State-imposed solutions to negative externalities: employment impact of pollution abatement policy

Musgrave was acutely aware that many private activities, both consumption and production, generate negative externalities. Advocates for an active government rely on this concept to justify public sector regulation of private activities. Regulations and mandates, along with penalties for non-compliance, are the primary instruments used by government to bring about the “correct” level of output whenever private output gives rise to negative externalities such as environmental pollution. This study in effect offers a case study of the Clean Air Act on employment, i.e., it empirically investigates whether pollution abatement costs have had a negative impact on manufacturing employment in the U.S. Conventional microeconomic theory suggests that there is a trade-off between environmental protection outlays and manufacturing activity, i.e., higher pollution abatement compliance costs borne by industries may contribute to plant shutdowns, lower production levels and lay-offs, and/or lack of investment, thereby leading to diminished manufacturing employment. Existing studies fail to offer a clear conclusion as to the impact of existing environmental protection measures on manufacturing activity. Using state-level data for 2001, this study finds that government-imposed pollution abatement costs have had a statistically significant negative impact on manufacturing employment in the U.S. Richard J. Cebula, Shirley and Philip Solomons Eminent Scholar.     

Multi-Market Collusion with Demand Linkages and Antitrust Enforcement

This paper analyzes dynamic cartel formation and antitrust enforcement when firms operate in demand-related markets. We show that cartel prosecution can have a knock-on effect: bringing down a cartel in one market reduces profits and cartel stability and leads to the break-up of the cartel in the adjacent market. Cartel prosecution can also have a waterbed effect: disrupting a cartel increases cartel stability in the adjacent market and induces cartel formation in previously competitive markets. We discuss the impact of dynamic cartel formation on consumer surplus, explore antitrust spillovers, the optimal scope of antitrust interventions and cartel formation with local firms.     

Zone of tolerance for banks: a diagnostic model of service quality

Service quality has become an increasingly important factor for success and survival in the banking sector. Provision of high-quality service aids in meeting several requirements such as customer satisfaction and its consequent loyalty and market share, soliciting new customers, financial performance, and profitability (Cui, C.C., Lewis, B.R., & Park, W. (2003). Service quality measurement in the banking sector in South Korea. International Journal of Bank Marketing, 21(4), 191–201.). This paper presents the bank service quality measurement in its extended form. It deals with the concept of ‘zone of tolerance’ in judgments of service quality proposed by Zeithaml, Berry, and Parasuraman (1993, The nature and determinants of customer expectations of service. Journal of the Academy of Marketing Science, 21(1), 1–12.). The ‘zone of tolerance’ is recognized in the service quality literature as representing a range of expectations and an area of acceptable outcomes in service interactions. The present study describes the zone of tolerance for young customers’ service expectations and determines the customer satisfaction level for banks. The study focusses only on the youth market to formulate long-term strategies because young customers tend to keep themselves up to date with latest technological developments. A conceptual model BANKZOT is presented in this study, and the results demonstrate that evaluation of services can be scaled according to different types of expectations – ‘desired' and ‘adequate’ – and that customers use these two types of expectations as a comparison standard in evaluating bank services. The findings reveal that young customers have a narrow zone of tolerance with regard to the services provided by the banks. The results with respect to gap analysis reveal that there was a shortfall in the service quality provided by the banks in the sample, with the largest gap being found in tangibles and empathy of service quality dimensions. The results of exploratory factor analysis reveal that the SERVQUAL model is found to be uni-dimensional in this study. The results, managerial implications, and future research implications are discussed in detail.     

Evidence of bias in NCAA tournament selection and seeding

We investigate bias in the selection and seeding decisions of the NCAA Division I Men's Basketball Committee. Using data on 910 teams associated with the ten tournaments from 1999 to 2008, we test for bias toward teams from seven ‘major’ conferences and six ‘mid‐major’ conferences, as well as for bias toward teams represented on the Committee. We find substantial support for the hypothesis of bias in favor of virtually all major and mid‐major conferences in selection and/or seeding, as well as evidence of bias toward majors over mid‐majors. We also find substantial evidence of bias toward teams with some type of Committee representation. Copyright © 2010 John Wiley & Sons, Ltd.     

