optimal policy in markov switching rational expectations models abstract in this paper we consider the optimal quadratic control problem of markov switching linear rational expectation models these models are general and flexible tools for modelling not only regime but also model or parameter uncertainty we show first how to find the solution of a markov switching linear rational expectation model based on this solution we then show how to apply dynamic programming to find the optimal time consistent policy and the resulting nash stackelberg equilibrium suitable modifications of the algorithm allow to deal with the non re case in which the policymaker and the private sector hold different beliefs or probabilities over regime change we also show how the optimisation procedure can be employed to obtain the optimal policy under commitment as an illustration we compute the optimal policy in a small open economy subject to stochastic structural breaks in some of its key parameters

evaluating welfare reform in the united states this paper reviews the economic literature on welfare reform over the 1990s a brief summary of the policy changes is followed by a discussion of the methodological techniques that analyze the effects of these changes on outcomes the paper then critically reviews the econometric and experimental literature on caseload changes labor force changes poverty and income changes and family formation changes a growing body of evidence suggests that recent policy changes have influenced economic behavior and well being one particular set of new style welfare programs seems to show especially promising results with significantly increased work and earnings and reduced poverty

holistic ethnography studying the impact of multiple national identities on post acquisition organizations ethnographic research in international business studies focuses mainly on small group case studies ignoring other genres of ethnography and limiting its role i argue based on a study of bmw mini that holistic ethnography allows multiple perspectives on the organization making it particularly useful for studying cross border acquisitions i analyze cross cultural relationships in the organization the interaction of manager and worker perspectives and the expression of national identities within the firm as its culture is negotiated allowing for greater understanding of the conflicts that in its managers view affected the integration of the acquired subsidiary

calculating and using second order accurate solutions of discrete time dynamic equilibrium models we describe an algorithm for calculating second order approximations to the solutions to nonlinear stochastic rational expectations models the paper also explains methods for using such an approximate solution to generate forecasts simulated time paths for the model and evaluations of expected welfare differences across different versions of a model the paper gives conditions for local validity of the approximation that allow for disturbance distributions with unbounded support and allow for non stationarity of the solution process

foreign locals a cautionary tale on the culture of mnc local employees multinational corporations mncs rely heavily on local employees when conducting their international operations yet the international business literature provides few instances of true focus on these employees the commonly used label host country nationals hcns confers them an identity strongly related to the culture of their country prompting both researchers and practitioners to know them through the knowledge about the local culture this paper provides evidence that a more sophisticated view of the culture of hcns is needed through an ethnographic exploration of hcns working in local subsidiaries of american mncs in romania i reveal that hcns are not always culturally interchangeable with the rest of the host country population hcns can display a variety of cultural profiles more or less reflective of the national culture depending on their enacted stance towards the native culture and the cultural landscape of the mncs themselves the findings call for further specification of theories relying on the assumed localness of hcns and should contribute to the ongoing conversation on the interplay between the cultures specific to the mnc and its host countries

determinacy and identification with taylor rules the new keynesian taylor rule theory of inflation determination relies on explosive dynamics by raising interest rates in response to inflation the fed induces ever larger inflation unless inflation jumps to one particular value on each date however economics does not rule out explosive inflation so inflation remains indeterminate attempts to fix this problem assume that the government will choose to blow up the economy if alternative equilibria emerge by following policies we usually consider impossible the taylor rule is not identified without unrealistic assumptions thus taylor rule regressions do not show that the fed moved from passive to active policy in 1980

the risky steady state we propose a simple quantitative method to linearize around the risky steady state of a small open economy unlike when the deterministic steady state is used the net foreign asset position is well defined we allow for stochastic income and stochastic interest rate

the cross cultural research imperative the need to balance cross national and intra national diversity this paper provides a brief overview of the evolution of comparative management theories paradigms and highlights the contribution of the cross vergence construct despite progress most studies of work values across countries continue to suffer from two primary limitations the first is the fallacious assumption of cultural homogeneity with nations given the growing diversity of the workforce within country intra national variations can often be as significant as cross national differences the second is the fallacious assumption of cultural stability over time since cultures evolve albeit slowly it is important to take these changes over time into consideration and be aware of the paradoxes inherent within any given society hence the paper calls for the need to balance cross national and intra national diversity in order to truly understand cross cultural phenomena and thus further improve the quality of cross cultural research

evolving monetary fiscal policy mix in the united states a micro founded model that allows for changes in the monetary fiscal policy mix and in the volatility of structural shocks is fit to us post wwii data agents are aware of the possibility of regime changes and their beliefs have an impact on the law of motion of the macroeconomy the results show that the 60s and the 70s were characterized by a prolonged period of active fiscal policy and passive monetary policy the appointment of volcker marked a change in the conduct of monetary policy but it took almost ten years for the fiscal authority to start accommodating this regime change

