TRADE INTEGRATION,OUTSOURCING AND EMPLOYMENT IN AUSTRIA: A DECOMPOSITION APPROACH

Outsourcing and trade integration of advanced countries is debated with respect to employment effects, in particular for low educated workers – at least in relative terms. We study the employment effects – differentiated by educational attainment levels – of changes in the patterns of trade integration and outsourcing in the Austrian economy over the periods 1995–2000 and 2000–2005 using hierarchical decomposition analysis based on deflated input–output tables. Outsourcing is modeled as changes in the shares of domestically produced intermediates in total intermediates. A similar decomposition of the final demand vector allows us to draw conclusions on the overall employment effects of trade integration. The results suggest that the expected negative employment effects of outsourcing and rising import penetration have been overcompensated by increasing exports. Thus, the overall employment effects of Austrian trade integration have been positive for all educational attainment groups. However, whereas the total effects have been strongest for medium and high educated workers over the period 1995–2000, employment of low educated workers have been strongest and positively affected over the period 2000–2005. This pattern can be explained by a more sluggish export performance together with stronger negative effects of outsourcing and import penetration in medium and high-skill intensive products.     

Economic impacts of conservation farming in a marginal environment: the case of ‘Landcare’ in the Philippines

In the marginal, upland regions of the Philippines, soil erosion and poverty are significant problems. The Landcare Programme has sought to address these twin problems. We assess the economic impacts of the Landcare Programme in the Province of Bohol. We first explore whether the adoption of Landcare practices, particularly those of contour farming and tree planting, in a highly degraded landscape has resulted in improved livelihood outcomes for upland farming families. Second, we analyse the potential for the piecemeal adoption of these measures to deliver tangible benefits at the watershed scale. Finally, using a benefit–cost approach, these outcomes are compared with the costs of research and extension projects that have helped achieve them. We conclude that the net economic impact of the Landcare Programme in Bohol is positive, with the primary beneficiaries being the individual households that adopt the Landcare practices. These benefits are largely generated by productive opportunities that arise once the hillsides have been stabilized. Although the downstream impacts of land-use changes associated with the Landcare Programme are positive, they are of marginal economic importance. Hence, the focus and primary justification of the Landcare Programme should be on improving the productivity and livelihoods of upland farming households.     

Are microfinance markets monopolistic?

Do microfinance institutions (MFIs) operate in a monopoly, monopolistic competition environment or are their revenues derived under perfect competition markets? We employ the Panzar–Rosse revenue test on a global panel data to assess the competitive environment in which MFIs of five selected countries operate: Ecuador, India, Indonesia, Peru and Philippines, over the period 2005–2009. We estimate the static and the dynamic revenue tests, with analyses of the interest rate and the return on assets. We control for microfinance-specific variables such as capital-assets-ratio, loans-assets and the size of the MFI. The analyses also account for the endogeneity problem by employing the fixed-effects two-stage least squares and the fixed-effects system generalized method of moments. Our results suggest that MFIs in Peru and India operate in a monopolistic environment. We also find weak evidence that the microfinance industry in Ecuador, Indonesia and Philippines may operate under perfect competition.     

Public–private partnerships for nature-based tourist attractions: the failure of Seal Rocks

In 1998, the Seal Rocks Sea Life Centre opened on Phillip Island, Australia. It was a public–private partnership, with a privately funded tourist attraction built on a government-owned protected area. Almost immediately it was beset by problems and court action found in favour of the private developer, who was awarded $A37 million in damages, with ownership of the centre returning to the state. This article fills a gap in the literature examining public–private partnerships by considering this failed venture. It is a qualitative case study, analysing the 2003 appeal court judgement in the case and newspaper accounts from 1995 to 2004. Our findings highlight that deficiencies with the drafting of commercial contracts for public–private partnerships may limit the environmental and economic benefits that are being sought by governments through these arrangements. In this case, the application of a “best efforts” clause was critical, as it required that priority was given to the commercial success of the project over environmental and planning concerns. Furthermore, the development was a centralised decision made by the state government, affording very little input from local parks management and community stakeholders. Such a court finding has important ramifications for future developments of partnership agreements in nature-based tourism.     

