Markets,Networks, and Risk: An Analysis of Labor Remuneration in the Lake Victoria Fishing Industry

This study applies concepts from Habermas' Theory of Communicative Action to the problem of identifying the circumstances under which networks replace markets as the primary governance mechanism for economic activities. The suggestion derived from this theory is that markets govern economic activities tied to material phenomena; whereas networks control such activities when they are tied to social relationships. This suggestion is subjected to an empirical test. Labor transactions in the Lake Victoria fishing industry are used to test the hypothesis that risk factors arising from natural contingencies will distribute according to a risk market model, whereas those arising from social relationships will be distributed through a logic of social power tied to networks and identities. The hypothesis is generally supported by data on the effects of kinship and, more strongly, ethnicity.     

‘No one to trust’: the cultural embedding of atomism in financial markets

The paper ethnographically explores the cultural embedding of atomistic indifference in online, global financial markets: arenas that have been digitally designed according to economic ideals and that demand an extreme form of relational and social dissociation from the partners to exchange and from those affected by the transactions. Its case‐study is lay financial‐trading in Israel, a country undergoing extensive neoliberalization. The study shows that dissociation is embedded in an economic culture marked by constant, multi‐sited declarations that economic‐Others are cold, uncaring and manipulative. It takes shape as traders convert the distrust towards Others into distrust towards portions of the Self that represent links to these Others, namely their own social‐psychology and social concern. Acting atomistically and selfishly in the market thus entails considerable reflexive work. The paper contributes to an ongoing debate on the moral and cultural embeddedness of markets in general and of the expanding financial markets in particular.     

Building democratic public spheres? Transnational advocacy networks and the social forum process

What, if anything, can transnational advocacy networks (TANs) contribute to the democratization of public spheres outside Westphalian frameworks? On the one hand, TANs excel at turning international public campaigns into political influence – connecting people and power across borders. On the other hand, the increasingly policy‐orientated nature of TANs raises questions about their legitimacy in speaking on behalf of multiple publics. In this article, I suggest that a TAN's success in ensuring the political efficacy of public spheres, while at the same time undermining their normative legitimacy, reflects two sides of the same coin. This is a consequence of the recent internal professionalization of advocacy networks. Framing professionalization as a particular form of communicative distortion within TAN decision‐making, I suggest that networks should incorporate internal deliberative mechanisms, adapted from international social forums, to enhance the normative legitimacy of democratic public spheres.     

Crypto‐coin hierarchies: social contestation in blockchain networks

In this article, I discuss the role of crypto‐coins (CCs) as an explicit response to the 2008 economic crisis. Drawing on networked social movement theory, I outline the tension between blockchain based currencies promoted as horizontal markets of technological innovation and the persistence of hierarchical authority within these networks. By examining the assumptions about authority and regulation that underpin the creation of CCs I argue that the cryptographic responses to the financial crisis understate the persistence of hierarchies in their claims to upset traditional monetary authority. As global networks, blockchain technology faces political challenges from regulators, hegemonic market actors and adherents devoted to particular CCs. Consequently, I draw parallels between CCs and networked social movements to argue that the emergence and proliferation of ‘altcoins’ presents a series of political challenges to the framing of CCs as disruptive technology. The innovative character of CCs relies on tacit and explicit assumptions about politics that social movement theory can help to explain. By examining the altcoins through the concepts of resource mobilization, framing and identity formation, I argue that the dynamics of offline social hierarchies persist and are magnified in the world of CCs.     

Should NPOs Follow International Standards for Financial Reporting? A Multinational Study of Views

Financial reporting is an important aspect of not-for-profit organisations’ (NPOs’) accountability. Globally, numerous and varying regimes exist by which jurisdictions regulate NPO financial reporting. This article explores whether NPOs should be required or expected to follow sector-specific international financial reporting standards. We investigate stakeholder perceptions on the nature and scope of any such developed standards, interpreting our findings through the lens of moral legitimacy. Using an international online survey of stakeholders involved in NPO financial reporting, we analyse 605 responses from 179 countries. Based on our findings, we argue that diverse stakeholder groups, especially those who are involved with NPO financial reporting in developing countries, are likely to grant moral legitimacy to developed NPO international accounting standards if the consequences are to enhance NPO accounting and accountability information, subject to agreement as to whether all or only NPOs of a certain size should comply and whether any such standards should be mandatory.     

