This paper performs panel regressions of output per worker, capital intensity, human capital, and total factor productivity in Latin America on measures of economic freedom in five policy areas. Results show that a smaller government raises output per worker in Latin America but not in the OECD. Stronger property rights and a tighter monetary policy also raise output per worker, but greater freedom to trade internationally does not, despite doing so in the OECD. Deregulation lowers output per worker in both Latin America and the OECD. Finally, a tighter monetary policy raises total factor productivity (TFP) but reduces capital intensity in Latin America, while deregulation raises capital intensity but lowers TFP in both sets of countries.
{"title":"Economic Freedom and Economic Performance in Latin America: A Panel Data Analysis","authors":"G. Livanis","doi":"10.1111/rode.12013","DOIUrl":"https://doi.org/10.1111/rode.12013","url":null,"abstract":"This paper performs panel regressions of output per worker, capital intensity, human capital, and total factor productivity in Latin America on measures of economic freedom in five policy areas. Results show that a smaller government raises output per worker in Latin America but not in the OECD. Stronger property rights and a tighter monetary policy also raise output per worker, but greater freedom to trade internationally does not, despite doing so in the OECD. Deregulation lowers output per worker in both Latin America and the OECD. Finally, a tighter monetary policy raises total factor productivity (TFP) but reduces capital intensity in Latin America, while deregulation raises capital intensity but lowers TFP in both sets of countries.","PeriodicalId":206472,"journal":{"name":"INTL: Political & Legal Issues (Topic)","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123926621","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We provide evidence that deterioration of relations between the United States and another country, measured by divergence in their UN General Assembly voting patterns, reduces US imports from that country during the second wave of globalization. Though statistically significant, such an effect of “political distance” on trade is small compared with the frictions imposed by other trade barriers. Indeed, using sector-level trade data, we show that except for petroleum and some chemical products, US imports are not affected by international politics. American firms, however, diversify their import of crude oil significantly away from the political opponents of the US, even after controlling for wars, sanctions, and tariffs. To explain the distinctive political impact on oil import diversification, we test the strategy commodity hypothesis over the hold-up risk hypothesis, because while oil is widely thought to be a strategic commodity, oil trade is also often associated with backward vertical FDI that is subject to the risks of hold-up and expropriation. Our results suggest both political and economic forces are at work. First, although the political limits on oil import are only significant when American firms import oil from dictators, the effect is even more pronounced when the exporting countries have high expropriation risk. Second, a similar import pattern is observed only for other major powers or countries with oil companies operating overseas. Finally, we show that while the US imports of a few strategic commodities, such as tin, are also discouraged by political distance, a similar political effect is also observed in the import of R&D intensive goods, in which case quasi-rents derived from backward FDI in R&D may be expropriated by a hostile government.
{"title":"International Politics and Import Diversification in the Second Wave of Globalization","authors":"S. Mityakov, Heiwai Tang, K. Tsui","doi":"10.2139/ssrn.2215002","DOIUrl":"https://doi.org/10.2139/ssrn.2215002","url":null,"abstract":"We provide evidence that deterioration of relations between the United States and another country, measured by divergence in their UN General Assembly voting patterns, reduces US imports from that country during the second wave of globalization. Though statistically significant, such an effect of “political distance” on trade is small compared with the frictions imposed by other trade barriers. Indeed, using sector-level trade data, we show that except for petroleum and some chemical products, US imports are not affected by international politics. American firms, however, diversify their import of crude oil significantly away from the political opponents of the US, even after controlling for wars, sanctions, and tariffs. To explain the distinctive political impact on oil import diversification, we test the strategy commodity hypothesis over the hold-up risk hypothesis, because while oil is widely thought to be a strategic commodity, oil trade is also often associated with backward vertical FDI that is subject to the risks of hold-up and expropriation. Our results suggest both political and economic forces are at work. First, although the political limits on oil import are only significant when American firms import oil from dictators, the effect is even more pronounced when the exporting countries have high expropriation risk. Second, a similar import pattern is observed only for other major powers or countries with oil companies operating overseas. Finally, we show that while the US imports of a few strategic commodities, such as tin, are also discouraged by political distance, a similar political effect is also observed in the import of R&D intensive goods, in which case quasi-rents derived from backward FDI in R&D may be expropriated by a hostile government.","PeriodicalId":206472,"journal":{"name":"INTL: Political & Legal Issues (Topic)","volume":"115 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132583471","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The European periphery is qualitatively different from the core. This implies that a monetary and fiscal policy mix which benefits the core will not, by definition, benefit the periphery except by coincident or accident. The debtor nations are also qualitatively different from the creditor nations. There is a distinct, but not total, overlap between the core and creditor countries, and between the peripheral and debtor countries. The (biased) case for the periphery is made in this article.