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

beyond hofstede and globe improving the quality of cross cultural research journal of international business studies 2010 41 1259 1274 doi 10 1057 jibs 2010 41 overview of 41 8 hofstede and globe in cross cultural research while hofstede s work was not the first systematic study on crossnational cultures his seminal book culture s consequences international differences in work related values 1980 succeeded in putting cross cultural analysis at the forefront of international business ib research in a later paper he boldly asserted that the business of international business is culture 1994 1 despite the criticisms that have been voiced against his work see mcsweeney 2002 oyserman coon kemmelmeier 2002 hofstede s influence on the fields of ib and management is undeniable according to harzing s publish or perish citation index as of june 2010 there were over 54 000 citations to his work this is a remarkable record that attests to first the growing popularity of cross cultural research in light of continued internationalization of the world economy and second hofstede s personal impact on scholarly research this jibs issue brings together 10 articles on culture and ib all of which were submitted to the editorial team led by jibs editorin chief lorraine eden while the articles were independently submitted through the regular double blind reviewing process the decision to join them in one collection creates in effect a special issue on culture in international business research which the jibs editors hope will be widely read and cited by ib scholars in general terms the papers in this collection fall into one of two categories 1 articles and commentaries about conceptual and methodological issues associated with hofstede s oeuvre vs the global leadership and organizational behavior effectiveness globe project s cultural dimensions and 2 articles and perspectives that use culture and or cultural dimensions as well as the operational measurement thereof to explain differences in behavior and practices across countries the common feature of all these scholarly pieces is that they challenge particular assumptions often made too easily in conventional cross cultural research the first paper in this collection is a perspective written by franke and richey that cautions against questionable generalizations from small numbers of countries in international business research using statistical analysis to support their assertion franke and richey argue that in order to draw credible generalizations in ib a minimum of 7 10 countries must be used this is an important message researchers should never formulate strong conclusions about the impact of cultural dimensions on journal of international business studies 2010 41 1259 1274 2010 academy of international business all rights reserved 0047 2506

building professional discourse in emerging markets language context and the challenge of sensemaking using ethnographic evidence from the former soviet republics this paper examines a relatively new and mainly unobserved concept in international business literature the phenomenon of communication disengagement that manifests itself in many emerging markets we link it to the deficiencies of the local professional business discourse rooted in language limitations which reflects a lack of experience with the market economy this hampers cognitive coherence between foreign and local business entities adding to the liability of foreignness as certain instances of professional experience fail to find adequate linguistic expression and complicates cross cultural adjustments causing multinational companies mncs financial losses we contribute to the ib literature by examining cross border semantic sensemaking through a retrospectively constructed observational study we argue that a relative inadequacy of the national professional idiom is likely to remain a feature of the business environment in post communist economies for some time and therefore should be factored into business strategies of mncs consequently we recommend including discursive hazards in the risk evaluation of international projects

testing for indeterminacy an application to u s monetary policy reply this paper considers a prototypical new keynesian model in which the equilibrium is undetermined if monetary policy is passive the likelihood based estimation of dynamic equilibrium models is extended to allow for indeterminacies and sunspot fluctuations we construct posterior weights for the determinacy and indeterminacy region of the parameter space and estimates for the propagation of fundamental and sunspot shocks according to the estimated model u s monetary policy post 1982 is consistent with determinacy whereas the pre volcker policy is not we find that before 1979 indeterminacy substantially altered the propagation of shocks

the casual ethnography of the executive suite some of the most influential work in international business ib is grounded by what looks remarkably like ethnographic fieldwork in which researchers hang out with the executives of the companies they study and incorporate into their analysis the insights they gain valuable as this work is it often fails to reflect on how these sources have shaped the account and it projects the subculture of the executive suite onto the entire organization ib would benefit from complementary serious ethnography that is reflective about sources builds on the rich ethnographic research literature and focuses on how the managed struggle to make sense of the directives from the executive suite