Local Food and Civic Engagement: Do Farmers Who Market Local Food Feel More Responsible for Their Communities?

Do farmers who participate in local food systems attach greater importance to civic engagement than farmers whose livelihood is not tied to the vitality of local markets? The literature on local food as a social movement continues to paint a picture of local food systems as contributing to, and benefiting from, rich networks of civil society groups. Yet to date, few studies have directly addressed the question of whether marketing local food is actually associated with higher levels of civic engagement among farmers. In this paper, I draw on local capitalism theory to identify two different mechanisms—depth of economic reliance on local markets, and breadth of social networks related to local food sales—that might spur farmers who market local food to feel more responsible for their communities. Then, using data from a large-scale survey of specialty crop growers, I explore whether a relationship exists between farmer involvement with local food markets and attitudes toward civic engagement. Results suggest that while farmers strongly committed to local food markets attach greater importance to civic engagement, participation in multiple categories or kinds of local food supply chains is not necessarily associated with stronger civic values.     

Markets or networks: Households’ choice of financial intermediary in Western China

We argue that households’ choice of financial intermediary is conditioned by households’ social network structures and socioeconomic status. Analyses show that households’ social network size and network composition affect their choices by limiting the quality and quantity of information, resources, and social influence one can access through social ties. Moreover, we find that high-SES families favor formal intermediaries due not only to their richer financial knowledge, higher affordability, and greater capacity to repay loans, but also to their high demands and special types of financial needs that can hardly be satisfied by embedded resources.     

Die Legitimität von Finanzregimen

In this article we propose a financial regime typology that adds the role of cultural legitimacy to financial market regulation. Bridging Comparative Political Economy and Economic Sociology we refer to a German Weberian tradition of institutionalist research that has stressed the intermediate position of institutions between social values and concrete market action. Financial regimes do not only define formal rules and organizational patterns, they also install symbolic boundaries between legitimate and illegitimate finance, providing cultural acceptance to these morally and historically “problematic” markets. The article then explores four fields of institutional regulation of stock exchanges in Germany and UK since the 19th century: (1) the creation of an official arena, (2) rules of market access, (3) the legitimate trading goods and (4) rules for penalizing misconduct. We show that German financial regulation was integrative and wanted to protect the real economy by corporatively embedding finance and restrain harmful transactions. In contrast, British financial regulation was segmental and tried to protect the real economy by installing a socially exclusive club of traders governed by professional expertise and hierarchy. This new typification of financial regimes will help to understand the resilience of national financial regulatory patterns across crises and the obstacles to a transnational harmonization of rules. Political reform-making is tied to institutional principles of the past.     

RISK, TRANSACTIONS CHARGES, AND THE MARKET FOR FOREIGN EXCHANGE SERVICES

This paper suggests that transactions charges in foreign exchange markets, rather than being solely brokerage fees, represent exchange rate uncertainty in periods of great fluctuations by including remuneration for the assumption of risk by foreign exchange dealers. Since most of the cost of exchange rate uncertainty may be largely endogenously included in the foreign exchange markets, attempts to examine the efficient market hypothesis in these markets should most appropriately include specific consideration of transactions costs. There appears to be empirical support for the premise that transactions charges are positively related to exchange rate risk, and, as well, inclusion of contemporaneous bid-ask spreads into the interest parity schedule leaves few unexplained profits from dollar-pound covered interest arbitrage during the 1970's and underscores the notion of classifying periods by degree of turbulence in analyzing covered interest arbitrage.     

Tracking phantastic objects: A computer algorithmic investigation of narrative evolution in unstructured data sources

We develop social network and “relative sentiment shift” analysis techniques to study how financial narratives influence financial markets. First, we analyze Reuters News articles focusing on narratives about Fannie Mae. Second, we analyze Broadband and Energy narratives in the Enron Corporation email database. Combining datasets we show that phantastic object narratives can be detected and tracked as they develop and spread through networks to lead to a disconnect between narrative and underlying “reality”. The methods may be applicable to other text datasets to create early warnings.     

