe because of the pervasive effects of measurement errors. We propose Dagenais and Dagenais [Dagenais, Marcel G., Dagenais, Denyse L., 1997. Higher moment estimators for linear regression models with errors in the variables. Journal of Econometrics 76 (1–2), 193–221] higher moments estimator as a solution. Our results show that estimates of the cost of equity obtained with Dagenais and Dagenais estimator differ sharply from popular OLS estimates and shed a new light on performance attribution and abnormal performance (α). Adapting the Generalized Treynor Ratio, recently developed by Hübner [Hübner, Georges, 2005. The generalized treynor ratio. Review of Finance 9 (3), 415–435], we show that the performance of managed portfolios with multi-index models should be revisited in presence of errors-in-variables.     

Humanitarian Negotiation to Protect: John Rabe and the Nanking International Safety Zone (1937–1938)

In the late months of 1937 and in the beginning of 1938, John Rabe, German CEO of Siemens China, engages in humanitarian negotiation with many actors, as the Japanese troops approach and then occupy Nanking, the capital city of Nationalist China. His responsibility as a leader and negotiator is guided by one purpose—the protection of the Chinese poorest of the poor. It motivates him in all his negotiation moves, whether he leverages principles, values, needs, interests, relationship and culture to persuade his interlocutors. The ten humanitarian negotiation situations that he faces suggest a three-step process: a planning stage to create a safety zone, an implementation stage to operationalize it and, finally, an exit stage to properly end the mission. Rabe’s ongoing questioning and doggedness, as well as that of the other twenty-one members of the International Safety Zone Committee, made a difference to protect 250,000 Chinese men, women and children. At the time, his heroism owed him the honored name of a living Buddha, and, sixty years later, of “The Schindler of China.” He was a pioneer of the responsibility to protect, and of corporate social responsibility.