American Economic Association

400: International Economics

Source: Journal of Economic Literature, Vol. 10, No. 4 (Dec., 1972), pp. 1492-1499
Published by: American Economic Association
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 Selected Abstracts 1493

"endowments" in almost all resources; phe- Underlying the traditional factor-endowment

nomenon parallels unskilled workers' obsoles- explanation of comparative advantage, and the
cence with HDCs. More directly, progress factor-price equalization theorem which follows
means HDCs' advantage lies in "physical- from it, is the assumption that labor, capital,
energy" intensive goods; LDCs' "human-energy" and land do not compete with one another.
intensive goods advantage becomes unimpor- This assumption is dropped, and earlier theo-
tant for growth. Rev. Soc. Econ., March 1972, ries are reviewed which recognize labor and
30(1), pp. 153-160 (English). DePaul Uni- capital competing with each other to supply
versity, U.S.A. energy, and capital and land competing to sup-
ply the soil's fertilizing elements. As capital is
FL0YSTAD, G.-Real wages, factor prices and
substituted for manual labor in industry, and
gain from international trade
for unimproved soil in agriculture, these latter
This paper deals with applied international inputs are rendered increasingly obsolete.
trade problems with special reference to Nor- Thus, it is possible that some less developed
way. It is pointed out that the factors of pro- countries have no comparative advantage in
duction do not get equal return in the different anything. Rev. Soc. Econ., March 1972, 30(1),
industries. The Samuelson-Stolper theorem of pp. 112-140 (English). The New School for
the impact of international trade on real wages Social Research.
is then discussed, assuming mobility of labor
and immobility of capital between sectors. It is JAMES, D. E.-Measuring the production cost of
concluded that the impact of freer trade on protection
real wages is very uncertain. The potential for This paper examines methods of calculating
gain through trade is estimated. There seems to the production cost of protection under the as-
be a considerable potential for gain through sumption of fixed international prices. A com-
trade by transferring resources from the im- parison is made of general-equilibrium and par-
port-competing to the export industries. Int. tial-equilibrium methods of cost calculation.
Econ. Rev., Feb. 1972, 13(1), pp. 65-84 (En- The Corden and Brigden-Young formulae are
glish). shown to yield identical results when a linear
VAN DE GEVEL, A. J. W.-De proliferatie van product-transformation function is used. A
modellen van de internationale handel (The simple two-sector model is provided. One com-
proliferation of international 'trade models: modity is produced under constant returns, the
Towards a realistic explanation) other under severely diminishing returns. The
relative size of the protected sector in the free-
The standard Heckscher-Ohlin-Samuelson
trade situation is a controlled variable, and the
theory is currently being replaced by 'five ortho-
cost of protection is calculated as the income
dox and one heretical theory that contend for
loss resulting from a prescribed fractional in-
supremacy. The orthodox theories can be
crease in the protected sector's output. The
grouped into a neo-factor proportions account
necessary rate of tariff duty is calculated. The
combining human and physical capital, and a
result's suggest that the fractional income loss
neo-technology account relying on economies of
is probably quite small and that a significant
scale, stage of production, product innovation,
cost is incurred only with exceptionally high
and product differentiation. The heretical the-
rates of duty. Australian Econ. Pap., Dec. 1971,
ory is the preference similarity account
10(17), pp. 134-41 (English). Macquarie Uni-
(Linder). The new theories are not yet very
versity, Sydney.
rigorous, but they offer richer explanations and
they are capable of being tested statistically. PETITH, H. C.-Vintage capital, joint produc-
They often overlap. Perhaps a synthesis will be tion and the theory of international trade
achieved in the future. De Economist, Sept.-
In this paper, a two country, two commodity
Oct. 1971, 119(5), pp. 556-610 (Dutch).
model of international trade is set out. The two
HUDSON, M.-Obsolescent factors in the inter- traded goods, which are consumption goods,
national economy are each produced in a separate vintage capital

