Global finance and the German model: German corporations, market incentives, and the management of employer-sponsored pension institutions

Where there was a settled political geography of state power and responsibilities, the remarkable growth of global finance has put enormous pressure on national economic, political and social institutions. Furthermore, the looming crisis facing many continental European social security systems has raised many doubts about the long-term viability of the German model compared to its Anglo-American rivals. In this context, large German corporations have sought ways of sustaining their global competitiveness by, in part, restructuring their national and regional commitments. To illustrate, in this paper we concentrate on the nature and organization of German employer-sponsored pension institutions in relation to Anglo-American management practice. Two issues drive the analysis. One has to do with an emerging coalition between corporate management and shareholders with respect to the market value of the firm. The second issue has to do with the allocation of risk and uncertainty between the social partners when negotiating the financing and final value of promised retirement income. The institutional framework of collective decision-making common to many of Germany's largest firms is under pressure; three models of investment decision making relevant to pension assets and liabilities are used to illustrate this point. In doing so, we suggest that the German model is more fragile than commonly realized. We also suggest that Anglo-American management practices have penetrated and affected German corporate (national and regional) institutions and regulations. The social market lauded by advocates of stakeholder capitalism is changing rapidly, at least in the sphere of large firms and global finance.     

Foreign-owned Firms' Campaign Contributions in the United States: An Exploratory Study

This study extends previous empirical work on corporate political activity by examining which foreign-owned firms provide campaign contributions to United States legislators. While numerous studies have examined which domestic firms make campaign contributions, little is known about the propensity of foreign-owned firms to make contributions. Using logit and Tobit analyses, the findings suggest that firm size, legislative issues, foreign ownership, and cultural characteristics are important determinants of a foreign-owned firm's political strategy. The findings also suggest that there are strong parallels between the political strategies of foreign-owned firms and domestic firms.     

A world geography of global media cities

This is an empirical study that analyses the geography of 33 global media firms through their locations in 284 cities across the world. The analyses are set within the world cities literature and a methodology is used that searches out city networks from data on firms to define ‘global media cities’. Resulting definitions of network connectivities allow comparisons to be made with more familiar world city network results on global service centres. The relative importance of media industries in European cities is highlighted. The main analysis uses a principal components model to discover global media fields centred upon specific articulator cities, notably New York, Los Angeles, Munich, Berlin, London and Paris. It is concluded that there is a geographical logic to the growth of large media companies.     

A THEORETICAL FRAMEWORK FOR SMALL BUSINESS POLICY

A number of public policy issues have been discussed in this article, the most important of which are: 1. Small business would not need special consideration if our economy were basically a competitive one. 2. A large and growing segment of our economy has sufficient market and political power to make our economy basically non-competitive. 3. Small firms tend to provide price competition, to lead in the development of new products and processes, and to generate new innovations and new employment. 4. Government policy tends to create artificial economies of scale, giving an unwarranted advantage to the very large firm. As a first approximation, a policy of government neutrality on firms of varying size is needed. But, because of discriminations which already exist which favor large firms over small firms, special small business programs may be necessary to provide an equitable policy base. Unfortunately, programs designed to benefit all business, like the investment tax credit, tend to primarily benefit larger firms (Berney, 1979). This is the case for two reasons. First, there is a basic difference in production relationships: large firms tend to be more capital intensive and small firms more labor intensive. Second, the more complex a rule or regulation, the more costly it is for small business to use it. Consequently, even the employment tax credit, which should benefit the small firm is not used by them. Instead, it tends more to benefit the larger firm. Neutrality, as a governmental policy, would appear to demand different treatment for firms of varying size. As an example, the “regulatory flexibility” concept applies different standards to different sized firms so that the burden of regulation is more equitably distributed. The concept of encouraging or requiring financial institutions and other lenders to establish “dual prime rates” is a further example. Since small firms appear to have much higher debt to equity ratios and rely more heavily on shorter-term bank credit, they are more heavily burdened by a tight money policy which forces increases of interest rates. Thus, dual prime rates help to spread the burden of rising interest costs more equally. As many people prefer to work for themselves, equalizing the burden of government policy could only serve to increase the basic growth rate for small business, thus providing an easier start for entrepreneurs and would encourage a more rapid rate of economic growth. None of these discussions, however, argues that small business should be protected from failure. The more efficient firms will succeed and prosper, and the least efficient will not. Many currently successful entrepreneurs learn how to improve their production processes or managerial skills from their failures. What is being recommended as a first step is that government should concentrate on equalizing burdens and benefits in order to achieve true neutrality. If private economies of scale do indeed exist, new firms must grow to survive; what the government should not create are artificial economies of scale with public policy. A strong argument for further action can also be made: it appears that significant external benefits are produced by an economic system with a dynamic small business sector. Since these benefits go to society as a whole rather than entrepreneurs alone in the form of increased profits, a freely operating market without government assistance does not generate as many new small businesses as would be optimal for our society. To internalize the benefits that come from small business, governmental programs need to be devised to increase the rate of return on new, innovative small businesses. Should this happen, we could then anticipate increased rapid rates of innovation and technological change, more rapid rates of employment growth, expanded price competition in all sectors of the economy, and improved export capabilities, in short, true flexibility in our capitalistic system.     