the transition from decentralized to network based mnc structures an evolutionary perspective this paper investigates and models the transition process within established multinational corporations mncs in moving from decentralized toward network based structures whereas there has been substantial research on various mnc models there has been little longitudinal research on the movement toward projected network based models this paper develops an evolutionary perspective of this transition distinguishing adjustments altering how the mnc defines its global strategy where it locates key resources and how it structures and manages operations it argues that rather then being a planned process each phase represents a viable strategic response to then existing challenges and opportunities the paper also argues that the focus of the process shifts over time initially focusing on building organizational linkages and adjusting the quantity and nature of resources within dispersed units and later shifting toward reallocating resources and roles across units

medicaid afdc and family formation this paper uses the fact that states joined the medicaid programme at different times between early 1966 and early 1970 to estimate the effect of health insurance availability on childbearing and marital choice data on women aged 15 to 45 during the 1964 to 1972 period from the march current population survey cps is used to estimate medicaid s effect on the probability that a woman has recently given birth and is not married it is found that the introduction of medicaid led to a small but statistically significant increase in the probability that a woman is single and has recently given birth specifically the introduction of medicaid led to a 0 3 percentage point increase in the probability that a woman is a single mother of young children this is an approximately 10 increase relative to the average fraction of single mothers in the sample of about 3 although nonwhite women are on average more likely to be single mothers than white women are it is found that medicaid did not significantly contr

comparing solution methods for dynamic equilibrium economies this paper compares solution methods for dynamic equilibrium economies the authors compute and simulate the stochastic neoclassical growth model with leisure choice using undetermined coefficients in levels and in logs finite elements chebyshev polynomials second and fifth order perturbations and value function iteration for several calibrations the authors document the performance of the methods in terms of computing time implementation complexity and accuracy and they present some conclusions about their preferred approaches based on the reported evidence

stochastic choice an optimizing neuroeconomic model a model is proposed in which stochastic choice results from noise in cognitive processing rather than random variation in preferences the mental process used to make a choice is nonetheless optimal subject to a constraint on available information processing capacity that is partially motivated by neurophysiological evidence the optimal information constrained model is found to oer a better t to experimental data on choice frequencies and reaction times than either a purely mechanical process model of choice the drift diusion

employees willingness to adopt a foreign functional language in multilingual organizations the role of linguistic identity language holds a central role in sustainable international expansion for multinationals the choice of the functional language can facilitate or hinder communication between headquarters and subsidiary locations in order to communicate effectively with the parent organization host country employees often have to adopt a language that is not native to the subsidiary region we take a subsidiary employee perspective in presenting an interdisciplinary theoretical model of host country employees willingness to adopt a foreign language in multinational organizations the construct of linguistic identity shaped by the linguistic landscape of the host location is introduced as an important determinant in this process specifically the foreign functional language may pose a threat to the employees existing linguistic identity willingness to adopt the foreign functional language may depend upon the extent of this perceived threat we incorporate the effects of foreign language proficiency and individuals motivation for enhancement in the theoretical model both high proficiency in a foreign language and need for social economic and career enhancements can increase individuals willingness to adopt the foreign functional language finally we develop and present implications of the linguistic identity processes for entry mode location and language strategies

financial crisis and the great depression a regime switching approach i explore the timing of and effects of the u s financial crisis of the 1930s in a regime switching framework estimated conditional probabilities over the state of the financial sector suggest that a prolonged period of crisis begins not with the 1929 stock market crash but with the first banking panic of october 1930 these probabilities also suggest that the crisis persists until the introduction of federal deposit insurance in early 1934 consistent with the view that this financial crisis had real effects these conditional probabilities contain additional explanatory power for output fluctuations this is in addition to that provided by the money stock

emerging themes in international business research this study is motivated by two research questions 1 which recent contributions have been driving the research agenda in international business 2 which emerging themes in the literature are likely to set the stage for future work to examine these questions the study examined scholarly work in international business over the time period 1996 2006 in six leading international business journals journal of international business studies management international review journal of world business international marketing review journal of international marketing and international business review next a delphi study of the most prolific authors in these journals over the same time period was conducted to delineate a future research agenda in international business addressing these two research questions provides us with a more complete understanding of the progress made to date in international business research and provides a glimpse of the future

culture meaning and institutions executive rationale in germany and japan this paper contributes rare primary empirical evidence to one of the major research questions in the social sciences today namely the linkage between national cultures and institutional structures of national business systems drawing on the work of redding we explore the thinking or rationale of senior executives of leading german and japanese firms about the ideal structure of the economy we find considerable variation in rationale across the two countries and in comparison with the shape of the business system of the united states our study has implications for our understanding of the meaning of economic activity in different countries and of the evolutionary trajectories of national business systems

