Decomposing TFP growth in the presence of cost inefficiency,nonconstant returns to scale,and technological progress

A thorough understanding of changes in productivity measures is important to economists and policymakers, because productivity growth is a major source of economic growth. This article explores the relationship between changes in total factor productivity (TFP) growth, defined using an index number approach, and changes in returns to scale, cost efficiency, and technology. Several decompositions are developed, using alternatively production and cost frontiers. The last decomposition developed also allows for multiple outputs.The refereeing process of this paper was handled through W.H. Greene.     

What,when, and who: Manager involvement in predicting employee resistance to acquisition integration

Applying sensemaking research to acquisition integration, we outline factors that influence employee resistance to acquisitions. While integration is widely viewed as important to acquisition outcomes, there is limited systematic study of how employees react to the integration process. Using survey data from Chinese acquirers and applying partial least squares structural equation modeling, we examine what changes with human and task integration with the speed of when changes are made to explore relationships with employee resistance. Consistent with a temporal perspective of acquisition processes and sensemaking we find slower task integration may mitigate employee resistance to acquisition integration. However, employee resistance to the speed that changes are made likely varies for who is involved, suggesting different roles for top and middle managers. Specifically, middle management involvement with slow human integration and top management involvement with fast task integration reduces employee resistance following an acquisition.     

Are twin currency and debt crises special?

In the literature on currency and banking crises it has become the standard procedure to distinguish pure currency crises, pure banking crises and combined (“twin”) currency and banking crises. We show theoretically and empirically that a similar differentiation should be chosen with regard to currency and debt crises. Twin currency and debt crises differ from both pure currency and pure debt crises in their determinants, course of events, and economic consequences. We find that each type of crises has a unique set of macroeconomic causes. We also identify internal contagion and selection bias effects, which may lead to biased empirical estimates if twin crises are not treated as a specific type of crises. Such a separation allows in significantly improving the efficiency of early warning systems especially for debt and twin crises.     

Corporate Governance and Performance: The REIT Effect

Real estate investment trusts (REITs) offer a natural experiment in corporate governance due to the fact that they leave little free cash flow for management, which reduces agency problems. We exploit a unique and leading corporate governance database to test whether corporate governance matters for the performance of U.S. REITs. We document for a sample including governance ratings of more than 220 REITs that firm value is significantly related to firm-level governance for REITs with low payout ratios only. Repeating the analysis with the complete database that includes more than 5,000 companies and a control sample of firms with high corporate real estate ratios, we find a strong and significantly positive relation between our governance index and several performance variables, indicating that the partial lack of a relation between governance and performance in the real estate sector might be explained by a REIT effect.     

On the growth and welfare effects of monopolistic distortions

The most fundamental proposition about growth and competition is that there is a tradeoff between static welfare and long-term growth. This paper reconsiders this basic proposition in an expanding variety endogenous growth model with competitive markets for “old” innovative products and for a traditional good. We shed light on some implications of monopolistic distortions which tend to be ignored by standard models. First, no growth may be better than some growth, since modest positive growth potentially requires sizeable static welfare losses. Second, the economy may converge to a steady state with zero growth, even though a locally saddle-point stable steady state with positive growth exists if the initial share of “cheap” competitive markets is sufficiently high, as this implies a relatively low demand for “expensive” innovative goods. Third, such a “no-growth trap” may happen in a world economy made up of several countries engaged in free trade with each other. The policy implications are that growth-enhancing policies may be misguided and that quick deregulation as well as quick trade liberalization can lead to stagnation in the long term.      

Impact of clusters on exhibition destination attractiveness: Evidence from Mainland China

Clusters, as concentrations of businesses in particular localities, may explain the spatial distribution of exhibitions, and exhibition destination attractiveness (Rubalcaba-Bermejo & Cuadrado-Roura, 1995). Drawing on Porter’s (1998a) cluster theory in the context of the exhibition industry in Mainland China, this study tests and confirms the validity of this proposition. A mixed method approach was employed that involved in-depth interviews with 32 exhibitors and a survey of 616 exhibitors to 1) establish what constitutes ‘clusters’ in an exhibition context and develop appropriate measurements, and 2) assess to what extent ‘clusters’ contribute to exhibition destination attractiveness. The study developed measures for and confirmed two distinct cluster effects – ‘leadership of the host city in the industry’ and ‘host city as a source of exhibitors.’ Both cluster effects had a significant influence on exhibitors’ perceived destination attractiveness, with other destination factors being less important, in a marked contrast to convention destination attractiveness. Implications of the study results are discussed and directions for future research provided.