Tax Reform and Environmental Taxation

I measure the industry impacts of an environmental tax reform where a carbon tax is used to finance full or partial corporate tax integration. I find that the industry impacts of such a reform are likely to be modest (in the sense of impacts on returns on equity).

Industrial Growth Rates and Instability: An Historical Analysis of the Former Centrally Planned Economies of Eastern Europe

One of the central tenets of socialism and central planning economics, as practiced by the East European countries, was that this organization of employment, production and activity could achieve higher growth rates than market economies. This paper presents an historical analysis of economic performance of seven countries: Bulgaria, Czechoslovakia, GDR, Hungary, Poland, Romania and Yugoslavia during the crucial period of socialism (1960-80). It studies the relationship between industry output growth rates and output instabilities in approximately twenty-five industries. Using empirically estimated models it was found that the instability (volatility) of industry output increased with growth rates and at an increasing rate. Since instability creates substantial costs, these findings imply that the true value of income and product streams in East European countries, after discounting for instability, was lower than otherwise believed. A decomposition of instability into two sources, systemic structure versus operational implementation is suggested

From the Grabbing Hand to the Helping Hand

I present a study of ownership of firms under government rent seeking. Using its control of regulated inputs, a government agency extracts rents from a manager who undertakes an investment. Such a government rent seeking activity leads to a typical hold-up problem. Government ownership is shown to serve as a second best commitment mechanism through which the government agency will restrain itself from the rent seeking activity and even offer the manager support and favor such as tax breaks and subsidies. This mechanism works at a cost as government ownership compromises ex post managerial incentives and creates distortion in resource allocation. Nevertheless, under some fairly general conditions, government ownership Pareto dominates private ownership. The analysis corresponds to a host of stylized empirical observations concerning local government-owned firms during China's transition to a market economy. Based on this analysis, I suggest that local government owned firms will be transformed to private ownership as China's input markets become more liberalized.http://deepblue.lib.umich.edu/bitstream/2027.42/39448/3/wp58.pd

Institutional Technology and the Chains of Trust: Capital Markets and Privatization in Russia and the Czech Republic

The introduction of mass privatization policies in Russia and the Czech Republic depended on the creation of impersonal capital markets to finance the needs of privatized companies and to provide a secondary market for the trading of securities. Yet, mass privatization created the contradictory conditions of generating millions of poorly informed shareholders, with no efficient markets for the sale of the shares. The absence of financial markets created systematic pressures to move assets by illegal or non-transparent means to users who value them. Privatization created the incentives to destroy the financial markets critical to its success. A comparative case analysis of post-privatization market formation in both these countries demonstrates that the functional necessity for these markets does not engender their own creation. In the absence of institutional mechanisms of state regulation and trust, markets become arenas for political contests and economic manipulation. The irony of these policies is that a principal lesson has been that market reforms cannot create viable markets, only institutional formation can.http://deepblue.lib.umich.edu/bitstream/2027.42/39719/3/wp335.pd

Microeconomic Aspects of Economic Growth in Eastern Europe and the Former Soviet Union, 1950-2000

The theme of this paper is the microeconomics of economic growth in Central and Eastern Europe (CEE) and the Newly Independent States (NIS) over the period 1950-2000. The key structural change in this region is the end of the socialist regime in 1989 and 1992, and the subsequent attempt at transition to a market economy. We begin the paper with an examination of the key legacies from the socialist period. We then examine the key microeconomic actors in transition economies: households, enterprises, and government officials. Although there are many common processes at work, differences in economic performance tend to coincide with the geographical divide. Legacies play an important part. We also argue that differences in openness also plays an important role in generating different outcomes. These factors, combined with defects in the political and legal system, have given rise to a vicious circle of resistance to reform in the NIS.http://deepblue.lib.umich.edu/bitstream/2027.42/39732/3/wp348.pd

The commercialisation of knowledge management practices to k-based development in Malaysia

