An Analysis of External Finance Availability on SMEs’ Decision Making: A Case Study of the Emerging Market of Poland

This article explores an understanding of the entrepreneurial behavior of small and medium enterprises (SMEs) in Poland, one of the emerging markets of the European Union, during the recent period of economic slowdown. It considers the role of accessibility to external financial resources in shaping decisions undertaken by such enterprises. The hypothesis is that, in a period of economic slowdown, SMEs that have difficulty in accessing external sources of financing adopt different strategies than those that have free access to those resources. The findings indicate that access to the external sources of financing is a statistically significant factor determining decisions of SMEs in relation to employment reduction, price reductions on goods/services, suspension of previously planned investments, and an increase in the level of salaries. Consequently, the study is important as it considers factors that impact the success and survival of SMEs in the emerging market; it is also unique, as it investigates these aspects in the recent period of the global economic downturn. © 2014 Wiley Periodicals, Inc.     

The ruling bargain: sovereign wealth funds in elite-dominated societies

This paper generates new results on the creation and use of sovereign wealth funds (SWF) as tools for maximizing political power of the ruling class. It models a ruler’s decision to set up a SWF in a society dominated by a powerful elite in order to pacify the elite’s political ambitions by transferring resource rents. Furthermore, it shows under which circumstances the ruler is able to gain the elite’s support using a fund and to overcome the danger of coups d’état. SWFs can serve as appropriate instruments for this purpose because they are long-term oriented and strongly institutionalized.     

Foreign Institutional Investment,Ownership, and Liquidity: Real and Informational Frictions

The literature widely documents the negative liquidity impact of foreign participation in firms that permit high foreign institutional ownership. This paper employs a unique setting for the limited participation of qualified foreign institutional investors (QFIIs) in China's A-share market and examines how this impacts on stock liquidity in emerging markets. Contrary to the findings in the literature, foreign investor participation helps enhance the liquidity of affected stocks by promoting trade activities and price discovery. The improvement in liquidity does not occur through the information friction channel, but rather the real friction channel. Our results are robust to endogeneity issue and the possible influence of the global financial crisis, industry effects and the stock exchange. Further, the liquidity improving effects of QFII are even stronger when the analysis is performed on a subsample of QFII firms.     

When More Poor Means Less Poverty: On Income Inequality and Purchasing Power

We show theoretically that the poor can benefit from price changes induced by higher income inequality. As the number of poor increases, the market for products aimed toward the poor grows, and such products become more profitable. As a result, there are circumstances where an increase in income inequality associates with higher purchasing power of the poor. Using cross‐country data on the price of one kilogram of rice and the price of a Big Mac hamburger, we confirm a negative association between income inequality and the price of inferior goods, robust to the inclusion of a large set of control variables. Results are also robust to a first difference specification and to a two‐stage instrumental variables approach. Examining economic well‐being, it is thus important to analyze not only the incomes of households, but also the prices of the products and services that they buy.     

Taking the Lab to the Field: Experimental Tests of Alternative Mechanisms to Procure Multiple Contracts

The first part of the paper reports the results from a sequence of laboratory experiments comparing the bidding behavior for multiple contracts in three different sealed bid auction mechanisms; first-price simultaneous, first-price sequential and first-price combinatorial bidding. The design of the experiment is based on experiences from a public procurement auction of road markings in Sweden. Bidders are asymmetric in their cost functions; some exhibit decreasing average costs of winning more than one contract, whereas other bidders have increasing average cost functions. The combinatorial bidding mechanism is demonstrated to be most efficient. The second part of the paper describes how the lab experiment was followed up by a field test of a combinatorial procurement auction of road markings.     

Tenants' participation — A study of residential service planning

During recent years there has been a large interest in residential service in Sweden. Several experiments and investigations have been carried out concerning various service facilities in residential districts and attempts to let the tenants themselves participate in the planning of this service. One of the most comprehensive projects is the one that was conducted in the district of Högaholm in Malmö. This article reports from an evaluation of the planning procedure in this district, where opinions and wants of the tenants have been continually collected in order to make the residential service as good as possible. The article mainly comprises a presentation of how the tenants participated in the planning process, an analysis of the reasons why this planning failed in some respects and a comparison to other research in this field.

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Zusammenfassung Der Beitrag beschäftigt sich mit schwedischen Erfahrungen mit der Berücksichtigung von Mieterwünschen. Dem Versuch, Bewohner an der Planung ihrer eigenen Wohnumwelt zu beteiligen, war bereits eine Reihe von Untersuchungen gewidmet. Eines der umfassendsten Projekte ist im Gebiet von Högaholm in Malmö durchgeführt worden. Der Aufsatz berichtet über die Vorgehensweise bei der Planung in diesem Gebiet, bei der die Wünsche und Vorstellungen der Bewohner systematisch erfaßt wurden, um die Anlagen des Wohngebietes möglichst gut daran anzupassen. Er schildert vor allem, auf welche Weise die Bewohner in den Planungsprozeß einbezogen wurden, analysiert dann die Ursachen dafür, daß die Partizipation in mancher Beziehung fehlschlug, und zieht Vergleiche zu anderen Forschungsergebnissen.

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Jerker Nilsson is a Research Assistent at the Department of Business Administration, University of Lund, PO box, S-220 05 Lund 5, Sweden. He wishes to express his thanks to Britt Pedersen, who is a Lecturer at the Department of Building Function Analysis at the Lund Institute of Technology. Britt Pedersen has not only given valuable advice for this article, but she has also been deeply involved in the Högaholm experiment of residential service.     

Capital budgeting and delegation

As part of our ongoing research into capital budgeting processes as responses to decentralized information and incentive problems, we focus in this paper on when a level of a managerial hierarchy will delegate the allocation of capital across projects and time to the level below it. In our model, delegation is a way to save on costly investigation of proposed projects. Therefore, it is more extensive the larger are the costs of such investigations. This delegation takes advantage of the fact that the lower-level manager's preferences are assumed to be similar (though not identical) to those of the higher level.     

Public participation in municipal transport planning processes – the case of the sustainable mobility plan of Ponta Delgada, Azores, Portugal

Public participation in transport planning is a recent trend. There is an increasing number of cases in Europe where the public is involved in the decision-making process. In Portugal, where the use of a motor vehicle as a means of transportation still enjoys a deep approval in the society, a participatory approach is an opportunity to change perceptions towards more sustainable transport modes. In Ponta Delgada (Archipelago of the Azores), for the first time in Portugal, the relevant stakeholders were involved in the development process of a sustainable mobility plan. It proved that, on a participatory basis, sustainable transport planning provides more satisfactory and efficient solutions. This paper presents the methodology and results of a participative transport management planning model. This model can be adapted to the specific needs and problems of other small island cities.