going the distance the pros and cons of expanding employees global knowledge reach while some scholars have suggested mnes to be superior to markets for managing knowledge across geographically distant boundaries how they actually accomplish this has not been fully considered we address this void by developing and testing a model that highlights the critical role of organizational incentives in enhancing employees internal search and use of knowledge data from 166 knowledge intensive projects support our argument that in contrast to process based incentives that influence more local search outcome based incentives motivate employee teams to reach well beyond their immediate location which in turn enhances performance at the same time we demonstrate that expanded reach also increases the likelihood of accessing more codifiable knowledge which can hurt performance our model examines the contradictory and previously unknown effects of global knowledge reach

acquisition or greenfield start up institutional cultural and transaction cost influences in this paper we develop and test a model of diversification mode choice how firms decide between acquisitions and greenfield start up ventures which includes institutional cultural and transaction cost variables using a sample of japanese firms entering western europe our results show the model correctly predicts over eighty seven percent of the mode choices thus we provide strong initial evidence to support using institutional cultural and transaction cost variables to predict firms choices between acquisitions and greenfield start ups in international expansion our findings also suggest that organizations which have developed strong intangible capabilities may be able to more readily leverage these capabilities through greenfield start ups copyright 2000 john wiley sons ltd

fdi as an outcome of the market for corporate control theory and evidence abstract much foreign direct investment fdi takes the form of mergers and acquisitions m a it is commonplace in finance to view acquisitions as manifestations of the market for corporate control following on that insight we propose a model of fdi in which headquarters bid to control overseas assets we derive an equation for bilateral fdi stocks that resembles the recently developed fixed effects approach to modelling bilateral trade flows we estimate the model and use its parameters to construct benchmarks for evaluating multilateral inward and outward fdi

private fiat money with many suppliers a dynamic rational expectations model of money is used to investigate whether a nash equilibrium of many firms each supplying its own brand name currency will optimally deflate their currencies in friedman s 1969 sense the optimal deflation does arise under an open loop dynamic structure but the equilibrium breaks down under a more realistic feedback control structure

antecedents and consequences of marketing dynamic capabilities in international joint ventures the influence of firms dynamic capabilities on performance has been well articulated in the strategy literature yet conceptualization and operationalization of dynamic capabilities in marketing function have not been attempted and empirical evidence substantiating the effect of dynamic capabilities is scarce this research develops a conceptualization of marketing dynamic capabilities mdcs investigates their development in international joint ventures ijvs and explores their effect on ijvs performance and competitive advantage using a dyadic dataset collected from top managers of ijvs in china as well as objective performance data collected separately the study found empirical support for the effect of mdcs on ijvs competitive advantage and performance in addition mdcs are found to be influenced by ijv resource magnitude resource complementarity organizational culture and organizational structure the theoretical implications of our findings and future research directions are also discussed

a case for comparative entrepreneurship assessing the relevance of culture as international entrepreneurship gains momentum as a significant and relevant field of research scholars need to address methodological issues that can facilitate the triangulation of research results in this paper we examine the relationship between culture and four personality characteristics commonly associated with entrepreneurial motivation by demonstrating systematic variation in entrepreneurial characteristics across cultures we raise important questions about the boundaries of international entrepreneurship research and the challenges of transcending them

will markets direct investments under the kyoto protocol lessons from the activities implemented jointly pilots under the kyoto protocol countries can meet treaty obligations by investing in projects that reduce or sequester greenhouse gases elsewhere prior to ratification treaty participants agreed to launch country based pilot projects referred to collectively as activities implemented jointly aij to test novel aspects of the project related provisions relying on a ten year history of projects we investigate the determinants of aij investment our findings suggest that review agency preferences related to national political objectives and possibly deeper cultural ties influenced project selection and limited the number of aij projects bilateral ties also appear to have affected investment decisions directly possibly because of related transaction costs the results suggest an investment process different from the assumptions that underlie well known estimates of cost savings related to the protocol s flexibility mechanisms we conclude that if approaches developed under the aij programs to approve projects are retained the scale of investment under kyoto s flexibility provisions and their cost savings will be less than what is generally anticipated and the pattern of investment less driven by abatement costs

