The determinants of the vertical boundaries of the construction firm

In the last few years, transaction cost economics has become a popular theory within the construction research community. This approach has been singularly applied as a means to explain and predict phenomena concerning the construction firm, including its vertical boundaries. However, this is at a time when the chief proponents of transaction costs are urging researchers to take a pluralistic stance in relation to the theory of the firm. The aim of this paper is to develop a pluralistic approach to the vertical boundaries of the construction firm. In order to achieve this, an integrative framework is described, based on the development of the efficient boundaries problem and the capabilities approach to vertical integration. Specifically, this framework draws on the complementary strengths of transaction cost economics and the resource-based view. It is concluded that the potential relative merits of theoretical pluralism, in terms of the vertical boundaries of the construction firm, are sufficient grounds to motivate empirical testing of the predictions associated with the integrative framework of vertical integration presented

A theory for optimal monitoring of marine reserves

Monitoring of marine reserves has traditionally focused on the task of rejecting the null hypothesis that marine reserves have no impact on the population and community structure of harvested populations. We consider the role of monitoring of marine reserves to gain information needed for management decisions. In particular we use a decision theoretic framework to answer the question: how long should we monitor the recovery of an over-fished stock to determine the fraction of that stock to reserve? This exposes a natural tension between the cost (in terms of time and money) of additional monitoring, and the benefit of more accurately parameterizing a population model for the stock, that in turn leads to a better decision about the optimal size for the reserve with respect to harvesting. We found that the optimal monitoring time frame is rarely more than 5 years. A higher economic discount rate decreased the optimal monitoring time frame, making the expected benefit of more certainty about parameters in the system negligible compared with the expected gain from earlier exploitation.

Developing foreign bank efficiency models for DEA grounded in finance theory

We develop foreign bank technical, cost and profit efficiency models for particular application with data envelopment analysis (DEA). Key motivations for the paper are (a) the often-observed practice of choosing inputs and outputs where the selection process is poorly explained and linkages to theory are unclear, and (b) foreign bank productivity analysis, which has been neglected in DEA banking literature. The main aim is to demonstrate a process grounded in finance and banking theories for developing bank efficiency models, which can bring comparability and direction to empirical productivity studies. We expect this paper to foster empirical bank productivity studies.

Cost-benefit analyses for your group and yourself: The rationality of decision-making in conflict

Two studies in the context of English-French relations in Québec suggest that individuals who strongly identify with a group derive the individual-level costs and benefits that drive expectancy-value processes (rational decision-making) from group-level costs and benefits. In Study 1, high identifiers linked group- and individual-level outcomes of conflict choices whereas low identifiers did not. Group-level expectancy-value processes, in Study 2, mediated the relationship between social identity and perceptions that collective action benefits the individual actor and between social identity and intentions to act. These findings suggest the rational underpinnings of identity-driven political behavior, a relationship sometimes obscured in intergroup theory that focuses on cognitive processes of self-stereotyping. But the results also challenge the view that individuals' cost-benefit analyses are independent of identity processes. The findings suggest the importance of modeling the relationship of group and individual levels of expectancy-value processes as both hierarchical and contingent on social identity processes

Reweaving the Silk Road through outsourcing and offshoring: The need for an externalisation theory

The reweaving and repaving of the modern Silk Road passes through outsourcing and offshoring activities that have a profound impact on both global business psyche and landscape. Firms, in particular, and their global value chain are being shaped and reshaped through a complex concoction of vertical integration and disintegration. The boundary of the firm and the firm/market interface has been of interest to students of organisation and economics for some time. It has provided the context for Internalisation Theory. Within the new economy, the twin trends of globalisation and advancing technologies are giving rise to a hitherto unknown “worldwide market for market transactions? and increased opportunities for international expansion by firms via market-based modes of organisation. We describe these trends and offer an early modeling approach for explaining why some firm’s externalise the marginal transaction in the so-called new economy. The paper further draws attention on the need to articulate an “Externalisation Theory? that adequately accounts for the firm’s offshoring and outsourcing activities, and that parallels as well as complement “Internalisation Theory? for a full explanation of today’s firms behaviour.