When do Non‐Family CEOs Outperform in Family Firms? Agency and Behavioural Agency Perspectives

Family firms represent a globally dominant form of organization, yet they confront a steep challenge of finding and managing competent leaders. Sometimes, these leaders cannot be found within the owning family. To date we know little about the governance contexts under which non‐family leaders thrive or founder. Guided by concepts from agency theory and behavioural agency theory, we examine the conditions of ownership and leadership that promote superior performance among non‐family CEOs of family firms. Our analysis of 893 Italian family firms demonstrates that these leaders outperform when they are monitored by multiple major family owners as opposed to a single owner; they also outperform when they are not required to share power with co‐CEOs who are family members, and who may be motivated by parochial family socioemotional priorities.     

The dynamics of parallel economies. Measuring the informal sector in Mexico

The existence of parallel economies that operate in the shadows of informality within most Latin American countries is widely recognized by the economic literature. However, its composition, size and effects on economic growth are still open questions. In this paper, we estimate the size and the evolution of the Mexican informal economy in the last three decades using a vector error correction model. In addition to the standard explanatory variables traditionally used in the currency demand approach, we include remittances given their relevance in the Mexican economic system. The results indicate that informality prior to the late 1980s accounted for at least two thirds of GDP, while stabilizing around one third of GDP in the last decade. Furthermore, our estimates provide evidence of a positive long-run relationship between informality and economic growth.     

Would you like to shrink the welfare state? A survey of European citizens

The fundamental problems facing European welfare states – high unemployment and unsustainable public pensions plans in particular – have been in the political debate for years, so why have we seen so little reform? To find out, we surveyed the opinions of citizens in France, Germany, Italy and Spain on their welfare states and on various reform options. This is what we found. First, most workers underestimate the costs of public pensions, though they are aware of their unsustainability. Second, the status quo is a majoritarian outcome: a majority of citizens opposes cuts to social security and welfare spending, but also opposes further increases. Since population ageing without reform implies an automatic expansion, our results suggest that most citizens would favour reforms that stabilize but do not shrink the current welfare states. Third, many would welcome changes in the allocation of benefits. A large number of workers in Italy and Germany would be willing to opt out of public pensions and replace them with private pensions, though the details of how this scheme is formulated matter for its popularity. And many Italians and Spaniards would welcome an extension of the coverage of unemployment insurance. Fourth, conflicts over the welfare state are mainly shaped by the economic situation of the respondent, while political ideology plays a limited role. Disagreements are found along three dimensions: young versus old, rich versus poor, and 'outsider' versus 'insider' in terms of labour market status. From a practical point of view, this suggests that there is scope to bundle reforms strategically in order to build a large and mixed coalition of supporters.
— Tito Boeri, Axel Börsch-Supan and Guido Tabellini     

CES and Translog parameter estimates in a SAM-based regional general equilibrium framework

The computation of General Equilibrium models crucially depends on Social Accounting Matrix (SAM)-based calibration and on how estimation/imputation are performed to reproduce the benchmark dataset as an equilibrium solution. In this paper, theoretical contributions are provided by suggesting a new procedure in which the production function parameters and the elasticity of substitution are estimated by resorting to the data contained in the SAM. To this aim, the Generalized Cross-Entropy estimator is used. Application of this self-contained procedure to the regional SAM for the Italian region Tuscany leads to empirical results consisting of the estimates of the elasticities of substitution of Constant Elasticity of Substitution and Translog production functions consistent with the theoretical background. This yields a more efficient and effective solution of Computable General Equilibrium models.     

