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Showing papers by "Stockholm School of Economics published in 1997"


Journal ArticleDOI
TL;DR: In this paper, the authors propose that dispersed outside ownership and the resulting managerial discretion come with costs but also with benefits, and demonstrate that monitoring and hence ownership concentration may conflict with performance-based incentive schemes.
Abstract: We propose that dispersed outside ownership and the resulting managerial discretion come with costs but also with benefits. Even when tight control by shareholders is ex post efficient, it constitutes ex ante an expropriation threat that reduces managerial initiative and noncontractible investments. In addition, we show that equity implements state contingent control, a feature usually associated with debt. Finally, we demonstrate that monitoring, and hence ownership concentration, may conflict with performance-based incentive schemes.

1,532 citations


Journal ArticleDOI
TL;DR: In this article, the authors define initiative as a key manifestation of corporate entrepreneurship and examine the types of initiative exhibited in a sample of six subsidiaries of multinational corporations, identifying four distinct types of initiatives: global, local, internal, and hybrid.
Abstract: This paper defines initiative as a key manifestation of corporate entrepreneurship, and examines the types of initiative exhibited in a sample of six subsidiaries of multinational corporations. From a detailed analysis of 39 separate initiatives, four distinct types are identified, which we refer to as ‘global,’ ‘local,’ ‘internal’ and ‘global–internal hybrid,’ to correspond to the locus of the market opportunity whence each arose. Two important conclusions are indicated. First, entrepreneurship at the subsidiary level has the potential to enhance local responsiveness, worldwide learning and global integration, a much broader role than previously envisioned. Second, the use of contextual mechanisms to create differentiated subsidiary roles has its limitations because each initiative type is facilitated in different ways. © 1997 by John Wiley & Sons, Ltd.

1,108 citations


Journal ArticleDOI
TL;DR: Inequalities in health favoured the higher income groups and were statistically significant in all countries, and were particularly high in the United States and the United Kingdom.

702 citations


Journal ArticleDOI
TL;DR: It is found that Gibbs sampling performs as well as, or better, then importance sampling and that the Gibbs sampling algorithms are less adversely affected by model size.
Abstract: In Bayesian analysis of vector autoregressive models, and especially in forecasting applications, the Minnesota prior of Litterman is frequently used. In many cases other prior distributions provid ...

635 citations


Journal ArticleDOI
TL;DR: In patients with coronary heart disease, simvastatin therapy is cost effective among both men and women at the ages and cholesterol levels studied.
Abstract: Background The Scandinavian Simvastatin Survival Study (4S) showed that lowering cholesterol levels with simvastatin reduces mortality and morbidity in patients with angina pectoris or previous acute myocardial infarction. Before the widespread use of cholesterol-lowering drugs in such patients is recommended, its cost effectiveness should be demonstrated. We estimated the cost effectiveness of simvastatin treatment to lower cholesterol levels in relation to the age, sex, and cholesterol level before treatment of patients with coronary heart disease. Methods We estimated the cost per year of life gained with simvastatin therapy. To model the increased life expectancy, hazard functions from 4S were used. The costs studied included those of the intervention and the direct and indirect costs associated with morbidity from coronary causes. We prepared separate estimates for men and women at various ages (from 35 to 70 years) and total cholesterol levels before treatment (213 to 309 mg per deciliter). Results ...

403 citations


Journal ArticleDOI
TL;DR: In this paper, the authors investigated the term structure of zero coupon bonds when interest rates are driven by a general marked point process as well as by a Wiener process and proved the existence of a time-independent set of basic bonds.
Abstract: We investigate the term structure of zero coupon bonds when interest rates are driven by a general marked point process as well as by a Wiener process. Developing a theory that allows for measure–valued trading portfolios, we study existence and uniqueness of a martingale measure. We also study completeness and its relation to the uniqueness of a martingale measure. For the case of a finite jump spectrum we give a fairly general completeness result and for a Wiener–Poisson model we prove the existence of a time–independent set of basic bonds. We also give sufficient conditions for the existence of an affine term structure.

366 citations


Journal ArticleDOI
TL;DR: In this article, it is argued that interjudge reliability, traditionally used within phenomeno-graphy, is an unreliable way of establishing reliability of the results produced, since it does not take into account the researcher's procedures for achieving fidelity to the individuals' conceptions investigated.
Abstract: This article takes up the issue of the extent to which phenomenographic results are reliable. It is argued that interjudge reliability, traditionally used within phenomeno‐graphy, is an unreliable way of establishing reliability of the results produced. First, interjudge reliability does not take into account the researcher's procedures for achieving fidelity to the individuals’ conceptions investigated. Second, and most fundamental, the use of interjudge reliability based on an objectivistic epistemology gives rise to methodological and theoretical inconsistency within phenomenography. Reliability as interpretative awareness, maintained through the phenemenological reduction, is suggested as one way of overcoming the problem of establishing reliability of phenomenographic results.

