In the early stages of the COVID-19 pandemic, masks and alcohol sanitizers were hoarded and resold in online markets. In Japan, restrictions were imposed on such resale. In this paper, we examine the effects of the resale regulations on the behavior of economic agents and changes in their surplus. We collected data on auctions and fixed-price sales of anhydrous ethanol in the periods before and after the resale regulation. As a result, we found that in fixed-price sales, sellers lowered their prices by nearly JPY 3,000 from the price that maximized their expected revenues due to the resale restrictions. We also found that, on average, the regulation reduced the consumer surplus and the producer surplus by about JPY 770 and JPY 1,300, respectively.
{"title":"Regulation and Resale Behavior in Online Marketplace during the COVID-19 Pandemic","authors":"Yohsuke Hirose","doi":"10.2139/ssrn.3936640","DOIUrl":"https://doi.org/10.2139/ssrn.3936640","url":null,"abstract":"In the early stages of the COVID-19 pandemic, masks and alcohol sanitizers were hoarded and resold in online markets. In Japan, restrictions were imposed on such resale. In this paper, we examine the effects of the resale regulations on the behavior of economic agents and changes in their surplus. We collected data on auctions and fixed-price sales of anhydrous ethanol in the periods before and after the resale regulation. As a result, we found that in fixed-price sales, sellers lowered their prices by nearly JPY 3,000 from the price that maximized their expected revenues due to the resale restrictions. We also found that, on average, the regulation reduced the consumer surplus and the producer surplus by about JPY 770 and JPY 1,300, respectively.","PeriodicalId":255350,"journal":{"name":"Economic Sociology eJournal","volume":"44 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132771371","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}
D. Hyslop, David C. Maré, Shakked Noy, Isabelle Sin
Workers who experience involuntary job loss suffer from deep and persistent negative consequences. In this paper, we first summarise the evidence on the effects of involuntary job loss on displaced workers’ wellbeing. We conclude that displacement harms workers’ mental health and economic security in the short term and negatively affects their earnings and mortality risk in the long term. We then extrapolate the estimates of Hyslop and Townsend (2017) to estimate the economy-wide net-present value of wages lost as a result of displacement by the workers displaced in New Zealand in a representative year. Our estimates suggest that this value is likely between $3.3 billion (in a year of economic upswing) and $15.4 billion (in a year of very severe economic downswing). Finally, we survey the policy options available for dealing with involuntary displacement. We conclude that unemployment insurance or unemployment benefits can effectively mitigate the immediate negative effects of displacement and have only small downsides. By contrast, training and job placement programs are typically ineffective, but in some circumstances might have high potential upside.
{"title":"Involuntary job loss: welfare effects, earnings impacts and policy options","authors":"D. Hyslop, David C. Maré, Shakked Noy, Isabelle Sin","doi":"10.2139/ssrn.3937734","DOIUrl":"https://doi.org/10.2139/ssrn.3937734","url":null,"abstract":"Workers who experience involuntary job loss suffer from deep and persistent negative consequences. In this paper, we first summarise the evidence on the effects of involuntary job loss on displaced workers’ wellbeing. We conclude that displacement harms workers’ mental health and economic security in the short term and negatively affects their earnings and mortality risk in the long term. We then extrapolate the estimates of Hyslop and Townsend (2017) to estimate the economy-wide net-present value of wages lost as a result of displacement by the workers displaced in New Zealand in a representative year. Our estimates suggest that this value is likely between $3.3 billion (in a year of economic upswing) and $15.4 billion (in a year of very severe economic downswing). Finally, we survey the policy options available for dealing with involuntary displacement. We conclude that unemployment insurance or unemployment benefits can effectively mitigate the immediate negative effects of displacement and have only small downsides. By contrast, training and job placement programs are typically ineffective, but in some circumstances might have high potential upside.","PeriodicalId":255350,"journal":{"name":"Economic Sociology eJournal","volume":"207 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133794619","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}
Abstract We study the influence of policy uncertainty on the moral behavior of firms. When facing uncertainty, managers perceive various socioeconomic obstacles as more severe and disruptive to their business. Using data from policy uncertainty spouts in 93 countries, we document that some firms engage in norm-deviant behavior by cheating on taxes and paying more bribes. While private firms prefer to cheat on taxes, public firms choose bribery as a favorite tool to “grease the wheels” during periods of uncertainty. Strong social capital (local trust and religiosity) breaks this link between uncertainty and corruption.