Assessing adaptive capacity of water management organizations. The case study of the municipality of Tomave (Bolivia)

Climate change is only one of several pressure and drivers, such as natural disasters, improvements in technologies and changing customers’ behaviors that water organizations have to relate and adapt to. This places new challenges (e.g. dealing with increased exposure, vulnerability, and uncertainty) to water management and require water organizations to change their perspective on how to deal with water issues. This paper builds on a literature review to identify dimensions and criteria of adaptive capacity and presents a conceptual framework to assess organizational adaptive capacity. The developed framework has been tested within the Municipality of Tomave (Bolivia). The paper results emphasize the incapacity to transform routines as the context is changing leads to the construction of barriers and to the inability of an organization to support the process of change of the society. In addition, the study emphasis that the development of a working system based on cooperation requires first that an organization acquires skills and adapt its routines to the new working system. Furthermore, the development of a participatory process of planning and implementation of policies would help to reduce the trade-offs and conflicts related to water management. Linked to this, the development of a system for monitoring and evaluation of policies implemented organization can contribute to build an iterative mechanism so to allow a redefinition and improvement of such policies.     

Difference in difference meets generalized least squares: Higher order properties of hypotheses tests

We investigate the estimation and inference in difference in difference econometric models used in the analysis of treatment effects. When the innovations in such models display serial correlation, commonly used ordinary least squares (OLS) procedures are inefficient and may lead to tests with incorrect size. Implementation of feasible generalized least squares (FGLS) procedures is often hindered by too few observations in the cross-section to allow for unrestricted estimation of the weight matrix without leading to tests with similar size distortions as conventional OLS based procedures. We analyze the small sample properties of FGLS based tests with a formal higher order Edgeworth expansion that allows us to construct a size corrected version of the test. We also address the question of optimal temporal aggregation as a method to reduce the dimension of the weight matrix. We apply our procedure to data on regulation of mobile telephone service prices. We find that a size corrected FGLS based test outperforms tests based on OLS.     

A socio‐economic assessment of cowpea diversity on the Ghanaian market: implications for breeding

Given the importance of cowpea [Vignaunguiculata(L)Walp] in fighting malnutrition and poverty, a socio‐economic assessment of cowpea diversity found on the Ghanaian market was conducted. The objective was to investigate emerging consumer preference for cowpea and make recommendations for the development of tailor‐made varieties. Forty‐seven cowpea accessions were collected from traders interviewed for morphological characterization to ascertain the degree of diversity. Data was subjected to Hierarchical Cluster Analysis using Genstat Discovery Edition 3 software and variations among the cowpea varieties based on the selected seed traits established. Cowpea varieties found on the markets were broadly categorized into foreign and local varieties and usually named after their sources. Foreign Cowpea varieties were very popular on the markets surveyed as reflected in the per cent distribution of respondents by cowpea varieties sold; Niger (52%), Burkina Faso (50%), Togo (46%), Lagos (36%) and Ghana (18–21%). At the trader level, the order of preference for cowpea characteristics was cleanliness (stone free and no dirt), colour (white seed colour), easy to cook, taste, size, less weevil damage, dryness and place of origin ranked in decreasing order of importance. At the consumer level, cleanliness that was also tied to the extent of weevil damage was ranked most important. This was followed by seed colour (preferable white), short cooking time, size and taste. From the sociological perspective, concerns are raised on the impact of past cowpea breeding activities giving the level of competitiveness and market performance of locally improved varieties observed. Recommendation is made for traders and consumers to be considered as relevant actors in all the stages of crop improvement and breeding activities. This is crucial for enhanced small‐holder farmer market access and strengthened food networks in rural economies.     

Stimulating Strategically Aligned Behaviour Among Employees

Strategically aligned behaviour (SAB), i.e. employee action that is consistent with the company's strategy, is of vital importance to companies. This study provides insights into the way managers could promote such behaviour among employees (who can be managers as well) by stimulating employee motivation, by informing employees, and by stimulating the development of their capabilities. The results of surveys conducted in three organizations suggest that, first, perceived efforts by management aimed at motivating and informing employees (both managers and non-managers), and at developing their capabilities, each are related to SAB. Second, among the perceived efforts to stimulate motivation among employees, providing a rationale for the strategy and an open communication climate have a stronger relationship with SAB than participation in decision making and supportiveness. Third, the perceptions of the different types of managerial effort are related to each other. For this reason, the efforts have direct as well as indirect relationships to SAB. Fourth, each of the perceived efforts seems to be complementary to the others, in the sense that the relationship of one type of effort to SAB is stronger when other types of effort are perceived to be higher.