{"title":"Conventions and the European Periphery","authors":"Stephen Kinsella","doi":"10.2139/ssrn.2155577","DOIUrl":"https://doi.org/10.2139/ssrn.2155577","url":null,"abstract":"The European periphery is qualitatively different from the core. This implies that a monetary and fiscal policy mix which benefits the core will not, by definition, benefit the periphery except by coincident or accident. The debtor nations are also qualitatively different from the creditor nations. There is a distinct, but not total, overlap between the core and creditor countries, and between the peripheral and debtor countries. The (biased) case for the periphery is made in this article.","PeriodicalId":206472,"journal":{"name":"INTL: Political & Legal Issues (Topic)","volume":"18 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-10-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128362653","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The study tries first to assess the extent of similarities and divergences among services rules in regional trade agreements as compared to the GATS. To do so, it uses a typology identifying variations in 48 key provisions structured under seven themes commonly found in RTAs and using the GATS as a benchmark. The analysis identifies two main families of agreements (GATS-inspired and NAFTA-inspired) and a residual category. The paper briefly explores the historical development that led to these families as well as their geographical spread both on an agreement by agreement basis and a country by country basis. The paper then analyses by theme the variations found in the RTAs among services rules including their novelty as compared to the GATS. Given the lack of available information on the implementation of the agreements the paper tries to assess whenever possible the magnitude of the discrepancies and their practical impacts. While subject to some qualifications, the results of the study are relatively straight forward: there is no spaghetti bowl in services rules, but just two families and one residual category. The details reveal that the degree of divergence between those two families does not overall seem insurmountable. This assessment concords with other studies (e.g. Marchetti, Roy) that have equated them in terms of national treatment and market access and have compared directly commitments undertaken under the three families of agreements. One may even note a certain tendency to a convergence towards the GATS model (e.g. the addition of market access clause in the second generation of NAFTA-like agreements or the use of GATS-type architecture by EU for agreements else than pre-adhesion ones).
{"title":"Services Rules in Regional Trade Agreements - How Diverse and How Creative as Compared to the GATS Multilateral Rules?","authors":"P. Latrille, Juneyoung Lee","doi":"10.2139/ssrn.2171698","DOIUrl":"https://doi.org/10.2139/ssrn.2171698","url":null,"abstract":"The study tries first to assess the extent of similarities and divergences among services rules in regional trade agreements as compared to the GATS. To do so, it uses a typology identifying variations in 48 key provisions structured under seven themes commonly found in RTAs and using the GATS as a benchmark. The analysis identifies two main families of agreements (GATS-inspired and NAFTA-inspired) and a residual category. The paper briefly explores the historical development that led to these families as well as their geographical spread both on an agreement by agreement basis and a country by country basis. The paper then analyses by theme the variations found in the RTAs among services rules including their novelty as compared to the GATS. Given the lack of available information on the implementation of the agreements the paper tries to assess whenever possible the magnitude of the discrepancies and their practical impacts. While subject to some qualifications, the results of the study are relatively straight forward: there is no spaghetti bowl in services rules, but just two families and one residual category. The details reveal that the degree of divergence between those two families does not overall seem insurmountable. This assessment concords with other studies (e.g. Marchetti, Roy) that have equated them in terms of national treatment and market access and have compared directly commitments undertaken under the three families of agreements. One may even note a certain tendency to a convergence towards the GATS model (e.g. the addition of market access clause in the second generation of NAFTA-like agreements or the use of GATS-type architecture by EU for agreements else than pre-adhesion ones).","PeriodicalId":206472,"journal":{"name":"INTL: Political & Legal Issues (Topic)","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115062915","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
At first glance, this paper deals with a simple classification issue only: the coverage and treatment of certain manufacturing operations and the resulting products under the General Agreement on Trade in Services (GATS) rather than under its long-standing counterpart in merchandise trade, the General Agreement on Tariffs and Trade (GATT). Yet there are important structural/conceptual differences between the two Agreements, which may have far-reaching consequences, inter alia, for the use of GATT-based tariffs and trade remedies (anti-dumping and countervailing measures). It is submitted that the currently applied classification system could prompt companies to (re-)define the ownership conditions of otherwise identical production activities, with a view to avoiding GATT disciplines. However, the relevant criteria separating goods- from services-related operations are not only hard to specify and monitor in practice, but it is also difficult to see an underlying policy rationale. In the interest of clarity and consistency, WTO Members might thus want to close this conceptual trapdoor. Due to the rapid proliferation of international production-sharing arrangements, the stakes will likely be rising.
