Archive for April, 2009

O&M Turns Three

| Peter Klein |

bybc03_250Saturday, April 25, 2009, marked this blog’s three-year anniversary. During the past three years we’ve served up 1,801 posts, hosted 4,597 comments, and entertained 525,624 unique users (that last figure comes from StatCounter and may or may not mean anything). Thanks to the O&M community for making blogging such a fun and interesting experience!

27 April 2009 at 11:31 am 9 comments

Jargon Watch: “Green Shoots” of Recovery

| Peter Klein |

Thanks to Bill Easterly for noticing that Chauncey Gardner is In the House. G7 officials are now telling us they see “green shoots” of recovery. Can’t you just imagine this behind-the-scenes conversation at the summit?

President “Bobby”: Mr. Gardner, do you agree with Ben, or do you think that we can stimulate growth through temporary incentives?
[Long pause]
Chance the Gardener: As long as the roots are not severed, all is well. And all will be well in the garden.
President “Bobby”: In the garden.
Chance the Gardener: Yes. In the garden, growth has it seasons. First comes spring and summer, but then we have fall and winter. And then we get spring and summer again.
President “Bobby”: Spring and summer.
Chance the Gardener: Yes.
President “Bobby”: Then fall and winter.
Chance the Gardener: Yes.
Benjamin Rand: I think what our insightful young friend is saying is that we welcome the inevitable seasons of nature, but we’re upset by the seasons of our economy.
Chance the Gardener: Yes! There will be growth in the spring!
Benjamin Rand: Hmm!
Chance the Gardener: Hmm!
President “Bobby”: Hm. Well, Mr. Gardner, I must admit that is one of the most refreshing and optimistic statements I’ve heard in a very, very long time.
[Benjamin Rand applauds]
President “Bobby”: I admire your good, solid sense. That’s precisely what we lack on Capitol Hill.

Actually, this level of analysis can also be found at the typical graduate macroecomomics seminar. Oops, did I say that?

27 April 2009 at 11:04 am 1 comment

My Working Relationship with Lasse

| Peter Klein |

Every coauthoring relationship is unique. Scholars bring different strengths and weaknesses to the table, and there are many opportunities to exploit gains from trade. The best coauthoring relationships are marked by strong complementarities (a theorist and an empiricst, a conceptual thinker and a detail-oriented person, an expert in literature A and an expert in literature B, a “starter” and a “finisher,” etc.). It doesn’t always work, but — as has been frequently noted — sole-authored papers are increasingly rare in business and the social sciences, suggesting that the benefits, on average, outweigh the costs.

Lasse and I have an excellent working relationship resulting in several published and forthcoming papers, numerous works in progress, some joint teaching projects, and more. If there were any doubt that my role in the partnership is basically that of a glorified research assistant, this website, in which one Peter Klein offers “Pre-Lien Services,” should put those doubts to rest.

27 April 2009 at 10:02 am 3 comments

Tragedy in Athens, Georgia

| Peter Klein |

You may have heard about George Zinkhan, a University of Georgia marketing professor who reportedly shot to death his wife and two others this afternoon before fleeing the scene. As of this writing he remains on the loose and is considered armed and dangerous. A nationwide manhunt is supposedly under way. (Here’s the Google News feed.)

w5t8dvd01I was Zinkhan’s colleague at UGA’s Terry College of Business from 1995 to 2002 and knew him casually. We had lunch together on occasion and played basketball together in a faculty/staff league. I didn’t know much about his personal life, only that he had two young children (I think from a second marriage). He was head of the Marketing department when I was there and was, by all accounts, a productive scholar and an effective teacher.

What a surreal experience to see pictures of SWAT teams assembled outside Brooks Hall — apparently staked out in case Zinkhan went there after the shootings, which occurred off campus — where I had my office and taught most of my classes.