different shades of green global oil and gas companies and renewable energy abstract the long term energy transition from fossil fuels to renewable energy raises critical questions about the future of oil and gas firms this study asks why some oil and gas firms are committed to renewable energy while others continue to maintain a distinct fossil fuels focus with little or no investment in renewable energy the analysis reveals that there is a wide range in the degree to which oil and gas firms have invested in renewable energy some firms have no investments and others have investments in multiple renewable energy technologies across many countries we examine a combination of country based institutional factors and firm based knowledge and experience factors that could impact oil and gas firms decisions to invest in renewable energy activity regulative and normative pressures impacted renewable energy investments as did environmental citizenship and the degree of internationalization the study s integration of country level factors with firm level experiences provides insights into how firms are dealing with the energy transition by examining areas such as sustainability and regulatory policy the paper sheds light on the ways in which scholars can tap into measures and methods that can extend traditional ib research

enhancing international customer supplier relationships through it resources a study of taiwanese electronics suppliers the growing popularity of outsourcing and offshore partnering activities raises the issue of what strategies are appropriate for firms to successfully manage customer supplier relationships in the international context little has been written about how information technology it systems may impact on international exchange relationships in the present study we report on how suppliers use it as a strategic resource to govern their international exchange relationships with multinational enterprise customers taking the supplier s perspective we propose that two types of it resources it advancement and electronic integration create value for suppliers with respect to innovativeness and market performance we argue that this value creation process is mediated by three specific forms of governance cooperativeness output monitoring and behavior monitoring to test these arguments primary data obtained from 240 taiwanese electronics suppliers are used for hypothesis testing the survey results provide evidence that suppliers it resources enable them to work effectively with their international key customers importantly of the three governance mechanisms cooperativeness has the strongest impact on supplier performance owing to supplier electronic integration post hoc analysis revealed that cultural distance does not play a role in moderating the relationship between it resources and governance mechanisms in international exchange

towards a more balanced treatment of culture in international business studies the need for positive cross cultural scholarship the results of a content analysis of 1141 articles published in the journal of international business studies over a 24 year time period 1989 2012 reveal that a pervasive tendency exists in the international business ib literature towards emphasizing the adverse outcomes associated with cultural differences more than the positive effects we argue that this imbalance is not an accurate reflection of the reality of cross cultural contact in ib and that it has hindered our understanding of the processes and conditions that help organizations leverage the benefits of cultural differences in a wide range of contexts we offer several explanations for the predominance of the negative over the positive in theory and research on culture in ib and using a positive organizational scholarship lens couched in the context of march s 1991 exploration vs exploitation organizational learning framework highlight a complementary perspective namely the idea that cultural differences can be an asset not just a liability in a range of ib contexts we conclude by offering an integrative framework within which both positive and negative effects of cultural differences can be understood and provide a road map for future research on culture in ib

phasing the operation mode of foreign subsidiaries reaping the benefits of multinationality through internal capital markets the lifetime of foreign equity partnerships is often limited research suggests that mncs abandon their local partners when the need for sharing ownership in foreign subsidiaries has diminished this study shows that mncs may abandon their local equity partners to reap the benefits of multinationality as mncs gain a competitive advantage from leveraging resources across borders they will initially benefit from sharing ownership with a local firm to embed their foreign subsidiaries in the local environment and access local resources more effectively later they will benefit from taking over the local partner s equity share to better embed their subsidiaries in the parent organization and transfer locally accessed resources to the mnc s other locations moderated mediation regressions provide evidence of such practice in the context of cross border transfers of capital resources this strategy seems to work as a corollary of our model panel regressions suggest that sharing ownership with local firms in a host country with a capital resource advantage is associated with appropriating more capital resources from the local debt market while abandoning these partner firms later is associated with transferring more capital resources from this host country via internal capital markets to other parts of the mnc

r d co practice and reverse knowledge integration in multinational firms this paper contributes to the developing literature on the management of distributed innovation in multinational firms we focus on a specific organizational mechanism r d co practice which we believe is an important facilitator of knowledge integration in multinationals with global innovation strategies in our formulation r d co practice joint technical activities between units increases levels of absorptive capacity and social capital among participating units thus increasing the likelihood that they will share knowledge at future time periods we find strong support for this hypothesis through an empirical analysis of reverse subsidiary to headquarters knowledge integration in two sectors automotive and pharmaceuticals over a 21 year period