{"title":"Economic Uncertainty and Corruption: Evidence From Public and Private Firms","authors":"Mansoor Afzali, Gonul Colak, Mengchuan Fu","doi":"10.2139/ssrn.3894468","DOIUrl":"https://doi.org/10.2139/ssrn.3894468","url":null,"abstract":"Abstract We study the influence of policy uncertainty on the moral behavior of firms. When facing uncertainty, managers perceive various socioeconomic obstacles as more severe and disruptive to their business. Using data from policy uncertainty spouts in 93 countries, we document that some firms engage in norm-deviant behavior by cheating on taxes and paying more bribes. While private firms prefer to cheat on taxes, public firms choose bribery as a favorite tool to “grease the wheels” during periods of uncertainty. Strong social capital (local trust and religiosity) breaks this link between uncertainty and corruption.","PeriodicalId":255350,"journal":{"name":"Economic Sociology eJournal","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-09-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127702516","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}
A. Mandel, Arpitha Y. Narasimha, K. K. Reddy, Vipin P. Veetil
In the wake of the COVID-19 pandemic, the Government of India imposed production restrictions on various sectors of the economy. Prima facia there is reason to believe that the cost of the quantity constraints may be greater than their simple sum. This is because quantity constraints percolate through the production network forcing some sectors to reduce output because of the non-availability of inputs. This paper uses an Input-Output Network Model (IO-NET Model) to study the impact of the lockdown on the Indian economy. We calibrate our IO-NET Model to the Indian economy using data on sectoral linkages. We then examine the impact of the lockdown using agent-based computational experiments. Such experiments allow us to examine the out-of-equilibrium time dynamics that emerge in response to the lockdown. The transient dynamics reveal certain counterintuitive phenomena. The first of which is that the supply of output of some sectors increases during and immediately after the lockdown. Second, recovery after the relaxation of the lockdown entails the overshooting of GDP above its normal levels. And the size of the overshooting depends on the stickiness of prices. These counterintuitive phenomena are intimately related to the network interaction between firms as buyers and sellers of intermediate inputs. The paper also measures the network effect of the lockdown across different sectors. There is sizeable heterogeneity among sectors in how their network position amplifies the quantity constraints imposed on sectors distantly related to them as buyers-sellers of intermediate inputs. Ultimately, models like our own can serve as testbeds for policy experiments, especially when the model is calibrated to granular data on buyer-seller linkages in the economy.
{"title":"Transient Dynamics of the COVID Lockdown on India’s Production Network","authors":"A. Mandel, Arpitha Y. Narasimha, K. K. Reddy, Vipin P. Veetil","doi":"10.2139/ssrn.3916355","DOIUrl":"https://doi.org/10.2139/ssrn.3916355","url":null,"abstract":"In the wake of the COVID-19 pandemic, the Government of India imposed production restrictions on various sectors of the economy. Prima facia there is reason to believe that the cost of the quantity constraints may be greater than their simple sum. This is because quantity constraints percolate through the production network forcing some sectors to reduce output because of the non-availability of inputs. This paper uses an Input-Output Network Model (IO-NET Model) to study the impact of the lockdown on the Indian economy. We calibrate our IO-NET Model to the Indian economy using data on sectoral linkages. We then examine the impact of the lockdown using agent-based computational experiments. Such experiments allow us to examine the out-of-equilibrium time dynamics that emerge in response to the lockdown. The transient dynamics reveal certain counterintuitive phenomena. The first of which is that the supply of output of some sectors increases during and immediately after the lockdown. Second, recovery after the relaxation of the lockdown entails the overshooting of GDP above its normal levels. And the size of the overshooting depends on the stickiness of prices. These counterintuitive phenomena are intimately related to the network interaction between firms as buyers and sellers of intermediate inputs. The paper also measures the network effect of the lockdown across different sectors. There is sizeable heterogeneity among sectors in how their network position amplifies the quantity constraints imposed on sectors distantly related to them as buyers-sellers of intermediate inputs. Ultimately, models like our own can serve as testbeds for policy experiments, especially when the model is calibrated to granular data on buyer-seller linkages in the economy.","PeriodicalId":255350,"journal":{"name":"Economic Sociology eJournal","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-09-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132509577","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}
