Transaction cost analysis of strategy-structure choice

Using a transaction cost approach this paper analyzes the relationship between strategy, structure and organizational performance. It addresses three related questions. First, what determines the limit to growth through internalization for a firm pursing a particular strategy? Second, why does a firm pursue different strategies for achieving growth? Third, what determines changes in the strategy and structure used by the firm over time? This analysis serves to integrate work in strategic management and provides a framework for analyzing corporate strategy choice.     

Promoting farm/non‐farm linkages for employment of the poor in South Africa: A research agenda focused on small‐scale farms and agroindustry

This article presents a policy research agenda for the promotion of farm/non‐farm linkages in South Africa. Our premise is that promoting the participation of small farms and small agroindustrial businesses in these linkages will have a strong impact on employment and income for the poor. We argue that there is potential for growth in linkages. The first question of the policy research agenda concerns the current status of linkages, and we note the dearth of research on this. The second question concerns the constraints on and prospects for promoting linkages from the demand side, and the third question treats the same concerns from the supply side. The fourth question is rooted in the duality in South Africa's non‐farm and farm sectors, and asks whether, and how, small and large agroindustrial businesses and farms will compete or relate in ‘business linkages’ that can benefit intersectoral linkages. The final question concerns the impacts of and alternatives for policies and programmes to spur linkages.     

Bulgaria’s hyperinflation in 1997: transition,banking fragility and foreign exchange

This article has two objectives: to study the 1997 episode of hyperinflation in Bulgaria, and to compare and contrast this analysis with the post-Keynesian theoretical approach. This approach highlights the role of three components observed simultaneously in order to understand the emergence of hyperinflation: a virulent distributive conflict; the presence of indexing mechanisms; and finally, flight from domestic currency into one or more foreign currencies. The article reveals that a transitional economy like that of Bulgaria in the 1990s may generate hyperinflation in the absence of any violent distribution conflict: the transition and the banking crisis engender inflation. The foreign exchange rate is decisive in the emergence of hyperinflationary dynamics (and therefore mistrust of domestic currency). This interpretation of hyperinflation is confirmed by an econometric analysis.     

Short-term capital flows under flexible exchange rates

Zusammenfassung Kurzfristige Kapitalbewegungen bei flexiblen Wechselkursen. — In dieser Arbeit werden die kurzfristigen Kapitalzuflüsse in ihrer Eigenschaft als ausl?ndische Nachfrage nach heimischem Geld behandelt. Unter diesem Aspekt hat ein exogener Zufluβ bei flexiblen Wechselkursen eine unmittelbar deflation?re Wirkung. Auβerdem werden die wechselkursinduzierten kurzfristigen Kapital-bewegungen in einem einfachen makro?konomischen Modell analysiert. Selbst wenn man den mehr traditionellen Typ von zinselastischen Kapitalbewegungen in dem Modell berücksichtigt, führt der hier gew?hlte Ansatz zu bedeutsamen Modifikationen der Standardargumentation.

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Résumé Les flux des capitaux à court terme sous les conditions de cours de change flexibles. — Cet article se concentre sur les afflux des capitaux à court terme compris comme démande extérieure en faveur d’argent local. Un afflux exogène sous cet angle a un effet directement déflationniste sous les conditions de cours de change flexibles. De plus, cet article analyse le r?le des afflux des capitaux à court terme induits par le cours de change. Même en considérant le type plus traditionel des flux des capitaux étant élastique envers l’intérêt dans notre modèle cette approche mène aux qualifications signifiantes du modèle de standard.

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Resumen Flujos de capital de corto plazo bajo tasas de cambio flexibles. — Este artículo se concentra sobre los influjos de capital de corto plazo considerados como demanda extranjera por moneda doméstica. Un influjo exógeno tiene, bajo este punto de vista, un efecto deflatorio directo bajo tasas de cambio flexibles. Además, este articulo analiza el rol de los flujos de capital de corto plazo inducidos por variaciones en la tasa de cambio en un modelo macro-económico simple. Incluso considerando en nuestro modelo flujos de capital elásticos con respecto a la tasa de interés del tipo más tradicional, este enfoque nos muestra cualificaciones significativas del modelo standard.

     

Explaining Foreign Holdings of Asia's Debt Securities: The Feldstein–Horioka Paradox Revisited*

In this paper, we find that home bias is still present in all economies and regions, especially in the case of short‐term debt securities, but that there are substantial variations among economies and regions in the strength of home bias, with the eurozone economies, the USA and developing Asia showing relatively weak home bias and advanced Asia, especially Japan, showing relatively strong home bias. We then examine trends over time in foreign holdings of debt securities and find that capital has been flowing from the USA and the eurozone economies to both advanced Asia (especially Japan) and developing Asia, and that foreign holdings of debt securities have been increasing in advanced as well as developing Asia but for different reasons. The main reason in the case of advanced Asia (especially Japan) appears to be higher risk‐adjusted returns, whereas the main reason in the case of developing Asia appears to be the growth of debt securities markets combined with relatively weak home bias and (in the case of short‐term securities) lower exchange rate volatility. Finally, we find that since the global financial crisis, foreign holdings of debt securities have declined (i.e. that home bias has strengthened) in all economies and regions except developing Asia, where they have increased (except for a temporary decline in 2008) but where their share is still much lower than the optimal share warranted by the capital asset pricing market model.     

Brexit: How Will UK Agriculture Fare?

There is little doubt that Brexit would have significant implications for UK agriculture, a sector with strong trade links to the EU and strong reliance on CAP income support. This article reports preliminary results from employing a Computable General Equilibrium Model, a Partial Equilibrium Model and Farm Level Models to explore selected trade and domestic policy scenarios post‐Brexit. These allow for the estimation of changes in producer prices, production and farm incomes against a baseline scenario of continued EU membership. Under a Free Trade Agreement with the EU, agricultural impacts are relatively modest. By contrast, unilateral removal of import tariffs has significant negative impacts on prices, production and incomes. Adoption of the EU's WTO tariff schedule for all imports favours net importers (e.g. dairy) and harms net exporters (e.g. sheep). Given the strong dependence of most UK farms on direct payments, their removal worsens negative impacts of new trade arrangements and offsets positive impacts. Impacts vary across different types and sizes of farm, but also regionally. However, the period of adjustment to new trade and domestic policy conditions may prove very challenging for a large number of farm businesses.     

Measuring rural consumers’ willingness to pay for quality labels using experimental auctions: the case of aflatoxin‐free maize in Kenya

Aflatoxins are a common health hazard in tropical countries, especially in rural areas. New methods to reduce aflatoxin levels in food staples, as well as cheaper test methods, are being developed, but consumers’ willingness to pay (WTP) for these improvements is unknown. A survey was conducted with a representative sample of rural consumers (1,344 in total, 63% women) in all major maize‐production zones of Kenya. The survey included an experimental auction with maize products of different qualities. The results showed that many rural consumers were aware of aflatoxins, but few understood their health risks. Respondents were willing to pay a premium for maize tested for aflatoxins and labeled, but asked a high discount for maize that was visibly contaminated with moldy grain. The premium was higher for respondents with education and in regions with aflatoxicosis outbreaks. Knowledge of aflatoxins substantially reduced the overall WTP, but did not increase the WTP for tested maize. Welfare analysis indicates that mandatory testing would result in substantial benefits if the cost of testing can be lowered to below the premium.