Trust relations in management of change

Trust is essential for the success of change, but transformational change challenges trust. This paper analyses how trust dynamics develop over time in two Danish manufacturing firms affected by major change programmes. The results show that change creates uncertainty among employees, thereby provoking intense scrutiny of management intentions and a tendency to make interpretations that exaggerate management intentions—with the end result of reduced trust. Management then react similarly with negative interpretations of employee reactions, creating a vicious cycle of reduced trust. The paper proposes a model for how change and trust interact and suggests a managerial strategy for trust repair: Strong management actions that symbolise integrity, competence and benevolence may counteract reduced trust, but if low trust turns into distrust, the result may be a deadlock that both parties find difficult to break.     

Extending the SAM with Social and Environmental Indicators: An Application to Bolivia

Extending economic accounts with sets of social and environmental indicators is a first step towards a more integrated analysis of aspects of sustainability problems. In this article, therefore, a proposal is made to nest social and environmental indicators into an existing economic accounting framework. The Social Accounting Matrix (SAM) is taken as a basis, because of its flexibility regarding extensions with non-monetary data addressing social and environmental concerns. The main thrust of the paper is methodological. From the discussion of methodological issues and the application to the SAM for Bolivia for the year 1989, it is concluded that it is, in principle, feasible and relatively simple to extend the SAM with the two sets of indicators. However, additional data will have to be collected to be able to address, more adequately, the problems of sustainability.     

Instrumental variable estimation based on grouped data

The paper considers the estimation of the coefficients of a single equation in the presence of dummy intruments. We derive pseudo ML and GMM estimators based on moment restrictions induced either by the structural form or by the reduced form of the model. The performance of the estimators is evaluated for the non-Gaussian case. We allow for heteroscedasticity. The asymptotic distributions are based on parameter sequences where the number of instruments increases at the same rate as the sample size. Relaxing the usual Gaussian assumption is shown to affect the normal asymptotic distributions. As a result also recently suggested new specification tests for the validity of instruments depend on Gaussianity. Monte Carlo simulations confirm the accuracy of the asymptotic approach.     

Consequences of competitive bidding in project-based production

This paper discusses the consequences competitive bidding have on lead time in project-based production, such as construction. Earlier studies argued that competitive bidding may significantly increase resource consumption and generate waste in the delivery process, which this paper supports. However, the relation between competitive bidding and lead time has been less discussed. Lead time reduction has long been considered a fundamental objective for overall business improvement. An objective of our study was to understand what contributes to long lead times. The reported findings are from a 4-year study on the delivery process of power distribution equipment, a type of engineered-to-order (ETO) product. The paper concludes by suggesting procurement practices that reduce lead times for ETO products.     

When does FDI have positive spillovers? Evidence from 17 transition market economies

We use rich firm-level data and national input–output tables from 17 countries over the 2002–2005 period to test new and existing hypotheses about the impact of foreign direct investment (FDI) on the efficiency of domestic firms in the host country (i.e., spillovers). We document that backward linkages have a consistently positive effect on productivity of domestic firms while horizontal and forward linkages show no consistent effect. We also examine how the strength of spillovers varies by sector, FDI source, institutional environment (corruption, red tape, level of development), firm’s distance to the technological frontier, and other firm- and country-specific characteristics.     

On the size of fiscal multipliers: A counterfactual analysis

We point out that fiscal multipliers derived from SVAR-models include the predicted future path of policy instruments. After the initial shock, net taxes and government expenditures react to each other and are autocorrelated. In a counterfactual simulation, we report fiscal multipliers that abstract from these dynamic responses.     

Unbundling institutional determinants of multinational investments

Previous studies often examined how a broad-based institution affects foreign direct investment (FDI) flows across countries. However, analysis of differential impacts of two or more constituent institutions within a broad-based institution appears to be more useful for policy decision-making. There is a paucity of studies on how constituent institutions within a broad measure of institution affect FDI across countries. Our article constitutes the first attempt in bridging this gap. In this article, we examine the relative effects of property rights institution (PI) and contracting institution (CI) on investment flows. Our results show that PI is much more important than CI in determining the cross-border flows of FDI and affiliate sales. Moreover, PI is found to be more important for FDI than for affiliate sales, indicating that final goods are less of a concern for being expropriated by governments and powerful elites than capital goods. Through unbundling a broad-based institution and examining how the constituent institutions affect investments flows, our article provides practical location decisions for investments in FDI, mergers and acquisitions (M&A) and affiliate sales.     

Does unemployment lead to a less healthy lifestyle?

In this article, we use 22 years of data from the German Socio-Economic Panel and information on plant closures to investigate the effects of unemployment on four indicators of unhealthy lifestyles: diet, alcohol consumption, smoking and (a lack of) physical activity. In contrast to much of the existing literature, which unlike our analysis is unable to assess causality, our results provide little evidence that unemployment gives rise to unhealthy lifestyles.     

Regulation,Minimum Wage and Informality: Introduction to Symposium

Are markets in developing and transition economies over‐regulated or under‐regulated? This is a perennial question in the development discourse, but one for which answers appear to come more from preset ideology than from context‐specific analysis and evidence. These issues become even more pressing when the debate turns to the links between regulation, deregulation and inequality. The recent experience of rising inequality in many countries has also brought to the fore predictable policy positions. A key aspect of labor regulation in developing countries, and one becoming more prominent in the era of rising inequality, is the minimum wage. The range of issues around regulation, minimum wage and informality was addressed by papers presented to a conference held in New Delhi on December 17–18, 2014. The conference was co‐sponsored by the World Bank, UK Department for International Development, Cornell University and Columbia University. The organizers of the conference were Kaushik Basu, Stefan Dercon, Ravi Kanbur and Jan Svejnar. A selection of papers from the conference which passed the usual review procedures of the Review of Development Economics, and a further selection of papers from those submitted to the journal, form this symposium.     

Systemtheorie,Shareholder Value-Konzept und Stakeholder-Konzept als theoretisch-konzeptionelle Bezugsrahmen der Balanced Scorecard

Zusammenfassung  Die theoretisch-konzeptionelle Würdigung der Balanced Scorecard steht trotz ihres Siegeszuges in der Praxis noch immer in den Anf?ngen. Der vorliegende Beitrag weist die Systemtheorie, das Shareholder Value-Konzept und das Stakeholder-Konzept als theoretisch-konzeptionelle Bezugsrahmen der Balanced Scorecard aus. Damit werden zugleich Modifikationsm?glichkeiten der Balanced Scorecard angedeutet, die sich aus einer noch konsequenteren Anlehnung an einen der drei Ans?tze ergeben k?nnten. Prof. Dr. Jan K?rnert ist Inhaber des Stiftungslehrstuhls für Allgemeine Betriebswirtschaftslehre, insb. Internationales Finanzmanagement/Kapitalm?rkte Dr. Cornelia Wolf ist Gesch?ftsführerin des Studentenwerkes Greifswald