The impact of science and technology parks on firms’ product innovation: empirical evidence from Spain

Science and Technology Parks (STP) have attracted considerable attention and public funds in recent years. However, the conclusions on their effectiveness remain mixed. This work evaluates the impact of STP on firm product innovation in the Spanish context, as an example of a less developed innovation system in which regional and national governments are prioritizing STP initiatives. This work draws on a large sample of firms provided by the Spanish Survey on Technological Innovation that is conducted annually by the National Statistical Institute. We explore alternative econometric methods to obtain average treatment effects for firms located in 22 Spanish STPs. Our results show that Spanish STPs have a strong and positive impact on the probability and amount of product innovation achieved by STP located firms. These results hold when the endogeneity of STP location is taken into account.     

The Origins and Development of the Latin American Structuralist Approach to the Balance of Payments, 1944–1964

The paper offers an historical account of the origins and development of the Latin American structuralist approach to the balance of payments between 1944 and 1964. We focus on the contributions by Raul Prebisch, Celso Furtado and Juan Noyola, all of them members of the United Nations Economic Commission for Latin America (CEPAL) during the 1950s. Prebisch used the foreign trade multiplier concept to distinguish the business cycle mechanisms at the ‘centre’ and at the ‘periphery’. Noyola introduced the notion of external disequilibrium as a feature of the industrialization process. This was further elaborated by Prebisch's formula connecting the relative rates of growth to the ratio of income-elasticities of import. Furtado examined the implications of the external demand constraint for economic growth, an important element of the two-gap models of the 1960s. The main piece of empirical structuralist research was the CEPAL 1957 report about Mexican external disequilibrium elaborated by Furtado and Noyola, not published at the time; we discuss that report in the context of the Mexican devaluation of 1954.     

Tax incentives… or subsidies for business R&D?

We study whether firms’ actual use of R&D subsidies and tax incentives is correlated with financing constraints -internal and external- and appropriability difficulties and investigate whether both tools are substitutes. We compare the use of both policies by SMEs and by large firms and find significant differences both across instruments and across firm size. For SMEs, financing constraints are negatively correlated with the use of tax of credits, while they are positively associated with the likelihood of receiving a subsidy. The use of legal methods to protect intellectual property is positively correlated with the probability of using tax incentives, but not with the use of subsidies. For large firms external financing constraints are correlated with instrument use, but results regarding appropriability are ambiguous. Our findings suggest that (1) direct funding and tax credits are not perfect substitutes in terms of their ability to reach firms experiencing barriers associated to market failures; (2) one size may not fit all in innovation policy when the type or intensity of market failure differs across firm size, and (3) subsidies may be better suited than tax credits to encourage firms, especially young knowledge-based firms, to start doing R&D.     

Exploring the Ethical Dimension of Hawala

The aim of this paper is to explore the ethical dimension of hawala, an ancient informal financial practice rooted in Islamic moral traditions. Widely used in countries with an Islamic background and their diasporas, hawala is considered an important vehicle for the financial and economic development of some less developed countries. Nevertheless, in Western countries, hawala is regarded with suspicion due its controversial ethical nature. Unlike other Islamic financial institutions, the controversial questions are not the legitimacy of profit sources or the interest charged, but rather the lack of transparency that surrounds hawala transactions. Yet, the literature on hawala has neglected its ethical perspective. Our study delves into this dimension with a critical approach, using the Triple Font Theory, grounded on virtue ethics. We conclude that if hawala transactions are carried out with honesty, and fairness, this practice deserves a positive ethical appraisal. However, it is necessary to implement efficient regulatory measures to guarantee that the system is not abused by money launders and criminals. In practice, it becomes imperative to bring over a change in the regulatory approach to hawala toward a more ethically, culturally, and economically sensitive strategy. Thus, future research should focus on how “hyper-norms” or fundamental principles inherent to humanity, which are common to both “formal” and “informal,” “Western” and “non-Western” financial practices, could run the new AML/CTF regulation agenda.     