Transnational marriages in Yiwu,China: tensions over money

In this article, I explore the role of transnational marriages in the activities and strategies of trading networks, through the lens of money and uncertainty in marriage. I argue that uncertainty in spousal relations challenges the durability of such unions and hence the effectiveness of their role in trading activities. These uncertainties are shaped by intertwined factors, including especially the embedded relationship between commercial and social networks (for example, business partners, kinship, friendship) and spousal relations, the differing cultural values and practices of the partners to such unions, stereotypes, varying forms and degrees of trust and mistrust, and the dynamics of global markets and state policy. Uncertainties driven by these factors exacerbate mistrust in both marriages and trading relations; they also shape shifting orientations toward future life. Therefore, I argue that the role of marriage in trading activities should be neither simplified nor romanticized.     

NGOs’ transnational advocacy networks: from ‘legitimacy’ to ‘political responsibility’?

NGOs that operate as part of transnational advocacy networks face a number of ‘legitimacy challenges’ concerning their rights to participate in the shaping of global governance. Outlining the legitimacy claims that development NGOs make, the article argues that ‘legitimacy’ is a socially constructed quality that may be ascribed to an NGO by actors and stakeholders with different viewpoints. NGOs operating transnationally link disparate communities and conceptions of legitimacy, and undermine the discourse and practice of sovereignty. Therefore such NGOs will find it difficult to be universally regarded as legitimate, especially by states that hold a sovereignty‐based conception of legitimacy. However, relationships are the building blocks of networks, and efforts to improve them should not be abandoned simply because ‘legitimacy’ is too closely connected with sovereignty. In particular, NGOs ought to improve their relationships with the poor and marginalized communities whose interests they claim to promote. To this end, the concept of ‘political responsibility’ is suggested as a pragmatic approach to understanding power relations as they arise in transnational advocacy networks and campaigns.     

Institutional Conditions of Economic Globalization: Effects of Antitrust and Merger Laws on the Global Integration of the Acquisition Market1

A central insight from institutional theory about markets is that they cannot operate without governing rules to guide interactions among actors. Because most of these rules are made and enforced within national borders, international economic transactions are said to suffer from an “institutional abyss,” the lack of institutional arrangements for economic exchanges. Scholars have found that the abyss can be filled by two factors: network connectedness, such as inter-governmental organizations, and intercountry economic agreements, such as the World Trade Organization or free trade. This article proposes a third factor: the global diffusion of governmental regulations. When countries adopt highly standardized regulations on a particular transaction, it provides legal familiarity for foreigners and reduces procedural uncertainty surrounding how the transaction should be executed. Using fixed-effects models on longitudinal data, I show that the adoption of antitrust and merger laws increases the volume of cross-border mergers—the transaction the laws are meant to regulate. This result stands in direct opposition to financial scholars’ predictions that antitrust and merger laws will reduce cross-border mergers because the laws are meant to restrain, not liberate, the transaction. This article theorizes how the diffusion of regulations, not the elimination of regulations, can facilitate global market integration.     

Gendered double embeddedness: Finding jobs through networks in the Chinese labor market

Inspired by the concept of “double embeddedness,” we argue that the gender gap in network-based job searching depends on the degree of legitimacy of gender status beliefs across institutional contexts. Analyses from the 2008 Chinese General Social Survey show that the gender gap in network-based job searching is larger in the market sector than in the state sector, as the gender status beliefs are more legitimate in the former than in the latter. Additionally, the sector difference of the gender gap in network-based job searching is significant when the resources channeled through networks are information-related, but it is insignificant when the network resources are influence-related. These findings indicate that job searching is double embedded in social networks and in cultural institutions.     

Educational ties,social capital and the translocal (re)production of MBA alumni networks

Research on elite, transnational networks has identified social and cultural capital associated with particular academic credentials as being an important element in network formation. How and why such networks are reproduced after graduation, however, has received less attention. In response, in this article I combine work on social capital and personal networks to explore the reproduction of MBA alumni networks in London's financial services district that were created in leading business schools in the USA and UK. My analysis documents the ways in which business schools and individual alumni combine forms of virtual and corporeal co‐presence to reproduce translocal educational ties. I then argue that the motivation for sustaining these educational ties lies in the potential to convert the social and cultural capital of MBA alumni networks into different types of value ranging from enhanced career progression to increased alumni donations. In doing so, I develop debates on the intersections between social capital, academic credentials and the reproduction of elite networks.     