Convergence,Divergence or Stability – How do Politicians' and Bureaucrats' Attitudes Change During an Election Period?

Abstract

The possibility that administrators mould politicians into bureaucratic thinking has been a recurring theme in politics since the writings of Weber and von Mises. However, empirical studies of attitude change in the interface between politics and officials are scarce. This study, using data from thirty Norwegian municipalities, investigates whether political attitudes towards diverse political issues change during an election period, and whether any such change aligns politicians' attitudes with those of the administrative leaders in the municipalities. Attitudes were measured among both politicians and administrators in 2000 (six months after the election) and 2003 (six months before the election). In general, there are few signs that politicians' attitudes converged with those of the administrators in the period studied. When attitudinal change does occur, it appears to be parallel in both groups. The findings do not support the notion that politicians' attitudes become aligned to the attitudes of leading administrators. Different explanations are discussed.     

How to deal with real estate booms: Lessons from country experiences

The financial crisis showed, once again, that neglecting real estate booms can have disastrous consequences. In this paper, we spell out the circumstances under which a more active policy agenda on this front would be justified. Then, we offer insights on the pros and cons as well as implementation challenges of various policy tools that can be used to contain the damage to the financial system and the economy from real estate boom–bust episodes. These insights derive from econometric analysis, when possible, and case studies of country experiences. Broadly, booms financed through credit and involving leverage are more likely to warrant a policy response. In that context, macroprudential measures can be targeted more precisely to specific sources of risk, but they may prove ineffective because of circumvention. In that case, monetary policy may have to be used to lean against the wind.     

The Adjustment Property

An input–output (IO) system which is capable of producing any semi-positive net product by an adequate choice of the activity levels of its processes satisfies the ‘adjustment’ property. We analyze under which conditions the adjustment property holds for IO systems in which some produced goods have a purely intermediate character. The peculiarity of these pure capital goods is that final demand for them is identically zero. One of the ways to deal with this type of system is to eliminate the pure capital goods, by means of vertical integration.     

Enhancing online brand experiences: An application of congruity theory

Providing a distinctive brand experience is critical to differentiate each hotel brand from others, due to the intangible characteristics of the hotel industry. Rooted in congruity theory, this study investigated how three congruities (i.e., self-image congruity, online–offline brand image congruity, and value congruity) influenced customers’ online brand experiences and their brand trust. Results from this study indicated both self-image congruity and online–offline brand image congruity significantly influenced both customers’ online brand experiences and their trust toward the hotel's brand. Extending brand experience literature and congruity theory, this study suggested hotels should develop a strategy that could capture these three congruity effects in online and offline channels because these effects should be key determinants for customers’ online brand experiences and their responses.     

Consumers' reaction to fair trade motivated price increases

Consumer perception of price increases and their reactions are a topic of great relevance for marketing research and practice. We investigate consumers' acceptance of price increases justified by higher costs due to company's corporate socially responsible activities by conducting two experimental studies. In the first study we examine perceived fairness and intentions following a price increase justified by a fair trade commitment. To assess the green attitude–behavior gap in consumer behavior our second study incorporates a real world experiment to explore actual consumer behavior against stated intentions. Our investigation adds nuance to our understanding of the effects of corporate social responsibility on consumer response to price increases. Our results reveal that a price increase due to a fair trade commitment is perceived as fair and does not have a negative impact on purchase behavior. We contrast our findings with a price increase due to higher taxes and due to profit increase. Our results demonstrate that fair trade justified price increases can skim twice the amount compared to tax justified increases. Furthermore, consumers' actual buying behavior reveals no difference to their stated intentions. Hence, prior research proclaiming an attitude–behavior gap in the context of consumers' socially responsible buying behavior has to be called into question.