350 citations


ReportDOI
TL;DR: In this paper, the investment effects of regional integration agreements and how such arrangements may affect inward and outward foreign direct investment flows in the integrating region are discussed, and the main conclusion is that the responses to an integration agreement largely depend on the environmental change brought about by the agreement and the locational advantages of the participating countries and industries.
Abstract: This paper deals with the investment effects of regional integration agreements and discusses how such arrangements may affect inward and outward foreign direct investment flows in the integrating region. After setting up a conceptual framework for the analysis, we provide three studies focusing on different kinds of regional integration: North-North integration (Canada joining CUSFTA), North-South integration (Mexico's accession to NAFTA), and South-South integration (MERCOSUR). The main conclusion of the study is that the responses to an integration agreement largely depend on the environmental change brought about by the agreement and the locational advantages of the participating countries and industries. Moreover, the findings suggest that the most positive impact on FDI has occurred when regional integration agreements have coincided with domestic liberalization and macroeconomic stabilization in the member countries.

336 citations


Journal ArticleDOI
TL;DR: The authors compare the relation between foreign affiliate production and parent employment in US manufacturing multinationals with that in Swedish firms and find that the great majority of Swedish affiliate production is in high-income countries, the United States and Europe, and is associated with more employment, particularly blue-collar employment, in the parent companies.
Abstract: We compare the relation between foreign affiliate production and parent employment in US manufacturing multinationals with that in Swedish firms. US multinationals appear to have allocated some of their more labour-intensive operations selling in world markets to affiliates in developing countries, reducing the labour intensity in their home production. Swedish multinationals produce relatively little in developing countries and most of that has been for sale within host countries with import-substituting trade regimes. The great majority of Swedish affiliate production is in high-income countries, the United States and Europe, and is associated with more employment, particularly blue-collar employment, in the parent companies. The small Swedish-owned production that does take place in developing countries is also associated with more white-collar employment at home. The effects on white-collar employment within the Swedish firms have grown smaller and weaker over time.

271 citations


Journal ArticleDOI
TL;DR: It is shown that a market is approximately complete iff an equivalent martingale measure is unique and two constructions of stochastic integrals with respect to processes taking values in a space of continuous functions are suggested.
Abstract: To the memory of our friend and colleague Oliviero Lessi. Abstract. The main purpose of the paper is to provide a mathematical back- ground for the theory of bond markets similar to that available for stock markets. We suggest two constructions of stochastic integrals with respect to processes taking values in a space of continuous functions. Such integrals are used to define the evolution of the value of a portfolio of bonds corresponding to a trad- ing strategy which is a measure-valued predictable process. The existence of an equivalent martingale measure is discussed and HJM-type conditions are derived for a jump-diffusion model. The question of market completeness is considered as a problem of the range of a certain integral operator. We introduce a concept of approximate market completeness and show that a market is approximately complete iff an equivalent martingale measure is unique.

253 citations


Journal ArticleDOI
TL;DR: In this paper, the similarities and differences between relationship marketing studies and network studies are analyzed, and the conclusion is that relationship marketing in its limited interpretation is just a development within the marketing mix approach.
Abstract: Predating the increased attention by marketing academics on relationship marketing, European marketing scholars developed a network approach to the study of industrial markets that is also based on relationships between seller and buyer as a fundamental concept. This article aims to analyse the similarities and the differences between relationship marketing studies and network studies. After comparative analyses of definitions, empirical and research foundations, attributes related to governance structures and to the marketing mix approach and of major issues addressed in the research agendas, the conclusion is: relationship marketing in its limited interpretation is just a development within the marketing mix approach. Relationship marketing in its extended interpretation is, or rather could become, close to the markets‐as‐networks approach. However the basic attribute in network studies of “embeddedness” is largely missing in relationship marketing. To develop relationship marketing as a generic concept...

Journal ArticleDOI
TL;DR: The paper rejects the hypothesis of no inequity because socioeconomic factors also have significant effects on utilization, e.g. income and size of community of residence.
Abstract: This paper tests the null hypothesis of no horizontal inequity in delivery of health care by use of count data hurdle models and Swedish micro data. It differs from most earlier work in three principal ways: First, the tests are carried out separately for physician and hospital care; second, the tests are carried out separately for the probability of seeking care and the amount of care received (given any use); and third, the tests are based on a model that includes several socioeconomic variables, e.g. income, education and size of community of residence. The paper rejects the hypothesis of no inequity because socioeconomic factors also have significant effects on utilization, e.g. income and size of community of residence. Size of community of residence has a positive significant effect on the frequency of physician visits but not on the probability of visiting a physician.