What’s in it for Me? An Examination of Accounting Students’ Likelihood to Report Faculty Misconduct

Since there are so few controls over detecting and preventing faculty misconduct, one of the most common ways in which it is discovered is through student reports (in other words, whistleblowing). Given the importance of student reports in bringing to light faculty’s ethical lapses, this paper seeks to understand what factors influence students’ likelihood to report faculty misconduct. We develop an empirical model that integrates the decision process of the Prosocial Organizational Behavior (POB) Model with insights from the emotional perspective on whistleblowing. Specifically, we use an experimental survey to examine how students’ perceived unfairness of the faculty misconduct, feelings of anger, and the students’ self-interest in the situation in conjunction with situational “cues for inaction” lead to the intention to blow the whistle. Overall, the results from our structural model partially support our theoretical model. Interestingly, these findings demonstrate that, in the case of faculty member misconduct, anger and perceptions of unfairness play a greater role than the more rational cost-benefit process of the POB model. These results could aid in development of ethics education for students and could also inform the development of university policies that encourage students to come forward when faced with faculty misconduct.     

Strategic orientation in handicraft subsistence businesses in Oaxaca,Mexico

Abstract

This article, based in the body of strategic orientation literature, identifies and explores the practices of innovativeness, proactiveness and competitive aggressiveness that make up the strategic orientation implemented by subsistence entrepreneurs to improve business performance. A factor analysis was carried out using the data of 101 entrepreneurs, small artisanal business owners who operate in the subsistence markets in Oaxaca, Mexico. The results show that subsistence entrepreneurs notably engage in innovative and proactive practices, and, to a lesser extent, competitive aggressiveness. The research concludes that a combination of innovativeness with proactiveness is the most viable option for improving performance, whereas competitive aggressiveness impedes its development. Even so, however, it is still implemented by subsistence businesses in order to conserve their market share.     

The Influence of Improvements in Accounting Standards on Earnings Management: The Case of IFRS

This article examines the effect of improvements in the quality of International Financial Reporting Standards (IFRS) on the level of earnings management. In order to achieve this aim, we study the accounting quality of German listed companies through discretionary accruals yielded from 1998 to 2006. We assess the effectiveness of efforts by the International Accounting Standards Board to improve IFRS by using two indices that consider the revision process of the standards, and their mandatory application. Our results indicate that the improvement of accounting standards quality significantly reduces the level of reported negative discretionary accruals of the German listed firms during the period of analysis, once incentive variables are controlled. Further, companies gradually assume the quality of the new standards from the moment they can be voluntarily applied.     

Is the Organisation for Economic Co-operation and Development Ready for China?

Abstract:

The re-emergence of China as a global economic power has intensified calls for the urgent reform of Western-dominated international organizations. We evaluate efforts by the Organisation for Economic Co-operation and Development (OECD) to adapt to the challenge of China. From the first decade of the 2000s, the OECD has undertaken reforms to boost its significance as a key policy actor in the global economy. Part of this effort involves bringing China closer to the organization. To date, only limited progress has been made. We set out three bold policy reforms the OECD could implement that would deepen the OECD’s relationship with China as well as with other emerging economies.     

Rethinking the Pfähler–Lambert decomposition to analyse real-world personal income taxes

We provide a generalization and adaptation of the decomposition methodology by Pfähler (Bull Econ Res 42:121–129, 1990) and Lambert (The distribution and redistribution of income, 1st edn, 1989, The distribution and redistribution of income, 3rd edn, 2001), designed to assess the redistributive effect of personal income taxation. In particular, we generalize the methodology to several deductions, allowances, schedules or tax credits, making it suitable for real-world complex tax structures, especially dual income taxes. Additionally, we avoid the problem of sequentiality on the measurement of partial redistributive effects and also take into account the re-ranking effects of tax treatments not related to income. Finally we illustrate the utility of the methodology by carrying out an empirical analysis for the 2007 Spanish Personal Income Tax, which meant a shift from a quasi-comprehensive to a semi-dual income tax.     

It’s never the same: the role of homogeneity in online services

This research aims to study the differences between services sold on the Internet, based on their degree of homogeneity. While travel services are mostly sold online, other customizable services do not enjoy the same success. We carry out an empirical study based on declared intentions, risk perceptions, and actual purchasing behavior. The main findings show that: the degree of homogeneity is an adequate segmentation variable for online services; homogeneous services seem more suited to e-commerce than non-homogeneous services; a relation exists between perceived risk and intention to buy services online; and the scope of some traditional classification variables needs narrowing.