全球化视角下的世界城市网络理论

城市诞生时就相互保持着联系,只有将城市纳入世界城市网络中才能正确把握城市产生和发展的本质。1980年以来在第三次全球化浪潮的背景下,世界生产要素和产品市场开始整合,世界城市的兴起是国际劳动分工在空间上的表达。Cohen、Friedmann、Sassen、Castells和Taylor等学者提出并发展了世界城市理论,世界城市网络理论已经成为研究城市问题的重要框架。联系数据的缺乏长期制约了世界城市网络的实证研究,二十世纪九十年代中期以来学者们创新性地解决了方法论的问题,对世界城市网络的各个层面进行了实证研究。     

Prudence and principle in international society: reflections on Vincent's approach to human rights

John Vincent's Human rights and International Relations argued for embedding the right to be free from starvation in the international society of states. Principle and prudence were combined in a distinctive English School analysis of the universal human rights culture. Vincent argued that the entitlement to be free from the tyranny of starvation and malnutrition was one principle on which most societies could agree despite their profound ideological differences. Other conceptions of human rights, including western liberal doctrines of individual freedom, had the potential to create major divisions within international society, particularly when linked with a doctrine of humanitarian intervention. More recent approaches to world poverty raise large questions about whether Vincent succeeded in attempting to marry prudence in preserving an international order that remains anchored in state sovereignty with a principled commitment to ending starvation. Important issues also arise about how to build on his reflections on the prospects for a global ‘civilizing process’ that bridges cultural and political differences in the first universal society of states.     

Combining Knowledge from Different Sources,Channels and Geographical Scales

The aim of this article is to examine conceptually and empirically how innovative firms combine knowledge (1) provided by different sources, (2) accessed at different spatial scales and (3) acquired through different channels. We add to the conceptual debate by contrasting and synthesising the perspectives offered on these issues by four key concepts, namely the local buzz and global pipelines argument, the knowledge-base approach, the notions of Science–Technology–Innovation and Doing–Using–Interacting modes of innovation as well as the regional innovation systems concept. The empirical part of the article contains an analysis of knowledge-sourcing activities employed by 181 firms belonging to the Austrian automotive supplier industry. Our findings reveal that it is, indeed, combinations of knowledge sourced from different partners located at different spatial scales and acquired through different channels that are relevant. However, it is particular combinations that dominate while others are negligible. Austrian automotive supplier firms combine knowledge provided by customers with knowledge inputs from a variety of other sources. Most of the combinations involve the European or global levels combined with the regional and/or national level. Finally, firms combine spillovers with a variety of other channels to acquire innovation-relevant knowledge.     

Wired Communities in the City: Sydney,Australia

Questions relating to the ability of particular groups in society to access information and communications technologies (ICTs) have become a growing part of the academic and policy literature. The issues raised in this literature have revolved around a number of themes, many of which can be subsumed under concerns about a growing digital divide whereby society is being divided into information rich and information poor sectors. This differentiation can be between particular social groups irrespective of place, or between people in particular places be these large regional areas (e.g. metropolitan versus non‐metropolitan) or localities and communities within an urban area. This paper focuses on the existence of a ‘digital divide’ across the Sydney metropolitan area. Using ABS 2001 census data the paper presents an analysis of computer and internet access and use for clusters of local communities and focuses on how usage differs across communities as differentiated by socio‐economic status, household and family status and ethnic background.     

Value chains, networks and clusters: reframing the global automotive industry

In this article, we apply global value chain (GVC) analysisto recent trends in the global automotive industry, with specialattention paid to the case of North America. We use the threemain elements of the GVC framework—firm-level chain governance,power and institutions—to highlight some of the definingcharacteristics of this important industry. First, nationalpolitical institutions create pressure for local content, whichdrives production close to end markets, where it tends to beorganized nationally or regionally. Second, in terms of GVCgovernance, rising product complexity combined with low codifiabilityand a paucity of industry-level standards has driven buyer–supplierlinkages toward the relational form, a governance mode thatis more compatible with Japanese than American supplier relations.The outsourcing boom of the 1990s exacerbated this situation.As work shifted to the supply base, lead firms and supplierswere forced to develop relational linkages to support the exchangeof complex uncodified information and tacit knowledge. Finally,the small number of hugely powerful lead firms that drive theautomotive industry helps to explain why it has been so difficultto develop and set the industry-level standards that could underpina more loosely articulated spatial architecture. This case studyunderlines the need for an open, scalable approach to the studyof global industries.     

