The gravity model and trade in intermediate inputs

Is the gravity model as applicable to trade in intermediate inputs as it is to trade in final goods? One of the contributions of this paper is that we explicitly account for the dual nature of products that can be used as either intermediate inputs or final goods. We find that the structural gravity model performs extremely well for describing bilateral trade in final goods and in intermediate inputs. Moreover, this continues to hold even when we focus on a subset of countries in which intermediate inputs trade accounts for a growing share of trade, namely "Factory Asia." However, the gravity model may perform poorly due to model misspecification (i.e., exclusion of intranational trade) and/or sample selection, even after the model considers the dual nature of products. We demonstrate that the poor performance of the gravity model is not attributable to the large trade flow of intermediate inputs, which supports the continued use of the model as these trade flows continue to grow in importance worldwide.     

An economic evaluation of area yield insurance for small-scale cane growers

In the past, crop insurance schemes have based indemnity payments on individual producers' yields. Insurance of individual yields does not cope efficiently with systemic risk and therefore fails in areas where crop yields are correlated across space. Area yield insurance provides an alternative and eliminates the problems of moral hazard and adverse selection associated with individual yield insurance. Area yield insurance therefore effectively copes with systemic risk. In this study, principles of area yield insurance were applied to yield data on small-scale cane growers in KwaZulu-Natal and used to calculate pure premium rates. The viability of a government-subsidised area yield insurance scheme for small-scale cane farmers was assessed in terms of affordability to the government, the farmers and private insurance companies. The empirical results obtained from this study indicate that such a scheme may pose great expense to the government and, as a result, may not be viable in South Africa. This topic needs further study, while other risk management strategies should also be considered.     

Vertical Pay Dispersion,Peer Observability,and Misreporting in a Participative Budgeting Setting

In this study, we examine the joint effect of vertical pay dispersion and peer observability on subordinates' misreporting choices. We adopt a participative budgeting setting in which two subordinates report to one superior, and we manipulate vertical pay dispersion (low/high) and peer observability (absent/present). Subordinates have private information about actual project costs and can over-report project costs to the superior without detection and thus create budgetary slack. When a peer's reporting choices are observable, we predict and find that peer reporting choices have an asymmetric influence on the focal subordinates' reporting choices, and this asymmetric influence depends on the level of vertical pay dispersion. Specifically, we find that when vertical pay dispersion is low, subordinates who observe peer reports containing low slack misreport less, whereas observing peer reports that contain high slack has no significant effect. However, when vertical pay dispersion is high, subordinates who observe peer reports containing high slack misreport more, whereas observing peer reports that contain low slack has no significant effect. Driven by these asymmetric effects, subordinates misreport less in the presence of peer observability than in its absence when vertical pay dispersion is low and misreport more in the presence of peer observability than in its absence when vertical pay dispersion is high. Overall, our findings suggest that when a firm has a more egalitarian pay structure (i.e., low vertical pay dispersion), an open information policy is conducive to a more honest reporting environment, whereas under a more hierarchical pay structure (i.e., high vertical pay dispersion), open information policies can compromise the honesty of subordinates' reports.     

Branding from the inside out at Yahoo!: HR's role as brand builder

Every day, thousands of companies spend millions of dollars to build external brand identity and customer loyalty. Branding implies more than just selling a product or service; the best companies create a strong emotional connection between the message and the product. The brand attaches meaning, the lifestyle, the transformation, the potential, the joy, and the fulfillment to the product. Today, competing for employees is as difficult as competing for customers; building employee loyalty is as important as building customer loyalty; and treating employees right is the key to treating shareholders right. Here we discuss what Yahoo! has done to build its strong branding image. © 2005 Wiley Periodicals, Inc.     

Understanding frame‐of‐reference training success: a social learning theory perspective

Employing the social learning theory (SLT) perspective on training, we analysed the effects of alternative frame‐of‐reference (FOR) training protocols on various criteria of training effectiveness. Undergraduate participants (N = 65) were randomly assigned to one of four FOR training conditions and a control condition. Training effectiveness was determined via trainee reactions, learning and rating accuracy. The results partially supported the study hypotheses: compared to the control group, the more comprehensive FOR training conditions evidenced: (1) significantly higher rating accuracy; (2) significantly higher levels of learning; and (3) more favorable reactions to the training. The discussion focuses on the implications of the results for protocol development when designing FOR training programs.     

Reverse importing and asymmetric trade and FDI: a networks explanation

This paper considers the impact of business and social networks on international trade and FDI. I propose that differences in the strength of network effects across countries can produce asymmetric trade and investment flows that may lead to trade friction. A firm from a country with strong network effects has a cost advantage in selling to buyers from its own country. This advantage results in lower inward FDI, lower total imports but larger volumes of reverse imports into the country with strong network effects. The model’s predictions match observed asymmetric trade and investment flows that sometimes lead to US-Japan trade friction.     

Relational Capital: Strategic Advantage for Small and Medium-Size Enterprises (SMEs) Through Negotiation and Collaboration

Collaborative entrepreneurship research suggests that organizations will soon pursue more collaborative relationships throughout a worldwide network of firms, driving a strategy of continuous innovation, specially small- and medium-size firms (SMEs). Tapping into a body of literature that focuses on the importance of human capital in driving long-term success, we merge ideas of collaborative research with a growing body of work on human capital or human resource management in SMEs. Our paper states that it is not the human, per se, that is the real asset but the relationships those humans have that are the most inimitable and important capital. We will discuss how companies use relational capital as the basis for collaborative entrepreneurship. Consistent with our hypotheses, our exploratory study suggests that smaller firms place more value on relational capital than do larger firms. We also have some indication that the key capital that differentiates low vs. high performance, regardless of firm size, is the relational capital aspect. To sum up, relational capital is a fundamental asset for firms, but especially for SMEs, and high performing companies are those that are able to negotiate with others and develop collaborative agreements, thus placing a high value in relational capital.     

Genuine Wealth Per Capita as a Measure of Sustainability and the Negative Impact of Corruption on Sustainable Growth in Sub‐Sahara Africa

In this paper, we argue that the answer to the question of whether the impact of corruption on development is homogenous, is no. Our optimism rest on how development may be conceptualised. When equated to a narrow measure in economic‐wise which fundamentally ignores critical issues, then there is a possibility the outlook could be positive. But when conceptualised using a broad‐based approach such as sustainable development, then the outlook could be negative. We assess a panel of 22 economies in Sub‐Sahara Africa with the most recent dataset (1996–2013) from the World Bank and other reputable agencies. Our finding is quite robust. It holds in pooled OLS, Fixed effects and GMM within IV settings; and it also holds for different measures of institutions and different measures of development using growth per capita GDP and genuine wealth per capita, respectively. Taking stock of major policy blue‐prints of selected countries in the region on the fight against corruption, we are able to point out that institutions play important role in insulating citizens against the devastation caused by corruption. Overall, through this comparison, we are able to signal that both incidental and systematic corruption poses a long‐term threat to sustainable development.     

Problematizing 'Innovation' as a Critical Project

Based on research experience within US corporations, this paper examines the rhetoric and practices of organizational and technological 'innovation'. Our aim is to identify discourses of innovation as a site for critical studies. Two cases are used to illustrate ways in which initiatives launched in the name of change are based in traditional cultural frames that work in practice to conserve existing institutional orders. We close with some observations on alternative, indigenous sources of innovation and the conditions required to sustain them.