Interim Report for The

Interim Report for the

Quality Assessment of Research

2001-2004

Economics and Business Administration

Amsterdam, October2005

vrije Universiteit amsterdam

Faculty of Economics and Business Administration

Table of Contentspage

Introduction 3

Section A: Research profile of the faculty 4

1. Mission Statement 5

2. Leadership 5

3. Strategy and Policy 6

4. Researchers and other personnel 7

5. Resources, funding and facilities 10

6. Processes in research, internal and external collaboration 11

7. Academic reputation 11

8. Overview of the results 13

9. Analysis, perspectives and expectations for the faculty 15

Section B: Documentation per programme 17

Strategic and Cooperative Decision Making 18

Time Series Econometrics 27

Applied Labour Economics 38

Farms and Firms 61

Regional Economics and Networks 76

Environmental Economics129

Finance and Banking150

Operations Research and Information Technology170

Accounting and Decision Making177

Dynamic Organisations and Markets193

Strategy and Organisation208

Marketing Strategy214

Human Resources221

Information Systems for Organisational Networks230

Transition and Development in International Perspective 249

Various Research Projects258

Appendices

Appendix I: Fellows of Tinbergen Institute266

Appendix II: Journals and publishers list of the faculty268

Introduction

This report contains the documentation of the Faculty of Economics and Business Administration at the Vrije Universiteit Amsterdam, as required for the 2005 Assessment of the research quality of the disciplines of ‘Economics and Econometrics’ and ‘Management and Business Administration’. The chosen format agrees with the demands of the 2003-2009Standard Evaluation Protocol for Public Research Organisations as published by the VSNU.

The documentation presents an overview of the research activities of the faculty in the period 2001-2004.

The Faculty of Economics of the Vrije Universiteit was established in 1948. In 1987 the Faculty merged with the Faculty of Actuarial Science and Econometrics to form the Faculty of Economics,Business Administration and Econometrics. Currently the Faculty is referred to as FEWEB (which stands for the Dutch equivalent of Faculty of Economics and Business Administration).

FEWEB is a medium-sizedfaculty, with approximately 3000 students, 1200 postgraduate students and about 400 academic and non-academic members of staff.

Section A

Research Profile of the Faculty

1Mission statement

The Faculty of Economics and Business Administration (FEWEB) aims at theoretical and applied research of high quality in the various fields of economics, econometrics and business administration. In this light it maintains a policy of a balanced division of research and educational tasks among staff, such that students are taught by staff members with strong research qualifications and the practice of teaching is fed by the latest insights from research. In addition to covering the various fields of education by strong research groups, the faculty aims at hosting some excellent research groups in fields that do not necessarily have a strong representation in education. Examples are the research groups in labour economics, regional and environmental economics, and development economics.

In line with current developments within the discipline, FEWEB invests a fair amount of energy in the creation of networks with regard to multidisciplinary research. Important networks include among others the Amsterdam Institute for International Development, which was created by the two Amsterdam universities, and the co-operation between the FEWEB Information Technology group and researchers from the Faculty of Science. Within the fields of environmental economics and regional economics ties have been established with the Institute for Environmental Studies (IVM-VU), Faculty of Spatial Sciences, University of Utrecht and the Research Institute for Housing, Urban and Mobility Studies, Delft University of Technology.

The Faculty attaches considerable importance to the societal relevance of its research, next to theory development. A focus on current and latent social issues can go hand in hand with the development of fundamental insights. Compelling examples of this merger can be found among the publications by researchers from labour economics, regional economics, development economics and business economics. The double focus on applied research and theory development has attracted numerous sources of external funding (notably within the research institutes connected with FEWEB), and programmes sponsored by the Netherlands Organisation for Scientific Research (NWO). The faculty will continue to encourage its researchers to seek both types of funding.

2. Leadership

The Board of Faculty is the most important administrative instrument of the faculty. All the important decisions are taken by this Board. The Board consists of the dean of the faculty, the research director, the teaching director, and a student (non-voting member). The board is assisted by the management director of the faculty, who is also directing the faculty’s office. The board is accountable to the Executive Board of the Vrije Universiteit (College van Bestuur).