Local Firms and Global Reach: Business Air Travel and the Irish Software Cluster

We study the external linkages of clusters through a typology of forms of temporary proximity (from foreign business meetings to co-located projects). We suggest that here business air travel and information and communication technologies have given significant advantages to small firms. We investigate these arguments through a case study of the Irish software industry in Dublin. Comparing indigenous and multinational corporation (MNC) firms confirms that indigenous firms are as travel intensive as MNCs but are linked to fewer destinations. We conclude that air travel enables small firms to go global without the support of collective cluster institutions.     

全球化背景下我国生态安全问题及应对措施

生态安全问题是最突出的全球性问题之一,已经成为影响国家安全及人类社会整体生存安全的大问题。我国的生态安全面临着来自国内和国际两方面的双重压力,而且生态安全恶化对我国经济社会的可持续发展带来了极大的负面影响。处理这些问题时,既要从国际环境法的角度加以考虑,又要从国内环境法的角度加以防范。     

From toys to automobiles: foreign investment,firm heterogeneity and intermediaries in a Portuguese industry

In the literature on territorial innovation systems there is a constant tension between the effect of endogenous and exogenous factors and their relative importance. In order to address this tension several approaches have sought to conceptualize the relational and multi-scalar dimension of innovation and to explain how external knowledge and economic flows in conjunction with regional contexts combine to produce regional growth, stagnation or decline. This paper will contribute to this debate, while also highlighting that even at the local level there is substantial heterogeneity between firms. It will also shed light on the role of intermediary organizations that can help address information and power asymmetries between multinational corporations and less competitive local firms. Empirically it will draw on the case study of the Portuguese moulds industry, which has successfully adapted to shifts in the global economy by drawing on local resources while also remaining integrated into global value chains.     

The Creative Industries,Creative Occupations and Innovation in London

London is a global hub of the creative industries. These industries are seen as both innovative in themselves and an input in innovation processes in other sectors. Yet few studies have tested these relationships. This article investigates these issues using large-scale survey data for London. Using four measures of product and process innovation, we find no evidence that London's creative industries are more innovative than other sectors. Yet, individuals doing creative occupations in other sectors are a robust driver of product innovation in London's firms. The results suggest that occupations performed in London may be an important driver of product innovation in the city, and firms in other sectors may use creative occupations to develop new products in the capital. This finding is supportive of policies attempting to stimulate the creative industries by integrating creative occupations into firms across the whole economy.     

Increasing Role of Services in Competitive Power and Innovativeness of Firms and Industrial Clusters

The aim of this paper is to discuss the importance of different types of global services for industrial firms and clusters in terms of their economic competitiveness and innovative performance. The theoretical debates argue that globalization, deregulation and the new production organization make it necessary to use global services that are supplied easily with the help of new telecommunication technologies. The existing empirical studies provide some supporting evidence. However, they also indicate that global service firms can be attained by only smaller numbers of industrial firms and clusters. Still, in-house services besides temporal and informal mechanisms are important to meet the needs of the specialized services, even for the firms that try to become a part of the global production system. The paper focuses on three main questions: “What types of global services are becoming crucial for manufacturing firms and what type of services are still local and national? Is there a significant difference between the characteristics of firms that use the same type of services? To what extent is having access to global services important for the innovativeness of industrial firms and clusters? This paper looks for the answers to these questions based on existing case studies as well as this study of three industrial clusters in Turkey. The findings indicate that there is not a perfect match between theory and empirical evidence and there is a need for more refined theoretical discourses on industry–service relations.     

The Evolving Spheres of International Justice

Recent discussions about globalization and increasing global inequalities of wealth have reawakened interest in the possibility of a just international order. The unequal distribution of wealth remains central to discussions of global justice but it is not the sole consideration. Additional issues are raised by the democratic deficit in international relations, the growing importance of cross-border harm, the need for cooperation to protect the environment and the treatment of non-human species. These different spheres of justice prompt the question of whether states can act as agents of reform, encouraged by the more progressive forces in global civil society. A related issue is whether the interplay between the states-system and global civil society will lead to more cosmopolitan forms of national and international law. Answers to these questions require new advances in normative and empirical inquiry.     

