Social upgrading and cooperative corporate social responsibility in global value chains: the case of Fairphone in China

In this article, we explore how a lead firm's strategy for corporate social responsibility influences the social upgrading of a supplier in a global value chain. Based on a single case study approach, we investigate the interaction between Dutch smartphone producer Fairphone and its Chinese supplier Guohong. On the one hand, the case illustrates how a cooperative approach to corporate social responsibility can lead to progress in suppliers' social upgrading. In particular, we highlight the role of a so‐called workers' welfare fund as a mechanism not only for improving measurable labour standards but also for enabling rights. On the other hand, the case demonstrates how the limited production and technological capabilities of the suppliers, a competitive market environment and lead firms' limited strategic access to the supply chain might constrain the extent of social upgrading through a cooperative approach towards corporate social responsibility in a global value chain.     

STEREOTYPE THREAT AND THE STUDENT‐ATHLETE

Achievement gaps may reflect the cognitive impairment thought to occur in evaluative settings (e.g., classrooms) where a stereotyped identity is salient (i.e., stereotype threat). This study presents an economic model of stereotype threat that reconciles prior evidence on how student effort and performance are influenced by this social‐identity phenomenon. This study also presents empirical evidence from a framed field experiment in which students at a selective college were randomly assigned to a treatment that primed their awareness of a negatively stereotyped identity (i.e., student‐athlete). This social‐identity manipulation reduced the test‐score performance of athletes relative to non‐athletes by 12%. These negative performance effects were concentrated among male student‐athletes who also responded to the social‐identity manipulation by attempting to answer more questions. (JEL I2, C9, D0)     

COMBINED PRODUCTION AND MAINTENANCE SCHEDULING FOR A MULTIPLE‐PRODUCT,SINGLE‐ MACHINE PRODUCTION SYSTEM

Traditionally, the problems of equipment maintenance scheduling and production scheduling in a multi‐product environment have been treated independently. In this paper, we develop a Markov decision process model that simultaneously determines maintenance and production schedules for a multiple‐product, single‐machine production system, accounting for the fact that equipment condition can affect the yield of different product types differently. The problem was motivated by an application in semiconductor manufacturing. After examining structural properties of the optimal policy, we compare the combined method to an approach often used in practice. In the nearly 6,000 test problems studied, the reward from the combined method was an average of more than 25 percent greater than the reward from the traditional method.     

The Optimal Trade-Off Between Quality and Quantity with Unknown Number of Survivors

In a model of endogenous fertility where individuals know the probability of child survival but not the final number of survivors, parents do not always formulate a precautionary demand for children. For some utility functions, parents have fewer children than what they would have in a situation in which the number of survivors is known earlier. The properties of the optimal economic policy depend on the degree to which the social welfare function takes ignorance into account. If social welfare is evaluated after parents know how many children survived, the parental response to uncertainty is socially inefficient. Individual decisions then should be corrected through tax or transfer on both births and education. This property helps determine the optimal public response to mortality crisis in the presence of educational externalities.     

Gender,Racial, and Ethnic Disclosure in NIH K-Award Funded Diabetes and Obesity Clinical Trials∗

In 1993, the National Institutes of Health (NIH) passed The Revitalization Act (Subtitle B) which mandated that all NIH funded clinical trials have “appropriate representation” of minority and women subjects. Our aim was to evaluate the impact of the mandate by examining the reporting and inclusion of minority and female subjects into NIH K-Award funded clinical trials, addressing the minority predominant diagnoses of diabetes and clinical obesity. Using the CRISP search engine and PUBMED, we selected publications published by the National Institute on Aging (NIA) and National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK) K-grant recipients during 1989–2004, associated with all the diabetes and obesity clinical trials. Studies were stratified into three timeline categories (1989–1993, pre-mandate; 1993–1996, post-mandate, and 1997–present, well past mandate) to evaluate trends in the recruiting of minorities and women before, during, and after the passing of the Revitalization Act. Of the 165 papers, only 37% disclosed race, a number that did not improve over time (p = .15), whereas 92% disclosed gender. Clinical trials that focused on females increased across the 3 timeframes (p < .001) for diabetes studies but not obesity studies. Overall, disclosure of race declined over the 3 timeframes whereas individually, the disclosure of African Americans improved.     

DO STATES FREE RIDE IN ANTITRUST ENFORCEMENT?

Recent research has documented a substantial role in antitrust enforcement by U.S. states. While many of the cases litigated involve small local firms, a nontrivial portion encompasses multiple‐state issues. Some previous literature has investigated whether states engage in free‐riding behavior in environmental regulation, and whether governments free ride on private decisions in provision of public goods. In this paper, we analyze a sample of antitrust cases involving cross‐state impacts (from the Multi‐State Antitrust Database, provided by the National Association of Attorneys General) and explain the determinants of free riding (which we define as participating in a case, but not as a lead plaintiff). (JEL L40, H41, H77)     

A CRITICAL ASSESSMENT OF MEASURES OF CENTRAL BANK INDEPENDENCE

The methodology of measuring central bank independence suggested by Bade and Parkin three decades ago and inverse correlations between the measures and inflation have been widely accepted. The measurement literature has made important contributions identifying elements of institutional design that establish the relationship between the central bank and the government and the measurements from an ordinal perspective provide some useful insights about the major institutional redesigns of central banks during the past several decades. At the same time, the measurement literature is problematic. First, a dummy variable bifurcating central banks into groups of independent and less independent central banks can duplicate the standard correlations suggesting the information content of the specific measures is limited; second, the correlations between inflation and measures of independence are not as stable as claimed; and most important, the measurements are subject to classification problems that have not been fully appreciated. Review of the institutional design and history of the Bank of Korea, Bank of Japan, and the Federal Reserve provide evidence the classification problems are important. The measures of independence are more appropriately regarded as ordinal rankings of central bank independence rather than considered cardinal measures suitable for econometric modeling. (JEL E50, E58, E65)     

WHY DO GOVERNMENTS END UP WITH DEBT? SHORT‐RUN EFFECTS MATTER

This paper reconsiders the impact of public debt in an economy with heterogeneous households and incomplete markets to emphasize the short‐run effects of an increase in public debt. As compared to models that rest on steady‐state analysis, we show that the welfare gains of a public debt increase are substantially higher when transitional dynamics are accounted for. The additional debt issue allows for a temporary reduction in the income tax rate, which stimulates labor supply and generates an overshooting of the interest rate. The short‐run gains create a temptation to deviate toward higher levels of debt. Debt increases continue to generate welfare gains even when debt is considerably higher than its long‐run optimal level. (JEL E60, H60)