A model of the U.S. food system: What are the determinants of the state vulnerabilities to production shocks and supply chain disruptions?

We adapt a Ricardian general equilibrium model to the setting of U.S. domestic agri-food trade to assess states’ vulnerability to adverse production shocks and supply chain disruptions. To this end, we analyze how domestic crop supply chains depend on fundamental state-level comparative advantages—which reflect underlying differences in states’ cost-adjusted productivity levels—and thereby illustrate the capacity of states to adapt to and mitigate the impacts of such disruptions to the U.S. agricultural sector. Based on the theoretical framework and our estimates of the model's structural parameters obtained using data on U.S. production, consumption, and domestic trade in crops, we undertake simulations to characterize the welfare implications of counterfactual scenarios depicting disruptions to (1) states’ agricultural productive capacity, and (2) interstate supply linkages. Our results emphasize that the distributional impacts of domestic supply chain disruptions hinge on individual states’ agricultural productive capacities, and that the ability of states to mitigate the impacts of adverse production shocks through trade relies on the degree to which states are able to substitute local production shortfalls by sourcing crops from other states.     

Assurance of Sustainability Reports: Impact on Report Users' Confidence and Perceptions of Information Credibility

This study examines whether (1) assurance, (2) the level of assurance (reasonable vs limited) and (3) the type of assurance practitioner (accountant vs specialist consultant) affect users' perceptions of reliability of sustainability reports. Based on an experimental questionnaire, we find that the provision of assurance improves perceived reliability of the environmental and social information. There are no significant main effects for both the level of assurance and type of assurance practitioner. However, a significant interaction is found between these two experimental factors and report users' perceptions of reliability of such reports. More specifically, report users place more confidence in sustainability reports when the level of assurance provided is reasonable (that is, high but not absolute), and when such assurance is provided by a top tier accountancy firm, compared to when the assurance is provided by a specialist consultant. No such difference is found when the level of assurance provided is limited for either type of assurance practitioner group. The results of this study thus highlight the relevance of assurance for sustainability reporting.     

Internal audit outsourcing in Australia

The present study investigates the determinants of internal audit outsourcing using survey data on 99 companies listed on the Australian Stock Exchange, where 54.5 per cent fully rely on in‐house facilities and 45.5 per cent outsource some or all of their internal audit function. Results from logistic regression analyses suggest that internal audit outsourcing is associated with perceived cost savings and the technical competence of the external provider. For a subsample of firms that have previously undertaken internal audit activities before outsourcing, contrary to expectations, the larger the organization the greater the propensity to outsource. In addition, smaller firms are found to be adopting internal audit for the first time, through outsourcing. These results suggest that internal audit outsourcing is an expanding business opportunity for professional accountants; but with 75 per cent of firms outsourcing to their external auditor, there are implications for external auditor independence.     

Absenteeism: A comparison of incentives in alternative organizations

This paper uses a game-theoretic model to analyze the incentives workers may have to play “hookey” from work given that there is an outwardly unobservable probability of being sick and thus being unable to work. We compare incentives and equilibria in labor-managed firms (LMFs) and in profit-maximizing firms (PMFs), both in single-period and repeated games. We show, among other things, that in an egalitarian LMF there are circumstances under which members will not work when it is optimal to work, while the PMF suffers from the opposite problem; daily paid workers will work even when it would be better if they did not.     

Finding Missing Markets (and a Disturbing Epilogue): Evidence from an Export Crop Adoption and Marketing Intervention in Kenya

Farmers may grow crops for local consumption despite more profitable export options. DrumNet, a Kenyan NGO that helps small farmers adopt and market export crops, conducted a randomized trial to evaluate its impact. DrumNet services increased production of export crops and lowered marketing costs, leading to a 32% income gain for new adopters. The services collapsed one year later when the exporter stopped buying from DrumNet because farmers could not meet new EU production requirements. Farmers sold to other middlemen and defaulted on their loans from DrumNet. Such experiences may explain why farmers are less likely to adopt export crops.     

Resale and Collusion in A Dynamic Market for Semidurable Goods

The paper studies the incentives to form collusive agreements when goods can be traded in second‐hand markets. It will be shown that such incentives crucially depend on the rate of depreciation of the durable good and on consumer heterogeneity. The main contribution of the paper shows that an active second‐hand market may strengthen the incentives to collude, as do policies that affect the functioning of the second‐hand market (e.g., leasing policy and buy‐back). It will also be argued that the oligopoly incentives to adopt strategies that strengthen collusion often differ from the monopoly incentives to increase profits.     

Cooperation in the Moshav

The moshav is a cooperative village in which members own and operate their farms individually. The moshav supervises cooperative marketing of most of the farms' products. But its most important function is as financial intermediary since its members are handicapped when acting by themselves in the credit market. Despite occasional internal conflicts about the cooperative marketing, in the long run the moshav enhances capital accumulation and income. This paper reports an empirical study of cooperative marketing, credit, and capital in the moshav. A dynamic model is developed and estimates are presented.     

ON THE REVISITED ILLYRIAN MODEL AND PERVERSITY: THE CASE OF THE LONG-RUN1

The modified theory of the Illyrian firm was developed, in part, to correct a perversity exhibited by the traditional theory of the Illyrian firm — that output rises in response to a fall in output price or a rise in fixed costs. We show that while this revised model has solved the problem for the short-run the problem remains in the long-run, and this long-run perversity may have important policy implications for the short-run as well. We also show that the under-production problem associated with the traditional LMF is mitigated (and perhaps even reversed) in the modified LMF.     

Two Wrongs Make a ‘Right’? Exploring the Ethical Calculus of Earnings Management Before Large Labor Dismissals

Journal of Business Ethics - This paper examines whether firms strategically legitimize large labor dismissals (LLDs) by performing ex-ante downward earnings management. We further assess whether...