Economics Insights @ CBS

The seminal work by Grossmann and Hart (1986) made the study of firm boundaries susceptible to formal economic analysis, and illuminated an important role for markets in providing incentives. In this essay, I discuss some new directions that the literature has taken since. As a central challenge, I identify the need to provide a formal theory of the firm in which managerial direction and bureaucratic decision-making play a key role. Merging a number of existing incomplete contracting models, I propose two approaches with very different contracting assumptions.

With globalization, cross-cultural competence is increasingly important to effective policies in international relations, business, and even in our schools and communities. Can we assess the skills and attributes relevant to gaining proficiency in other cultures? What kinds of training can help people toward this goal? Evidence on the assessment question comes from surveys of immigrant acculturation and expatriate adjustment, investigating antecedents including personality, general intelligence (g), and social-cultural intelligence.

This special section is the result of an effort by several scholars to move marketing academic research toward greater practical relevance. This initiative, called Theory Practice in Marketing (TPM), started with a conference at Columbia Business School in 2011, and the five papers published in this special section were presented at the second TPM conference held at Harvard Business School in 2012.