This paper intends to relate more closely corporate governance, industry dynamics and firms performance. In this perspective, it focuses on the impact of applying the normative, best practice, shareholder value model of corporate governance on industry dynamics and related performance measured by economic as well as financial indicators. At a theoretical level, the paper presents an integrated framework based on the connection between firms governance and industry dynamics issues. But the core of the paper is to advance that the combination of corporate governance and industry dynamics also requires important investigations into empirical aspects. At a case study level, our major finding is that the adoption of the best practice model of corporate governance in the telecoms equipment supplier industry contributed to create large ups and downs in the industry dynamics affecting both economic and financial performances. At a more general level, combining two different datasets Corporate governance Quotient (CGQ) and DATASTREAM, we show the variegated impact of the normative model on industry dynamics and confirm the observed phenomenon of ups and downs amplifications formerly emphasized, at least at the level of stock market performance.

This study explores the impact of non-constant returns to scale and imperfectly competitive product markets on the empirical performance of the q-model of investment. We present an econometric specification linking the unobserved shadow price of capital to financial market data when returns-to-scale are not necessarily constant and product markets are not necessarily competitive. Furthermore, unlike most Q-studies, we work within a discrete-time framework, and give explicit attention to the relations between inventories, sales, and production. Our new specification allows us to recover parameters characterizing returns-to-scale, product market, and adjustment cost elasticities. Estimates are reported for 12 mature industries in the United States drawn from VALUELINE.

Unemployment has risen steadily during the last five years in all of the major European economies. Although there have been some signs that the rate of increase may have slackened this is mainly due to the fiscal-led expansion in the United States. Recent evidence suggests that the growth rate in the United States is slackening, and the need to reduce the structural budget deficit means that the rest of the developed countries can no longer rely on the United States as the main source of demand growth in the world economy. In spite of this, European governments have been reluctant to undertake fiscal and monetary policy actions which might sustain the recovery. In part this reflects a pessimism about the efficacy of conventional stabilisation policies born of the experience of the mid-seventies. However, the current situation is arguably very different now. Whereas the recession of the mid-seventies was largely the result of a supply-side shock requiring a downward adjustment in real wages, the recession of the early eighties is largely a consequence of the contractionary fiscal and monetary policies pursued outside the United States. That the present high levels of unemployment are Keynesian rather than Classical in nature has been argued forcefully by e.g. Dornbusch et al. (1983) and Bruno (1985). A reversal of these contractionary policies could therefore be expected to increase employment. Thus Layard et al. (1984) have argued there is scope for a temporary, supply-side friendly, fiscal expansion concentrated in public investment, subsidies to private investment and measures to reduce the marginal cost of employment. This would be accompanied by a modest relaxation of monetary policy to prevent real interest rates rising. Because such an expansion would be temporary it need have no long-run implications for inflation or real interest rates.

Cette note est consacrée à l’examen empirique des biais de distorsion en analyse transversale provenant d’une modification par cohorte du calendrier ou de l’intensité du phénomène étudié. Ces biais, liés à l’utilisation de l’artifice de la cohorte fictive, ont été bien décrits par N.B. Ryder notamment sous le nom de « distributional distortion ». L’intensité d’un phénomène (nombre moyen d’événements par tête), mesuré dans l’optique transversale d’analyse, ne dépend pas seulement de l’intensité du phénomène par cohorte mais également des variations du calendrier de ce phénomène d’une cohorte à l’autre; de même, la durée moyenne d’éventualité mesurée en analyse transversale ne dépend pas seulement du calendrier réel du phénomène par cohorte mais subit également l’influence d’une modification de l’intensité du phénomène d’une cohorte à l’autre. C’est ce dernier problème que nous analyserons ici en recourant à l’exemple de l’âge moyen au premier mariage calculé par la méthode élaborée par John Hajnal.

This paper presents the results of an empirical study on the relationship between internal structural change and performance, in a sample of 138 large U.K. companies, 1959-1976. The paper considers the introduction of the multidivisional form (M-form) within the sample and addresses itself to three principal questions:

Firstly, whether re-organization to an M-form structure followed a significant decline in the performance of the firm?

Secondly, whether M-form adoption was followed by a significant improvement in performance?

Finally, was the performance impact, if any, of re-organization related in a systematic way to firm characteristics — e.g. size, diversification etc. — in a manner consistent with the M-form hypothesis?

Discussion of economics of exhaustible resource in its modern form stemmed from Hotellings 1931 paper. The principles of optimal resource utilisation are now fairly clearly understood in the context of centrally planned economies but it is only since Hotellings paper that there has been a limited amount of work done on the description of behaviour of resource extractors in a market economy and there has still been virtually no work done in this literature on government policy over natural resources and their extraction in a market economy with the exception of a brief cryptic passage in Hotellings paper. Since Hotellings paper is an obvious point of departure for the exercises of the present it is worth summarising his framework.