a theory of ambiguity credibility and inflation under discretion and asymmetric information this paper develops a positive theory of credibility ambiguity and inflation under discretion and asymmetric information the monetary policymaker maximizes his own politically motivated objective function that is positively related to economic stimulation through monetary surprises and negatively related to monetary growth the relative importance he assigns to each target shifts stochastically through time his current preference trade off is known to him but not to the public when choosing the state contingent path of money growth for the present and the future the policymaker compares the benefits from current stimulation with the costs associated with higher future inflation expectations current monetary growth conveys information to the public about future money growth because there is persistence in the policymaker s objectives although expectations are rational information is imperfect because monetary control procedures are imprecise as a result the public cannot correctly distinguish persistent changes of emphasis on different policy objectives from transitory monetary control errors the public becomes aware of changes gradually by observing past monetary growth credibility is defined in terms of the speed with which the public recognizes changes in the objectives of the policymaker credibility is lower the noisier monetary control and the more stable the objectives of the policymaker looser monetary control and a higher degree of time preference on the part of the policymaker induce him to produce higher and more variable monetary growth when the policymaker is free to determine the accuracy of monetary control he does not always choose the most effective control available in spite of the fact that monetary surprises always have an expected value of zero the reason is that ambiguous control procedures enable the policymaker to generate positive surprises when he cares more than on average about economic stimulation he leaves the inevitable negative surprises for periods in which he cares more about inflation prevention this result provides an explanation for the fed s preference for ambiguity recently documented by goodfriend 1986 the policymaker is more likely to pick more ambiguous control procedures the more uncertain his objectives and the higher his time preference the paper also provides a theoretical underpinning for the well documented crosscountry positive correlation between the level and the variability of inflation

accounting for endogeneity when assessing strategy performance does entry mode choice affect fdi survival firms choose strategies based on their attributes and industry conditions therefore strategy choice is endogenous and self selected empirical models that do not account for this and regress performance measures on strategy choice variables are potentially misspecified and their conclusions incorrect i highlight how self selection on hard to measure or unobservable characteristics can bias strategy performance estimates and recommend an econometric technique that has been developed to account for this effect although this concern applies to a wide range of strategy questions to demonstrate its effect i empirically examine if entry mode choice acquisition versus greenfield influences foreign direct investment survival in specifications that do not account for self selection i find that greenfield entries have survival advantages compared to acquisitions this confirms previous findings however the significance of this effect disappears once i account for self selection of entry mode in the empirical estimates the results confirm that estimates from models that do not account for self selection of strategy choice can lead to incorrect or misleading conclusions

effects of fdi flows on institutional development does it matter where the investors are from global fdi flows to and from developing countries have increased significantly since the 1990s while developing countries saw this as a positive development many economists and policy makers in developed countries have raised concerns regarding the institutional effects of developing country investments in other developing countries in this paper we explore the effects of bilateral fdi flows on institutional development gaps between countries and whether such effects are conditional on the direction of flows including south south south north north south and north north directions the empirical results using bilateral flows between 134 countries and a variety of institutional development measures during 1990 2009 suggest that the institutional development effects of fdi flows in any direction including the north south or south south directions are not significant in any case we do not find any significant convergence or divergence effect of fdi flows on the institutional distance between host and home countries we also fail to find any significant effect of aggregate north south fdi flows on host country institutions in contrast we find that aggregate south south fdi flows have a significantly negative effect on host country institutions furthermore we find some evidence that south south fdi flows may be harmful to institutional development in natural resource rich countries while the opposite is true for north south flows overall the results suggest that there is no strong evidence of any benevolent or malevolent effects of bilateral fdi flows from developed or developing countries to developing countries

monetary policy and commodity money equilibria abstract commodity monies are thought to be desirable because of their ease of implementation and their generation of stable prices this paper presents an investigation into these properties and a derivation of the restrictions commodity monies place on monetary policy it is found that for commodity money systems to be feasible monetary policy must follow a feedback rule which is a function of the growth rates for all asset stocks and in general a reduction in economic welfare accrues to agents in a commodity money economy moreover the restrictions implied by a commodity money system are often inconsistent with existence of equilibrium

ceo international experience effects on strategic change and firm performance despite the growing importance of ceos international experience ie we have yet to gain sufficient insights into its conceptualization and effect on firm outcomes based on prior research and work experience models we suggest a new framework for measuring ie including three components length of time number of countries and cultural distance along with their interactions drawing upon social and cognitive learning theories we explore the impact of ceos ie on two outcomes strategic change and firm performance we argue that ie components affect the two outcomes by enhancing executives international knowledge and general competencies while international knowledge may affect firm performance directly general competencies may affect firm performance both directly and indirectly through strategic change using a sample of 387 new ceos we found that time abroad had a positive effect on strategic change and firm performance while number of countries and cultural distance positively moderated these relationships additionally we also found that these components affected firm performance both directly and mediated through strategic change our findings have important theoretical implications for the conceptualization and impact of ceos ie and practical implications for executive development and promotion