While ensuring employment opportunities is critical for global progress and stability, workers are now subject to several disruptive trends, including automation, rapid changes in technology and skill requirements, and energy transitions. Yet, these trends seem almost insignificant compared to labor impact of the COVID-19 pandemic. While much has been written about the pandemic’s short-term impacts, this study analyzes anticipated long-term impacts on the labor force of 2029 by comparing original 2029 labor projections to special COVID-adjusted projections recently published by the US Bureau of Labor Statistics. We find that future demand for nearly every type of labor skill and knowledge increases, while work activities shift from physical to more cognitive tasks. Of the nearly three million jobs projected to disappear by 2029 due to COVID, over 91% are among workers without a bachelor’s degree. Among workers with a degree demand shifts primarily from business-related degrees to computer and STEM degrees. We further find that the socialness of labor, which is important for both innovation and productivity, increases in many more industries than it decreases. Finally, an examination of how COVID affects trends in automation and teleworking is mixed across industries. Overall, our results suggest that future workers will need to engage more often in training and skill acquisition, requiring life-long learning and skill maintenance strategies.
{"title":"Long-Term COVID-19 Impacts and the U.S. Workforce of 2029","authors":"S. Shutters","doi":"10.2139/ssrn.3911455","DOIUrl":"https://doi.org/10.2139/ssrn.3911455","url":null,"abstract":"While ensuring employment opportunities is critical for global progress and stability, workers are now subject to several disruptive trends, including automation, rapid changes in technology and skill requirements, and energy transitions. Yet, these trends seem almost insignificant compared to labor impact of the COVID-19 pandemic. While much has been written about the pandemic’s short-term impacts, this study analyzes anticipated long-term impacts on the labor force of 2029 by comparing original 2029 labor projections to special COVID-adjusted projections recently published by the US Bureau of Labor Statistics. We find that future demand for nearly every type of labor skill and knowledge increases, while work activities shift from physical to more cognitive tasks. Of the nearly three million jobs projected to disappear by 2029 due to COVID, over 91% are among workers without a bachelor’s degree. Among workers with a degree demand shifts primarily from business-related degrees to computer and STEM degrees. We further find that the socialness of labor, which is important for both innovation and productivity, increases in many more industries than it decreases. Finally, an examination of how COVID affects trends in automation and teleworking is mixed across industries. Overall, our results suggest that future workers will need to engage more often in training and skill acquisition, requiring life-long learning and skill maintenance strategies.","PeriodicalId":255350,"journal":{"name":"Economic Sociology eJournal","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133413411","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 studies the impact of consumers' social learning from the reviews of early adopters of a new product. We consider a two-period setting with an introduction (penetration) period followed by the product maturing period. Early buyers make purchase decisions in the introduction period under significant product valuation uncertainty and future price uncertainty and would like post reviews online to share their experiences about the product. The online product reviews posted by early adopters play an important role in shaping following consumers' product valuations and further influence their purchasing decisions. While the majority of research on social learning focuses on the impact of social learning on the consumer decisions and firm pricing in the maturing period, we find an indirect impact of electronic word-of-mouth (EWOM) on the strategic early buyers' purchase decisions and firm pricing in the introduction period. When early buyers make purchase decisions, they need to forecast the future second period price, estimate the expected utility from waiting, and compare it with the expected utility from buying early. We find that social learning increases the uncertainty in future price, which depends on reviews and therefore unknown, for early buyers in the introduction period. This price-uncertainty-increasing effect may balk early buyers from adopting in the introduction period and thus impact a firm's profit. Driven by this effect, we find that under social learning negative reviews may benefit a firm while positive reviews can also hurt a firm.
