Showing papers by "Stockholm School of Economics published in 2000"

Factors in risk perception

Abstract: Risk perception is a phenomenon in search of an explanation. Several approaches are discussed in this paper. Technical risk estimates are sometimes a potent factor in accounting for perceived risk, but in many important applications it is not. Heuristics and biases, mainly availability, account for only a minor portion of risk perception, and media contents have not been clearly implicated in risk perception. The psychometric model is probably the leading contender in the field, but its explanatory value is only around 20% of the variance of raw data. Adding a factor of "unnatural risk" considerably improves the psychometric model. Cultural Theory, on the other hand, has not been able to explain more than 5-10% of the variance of perceived risk, and other value scales have similarly failed. A model is proposed in which attitude, risk sensitivity, and specific fear are used as explanatory variables; this model seems to explain well over 30-40% of the variance and is thus more promising than previous approaches. The model offers a different type of psychological explanation of risk perception, and it has many implications, e.g., a different approach to the relationship between attitude and perceived risk, as compared with the usual cognitive analysis of attitude.

Understanding Human Competence at Work: An Interpretative Approach

Abstract: In the prevalent rationalistic approaches, human competence at work is seen as constituted by a specific set of attributes, such as the knowledge and skills used in performing particular work. As a...

Long-Term Risk of Osteoporotic Fracture in Malmö

Abstract: The objectives of the present study were to estimate long-term risks of osteoporotic fractures. The incidence of hip, distal forearm, proximal humerus and vertebral fracture were obtained from patient records in Malmo, Sweden. Vertebral fractures were confined to those coming to clinical attention, either as an inpatient or an outpatient case. Patient records were examined to exclude individuals with prior fractures at the same site. Future mortality rates were computed for each year of age from Poisson models using the Swedish Patient Register and the Statistical Year Book. The incidence and lifetime risk of any fracture were determined from the proportion of individuals fracture-free from the age of 45 years. Lifetime risk of shoulder, forearm, hip and spine fracture were 13.3%, 21.5%, 23.3% and 15.4% respectively in women at the age of 45 years. Corresponding values for men at the age of 45 years were 4.4%, 5.2%, 11.2% and 8.6%. The risk of any of these fractures was 47.3% and 23.8% in women and men respectively. Remaining lifetime risk was stable with age for hip fracture, but decreased by 20-30% by the age of 70 years in the case of other fractures. Ten and 15 year risks for all types of fractures increased with age until the age of 80 years, when they approached lifetime risks because of the competing probabilities of fracture and death. We conclude that fractures of the hip and spine carry higher risks than fractures at other sites, and that lifetime risks of fracture of the hip in particular have been underestimated.

Managing the Post-acquisition Integration Process: How the Human Iintegration and Task Integration Processes Interact to Foster Value Creation

Abstract: The paper reports a study of the post-acquisition integration process in three foreign acquisitions made by Swedish multinationals. Detailed interview data and questionnaire responses in both acquiring and acquired firms are presented. The sub-processes of task integration and human integration are separated out and it is shown that effective integration in these cases was achieved through a two-phase process. In phase one, task integration led to a satisficing solution that limited the interaction between acquired and acquiring units, while human integration proceeded smoothly and led to cultural convergence and mutual respect. In phase two, there was renewed task integration built on the success of the human integration that had been achieved, which led to much greater interdependencies between acquired and acquiring units.

Constructing Organizations: The Example of Public Sector Reform

Abstract: Organizations are socially constructed phenomena. A crucial task for organizational research is to analyze how and why people construct organizations rather than other social forms. In this paper, it is argued that recent public-sector reforms can be interpreted as attempts at constructing organizations. Public-sector entities that could formerly be described as agents or arenas have been transformed into `more complete' organizations by installing or reinforcing local identity, hierarchy and rationality. This interpretation helps to explain important aspects of the reform process.

Tax policy and aggregate demand management under catching up with the Joneses

Abstract: This paper examines the role for tax policies in productivity-shock driven economies with catching-up-with-the-Joneses utility functions. The optimal tax policy is shown to affect the economy countercyclically via procyclical taxes, i.e., "cooling down" the economy with higher taxes when it is "overheating" in booms and "stimulating" the economy with lower taxes in recessions to keep consumption up. Thus, models with catching-up-with-the-Joneses utility functions call for traditional Keynesian demand-management policies but for rather unorthodox reasons.

Testing the Female Underperformance Hypothesis

Abstract: Most previous studies have found evidence at the aggregate level that female entrepreneurs underperform relative to their male counterparts. This study conducts a comprehensive test of this finding. The test is conducted on a large Swedish sample of 4200 entrepreneurs (405 females) with 1 to 20 employees in all sectors of the economy. Our study confirms the results of several previous studies that female entrepreneurs tend to underperform relative to men when the data is examined at the most aggregate level. At the same time our data reveals sharp structural differences between male and female entrepreneurs. In an extensive multi-variate regression with a large number of controls it turns out that female underperformance disappears for three out of four performance variables. The only exception is sales. No gender difference is found for profitability. A more detailed analysis reveals that the evidence of female underperformance is much weaker in larger firms and nonexistent in firms with only one employee. If it is true that female entrepreneurs on average have weaker preferences for sales growth, while we consistently find that they do not underperform in terms of profitability, our study provides no support for female underperformance given differences in preferences.

