Maximising the economic and social impact of Six Sigma

This paper reports on how Six Sigma training can be made more effective. The research is empirically based. To date it has engaged with over 100 respondents from 60 different organisations around the world. The questionnaire has been derived from leading refereed sources and expert practitioner experience and addresses both success factor and tools issues from three perspectives: (i) academic, (ii) training, and (iii) practice to help maximise economic and social impact of programmes. This topic is important because the popularity of Six Sigma adoption in organisations has grown dramatically over recent years. This is probably because many accounts of great cost savings and quality improvements have been published by major international companies. However, other companies striving to emulate this success are finding that effective implementation needs experienced and well trained individuals. To date, there have been few such surveys and this work-in-progress benchmarking study provides unique insight.

Empirical analysis of human capital development and economic growth in Europe

Recent discussion of the knowledge-based economy draws increasingly attention to the role that the creation and management of knowledge plays in economic development. Development of human capital, the principal mechanism for knowledge creation and management, becomes a central issue for policy-makers and practitioners at the regional, as well as national, level. Facing competition both within and across nations, regional policy-makers view human capital development as a key to strengthening the positions of their economies in the global market. Against this background, the aim of this study is to go some way towards answering the question of whether, and how, investment in education and vocational training at regional level provides these territorial units with comparative advantages. The study reviews literature in economics and economic geography on economic growth (Chapter 2). In growth model literature, human capital has gained increased recognition as a key production factor along with physical capital and labour. Although leaving technical progress as an exogenous factor, neoclassical Solow-Swan models have improved their estimates through the inclusion of human capital. In contrast, endogenous growth models place investment in research at centre stage in accounting for technical progress. As a result, they often focus upon research workers, who embody high-order human capital, as a key variable in their framework. An issue of discussion is how human capital facilitates economic growth: is it the level of its stock or its accumulation that influences the rate of growth? In addition, these economic models are criticised in economic geography literature for their failure to consider spatial aspects of economic development, and particularly for their lack of attention to tacit knowledge and urban environments that facilitate the exchange of such knowledge. Our empirical analysis of European regions (Chapter 3) shows that investment by individuals in human capital formation has distinct patterns. Those regions with a higher level of investment in tertiary education tend to have a larger concentration of information and communication technology (ICT) sectors (including provision of ICT services and manufacture of ICT devices and equipment) and research functions. Not surprisingly, regions with major metropolitan areas where higher education institutions are located show a high enrolment rate for tertiary education, suggesting a possible link to the demand from high-order corporate functions located there. Furthermore, the rate of human capital development (at the level of vocational type of upper secondary education) appears to have significant association with the level of entrepreneurship in emerging industries such as ICT-related services and ICT manufacturing, whereas such association is not found with traditional manufacturing industries. In general, a high level of investment by individuals in tertiary education is found in those regions that accommodate high-tech industries and high-order corporate functions such as research and development (R&D). These functions are supported through the urban infrastructure and public science base, facilitating exchange of tacit knowledge. They also enjoy a low unemployment rate. However, the existing stock of human and physical capital in those regions with a high level of urban infrastructure does not lead to a high rate of economic growth. Our empirical analysis demonstrates that the rate of economic growth is determined by the accumulation of human and physical capital, not by level of their existing stocks. We found no significant effects of scale that would favour those regions with a larger stock of human capital. The primary policy implication of our study is that, in order to facilitate economic growth, education and training need to supply human capital at a faster pace than simply replenishing it as it disappears from the labour market. Given the significant impact of high-order human capital (such as business R&D staff in our case study) as well as the increasingly fast pace of technological change that makes human capital obsolete, a concerted effort needs to be made to facilitate its continuous development.

Economic performance in European telecommunications, 1978-1998:a comparative study

The European telecommunications sector is undergoing major structural change in the face of new technology, privatisation and European Commission directives requiring market liberalisation. This study considers the comparative performance of the major European telecommunications operators between 1978 and 1998. This period encompasses an era of state monopolies, market liberalisation initiatives and a number of privatisations. The objectives are to assess: the extent so far to which market liberalisation and privatisation have impacted on the efficiency with which telecommunications services are provided in Europe; and changes in the performance of the different telecommunications operators over time with a view to providing an insight into the comparative efficiency performance of the different telecommunications operators in Europe. Performance is measured in terms of profit margins and labour and total factor productivity.

