Book Reviews

Moh Arsyad Anwar (ed.), Prospek dan Permasalahan Ekonomi Indonesia 1985/86 [The Indonesian Economy in 1985/86: Prospects and Problems], Jakarta: Sinar Harapan (for the Fakultas Ekonomi Universitas Indonesia), 1985, pp. 383.

Michael T. Skully (ed.), Financial Institutions and Markets in South-East Asia: A Study of Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand, London: Macmillan, 1984, pp. xviii + 411. $72.00 (cloth).

Philip M. Hauser, Daniel B. Suits and Naohiro Ogawa (eds), Urbanization and Migration in ASEAN Development, Tokyo: National Institute for Research Advancement, 1985. $25.00 (paper).

John P. Lea and John M. Courtney (eds), Cities in Conflict: Studies in the Planning and Management of Asian Cities, Washington D.C.: The World Bank, 1985.

Gavin W. Jones (ed.), Women in the Urban and Industrial Workforce: Southeast and East Asia, Development Studies Centre Monograph No. 33. Canberra: The Australian National University, 1984, pp. xi + 435.

G. Chandler, Market Trade in Rural Java, Monash Papers on Southeast Asia No. 11, Centre of Southeast Asian Studies, Monash University, 1984, pp. xii + 198.

Jan Breman, Control of Land and Labour in Colonial Java, Verhandelingen van het Koninklijk Instituut voor Taal-, Land- en Volkenkunde No. 101, Dordrecht: Foris, 1983, pp. xi = 159. Dfl 40 (paper).     

Market Orientation and Firm Performance: An Empirical Analysis of Ghanaian Microenterprises

ABSTRACT

While previous researchers have explored the relationship between market orientation and firm performance in larger organizations, such studies in microenterprises are scarce. This empirical study uses a structural equation model to examine the role of market orientation on firm performance of microenterprises operating in Ghana. To measure market orientation, we used a well-known scale (MARKOR), and the data (N = 347) for this study were collected from Ghanaian microenterprises using personal interviews. Study results indicated that the MARKOR scale provided a good measure of market orientation in Ghanaian microenterprises. The conceptualized model provided a good fit to the relationship between market orientation and the performance of Ghanaian microenterprises, indicating that market orientation as measured by MARKOR had a statistically significant positive impact on performance. However, the explanatory power of the model was relatively low, indicating the potential impact of other factors that were not incorporated in the model. Study implications are discussed.     

Competitive pressure,innovation and trade protection: Evidence from US patent data

Recent theoretical models have suggested that the relationship between competition and innovation may best be characterised as an inverted‐U shape: firms in industries with low levels of competition are more likely to innovate in the wake of increased competition as they attempt to escape competition, while those in highly competitive industries will decrease innovation in the wake of increased competition as the profit incentive to innovate dissipates. Results from other studies have found positive as well as negative relationships between innovation and competition. In a parallel literature, trade economists have produced conflicting results regarding the impact of trade liberalisation on innovation. One stream of research has shown that increased access to imported intermediate goods increases productivity, suggesting a positive relationship between imports and innovation. Others have hypothesised that firms may use the technology embodied in intermediate inputs as a substitute for domestic innovation. In this paper, we merge these divergent literatures and investigate whether innovation, as measured by the production of patents by US manufacturers, has been impacted by market competition and tariff reductions. Our empirical findings indicate that insulation from imports in the form of higher tariffs on final goods was associated with innovation until the late 1980s, while falling tariffs on intermediate goods appear to have facilitated innovation during the 1990s. We also find evidence of the inverted U‐shaped relationship between market competition and innovation.     

Trustee reputation in securitization: When does it matter?

We consider the role of trustees–who are nominated to protect the interests of investors–in securitization pricing and whether investors rely on them to mitigate risks. In particular, we examine the effect of trustee reputation on initial yield spreads of European mortgage‐backed security (MBS) issuances between 1999 and the first half of 2007. We find that engaging reputable trustees led to lower spreads during the credit boom period prior to the 2007–2009 financial crisis. Our findings suggest that trustees’ reputation was considered by investors to be more important when risk assessment became more challenging.     

