Shadow-Pricing Interpretation of the Pigovian Rule for the Optimal Provision of Public Goods: A Note

The Pigovian rule for the optimal public goods provision with distortionary taxation is given a new interpretation. It relates the Pigovian rule to project evaluation rules in terms of shadow prices. Our formula for the Pigovian rule is compared with that given by existing literature for cases in which commodity taxes are set optimally to articulate the implications of their results. This approach also renders a clear insight on the nature of resource allocation and income redistribution effect involved in the public goods provision in a heterogeneous-consumers economy.     

Inference on impulse response functions in structural VAR models

Skepticism toward traditional identifying assumptions based on exclusion restrictions has led to a surge in the use of structural VAR models in which structural shocks are identified by restricting the sign of the responses of selected macroeconomic aggregates to these shocks. Researchers commonly report the vector of pointwise posterior medians of the impulse responses as a measure of central tendency of the estimated response functions, along with pointwise 68% posterior error bands. It can be shown that this approach cannot be used to characterize the central tendency of the structural impulse response functions. We propose an alternative method of summarizing the evidence from sign-identified VAR models designed to enhance their practical usefulness. Our objective is to characterize the most likely admissible model(s) within the set of structural VAR models that satisfy the sign restrictions. We show how the set of most likely structural response functions can be computed from the posterior mode of the joint distribution of admissible models both in the fully identified and in the partially identified case, and we propose a highest-posterior density credible set that characterizes the joint uncertainty about this set. Our approach can also be used to resolve the long-standing problem of how to conduct joint inference on sets of structural impulse response functions in exactly identified VAR models. We illustrate the differences between our approach and the traditional approach for the analysis of the effects of monetary policy shocks and of the effects of oil demand and oil supply shocks.     

Managerial skill utilization: work environment,gender, and training incentive

Past studies have demonstrated that a supportive work environment can positively influence managerial skill utilization. Adopting the instrumentality-expressiveness perspective, the present study extended the past research by illustrating the moderating effect of gender on this relationship. It found that the relationship between the work environment and managerial skill utilization is stronger among female managers than among male managers and further, that this interactive effect is more pronounced in a low incentive situation than in a high incentive situation in terms of reaching a high level of training performance. The theoretical and practical implications of the results are discussed.     

How Japanese manufacturing firms align their human resource policies with business strategies: testing a contingency performance prediction in a Japanese context

This study examines the interaction effects of business-level strategy and HRM policies upon performance among Japanese manufacturers, in response to the current debate around the contingency fit proposition in the field of strategic human resource management (SHRM). Specifically, it was hypothesized that the three generic strategic types (cost reduction, differentiation (innovation), and quality enhancement) would moderate the relationship between particular HRM policies and the performance of Japanese manufacturing firms. The results, based on a sample of 312 Japanese manufacturers operating in the domestic environment, reveal the existence of links between appropriate strategy and HRM policies in predicting performance, providing strong support for the proposition of contingency fit from SHRM theory. The findings are used to discuss how Japanese manufacturers can align their HRM policies with business strategies to increase manufacturing performance. Limitations of the study and directions for future research are also considered.     

Top management team functional diversity and organizational innovation in China: The moderating effects of environment

While conflicts (cognitive and affective) have been considered as important process variables to better understand the mixed findings on the relationship between top management team functional diversity and organizational innovation, such an input‐process‐outcome model is still incomplete without considering the environmental factors. This study was formulated to assess the importance of both competitive and institutional environments in moderating such upper echelon effects within a transition economy. The chief executive officers and chief technology officers of 122 Chinese firms were surveyed and both competitive uncertainty and institutional support were found to shape top management team decision making processes and their outcomes. Copyright © 2012 John Wiley & Sons, Ltd.     

Sharing health risk and income risk within households: evidence from Japanese data

The question of which household members should consume medical services, and in what quantities, is examined by using Japanese household-level data. Two key concepts are employed, health risk and income risk, and whether family heads or dependants bear these risks investigated. Health risk is the risk that a household member falls ill, while income risk is the risk that future household income decreases. It is found that both heads and dependants make fewer visits to doctors as household size increases. It is also found that only dependants visited doctors less frequently following the reform of the public health insurance system, which raised the co-payment rate of family heads from 10% to 20%. These findings imply that heads and dependants share health risk but dependants bear income risk.     

A theory of competitive industry dynamics with innovation and imitation

Empirical evidence on industry life-cycle reveals a pattern in which innovation rates remain fairly stable or are perhaps even higher at early stages, while patenting increases sharply as the industry matures. This increase in patenting in later stages is accompanied by net exit and lower rates of output growth and price decline. In this paper, we develop a dynamic model of a competitive industry with innovation and imitation that is consistent with these stylized facts. We derive an equilibrium growth path, along which leading firms invest in increasing the stock of technological knowledge and choose not to prevent imitation by other firms as long as the industry remains relatively small. As the industry expands including new entry, the leaders' optimal amount of investment gradually declines. We show that under some rather general conditions, there would exist a scale of the industry where innovating firms would choose to start preventing free imitation, bringing further expansion of the industry through new entry to a halt and causing net exit.     

The measurement of waste with nonconvex technology

The measurement of waste problem is reconsidered with the generalization that nonconvex production technologies are allowed. A general equilibrium measure of waste allowing for nonconvexity in production is derived by extending the contributions by Debreu (1954) and Diewert (1981, 1985).