This paper studies the connection between the commercialization of knowledge management practices and its contributions toward the knowledge-based development in Malaysia. Theoretical relations in this paper were tested through an empirical study carried out among public-listed organisations in the industrial products, consumer products, and service industries in Malaysia. The findings of this paper revealed that it is important for corporations to focus on knowledge management in the development of the organisation’s corporate strategy. Empirical evidence supported the view that firms with knowledge management capabilities and understanding will utilise these capabilities to drive their quality strategy, thus performing better than those that do not. In addition, the finding serves as an initial move among private sector business toward a knowledge-based country. This paper concludes that these practices have a positive incidence not only on the performance of the firm but it also gives some initial contributions toward the development of Malaysia as a knowledge-based country

Monoculture versus diversity in competition economics

Economics rightfully represents the major basis for competition policy. Next to generating knowledge about competition and its welfare effects, the currently popular 'more-economic approach' is charged with a number of additional hopes and expectations, leading to a reduction of the ambiguities of real-world competition policy. While this article highlights the benefits of economics-based competition policy, it takes a cautious stance towards excessive expectations in particular regarding the idea that a monocultural, 'unified' competition theory as an exact, objective, and unerring scientific approach to antitrust makes normative assessment and generalizations superfluous. In a combination of two lines of argumentation, diversity in competition economics is advocated. Firstly, competition economics is empirically characterized by a considerable pluralism of theories and policy paradigms. This includes deviating views on core concepts like the nature of competition, the meaning of efficiency, or the goals of antitrust. Secondly, it is demonstrated that diversity of theories represents no imperfection of the state of science. In contrast, it is theoretically beneficial for future scientific progress. Therefore, no ultimate competition theory can ever be expected. As a consequence, the 'more-economic approach' must be extended in order to embrace diversity. This does not decrease its meaning and importance but instead puts some of the related high hopes into perspective. --antitrust,more-economic approach,competition policy paradigms,industrial economics,methodology of science

Assessing partnership alternatives in an IT network employing analytical methods

One of the main critical success factors for the companies is their ability to build and maintain an effective collaborative network. This is more critical in the IT industry where the development of sustainable competitive advantage requires an integration of various resources, platforms, and capabilities provided by various actors. Employing such a collaborative network will dramatically change the operations management and promote flexibility and agility. Despite its importance, there is a lack of an analytical tool on collaborative network building process. In this paper, we propose an optimization model employing AHP and multiobjective programming for collaborative network building process based on two interorganizational relationships’ theories, namely, (i) transaction cost theory and (ii) resource-based view, which are representative of short-term and long-term considerations. The five different methods were employed to solve the formulation and their performances were compared. The model is implemented in an IT company who was in process of developing a large-scale enterprise resource planning (ERP) system. The results show that the collaborative network formed through this selection process was more efficient in terms of cost, time, and development speed. The framework offers novel theoretical underpinning and analytical solutions and can be used as an effective tool in selecting network alternatives

Simulating emergent urban form: desakota in China

We propose that the emergent phenomenon know as ?desakota?, the rapidurbanization of densely populated rural populations in the newlydeveloped world, particularly China, can be simulated using agent-basedmodels which combine both local and global features. We argue thatdeskota represents a surprising and unusual form of urbanization wellmatchedto processes of land development that are driven from the bottomup but moderated by the higher-level macro economy. We develop asimple logic which links local household reform to global urban reform,translating these ideas into a model structure which reflects these twoscales. Our model first determines the rate of growth of different spatialaggregates using linear statistical analysis. It then allocates this growth tothe local level using developer agents who determine the transformation ormutation of rural households to urban pursuits based on local land costs,accessibilities, and growth management practices. The model is applied todesakota development in the Suzhou region between 1990 and 2000. Weshow how the global rates of change predicted at the township level in theWuxian City region surrounding Suzhou are tempered by localtransformations of rural to urban land uses which we predict using cellularautomata rules. The model, which is implemented in the RePast 3software, is validated using a blend of data taken from remote sensing andgovernment statistical sources. It represents an example of generativesocial science that fuses plausible behavior with formalized logics matchedagainst empirical evidence, essential in showing how novel patterns ofurbanization such as desakota emerge