The impact of the post-1993 economic reforms on Chinese state-owned enterprises:evidence from the electronics industry

Since 1979, China has embarked on a series of economic reform programmes, leading its socialist economy away from a Soviet planning model towards a much greater reliance on the market. In the course of the last twenty years, the Chinese economy has enjoyed a phenomenally high economic growth rate. However, earlier research suggests that Chinese state-owned enterprises remain a financial 'black hole' for the Chinese economy, in spite of various enterprise reform measures. This thesis tries to assess the impact of the reforms after 1993, especially the so-called Modern Enterprise System, on the behaviour and management practices of state firms. The central research question is whether the new rounds of economic reform have changed state firms into commercial entities operating according to market signals, as intended. In order to explore this question, an institutional approach is employed. More specifically, the thesis examines how the behaviour and management practices of state enterprises have changed with changes in the institutional environmental resulting from the introduction of new reform measures and especially the MES. The main evidence used in this research comes from the Chinese electronics industry (CEI). Non-state firms, namely collectives and joint ventures, are involved in the study to provide a benchmark against which changes in the behaviour of state firms in the mid and late 1990s are compared. A comparative statistical analysis shows that state-owned firms, both traditional and corporatised ones, still lag behind collectives and joint ventures in terms of both labour and total factor productivity. The further empirical work of this research consists of a questionnaire survey and case studies that are based on interviews with senior managers of 17 firms in the CEI. The findings of these analyses suggest that there has been little fundamental change in the behaviour pattern of state firms in the 1990s, despite the introduction of the Modern Enterprise System, and that the economic reforms after 1993 so far seem to have failed to transform the state firms into commercial entities operating according to market signals.

Openness and economic growth

The themes of this thesis are that international trade and foreign direct investment (FDI) are closely related and that they have varying impacts on economic growth in countries at different stages of development. The thesis consists of three empirical studies. The first one examines the causal relationship between FDI and trade in China. The empirical study is based on a panel of bilateral data for China and 19 home countries/regions over the period 1984-98. The specific feature of the study is that econometric techniques designed specially for panel data are applied to test for unit roots and causality. The results indicate a virtuous procedure of development for China. The growth of China’s imports causes growth in inward FDI from a home country/region, which in turn causes the growth of exports from China to the home country/region. The growth of exports causes the growth of imports. This virtuous procedure is the result of China’s policy of opening to the outside world. China has been encouraging export-oriented FDI and reducing trade barriers. Such policy instruments should be further encouraged in order to enhance economic growth. In the second study, an extended gravity model is constructed to identify the main causes of recent trade growth in OECD countries. The specific features include (a) the explicit introduction of R&D and FDI as two important explanatory variables into an augmented gravity equation; (b) the adoption of a panel data approach, and (c) the careful treatment of endogeneity. The main findings are that the levels and similarities of market size, domestic R&D stock and inward FDI stock are positively related to the volume of bilateral trade, while the geographical distance, exchange rate and relative factor endowments, has a negative impact. These findings lend support to new trade, FDI and economic growth theories. The third study evaluates the impact of openness on growth in different country groups. This research distinguishes itself from many existing studies in three aspects: first, both trade and FDI are included in the measurement of openness. Second, countries are divided' into three groups according to their development stages to compare the roles of FDI and trade in different groups. Third, the possible problems of endogeneity and multicollinearity of FDI and trade are carefully dealt with in a panel data setting. The main findings are that FDI and trade are both beneficial to a country's development. However, trade has positive effects on growth in all country groups but FDI has positive effects on growth only in the country groups which have had moderate development. The findings suggest FDI and trade may affect growth under different conditions.

