nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2012‒09‒09
nine papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. Does workers’ control affect firm survival? Evidence from Uruguay By Gabriel Burdin
  3. The Formative Years of the Modern Corporation: The Dutch East India Company VOC, 1602-1623 By Oscar Gelderblom; Abe de Jong; Joost Jonker
  4. Strategy Formulation Approach, Industry Factors, Competition and the Notion of Learning Organization: Evidences from KAO Corporation. By Dissanayake, D.M.N.S.W.
  5. Fairness considerations in labor union wage setting: A theoretical analysis By Strifler, Matthias; Beissinger, Thomas
  6. A Tear in the Iron Curtain: The Impact of Western Television on Consumption Behavior By Bursztyn, Leonardo; Cantoni, Davide
  7. A Spatial Econometric Analysis of the Effect of Vertical Restraints and Branding on Retail Gasoline Pricing By Stephen Hogg; Stan Hurn; Stuart McDonald; Alicia Rambaldi
  8. The Firm's Management in Production: Management, Firm and Time Effects in an Indian Ocean Tuna Fishery By François-Charles Wolff; Dale Squires; Patrice Guillotreau
  9. Methodological mistakes and econometric consequences By Zaman, Asad

  1. By: Gabriel Burdin (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía / University of Siena (Italia). Department of Economics.)
    Abstract: Worker-managed firms (WMFs) represent a marginal proportion of total firms and aggregate employment in most countries. The bulk of firms in real economies is ultimately controlled by capital suppliers. Different theoretical explanations suggest that WMFs are prone to failure in competitive environments. Using a panel of Uruguayan firms based on social security records and including the entire population of WMFs over the period January 1997-July 2009, I present new evidence on worker managed firms´ survival. I find that the hazard of exit is 24%-38% lower for WMFs than for conventional firms. This result is robust to alternative estimation strategies based on semi-parametric and parametric frailty duration models that impose different distributional assumptions about the shape of the baseline hazard and allow to consider firm-level unobserved heterogeneity. The evidence suggests that the marginal presence of WMFs in market economies can hardly be explained by the fact that these organizations exhibit lower survival chances than conventional firms. This paper adds to the literature on labor-managed firms, shared capitalism and to the industrial organization literature on firm survival.
    Keywords: labor-managed firms, capitalist firms, survival analysis.
    JEL: P13 P51 C41
    Date: 2012–05
  2. By: Karen Andrea García Rojas
    Abstract: On average women are paid less than men for equal work in every country in the world. In Colombia, the average of the wage gap seems to be between 10% and 13% although women have surpassed men in average years of education. A part of these gap can be explained because of men are greater represented in better paid disciplines, but the main explanation, 'the subjective one', relevant with gender wage discrimination, could explain more than the half of the gap. Historically, the female has had to cope with the existence of a stereotyped division of work, which has assigned her, specific roles with deep traditional roots. For women it has not been easy to get rid of these cultural patterns, which not only involve employment discrimination by employers, but also involve, in general, doubts and dilemmas that make them less competitive in a world dominated by men during centuries. There are several papers about the gender wage gap in Colombia. But this field only considers women professional workers, it means, high and middle classes. If they are in that situation, what happen with the lower classes’ women? This essay constructs a discussion since a political economy critical view, around the difficult situation of labor gender discrimination and particular situations of female workers in all social classes, making a comparison between the roles and dilemmas of women workers of different classes; under the recognition that low class women face a deeper and more dramatic discrimination. In the lower classes, women's situation is far to be ‘liberation’, although in some social circles there is the wrong idea that work gender discrimination ‘is over’. In general, lower classes’ women do have a low possibility of independence, autonomy and gender consciousness, because of the difficult access to quality education and formal jobs. Moreover, there is evidence which proves that executive women and women in leadership jobs have been decisively supported by the domestic work to get 'success' in their careers; which shows that in our society there is a gender gap by social class: the dynamics of modern capitalism has allowed, in general, the improved of the welfare, independence and equality for women in upper class (although there remains a gap with their male counterparts), but has not brought the same benefits to lower class women.
    Date: 2012–01–29
  3. By: Oscar Gelderblom; Abe de Jong; Joost Jonker (Universiteit Utrecht and Erasmus University Rotterdam)
    Abstract: With their legal personhood, permanent capital with transferable shares, separation of ownership and management, and limited liability for both shareholders and managers, the Dutch East India Company (VOC) and subsequently the English East India Company (EIC) are generally considered a major institutional breakthrough. Our analysis of the business operations and notably the financial policy of the VOC during the company’s first two decades in existence shows that its corporate form owed less to foresight than to constant piecemeal engineering to remedy original design flaws brought to light by prolonged exposure to the strains of the Asian trade. Moreover, the crucial feature of limited liability for managers was not, as previously thought, part and parcel of that design, but emerged only after a long period of experimenting with various, sometimes very ingenious, solutions to the company’s financial bottlenecks.