{"title":"Selling New Products with Social Learning: The Role of Online Product Reviews","authors":"Xuying Zhao, Z. Pang, J. Zhang","doi":"10.2139/ssrn.3738411","DOIUrl":"https://doi.org/10.2139/ssrn.3738411","url":null,"abstract":"This paper studies the impact of consumers' social learning from the reviews of early adopters of a new product. We consider a two-period setting with an introduction (penetration) period followed by the product maturing period. Early buyers make purchase decisions in the introduction period under significant product valuation uncertainty and future price uncertainty and would like post reviews online to share their experiences about the product. The online product reviews posted by early adopters play an important role in shaping following consumers' product valuations and further influence their purchasing decisions. While the majority of research on social learning focuses on the impact of social learning on the consumer decisions and firm pricing in the maturing period, we find an indirect impact of electronic word-of-mouth (EWOM) on the strategic early buyers' purchase decisions and firm pricing in the introduction period. When early buyers make purchase decisions, they need to forecast the future second period price, estimate the expected utility from waiting, and compare it with the expected utility from buying early. We find that social learning increases the uncertainty in future price, which depends on reviews and therefore unknown, for early buyers in the introduction period. This price-uncertainty-increasing effect may balk early buyers from adopting in the introduction period and thus impact a firm's profit. Driven by this effect, we find that under social learning negative reviews may benefit a firm while positive reviews can also hurt a firm.","PeriodicalId":255350,"journal":{"name":"Economic Sociology eJournal","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129027943","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}
S. Kesavan, S. Lambert, Joan C. Williams, Pradeep K. Pendem
We estimate the causal effects of employee-friendly scheduling practices on store financial performance at the US retailer Gap, Inc. The randomized field experiment evaluated a multi-component intervention designed to improve dimensions of work schedules – inconsistency, unpredictability, inadequacy, and lack-of-employee control – shown to undermine employee well-being and productivity. The experiment was conducted in 28 stores in the San Francisco and Chicago metropolitan areas during a 9-month period between November 2015 and August 2016. Intent-to-treat (ITT) analyses indicate that implementing employee-friendly scheduling practices increased store productivity by 5.1%, a result of increasing sales (by 3.2%) while also decreasing labor (by 1.8%). Drawing on qualitative interviews with managers and quantitative analyses of employee shift-level data, we offer evidence that the intervention improved financial performance through two mechanisms: enhanced employee effort and store execution. Given the common assumption that employee-friendly scheduling practices are costly for business because they reduce labor flexibility for employers, we give particular attention to examining how the intervention reduced labor hours. Analyses indicate that a significant proportion of the reduction can be traced to improved employee schedule adherence and the subsequent decrease in downstream “paper cuts” to the labor budget that occurs as one employee’s tardiness cascades throughout the day and to coworkers. Our findings thus provide compelling evidence that schedule adherence is not exogenous to managers’ scheduling behavior or to scheduling algorithms. Employers place profits at risk when they underestimate the business benefits of employee-friendly scheduling practices.
{"title":"Doing Well By Doing Good: Improving Store Performance with Responsible Scheduling Practices at the Gap, Inc.","authors":"S. Kesavan, S. Lambert, Joan C. Williams, Pradeep K. Pendem","doi":"10.2139/ssrn.3731670","DOIUrl":"https://doi.org/10.2139/ssrn.3731670","url":null,"abstract":"We estimate the causal effects of employee-friendly scheduling practices on store financial performance at the US retailer Gap, Inc. The randomized field experiment evaluated a multi-component intervention designed to improve dimensions of work schedules – inconsistency, unpredictability, inadequacy, and lack-of-employee control – shown to undermine employee well-being and productivity. The experiment was conducted in 28 stores in the San Francisco and Chicago metropolitan areas during a 9-month period between November 2015 and August 2016. Intent-to-treat (ITT) analyses indicate that implementing employee-friendly scheduling practices increased store productivity by 5.1%, a result of increasing sales (by 3.2%) while also decreasing labor (by 1.8%). Drawing on qualitative interviews with managers and quantitative analyses of employee shift-level data, we offer evidence that the intervention improved financial performance through two mechanisms: enhanced employee effort and store execution. Given the common assumption that employee-friendly scheduling practices are costly for business because they reduce labor flexibility for employers, we give particular attention to examining how the intervention reduced labor hours. Analyses indicate that a significant proportion of the reduction can be traced to improved employee schedule adherence and the subsequent decrease in downstream “paper cuts” to the labor budget that occurs as one employee’s tardiness cascades throughout the day and to coworkers. Our findings thus provide compelling evidence that schedule adherence is not exogenous to managers’ scheduling behavior or to scheduling algorithms. Employers place profits at risk when they underestimate the business benefits of employee-friendly scheduling practices.","PeriodicalId":255350,"journal":{"name":"Economic Sociology eJournal","volume":"88 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126208481","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 argues that the study of wage gaps between public and private sector employees is sensitive to the selection of the sample. In the context of Bangladesh, Labour Force Surveys is a dominant source of employment-related data, which is disproportionately inflated with large pool of informal sector employees. Since government jobs are highly formal, the studies on wage differentials should select the groups that are as much comparable as possible on the question of formality. However, employing Oaxaca-Blinder mean decomposition method and Melly quantile counterfactual decomposition method, we find a decreasing trend in public sector wage premium as we impose more restrictions to make the sectors fitting formal. The wage differential even disappears in the entire restriction sample, and it is slightly biased towards private in the top quantile only. Therefore, we can conclude that the superiority of the public sector job does not come from wage compensation but non-monetary issues, with a strong implication for labour markets in Bangladesh.