Risk and Private Military Work

Abstract: To date geography has paid scant attention to private military contracting. Other disciplines have studied the topic, but their work is state‐centric. In this paper I examine private military contracting through a geoeconomic lens and make four arguments. First, the heightened security risks of the contemporary era cannot be explained solely as a result of states’ decision to cede their monopolies over the means of violence. We must also examine the private military firms that have created new monopolies and the strategies they use to manage and distribute risk. Second, the industry has increased risk in the world system by offloading security risks onto their employees. This “responsibility over rights” management model provides inadequate human rights training and battlefield adjudication procedures for contractors and civilians alike. Third, the geography of private military work does not always conform to the global division of labor between north and south. Instead, private military work creates a class of work that cuts across social and geographic divides. Finally, while activists should encourage states to regulate the industry, they should also push it to reform employment practices since private military firms are increasingly global in scope.     

ON THE IMPACT OF COMPETITION ON TRADE AND FIRM LOCATION

We study how the level of trade costs and the intensity of competition interact to explain the nature and intensity of trade within a given industry and the location of firms across countries. As trade costs decrease from very high to very low values, the global economy moves from autarky to two‐way trade, through one‐way trade from the larger to the smaller region. By exploring the intensive and extensive margins of exports, we investigate how the intensity of trade reacts to the degree of competitiveness. Furthermore, when firms are free to change location, they flow from the small to the large country, and the larger country is always a net exported on the manufactured good. Firms located in the big country have a bigger size than those located in the small one. Under one‐way trade, the relocation of firms changes their attitude toward export.     

Restructuring of a metropolitan industrial park: case study in Herzeliyya, Israel

The nature and magnitude of the restructuring processes are unveiled in Herzeliyya Industrial Park, a satellite park of metropolitan Tel Aviv. The processes are explored in the context of Israel's recent entry into the post-industrial age and its swift integration into the "global" economy, using survey data of a sample of 104 firms. Since the mid-1980s the park has experienced functional upgrading in a process of "invasion and succession". Upgrading has been accompanied by high "mortality" rates of firms, and by large-scale renewal. Among the attributes reflecting the functional upgrading are the extended spatial reach of firms for clients and joint venturers, and of their organizational affiliations, expanding far beyond the metropolis into the world at large. The newly arriving firms tend to reveal a different set of locational factors than do the veteran ones. Future research avenues are set out.     

Managing the Global–Local Dimensions of Clusters and the Role of “Lead” Organizations: The Contrasting Cases of the Software and Medical Technology Clusters in the West of Ireland

The purpose of this paper is to investigate “leading” firms in an industrial cluster to understand how the balance between global and local dimensions of the cluster can be managed. Two cases of industry clusters, the software and medical technology clusters in the west of Ireland, are employed to examine how certain organizations can occupy a “lead” position and how—if at all—such organizations generate an agglomerative effect in a cluster. In the case of the medical technology cluster, the study shows that when large firms enact a leading role by influencing the technology trajectory of the region and stimulating the local dynamic, they can generate agglomerative effects, thereby enhancing the relevance and sustainability of clusters. Most significantly, it shows how leading organizations act as an important facilitator in connecting the global and local dimensions of clusters even in the absence of extensive local formal linkages. At the same time, the case of the software cluster reveals that the presence of large organizations alone does not inevitably stimulate such a clustering effect and emphasizes that appropriate characteristics and conditions need to be in place. Overall, while the study substantiates previous research on the significance of temporary and organized forms of proximity, it also shows the value that permanent geographical proximity can have, thereby contesting recent research that downplays the relevance of the clustering institution (e.g. Lorentzen, A. (2007) The geography of knowledge sourcing—A case study of Polish manufacturing enterprises, European Planning Studies, 15, pp. 467–486; Wickham, J. & Vecchi, A. (2008) Local firms and global reach: Business air travel and the Irish software cluster, European Planning Studies, 16, pp. 693–710).     

Migration,Geographies of Marginality and Informality—Impacts on Upper and Lower Ends of Urban Systems in the North and South

Since the onset of post-industrialism, the research focus in the developed world has increasingly shifted to the role of the information and communication technology, knowledge workers and the creative sector in the global economy. It has led to what could be described as an iceberg approach to economic research. In this approach, the focus is primarily on what happens in the part of the global economic iceberg above the waterline—the “clean”, “fast-moving”, “technologically advanced” elements of the global economy. However another element of the global economy, the informal sector, is growing at an alarming rate in cities in both the developed and developing worlds. These activities are unobtrusively operating in a part of the iceberg below the waterline that receives relatively little attention from the research community. The purposes of this paper are to demonstrate how the information networks created in the iceberg above the waterline are being used by a growing section of the society in the developing world in order to reach first-world destinations. It shows how informality is changing the urban landscape in first-world cities where large concentrations of non-Western populations occur. The paper then shifts its attention to the overwhelmingly informally driven economies of African cities and outlines the inappropriateness of standard economic measures to accurately portray conditions there.