Economic transition in Central Europe and the Commonwealth of Independent States

Fifteen years ago, twenty-seven countries in Europe and Central Asia embarked on their economic transition paths. For some, the outcome was a considerable success. Several others are still struggling to shed the inheritance of the past and to correct more recent policy mistakes. Why were post-Communist recessions so long in some countries and growth disappointing? Why was fiscal performance so different? Was democracy a factor, which facilitated reforms or rather slowed them down? This book discusses these questions in the context of new empirical evidence, including a critical examination of the main themes in the economics of transition.

Absorptive capability and economic growth:how do countries catch-up?

This paper investigates empirically the importance of technological catch-up in explaining productivity growth in a sample of countries since the 1960s. New proxies for a country's absorptive capability—based on data for students studying abroad, telecommunications and publications—are tested in regression models. The results indicate that absorptive capability is a factor in explaining growth, with the most robust finding that countries with relatively high numbers of students studying science or engineering abroad experience faster subsequent growth. However, the paper also indicates that the significance of coefficients varies across specifications and samples, suggesting caution in focusing on individual results.

A dual definition for the factor content of trade and its effect on factor rewards in US manufacturing sector

We introduce a dual definition of the Factor Content of Trade (FCT) using the concept of the Equivalent Autarky Equilibrium. Estimating a symmetric normalized quadratic revenue function for the U.S. manufacturing sector between 1965 and 1991, we find that the FCT for capital is positive, while the FCT for skilled and unskilled labor is negative, suggesting that the Leontief Paradox is not present. Then the growth rate of the factor rewards is decomposed to the FCT, endowments, and technological change effects. We find that technological change is the most important determinant in explaining wage inequality between skilled and unskilled labor.

A gazdaságpolitikai döntéshozatal nemzetek fölötti centralizációja és a közösségi gazdaságtan. Az adóverseny elméletének néhány tanulsága (Supranational centralization of economic policy-making and community economics: some lessons from the theory of tax competition)

Mennyiben képes jelenleg a közösségi gazdaságtan az adópolitikák nemzetek fölötti centralizációjára vonatkozó politikai döntések megalapozására? Válaszunk röviden az lesz, hogy a közösségi gazdaságtan főárama - noha számos releváns gazdasági és politikai tényező hatását sikeresen elemzi - jelenleg nem kínál kielégítőnek tekinthető döntési kritériumokat a döntéshozók számára. Ennek oka, hogy központi szerepet játszik benne egy, a modellek szempontjából exogén és a közgazdasági elmélettől idegen tényező: a kormányzatok jóindulatára, pontosabban annak mértékére vonatkozó premissza. Tanulmányunk az adóverseny fiskális föderalista elméletét vizsgálja, és megpróbál általánosabb szinten is a közszektor gazdaságelméletének jelenlegi állapotára, valamint továbbfejlesztésére vonatkozó tanulságokat levonni. A kiutat az elméleti zsákutcából a kormányzati működés és döntéshozatal, valamint a kívánatos gazdaságpolitikai döntések elméletének összekapcsolása jelentheti. Erre megtörténtek az első kísérletek, de a szisztematikus és átfogó elemzés egyelőre várat magára. / === / How far can community economics provide a basis for political decision-making on supranational centralization of taxation policies? The short answer here will be that although the mainstream of community economics succeeds in analysing many relevant economic and political factors, it fails at present to provide satisfactory criteria for decisionmakers. This is because a central role is played in it by a factor exogenous to the models and alien to economic theory: the premise of the measure of goodwill from governments. The study examines the fiscal federalist theory of tax competition. It tries to draw conclusions, on a more general level, about the present state of the economic theory of the public sector and future development of it. The way out of the theoretical blind alley could be to link the theories of government operation and decision-making and of desirable economic-policy decision-making. The first attempts to do so have been made, but a systematic and comprehensive analysis is still awaited.

