Home  About us  Contact
 

Specific Investment (specific + investment)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Selected Abstracts

The Theory of Human Capital Revisited: on the Interaction of General and Specific Investments,

THE ECONOMIC JOURNAL, Issue 514 2006
Anke S. Kessler
Human capital theory distinguishes between training in general-usage and firm-specific skills. Becker (1964) argues that employers will only invest in specific training, not general training, when labour markets are competitive. The article reconsiders Becker's theory. Using essentially his framework, we show that there exists an incentive complementarity between employer-sponsored general and specific training: the possibility to provide specific training leads the employer to invest in general human capital. Conversely, the latter reduces the hold-up problem that arises with firm-specific training. We also consider the desirability of institutionalised training programmes and the virtues of breach penalties, and discuss some empirical facts that could be explained by the theory. [source]

Bargaining, Bonding, and Partial Ownership

INTERNATIONAL ECONOMIC REVIEW, Issue 3 2000
Sudipto Dasgupta
This article provides a theory of interfirm partial ownership. We consider a setting in which an upstream firm can make two alternative types of investment: either specific investment that only a particular downstream firm can use or general investment that any downstream firm is capable of using. When the benefits from specific and general investments are both stochastic, equity participation by the downstream firm in the upstream firm can lead to more efficient outcomes than take-or-pay contracts. The optimal ownership stake of the downstream firm is less than 50 percent under a natural assumption about relative bargaining power. [source]

Does the Competitive Environment Influence the Efficacy of Investments in Environmental Management?

JOURNAL OF SUPPLY CHAIN MANAGEMENT, Issue 3 2004
Mark Pagell
SUMMARY Supply chain managers confront numerous threats and opportunities in today's competitive environment. Firms simultaneously face increased pressure to lower costs and to be innovative. In addition, most firms are also under increased pressure to improve their environmental (ecological) performance. These rival demands from the competitive environment make it difficult for supply chain managers to determine how a specific investment will influence performance. Thus, inevitable tradeoffs among investments must be assessed and implemented. This research examines the efficacy of investments in environmental management in different competitive environments, and provides guidelines for supply chain managers in determining when and how they should respond to simultaneous pressures to improve economic and ecological performance. [source]

A Dynamic Theory of Holdup

ECONOMETRICA, Issue 4 2004
Yeon-Koo Che
The holdup problem arises when parties negotiate to divide the surplus generated by their relationship specific investments. We study this problem in a dynamic model of bargaining and investment which, unlike the stylized static model, allows the parties to continue to invest until they agree on the terms of trade. The investment dynamics overturns the conventional wisdom dramatically. First, the holdup problem need not entail underinvestment when the parties are sufficiently patient. Second, inefficiencies can arise unambiguously in some cases, but they are not caused by the sharing of surplus per se but rather by a failure of an individual rationality constraint. [source]

Severance Payments and Firm,specific Human Capital

LABOUR, Issue 1 2003
Jens Suedekum
What effect does employment protection through severance payments have on the behaviour of employed workers? We analyse this issue within a stochastic two,period framework where workers decide on human capital investments and find two competing effects: severance payments imply higher job security that fosters human capital formation. At the same time, a lay,off is perceived by the workers to be a weaker penalty if severance payments are provided. This incentive lowers their optimal amount of firm,specific investments. Which effect prevails on balance depends on the distribution of investment returns among firm and workers. For strong positive reactions, employment protection is also in the interests of the firm. [source]