Efficiency wages and union-firm bargaining with private information

We consider efficiency wage effects in a union-firm bargaining model with private information. We show that an increase in the efficiency wage effects does not necessarily increase the wage level at equilibrium, even when the wage bargaining with private information is close to one with complete information. However, if it is commonly known that the firm is stronger than the union and the demand is sufficiently elastic, then an increase in the efficiency wage effects increases for sure the wage at equilibrium.JEL Classification: J41, J50, J52We thank Juan Dolado and two anonymous referees for valuable comments. Vincent Vannetelbosch is Chercheur Qualifié at the Fonds National de la Recherche Scientifique. The research of Ana Mauleon has been made possible by a fellowship of the Fonds Européen du Développement Economique Régional (FEDER). Financial support from the Belgian French Communitys program Action de Recherches Concertée 99/04-235 (IRES, Université catholique de Louvain) is gratefully acknowledged.     

Comparing Environmental Policy Instruments in the Presence of Imperfect Compliance – A Case Study

In this paper, we aim to include rule making, implementation, monitoring and enforcement costs into the cost comparison of policy instruments. We use a simple partial equilibrium model and apply it to the textile industry. The model includes discrete abatement functions and costly monitoring and enforcement. The case study uses individual firm data to simulate the differences in abatement costs and compliance decisions between firms. We compare combinations of regulatory instruments (emission taxes, emission standards and technology standards) and enforcement instruments (criminal fines, civil fines and transaction offers). We show that the inclusion of information, monitoring and enforcement costs indeed alters the relative cost efficiency of the different instruments.     

Consistency of elementwise-weighted total least squares estimator in a multivariate errors-in-variables model <Emphasis Type="Bold">AX=B</Emphasis>

A multivariate measurement error model AXB is considered. The errors in [A,B] are rowwise independent, but within each row the errors may be correlated. Some of the columns are observed without errors, and in addition the error covariance matrices may differ from row to row. The total covariance structure of the errors is supposed to be known up to a scalar factor. The fully weighted total least squares estimator of X is studied, which in the case of normal errors coincides with the maximum likelihood estimator. We give mild conditions for weak and strong consistency of the estimator, when the number of rows in A increases. The results generalize the conditions of Gallo given for a univariate homoscedastic model (where B is a vector), and extend the conditions of Gleser given for the multivariate homoscedastic model. We derive the objective function for the estimator and propose an iteratively reweighted numerical procedure.Acknowledgements.A. Kukush is supported by a postdoctoral research fellowship of the Belgian office for Scientific, Technical and Cultural Affairs, promoting Scientific and Technical Collaboration with Central and Eastern Europe. S. Van Huffel is a full professor with the Katholieke Universiteit Leuven. This paper presents research results of the Belgian Programme on Interuniversity Poles of Attraction (IUAP Phase V-22), initiated by the Belgian State, Prime Ministers Office-Federal Office for Scientific, Technical and Cultural Affairs, of the Concerted Research Action (GOA) projects of the Flemish Government MEFISTO-666 (Mathematical Engineering for Information and Communication Systems Technology), of the IDO/99/03 project (K.U. Leuven) Predictive computer models for medical classification problems using patient data and expert knowledge, of the FWO projects G.0200.00, G.0078.01 and G.0270.02. The scientific responsibility is assumed by its authors. The authors would like to thank Maria Luisa Rastello and Amedeo Premoli for bringing the EW-TLS problem to their attention. The authors are grateful to two anonymous referees for the valuable comments.     

Gefährdet TTIP die ökonomische Zukunftsfähigkeit?

This article contributes to the discussion on the economic effects of TTIP by focusing on the opportunities for the participating economies of enhancing their innovative capacities. Referring to the insights of Neo-Schumpeterian evolutionary innovation economics the article concludes that according to the currently published documents the legal properties of TTIP can harm the ability of states to adapt their regulatory standards — a main instrument for a dynamic and technology-specific innovation policy. The missing flexibility for the new supranational standards can be a major reason for difficulties in the reform of standards aiming at a “creative disturbance” of market processes by the state in order to stimulate innovative activities and to induce additional growth.     