Journal ArticleDOI
TL;DR: It is concluded that the friction cost method does not seem to be a useful alternative to the human-capital approach in the estimation of indirect costs.

Journal ArticleDOI
TL;DR: This paper compares the relative performance of quality adjusted life years (QALYs) based on quality weights elicited by rating scale (RS), time trade-off (TTO) and standard gamble (SG) with the standard against which relative performance is assessed.

Journal ArticleDOI
TL;DR: In this paper, a study of the availability and use of methods in business process re-engineering (BPR) projects was carried out in five large consulting companies and six functions of methods were identified.
Abstract: States that highly structured methods and tools for bringing about organizational change are frequent features in both the management literature and the practice of management consultants. Reports that, in order to understand the nature and popularity of these methods and tools, a study of the availability and use of methods in business process re‐engineering (BPR) projects was carried out in five large consulting companies. Identifies six functions of methods on the basis of this study. Finds that methods play important roles both in the consulting organization and in the consultant’s interaction with the client in the specific change project. Also reveals that common to the identified functions is an ability to store and transfer knowledge, which contributes to the change process interface for clients and consultants. Shows also that consulting companies with very different professional backgrounds have very similar approaches to BPR projects. Identifies and comments on the similarities between these companies’ methods in respect of managing change.

Journal ArticleDOI
TL;DR: Technological diversification in the Multinational Corporation : Historical Trends and Future Prospects as mentioned in this paper, is a recent survey of trends and future prospects of the multinational corporations in terms of technology diversification.


Journal ArticleDOI
TL;DR: The costs related to hip fracture patients admitted for a primary hip fracture during 1992 in Stockholm, Sweden and the potential cost savings from preventing hip fractures are calculated.
Abstract: We calculated the costs related to hip fractures and estimated the potential cost savings from preventing hip fractures. Subjects for this retrospective study were 1,709 hip fracture patients admitted for a primary hip fracture during 1992 in Stockholm, Sweden. Direct costs were compiled for the services of hospital orthopedics, hospital geriatrics, nursing homes, home for the elderly, group living, other acute hospital care, and municipal home help. The direct costs per patient during 1 year after a fracture amounted to about USD 40,000. The county council was responsible for 59% of the direct costs during 1 year after a hip fracture, while the remaining 41% were referred to the municipality. In the morbidity group, the potential cost savings per patient from preventing hip fractures was about USD 22,000.

Journal ArticleDOI
TL;DR: The actual and potential role of economic evaluation in different drug pricing and reimbursement schemes, such as 'free pricing' systems, two-stage administered systems, reference pricing systems, and economic evaluation systems are reviewed.

Journal ArticleDOI
TL;DR: In this article, the authors estimate the value of a blip, i.e. an immediate small reduction in the hazard rate for a random sample of Swedes, and show that the value exhibits an inverted-U shape with respect to age, peaking at the age of 40, and lies within the $3 to $7 million interval where most reasonable estimates are clustered according to Viscusi's survey.
Abstract: We estimate the value of a ‘blip’, i.e. an immediate small reduction, in the hazard rate for a random sample of Swedes. Since the risk reduction is age-independent (2 ‘extra saved lives’ out of 10,000 during the next year), we can examine how the value of a statistical life varies with age. We also show how blip data can be used to obtain a lower bound for the value of a permanent change in an individual's hazard rate. The value of a life exhibits an inverted-U shape with respect to age, peaking at the age of 40, and lies within the $3 to $7 million interval where most reasonable estimates are clustered according to Viscusi's (1992) survey.

Journal ArticleDOI
TL;DR: In this paper, the authors provide a framework for understanding the lingering problem of soft budget constraints in many transition economies even after the macroeconomic situation has been stabilized and a sound banking system has been introduced.

Journal ArticleDOI
TL;DR: In this article, the authors examine rights issues on the Oslo Stock Exchange, where seasoned public offerings now take place almost exclusively through use of the relatively expensive standby underwriting method rather than unsinsured rights.