A vállalati informatika szerepe a versenyképesség alakításában a pénzügyi és gazdasági válság időszakában (Corporate IT in shaping the competitiveness of the Hungarian enterprises in the financial and economic crisis)

A cikk az informatika és a versenyképesség kapcsolatát vizsgálja. A Budapesti Corvinus Egyetem Versenyképesség Kutatási Programjának korábbi felmérései óta számos új technológia bukkant fel, illetve hazánkat is elérte a világméretű pénzügyi és gazdasági válság hatása. E kihívások tükrében érdemesnek tűnt újra megvizsgálni az információtechnológia (IT) szerepét a versenyképesség alakításában. / === / In this paper the relationship between information technology (IT) and competitiveness is tackled. Since the authors’ previous surveys within their Competitiveness Research Program several new technologies have emerged, and the influence of the word wide financial and economic crisis has reached Hungary as well. In the face of these challenges it is worth reexamining the role of IT in shaping the competitive position of companies. The structure of the paper is as follows. A brief theoretical introduction is provided before their research questionsare presented. After that, the paper contains an analysis on selected fields of the corporate IT function, namely IT infrastructure, IT applications, IT management and IT strategy. Based on this, conclusions are made both at the end of the main parts, and in the final section of the paper. As far as the final conclusions are concerned, the majority of respondents do not regard IT today as a source of sustainable or contestable competitive advantage, though the dominant opinion underlines that IT is a strategic necessity. Besides this, their research results suggest a kind of association between corporate performance and the maturity level of the IT function. However, even the best performing companies are not prepared yet to effectively respond to their own prediction that forecasts the strengthening role of IT as a competitive factor.

The economic approach of advertising and the problem of allocating advertising budgets during a recession

The importance of advertising has changed in many aspects in the last decade, and mainly during the last years of the economic crisis. Economics traditionally did not find advertising a valuable factor until empirical studies demonstrated that advertisement affects consumer perception by means of indicating the quality of the underlying product. Consequently, products that are advertised more frequently, are more likely to be associated with a higher quality. Nevertheless, advertising is a strong tool in competition, which statement is confirmed by the recognition that increasing consumer knowledge contributes to the diffusion of innovation and to the reduction of research and development (R&D) costs. This contribution can be achieved nowadays by consumer interactivity, where companies deliberately rely on the involvement of their consumers. Recently, when companies were confronted to the global economic crisis, brand managers realized that allocating advertising budgets in a recession (considering the actual state of the economic conditions) is a highly important decision factor beside competition, consumer behaviour, trends or industrial conditions. Companies have to realize that their communication budgets are planned substantially in a different way in times of crisis than during an upsurge. Moreover, should a company make the best of maintaining their advertising budgets in recession times, it will indicate more trust towards their consumers and show a more favorable image towards their investors. This study assembles different approaches from the economics of advertising to draw conclusions for the subsequent analyses of advertising in times of a crisis. The main objective with the literature review is to show, that pro-cyclical actions (reducing advertising budgets in times of crisis and overspending during upsurge) of companies can lead to problems of profitability, consumer trust and competitiveness in the long run.

Economic reform, allocative effiency and terms of trade

It has widely been agreed that the distorted price system is one of the causes of inefficient ecooomic decisions in centrally planned economies. The paper investigates the possible effect of a price reform on the allocation of resources in a situation where micro-efficiency remains unchanged. Foreign trade and endogenously induced terms-of-trade changes are focal points ín the multisectoral applied general equilibrium analysis. Special attention is paid to some methodological problems connected to the representation of foreign trade in such models. The adoption of Armington's assumption leads to an export demand function and this in turn gives rise to the question of optimal export structure, different from the equilibrium one-an aspect so far neglected in the related literature. The results show, that the applied model allows for a more flexible handling of the overspecialization problem, than the linear programming models. It also becomes evident that the use of export demand functions brings unwanted terms-of-trade changes into the model, to be avoided by a suitable reformulation of the model. The analysis also suggests, that a price reform alone does not significantly increase global economic efficiency. Thus the effect of an economic reform on micro-efficiency appears to be a more crucial factor. The author raises in conclusion some rather general questions related to the foreign trade practice of small open economies.

