New evidence on the dynamic wage curve for Western Germany: 1980–2004

Blanchflower and Oswald [Blanchflower, David G. and Oswald, Andrew J., 1994a, The Wage Curve, (Cambridge, MA, MIT Press), Blanchflower, David G. and Oswald, Andrew J., 1994b, Estimating a Wage Curve for Britain 1973–90, The Economic Journal 104, 1025–1043. Eine praktische Einführung, Nürnberg] reported that they have found an ‘empirical law of economics’ — the Wage Curve. Our paper reconsiders the western German Wage Curve using disaggregated regional data and is based on almost one million employees drawn from the Federal Employment Services of Germany over the period 1980–2004. We find that the wage equation is highly autoregressive but far from unit root. The unemployment elasticity is significant but relatively small: only between ? 0.02 and ? 0.04. We also check the sensitivity of this elasticity for different population groups (young versus old, men versus women, less educated versus highly educated, German native versus foreigner), confirming that it is stronger the weaker the bargaining power of the particular group.     

The strategic impetus for social network ties: reconstituting broken ceo friendship ties

Research on organization–environment relations has focused primarily on formal linkages between organizations such as board interlock ties as a strategy for managing resource dependence. This study examines whether top corporate executives may maintain more informal ties to executives of other firms in order to manage uncertainty arising from resource dependence. Our point of departure is prior research on boards of directors that has examined whether so‐called ‘broken board ties’ (i.e., ties that are disrupted due to executive turnover) tend to be reconstituted, and whether resource dependence explains the likelihood of reconstitution. These studies have generally provided little evidence that corporate board ties are used to manage resource dependence. We draw from theory and research on social embeddedness and friendship to suggest that, as a strategy for managing dependence, the maintenance of friendship ties between top executives provides benefits that are comparable to the supposed benefits of board cooptation, while imposing fewer constraints on the organization. Our theory leads to the contention that, despite limited prior evidence that resource dependence determines the formation of formal board ties, corporate leaders may nevertheless reconstitute informal (i.e., friendship) ties to leaders of other firms that have the power to constrain their firms' access to needed resources when those ties have been disrupted (e.g., due to turnover of the CEO's friend). We test our hypotheses with a unique dataset that includes survey data from U.S. corporate leaders collected at two points in time, thus permitting an assessment of whether top executives reconstitute broken social ties to leaders of other firms, and whether various sources of resource dependence predict the likelihood of reconstitution. We discuss implications for strategic perspectives on inter‐organizational relations and the sociological literature on embeddedness. Copyright © 2006 John Wiley & Sons, Ltd.     

Strategies for survival

In the debate about relocation to the developing countries of “structurally weak” industries the clothing industry has attracted the special interest of academic and political economists in the Federal Republic of Germany. The following article constitutes a summary of the most important findings of a study of the conditions under which this industry will be able to ensure its continuing existence in the Federal Republic in the future.     

Editorial

Ohne Zusammenfassung     

Strategic provision of local public inputs for oligopolistic firms in the presence of endogenous location choice

We develop a model in which two regional governments compete for a mobile oligopolistic firm by providing local public inputs. The central mechanism of our model is the interaction of an agglomeration advantage (partial nonrivalness of the local public inputs) and an agglomeration disadvantage (costs associated with the change of location of firms). We show that a central government of both regions induces an interregionally optimal allocation of firms by providing the optimal levels of local public inputs. The decentralized provision of local public inputs by regional governments, however, leads in most cases to a (interregionally) suboptimal allocation.