Les mesures d'inégalité du revenu rassemblent deux types d'indicateurs décomposables : les indices décomposables en sous-populations et les indices décomposables en sources de revenu. Les premiers permettent de partager l'inégalité totale en une inégalité intragroupe et une inégalité intergroupe et les seconds d'attribuer à chaque facteur de revenu (revenu du travail, revenu du capital, taxes, etc.) une part de l'inégalité totale. Dans cet article, nous examinons d'une part la construction de ces techniques et d'autre part nous relatons les débats auxquels elles ont aboutis et plus particulièrement celui de la convergence vers un emploi simultané des deux types de décomposition.

The primary purpose of this paper is to study the extent to which prices and markets can be employed as means towards efficient control of pollution. The model which is examined is, however, sufficiently general to apply to any sort of externalities among producers and consumers, including classical public goods. In the first section we consider the problem of efficient means of achieving a specified standard of environmental quality. We then briefly discuss the more difficult problem of choosing the environmental quality standards themselves.

The task of re-stating the theory of the true cost-of-living index when preferences are subject to taste change was undertaken by F. Fisher and K. Shell in their contribution to the Hicks' Festschrift [Fisher-Shell (1969)]. It was succeeded by a paper, co-authored by L. Phlips and R. Sanz-Ferrer (1972), that proposed an index different from the one elaborated by Fisher and Shell. They also expounded an algorithm for calculating the two indexes with the help of Phlips' dynamic linear expenditure system [Phlips (1972)].

The purpose of this paper is to extend the work of Fisher and Shell in three directions. First, taste change is parametrised in the utility function in such a way as to allow its application to Phlips' dynamic system. Secondly, a broader definition of the true cost-of-living index is provided. Thirdly, the influence of taste change on the index is less restrictive than in the Fisher-Shell case without, we believe, incurring the reproach of cardinality. It is patterned on the Phlips-Sanz-Ferrer approach.

I. INTRODUCTION

Unemployment in Europe has risen during the 70s and early 80s to double digit rates, rates which are not considered likely to fall much in the remaining years of the 80s. This is so in enough countries to encourage some to speak of a ‘European disease’. Those of us who live in Britain have long been familiar with the ‘British disease’, as have the Dutch with their ‘Dutch disease’ (supposedly related to North Sea energy resources). This paper suggests that these earlier national ailments are precursors of the general European one to which attention has more recently been drawn — notably by Professor Giersch who has spoken of a ‘market sclerosis’ in Europe, especially in the labour market (Giersch, 1985). (Also see OECD (1985, p. 38)).

However, in spite of this provocative general opening we wish to focus in this paper on West Germany, and thus to highlight a specific case of what may well be a general phenomenon. Our motivation is fourfold: to widen the analysis of the possible disease to a country in which there is wide interest; to stimulate other European researchers to work along the lines of analysis portrayed here; to follow up the echoes sounded in the comments of authoritative national students (e.g. Giersch, op. cit., and de Grauwe, Fratianni and Nabli, 1985), and finally, to utilize a full macroeconomic model of the Federal Replublic of Germany in this direction of research.

Allotment and subcontracting are the two procedures enabling small businesses to participate in procurement. We compare these two procedures in the context of a procurement contract awarded by a first-price sealed-bid auction. We assume that the public buyer wishes to fulfil two different goals: to minimize expected costs of the contract for the public buyer and to maximize small businesses' profit. We show that, under specific cost-technology conditions we determine, the allotment procedure not only enables extensive participation by small businesses but also can achieve the goal of minimizing expected total costs for the public buyer.

1. INTRODUCTION

Since the mid-seventies vintage models have played an important role in the analysis of the Dutch economy. Although earlier vintages of these models were of a clay-clay nature, due to technical progress in economic analysis and in estimation methods, more recent vintages are of a putty-clay nature. Examples of the latter are Kuipers and van Zon (1982) and Gelauff, Wennekers and De Jong (1985). We shall further refer to them as KvZ and GWJ, respectively. Our model fits in with this putty-clay tradition. However, before highlighting several features of our model, some general remarks should be made.

In the period 1950-1970 employment in the private sector in the Netherlands increased from 3400 to 4130 thousand man-years. It remained at a more or less constant level of 4100 thousand man-years till 1980 and then decreased rapidly to a level of 3800 in 1983, at which it remained for the years 1984 and 1985. Likewise, unemployment increased slowly from 70 thousand man-years in 1970 to 325 thousand man-years in 1980. Then unemployment accelerated towards a level of 800 thousand man-years in 1983, at which it remained for the years 1984 and 1985. The unemployment rate is about 17 % nowadays. Muyskens and Meijers (1985) explain that the earlier developed clay-clay vintage models cannot adequately deal with these turbulent developments in the period 1980-1985.