{"title":"Is the Public Sector Wage Premium Real? Findings from Bangladesh","authors":"S. Islam, Emran Hasan","doi":"10.2139/ssrn.3884596","DOIUrl":"https://doi.org/10.2139/ssrn.3884596","url":null,"abstract":"This paper argues that the study of wage gaps between public and private sector employees is sensitive to the selection of the sample. In the context of Bangladesh, Labour Force Surveys is a dominant source of employment-related data, which is disproportionately inflated with large pool of informal sector employees. Since government jobs are highly formal, the studies on wage differentials should select the groups that are as much comparable as possible on the question of formality. However, employing Oaxaca-Blinder mean decomposition method and Melly quantile counterfactual decomposition method, we find a decreasing trend in public sector wage premium as we impose more restrictions to make the sectors fitting formal. The wage differential even disappears in the entire restriction sample, and it is slightly biased towards private in the top quantile only. Therefore, we can conclude that the superiority of the public sector job does not come from wage compensation but non-monetary issues, with a strong implication for labour markets in Bangladesh.","PeriodicalId":255350,"journal":{"name":"Economic Sociology eJournal","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-01-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117328495","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 advances theory on arm’s length transactions by considering their causes and consequences in a novel context- global trade transactions. The study is made possible by merging comprehensive bilateral trade data from the United Nations (UNCOMTRADE) with a propriety dataset capturing bilateral payments provided by the Society of Worldwide Interbank Financial Transfers (SWIFT). The resulting dataset reveals that more than two-thirds of bilateral trade relationships are structured indirectly- African countries export their products to a trade partner, but that importing partner does not pay the exporter directly. My analysis reveals the attributes of country-level transaction relationships that use this indirect payment structure, what the performance implications are for indirect payments ties, and why countries that initially use indirect payments ties subsequently switch to direct payments (the triad closes) or vice versa. Results show that indirect payments are more likely when countries have higher gravity-based distances, dissimilar administrative institutions, weaker governance institutions, and trade in more substitutable goods. Indirect transactions, however, are associated with lower stability and lower growth in all these relationships with the exception of those with weaker governance institutions, where intermediaries are a benefit to the transacting parties. Overall, the evidence strongly suggests that direct, embedded transactions at a global level are associated with similar positive benefits that scholars have found at local, inter-firm levels. A concluding discussion highlights five important questions for future research to consider than cannot be answered by this study.
