Political credibility and economic growth in less developed countries

While the mainstream of economic development theory focuses on the efficiency of policy measures, the role of the credibility of these measures is rarely analyzed. In this paper we argue that in less developed countries the problem of establishing the credibility of policy measures is at least as important as the problem of choosing the efficient policy solution. We claim that many of the difficulties less developed countries face can be understood in terms of lack of effective control on the discretionary power of governments, which ultimately leads to policies that are not credible. The private sector anticipates large swings in policies and reacts by withholding its resources. Symptoms of these credibility problems in less developed countries include the size of the informal sector, capital flight, and the reluctance of investors to commit capital. All of these reactions contribute to the slow economic growth in these countries. This paper concludes that establishing strategies for the control of state discretionary power is a crucial precondition for overcoming these problems and generating long term economic growth.     

The Exchange Rate and its Fundamentals in a Complex World

We develop a nonlinear exchange rate model with heterogeneous agents. Some agents adopt a “fundamentalist” forecasting rule, while others use a “chartist” forecasting rule. We show that the model is capable of explaining the empirical puzzles relating to exchange rate movements. In particular, the model explains the “exchange rate determination” and PPP puzzles, the excess volatility, and fat tails in exchange rate returns.     

Collaborative commerce in tourism: implications for research and industry

Technology advances enable people to trade and sell their own travel products, which in turn create numerous transformation changes into the tourism industry structure, the nature of tourism products and experiences, the competitiveness of traditional and new tourism players and the process creating (social) value in tourism. This paper investigates the application and implications of collaborative commerce in tourism and provides suggestions for future research.     

The sustainability behaviour of small firms in tourism: the role of self-efficacy and contextual constraints

This article presents a grounded theory to explain why some small businesses in tourism adopt sustainable business practices while others do not, even when they share environmental and wider sustainability concerns. It does so based on research undertaken among business owners in Crete. The paper starts by considering studies on sustainability awareness, knowledge and the mechanisms for accepting responsibility. Secondly, it summarises the influence of task difficulty and effort on sustainability self-efficacy. Thirdly, it focuses on social comparisons and vicarious experiences, as a way of learning what is important. Finally, it examines powerlessness due to perceived situational constraints. In so doing, the study finds that self-efficacy helps to explain sustainable attitude formation and the attitude-behaviour gap; it partly shifts the locus of responsibility for an inability to act sustainably away from the individual and towards their context. The paper contributes to the theoretical literature on small businesses and sustainability, and leads to new avenues for policy interventions.     

Complementary technologies,knowledge relatedness,and invention outcomes in high technology mergers and acquisitions

Prior research on M&As and invention outcomes has not systematically examined the influence of two types of knowledge differences. Knowledge relatedness has typically been equated with knowledge similarity and the separate influence of knowledge complementarity has been overlooked. Similarly, studies examining innovation outcomes of M&As have typically focused on the role of technological knowledge and overlooked the influence of scientific knowledge. We develop a model of relatedness and invention performance of high‐technology M&As that considers science and technology similarity and complementarity as important drivers of invention. We test the model using a sample of M&As from the drug, chemical, and electronics industries and a fine‐grained measure of knowledge relatedness that distinguishes between science and technology relatedness. We find that complementary scientific knowledge and complementary technological knowledge both contribute to post‐merger invention performance by stimulating higher quality and more novel inventions. This suggests that high‐technology firms seeking acquisitions should search for, identify, and acquire businesses that have scientific and technological knowledge that is complementary to their own. Our results also suggest that similarities in knowledge facilitate incremental renewal, while complementarities would make discontinuous strategic transformations more likely, and that absorptive capacity research should be expanded to consider complementarities as well as similarities. Copyright © 2010 John Wiley & Sons, Ltd.     

Empowerment and resident support for tourism in rural Central and Eastern Europe (CEE): the case of Pomerania,Poland

Despite empowerment being a crucial component of sustainable tourism, few scholars have quantitatively operationalized empowerment and looked at how it applies to rural societies within the post-communist European Union (EU) member states. Knowing the high priority of sustainable rural development goals within the EU, empowering residents within these post-communist societies has become a pertinent issue especially where those societies appear more reluctant to engaging in democratic ways of decision-making. In response to this gap, this study tests the cross-cultural validity of the Resident Empowerment through Tourism Scale, and then evaluates how empowerment predicts residents’ support for tourism within the municipality of Choczewo, Pomerania, Poland. Using a theoretical perspective that blends Social Exchange Theory with Weber's Theory of Formal and Substantive Rationality, these non-economic empowerment dimensions are coupled with a measure of resident perceptions of economically benefiting from tourism to see if rural residents in Choczewo, Poland, are more swayed by the economic or non-economic benefits of tourism. Results show that residents within this Central and Eastern Europe setting are more influenced by the pride and self-esteem boost associated with psychological empowerment and the perceptions of increased community cohesion (i.e. social empowerment) than the economic promises of tourism.     

Confucian Ethics and the Limited Impact of the New Public Management Reform in Thailand

The diffusion of New Public Management reforms across the globe is based on the assumption of the universal applicability of managerialism, driven by instrumental rationality, individualism, independence and competition. The aim of this article is to challenge this conception and to fill a significant gap in the existing research by analysing potential problems arising from the implementation of the NPM philosophy in non-Western public organisations. In-depth interviews and a large-scale survey were conducted across six public organisations in Thailand based on the Competing Values Framework (CVF). Thematic analysis of the data revealed that the traditional cultural model of the organisations studied was characterised by a combination of hierarchical and clan-based cultures, which remained largely unaltered despite massive-scale reform. The persistence of this hybrid cultural system appears to be rooted in the deep-seated Confucian ethical values governing Thai society, in which the organisations are embedded. Based on the research findings, the paper underlies the importance of a symbolist viewpoint of culture and argues that a rational perspective underpinning a functionalist cultural management must be challenged.     

Performance pay and changes in U.S. labor market dynamics

A shift in the design of labor compensation occurred at around the mid-1980s in the U.S. and deals with an increased role of performance pay in driving the cyclical movements of wages. Using a DSGE model we show that this structural change accounts at least qualitatively for many observed changes in the U.S. labor market dynamics. It generates the disappearance of the procyclical response of labor productivity to non-technology shocks and the reduction of the contractionary effects of technology shocks on hours. Moreover, it is conducive to a drop in the volatility of output, a parallel increase in the volatility of wages and to changes in unconditional correlations consistent with what documented in the U.S. between the pre- and post-1984 periods.     

Investment and institutional uncertainty: A comparative study of different uncertainty measures

Investment and Institutional Uncertainty: A Comparative Study of Different Uncertainty Measures. — There is ample empirical evidence of a negative relationship between aspects of institutional uncertainty and investment. Most studies, however, do not allow a comparison between different dimensions of such uncertainty because they focus on specific indicators, particular regions or different periods. The paper concludes with an evaluation of the quantitative effects of the significant uncertainty indicators on investment finding that a lack of rule of law, high corruption, and volatility in real exchange rate distortions are the most detrimental for investment.