Given the difficulties of utilitarian and egalitarian social welfare functions in the context of intergenerational equity, an analysis directly based on the potential transfers that can be made between generations is proposed. A consumption path may be rejected if some transfers with infinite returns can be made. It is shown that such potential transfers are unlikely in the short run in ordinary growth models, but that the returns to sacrifice are often unbounded when distant dates are considered, except in some particular cases. These concepts help select acceptable growth paths, and give some insight into the dilemmas of intergenerational justice.

Answers of sample survey respondents to questions like the following one: “In the circumstances of your household, what income would you regard as the minimum (or good/bad/sufficient, etc.) for your household?” can be used to estimate equivalence scales. It is sometimes claimed that this is a simple and cheap method to obtain “true” equivalence scales. Typically, these scales are much flatter than those derived from consumption behaviour data, or those incorporated in official poverty lines. A number of possible reasons have been advanced for this result. Yet, using subjective data does not necessarily result in a flat equivalence scale. Equivalence scales can also be estimated from answers to direct survey questions on how satisfied the respondent is with his or her household income, and these scales are often quite steep. In this paper, an application of both methods is reported. A number of possible reasons for the discrepancy are explored. In particular, the effects of a wide range of exogenous variables are examined. Data are from the 1985 and 1988 waves of the Belgian Socio-Economic Panel, a household income survey. The conclusion is that the discrepancy between the equivalence scales persists, even when controlling for a large number of possibly intervening factors.

Dans l'ouvrage que Van Parijs a consacré en 1995 aux fondements philosophiques et économiques du projet d'allocation universelle, le chapitre IV est dédié au problème du financement « soutenable » d'une telle mesure. Les « rentes d'emploi » y sont présentées comme un troisième type de ressources susceptibles d'élargir l'assiette fiscale du financement, à côté des « ressources externes » et des « ressources internes » des individus. Les difficultés d'exploitation de telles rentes légitiment l'exploration d'une stratégie alternative de financement fondée sur la flexibilité « walrassienne » des salaires, laquelle permet de réduire une certaine contradiction entre l'acceptation par Van Parijs de rentes de situation liées à l'emploi et sa volonté ultérieure (chapitre VI) d'« optimiser » le capitalisme. Incidemment, la différence réelle entre allocation universelle et impôt négatif sur le revenu est aussi réexaminée.

Cet article est une introduction élémentaire à la littérature concernant l'analyse du concept d'une allocation «sans envie», c'est à dire une allocation telle que chaque personne préfère son panier de consommation au panier de toute autre personne. Nous présentons une liste des mérites de cette définition et une liste de ses limitations.

The analysis of intra-industry trade, as it is understood now, was born almost by accident. In his study of the changes in the pattern of intrabloc trade of the Benelux Union, Verdoorn (1960) calculated the bilateral trade ratios of a sample of 121 products at comparable levels of international trade classification, for two different points in time. He noticed that the number of the extreme values of the ratios had been reduced while their median increased since the formation of the Benelux Union. From this he inferred that specialization, if it did accompany the intra-bloc trade, was to be found within rather than between the different categories of trade. He also argued that the rather large variance of the price differentials found for the Dutch and BLEU bilateral export prices indicated, in the absence of trade obstacles, a high degree of product differentiation and corroborated the trend towards intra-industry specialization. These findings, tucked away into seven brief sentences in the text of Verdoorn’s (1960) article did not immediately attract attention as “new territory”.

The strengthening of the economic forces which link together the economies of different countries has been a remarkable feature of the postwar years. The main contributing factor has been the rapid increase in international trade. This has been reinforced by the resurgence of international capital flows, tied to the growth of international corporations and to the birth of the Eurobonds market. Another characteristic of recent years is that contacts between policy makers of different countries have become much more frequent than in the past, among other things because of the striking development of international organizations.

The duality between measures of economic and technical efficiency has been extensively studied in the productive efficiency analysis. This duality ensures a meaningful interpretation of technical efficiency as economic efficiency evaluated at the most favorable shadow prices. This paper concentrates on economic efficiency as short run profit efficiency. We first argue that a modified version of Varian's goodness-of-fit measure provides an appropriate economic efficiency measure in that context. Next, we show that a variant of the McFadden gauge function provides a natural dual efficiency measure for this short run profit efficiency measure. In particular, we establish two attractive properties of that technical efficiency measure: (i) it can be interpreted as Varian's profit efficiency measure evaluated at shadow prices; (ii) it provides an upper bound for profit efficiency

The taxation of income is usually criticized for the efficiency loss that results from distorting the intertemporal consumption decision. This argument is rejected in a world where the return to savings is random. It is shown that a distorting marginal tax on uncertain interest income serves as partial insurance and that this effect outweighs the efficiency loss, if only the first marginal dollar in tax revenue is valued less elastically than the last dollar spent on private consumption. A consumption tax — even one with intertemporally differentiated rates — would not provide insurance under these circumstances. The explicit consideration of uncertainty thus gives support to taxes that allow differentiation between the safe withdrawal of savings and the random return thereon.