The Internationalization of Small and Medium-Sized Firms

This paper contributes to the existing research by integrating the notions of organizational learning and entrepreneurial orientation into the body of international entrepreneurship. Our primary framework combines learning theory and the new venture theory of internationalization to study the extent to which small and medium-sized companies engage in international activities. We found that the firms’ international learning effort and entrepreneurial orientation are positively associated with internationalization intent whereas domestic learning effort is negatively related with internationalization intent. Overall, our results suggest (1) that intensive knowledge renewal and exploitation regarding foreign markets and the internationalization process itself may increase internationalization by affecting the perceptions of opportunities offered by further international expansion, and (2) that firms with an entrepreneurial mindset may be more likely to develop a long-term, substantial presence in the international arena, compared to firms that are more reactive or conservative.     

EC Competition Law After Modernisation: More than Ever in the Interest of Consumers

In this paper it is argued that even though the consumer cannot (anymore) be reduced to a homo oeconomicus, competition law is the cornerstone of consumer law and that the decentralised application of EC competition law since 1 May 2004 (pursuant to Regulation 1/2003) gives new opportunities for an effective application of the EC competition rules to the benefit of consumers. While the EC Treaty (and the future Constitution for Europe) aim to protect consumers in the framework of the internal market programme, as well as on the basis of a genuine consumer protection policy, it is submitted that an effective competition policy remains crucial for consumers in a market economy. Consumer interests are generally diffuse and therefore difficult to protect via legal procedures. Nevertheless a further development of remedies which are already available in Community law (nullity of restrictive agreements, claims for damages, actions for a cease and desist order, and so on) will contribute to an increased application of the competition rules in the interest of consumers.     

The Moderating Effect of Perceived Effectiveness of SMEs' Marketing Function on the Network Ties—Strategic Adaptiveness Relationship

This study examines the critical role of perceived effectiveness of the Marketing function (MF) in small and medium‐sized enterprises (SMEs) in leveraging entrepreneurial network ties to improve strategic adaptiveness (SA). The study tests whether a MF perceived as effective by SMEs’ managers/owners moderates the relationship between SMEs network ties and SA required for improved performance. Findings of a moderated regression analysis on a sample of 263 Croatian SMEs indicate that network ties contribute significantly to their SA, and that a MF perceived as effective only moderates the impact of customer and competitor ties on SMEs’ SA. Research and practical implications are discussed.     

Corporate Social Performance as a Business Strategy

Having the ambition to contribute to the practical value of the theory on corporate social performance (CSP), this paper approaches the question whether CSP can contribute to the competitive advantage of firms. We adopted an explorative case-study methodology to explore the variety of positive and negative effects of CSP on the competitiveness of organizations. As this study aimed at identifying as great variety of these effects as possible, we selected a diversified group of respondents. Data was thus collected through embedded units of analysis in a petrochemical company, and triangulated with the opinions of experts on CSP. Overall, we found various positive and negative effects of CSP on the competitiveness of organizations. CSP is therefore not an innocent adventure for executives, but rather a strategy for achieving corporate objectives. If not carefully implemented, the CSP strategy may harm the competitive advantage of the firm, as our results have suggested.Paper presentated at the EBEN annual conference 2004, Enschede, The Netherlands June 24–26     

Sustaining Inter-organizational Relationships Across Institutional Logics and Power Asymmetries: The Case of Fair Trade

This paper explores an empirical puzzle, namely, how inter-organizational relationships can be sustained between organizations that draw upon distinctive—and potentially conflicting—institutional logics under conditions of power asymmetry. This research analyses cases of these relationships and suggests some key conditions underlying them. Examining relationships between ‘Fair Trade’ organizations and corporate retailers, a series of contingent factors behind the dynamic persistence of such relationships are proposed, namely: the presence of pre-existing ‘hybrid logics’; the use of boundary-spanning discourses; joint tolerance of conflict; and co-creation of common rules. These four elements are supported by a fifth mediating factor, i.e. the presence and use of a Fair Trade certification system in the collaboration. The latter appears as a central vehicle facilitating cross-logic relationships—it can be seen as a ‘boundary object’ embodying a series of narratives and discourses that are open to multiple interpretations corresponding to the dominant institutional logics of each partner organization.     

Monetary unification and the price of risk: An unconditional analysis

In this paper, the standard International Arbitrage Pricing Theory is used to assess the effects of European monetary unification on the functioning of the European financial market. In particular, the focus is on the effects that unification may have had on the risk-sharing capacity of the financial markets. It is found that, already in the ERM decade, exchange rate changes do not (unconditionally) correlate strongly with financial market movements across countries. Consequently, elimination of exchange rate variability through monetary unification is not likely to have major implications for the pricing behavior in EMU. JEL no. G12, G15