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 1494 Journal of Economic Literature
industry. The machines for these two industries
are produced jointly by the capital goods sec-
tor. In a balanced growth trading situation the
country with the higher savings ratio will have,
i) the lower interest rate, ii) the higher wage,
iii) the shorter machine life spans, and iv) will
export the capital intensive good. Surprisingly,
an increase in the price of the labor intensive
good will not necessarily raise the real wage.
Int. Econ. Rev., Feb. 1972, 13(1), pp. 148-59
(English).
RAO, V. S.-Tariffs and welfare of factor own-
ers: A normative extension of the Stolper-
Samuelson theorem
This paper analyzes the effect of tariffs on
the welfare of factor owners within the frame-
work of a two-class, two-sector model of inter-
national trade. Given that the allowable income
reallocation is limited only to distributing the
tariff revenue according to some fixed formula,
a necessary and sufficient condition for an
economy to attain a Pareto-superior equilib-
rium by changing the tariff rate is obtained.
Further, a diagrammatic representation of this
condition is given. J. Int. Econ., Nov. 1971,
1(4), pp. 401-15 (English). University of
Western Ontario, Canada.
SCHITTKO, U. K.-A note on economic expan-
sion and international trade
The note gives: (a) A different set of defini-
tions of "ultra-pro-trade-biased growth, "pro-
trade-biased growth," etc., which allows a bet-
ter economic interpretation of Johnsons' find-
ings and supplies some additional extensions
which carry it beyond Johnson. (b) A state-
ment of conditions for "Immiserizing Growth"
in terms of modern welfare analysis rather than
with production possibility and indifference
curves, correcting a deficient statement made
by Bhagwati. Especially, it is not needed to
formulate the results in elasticity terms. Jahr.
Nationalkon. Statist., Sept. 1971, 186(1), pp.
29-38 (English). Lehrstuhl fur Statistik der
Universitat Augsburg.
SCHWEIIZER, A. International economy and
economic systems
The critique of Michael Hudson's theory of
the obsolescent factor in international trade en-
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larges the factual scope of the theory by add-
ing prematurely discarded products to the
analysis. The present paper seeks to prove that
obsolescence is limited to submarginal factors
but cannot cover the disadvantaged but still
employed factors. This is shown by examining
the export policies of leading less developed
countries. By introducing the distinction be-
tween imperialist and poverty systems, the pol-
icies of economic nationalism seek to diminish
the negative impacts of imported technology
by fighting the imperialist system, but reduce
economic disadvantages of low priced products
by negotiating long term contracts with im-
porting countries. Rev. Soc. Econ., March
1972, 30(1), pp. 141-52 (English). Indiana
University, U.S.A.
420 TRADE RELATIONS; COMMERCIAL
POLICY; ECONOMIC INTEGRATION
421 Trade Relations
AULT, D.-The determinants of world steel ex-
ports: An empirical study
The purpose of this paper is to examine the
impact of differences in technology upon the
trading patterns of those products produced by
industries characterized by process innovations.
A model is developed which is based upon
three theories: the Doctrine of Comparative
Costs, the Scale Economies Thesis, and the
Posner Technological Gap Theory. The steel
industry was used as the vehicle for the empiri-
cal test of the model because it is characterized
by internal and external economies of scale and
process, rather than product, innovations. The
results of the empirical test indicate that differ-
ences in technology are important to the deter-
mination of trading patterns of steel products.
Adoption of the latest innovations by the steel
industry of the ith country can offset any disad-
vantages that the steel industry may have with
respect to unit production costs using older
production techniques. Rev. Econ. Statist.,
Feb. 1972, 54(1), pp. 38-46 (English).
GRUBEL, H. G. AND LLOYD, P. J.-The empiri-
cal measurement of intra-industry trade
This paper measures and partly explains the
phenomenon that countries simultaneously ex-
port and import products of many important
 Selected Abstracts 1495
industries. A statistical measure of average in-
tra-industry trade is applied first to Australian
trade at all levels of aggregation in the Stan-
dard International Trade Classification. Intra-
industry trade is significant even at the 7-digit
level. When the trade of major OECD coun-
tries at the 3-digit level is examined, one-half
of their total trade is found to be intra-industry
trade. Some of it is due to border trade, or in-
tra-industry specialization or joint production
unmatched by complementarity of demand.
Econ. Rec., Dec. 1971, 47(120), pp. 494-517
(English). University of Pennsylvania and
Australian National University.
MARSTON, R.-Income effects and delivery
lags in British import demand: 1955-67
This paper discusses the specification and es-
timation of import demand functions for the
United Kingdom. Import functions for five
commodity groups are estimated for the 13
year period prior to the 1967 devaluation. A
distinction is made between long run and cycli-
cal income effects, the concept of an income
elasticity being revised accordingly. Both the
Koyck lag and a more general lag form are es-
timated for each commodity group; the results
from consistent estimation of the Koyck lag
confirm the short lags estimated with the more
general lag form. The disaggregation into com-
modity groups, the reinterpretation of income
effects, and the alternative specification of lag
forms all contribute to a fresh interpretation of
import demand in this period. J. Int. Econ.,
Nov. 1971, 1(4), pp. 375-99 (English). Massa-
chusetts Institute of Technology.
PHAN, D.-L.-Les echanges exterieurs en 1975
entre les six, le Royaume-Uni et les Etats-
Unis d'apres un modele gravitationnel (For-
eign trade in 1975 between the E.E.C. coun-
tries, the United Kingdom and the United
States according to a gravity model)
The purpose of this paper is twofold: 1) to
test the influence of third countries in the de-
termination of bilateral trade flows by use of a
modified version of the usual gravity model,
which gives full account for the possibility of
trade deviations; 2) to apply the model to pro-
jection of a trade network, with appropriate
qualifications.
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It is found that creation effects do have some
importance. Since the test is limited to an
"open" network, some leakage may occur
which makes the identification of these effects
difficult (one estimate out of three is statisti-
cally significant). For this reason, projections
to 1975 are based upon the reduced form of
the model which corresponds precisely to a
gravity model of the classical kind. Rev. Econ.
Politique, Jan.-Feb. 1972, 82(1), pp. 80-106
(French). CEPREMAP and C.N.R.S.
422 Commercial Policy
GREEN, J. R.-The question of collective ratio-
nality in Professor Gale's model of trade im-
balance
Professor Gale has introduced a model of in-
ternational trade over time in which there are
two equilibria, one of which is a state of perma-
nent trade imbalance. This paper explores the
properties of this model further. Particular at-
tention is paid to the possibility that one coun-
try in the unbalanced equlibrium might im-
prove its welfre by collective action. Two po-
tential policies for this are studied. J. Iht.
Econ., Feb. 1972, 2(1), pp. 39-56 (English).
Harvard University.
KIRKPATRICK, C. H.-The measurement of the
effective protection of Indian industry
1964-65
This paper provides estimates of the effec-
tive rate of protection of 39 industrial sectors
of the Indian economy in 1964-65. The results
obtained indicate an escalation of effective pro-
tection rates as between investment and inter-
mediate goods, and consumption goods. There
is also considerable divergence between the
nominal and effective rates of protection for
particular sectors. The conclusion drawn is that
the effect of the tariff structure during this pe-
riod was to encourage consumption-good pro-
duction despite the declared intention of giving
priority to domestic production of intermediate
and investment goods. Bull. Econ. Res., Nov.
1971, 23(2), pp. 141-48 (English). University
of Manchester.
MELVIN, J. R.-The effects of tariff preferences
in Canadian imports: An empirical analysis
Although much has been said about prefer-
 1496 Journal of Economic Literature