{"title":"Trade Disciplines with a Trapdoor: Contract Manufacturing","authors":"Rudolf Adlung, Weiwei Zhang","doi":"10.2139/SSRN.2144114","DOIUrl":"https://doi.org/10.2139/SSRN.2144114","url":null,"abstract":"At first glance, this paper deals with a simple classification issue only: the coverage and treatment of certain manufacturing operations and the resulting products under the General Agreement on Trade in Services (GATS) rather than under its long-standing counterpart in merchandise trade, the General Agreement on Tariffs and Trade (GATT). Yet there are important structural/conceptual differences between the two Agreements, which may have far-reaching consequences, inter alia, for the use of GATT-based tariffs and trade remedies (anti-dumping and countervailing measures). It is submitted that the currently applied classification system could prompt companies to (re-)define the ownership conditions of otherwise identical production activities, with a view to avoiding GATT disciplines. However, the relevant criteria separating goods- from services-related operations are not only hard to specify and monitor in practice, but it is also difficult to see an underlying policy rationale. In the interest of clarity and consistency, WTO Members might thus want to close this conceptual trapdoor. Due to the rapid proliferation of international production-sharing arrangements, the stakes will likely be rising.","PeriodicalId":206472,"journal":{"name":"INTL: Political & Legal Issues (Topic)","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-09-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121283162","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
B. Balachandran, C. Krishnamurti, M. Theobald, Berty Vidanapathirana
Australian companies pay dividends semi-annually with smaller “interim” payments and larger “final” payments. Interim dividends are declared and paid within a less full information environment than final dividends. We analyze the interactions between the timing of dividends and their information content, controlling for share repurchase and tax effects. Dividend reductions that are not associated with share repurchases are statistically significantly related to future abnormal earnings and provide strong support for the information content of dividend reductions. The percentage of dividend reduction is stronger for interim than for final dividend reductions. The market reaction is negatively related to the reduction in imputation tax credit and reacts more aggressively and negatively to interim as compared to final dividend reductions.
{"title":"Dividend Reductions, The Timing of Dividend Payments and Information Content","authors":"B. Balachandran, C. Krishnamurti, M. Theobald, Berty Vidanapathirana","doi":"10.2139/ssrn.2009293","DOIUrl":"https://doi.org/10.2139/ssrn.2009293","url":null,"abstract":"Australian companies pay dividends semi-annually with smaller “interim” payments and larger “final” payments. Interim dividends are declared and paid within a less full information environment than final dividends. We analyze the interactions between the timing of dividends and their information content, controlling for share repurchase and tax effects. Dividend reductions that are not associated with share repurchases are statistically significantly related to future abnormal earnings and provide strong support for the information content of dividend reductions. The percentage of dividend reduction is stronger for interim than for final dividend reductions. The market reaction is negatively related to the reduction in imputation tax credit and reacts more aggressively and negatively to interim as compared to final dividend reductions.","PeriodicalId":206472,"journal":{"name":"INTL: Political & Legal Issues (Topic)","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130743034","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
People’s attachment to a subsidy creates difficulties for the government to phase out, and eventually eliminate, the subsidy. Elimination of fuel subsidy scheme in Indonesia is a perfect example of such occurrence. The subsidy has been implementing to commodity as opposed to households, thus individuals may not necessarily realized that they have been enjoying the subsidy when they buy fuel. In this case people may feel as if they are endowed by the values from the provision of the policy. The elimination of the subsidy consequently may be perceived as a loss - as opposed to a foregone gain. This study aims to obtain the most acceptable exit strategy to eliminate the subsidy from the perspective of households by conducting a laboratory-based survey. The alternative exit strategies include methods of elimination of the subsidy and of reallocation of resources saved from eliminating the subsidy. The policy options have been derived using insight from behavioral economics ranging from endowment effect, status quo bias, to present biasness. The survey includes 335 subjects, who come from four different backgrounds: 1) households with no motor vehicle; 2) households with only motorcycle(s); (3) households with one car and; 4) households with one luxurious car or more than one car. Each subject faces 55 paired-wise policy alternatives and the method proposed by Dunn-Rankin (1983) has been used to derive the ordering of preferences. The result shows that gradual elimination of fuel subsidy and reallocation to earmarked programs were the most acceptable policy elements of the exit strategy. The survey, indirectly, showed that subjects’ valuation of losses is greater for direct elimination strategies than that of the equivalent gradual elimination strategies. The results also show that respondents chose “to pay” later at a smaller amount than “to pay” immediately of the equivalent total value. The reallocation of resources saved to earmarked programs is more acceptable than the reallocation to non-earmarked programs. In particular, respondents opted for a more immediate compensation from the elimination or reduction of the subsidy.