Constructing threat: How Americans identify economic competitors

China's emergence as an economic powerhouse has often been portrayed as threatening to America's economic strength and to its very identity as "the global hegemon." The media's alarmist response to an economic competitor is familiar to those who remember US-Japanese relations in the 1980s. In order to better understand the basis of American threat perception, this study explores the independent and interactive impact of three variables (perceptions of the Other's capabilities, perceptions of the Other as a threat versus as an opportunity, and perceptions of the Other's political culture) on attitudes toward two different economic competitors (Japan 1977-1995 and China 1985-2011). Utilizing four methods (historical process tracing, public polling data analysis, social scientific experimentation, and content analysis), this study demonstrates that increases in the Other's economic capabilities have a much smaller impact on attitudes than is commonly believed. It further shows that while perceptions of threat/opportunity played a significant role in shaping attitudinal response toward Japan, perceptions of political culture are the most important factor driving attitudes toward China today. This study contributes to a better understanding of how states react to threats and construct negative images of their economic rivals. It also helps to explain the current Sino-American relationship and enables better predictions as to its potential future course. Finally, these findings contribute to cultural explanations of the democratic peace phenomenon and provide a boundary condition (political culture) for the liberal proposition that opportunity ameliorates conflict in the economic realm.^

Measured parental weight status and familial socio-economic status correlates with childhood overweight and obesity at age 9

Background: Parental obesity is a predominant risk factor for childhood obesity. Family factors including socio-economic status (SES) play a role in determining parent weight. It is essential to unpick how shared family factors impact on child weight. This study aims to investigate the association between measured parent weight status, familial socio-economic factors and the risk of childhood obesity at age 9. Methodology/Principal Findings: Cross sectional analysis of the first wave (2008) of the Growing Up in Ireland (GUI) study. GUI is a nationally representative study of 9-year-old children (N = 8,568). Schools were selected from the national total (response rate 82%) and age eligible children (response rate 57%) were invited to participate. Children and their parents had height and weight measurements taken using standard methods. Data were reweighted to account for the sampling design. Childhood overweight and obesity prevalence were calculated using International Obesity Taskforce definitions. Multinomial logistic regression examined the association between parent weight status, indicators of SES and child weight. Overall, 25% of children were either overweight (19.3%) or obese (6.6%). Parental obesity was a significant predictor of child obesity. Of children with normal weight parents, 14.4% were overweight or obese whereas 46.2% of children with obese parents were overweight or obese. Maternal education and household class were more consistently associated with a child being in a higher body mass index category than household income. Adjusted regression indicated that female gender, one parent family type, lower maternal education, lower household class and a heavier parent weight status significantly increased the odds of childhood obesity. Conclusions/Significance: Parental weight appears to be the most influential factor driving the childhood obesity epidemic in Ireland and is an independent predictor of child obesity across SES groups. Due to the high prevalence of obesity in parents and children, population based interventions are required.

Projecting the fate of fish populations using ecological-economic modeling

Four marine fish species are among the most important on the world market: cod, salmon, tuna, and sea bass. While the supply of North American and European markets for two of these species - Atlantic salmon and European sea bass - mainly comes from fish farming, Atlantic cod and tunas are mainly caught from wild stocks. We address the question what will be the status of these wild stocks in the midterm future, in the year 2048, to be specific. Whereas the effects of climate change and ecological driving forces on fish stocks have already gained much attention, our prime interest is in studying the effects of changing economic drivers, as well as the impact of variable management effectiveness. Using a process-based ecological-economic multispecies optimization model, we assess the future stock status under different scenarios of change. We simulate (i) technological progress in fishing, (ii) increasing demand for fish, and (iii) increasing supply of farmed fish, as well as the interplay of these driving forces under different sce- narios of (limited) fishery management effectiveness. We find that economic change has a substantial effect on fish populations. Increasing aquaculture production can dampen the fishing pressure on wild stocks, but this effect is likely to be overwhelmed by increasing demand and technological progress, both increasing fishing pressure. The only solution to avoid collapse of the majority of stocks is institutional change to improve management effectiveness significantly above the current state. We conclude that full recognition of economic drivers of change will be needed to successfully develop an integrated ecosystem management and to sustain the wild fish stocks until 2048 and beyond.