ential tariffs, very little empirical evidence on
their effects is available. This study uses cross
sectional data on Canadian imports to test the
hypothesis that British Preferential tariffs have
influenced the level of Canadian imports from
British Preferential countries. Simple linear re-
gressions are used to relate import shares to
tariff variables for a number of commodity
classes, and the results are found to be signifi-
cant. Tentative predictions on the possible
effects on Canadian imports from Britain join-
ing the EEC are made, and it is estimated that
removal of preferences could reduce British ex-
ports to Canada by 30 percent. Can. J. Econ.,
Feb. 1972, 5(1), pp. 48-69 (English). The
University of Western Ontario, London, Can-
ada.
convenience and economic objectives. Accep-
tance of the BTN as a tariff base tends to cre-
ate many difficulties for developing countries
which attempt to use tariff policy as a major
weapon of economic policy. Although designed
to facilitate the identification and classification
of goods so as to ease costly and time-consum-
ing customs and tariff procedures, the nomen-
clature is neither a simple nor an efficient sys-
tem to implement in a developing country. Far
from simplifying procedures, the adoption of
the BTN in a tariff as opposed to an "end-use"
system of classification frequently leads to a
new, more complicated tariff with a revised
and excessively detailed structure of duty
rates. Econ. Rec., Dec. 1971, 47(120), pp. 553-
67 (English). Cambridge.