{"title":"Indirect Transactions at a Global Scale","authors":"Christopher B. Yenkey","doi":"10.2139/ssrn.3741607","DOIUrl":"https://doi.org/10.2139/ssrn.3741607","url":null,"abstract":"This paper advances theory on arm’s length transactions by considering their causes and consequences in a novel context- global trade transactions. The study is made possible by merging comprehensive bilateral trade data from the United Nations (UNCOMTRADE) with a propriety dataset capturing bilateral payments provided by the Society of Worldwide Interbank Financial Transfers (SWIFT). The resulting dataset reveals that more than two-thirds of bilateral trade relationships are structured indirectly- African countries export their products to a trade partner, but that importing partner does not pay the exporter directly. My analysis reveals the attributes of country-level transaction relationships that use this indirect payment structure, what the performance implications are for indirect payments ties, and why countries that initially use indirect payments ties subsequently switch to direct payments (the triad closes) or vice versa. Results show that indirect payments are more likely when countries have higher gravity-based distances, dissimilar administrative institutions, weaker governance institutions, and trade in more substitutable goods. Indirect transactions, however, are associated with lower stability and lower growth in all these relationships with the exception of those with weaker governance institutions, where intermediaries are a benefit to the transacting parties. Overall, the evidence strongly suggests that direct, embedded transactions at a global level are associated with similar positive benefits that scholars have found at local, inter-firm levels. A concluding discussion highlights five important questions for future research to consider than cannot be answered by this study.","PeriodicalId":255350,"journal":{"name":"Economic Sociology eJournal","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129500801","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}
Deinstitutionalization of taken-for-granted practices as a natural consequence of ever increasing entropy seems to directly contradict the major institutional thesis, namely, that over time isomorphic forces increase and, as a result, possibilities for deinstitutionalization decrease culminating in the impossibility of abandoning in highly institutionalized fields. We argue that the possibilities for deinstitutionalization have been overestimated in organizational literature and offer a revisited account of deinstitutionalization vs. institutional isomorphism and institutionalized vs. highly diffusing-but-not-institutionalized practices. A freedom for choice between alternative practices exists during the pre-institutional stage but not when the field is already institutionalized. In contrast, institutionalized, taken-for-granted practices are immutable to any sort of functional and political pressures and they use to persist even when no technical value remains thus deinstitutionalization on the basis of a functional dissatisfaction seems to be a paradox. We offer a solution to this theoretical inconsistency by distinguishing between truly institutionalized practices and currently popular practices (highly diffused but non-institutionalized). It is only the later that are subject to the norms of progress which allow abandoning and replacing of existing organizational activities. Deinstitutionalization theory is thus can be applied to popular practices that are subject to reevaluation, abandonment and replacement with new optimal practices while institutions are immutable to these norms of progress. Institutions are immutable to deinstitutionalization and the deinstitutionalization of optimal practices is subject to the logic of isomorphic convergence in organizational fields. Finally, we revisit a traditional two-stage institutional diffusion model in order to explain the possibility and likelihood of abandonment during different stages of institutionalization.
{"title":"Rethinking Deinstitutionalization: Exploring the Boundary Conditions for Abandoning and Decoupling Highly Diffused and Institutionalized Practices","authors":"Herman Aksom","doi":"10.2139/ssrn.3736139","DOIUrl":"https://doi.org/10.2139/ssrn.3736139","url":null,"abstract":"Deinstitutionalization of taken-for-granted practices as a natural consequence of ever increasing entropy seems to directly contradict the major institutional thesis, namely, that over time isomorphic forces increase and, as a result, possibilities for deinstitutionalization decrease culminating in the impossibility of abandoning in highly institutionalized fields. We argue that the possibilities for deinstitutionalization have been overestimated in organizational literature and offer a revisited account of deinstitutionalization vs. institutional isomorphism and institutionalized vs. highly diffusing-but-not-institutionalized practices. A freedom for choice between alternative practices exists during the pre-institutional stage but not when the field is already institutionalized. In contrast, institutionalized, taken-for-granted practices are immutable to any sort of functional and political pressures and they use to persist even when no technical value remains thus deinstitutionalization on the basis of a functional dissatisfaction seems to be a paradox. We offer a solution to this theoretical inconsistency by distinguishing between truly institutionalized practices and currently popular practices (highly diffused but non-institutionalized). It is only the later that are subject to the norms of progress which allow abandoning and replacing of existing organizational activities. Deinstitutionalization theory is thus can be applied to popular practices that are subject to reevaluation, abandonment and replacement with new optimal practices while institutions are immutable to these norms of progress. Institutions are immutable to deinstitutionalization and the deinstitutionalization of optimal practices is subject to the logic of isomorphic convergence in organizational fields. Finally, we revisit a traditional two-stage institutional diffusion model in order to explain the possibility and likelihood of abandonment during different stages of institutionalization.","PeriodicalId":255350,"journal":{"name":"Economic Sociology eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130187013","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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