the tortuous evolution of the role of culture in ib research what we know what we don t know and where we are headed this paper takes stock of the literature on culture in international business by looking back in terms of evaluating what we know and what we do not know and looking forward by identifying emerging trends and outlining avenues for future research unresolved issues gaps and limitations include 1 narrow conceptualization of culture and fragmented approach to the study of culture 2 failure to adopt a multilevel approach and insufficient attention to level of analysis 3 insufficient attention to context and process 4 failure to adopt a more dynamic view of culture 5 tendency to equate country with culture and failure to explore other national differentiators and 6 western centric approach to the study of culture suggestions on redressing the unresolved issues include 1 broadening the definition of culture and transcending the values based approach to include schemas norms and memes 2 paying more attention to process context by exploring the situation dependent and dynamic nature of culture and 3 entertaining alternative research designs methods such as emic approaches qualitative methods experimental designs neuroscience based methods and replication studies while these may represent a major departure from methodologies popular in our field their use can hopefully help us overcome the fragmented discipline based approach which has contributed to the persistent problems that have plagued the study of culture in ib in the past

cultural differences mne learning abilities and the effect of experience on subsidiary mortality in a dissimilar culture evidence from korean mnes in a departure from prior studies presuming a beneficial experience effect in foreign direct investment fdi the present paper examines the conditions under which fdi experience may actually harm subsequent subsidiaries we argue that multinational enterprises mnes may draw erroneous inferences and learn incorrectly from their early expansions when new to a dissimilar culture because their learning abilities are eroded by cultural differences we posit that the characteristics of an mne s international expansion including scope pace rhythm and entry mode moderate this negative experience effect by influencing the mne s learning ability in foreign cultures using a data set of fdis by south korean mnes between 1990 and 2006 we find a positive relationship between subsidiary mortality and experience when an mne has a low level of experience in a dissimilar culture this relationship is weaker if the mne s prior fdi has been dispersed across different cultures is stronger if it expanded internationally at a fast pace and becomes negative once the mne has accumulated a high level of experience in the host culture we conclude that when expanding into dissimilar cultures mnes must establish mechanisms to mitigate incorrect learning and reexamine the correctness of inferences drawn from past experience before applying them

examining asymmetries in the transmission of monetary policy in the euro area evidence from a mixed cross section global var model abstract i estimate the transmission of a common euro area monetary policy shock across individual euro area economies to do so i develop a global var model in which all euro area economies are included individually while at the same time their common monetary policy is modelled as a function of euro area aggregate output growth and inflation the results suggest that the transmission of monetary policy across euro area economies displays asymmetries and that in line with economic theory these are driven by differences in economies structural characteristics in particular euro area economies in which a higher share of aggregate output is accounted for by sectors servicing interest rate sensitive demand exhibit a stronger transmission of monetary policy to real activity similarly even though the evidence is less conclusive euro area economies which feature more real wage and or fewer unemployment rigidities also appear to display a stronger transmission of monetary policy to real activity

performance and survival of joint ventures with non conventional ownership structures the international joint venture jv literature has focused on two parent jvs formed between one foreign and one local firm yet other types of jvs exist this paper identifies four distinct forms of jvs based on the jv partners nationality and equity affiliation these are i jvs that are formed between affiliated home country based firms ii jvs that are formed between unaffiliated home country based firmsl iii jvs that are formed between home country based and local firms and iv jvs that are formed between home country and third country based firms our analysis of 737 japanese jvs in asia demonstrates that the conventionally assumed form of jv represented only 30 percent of the total further each of the four jv forms significantly differed in terms of incidence performance and survival likelihood

motives of non american firms investing in the united states non american firms have recently begun investing larger sums of money in the u s such increased activity has created a great deal of interest and concern the growth in foreign direct investment and findings of a mailed questionnaire will be reviewed in this article factor analysis was utilized to help isolate the salient motives for these investment activities although the size of the u s market and the attractiveness of a new market or the desire to preserve the existing u s market were the most frequently cited reasons for new investment in the u s factor analysis reveals that these reasons merely reinforce the primary motive namely the desire to benefit from a higher level of u s technology and innovation

china s emergence in the world economy and business cycles in latin america the international business cycle is very important for latin america s economic performance as the recent global crisis vividly illustrated this paper investigates how changes in trade linkages between china latin america and the rest of the world have altered the transmission mechanism of international business cycles to latin america