SCHYDLOWSKY, D.-Latin American trade YADAV, G.-Discriminatory aspects of

policies in the 1970's: A prospective ap- Canada's imports of manufactured goods
praisal from the less developed countries
An exchange rate system implicitly of multi- The purpose of this paper is to investigate
ple-rate type with strong bias in favor of im- the discriminatory aspects of Canadian tariffs
port substitution and against industrial exports and quotas on the imports of manufactured
has shaped Latin American development since goods from less developed countries. It exam-
World War II. The consequences include de- ines the combined impacts of tariffs and quotas
parture from comparative advantage special- on imports, and also, it compares nominal tariff
ization, "inefficiency illusion" in industry, and rates and the relative reduction in the value of
weak price effects in the balance of payments imports from developed and less developed
adjustment mechanism, Policy must emphasize countries due to these tariff rates. The evidence
generation of industrial exports for industry to suggests that the Canadian system of tariffs
be an engine of growth, user of installed capac- and quotas discriminates considerably against
ity, and provider of employment. Undistorted the imports of manufactured goods from less
specialization pursuant to economic integration developed countries. Can. J. Econ., Feb. 1972,
also requires improved exchange rate struc- 5(1), pp. 70-83 (English). University of Brit-
tures. Export subsidies and compensated de- ish Columbia, Vancouver, Canada.
valuation are examined as remedies. Quart. J.
423 Economic Integration
Econ., May 1972, 86(2), pp. 263-89
HITIRIS, T.-Estimation of the price-import
(English). Harvard University, Cambridge,
Massachusetts. effects of economic associations
Economic Association between a developed
WARD, M.-The Brussels Tariff Nomenclature customs union and a developing country is
and developing countries common nowadays. However, no attempt has
This paper attempts to analyze the appropri- been made to estimate the effects of such asso-
ateness-in terms of present economic needs ciations on the economies of the developing
and the desire for incrpased development-ofcountries. In this paper a method of estimating
the adoption by developing nations of new tar- the effects of association on the imports of the
iffs based on the Brussels Tariff Nomenclature. associate members is suggested and applied.
It emphasizes the need for an essentially prag- The following points are made: 1) The effects
matic approach to tariff policy which reconciles of gradual adjustment of the tariff are not
the conflicitng aims of practical administrative equal to the effects of a once-and-for-all equiv-