knowledge transfer in international acquisitions this paper reports on a multimethod study of knowledge transfer in international acquisitions using questionnaire data we show that the transfer of technological know how is facilitated by communication visits meetings and by time elapsed since acquisition while the transfer of patents is associated with the articulability of the knowledge the size of the acquired unit and the recency of the acquisition using case study data we show that the immediate post acquisition period is characterized by imposed one way transfers of knowledge from the acquirer to the acquired but over time this gives way to high quality reciprocal knowledge transfer

time varying rational expectations models abstract this paper develops a comprehensive theory for rational expectations models with time varying random coefficients based on the multiplicative ergodic theorem it develops a linear algebra in terms of lyapunov exponents defined as the asymptotic growth rates of trajectories together with their associated lyapunov spaces they provide a perfect substitute for the eigenvalue eigenspace analysis used in constant coefficient models in particular they allow the construction of explicit solution formulas similar to the standard case these methods and their numerical implementation is illustrated using a canonical new keynesian model with a time varying policy rule and lagged endogenous variables

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

beyond categorization new directions for theory development about entrepreneurial internationalization categorizations emphasizing the earliness of internationalization have long been a cornerstone of international entrepreneurship research here we contend that the prominence of categories has not been commensurate with theory development associated with them we draw on categorization theory to explain why earliness based categories are persistent and argue that a greater focus on notions related to opportunity can open new avenues of research about the entrepreneurial internationalization of business we propose and discuss three directions for opportunity based research on entrepreneurial internationalization involving context dynamics and variety

estimating price elasticities of convalescent care programmes this study is the first to estimate price elasticities of demand for convalescent care programmes in 1997 the german legislature more than doubled the daily co payments for the publicly insured from 6t o 13 the measure caused the overall demand for convalescent care treatments to fall by 20 to 25 i estimate the price elasticity for medical rehabilitation programmes aimed at preventing work disability to be about 0 3 whereas the elasticity for medical rehabilitation programmes for recovery from accidents at work lies around 0 5 the demand for preventive treatment at health spas is elastic and less than 1 how does the demand for medical care change when prices change since the early days of the profession of health economics the question of the price elasticity for health services has been central joseph p newhouse one of the founders of the field of health economics has published more than 100 articles alone on health care demand newhouse was also the leader of the rand group that designed and directed the famous rand health insurance experiment that focused on the impact of costsharing on the demand for medical care not only newhouse but also many other economists have devoted a great deal of attention to this topic

from the editors how to write articles that are relevant to practice although the journal of international business studies is not a practice oriented journal thinking deeper about the practical relevance of our articles can only help enrich them and help decision makers implement better decisions however while many academic articles in social sciences go to great lengths to explain their theoretical and empirical impact in many cases their explanation of practical relevance is a paragraph in the conclusion section with a few cursory ideas that appear to be an afterthought rather than an integral part of the article here we provide suggestions for crafting a practical implications section that is relevant for decision makers

from the editors advancing interdisciplinary research in the field of international business prospects issues and challenges doi 1 0 1 057 jibs 2009 4 1 two decades ago jibs published john dunning s presidential address at the aib annual meeting in san diego in which he made a passionate plea for a more interdisciplinary approach to international business ib studies based on a careful analysis of the major economic social political and institutional changes taking place at the time dunning 1989 411 observed

female labor supply and divorce new evidence from ireland if participation in the labor market helps to secure women s outside options in the case of divorce separation an increase in the perceived risk of marital dissolution may accelerate the increase in female labor supply this simple prediction has been tested in the literature using time and or spatial variation in divorce legislation e g across us states leading to mixed results in this paper we suggest testing this hypothesis by exploiting a more radical policy change i e the legalization of divorce in ireland the right to divorce was introduced in 1996 followed by an acceleration of marriage breakdown rates we use this fundamental change in the irish society as a natural experiment we follow a difference in difference approach using families for whom the dissolution risk is small as a control group our results suggest that the legalization of divorce contributed to a significant increase in female labor supply mostly at the extensive margin results are not driven by selection and are robust to several specification checks including the introduction of household fixed effects and an improved match between control and treatment groups using propensity score reweighting

the time varying volatility of macroeconomic fluctuations we investigate the sources of the important shifts in the volatility of us mac roeconomic variables in the postwar period to this end we propose the esti mation of dsge models allowing for time variation in the volatility of the structural innovations we apply our estimation strategy to a large scale model of the business cycle and find that shocks specific to the equilibrium condition of investment account for most of the sharp decline in volatility of the last two decades jel c51 e32