monetary rules and commodity money schemes under uncertainty abstract the paper sets out a simple monetary model and uses it to compare alternative monetary systems money may be either fiat or gold both gold supply and velocity are uncertain asset demands are derived from expected utility maximization i demonstrate the basic argument against a commodity money that it wastes resources show why the optimal growth rate of money may be zero and compare the behavior of the economy under constant money stock constant price level and constant gold price rules expected utility is typically highest under the constant price level rule

the effect of national culture on the choice of entry mode characteristics of national cultures have frequently been claimed to influence the selection of entry modes this article investigates this claim by developing a theoretical argument for why culture should influence the choice of entry two hypotheses are derived which relate culture to entry mode choice one focusing on the cultural distance between countries the other on attitudes towards uncertainty avoidance using a multinomial logit model and controlling for other effects the hypotheses are tested by analysing data on 228 entries into the united states market by acquisition wholly owned greenfield and joint venture empirical support for the effect of national culture on entry choice is found

regulation and investment use newly assembled data on regulation in several sectors of many oecd countries to provide evidence that regulatory reform of product markets is associated with an increase in investment a component of reform that plays a very important role is entry liberalization but privatization also has a substantial effect on investment sensitivity analysis suggests that our results are robust jel e22 l5

a laissez faire approach to monetary stability this paper develops some diverse hints for a new monetary system offered separately by fischer black eugene fama and robert e hall for reasons that will become evident though we should perhaps say payments system instead of monetary system none of the economists mentioned has actually proposed the particular system set forth here nor examined all its properties and we call it the bfh system not to implicate them but only to give credit for some component ideas and to have a convenient label l regardless of who if anyone may actually advocate the system contemplating it is instructive it illuminates by contrast some characteristics of our existing and recent systems

location specificity and the transferability of downstream assets to foreign subsidiaries we investigate the effect of firm specific advantages being local in scope and the influence of subsequent location specific disadvantages on the choice of foreign entry mode and subsidiary performance to look into this issue we examine japanese fdi data from the wholesale and retail industries two sectors that have productive activity concentrated in downstream processes and location bound resources our theoretical and empirical analyses demonstrate that in situations where required capabilities must be developed through local experience and where location specific resources were subject to market failure acquisition and joint venture strategies were preferred greenfield entries were successful in industries that permitted the offsetting of location specific disadvantages with firm specific advantages from our results we draw implications for the entry mode literature and offer a perspective on the performance of the entry mode choice

widening the lens rethinking distance diversity and foreignness in international business research through positive organizational scholarship the point of departure for the special issue is that current theory and research in international business ib may have overly emphasized a negative view on foreignness distance and differences of all kinds national cultural organizational and institutional with an emphasis on liabilities and adverse outcomes associated with such differences while existing research is certainly valuable we argue that focusing on mostly negative processes and outcomes has hindered our understanding of the dynamics processes and conditions that enable organizations to benefit from diversity in a wide range of ib contexts the goal of this special issue is to promote research that is in line with a positive organizational scholarship perspective which encourages scholars to look at commonly considered phenomena in new ways as well as to explicitly consider positive phenomena in ib research we then introduce the three articles included in the special issue and highlight how they help ib scholars better understand when and how foreignness distance and diversity can enhance organizational effectiveness and performance at multiple levels

time consistency of fiscal and monetary policy the problem of time inconsistency arises from two different sources first as shown by guillermo a calvo 1978 the re is an incentive for each government to engage in an initial unanti cipated inflation second as discussed by robert e lucas and nancy l stokey 1983 there is an incentive for each government to deviat e from the path of taxes announced by the preceding government in th is paper it is shown that these two sources of time inconsistency ca n be removed by a particular method of debt management involving bot h nominal and indexed government bonds of various maturities copyright 1987 by the econometric society

expatriation repatriation and domestic geographical relocation an empirical investigation of adjustment to new job assignments this research examines the relative impact of six sets of factors on multiple indices of adjustment to new job assignments these six sets of factors include demographic variables indices of the internationalness of the job change e g whether the job changer is an expatriate repatriate or domestic geographical relocator job characteristics variables types and amount of career development assistance degree of change between successive job assignments and types of individual coping strategies employed by job changers data were collected from 459 job changers from twenty six countries the results highlight both the commonalities among expatriates repatriates and domestic geographical relocators in adjusting to new job assignments as well as the differences among them