{"title":"On the Complexity of Eliminating Fuel Subsidy in Indonesia: A Behavioral Approach","authors":"Rimawan Pradiptyo, Gumilang Aryo Sahadewo","doi":"10.2139/ssrn.2104997","DOIUrl":"https://doi.org/10.2139/ssrn.2104997","url":null,"abstract":"People’s attachment to a subsidy creates difficulties for the government to phase out, and eventually eliminate, the subsidy. Elimination of fuel subsidy scheme in Indonesia is a perfect example of such occurrence. The subsidy has been implementing to commodity as opposed to households, thus individuals may not necessarily realized that they have been enjoying the subsidy when they buy fuel. In this case people may feel as if they are endowed by the values from the provision of the policy. The elimination of the subsidy consequently may be perceived as a loss - as opposed to a foregone gain. This study aims to obtain the most acceptable exit strategy to eliminate the subsidy from the perspective of households by conducting a laboratory-based survey. The alternative exit strategies include methods of elimination of the subsidy and of reallocation of resources saved from eliminating the subsidy. The policy options have been derived using insight from behavioral economics ranging from endowment effect, status quo bias, to present biasness. The survey includes 335 subjects, who come from four different backgrounds: 1) households with no motor vehicle; 2) households with only motorcycle(s); (3) households with one car and; 4) households with one luxurious car or more than one car. Each subject faces 55 paired-wise policy alternatives and the method proposed by Dunn-Rankin (1983) has been used to derive the ordering of preferences. The result shows that gradual elimination of fuel subsidy and reallocation to earmarked programs were the most acceptable policy elements of the exit strategy. The survey, indirectly, showed that subjects’ valuation of losses is greater for direct elimination strategies than that of the equivalent gradual elimination strategies. The results also show that respondents chose “to pay” later at a smaller amount than “to pay” immediately of the equivalent total value. The reallocation of resources saved to earmarked programs is more acceptable than the reallocation to non-earmarked programs. In particular, respondents opted for a more immediate compensation from the elimination or reduction of the subsidy.","PeriodicalId":206472,"journal":{"name":"INTL: Political & Legal Issues (Topic)","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-07-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134013094","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper provides an analytical approach to the negotiation process for financial assistance in Latvia. We believe that auditing the negotiation process may help us gain a better understanding of financial assistance programmes’ outcomes. More specifically, we assume that decision-makers engaged in a financial assistance negotiation might need to place a high priority on determining the difference that the process makes, net of other influences, to the outcome.The paper is structured as follows: The first part constructs an analytical framework for conceptualising financial stabilization negotiations. This framework allows for testing hypotheses concerning the negotiation process based on evidence from actual experience, in addition to laboratory evidence. It then outlines the various international negotiation strategies that debtors and lenders can use to affect the outcome. It also discusses the importance of actors’ negotiation ‘capability’ in shaping negotiation strategies and outcome. The second part presents findings on the Latvian case, with a brief review of the negotiation process and outcome in the form of a description of policy interaction with policy circles and a review of core areas of policy conditionality. The paper then explains the factors that account for the negotiating strategies attempted by the lenders (e.g.,IMF and the European Commission) and the debtors (e.g., the Latvian government and other key stakeholders) as well as their influence on the outcome. Finally, it concludes by summarizing lessons that can be learned from the negotiation process surrounding financial assistance in Latvia.
