nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2013‒10‒02
ten papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. Women and Corporate Governance: Towards a New Model! By De Beaufort, Viviane; Summers , Lucy
  2. Changing the Corporate Elite? Not So Easy. Female Directors’ Appointments onto Corporate Boards By Gregoric, Aleksandra; Oxelheim, Lars; Randøy, Trond; Thomsen, Steen
  3. How should economics curricula be evaluated? By Andrew Mearman
  4. Why do students study economics? By Andrew Mearman; Aspasia Papa; Don J. Webber
  5. Industrial dynamics and clusters: a survey By Koen Frenken; Elena Cefis; Erik Stam
  6. Business Restructuring of Japanese Firms: Structural changes during the "Lost Decades" By MORIKAWA Masayuki
  7. Price setting practices in Greece: evidence from a small-scale firm-level survey By Daphne Nicolitsas
  8. Wage Adjustment in the Great Recession By Michael W. Elsby; Donggyun Shin; Gary Solon
  9. Towards sustainable labour costing in UK fashion retail By Doug Miller
  10. Workers’ agency and re-working power relations in Cambodia’s garment industry By Dennis Arnold

  1. By: De Beaufort, Viviane (ESSEC Business School); Summers , Lucy (University of Queensland)
    Abstract: The feminization of Boards has the potential to be a vector of change, bringing "added value" to organisations through gender diversity, thus creating greater efficiency. Promoting women to positions of power only makes sense, however, if these women are allowed to bring, in terms of skills and behavior, a difference to the table. This involves confronting the masculine model, in order to BUILD a model of mixed leadership integrating the "feminine" quotient (A.Arcier). A qualitative study on women and their relation to power, undertaken in France and abroad (published in October 2012), allowed the formulation of some hypotheses in order to construct a proposition of a mixed power model that would integrate both masculine and feminine "polarities" within enterprises and organisations (ValérieRocoplan).This article is the outcome of various influences: the data of this study (by the same author with the support of the firm Boyden) which was further enriched by the analysis of other publications on the subject, as well as the experience acquired within the framework of the program Women Be European Board Ready (created by ESSEC). The article deliberately focuses on the issues surrounding gender and governance in order to address the smooth and effective running of Boards. The study essentially aims to highlight the fact that women wishing to obtain these mandates, or those who have reached these posts, share a rigorous and idealised vision of the functioning of the Boards and demand a model based on "sustainable governance" that is better adapted to the challenges which Boards face in our corporate world of upheaval. These women are potential "engines" for change.
    Keywords: Corporate Governance; Leadership; Board Composition; Corporate Productivity; Firm-Level Governance Outcomes; Sustainable Governance; International Corporate Governance; Cross-Boarder Corporate Governance Issues; evolution of models of governance; women and boards; non-executive board members; gender dimension; women and power
    JEL: G30 J16
    Date: 2013–09
  2. By: Gregoric, Aleksandra (Department of International Economics and Management); Oxelheim, Lars (Research Institute of Industrial Economics (IFN)); Randøy, Trond (University of Agder); Thomsen, Steen (Department of International Economics and Management)
    Abstract: Scholars have previously investigated country and organizational-level factors associated with the incidence of female directors on boards. These studies, however, cannot explain why, in countries with strong gender equality and pressure for female directorships, firms are still hesitant to promote new women to their boards. To address this issue we – in this study – introduce the cognitive and affective processes related to directors’ identification with the traditional corporate elite as an explanation for the slow organizational response to pressure for gender diversity on boards. We bridge the social identity and critical mass theory to further show how these responses may vary with the current composition of the board. Viewing the board as a locus for the maintenance of the positive distinctiveness of the established corporate elite, we conjecture that new female appointments will not only depend on the current share of women on board but also on the current (minority) share of board positions held by male directors who are not prototypical of the established elite. We also uncover how this relationship is moderated by the share of institutional investors’ ownership. We test and support these propositions on a sample of 387 publicly traded Nordic corporations during 2001–2008.
    Keywords: Social identity; Board of director; Gender diversity
    JEL: D22 F23 G34 M16
    Date: 2013–09–19
  3. By: Andrew Mearman (University of the West of England, Bristol)
    Abstract: This paper explores the evaluation of economics curricula. It argues that the dominant approach in economics education, experimentalism, has serious limitations which render it an unsuitable evaluation method in some cases. The arguments against experimentalism are practical, ethical and also rest on a view of the world as a complex, open system in which contexts are unique and generalised regularities are unlikely. In such an environment, as often found in educational contexts, alternative methods are advisable, at least as part of a suite of approaches in a realistic, case-based, mixed-methods approach to evaluation. Thus, economics curricula should be evaluated using a method or set of methods most appropriate to the particular object case. As such, there is no single answer to the question posed.
    JEL: A20 A22 B4 B5 C80 C9
  4. By: Andrew Mearman (University of the West of England, Bristol); Aspasia Papa (University of the West of England, Bristol); Don J. Webber (University of the West of England, Bristol)
    Abstract: This paper presents a chronological, adaptive and reflective investigation into students’ perceptions of and motivations for choosing to study economics. Applications of multiple techniques to student-level primary data reveal the following. First, students’ perceptions of economics are on average somewhat negative, although there is considerable variation. Second, they regard economics as having value, in terms of providing insight, specialist knowledge, and skills of argumentation (all of which are perceived to be superior to peers). Third, they recognise the subject yields financial and other career advantages and has kudos. Fourth, they suggest that the relevance and usefulness of economics is important and consequently that excessive theorisation and a lack of practicality are problematic. These findings have considerable implications for how economics is taught, and for the nature of the subject itself.
