A theoretical model of the relationship between value added elements and end product

This paper focuses on the development of a theoretical scheme describing the transformation of primary incomes into end consumption and savings in the Russian economy. This scheme is basically a system of interrelated tables reflecting the distribution of primary incomes across the institutional sectors and their further reallocation and use. The scheme makes allowances for the specific features of the Russian economy and existing statistics. In terms of methodology, it is coordinated with the interindustry balance in current buyer prices and, from the theoretical standpoint, describes the connection between Quadrant II and Quadrant III of the balance. Therefore, the proposed system of tables is treated in the paper as Quadrant IV of the interindustry balance. The theoretical scheme is used by the authors as a necessary basis for constructing an empirical model of the relationship between value added and end product, which will be published in the next issue of this journal.     

The colors of investors’ money: The role of institutional investors around the world

We study the role of institutional investors around the world using a comprehensive data set of equity holdings from 27 countries. We find that all institutional investors have a strong preference for the stock of large firms and firms with good governance, while foreign institutions tend to overweight firms that are cross-listed in the U.S. and members of the Morgan Stanley Capital International World Index. Firms with higher ownership by foreign and independent institutions have higher firm valuations, better operating performance, and lower capital expenditures. Our results indicate that foreign and independent institutions, with potentially fewer business ties to firms, are involved in monitoring corporations worldwide.     

The economic performance of the Russian economy in 2006 and a forecast for 2008–2010

This article examines the economic outcome of 2006 and builds a forecast for 2007–2010. The medium-term development risks of the Russian economy are analyzed.     

Squatting as a transition problem in South Africa

This paper applies principles of transition to land tenure and squatting in South Africa. Political transition in South Africa reassigned political property rights, which produced contestable, and rent‐seeking incentives for squatting as a means to privatize land and redistribute wealth. Government failure to establish and protect private property rights in a squatter camp resulted in common‐pool problems that resisted private and public resolution with consequent rent dissipation and social loss. In response to this retreat from duty, informal agents emerged to claim their own share of the prize. Without enforceable rules of capture, the growth of squatter camps in South Africa will continue. JEL classification: D7, H8, K1, K4, R1, R4.     

R&D–Marketing Integration Mechanisms, Communication Flows, and Innovation Success

Rudy Moenaert, William Souder, Arnoud De Meyer, and Dirk Deschoolmeester report the results of their study of forty technologically innovative Belgian companies to examine the interaction between marketing and R&D. They studied one commercially successful and one commercially unsuccessful technological product innovation project in each participating company and collected data from one marketing and one R&D respondent per project. Communication flows between marketing and R&D are increased under conditions involving formalization of projects, decentralization, positive interfunctional climate, and role flexibility.     

PROCYCLICAL RETAIL LABOUR PRODUCTIVITY*

The influence of lagged adjustment and consumer spending on retail labour productivity is investigated. Both influences result in a procyclical productivity pattern.     

Bank Monitoring and Environmental Risk

Abstract:  Loan announcement effects for 152 Canadian companies are examined to investigate the efficiency of monitoring by banks facing lender environmental liability. Market reaction to the announcement of bank debt to 'environmental' firms is more positive and significant than for 'non-environmental' firms and, for firms in industries with a higher likelihood of experiencing spill events, is more positive and significant, reinforcing earlier results that establish a relationship between specific loan/borrower characteristics and announcement period excess returns and providing further evidence on the 'uniqueness' of bank loans by demonstrating the superior ability of banks to monitor corporate borrowers exposed to environmental liability.