Cultural variation of leadership prototypes across 22 European countries

Abstract: This study sets out to test the assumption that concepts of leadership differ as a function of cultural differences in Europe and to identify dimensions which describe differences in leadership concepts across European countries. Middle-level managers (N = 6052) from 22 European countries rated 112 questionnaire items containing descriptions of leadership traits and behaviours. For each attribute respondents rated how well it fits their concept of an outstanding business leader. The findings support the assumption that leadership concepts are culturally endorsed. Specifically, clusters of European countries which share similar cultural values according to prior cross-cultural research (Ronen & Shenkar, 1985), also share similar leadership concepts. The leadership prototypicality dimensions found are highly correlated with cultural dimensions reported in a comprehensive cross-cultural study of contemporary Europe (Smith, Dugan, & Trompenaars, 1996). The ordering of countries on the leadership dimensions is considered a useful tool with which to model differences between leadership concepts of different cultural origin in Europe. Practical implications for cross-cultural management, both in European and non-European settings, are discussed.

Net National Product, Wealth, and Social Well-Being

Abstract: This paper is about net national product (NNP) We are concerned with what NNP means, what it should include, what it offers us and, therefore, why we may be interested in it We show that NNP, properly defined, can be used to evaluate economic policies, but we also show that it should not be used in any of its more customary roles, such as in making intertemporal and cross-country comparisons of social well-being We develop such indices as would be appropriate for making those comparisons In particular, we show that welfare comparisons should involve comparisons of wealth Writings on the welfare economics of NNP have mostly addressed economies pursuing optimal policies, and are thus of limited use Our analysis generalises this substantially by studying economies whose governments are capable of engaging only in policy reforms We show how linear indices can be used for the evaluation of policy reform even in the presence of non-convexities in the economic environment The analysis pertinent for optimising governments are special limiting cases of the one we developThe literature on green NNP has widely interpreted NNP as ‘constant-equivalent consumption’ We show that this interpretation is wrong It is the Hamiltonian that equals constant-equivalent utility Since both theory and empirics imply that the Hamiltonian is a non-linear function of consumption and leisure, the Hamiltonian should not be confused with NNP

Multinational Corporations and Productivity Convergence in Mexico

Abstract: Since the 1960s the developing countries have had very different experiences regarding income and productivity growth, and the extent to which they have converged on developed countries. Some, such as the Asian newly-industrialized countries (NICs), clearly are in a process of rapid convergence, whereas others, such as most countries in Africa, show no sign of convergence. This indicates that the realization of the potentiality for productivity catch-up simply because of backwardness depends strongly on another set of causes, some of which are internal and others external to the countries themselves (see Abramovitz, 1986).

Definition, interpretation and calculation of cost-effectiveness acceptability curves.

Abstract: This paper discusses the definition, interpretation and computation of cost-effectiveness (CE) acceptability curves. A formal definition of the CE acceptability curve based on the net benefit approach is provided. The curve can be computed using parametric or non-parametric techniques and for both computational approaches we establish a formal relation between the CE acceptability curve and statistical inference based on confidence intervals and P values in CE analysis.

Capital Subsidies and the Performance of Firms

Abstract: In many countries, governments grant different capital subsidies to the business sector in order to promote growth. Also the EU, provides this type of subsidies. As De Long and Summers (1991) suggest there may be market failure justifications for public subsidisation of firms. However, because the use of subsidies may cause problems, it is far from clear how they affect long-run economic growth. This study examines the effects on total factor productivity of public capital subsidies to firms in Sweden between 1987 and 1993. Panel data which distinguish between subsidised and unsubsidised firms in the manufacturing industry are used. The results suggest that subsidisation can influence growth, but there seems to be little evidence that the subsidies have affected productivity.

Performance and Characteristics of Swedish Mutual Funds

Abstract: This paper studies the relation between fund performance and fund attributes in the Swedish market. Performance is measured as the alpha in a linear regression of fund returns on several benchmark assets, allowing for time-varying betas. The estimated performance is then used in a cross-sectional analysis of the relation between performance and fund attributes such as past performance, flows, size, turnover, and proxies for expenses and trading activity. The results show, among other things, that good performance is to be found among small equity funds, low-fee funds, funds whose trading activity is high, and in some cases, funds with good past performance.

On measurement of intangible assets: A study of robustness of partial least squares

Abstract: The customer asset is an important intangible. Its value depends, for example, on the customer satisfaction level. Thus, it is important to monitor that level, and to identify cost-efficient action...

The Long-Run Growth Effects of R&D Subsidies

Abstract: This article presents a generalized versionof Howitt's (1999) model of R&D-driven growth withoutscale effects and a complete characterization of the long-rungrowth effects of R&D subsidies. R&D subsidiescan either promote or retard long-run economic growth, and surprisingly,the growth-retarding outcome occurs for a wide range of plausibleparameter values. This article also presents a new intuitiveexplanation for why R&D subsidies can have long-rungrowth effects (both positive and negative).