    Keywords: Dutch East India Company (VOC), corporate governance, Dutch Republic, financial markets, colonial expansion
    Date: 2012–08
  4. By: Dissanayake, D.M.N.S.W.
    Abstract: Particularly this report defines the strategic aspects of the KAO Corporation in Japan. The KAO Corporation is one of the leading consumer product providers in the Japanese market. Though the company exists in the FMCG industry, it can be stated that the company has attained a competitive advantage over the existing players in the market. At the outset the report defines a clear introduction with regards to the company philosophy. The activities of the business and the market position of the company. Following, a clear understanding has been provided with regards to the company strategic formulation. And the steps of the strategic formulation have also been provided. And predominantly, the report encompasses an industry analysis. Moving along with the report, the learning has been defined with regards to the company perspective, since the company constantly engaging with the notion or learning organization. Last but not the least the report defines how the company has engaged with the idea of learning organization.
    Keywords: Competition; Learning organization; Strategy formulation
    JEL: M00
    Date: 2012–08–29
  5. By: Strifler, Matthias; Beissinger, Thomas
    Abstract: We consider a theoretical model in which unions not only take the outside option into account, but also base their wage-setting decisions on an internal reference, called the fairness reference. Wage and employment outcomes and the shape of the aggregate wagesetting curve depend on the weight and the size of the fairness reference relative to the outside option. If the fairness reference is relatively high compared to the outside option, higher wages and lower employment than in the standard model will prevail. If hit by an adverse technology shock, the economy will then react with a stronger downward adjustment in employment, whereas real wages are more rigid than in the standard model. With a low fairness reference the opposite results are obtained. An increase in the fairness weight amplifies the deviations of wages and employment from those of the standard model. It also leads to an increase in the degree of real wage rigidity if the fairness reference is high and an increase in the degree of real wage flexibility if the fairness reference is low. Thus, higher wages go hand in hand with more pronounced wage stickiness. --
    Keywords: Labor Unions,Fairness,Wage Rigidity,Wage Flexibility,Wage Stickiness,Wage-Setting Curve,Wage-Setting Process,Unemployment
    JEL: J51 J64 E24
    Date: 2012
  6. By: Bursztyn, Leonardo; Cantoni, Davide
    Abstract: This paper examines the impact of exposure to foreign media on the economic behavior of agents in a totalitarian regime. We study private consumption choices focusing on former East Germany, where differential access to Western television was determined by geographic features. Using data collected after the transition to a market economy, we find no evidence of a significant impact of previous exposure to Western television on aggregate consumption levels. However, exposure to Western broadcasts affects the composition of consumption, biasing choices in favor of categories of goods with high intensity of pre-reunification advertisement. The effects vanish by 1998.
    Keywords: Consumption; Media; Television; Advertising; East Germany; Communism
    JEL: D12 E21 Z10
    Date: 2012–08–27
  7. By: Stephen Hogg (UQ); Stan Hurn (QUT); Stuart McDonald (UQ); Alicia Rambaldi
    Abstract: This paper builds an econometric model of retail gas competition to explain the pricing decisions of retail outlets in terms of vertical management structures, input costs and the characteristics of the local market they operate within. The model is estimated using price data from retail outlets from the South-Eastern Queensland region in Australia, but the generic nature of the model means that the results will be of general interest. The results indicate that when the cost of crude oil and demographic variations across different localities are accounted for, branding (i.e. whether the retail outlet is affiliated with one of the major brand distributers - Shell, Caltex, Mobil or BP) has a statistically significant positive effect on prices at nearby retail outlets. Conversely, the presence of an independent (non-branded) retailer within a locality has the effect of lowering retail prices. Furthermore, the results of this research show that service stations participating in discount coupon schemes with the two major retail supermarket chains have the effect of largely off-setting the price increase derived from branding affiliation. While, branding effects are not fully cancelled out, the overall effect is that prices are still higher than if branding did not occur.
    Keywords: Retail Gasoline Pricing, Vertical Restraints, Shop-a-Docket Discount Scheme, Spatial Econometrics, Australia
    JEL: C21 L13
    Date: 2012–08–27
  8. By: François-Charles Wolff (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272, INED - Institut National d'Etudes Démographiques Paris - INED); Dale Squires (National Marine Fisheries Service - University of California, San Diego); Patrice Guillotreau (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272)
    Abstract: The firm's management in production is a critical, but unobserved input. Within a panel data framework, the firm's management and firm effects have to date been conflated. Exploiting variability in the managerial dimension, this paper identifies the firm's management from firm and time effects in a production function using a three-way fixed effect model and a unique panel data set tracking multiple managers for each firm in each year for an industry over 27 years. We also allow for time-varying firm management through learning. The model is applied to the French purse-seine fleet harvesting tunas in the Indian Ocean. We find that fishing hours and number of sets on floating objects and on free-swimming schools explain more than 70% of variation in tuna catches over the period. The skipper and vessel fixed effects have a rather similar influence (around 5% each). Skipper learning-by-doing as measured by experience and job tenure plays no significant role, meaning that managerial ability is time-invariant in this industry.
    Keywords: Firm's management ; firm effect ; management effect ; time effect ; tuna fisheries
    Date: 2012–08–31
  9. By: Zaman, Asad
    Abstract: Econometric Methodology is based on logical positivist principles. Since logical positivism has collapsed, it is necessary to re-think these foundations. We show that positivist methodology has led econometricians to a meaningless search for patterns in the data. An alternative methodology which relates observed patterns to real causal structures is proposed
    Keywords: Econometric Methodology; logical positivism; realism; causality; VAR models; Forecasting; surprise; goodness of fit
    JEL: B16 C19
    Date: 2012–08–30

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