Monetary transmission with multiple policy rates: evidence from Turkey

Quantitative easing policies have led to persistent divergence between officially announced policy rates and short-term money market rates in many economies, making it challenging to assess the stance of monetary policy in the aftermath of the global financial crisis. Lack of data variation in short-term interest rates across time dimension has made it difficult to identify the monetary transmission mechanisms. In order to shed some light on this topic, we make advantage of a specific period from Turkey during which the central bank deliberately allowed the policy rates to diverge frequently from the interbank rates due to capital flow management purposes. Using bank-level flow data from this episode, we investigate the relationship between various short-term interest rate measures and bank loan/deposit rates through panel estimation methods. Our findings suggest that interbank rates are more relevant than central bank’s officially announced rates for the transmission of monetary policy when the two diverge from each other persistently. Interbank rates particularly play a key role in the pricing of loans and deposits. These findings provide helpful guidance for evaluating the monetary stance under unconventional policies.     

Examining Social Networking Sites as a Survey Distribution Channel for Hospitality and Tourism Research

As businesses use social networking sites (SNS) to connect with consumers, SNS can be viewed as another way to collect users’ information. Since many consumers spend significant amounts of time connecting with others on SNS, it would be a suitable channel to gather information from the captured audience. This study compares survey responses from the traditional paper-and-pencil survey and online survey collected through an SNS recruitment method. The test results showed that there are no statistically significant differences in model fits from the two data collection methods. Thus, this study concludes that SNS holds great potential to serve as a survey distribution channel for collecting meaningful data. More in-depth empirical studies are needed to validate the method before using it for a wider range of research.     

Subsidizing rent-seeking: Antidumping protection and the Byrd Amendment

This paper argues that a recent U.S. law, which distributes the tariff revenue resulting from successful antidumping petitions to firms that supported the petitions, increases the amount of antidumping protection requested by U.S. firms in two ways. First, by increasing the total benefits accruing to industries filing successful petitions, the law subsidizes rent-seeking. Second, by awarding these subsidies only to those firms that actively support the petition, it mitigates the free rider problem traditionally associated with collective actions. Empirical results provide strong evidence that industries have filed more antidumping petitions under the new law. Moreover, the average proportion of firms in the industry filing these petitions increased under the law, suggesting that the law at least partially alleviates free riding incentives.     

Three Views on the Ethics of Tax Evasion

In 1944, Martin Crowe, a Catholic priest, wrote a doctoral dissertation titled The Moral Obligation of Paying Just Taxes. His dissertation summarized and analyzed 500 years of theological and philosophical debate on this topic, much of which took place in Latin. Since Crowe’s dissertation, not much has been written on the topic of tax evasion from an ethical perspective, with a few exceptions. In 1998 and 1999, a few articles were published on the ethics of tax evasion in the Journal of Accounting, Ethics & Public Policy. An edited book on this topic was published in 1998. The present paper summarizes, updates and expands on Crowe’s work and the other more recent work that has been published on this topic. Three basic views on the ethics of tax evasion have emerged over the centuries. This article presents and critiques those three views and raises some questions about points that have not yet been explored in the literature.     

An applied stochastic model of the quality–quantity trade-off in the public health care sector

It is a striking feature of the many of the developing country public service sectors that the sectors in question often overproduce the quantity of services but underproduce the quality. This feature, which is exemplified in this paper, is rooted in a wide spectrum of economic and sociological factors ranging from the economic and sociological profile of the service receiving people to the asymmetric density of service-receiving population across their regions. This feature, we conjecture, is a source of a considerable degree of suboptimality in some of the developing countries. If our conjecture is correct, correcting such suboptimalities is likely to yield significant welfare improvements that could help speed up the process of development in the underdeveloped regions of the world. To analyze the supoopimalites in question, we will first develop a concept (and a model) of optimal quality in the public service sector, which indicates the level of quality that maximizes expected public satisfaction subject to available resources. Resources are used in an efficient manner to produce the service in question. The concept and the model in the paper make a needed contribution to the quality discourse by presenting a way of determining the quality improvements (or adjustments) necessary to achieve optimum in the public service sector. The paper presents an application (a case study) of this new concept in the public healthcare sector in Turkey, and explores the differences between the actual and optimal quality in the sector in question. It turns out that there is a considerable difference between the actual and optimal levels of quality (as well as those of quantity) in the Turkish public healthcare sector in an overpopulated city (Istanbul), indicating a significant overproduction of quantity and underproduction of quality. Thus, to achieve the optimal levels, the sector should increase quality and reduce quantity by a considerable margin. The quantified differences (gaps) between actual and optimal levels point out a considerable room for welfare improvement. Optimum-seeking adjustments closing these gaps could be shown to lead to considerable satisfaction and welfare gains, the measurement of which is worthy of future research.