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 Selected Abstracts 1497
alent adjustment of the tariff, because of the
interplay of the direct price effect and the sub-
stitution effect. 2) Period analysis is an appro-
priate method for the study of the inter-tempo-
ral pattern of the effects of the gradual adjust-
ment of the tariff. 3) The application of this
method of analysis to actual statistical data is
demonstrated. Bull. Econ. Res., Nov. 1971,
23(2), pp. 95-105 (English). University of
York, U.K.
430 BALANCE OF PAYMENTS;
INTERNATIONAL FINANCE
431 Balance of Payments; Mechanisms of
Adjustment; Exchange Rates
DUFFY, M. AND RENTON, A.-An analysis of
the U.K. balancing item
This paper reports on an attempt to estimate
explanatory relationships for the errors and
omissions item in the United Kingdom balance
of payments accounts. The method is to regress
the balancing item upon principal components
extracted from the probable major sources of
error in the accounts and from the likely deter-
minants of unidentified monetary flows. This
regression, when re-interpreted in terms of the
balance of payments items, enables the major
errors to be identified. Int. Econ. Rev., Oct.
1971, 12(3), pp. 448-64 (English).
NATIONAL INSTITUTE OF ECONOMIC AND So-
CIAL RESEARCH-The effects of the devalua-
tion of 1967 on the current balance of pay-
ments
This is an estimate, made by a team of econ-
omists at the National Institute, London, of the
effects upon the current balance of payments
of the United Kingdom of the sterling devalua-
tion of 1967. The method is to find for each
item a good explanation of past behavior to
predict what would have happened in the ab-
sence of devaluation. The conclusions are that
the price elasticities for goods are low, and that
the greater part of an "effect" of the order of
$1,000 million could be attributed to invisibles.
Econ. J., March 1972, 82(325s), pp. 442-64
(English). National Institute of Economic and
Social Research, London.
SCHWARTZ, J.-J.-Anticipations et desequilib-
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re de la balance des payements (Anticipa-
tions and disequilibrium in the balance of
payments)
There used to be an automatic adjustment
process towards equilibrium in the balance of
payments due to the effects of prices, income
and interest rate, and a possible speculation
used to exert a stabilizing influence. However,
the anticipations of variations in the exchange
rate cause regularly increasing speculative ac-
tivities today (before 15th August 1971), thus
provoking a break-down of the system. Specu-
lation would have a stabilizing effect-if it oc-
curred at all-in a system of flexible exchange
rates, provided the limits of fluctuations and
variations in the exchange rates and the dates of
these variations are fixed in advance. Schweiz.
Z. Volkswirtsch. Statist., March 1972, 108(1),
pp. 61-72 (French). University of Geneva,
Switzerland.
432 International Monetary Arrangements
COOPER, R. N.-Comment on the Howle-
Moore analysis and proposed modification of
Cooper's gliding parity system
This note comments on and elaborates nu-
merical calculations on the implicit devaluation
of the U.S. dollar that would have taken place
during the 1960s if a system of gliding parities
based on reserve movements had been in oper-
ation, with the dollar retaining a "passive" role
as pivot point of the international payments
system. It contrasts these results with those that
would have occurred if the dollar had been
treated symmetrically with other currencies,
and draws attention to some complications in-
troduced by such symmetric treatment. J. Int.
Econ., Nov. 1971, 1(4), pp. 437-42 (English).
Yale University.
HOWLE, E. AND MOORE, C. F. J.-Richard
Cooper's gliding parities: A proposed modi-
fication
A sliding-peg system of exchange-rate ad-
justment must have a limited rate of slide to
minimize problems with capital flows and in-
terest rate adjustments. If adjustment needs
of given countries are to be accommodated
within such a system, the required rate of
slide can be minimized only if adjustments are
 1498 Journal of Economic Literature
distributed between appreciations and depreci-
ations according to a certain criterion. Richard
Cooper has proposed a variant of the sliding-
peg system in which this criterion cannot be
met. Also, evidence indicates the U.S. could
not maintain payments equilibrium within
Cooper's plan. A modification is suggested to
overcome these difficulties. J. Int. Econ., Nov.
1971, 1(4), pp. 429-36 (English). University
of North Carolina at Chapel Hill.
HUNTER, J. S. H.-The role of exchange rates
in the adjustment international payments
This article contains an evaluation of a recent
IMF Report on exchange rate flexibility.
There is agreement with the Executive Direc-
tors that i) inflation is a prime cause of persis-
tent balance of payments disequilibria; ii)
there is a continued need for international co-
operation in exchange rate policy; and iii)
needed changes in exchange rates have been
unduly delayed in the past. With regard to
(iii) it seems that proposals for allowing ex-
change rates to vary without the Fund's con-
currence are incompatible with the notion that
exchange rate adjustments should only be im-
plemented when there is evidence of a funda-
mental disequilibrium Z. ges. Staatswiss., Oct.
1971, 127(4), pp. 597-608 (English). The Uni-
versity of New England, Armidale, N.S.W.
MAKIN, J.-On the success of the reserve cur-
rency system in the crisis zone
The dynamics of a dollar/gold reserve cur-
rency system are examined. A continued rise of
dollar claims outstanding relative to the U.S.
gold stock is shown to be a necessary condition
for the gold exchange standard to be dynami-
cally stable. This condition holds for a system
where interest on dollars is treated as a policy
variable to offset an excess demand for gold, as
well as for a market system with a single mar-
ket for dollar assets along with a market where
an expected return on gold is reflected. The
condition for stability is reversed where there
are two markets for dollar assets (U.S. and
Euro-dollars.) J. Int. Econ., Feb. 1972, 2(1),
pp. 77-86 (English). University of Wisconsin-
Milwaukee.
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440 INTERNATIONAL INVESTMENT AND
FOREIGN AID
441 International Investment and
Capital Markets
HATTI, N.-Growth of private foreign invest-
ments in India 1948-1960
To place the status of foreign investments in
India in a historical perspective, their growth
over the years will have to be studied carefully.
Such a study of the trends in the growth of pri-
vate foreign capital during 1948-1960, based
on both countrywise and industrywise classifi-
cation, is attempted in the essay with a view to
focus attention on some of the major trends in
private foreign capital inflow into India. The
essay deals with estimates, sectors and classifi-
cation of the investments and Indo-foreign col-
laborations, attempting to bring out various
trends such as, the steady increase of foreign
capital inflow into the manufacturing sector
and the paradox of a continuously increasing
volume of private foreign capital co-existing
with a net outflow of funds on the private for-
eign capital account. Economy and History,
1970, 13, pp. 54-80.
MENDELSON, M.-The Eurobond and capital
market integration
The Eurobond market brings together finan-
cial interests from many countries. The conflu-
ence of yields that might result is inhibited by:
various governmental measures, e.g., subsidies,
queing privileges, the IET and foreign direct
investment regulations; and operational inade-
quacies, e.g., the need to permit participation
in new issues by many banks with little place-
ment power, clearing difficulties, and the par-
tially consequent limitations of the secondary
market. Self regulation through the Association
of International Bond Dealers should help over-
come a number of operational shortcomings.
The market has survived the international mon-
etary turmoil and has clearly improved the
world's financial framework. J. Finance, March
1972, 27(1), pp. 110-26 (English). University
of Pennsylvania, Philadelphia, Pa.
WEISSKOPF, T. E.-The impact of foreign cap-
ital inflow on domestic savings in underdevel-
oped countries
 Selected Abstracts 1499