Director of Faculty: Drs. F.A.M. Snijders

Board of Faculty:

Prof. dr. H. Verbruggen, dean
Prof. dr. J.W. Gunning, research
Drs. P. Sneep, teaching
Drs. F.A.M. Snijders, director
K. Anev, student

The Faculty of Economics and Business Administration has 7 departments and each department has at least one head of department.

Heads of departments:

Prof.dr. T.L.C.M. Groot (Accounting)
Prof.dr. G. van den Berg (Economics)
Prof.dr.ir. G. van der Laan (Econometrics)
Prof.dr. M. van der Nat (Finance)
Prof.dr. B. Compaijen (BFS)
Prof.dr. A.R. van Goor (as of September, 1 2005, Information systems and logistics)
Prof.dr. P.G.W. Jansen (Management and Organisation Studies)
Prof.dr. R.T. Frambach (Marketing)
Prof.dr. P. Rietveld (Regional Economics)

Each department has one or more researchprogramme, and each researchprogramme has one or moreprogramme leader. Currently, the faculty has 13 researchprogrammes:

Strategic and Co-operative Decision Making (Prof.dr.ir. G. van der Laan)
Time Series Econometrics: methods, computations and applications (prof.dr. S.J. Koopman)
Applied Labour Economics (prof.dr. M. Lindeboom)
Farms and Firms: The Microeconomics of Poverty, Risk and Development (prof.dr. J.W. Gunning)
Regional Economics and Networks (Prof.dr. P. Rietveld)
Environmental Economics (prof.dr. J.C.J.M. van den Bergh and prof.dr. C.A.A.M. Withagen)
Finance and Banking (prof.dr. A. Lucas)
Operations Research and Information Technology (prof.dr. H.C. Tijms)
Accounting and Decision Making (prof.dr. T.L.C.M. Groot)
Strategy & Organization (Dr.Ir. B.A.G. Bossink)
Marketing Strategy (Prof.dr. R.T. Frambach)
Human Resources (prof.dr. P.G.W. Jansen)
Information Systems for Organisational Networks (prof.dr. Y.H. Tan)

3. Strategy and Policy

The Faculty of Economics and Business Administration (FEWEB),aiming for high quality theoretical and applied research in economics, econometrics and business administration, maintains a policy in which the research and teaching tasks among staff members are well divided. Both students are taught by staff members with strong research qualifications as well as the practice of teaching is fed by the latest insights from research.

The latest research assessment was in August 2002 (Economics) and December 2002 (Business Administration and Management). Partly in response to these assessments of research quality, nearly all the research programmes of the faculty were changed, both in content and in name.

The Research Programme “Transition and development in international perspective”, which was not very well evaluated during the last assessment in 2001, has been discontinued in 2002. Most of the researchers of this programme were able to fit in other research programmes.

The following economic research programmes changed their names:

Competition and Cooperation has becomeStrategic and Cooperative Decision Making;
Applied Econometrics has becomeTime Series Econometrics;
Spatial Dynamics has becomeRegional Economics and Networks;
Economic Dimensions of Sustainable Developmenthas becomeEnvironmentalEconomics.

The following business administration and management research programmes have been changed:

Stochastic Operations Researchis now calledOperations Research and Information Technology;
Dynamic Organisations and Markets has been split into three programmes:
Strategy and Organisation,
Marketing Strategy, and
Human Resources.
Information Technology and the Changing Organization has becomeInformation Systems for Organisational Networks;
Financial Markets and Institutions has becomeFinance and Banking.

Of these changes the most important one is the split of the “Dynamic Organisations and Markets” programme (which suffered from excessive heerogeneity) into three well-focused programmes. This is considered a great improvement.

A detailed description, and strategies and policy, and plans for the short and long term are given in the research programmes documentation section.

4. Researchers and other personnel

The Faculty of Economics and Business Administration maintains a system of assessment of the research output of its members of staff that enables the (re)distribution of research funding according to individual achievements. The system comprises the rating of the five best publications of a researcher over the five past years, based on a journals- and publishers list (see enclosures). It was faculty’s policy to ask only for the five best publications, and not all the publications in order to give aproper incentive to researchers.

The periodic reallocation of research funding used to take place every five years. Starting 2005, however, the procedure will be followed every three years, to allow more dynamics and to align with the national agenda for internal and external research assessments.

