Black economic empowerment,legitimacy and the value added statement: evidence from post‐apartheid South Africa

We examine why companies in South Africa voluntarily provide a value added statement (VAS). The VAS can be used by management to communicate with employees and thereby establish a record of legitimacy. Since we want to establish if the VAS is used to establish symbolic or substantive legitimacy, we examine whether production of a VAS is associated with actual performance in labour‐related areas. To measure labour‐related performance, we use an independent Black Economic Empowerment (BEE) rating. We find that BEE performance is significantly and positively related to the voluntary publication of a VAS. Our results suggest that BEE performance and disclosure of a VAS are two elements of a strategy used by South African companies to establish their substantive legitimacy with labour.     

The Ethics of Insider Trading Revisited

Following Manne (1966, Insider Trading and the Stock Market (New York, Free Press)) we introduce a distinction between insider trading and market manipulation on the one hand and corporate insiders versus misappropriators on the other hand. This gives rise to four types of alleged inside transactions. We argue that the literature on insider trading has often targeted inside transactions type II, III and IV but that these arguments do not necessarily hold for type I transactions. We look for consequentionalist as well as non-consequentionalist arguments against type I transactions and demonstrate that these are hard to find. Throughout the article we refer extensively to the economic literature on insider trading in order to overcome a relative divide between the economic, legal, and philosophical discussion on insider trading.

Are there major differences in the attitudes and service quality of standard and seasonal employees? An empirical examination and implications for practice

Despite the increased use of seasonal employees by organizations, few studies have been completed on the attitudes and service quality of seasonal office workers. Using Lautsch's classification model, we analyzed the organizational context in which the standard and seasonal workers in this study were employed. Hypotheses were developed based upon the organizational analysis and social exchange theory. Results from archival data obtained from a web‐based organizational survey of 205 clerical and professional workers indicated contrary to expectations, standard and seasonal employees did not significantly differ in terms of perceptions of overall job conditions, perceived organizational support (POS), or job engagement. However, seasonal employees did report significantly fewer opportunities to work on challenging tasks, less comfortable physical working conditions, and less job security than the standard workers. As predicted, standard employees reported significantly higher levels of service quality performance than seasonal employees. Additionally, job engagement mediated the relationship between POS and service quality for both the standard and seasonal employees. Implications for managing seasonal employees are discussed.     

Strategic Regulation Policy in the Internet

Some countries are importers while others are exporters of global backbone connectivity. At the same time, input components such as local access are non-traded. This paper analyzes a non-cooperative regulatory game between importing and exporting countries, assuming that the prices of both traded and non-traded inputs can be regulated. We show that exporting countries choose a more restrictive regulation of non-traded goods than importing countries do. We further show that a requirement of international non-discrimination may hurt importing countries, and give firms producing traded inputs incentives to invest in quality degradation.     

Is capital a collusion device?

Summary. We examine how irreversible capital reduces the possibility of a duopoly to sustain implicit collusion by grim strategies, when the product is homogenous and firms compete in quantities. Compared with the case of reversible capital, there are two countervailing effects: Deviation from an existing collusion is less attractive, because capital once installed causes costs forever. But the punishment will also be less severe due to the high capacity the deviating firm can build before punishment starts. The last effect dominates, meaning that the commitment value of capital is negative for all firms. If capital is irreversible, collusion breaks down for realistic magnitudes of interest rates. Received: April 30, 1999; revised version: November 30, 2001     

Existence of a competitive equilibrium in a one sector growth model with heterogeneous agents and irreversible investment

Summary. We prove existence of a competitive equilibrium in a version of a Ramsey (one sector) model in which agents are heterogeneous and gross investment is constrained to be non negative. We do so by converting the infinite-dimensional fixed point problem stated in terms of prices and commodities into a finite-dimensional Negishi problem involving individual weights in a social value function. This method allows us to obtain detailed results concerning the properties of competitive equilibria. Because of the simplicity of the techniques utilized our approach is amenable to be adapted by practitioners in analogous problems often studied in macroeconomics. Received: September 13, 2001; revised version: December 9, 2002 RID="*" ID="*" We are grateful to Tapan Mitra for pointing out errors as well as making very valuable suggestions. Thanks are due to Raouf Boucekkine and Jorge Duran for additional helpful discussions. We also thank an anonymous referee for his/her helpful comments. The second author acknowledges the financial support of the Belgian Ministry of Scientific Research (Grant ARC 99/04-235 “Growth and incentive design”) and of the Belgian Federal Goverment (Grant PAI P5/10, “Equilibrium theory and optimization for public policy and industry regulation”). Correspondence to: C. Le Van     

Fiscal Coordination and Political Competition

This contribution investigates fiscal coordination in the framework of two countries asymmetric in respect of their capital–labor endowment. When tax policies are decided by majority voting inside each country, and they are not coordinated at a supranational level, factors of production are inefficiently allocated, at equilibrium. Our main result shows that fiscal coordination, via a minimum capital tax, does not always lead to a Pareto–improvement for the median voter's welfare, with respect to the noncooperative outcome.     

Inter-market competition for exchange traded funds

We examine how the different mix of informed and liquidity trading in the market for ETFs affects the nature of inter-market competition. We find that both the characteristics of the securities and the structures of the competing markets jointly determine the nature of inter-market competition. Given the superior execution quality on the ECNs and the low adverse selection costs in the ETF market, anonymous market such as the ECNs, attract both liquidity and informed traders. We also find that markets compete in a subset of ETFs. In addition, we find that quotebased competition is prevalent in the market for ETFs.