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- Title
Even the bad times are good: a behavioural theory of transformation pressure.
- Authors
Erixon, Lennart
- Abstract
A theory of transformation pressure was developed in Sweden in the 1990s which suggested that structural changes, rationalisations and innovations are stimulated by profit crises, arising, for example, from negative demand shocks and restrictive economic policies. Firms will then either become more creative or abandon an overconfident, risk-prone and irrational status quo strategy. A qualified theory states that productivity will increase as external pressures become stronger but only up to a certain point. A competing qualified theory maintains that productivity is maximised if periods of hard pressure are succeeded by periods of financial and technical consolidation, scale advantages and weaker demands for defensive actions to raise productivity.
- Subjects
SWEDEN; ECONOMIC policy; ECONOMIC stabilization; INDUSTRIAL management; SWEDISH economy, 1945-
- Publication
Cambridge Journal of Economics, 2007, Vol 31, Issue 3, p327
- ISSN
0309-166X
- Publication type
Article
- DOI
10.1093/cje/bel035