Social Networks and Employment: Mechanisms (Part 1)

While substantial progress has recently been made in the literature on social networks and employment, this research has not been accompanied by a larger organizing framework. In this article, we attempt to provide such framework while reviewing the literature that addresses the context of work and employment from a social network perspective – that is, research based on the assumption that actors are embedded in networks of social relations and interactions. In particular, our review focuses on the primary mechanisms that help explain how networks may shape employment outcomes and processes, namely, by conveying resources and providing signals to others. Ties among social actors may transfer better or unique resources such as information, learning, influence, and support, which consequently may affect key employment outcomes. Ties may also provide signals concerning ability, legitimacy/trust, status, and relationship meaning. We conclude by presenting a number of alternative arguments in the literature and discussing future directions for the research on social networks and employment.     

Vulnerability in old age: The issue of dependency in American society

The American focus on the importance of self-sufficiency and independence stands in contrast to the economic trends of recent decades that have led to an increased number of adults standing outside the productive core of economic activity. This “burden of dependency” has been manufactured by public policies designed to reconstitute the labor force and redistribute the burden of unemployment largely through the growth in retirement. Recently the success of income maintenance programs developed to improve the financial accessibility of retirement for older workers has begun to undercut the legitimacy of their status as dependents. This article examines that role of dependency, and argues that the social processes that produce dependency among our elders are not substantively different from the processes that affect younger age groups. Consequently the questions of distributive justice that are involved in the dependency of the elderly are questions that relate to members of all age groups who occupy positions of disadvantage in the economic structure.     

Correlates of Recovery from Substance Use Disorders

A sample of 263 respondents from 2 recovery networks were surveyed to explore the role recovery capital contributed to their recovery. Recovery capital was conceptualized as social support, affiliation with 12-step groups (e.g., Alcoholics Anonymous), spirituality, and respondents’ financial situation. It was hypothesized that greater levels of recovery capital are associated with higher levels of alcohol or drug abstinence self-efficacy. Findings revealed that recovery capital is a statistically significant predictor of alcohol and drug abstinence self-efficacy. Given the salience in positively influencing ongoing substance use recovery, the authors promoted the idea that social workers should be educated on the construct of recovery in its relevance to practice     

Network domains in social networking sites: expectations,meanings, and social capital

This paper examines why the use of social networking sites (SNSs) leads to different results in cultivating bridging and bonding social capital for different groups of people. Based on in-depth interviews of 45 university students in Hong Kong, I find that Mainland Chinese students studying in Hong Kong actively use SNSs for seeking practical information about offline matters, and they obtain substantial enacted support from other Mainland students of the same university through SNS use. As a result, they accumulate both bridging and bonding social capital. Local Hong Kong students, however, use SNSs mainly for social information seeking and are only able to accrue limited bridging social capital through SNS use. Drawing on the theory of network domains, I argue that the different offline network structures in which students are located – namely, homogeneous and closed networks versus heterogeneous and open networks – explain this difference. Students with closed offline networks have defined expectations of online ties; they think of their online activities as practical and leading to real changes in their status among peers. Those with open networks have indefinite expectations of their online audience; thus, they interpret online activities differently, thinking of them as recreational, and they are playful in their online behaviour. These different outcomes of online activities consequently lead to diverse results in social capital accrual.     

INTERNATIONAL DEAL EXPERIENCE AND CROSS‐BORDER ACQUISITIONS

I show that corporate directors' human capital facilitates international investments. Directors' experience with cross‐border transactions positively influences firms' decisions to conduct their first cross‐border acquisitions. Cross‐border acquirers are more likely to buy firms headquartered in countries with which the directors have prior deal experience. This effect is strongest for target firms headquartered in culturally and institutionally dissimilar countries. Announced cross‐border acquisitions are received more favorably by financial markets and are more likely to be completed successfully when the announcing firm has a director with cross‐border acquisition experience. These effects are not driven by investment bank involvement in the deal process or by other forms of directors' human capital, and they are robust to endogeneity of director hires. (JEL F23, F21, J24, L23)