The objective of this paper is to test the hy- pp. 14-28 (German) . Institut fiir Gesellschafts-
potheses 1) that the level of domestic savings und Wirtschaftswissenschaften Statistische
in underdeveloped countries is related to the Abteilung, Universitat Bonn.
level of net foreign capital inflow as well as the
level of national income, and 2) that the func- SITTIG, J.-Ach, waren alle mensen wijs en
tional dependence of domestic savings on capi- wilden daarbij wel.... Predictie en doels-
tal inflow is significantly negative. An empirical telling als elementen van besIuitvorming
test is first devised and applied to time series (Prediction and purpose as elements of deci-
data for 44 underdeveloped countries in order sion making)

to determine in each case whether a behavioral
savings function can actually be identified.
Among the countries for which a savings func-
tion can be identified, the results show that the
impact of foreign capital inflow on domestic
savings is consistently negative. J. Int. Econ.,
Feb. 1972, 2(1), pp. 25-38 (English). Harvard
University.
500 Administration; Business Finance;
Marketing; Accounting
510 ADMINISTRATION
511 Organization and Decision Theory
FEICHTINGER, G.-Ober Lernprozesse mit va-
riabler Transitionsstruktur in Entscheid-
ungssituationen bei Ungewissheit (Some
learning processes with a variable transition
structure arising in decision situations under
uncertainty)
The starting point is a decision situation un-
der uncertainty (in the restricted sense) in a
stationary stochastic environment. It is as-
sumed that the decision maker has initially no
information concerning the nature and the pay-
off-matrix. However, if he is exposed to the
same situation repeatedly, he will try to fill up definition widens the traditional concept of
his ignorance about the world to accomplish a
decision problem under risk. First some re-
marks are given concerning the fields of norma- these messages, and design of future behavior.
tive decision theory and descriptive learning
theory. The one-step transition probabilities are (Italian).
transformed by a linear reinforcement schedule
depending on the pay-off which is realized on
the immediately preceding trial. It is shown
that such a model with a variable transition
structure yields an optimal solution in the
following sense: the decision maker with prob-
ability one to take the Bayes-optimal action.
Jahr. Nationalokon. Statist., Sept. 1971, 186(1),
Decision making is presented as a joint ven-
ture of management and operations research.
The main contribution of management is the
choice of objectives, whereas operations re-
search is responsible for making good predic-
tions. A critical analysis of decision making is
given in the case of area bombing (1942). The
following special problems in the formulation
of aims are treated: multiplicity of objectives,
and objectives sometimes being imponderable.
De Economist, Sept.-Oct. 1971, 119(5), pp.
539-55 (Dutch).
512 Managerial Economics
DI FENrzIo, F.-Potere, economia, tecnologia
nella grande impresa (Power, economics, and
technology in the large firm )
This article is divided into two parts. The
first part stresses the importance of an inter-
disciplinary approaqh in the social sciences. The
second part shows how this approach may also
be extremely useful in the analysis of the de-
cision-making process in a large firm. The large
firm is considered here as a social "whole"; its
problems and behavior are analogous, be it a
private or a public firm, and whatever may be
the economic system to which it belongs. This
"firm", which is not a simple "economic entity",
but a center of images, messages, elaboration of
L'industria April-June 1971, 2, pp. 123-35
GRABOWSKI, H. G. AND MUELLER, D. C.-
Managerial and stockholder welfare models
of firm expenditures
The determinants of firm expenditures on
capital equipment, research and development,
and dividends are explored within a common
analytical framework. The major objectives are

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