The regionalization of indian politics and its implications for economic reform

Is political decentralization an impetus for economic liberalism, or are state and local governments impediments to a rigorous reform process? This article describes India's federal system, the growth of regional parties and governments, the changing balance of power between India's state and central governments, and the deterioration of state administrations, then assesses the economic reform and human resource policies of the states. The factors which slow the pace of reforms (politically unstable governments, fiscal populism, organized local interests, patronage and rents for party and government officials) and those that push for reforms (fiscal deficits, the need for investments in infrastructures, and inter-state competition for private investment) are analyzed.     

The impact of foreign interest rates on the economy: The role of the exchange rate regime

It is often argued that many economies are affected by conditions in foreign countries. This paper explores the connection between interest rates in major industrial countries and annual real output growth in other countries. The results show that high foreign interest rates have a contractionary effect on annual real GDP growth in the domestic economy, but that this effect is centered on countries with fixed exchange rates. The paper then examines the potential channels through which major-country interest rates affect other economies. The effect of foreign interest rates on domestic interest rates is the most likely channel when compared with other possibilities, such as a trade effect.     

Corporate identity and the societal constituent

Increasingly, the management of corporations’ identities is being conducted in the context of empowered, socially engaged, culturally adept social actors who present organizations with a range of conflicting societal and economic expectations. These social actors, referred to as societal constituents, claim moral legitimacy to influence the decisions and actions of corporations they feel have affected their personal and community space. Firms’ environments come to be regarded as complex webs of social groups whereby the cultural meanings embedded in their corporate brands come to be morphed across the range of social groups. As such, the management of corporate brands becomes a task of symbolic facilitation and managing contradictions. Jay M. Handelman (jhandelman@business.queensu.ca) is an associate professor of marketing in the Queen’s University School of Business, Kingston, Ontario, Canada. His articles have appeared in theJournal of Marketing, theJournal of Consumer Research, and theJournal of Retailing. His current research interests include the application of institutional theory to help understand how product and corporate brands come to be managed in the context of a turbulent social environment. His teaching interests include brand management, marketing ethics, marketing theory and history, and interpretive research methods.     

YOUNG BABY BOOMERS' WEALTH

Researchers know relatively little about the beginnings of wealth accumulation. This paper analyzes the wealth of young baby boomers, individuals born from 1957 to 1964, using a previously ignored wealth data set, the National Longitudinal Survey of Youth 1979 (NLSY79). First, a detailed data quality evaluation is performed. Findings suggest that not cleaning NLSY79 wealth data causes nonsensical results, but there are no other serious problems. Analyzing the cleaned wealth data quantifies many stylized facts. For example, the typical baby boomer's wealth holdings increase by more than $2,000 a year. Married females hold more wealth than either married or unmarried males. Finally, while young boomers start with a majority of their wealth in illiquid holdings such as automobiles and possessions, they rapidly shift their wealth holdings into homes as they grow older.     

The Effect of Corporate Governance on Investment: Evidence from Real Estate Investment Trusts

This study investigates the relation between firms' investment choices and various governance mechanisms, using a sample of real estate investment trusts (REITs). We find evidence that the responsiveness of REITs' investment expenditures to their opportunities depends on their corporate governance structures. Within the set of governance mechanisms that we examine, we find particularly strong links between investment behavior and ownership. Specifically, we find that the investment choices of REITs are more closely tied to Tobin's q if they have greater institutional ownership or if they have lower director and officer stock ownership. These results are consistent with institutional owners monitoring the firm's investment policies as well as with high insider ownership allowing managers to follow their own investment agendas.