A macroeconomic perspective on Knowledge Management

This paper provides a theory of the interactions between knowledge codification, firm-level organization structures, information diffusion and the dynamics of technological competition. At the firm level, we focus on incentives to design Knowledge Management policies based on the codification of soft into hard information. At the aggregate level, we discuss the endogenous nature of knowledge spillover and the implications for macroeconomic growth. The model predicts the existence of a bell shaped relationship between knowledge codification and technological competition.     

Patterns of Current Account Adjustment��Insights from Past Experience

Theoretical models on trade balance adjustment make a distinction between adjustment led by relative quantities (expenditure reduction) and adjustment led by relative prices (expenditure switching). Using cluster analysis on a set of over 70 current account adjustment episodes, we confirm the empirical relevance of this theoretical distinction, as quantity and price-driven adjustment cases can be distinguished in a statistically meaningful sense. We also identify a group of mixed cases, where both quantities and prices played a significant role in adjustment. Multinomial logit results suggest that economic fundamentals and business cycle positions prior to the adjustment have predictive power over the type of adjustment, i.e. whether the adjustment is quantity?C or price-driven. The exchange rate regime and the level of economic development (emerging market versus advanced status) do not have significant predictive power.     

The impact of trade union membership on training in Britain

This article investigates the impact of openness and tariff reductions on the technical inventiveness of selected OECD countries. The results suggest that even these simple forms of trade liberalization may, under certain conditions, favour technical inventiveness or creativity, the most advanced form of technological gain. It is therefore likely that other, more directly relevant kinds of liberalization of exchange, will have some positive effects on less extreme forms of acquisition of technical knowledge. The diversity in outcomes across the range of countries surveyed points to the need to specify the conditions under which these dynamic technological gains can be reaped and serve as a rationale for international trade policy.     

The Hussain–Thirlwall Model: Extensions and Implications for Development Economics

Abstract: In the context of developing countries, Thirlwall and Hussain (1982) proposed to include capital flows and the terms of trade in a post‐Keynesian growth model based on foreign exchange constraint. Thereafter, the model has been improved to take into account the effect of debt servicing but its modification and adaptability are very broad and allow analysing multiple issues related to development economics. The model was also applied and tested in the majority of developing countries and the results generally supported the thesis according to which economic growth is led by exports because they are a source of foreign currencies and allow financing imports necessary to economic development. The objective of this article is to highlight the magnitude of the debates and the theoretical and empirical literature which followed the publication of the model and to underline its relevance in the analysis of development issues. In the case of sub‐Saharan Africa, Dr M. Nureldin Hussain worked out important development strategies (promotion of exports, effective utilization of foreign assistance, reduction of poverty) that are important to remember.     

Measuring internal trade distances: a new method applied to estimate provincial border effects in Canada

In this paper we suggest an improved methodology for comparing the intensity of trade across and within national and provincial boundaries. Earlier efforts to assess border effects for provinces or for countries without internal trade statistics made fairly arbitrary assumptions about average distances for internal trade flows. We improve on earlier efforts by taking more complete account of the distribution of population within each province or country. Internal distance is estimated as a population-weighted average of intra-city and intercity distances as well as distances to and within rural areas. We find higher estimates of internal distances, and hence border effects, than found in previous studies.     

Market portfolio efficiency and value stocks

In this journal, Best, Best, and Yoder (2000) recently demonstrated that portfolios of U.S. value stocks dominate portfolios of U.S. growth stocks in terms of second-order stochastic dominance (SSD). We cannot conclude from this finding that the market is SSD inefficient, however, because market portfolio efficiency generally does not require growth portfolios to be efficient. Furthermore, stochastic dominance results are very sensitive to sampling error. In fact, the value-weighted market portfolio is not significantly inefficient, and no significant value effects exist in the sample of Best, Best, and Yoder. This study forms part of a research program on stochastic dominance. Details on the program are available at http://www.few.eur.nl/few/people/gtpost/stochastic_dominance.htm. We appreciate the comments of an anonymous referee. The financial support of Tinbergen Institute, Erasmus Research Institute of Management, and Erasmus Center of Financial Research is gratefully acknowledged. Any remaining errors are the authors' responsibility.     

Shadow Price Approach to Total Factor Productivity Measurement: With an Application to Finnish Grass-Silage Production

This paper explores an intermediate route between the Fisher and the Malmquist productivity indexes so as to minimize data requirements and assumptions about economic behavior of production units and their production technology. Assuming quantity data of inputs and outputs and the behavioral hypothesis of allocative efficiency, we calculate the exact value of the Fisher ideal productivity index using implicit shadow prices revealed by the choice of input–output mix. The approach is operationalized by means of a nonparametric data envelopment analysis (DEA) model. Empirical application to Finnish grass silage farms suggests that the Malmquist and the Fisher productivity indices yield similar results when averaged over firms, but there can be major differences in the results of the two approaches at the level of individual firms.     

The trade-creating effects of business and social networks: evidence from France

Using theory-grounded estimations of trade flow equations, this paper investigates the role that business and social networks play in shaping trade between French regions. The bilateral intensity of networks is quantified using the financial structure and location of French firms and bilateral stocks of migrants. Compared to a situation without networks, migrants are shown to double bilateral trade flows, while networks of firms multiply trade flows by as much as four in some specifications. Finally, taking network effects into account divides the estimation of the impact of transport costs and of the effect of administrative borders by around three.     

Monitoring Policy and Organizational Forms in Franchised Chains

Franchising is nowadays a prominent way to organize the distribution sector. While previous literature suggests that monitoring issues are a critical determinant of organizational choices, it is rather silent on the optimal monitoring strategy once the organization of the chain is set. In this article, we analyze the monitoring policy of chains with both franchised and company-owned units. We develop a model in which a chain monitors its outlets under asymmetric information on local demands and managers’ efforts. We show that partial monitoring (i.e., when the franchisor monitors only a subset of its outlets) represents an optimal monitoring policy. Second, we identify the units that should be monitored. Finally, we discuss the impact of information technologies and outlet location on monitoring policy and how it may affect the proportion of franchised and company-owned units within the mixed chains.