how do cross border mergers and acquisitions answer to deregulation in services whereas competition in the manufacturing sector was progressively ensured beginning with the end of the second world war services have been progressively opened to international competition only since the late 1980s and are still among the most regulated sectors in oecd countries in this paper we analyse the impact of deregulation in that sector on cross border mergers and acquisitions m as in services we find that deregulation favours inward m as in services this positive effect occurs through two channels a reduction in entry costs and an increase in investment opportunities on the other hand deregulation has an ambiguous impact on outward m as that depends on the initial level of regulation in the acquiring country in particular we provide some evidence of a u shaped relationship between deregulation and outward m as in the service sector in countries that are initially highly deregulated deregulation fosters outward m as conversely in situations in which government control is large privatisation and deregulation are likely to reduce the incentive for firms to engage in cross border m a deals

confirmation bias in individual level perceptions of psychic distance an experimental investigation in this article we draw from social cognition theory to explore the influence of confirmation bias on perceptions of psychic distance despite the prominence of psychic distance and other forms of distance as potential predictor variables in international business ib research very little work has been done exploring the factors and processes that shape a decision maker s perceptions of distance we argue in this article that social cognition theory can help fill that void specifically we hypothesize that confirmation bias may influence managers processing of information concerning differences between cultures such a bias may cause managers to attend more to information that confirms pre existing beliefs and discount information that contradicts pre existing beliefs thus biasing their perceptions of psychic distance using an experimental approach the impact of confirmation bias on perceptions of psychic distance is confirmed in a sample of 200 australian managers the observed changes in perceptions are also associated with changes in perceptions of risk and preferences for entry modes in a hypothetical business scenario as a result this article demonstrates how the application of social psychology theories and methods can provide new theoretical perspectives to explain when how and why individual level perceptions of psychic distance might diverge from national level averages

macroeconomic policy uncertainty shocks on the chinese economy a gvar analysis abstractthis article studies the spillovers of economic policy uncertainty epu from developed economies to china in terms of the source extent and persistence by estimating a global vector autoregressive gvar model with both financial and trade variables acting as the transmission channels our findings confirm the existence of international transmissions of policy uncertainty while the patterns differ markedly the us epu appears to be the most significant cause of the fall of export industrial production equity price and exchange rate meanwhile the eu epu is also to be blamed for the depreciation of rmb in contrast to industrial production which shows the largest negative impact chinese inflation increases to a relatively smaller extent with the epu shocks ranking as the us japanese and the eu regardless of the minor impact on a long term interest rate the short term interest rate in china reacts positively to the european and us epu shocks despite the independent national monetary poli

rules commitment and the search for stable money a review essay political economists have always criticized existing monetary institutions and struggled to articulate a vision of an ideal monetary system the volume under review the search for stable money essays on monetary reform edited by james a dorn and anna j schwartz university of chicago press 1987 stands firmly in this tradition it addresses the shortcomings of modern monetary institutions and debates the merits of various alternative arrangements the volume consists of nineteen essays and a number of short comments among the contributors are three nobel prize winners buchanan friedman and hayekthough buchanan simply comments on bernholz generally speaking the essayists disapprove of the virtually unlimited discretion invested in the federal reserve they argue that discretion leads to unnecessarily high and variable rates of inflation the essayists also agree that the solution ought to take the form of a change in the political rules which would have the effect of limiting government control over the monetary system beyond this there is no consensus the contributors consider money growth rules the gold standard a proposal for a compensated dollar and competitive currency systems but often find one another s proposals as objectionable as the status quo the essays in this volume are about five years old with the exception of the introductory piece by james dorn each was originally published elsewhere most originally appeared in the cato journal in 1983 sometimes the age of the essays shows careful analysis of federal reserve policy in 1981 82 was no doubt of topical interest when the essays were written but is less so now

international expansion of telecommunication carriers the influence of market structure network characteristics and entry imperfections this paper examines the internationalization process of telecommunication carriers in this industry early entrants gain substantial first mover advantages due to the transient nature of the windows of market opportunity and the potential to influence the regulatory process as an incumbent to capture these strategic and economic advantages firms follow a strategy of preemption both of markets and partners the authors argue for the need to augment prevailing theory with contextual idiosyncrasies that characterize specific industries

the role of china in the world economy evidence from a global var model since the 1980s china has experienced very high economic growth and its share in global trade has increased rapidly currently however the chinese economy is rebalancing and its growth is slow