26 April 2009 at 12:13 am 1 comment

One More Ill-Defined, Un-Measured (?) Core Construct: Routines

| Nicolai Foss |

It seems that O&M may usefully introduce a new category: “Constructs that are central to one or more management fields, but so far have not been measured.” Yesterday, we blogged on opportunity discovery, and could report only one existing scale in the entrepreneurship literature. Today the focus is on routines, a frequently discussed topic here on O&M.

Routines are, of course, absolutely central in much management research, notably strategic management, international business, technology strategy, organizational theory and much else. The construct itself was essentially introduced to management research in Nelson and Winter’s 1982 book, An Evolutionary Theory of Economic Change, although it is often argued that it originates somewhat earlier, namely with the behavioralists (Simon, Cyert, & March; for a critique of this interpretation, see this paper). 

The boundaries of the concept are, even for management research, highly  ill-defined and virtually everything in an organization, save for physícal capital, that has some degree of stability has been called a routine by some author. As if this extreme inclusiveness wasn’t enough, it has even been argued that routines can be “sources of continuous change.”

Such conceptual fuzziness would seem to imply that almost anything goes, empirically speaking. In fact, there is quite  a lot of empirical work on routines, and of a rather diverse nature. However, it all seems to be qualitative in nature (e.g., this recent paper), as least as far as I can see. 

So, do you know of any attempts to grapple empirically with routines in the sense of actual measurement? Are there any scales out there?

25 April 2009 at 10:37 am 6 comments

One Part of the Financial Sector Is Still Growing

| Peter Klein |

Courtesy of EconomPicData:


It takes money to make money, you know.

25 April 2009 at 8:33 am 3 comments

Vive la Révolution!

| Peter Klein |

So says the all-star team of Acemoglu, Cantoni, Johnson, and Robinson in  “The Consequences of Radical Reform: The French Revolution.” Check it out:

The French Revolution of 1789 had a momentous impact on neighboring countries. The French Revolutionary armies during the 1790s and later under Napoleon invaded and controlled large parts of Europe. Together with invasion came various radical institutional changes. French invasion removed the legal and economic barriers that had protected the nobility, clergy, guilds, and urban oligarchies and established the principle of equality before the law. The evidence suggests that areas that were occupied by the French and that underwent radical institutional reform experienced more rapid urbanization and economic growth, especially after 1850. There is no evidence of a negative effect of French invasion. Our interpretation is that the Revolution destroyed (the institutional underpinnings of) the power of oligarchies and elites opposed to economic change; combined with the arrival of new economic and industrial opportunities in the second half of the 19th century, this helped pave the way for future economic growth. The evidence does not provide any support for several other views, most notably, that evolved institutions are inherently superior to those ‘designed’; that institutions must be ‘appropriate’ and cannot be ‘transplanted’; and that the civil code and other French institutions have adverse economic effects.

Think of this as a fixed-effects model estimating the within-country effect of legal origin; what happens when a society’s institutional (particularly, legal) environment changes suddenly and unexpectedly? If a common-law country is invaded and occupied by a civil-law country, what happens to financial-market development? An interesting counterpoint to the cross-sectional studies that are the norm in this field.

24 April 2009 at 2:49 pm Leave a comment

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Our Recent Books

Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
Peter G. Klein and Micheal E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Edward Elgar, 2010).
Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Mises Institute, 2010).
Richard N. Langlois, The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy (Routledge, 2007).
Nicolai J. Foss, Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources (Oxford University Press, 2005).
Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, eds., Managing in the Modular Age: Architectures, Networks and Organizations (Blackwell, 2003).
Nicolai J. Foss and Peter G. Klein, eds., Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization (Elgar, 2002).
Nicolai J. Foss and Volker Mahnke, eds., Competence, Governance, and Entrepreneurship: Advances in Economic Strategy Research (Oxford, 2000).
Nicolai J. Foss and Paul L. Robertson, eds., Resources, Technology, and Strategy: Explorations in the Resource-based Perspective (Routledge, 2000).