{"title":"Conceptualising the EU/LMF Financial Assistance Process","authors":"Samuel Dahan","doi":"10.2139/ssrn.2084849","DOIUrl":"https://doi.org/10.2139/ssrn.2084849","url":null,"abstract":"This paper provides an analytical approach to the negotiation process for financial assistance in Latvia. We believe that auditing the negotiation process may help us gain a better understanding of financial assistance programmes’ outcomes. More specifically, we assume that decision-makers engaged in a financial assistance negotiation might need to place a high priority on determining the difference that the process makes, net of other influences, to the outcome.The paper is structured as follows: The first part constructs an analytical framework for conceptualising financial stabilization negotiations. This framework allows for testing hypotheses concerning the negotiation process based on evidence from actual experience, in addition to laboratory evidence. It then outlines the various international negotiation strategies that debtors and lenders can use to affect the outcome. It also discusses the importance of actors’ negotiation ‘capability’ in shaping negotiation strategies and outcome. The second part presents findings on the Latvian case, with a brief review of the negotiation process and outcome in the form of a description of policy interaction with policy circles and a review of core areas of policy conditionality. The paper then explains the factors that account for the negotiating strategies attempted by the lenders (e.g.,IMF and the European Commission) and the debtors (e.g., the Latvian government and other key stakeholders) as well as their influence on the outcome. Finally, it concludes by summarizing lessons that can be learned from the negotiation process surrounding financial assistance in Latvia.","PeriodicalId":206472,"journal":{"name":"INTL: Political & Legal Issues (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131383885","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Elisabeth Oltheten, Theodore Sougiannis, N. Travlos, Stefanos Zarkos
This study examines Greece’s experience as a member of the Eurozone over the period 2002 to 2011. We do not find evidence of incremental benefits for Greece from joining the Eurozone in terms of higher growth in Gross Domestic Product, improved balance of payments, higher levels of public and private investments, higher levels of employment, and lower inflation relative to the prior ten years. In evaluating the Greek experience within the Eurozone, we derive the following fundamental policy lessons that apply both to similar small peripheral EU countries that plan to enter the Eurozone, or any other economic union, and to the Eurozone itself, in terms of facilitating their integration in a large monetary union. First, countries with inefficient public systems must re-engineer and restructure the decision making process in the public sector before they become members of an economic union. Second, countries must generate a friendly environment towards business and provide a) a simple and stable tax system, b) an effective and efficient justice system, and c) a high quality educational system. Third, countries with governments following populist fiscal policies financed by excessive borrowing are likely to lose their competitiveness which in turn lowers the living standards of their people. Fourth, the admission requirements to an economic union must be strict and they must be enforced. Sixth, capital market investors must always differentiate default risk within the country-members of a monetary union.
{"title":"Greece in the Eurozone: Lessons from a Decade of Experience","authors":"Elisabeth Oltheten, Theodore Sougiannis, N. Travlos, Stefanos Zarkos","doi":"10.2139/ssrn.2066125","DOIUrl":"https://doi.org/10.2139/ssrn.2066125","url":null,"abstract":"This study examines Greece’s experience as a member of the Eurozone over the period 2002 to 2011. We do not find evidence of incremental benefits for Greece from joining the Eurozone in terms of higher growth in Gross Domestic Product, improved balance of payments, higher levels of public and private investments, higher levels of employment, and lower inflation relative to the prior ten years. In evaluating the Greek experience within the Eurozone, we derive the following fundamental policy lessons that apply both to similar small peripheral EU countries that plan to enter the Eurozone, or any other economic union, and to the Eurozone itself, in terms of facilitating their integration in a large monetary union. First, countries with inefficient public systems must re-engineer and restructure the decision making process in the public sector before they become members of an economic union. Second, countries must generate a friendly environment towards business and provide a) a simple and stable tax system, b) an effective and efficient justice system, and c) a high quality educational system. Third, countries with governments following populist fiscal policies financed by excessive borrowing are likely to lose their competitiveness which in turn lowers the living standards of their people. Fourth, the admission requirements to an economic union must be strict and they must be enforced. Sixth, capital market investors must always differentiate default risk within the country-members of a monetary union.","PeriodicalId":206472,"journal":{"name":"INTL: Political & Legal Issues (Topic)","volume":"78 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-05-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126318029","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The purpose of this paper is to investigate the main issues surrounding ethics-focused corporate governance. Insights into how business ethics have emerged is provided and whether firms are attempting to strike the right balance between regulatory and compliance-led processes on the one hand, and improving their ethical governance by embedding the right corporate culture on the other hand. Thus, the paper examines the benefits of implementing