openness to foreign direct investment in services an international comparative analysis this paper quantifies and analyses the extent of restrictions on inward foreign direct investment fdi in the service sector in developed and developing countries services account for an increasing share of global fdi recognition of the economic benefits of fdi clashes with nationalistic economic political and national security concerns about foreign takeover of strategic sectors such as telecommunications finance and transport consequently almost all countries impose restrictions on fdi in services several different types of restrictions are considered limitations on foreign ownership screening or notification procedures management restrictions and operational restrictions these restrictions on fdi are computed at the industry level and then aggregated into a single measure for the service sector as a whole for 23 developed and 50 developing countries notwithstanding the worldwide trend towards liberalisation of restrictions there remain substantial disparities between regions and individual countries in the severity of restrictions on inward fdi in services the lowest restriction scores are in europe and latin america whereas east asia south asia and the middle east have the highest levels of restrictions the evolution over time of fdi restrictions is also presented for developed countries over the period 1981 2005 showing liberalisation in all countries especially since the early 1990s although to varying extents across countries the severity of restrictions also differs considerably by sector with electricity telecommunications transport and finance most restricted the paper also finds a strong negative correlation of restrictiveness with inward stocks of fdi in services suggesting that restrictions impede fdi

formalizing internationalization in the eclectic paradigm the paper presents a simple general equilibrium model that formalizes internationalization in the eclectic paradigm based on a reconfiguration of concepts taken from the new classical economics literature the model enables us to address simultaneously the role of ownership location and internalization advantages and their interaction in the emergence of the multinational enterprise mne through a set of mathematical inequalities our model offers a bridge between the detached perceptions of the mne often held by international trade economists and international business scholars and makes specific aspects of the eclectic paradigm empirically testable

the salience of culture s consequences the effects of cultural values on top executive commitment to the status quo while top executives are argued to play a central role in strategic adaptation evidence suggests that they are not equally open to organizational change this study extends earlier investigation of the determinants of top executive commitment to the status quo csq to the international arena examining the influence of cultural values on executive open mindedness toward change using data from a survey of top managers in 20 countries analyses reveal that values of individualism uncertainty avoidance power distance and long term orientation are significantly related to executives adherence to existing strategy and leadership profiles further while confirming earlier findings that industry tenure is positively related to strategy csq results show that tenure does not significantly affect leadership csq once cultural values are controlled in summary the findings reveal that culture has an important impact on executive mindsets as demonstrated by the fact that executives of differing cultural background are not equally open to change in organizational strategy and leadership profiles second the findings suggest that executives views of appropriate leadership profiles reflect the imprint of cultural socialization moreso than professional experience finally and more broadly the study offers empirical support for the view that values figure prominently in shaping executives strategic and leadership orientations 1997 by john wiley sons ltd

cross border mergers and acquisitions and the role of trade costs abstract cross border mergers and acquisitions m as have increased dramatically over the last two decades this paper analyses the role of trade costs in explaining the increase in the number of cross border m as in particular we distinguish horizontal and non horizontal m as and investigate whether trade costs affect these two types of mergers differently we analyse this question using industry data for 23 oecd countries for the period 1990 2001 our findings suggest that while in the aggregate trade costs affect cross border merger activity negatively its impact differs importantly across horizontal and non horizontal mergers the impact of trade costs is less negative for horizontal mergers which is consistent with the tariff jumping argument

the superiority of contingent rules over fixed rules in models with rational expectations the paper investigates the robustness of the proposition that in stochastic models contingent or feddback rules dominate fiped or openloop rules four arguments in favour of fixed rules are considere 1 the presence of an incompetent op malevolent policy maker 2 a trade off between flexibility and simplicity or credibility 3 the new classical proposition that only unanticipated stabilization policy has real effects 4 the time inconsistency of optimal plans in non causal models that is models in which the current state of the economy depends on expectations of future states the main conclusion is that the rational expectations revolution represented by arguments 3 and 4 does not affect the potential superiority of time inconsistent closed loop policies over time inconsistent open loop policies the case against conditionality in the design of policy must therefore rest on argument 1 or 2 which predate the new classical macroeconomics

licensing duration in foreign markets a real options perspective licensing can be considered an initial trial of a foreign market before a firm fully commits to it through other investment modes the length of trial has great importance because licensing duration represents part of the licensing agreement when it is too short the firm may not acquire the necessary experience and knowledge of the foreign market but if it is too long the firm misses optimal expansion timing arguing that licensing can be considered as a european style real option with a fixed holding period we develop and test a model of the determinants of licensing duration in foreign markets empirical results based on a sample of firms in various countries show that uncertainty and threat of competitive pre emption in the foreign market are related to shorter duration of the technology licensing agreements we also find that irreversibility of the impending investment moderates the relationships between uncertainty and duration specifically market and technology uncertainties in the foreign market induce shorter contracts under low levels of irreversibility