In 2003/2004 a new journals- and publishers list has been established. The former list was created in 1992 and did no longer meet the requirements for accurate output assessment. For the fields covered by the faculty's research school, the Tinbergen Institute, the TI journals list was adopted (In exceptual cases journals were added to this list and the classification of the Journal of Urban Economics, a B-journal on the I list, was changed to A. As the fields covered by the TI list do not include the entire range of fields covered by the Faculty of Economics and Business Administration, it has been supplemented with the core journals for Business Administration and Econometrics. For more information about the creation of the faculty’s list and the Tinbergen list, see the website of the faculty ( and the Tinbergen Institute (

Measurement principles

Through its system of allocation of research funding (expressed in full time equivalents) the Faculty of Economics and Business Administration seeks to emphasise quality. This policy has proven effective, as over the years an increasing number of researchers acceded to publishers and journals of international standard.

The faculty also strives after transparency through objective rules and a clear classification system that acknowledges the various fields covered by the faculty's research. Both book and journal contributions are appreciated provided that they are based on research. To enable easy access to research funding for junior staff, dissertations are classified as B.

The allocation of research funding

The research funding is meant for members of the scientific staff with an appointment on the account of the university ("eerste geldstroom") or on a structural externally funded position. PhD students and post-docs are not entitled to research funding, other than the funding agreed upon at the start of their contract.

Entitlements to research funding are expressed in percentages of full time equivalents. A maximum of 60 per cent can be allocated. The percentage obtained ought to be multiplied with the employment factor (wtf) and reduced by possible budget cuts, to arrive at the number of working hours to be dedicated to research.

Until January, 1 2005, Assistant professors (UD) who did not yet defended their PhD and whose manuscript drawn near completion were able to request an allowance of 20% maximum to be dedicated to the writing of their thesis. The allowance were granted for the period of one year, to be extended twice (at the most) for six months following a written request and a progress report.

Tenure Track

On January, 1 2005 a tenure track system has been introduced. This system will guarantee new members of staff a minimum of hours to be dedicated to research.

In order to increase the quality of the scientific staff of FEWEB and to further the career possibilities of young talented scientists within our faculty, young scientists will get the opportunity to spend 0,4 fte of their full-time position to do research during a period of 5 years. This allotment of research time will make it easier for them to make a next move in their career, which could be a permanent appointment as assistant professor 1 or as associate professor (tenure). The career move depends on performance during the five-year period.

PhD students and Research Fellows

PhD students are recruited on the basis of open competition; a decisive selection criterion is the academic quality of the candidates. Once accepted, the graduate students and their supervisors write a plan with regard to their training and supervision, covering the four years of their contract. Progress reports are written at least once a year, allowing the Tinbergen Institute and the faculty to monitor the process of writing and the academic development of the students. The students are encouraged to participate in conferences, to publish their results in international scientific journals and to develop relevant networks of professional contacts. After graduation, the faculty explicitly seeks to hold on to promising researchers by offering career perspectives. The allocation of research funds is based among others on the principle that productive researchers should be allowed room to exploit their talents. In most cases they can be offered a tenure position after a few years of temporary post-doc contracts.

As of 2005 PhD students (Eerste Geldstroom) in economics and econometrics are recruited from the Tinbergen Institute (M.Philprogramme). The M.Phil. programme is a two-year research master in economics, econometrics, and finance, and is an excellent preparation for Ph.D. thesis research in these fields. The M.Phil.programme is taught by the best researchers of the three economics departments participating in the institute and by internationally renowned guest lecturers. Students are carefully selected from a large international pool of applicants. Each year at most 30 studentsare admitted and thorough selection is part of the admission procedure. The M.Phil. programme has been accredited by the Dutch and Flemish Accreditation Organisation for higher education (NVAO) and leads to a Master of Philosophy in Economics degree.

PhD students in business administration and management will continue to be recruited on the basis of open competition.

As of 2004 PhD students are given opportunities to teach and are advised to do so. Teaching is important for career development. The maximum teaching load is 10%.

