This issue features three research articles relevant to managerial decision making. These have been selected because interesting generalizations can be made with regard to managerial business environment, on the basis of these studies. These empirical analyses enable the readers to draw some very relevant conclusions ranging from the dependence of efficiency in key sectors, to some basic parameters pertaining to institutions like universities, governments and regulating agencies.

In the first paper, "How Does University Interaction Contribute to Successful R&D Management? An Examination of the Swedish Setting", by Anders Broström and Hans Lööf, an interesting examination has been made of the influence of research universities in successful R&D (Research and Development) projects in industries in Sweden. The setting is ideal for an enquiry into value analysis in the manufacturing sector, since Sweden has been traditionally well known as a place for innovation in diverse goods, ranging from matches to heavy machinery and equipment. The authors have studied the trends in the registering of patents, as a consequence of collaborative research between researchers in principal universities and industrial houses. They have hit the nail on its head by making a methodological distinction between the fundamental innovative breakthrough in a process or a product, and parametric shifts that must inevitably follow after the breakthrough has been achieved. The paper points out that the university collaboration projects are productive in the former case, while the subsequent research, which is essentially a follow-up to customize the fundamental breakthrough to individual sectors and operations, is better taken care of by independent in-house R&D units. These findings substantiate the assumption that academicians orient their research projects towards the general deductive model, wherein one starts by general assumptions and comes to particular conclusions. These particular conclusions need to be subjected to verification and qualifications in specific empirical settings. This is how fundamental research, powered by intellectuals at university research departments, gets complemented by individual in-house industry R&D activities.

The second paper, "MNCs, FDI and Host Country Productivity: A Theoretical and Empirical Appraisal", by Argentino Pessoa, is an enquiry into the general impact of the FDIs (Foreign Direct Investments) by multinational corporations on the productivity of host countries' labor and resources. In other words, it is an analysis of the question as to whether the infusion of foreign ownership of businesses—wholly-owned subsidiaries and joint ventures—is making way for a genuine long-term benefit for the host nation, which is usually a developing country. This research effort is extremely relevant to the current debate on the issue of zero-technology imports of brands, which do not transfer any know-how but act as drags on scarce foreign exchange reserves, when interests and profits are to be repatriated at a high rate. In addition, these types of investments can adversely affect local entrepreneurial talent by making use of economies of scale, and by controlling or owning distribution networks. The author finds that the effect of FDIs is favorable to productivity in the host country only if the latter's industrial community and business environment are ready for them. If the business regulation and company law are efficient enough, the local entrepreneurial class will imbibe the productivity traits of the investing nation. Otherwise, the influence of the foreign partner gets dampened, and is confined to only the chosen sector of investment for a short span of time. In other words, there are no lasting changes for the better in the industrial productivity of the host nation. To conclude, the institutional factors of the host nation, including the political climate, determine the nature of change ushered in by the FDI deals.

The third paper, "Ownership and Efficiency: A Non-Radial Bilateral Performance Comparison of Indian Commercial Banks", by Ram Pratap Sinha, is a study of performance of firms in the banking sector. There is a special emphasis on the relationship of the ownership pattern to the measures of performance in the large banking corporations. The author has traced the historical record of performance of these institutions since the era of liberalization, ushered in the year 1991. With the liberalization and free entry of private banks, there was considerable scope for healthy competition in innovative service provision and intelligent strategizing. The author has studied a group of 40 private and public banks, and has used non-parametric statistical analysis, which is a variation of Data Envelopment Analysis (DEA). The results show that there is no conclusive evidence that the ownership pattern has a direct bearing on the efficiency of performance of these corporations. The author has divided the operations of the sector into deposit creation and lending. There seem to be more pressing issues of decisive nature, to do with the governance and leadership that influence performance. These seem to be having less to do with ownership per se.

-- Syamasundar Tallury
Consulting Editor