changing ib scholarship via rhetoric or bloody knuckles a case study in the boundary conditions for persuasion papers challenging institutionalized fields to change are rare and those not extinguished by neglect are rarer shenkar understands his target audience those in that target community of ib scholars studying cultural distance s cd associations with foreign direct investment fdi might read this paper as relatively radical culture scholars sometimes interpret the discussion of cultural friction cf as competing with even slighting by omission their corpus of work on contact and interaction both readings are false and forced comparison with two later papers reveals retrospective bias at work it further reveals cf as a metaphor not theory it is not a research agenda assigned to the field even if it becomes a personal project for the author rhetorical theory is the basis to compare the reasoning of appeals and emotion the discussion considers whether academic change agents might consider more use of emotion bringing shenkar into focus enriches our appreciation for its impressive craftsmanship as well as its scholarship i discuss implications for impact as a concept currently stuck with looking for citation over substance and offer suggestions for reviewers and editors to lower the barriers for impact

manufacturer governance of foreign distributor relationships do relational norms enhance competitiveness in the export market research on international marketing channels accentuates the importance of relational norms and trust building activities between buyers and sellers indeed cultural and country differences may limit the use and effectiveness of traditional tools such as market incentives and authoritative control that govern the relationship between an exporting manufacturer and its foreign distributor consequently exporting manufacturers need to emphasize relationships with their foreign distributors this research finds evidence that supports both direct and indirect effects between the manufacturer s use of governance via relational norms and its competitiveness in the export market the indirect effect results from the mediating role of trust a finding that makes a key contribution to the understanding of the role of relational governance in cross border relationships

seigniorage inflation and reputation abstract this paper derives a reputational equilibrium for inflation in a model in which the sovereign obtains valuable seigniorage by issuing fiat money in exchange for real resources with contemporaneous perception of actual sovereign behavior and immediate adjustment of real cash balances to new information the friedman elasticity solution for maximal seigniorage is a reputational equilibrium more generally the objective of maximal seigniorage produces an equilibrium inflation rate equal either to a generalization of the friedman elasticity solution or to the rate at which the sovereign discounts future seigniorage adjusted for the growth rate whichever is larger the model formalizes the conjecture that inflation rates in excess of the friedman solution are attributable to high discount rates for future seigniorage

barbarians at the gates state control of global mergers and acquisitions cross border mergers and acquisitions are a major and often politicised component of foreign direct investment using data on individual transactions between 1970 and 2006 we examine the restrictions countries place on mergers and acquisitions whether they use these controls to discriminate against foreigners seeking to acquire domestic firms and what factors may predict the propensity to block foreign entry by this method of direct investment drawing partly on the existing literature we test hypotheses that state intervention can be explained by characteristics of the countries whose firms are targeted by acquirers including per capita income democracy trade exposure market size government share of national income and industrial structure although democracy trade exposure and high government expenditure are associated with more stringent merger control laws none of these attributes cause states to discriminate against cross border mergers countries with high per capita incomes large markets and strict merger control laws do use those regulations to discourage foreign acquirers a second set of tests based on observations of individual deals rather than national aggregates reveal that governments are particularly averse to foreigners acquiring firms that are bankrupt or in the defence sector overall governments do treat cross border mergers and acquisitions differently and use their merger control laws to discriminate against foreign investors particularly with respect to certain types of transactions

the construct of institutional distance through the lens of different institutional perspectives review analysis and recommendations this paper presents a review and critique of the 20 year old literature on institutional distance which has greatly proliferated we start with a discussion of the three institutional perspectives that have served as a theoretical foundation for this construct organizational institutionalism institutional economics and comparative institutionalism we use this as an organizing framework to describe the different ways in which institutional distance has been conceptualized and measured and to analyze the most common organizational outcomes that have been linked to institutional distance as well as the proposed explanatory mechanisms of those effects we substantiate our qualitative review with a meta analysis which synthesizes the main findings in this area of research building on our review and previous critical work we note key ambiguities in the institutional distance literature related to underlying theoretical perspectives and associated mechanisms distance versus profile effects and measurement we conclude with actionable recommendations for improving institutional distance research