Table 1

Research staff at institutional level in fte

2001 / 2002 / 2003 / 2004
Tenured staff / 24.40 / 25.19 / 26.43 / 26.13
Non-tenured staff / 15.10 / 14.87 / 13.89 / 13.22
PhD students / 24.80 / 29.36 / 24.47 / 24.62
Total research staff / 64.30 / 69.42 / 64.79 / 63.97
Supporting staff / 16.08 / 17.36 / 16.20 / 15.99
Total staff / 80.38 / 86.78 / 80.99 / 79.96

The changes in research staff are mostly due to changes in research funds (2e geldstroom) en contracts (3e geldstroom). As of 2005, the allocation in direct funding (1e geldstroom) has been raised from 27.99 to 31.28.

For research staff at research programme level:See documentation regarding the level of the research programme

5. Resources, funding and facilities

Table 2

Funding and expenditure at institutional level (In k€ and in %)

2001 / 2002 / 2003 / 2004
K€ % / K€ % / K€ % / K€ %
Total Funding
Funding research / 5.134 44,0% / 4.504 34,4% / 5.236 37,9% / 5.845 38,7%
Funding teaching / 6.529 56,0% / 8.582 65,7% / 8.589 62,1% / 9.260 61,3%
Total funding / 11.663 100,0% / 13.086 100,0% / 13.825 100,0% / 15.105 100,0%
Total expenditure
Expenditure research / 5.230 43,3% / 5.794 44,5% / 5.575 39,5% / 5.709 37,9%
Expenditure teaching / 6.849 56,7% / 7.226 55,5% / 8.532 60,5% / 9.364 62,1%
Total expenditure / 12.079 100,0% / 13.020 100,0% / 14.107 100,0% / 15.073 100,0%
Funding research
Direct funding / 3.995 77,8% / 3.266 72,5% / 4.204 80,4% / 4.785 81,9%
Research funds / 758 14,8% / 936 20,8% / 531 10,1% / 592 10,1%
Contracts / 158 3,1% / 139 3,1% / 347 6,6% / 279 4,8%
Other / 223 4,3% / 163 3,6% / 154 2,9% / 189 3,2%
Total / 5.134 100,0% / 4.504 3,6% / 5.236 100,0% / 5.845 100,0%
Expenditure research
Personnel costs / 4.500 86,0% / 5.060 87,3% / 4.839 86,8% / 4.967 87,0
Other costs / 730 14,0% / 734 12,7% / 736 13,2% / 742 13,0%
Total / 5.230 100,0% / 5.794 100,0% / 5.575 100,0% / 5.709 100,0%

As from the year 2002 the university introduced a new allocation model IVVU (InternVerdeelmodelVU) that is used by the university to determine the direct funding of the research and the teaching activities for the different faculties of the university. Although the total direct funding of the faculty was initially not influenced by this new model, the share of research funding in the total funding decreased enormously from 44,0% in 2001 to 34,4% in 2002. For faculties with teaching activities leading to the Master degree, the policy of the university is to allocate approximately 35% of the direct funding for research activities. The remaining 65% is then used for teaching activities.

Over the years 2001-2004 the total of activities of the faculty has increased due to the start of Business Administration. During this period, the faculty has adjusted the expenditure in research and teaching activities according to the policy of the university.

6. Processes in research, internal and external collaboration

To stimulate internal and external collaboration, the Faculty of Economics and Business Administration participates in several research schools and research institutes, such as:

Tinbergen Institute

The Faculty of Economics and Business Administration participates in the Tinbergen Institute, a graduate and research school in economics, econometrics and finance. FEWEB PhD students participate in the graduate school and 36 research fellows of our faculty participate in the research institute. These fellows are selected on the basis of their publication records. A list of research fellows of the Tinbergen Institute is provided in the enclosures (Appendix I).

ARCA

The Research by the Department of Accounting is organized through the AmsterdamResearchCenter in Accounting (ARCA). The scope of ARCA also includes research into auditing and accounting information systems. This center provides organizational support, funding and is a platform for organizing courses for Ph.D.-students and other researchers.

ESI / AMBER

The Economic and Social Institute (ESI) was founded in 1954 as a foundation operating under the auspices of the Faculty of Economics, Business Administration and Econometrics of the Vrije Universiteit of Amsterdam. It is therefore almost fifty years since ESI began conducting contract and fundamental academic research, and almost fifty years since it offered its first trainee research assistant placements.