Labor income and risky investments: can part-time farmers compete?

In the developed countries, a majority of farm households receive at least as much income from nonfarm sources as from the farm. Such part-time farms have survived inspite of lower returns than full-time farms. This paper considers when lower returns to part-time farming could be compensated by risk-reduction due to diversification of income sources. The paper uses a dynamic portfolio choice model with labor income. The model and results could be applied in other contexts as well.     

A Gendered Model of the Peasant Household: Time poverty and Farm Production in Rural Mozambique

Using insights from a case study on the allocation of labor in subsistence households in Mozambique, this study develops a conceptual framework for examining linkages between time poverty and farm production. An unexpected event such as a health crisis increases the demand for labor provided by women, thus making them more time poor. The model and numerical simulations show that a deterioration in a woman's time constraint will have an adverse effect on agricultural output of the household. This occurs because most women respond to an increase in household work by reducing their work hours on the farm and by reducing their leisure time. The latter outcome is expected to have a negative effect on women's physical and mental health, which will then cause a decline in their productivity on the farm.     

Alternate signs of life: The growth of biotechnology industries in Shanghai and Bangalore

This paper explores the emergence of biotechnology centers in Shanghai and Bangalore by comparing their development to best practices in the literature for biotechnology cluster growth and development. Interviews with over fifty biotech companies and related institutions in China and India indicate that these regions are developing alternate models of low cost manufacturing and services that build on the current local base of knowledge and expertise. The ability to convert research into successful commercial activity was identified in both regions. The strong research capacity, private sector funding, and entrepreneurial environment deemed critical best practices were limited. New growth theory is used to explain these alternate approaches to technological and social change.     

A dynamic approach to the analysis of strategic alliances

The increasing trend in strategic alliance formation between major firms around the world, has prompted researchers from various disciplines to look at this phenomenon in great detail. In this paper, we review alternate approaches in the literature in this area. We then propose a non-linear dynamic approach to study the formation of competitive strategic alliances and contrast it with the traditional game-theoretic approach. The pros and cons of these two approaches are discussed with reference to a competitive alliance scenario. Dynamic models have significant managerial implications as they enable us to investigate ‘if-then’ type scenarios and project the impact of different strategies.     

Social Media Index Valuation: Impact of Technological,Social, Economic,and Ethical Dimensions

Marketing practitioners have recognized a growing need to measure consumer-generated social media in a standard way since there are numerous social media indicators in use, making intra- and inter-company comparisons difficult. This paper identifies four social media dimensions for measurement and evaluation: technological, social, economic, and ethical; and, subsequently, measures social media. The study makes a contribution to social media literature by using analytic hierarchy process of developing a mathematical model for social media index valuation. The “social media composite index number” will serve as an industry benchmark signifying the organization's share and commitment to social media.     

A trade theoretic analysis of outward capital flows: with special reference to Hong Kong

This paper sets up a trade theoretic model to explain the output, price and welfare consequences of the outward investment from Hong Kong to the Pearl River Delta. A four-good trade theoretic model is set up to incorporate some special features of the Hong Kong Economy. We assume that the economy produces four goods: an exportable good, an importable good and two non-traded goods. A special feature of the model is that one of the non-traded goods (locally produced) is also consumed by foreigners and produced under the assumption of non-competitive market framework. As tourist or business-centre trade is of great significance to Hong Kong, this model allows us to capture this phenomenon. First, precise conditions are derived regarding the decline in manufacturing output in Hong Kong. Second, it is shown that, in spite of the supply side determination of the relative price of non-traded goods, income effects in this market are of great significance in both income (welfare) and output movements. These income effects cannot be captured in industrial organization type applied work. Third, it is shown how outflow of capital affects labour productivity. A surprising result obtained for this part of the analysis is that a fall in productivity (outflow of capital and de-industrialization) creates a favourable terms-of-trade effect in the monopolized sector. The welfare effect consists of four terms: (1) a terms-of trade effect via the price of non-traded goods consumed by tourists/foreigners; (2) the loss (gain) in productivity due to an outflow of capital; (3) repatriation payments; and (4) the gains from exporting from the Special Economic Zones as well as other Pearl River Delta cities. Our decomposition has two very important features in contrast to traditional models: a terms-of-trade effect from the consumption of services and productivity gains or losses. The last point is exceedingly important for policy makers specifically if outward flow of capital affects productivity negatively.     

Social network and private provision of public goods

Using a simple model with interdependent utilities, we study how social networks influence individual voluntary contributions to the provision of a public good. Departing from the standard model of public good provision, we assume that an agent’s utility has two terms: (a) ‘ego’-utility derived from the agent’s consumption of public and private goods, and (b) a social utility which is the sum of utility spillovers from other agents with whom the agent has social relationships. We establish conditions for the existence of a unique interior Nash equilibrium and describe the equilibrium in terms of network characteristics. We show that social network always has a positive effect on the provision of the public good. We also find that, in networks with “small world”-like modular structures, ‘bridging’ ties connecting distant parts of social network play an important role inducing an agent’s contribution to public good. Assumptions and results of the model are discussed in relation to the role of social capital in community-level development projects and to the effect of innovation networks on firms’ R&D investments.     

Weak Property Rights and Holdup in R&D

We study how the sequence of financing of R&D varies according to the ease with which property rights over knowledge can be defined. There are two financiers: a venture capitalist (VC) and a corporation. The knowledge acquired in costly research becomes embodied in the researcher's human capital, and she may hold up the financier and walk away with the project to develop it elsewhere. The main results are: (1) When property rights are strong, research is always funded by the VC, development is performed efficiently, and breakaways from the VC to the corporation are observed in equilibrium. (2) When property rights are weak, projects may be financed by the VC or the corporation, or may remain unfunded. (3) When property rights are weak, no breakaways occur in equilibrium; local spillovers and strong product market competition increase the likelihood that research projects will get funding. (4) The equilibrium sequence of R&D finance need not be first-best efficient. (5) In equilibrium, and controlling for the strength of property rights, VCs finance projects that are more profitable on average.     

Image and cost factors in the choice of mental health-care organizations: A causal model

The importance of image as a determinant of choice has been demonstrated for banks, supermarkets, hospitals and other service organizations, but not in the instance of mental health-care providers. Based on a mail survey of residents of a medium-sized metropolitan area, this study explores the components of image for mental health-care institutions. A causal model is hypothesized and validated, specifying the relationships between preferences towards mental health-care institutions, with image and cost factors as potential determinants. The findings suggest that cost does not play a significant role in the choice of mental health providers, whereas image has a significant impact.     

Structural models of complementary choices

This article reviews the rapidly growing literature on structural models of complementary choices. It discusses recent modeling developments and identifies promising areas for future research.