Economic forces

Abstract: The proposition that limited natural resources provide a limit to growth and to the sustainable size of population is an old one. The natural resource that was the centre of the discussion in Malthus' day was land; more recently, some concern has been expressed over the limitations imposed by the supplies of oil, or more generally, energy sources, of phosphorus, and of other materials required for production. Those who predicted imminent doom in the nineteenth century were obviously wrong. Were they simply wrong about the immediacy of catastrophe, or did they leave out something fundamental from their calculations? There are at least three economic forces offsetting the limitations imposed by natural resources: technical change, the substitution of man-made factors of production (capital) for natural resources, and returns to scale. This study is an attempt to determine more precisely under what conditions a sustainable level of per capita consumption is feasible, to characterize steady state paths in economies with natural resources, and to describe the optimal growth path of the economy, in particular to derive the optimal rate of extraction and the optimal savings rate in the presence of exhaustible natural resouces. One of the interesting problems posed by the presence of exhaustible natural resources is that some of the basic concepts of growth theory, such as " steady state " and " natural rate of growth ", need to be re-examined. If, for instance, there are two unproduced factors, labour and natural resources, one of which is growing exponentially, the other of which is not growing at all, what is the " natural rate of growth "? In conventional economic discussions, the long-run growth rate of the economy is determined simply by the natural rate of growth and is independent of the savings rate. We shall show that in economies with natural resources, efficient growth paths which differ with respect to savings rate also differ, even asymptotically, with respect to the rate of growth. The analysis of optimal growth paths presents certain technical difficulties, because there are two state variables (the stock of capital per man and the stock of natural resources per man) and two control variables (the rate of extraction of natural resources and the savings rate). Fortunately, by the appropriate choice of variables, the qualitative properties of the path can be completely described. Optimal growth paths for economies with only capital or with just natural resources have been examined elsewhere. Typically, a country begins with little capital and hence, in the former models, optimal growth is characterized by increasing consumption per capita. On the other hand, natural resources act much like a capital good; since the stock

Abstract: The last several decades have witnessed a steady, irreversible trend toward the globalization of business, and of software-intensive high-technology businesses in particular. Economic forces are relentlessly turning national markets into global markets and spawning new forms of competition and cooperation that reach across national boundaries. This change is having a profound impact not only on marketing and distribution but also on the way produces are conceived, designed, constructed, tested, and delivered to customers. The author considers how software development is increasingly a multisite, multicultural, globally distributed undertaking.

Abstract: Emerging economies are characterized by an increasing market orientation and an expanding economic foundation. The success of many of these economies is such that they are rapidly becoming major economic forces in the world. Entrepreneurship plays a key role in this economic development. Yet to date, little is known about entrepreneurship in emerging economies. This introductory article to the special issue on entrepreneurship in emerging economies examines the literature that exists to date in this important domain. It then reviews the research that was generated as part of this special issue on this topic. The article concludes with a discussion of the critical future research needs in this area.

Abstract: What forces explain corporate structure and shareholder behavior? For decades this question has gone unasked, as both corporate law scholars and practitioners tacitly accepted the answer given in 1932 by Adolf Berle and Gardiner Means that the separation of ownership and control stemming from ownership fragmentation explained and assured shareholder passivity.' Over this decade, however, corporate law scholars have recognized that this standard answer begs an essential prior question: if ownership fragmentation explains shareholder passivity, what explains ownership fragmentation? Although the Berle and Means model assumed that largescale enterprises could raise sufficient capital to conduct their operations only by attracting a large number of equity investors, contemporary empirical evidence finds that, even at the level of the largest firms, dispersed share ownership is a localized phenomenon, largely limited to the United States and Great Britain. Not only does the latest comparative research demonstrate that concentrated, not dispersed, ownership is the dominant worldwide pattern,2 but in-depth studies of individual countries show that shareholder activism increases in direct proportion to ownership concentration.' As a result, these findings, in turn, suggest that the conventional governance nouns in the United States may be more the product of a path-dependent history than the "natural" result of an inevitable evolution toward greater ef ficiency. Propelling this new inquiry into whether the Berle/Means corporation-with its famous "separation of ownership and control"-is the inevitable and efficient endpoint of economic evolution, or only the artifact of political forces and historical contingencies, is the unavoidable reality of increased global competition in both the product and capital markets. As a result, dispersed and concentrated ownership structures not only differ, but they may be forced to compete. Although scholars have debated the relative merits of these rival models for a decade or more, this prospect of an evolutionary competition-with its implication of a Darwinian "survival of the fittest" struggle-is very new. Ultimately, the issue thus posed is which system will dominate, and why: the stock market centered-system of dispersed ownership first described by Berle and Means, or the blockholder and cross-shareholding systems that now prevail across Europe and Asia? Of course, a clear winner does not necessarily have to emerge. The more one believes that political forces are likely to constrain and override purely economic forces, the more one is likely to expect a more muddled and contextual outcome. Thus, the current debate has two levels that can often become confused: (1) Which system of corporate governance is superior?, and (2) Which set of forces-economic or political-is likely to prove more powerful? To appreciate this distinction, it is useful to understand that the current debate has progressed through several discrete stages. First, beginning eartier in this decade, a provocative new wave of law and economics scholars advanced "political" theories that explained dispersed share ownership in large American corporations as the product of political forces and historical contingencies, not economic efficiency. An undercurrent in this criticism was the theme that political constraints had produced a suboptimal system of corporate governance, with dispersed ownership implying inherently inadequate corporate monitoring. Some of these scholars argued that the Anglo-American pattern of dispersed ownership was clearly inferior to the bank-centered capital markets of Germany and Japan, because the latter enabled corporate executives to manage for the long run, while U.S. managers were allegedly forced to maximize short-term earnings 5 Still, with the burst of the "bubble economy" in Japan, the more recent Asian and Russian financial crises, and notable monitoring failures by German universal banks, the tide of opinion has lately turned against the presumed superiority of banks as monitors. …