The Methodology of Risk Perception Research

Abstract: Risk perception is not strictly a matter ofsensory perception, but of attitudesand expectations. As such, it can be studied byreasonably well developed methods of attitudemeasurement and psychological scaling. Suchmeasurement needs to be applied in a pragmaticfashion, however, since the discussions of fundamentalmeasurement and requirements of scale levelsappropriate for various types of statistical analysis hasfailed in establishing a useful basis for empiricalresearch. The paper also discuses samplingprocedures and the response rateproblem. In risk perception work, there is usually abias involving too many respondents withan above average level ofeducation, but that variable tends to be weaklyrelated to risk perception variables. Finally,post-modern claims and their rejection ofquantitative methods are critically discussed.

Direct medical costs for patients with type 2 diabetes in Sweden

Abstract: OBJECTIVES: To estimate the total direct medical costs to society for patients with type 2 diabetes in Sweden and to investigate how different factors, for example diabetic late complications, affect costs. DESIGN: Cross-sectional data regarding health care utilization, clinical characteristics and quality of life, were collected at a single time-point. Data on resource use cover the 6-month period prior to this time point. SETTING: Patient recruitment and data collection were performed in nine primary care centres in three main regions in Sweden. SUBJECTS: Only patients with an age at diabetes diagnosis >/= 30 years (type 2 diabetes) were included (n = 777). RESULTS: The total annual direct medical costs for the Swedish diabetes type 2 population were estimated at about 7 billion SEK (Swedish Kronor) in 1998 prices, which is about 6% of the total health care expenditures and more than four times higher than the former Swedish estimate obtained when using diabetes as main diagnosis for calculating costs. The annual per patient cost was about 25 000 SEK. The largest share of this cost was hospital inpatient care. Costs increased with diabetes duration and were higher for patients treated with insulin compared to those treated with oral hypoglycaemic drugs or with life style modification only. Patients with both macro- and microvascular complications had more than three times higher costs compared with patients without such complications. CONCLUSIONS: Type 2 diabetes is a serious and expensive disease and the key to reducing costs seems to be intensive management and control in order to prevent and delay the associated late complications. (Less)

Cost-Effectiveness of Pneumococcal Vaccination of Older People: A Study in 5 Western European Countries

Abstract: Pneumococcal vaccination of older persons is thought to be cost-effective in preventing pneumococcal pneumonia, but evidence of clinical protection is uncertain. Because there is better evidence of vaccination effectiveness against invasive pneumococcal disease, we determined the cost-effectiveness of pneumococcal vaccination of persons aged > or =65 years in preventing hospital admission for both invasive pneumococcal disease and pneumococcal pneumonia in 5 western European countries. In the base case analyses, the cost-effectiveness ratios for preventing invasive disease varied from approximately 11,000 to approximately 33,000 European currency units (ecu) per quality-adjusted life year (QALY). Assuming a common incidence (50 cases per 100,000) and mortality rate (20%-40%) for invasive disease, the cost-effectiveness ratios were or =65 years.

The Invincible Character of Management Consulting Rhetoric: How One Blends Incommensurates While Keeping them Apart

Abstract: As experts and fashion setters of the business community, management consultants have a strong position in modern society. We argue that the basis of this position is the size of the rhetorical space of legitimate arguments open to consultants. In legitimating their activities, consultants produce a great array of arguments based on two contradictory myths or master-ideas recurrent in the business discourse—the normative/pragmatic myth and the rationalistic myth. These two myths are in turn viewed as a variation of the deeply institutionalized western dichotomy of nature vs. culture. Although these myths officially are incommensurable, management consultants freely mix arguments based on both myths when translating organizational change. Herein lies the potential invincibility of the consultants' rhetoric—the possibility of transforming that which earlier was treated as `objective' and given into something negotiable and changeable, and vice versa, thereby increasing the possibility of satisfying ever-cha...

Risk of hip fracture derived from relative risks: an analysis applied to the population of Sweden.

Abstract: Bone mineral density measurements are widely used to estimate the relative risk of hip fracture. In addition, many other risk factors have been identified, some of which are known to add to the risk independently of other risk factors, including bone mineral density measurements. In this paper we develop an algorithm that converts relative risks for hip fracture to absolute (15 years and lifetime) risks, modeled on the population of Sweden. Lifetime risks increased as expected with increments in relative risk. Average lifetime risk in women at the age of 50 years was 22.7%, which increased to 64.9% when the relative risk was 6.0. In men the risk increased from 11.1% to 41.3%. The identification of high-risk groups had little effect on the specificity of assessments but increased the sensitivity over a wide range of assumptions. The increment in lifetime risk was relatively stable across all ages, reducing the complexity of computing lifetime risks from relative risk. The derivation of absolute risk from relative risk permits the optimization of selection of individuals or populations either for further risk assessment or for treatment.