appropriate and effective strategies into a firm’s compliance processes which also considers both macro- and micro-economic conditions and changes in current world markets. The research is primarily based on literature developed since 2000. A range of prior empirical academic findings and existing theories have been compared and contrasted. The findings in the literature show that international organisations face more complex issues than those operating in domestic markets as different standards and values across the different countries need to be considered. A rigid approach adopted across various nations does not appear to work well; instead the implementation of a dynamic and flexible framework is suggested to help in coping with the changing business environments. Effective firm performance furthermore needs to consider the influence that stakeholders have on firms’ strategic decision-making processes. This not only requires the commitment of boards of directors and top level executives, but also every other employee within an organisation. A survey was conducted to understand the perceptions on the effectiveness of ethics measures among a transnational sample from various academic and professional backgrounds targeting those in legal and economics/business management functions and involving those in banking, accounting and finances, sciences and education, sales and operations and human resources. The findings in this study based on the foregoing combined stakeholder management theory and the theory of planned behaviour show that perceived stakeholder pressure and consciously recognised internal and external benefits have a significant effect on firms to exploit their ethics codes. Codes of business conduct or ethics codes utilisation was significantly correlated to perceived internal benefits when it was concerned with deterring unethical behaviour and creating an ethical firm culture but also when the codes were seen as promoting a positive external image. Of particular note, perceptions on efforts in training on ethics codes principles was not found to be effectively integrated into firms’ decision-making processes. This study shall be useful to firms seeking to enhance their ability to manage, monitor and evaluate ethical business practices along with regulatory and compliance-led firm strategies. The time and resource constraints did not allow data collection from a larger sample and an in-depth analysis of the entire set of the data available, thus limiting the results. Also, the sensitive nature
{"title":"Corporate Ethics Governance - The Role of Stakeholders in a Framework beyond Codes and Borders","authors":"Senem Sezek, D. Koufopoulos","doi":"10.2139/ssrn.2043119","DOIUrl":"https://doi.org/10.2139/ssrn.2043119","url":null,"abstract":"The purpose of this paper is to investigate the main issues surrounding ethics-focused corporate governance. Insights into how business ethics have emerged is provided and whether firms are attempting to strike the right balance between regulatory and compliance-led processes on the one hand, and improving their ethical governance by embedding the right corporate culture on the other hand. Thus, the paper examines the benefits of implementing appropriate and effective strategies into a firm’s compliance processes which also considers both macro- and micro-economic conditions and changes in current world markets. The research is primarily based on literature developed since 2000. A range of prior empirical academic findings and existing theories have been compared and contrasted. The findings in the literature show that international organisations face more complex issues than those operating in domestic markets as different standards and values across the different countries need to be considered. A rigid approach adopted across various nations does not appear to work well; instead the implementation of a dynamic and flexible framework is suggested to help in coping with the changing business environments. Effective firm performance furthermore needs to consider the influence that stakeholders have on firms’ strategic decision-making processes. This not only requires the commitment of boards of directors and top level executives, but also every other employee within an organisation. A survey was conducted to understand the perceptions on the effectiveness of ethics measures among a transnational sample from various academic and professional backgrounds targeting those in legal and economics/business management functions and involving those in banking, accounting and finances, sciences and education, sales and operations and human resources. The findings in this study based on the foregoing combined stakeholder management theory and the theory of planned behaviour show that perceived stakeholder pressure and consciously recognised internal and external benefits have a significant effect on firms to exploit their ethics codes. Codes of business conduct or ethics codes utilisation was significantly correlated to perceived internal benefits when it was concerned with deterring unethical behaviour and creating an ethical firm culture but also when the codes were seen as promoting a positive external image. Of particular note, perceptions on efforts in training on ethics codes principles was not found to be effectively integrated into firms’ decision-making processes. This study shall be useful to firms seeking to enhance their ability to manage, monitor and evaluate ethical business practices along with regulatory and compliance-led firm strategies. The time and resource constraints did not allow data collection from a larger sample and an in-depth analysis of the entire set of the data available, thus limiting the results. Also, the sensitive nature ","PeriodicalId":206472,"journal":{"name":"INTL: Political & Legal Issues (Topic)","volume":"84 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-04-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123556214","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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