Journal ArticleDOI
TL;DR: Bergloof as discussed by the authors argues that reform efforts should not interfere with specific ownership and control structures, and that reform is best handled at the level of individual member states and not at the European Union level.
Abstract: Boardrooms Reforming corporate governance in Europe Corporate governance reform is in the air. This article warns against partial and hastily conceived interventions in complex and fragile governance arrangements. Reformers should step back and analyse the fundamental links between corporate law and corporate finance, and between corporate governance and the rest of the economic and legal system. Reform efforts should not meddle with specific ownership and control structures. Specific problems like the poor liquidity of particular stock markets and poor protection of minority shareholders in some countries should be addressed directly. Fundamental reform of corporate governance is probably desirable in certain countries, but will require far-reaching and country-specific changes in the economic system. Reform is thus best handled at the level of individual member states. Initiatives to harmonize the structure and control of corporations at the European Union level are bound to fail, and the prospects for specific proposals like the European company statute are bleak at best. A European Commission ‘Corporate Governance Policy’ should focus on promoting transparency and the dissemination of information. — Erik Bergloof

Journal ArticleDOI
TL;DR: A highly significant correlation is found between the quality of life a person expects to achieve at an advanced age and the insurance premium a person is willing to pay in exchange for a programme increasing the expected length of life by one year.

Journal ArticleDOI
TL;DR: The implications of the lean enterprise framework for the smaller firm can be summarized in three basic ideas as mentioned in this paper : building a larger and more comprehensive offer through partnerships, which has a potential to offer comparatively significant advantages.
Abstract: Addresses the question of whether the lean enterprise concept is applicable to small and medium‐sized firms. The implications of the lean enterprise framework for the smaller firm can be summarized in three basic ideas. First, building a larger and more comprehensive offer through partnerships, which has a potential to offer comparatively significant advantages. Second, building unique competence through collaboration with smaller and focused businesses. Third, avoiding large geographical distances when collaborating in more advanced knowledge areas and paying attention to the amount of corporate management capacity that can be occupied by global networking issues.

Journal ArticleDOI
01 Oct 1997-BJUI
TL;DR: Quality of life was significantly related to the severity of the symptoms and was worse than that of the sex- and age-matched general Swedish population and the initial number of micturitions and leakages, and income.
Abstract: Objective To measure the willingness to pay for a reduction in the number of micturitions and urinary leakages for patients with urge incontinence Patients and methods A self-administered questionnaire with a binary willingness-to-pay question was administered to 541 patients in Sweden with urge or mixed incontinence; 461 questionnaires were returned The reduction in micturitions and urinary leakages valued in the willingness-to-pay question was varied randomly between 25% and 50% in two different subsamples Information was also collected about the number of micturitions and urinary leakages, health-related quality of life and socio-economic characteristics of the patients in the study Results Quality of life was significantly related to the severity of the symptoms and was worse than that of the sex- and age-matched general Swedish population The median (mean) willingness to pay per month was 240 (530) Swedish krona (SEK, £1=SEK 1150) for a 25% reduction in micturitions and leakages and SEK 470 (1030) for a 50% reduction in micturitions and leakages As hypothesized, the willingness to pay was significantly related to the size of the reduction in micturitions and leakages, the initial number of micturitions and leakages, and income Conclusions Patients with incontinence problems are willing to pay substantial amounts for a reduction in the number of micturitions and leakages

Journal ArticleDOI
TL;DR: In this paper, the evolutionary foundations of bilateral bargaining behavior are examined, in the sense that agents may recognize each others' bargaining strategies, and the unique outcome is an equal split.
Abstract: The paper examines the evolutionary foundations of bilateral bargaining behavior. Interaction is assumed to be personal, in the sense that agents may recognize each others' bargaining strategies. In particular, the model allows interaction between "obstinate" agents, whose demands are independent of the opponent, and "sophisticated" agents, who adapt to their opponent's expected play. When the pie's size is certain, evolution favors obstinate agents who insist on getting at least half the pie. The unique outcome is an equal split. In sufficiently noisy environments, sophisticated behavior appears in equilibrium together with greedy obstinate behavior. There is then a positive probability of conflict.

Journal ArticleDOI
TL;DR: In this article, the authors present the costs and benefits from reductions in the loads of nitrogen and phosphorus to the Baltic Sea, and show that the benefits of a 50% reduction in the load of nitrogen are about as large as the associated total costs.

Journal ArticleDOI
TL;DR: The authors conclude that the total resource consequences of changes in mortality should be routinely considered in cost-effectiveness analyses.
Abstract: It has been shown that the difference between consumption and production during life years gained should be included as a cost in cost-effectiveness analysis. In this study the authors estimate the impact of including these future costs on the cost-effectiveness of the treatment of hypertension in Sweden. The cost per quality-adjusted life year (QALY) gained changes little among young men and women due to the addition of future costs, but increases by about $14,000 for middle-aged men and women and about $27,000 for older men and women. When future costs are not included, the cost per QALY gained is generally lowest among older men and women, but when future costs are included, the cost per QALY gained is generally lowest among middle-aged men and women. The authors conclude that the total resource consequences of changes in mortality should be routinely considered in cost-effectiveness analyses.

Journal ArticleDOI
TL;DR: The gain in quality of life due to hormone replacement therapy for women with mild and severe menopausal symptoms is measured.