Rising marginal cost and concavity of the production function

Suppose a production function, f, is continuous, quasi-concave and weakly monotone on the non-negative orthant of Euclidean n-space. Let c(·, ·) be the associated cost function. Then it is shown that f is concave if and only if for each w, c(w, ·) is convex.     

Banning information in hiring decisions

Journal of Regulatory Economics - Over the past decade, federal, state and local governments have restricted the types and uses of information in hiring and promotion decisions. Examples include...     

Doing More with Less: The Disordinal Implications of Firm Age for Leveraging Capabilities for Innovation Activity*

Innovation requires the entrepreneurial capabilities of opportunity recognition and opportunity exploitation. Such capabilities generally accrue over time from a firm's cumulative learning and experience. In this study, we theorize that firm age should therefore moderate the firm's ability to leverage these capabilities for innovation activity, such that older firms can obtain higher outputs from their capabilities than younger firms can. We examine this relationship using a sample of 676 small and medium enterprises. We find that when both younger and older firms have highly developed innovation capabilities, older firms appear to enjoy higher levels of innovation activity than younger firms do. However, younger firms generally appear more likely to have higher levels of innovation activity than older firms do, when neither firm has highly developed innovation capabilities. We conclude with a discussion of the implications of these findings for research and practice.     

Modelling spatial regimes in farms technologies

We exploit the information derived from geographical coordinates to endogenously identify spatial regimes in technologies that are the result of a variety of complex, dynamic interactions among site-specific environmental variables and farmer decision making about technology, which are often not observed at the farm level. Controlling for unobserved heterogeneity is a fundamental challenge in empirical research, as failing to do so can produce model misspecification and preclude causal inference. In this article, we adopt a two-step procedure to deal with unobserved spatial heterogeneity, while accounting for spatial dependence in a cross-sectional setting. The first step of the procedure takes explicitly unobserved spatial heterogeneity into account to endogenously identify subsets of farms that follow a similar local production econometric model, i.e. spatial production regimes. The second step consists in the specification of a spatial autoregressive model with autoregressive disturbances and spatial regimes. The method is applied to two regional samples of olive growing farms in Italy. The main finding is that the identification of spatial regimes can help drawing a more detailed picture of the production environment and provide more accurate information to guide extension services and policy makers.     

Does labor diversity promote entrepreneurship?

We find evidence that workforce educational diversity promotes entrepreneurial behavior of employees as well as the formation of new firms, whereas diversity in demographics hinders transitions to self-employment. Ethnic diversity favors entrepreneurship in financial and business services.     

Disaggregating entrepreneurial orientation: the non-linear impact of innovativeness, proactiveness and risk-taking on SME performance

Previous studies have generally established a positive relationship between aggregated measures of entrepreneurial orientation (EO) and firm performance. However, there are theoretical reasons suggesting that three dimensions of EO (innovativeness, proactiveness, and risk-taking) may possess differential relationships with performance in smaller firms. This study utilizes a sample consisting of 1,668 small-to-medium sized enterprises (SMEs) in nine countries across 13 different industries to provide a finer-grained analysis of the EO-performance relationship. Specifically, we theorize and test a non-monotonic influence of innovativeness, proactiveness, and risk-taking on SME performance. Innovativeness and proactiveness displayed predominantly positive U-shaped relationships with SME performance. Risk-taking, however, displayed a predominantly negative U-shaped relationship with SME performance. Further, individualism was found to positively moderate the relationships between innovativeness-performance and proactiveness-performance. Taken together, these results suggest that differential relationships exist between three dimensions of EO and SME performance, with important theoretical implications for future EO research.     

Human resource management and industrial relations in European companies

The paper explores the different patterns of labour relations in European companies. It is based on comparative research carried out in fifteen companies in Italy, France, Germany, Great Britain and Spain. ^{1 1}This paper is based on a comparative research study conducted in 1991 in fififteen industrial companies in Italy, France, Germany, Great Britain and Spain. The research team consisted of Paolo Perulli and Ida Regalia (Italy), Alain Lipietz (France), Bruno Cattero (Germany), Paul Marignson (Great Britain) and Fausto Miguelez (Spain). In each country, three case studies were made of companies in thse chemical, food-procesing and engineering industries. Interviews were conducted with the company management as well as with workers' representatives and trade unionists. Of course, this methodology does not allow us to gen eralize our findings, even less to compare national or sectoral patterns. What it does allow us to do, however, is, first, to sugest hypotheses on common trends and major differnces by using the cases studied as anecdotal evidence; second, it allows us to show how apparently similar patterns of personnel management and of labour relations display different features im different cases; third, it enables us to see whether some of these features are systematically asociateed with other variables. View all notesIn each country, three companies in the chemical, food-processing and engineering industries have been studied, through interviews with the company management as well as with workers' representatives.

The starting point is the observation that employers' policies of Jabour relations are today more differentiated than in the recent past: while many employers tend to involve unions in the re-organization of work, have frequent meetings with them and grant them full recognition, others pursue more unilateral paths to industrial adjustment and others still adopt a mixed policy of union involvement on some issues or for some categories of workers and of individual bargaining on others.

An analysis of the major differences among the companies studied is then developed by illustrating three types of choices that managers have to make. The first concerns the extension of the involvement of workers' representatives in decisions. The second has to do with the use of direct relationships with individual workers, as an attempt to bypass the unions or simply as a new method to increase the overall information and communication. The third alternative regards the degree of homogeneity in the management of human resources, in which some rules and advantages may apply to either the whole labour force or some professional (and possibly age or gender) groups only.

In the final section, some possible determinants of the differences in employers' strategies of labour regulation between firms and countries are examined. Special attention is paid to two institutional factors: the role of legal rights to information, consultation and negotiation in different national contexts, and the type of workers' representatives which are present in the companies.     

An adjustment process defined on a constraint surface with an application to Ramsey pricing

This paper considers a gradient method algorithm which locates a local optimum of an objective function on a constraint surface. The adjustment process is applied to the problem of searching for a Ramsey optimal price vector for a monopoly firm.     

Work‐related perks,agency problems,and optimal incentive contracts

Work‐related perks, such as corporate jets, nice offices, and so forth, improve the tradeoff between incentives and insurance that determines the optimal incentive contract. We show that (i) such perks may be offered even if their direct consumption benefits are offset by their costs; (ii) they will be offered for free; (iii) agents in more uncertain production environments will receive more perks; (iv) senior executives should receive more perks; and (v) better corporate governance can lead to more perk consumption by CEOs. Our analysis also offers insights into firms' decisions about how much autonomy they should grant to their employees.