    Keywords: Mixed-methods; UK student perceptions; Realisticness; Focus groups; Survey
    JEL: A11 A20
  5. By: Koen Frenken; Elena Cefis; Erik Stam
    Abstract: We review the literature on clusters and their effects on entry, exit and growth of firms as well on the evolutionary dynamics underlying the process of cluster formation. Our extensive review shows that there is strong evidence that clusters promote entry, but little evidence that clusters enhance firm growth and firm survival. The emergence of clusters is best understood as an evolutionary process of capability transmission between parent firms and their spinoffs, rather than as an outcome of localisation economies that would increase the performance firms in clusters compared to firms outside clusters. From a number of open questions we distil various future research avenues stressing the importance of understanding firm heterogeneity and the exact mechanisms underlying localisation economies.
    Keywords: entry, exit, industrial cluster, localisation economies, product lifecycle, industry lifecycle, evolutionary economic geography, firm heterogeneity
    JEL: L10 L20 L26 R10
    Date: 2013–09
  6. By: MORIKAWA Masayuki
    Abstract: This paper is an overview of the business restructuring—the entry into new businesses and the exit from unprofitable ones—of Japanese firms and its relationship with the corporate governance system. Specifically, we analyze changes in the restructuring behavior of Japanese firms by comparing two identical surveys conducted in 1998 and 2012. These surveys include large listed and small unlisted firms. There are many stable characteristics of Japanese firm restructuring behavior: the significant role of workers and customers/suppliers as stakeholders and the reluctance to reduce the number of employees. Japanese firms have become active in restructuring their businesses through mergers and acquisitions (M&As) to expand business areas and divestitures of unprofitable segments.
    Date: 2013–09
  7. By: Daphne Nicolitsas (Bank of Greece)
    Abstract: The paper documents the price setting practices followed by some 400 or so firms operating in Greece. Survey replies reveal: a low percentage of firms changing prices with frequency higher than annual; staggering of price changes during the year; sluggish adjustment of prices to cost shocks; asymmetries in price adjustment across positive and negative cost shocks and a speedier adjustment to increases in costs than to reductions in demand. The data confirm cross-sectional variations in price setting practices also found for other countries. On the basis of the results reached the conjecture that the prevalence of small firms, of firms providing services to businesses and of firms active in tourism-related activities might lie behind the inflation persistence exhibited until recently in Greece appears plausible.
    Keywords: price setting; competition; survey data
    JEL: E31 C41 J31 J41
    Date: 2013–04
  8. By: Michael W. Elsby; Donggyun Shin; Gary Solon
    Abstract: Using 1979-2011 Current Population Survey data for the United States and 1975-2011 New Earnings Survey data for Great Britain, we study wage behavior in both countries, with particular attention to the Great Recession. Real wages are procyclical in both countries, but the procyclicality of real wages varies across recessions, and does so differently between the two countries. U.S. distributions of year-to-year nominal wage change show many workers reporting zero change (suggesting wage stickiness) and many reporting nominal reductions (suggesting wage flexibility), but both findings could be distorted by reporting error. The British data, which are based on employers’ payroll records, show much lower prevalence of zero wage change, but still show surprisingly frequent nominal wage cuts. The complex constellation of empirical regularities defies explanation by simple theories.
    JEL: E24 E32 J3 J64
    Date: 2013–09
  9. By: Doug Miller
    Abstract: Abstract This paper focuses on a specific feature of buying behaviour in the UK fashion retail industry: the negotiation of a manufacturing price (cut-make-trim, CMT, cost) with suppliers that does not separately itemize labour cost. This practice, tacitly supported by both buyers and suppliers, is examined against the backdrop of ongoing wage defaulting and import price deflation in the global apparel industry. While wage non-compliance cannot be explained solely by this buying practice, since other commercial practices and factors may have an equal if not greater impact on a supplier’s liquidity/ability to pay on time and in full, the case is nevertheless made that an absence of labour costing must inevitably have an effect on the capacity of a factory to deliver an order at a negotiated price and to meet compliance benchmarks at the same time. The paper attempts to construct a formula for sustainable labour pricing at the buyer end using industrial engineering principles that appear to have been lost in the truncation of buying firms caused by international sourcing. The methodology, which can be used to calculate a living wage, has implications for international buying practice and for organized labour in the international global apparel industry and has the potential to accelerate a trend already underway in the sector towards greater consolidation and collaboration between buyers and suppliers in the manufacture of apparel.
    Date: 2013
  10. By: Dennis Arnold
    Abstract: Abstract This paper explores Cambodian garment factory workers’ collective voice and ability to negotiate a living wage. Workers’ agency is examined through a case study of a large-scale strike in September 2010 over national minimum wage negotiations, led by two Cambodian trade union federations. Analysis is centred on four structural impediments to workers’ wage demands. First, the Cambodian People’s Party (CPP) consolidated power in 2008. As a result, space for independent trade unions and civil society is decreasing. Second, Cambodia is not deemed ‘competitive’ as a global sourcing option in terms of price, quality and speed to market. As a result, low wages and a proliferation of unmonitored subcontract factories are increasingly becoming the industry’s competitive advantage vis-à-vis Bangladesh and Vietnam. Third, the proliferation of fixed-duration contracts in Cambodia means work is less secure, with attendant impacts on workers and unions’ negotiating strength. And fourth, the unusually high number of plant-level and national trade union federations makes it difficult for ‘genuine’ unions to promote the rights of their members, and workers’ agency potential is marginalized. The intersection of these four structural forces circumscribes workers and independent trade unions’ ability to rework power relations with the employers association, the Garment Manufacturers Association in Cambodia (GMAC). Despite the challenges, workers and independent unions recognize themselves as the agents who must shape key demands, including on wages.
    Date: 2013

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