Industrial organisation

Gabriel Ahlfeldt, Nancy Holman, 24 September 2016

Good architectural design is a public good, but economists and policymakers lack robust evidence on the impact of well designed architecture on location value when planning spaces. This column verifies the worth of preserving and designing good architectural spaces by analysing the changes in property prices across conservation and non-conservation areas in England. It finds that good design in buildings has a substantial positive impact on location value. 

Alex Edmans, 23 September 2016

During political campaigns, candidates often set their sights on CEO compensation as a target for potential regulation. This column considers the various arguments for regulating CEO pay and questions whether it is a legitimate target for political intervention. Some arguments for regulation are shown to be erroneous, and some previous interventions are shown to have failed. While regulation can address the symptoms, only independent boards and large shareholders can solve the underlying problems.

Ralph De Haas, Steven Poelhekke, 22 September 2016

The extraordinary expansion in global mining activity over the last two decades, and its increasing concentration in emerging markets, has reignited the debate over the impact of mining on local economic activity. This column analyses how the presence of nearby mines influences firms in eight countries with large manufacturing and mining sectors. Mines are found to out-compete local manufacturing firms for inputs, labour, and infrastructure. However, mining activity is found to improve the business environment on a wider geographic scale.

Dalia Marin , Linda Fache Rousová, Thierry Verdier, 21 September 2016

We know little detail about how much multinational firms transplant their organisational culture to affiliates. Data from Austrian and German multinational firms shows that, contrary to what we might expect, almost 70% of foreign investments do not adopt the parent firm's mode of organisation. This column argues that the size of the home and host markets, and the level of competition in each market, all influence the decision to transplant culture. Globalisation also creates 'reverse transplanting', in which the parent firm's organisation becomes more like the optimal organisation of the subsidiary. 

Benny Moldovanu, Axel Ockenfels, 14 September 2016

Reinhard Selten, co-recipient of the 1994 Nobel Memorial Prize in Economic Sciences, passed away in August. This column outlines the intellectual life and career of a pioneering analyst of strategic interaction of both fully rational players (game theory) and real human beings with ‘bounded rationality’ (experimental economics). Selten called himself a ‘methodological dualist’, making a sharp distinction between normative game theory and descriptive theories of social and economic interaction. Nobody else has made such substantial and important contributions to both lines of research.

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