regime switches agents beliefs and post world war ii u s macroeconomic dynamics the evolution of inflation and output over the last 50 years is examined through the lens of a micro founded model that allows for changes in the behavior of the federal reserve and in the volatility of structural shocks agents are aware of the possibility of regime changes and their beliefs have an impact on the law of motion underlying the macroeconomy the results support the view that there were regime switches in the conduct of monetary policy however the behavior of the federal reserve is identified by repeated fluctuations between a hawk and a dove regime instead of by the traditional pre and post volcker structure counterfactual simulations show that if agents had anticipated the appointment of an extremely conservative chairman inflation would not have reached the peaks of the late 70s and the inflation output trade off would have been less severe these beliefs counterfactuals are new in the literature finally the paper provides a bayesian algorithm to handle the technical difficulties that arise in a rational expectations model with markov switching regimes

lost that lovin feeling the erosion of trust between small high distance partners we investigate the role of high distance in trust erosion between small partners high distance is known to hinder the formation of trust between potential partners but its role in trust erosion in established partnerships is less understood by international business scholars through a qualitative longitudinal study we extend current theory of how high distance affects the trust dynamics between cross border partners specifically we unearth three interrelated mechanisms that together explain how and why trust can erode due to high distance we show that before a partnership is formed high distance can lead partners to erroneously attribute cues to a potential partner s high quality leading to over expectations of partner performance once the partnership is operational high distance hinders actors ability to understand situational factors associated with disappointing outcomes and so they are attributed to failings of the partner at the same time distance related challenges of bounded reliability render partners reluctant to discuss partnership outcomes this can result in a vicious cycle of inertia as partners strive to protect goodwill while abandoning efforts to produce partnership outcomes because of doubts of the other s quality thus our theoretical model illustrates the limitations of trust and explains how paradoxically high distance can facilitate both trust formation and trust erosion

what determines family structure i introduction the most prevalent type of family structure in which children in the united states are raised today is the traditional one in which both biological parents are present in the home and married but in the past 30 40 years it has become increasingly common for children to experience alternative family structures such as living with the mother with no father present the mother and a stepfather and cohabiting parents children who grow up in a family with married biological parents have better education employment marriage childbearing and psychological outcomes on average than their counterparts who spend substantial parts of childhood living in alternative family structures 1 these differences are generally quite large and dwarf the effects of income and maternal employment the evidence suggests that at least part of the association between family structure and child outcomes is causal there is much still to be learned about the consequences of growing up in alternative family structures but there is a consensus that family structure matters for child development in contrast there is much less known about the determinants of family structure the proximate determinants of family structure are well studied demographic behaviors union formation and dissolution transition from cohabitation to marriage and fertility both in and outside of unions but the implications of adult demographic behaviors for the family structure experiences of children depend crucially on interactions among these behaviors for example the impact on a child of being born out of wedlock is likely to depend on whether the mother and biological father subsequently marry or cohabit and if so how soon after the birth of the child the impact on a child of the dissolution of a union may depend on whether the man in the union was the child s biological father or a stepfather and on the duration of the union economic theories of family formation and dissolution suggest a number of observable factors that affect the demographic behaviors that determine family structure 2 these include the wage rates available to men and women the tax and transfer incentives to cohabit marry and bear children the legal environment governing divorce and child support provided by absent parents and the state of the marriage market many studies have examined the effects of these factors on the family structure experiences of children but most have taken a narrow approach for example a typical study examines the impact of changes over time in one or two determinants of family structure without considering the implications of simultaneous changes in other factors most studies examine only one or two of the key demographic behaviors that determine the family structure experienced by children for example one study might focus only on entry to cohabitation and marriage whereas another study examines childbearing while single and a third study analyzes marital dissolution in this article we propose a new approach to analyze the determinants of the family structure experiences of children our approach has four distinguishing features first we jointly model union formation union dissolution and childbearing decisions previous analyses have integrated some of these behaviors in a single model but none has integrated the full range of behaviors needed for a thorough analysis of family structure a major feature of change in recent years has been de linking of marriage and childbearing decisions hence it is crucial to recognize as emphasized by ellwood and jencks 2004 that marriage and childbearing are in fact distinct decisions and that treating single parenthood as one decision rather than the consequence of related but distinct union and childbearing decisions misses key elements of changes in behavior furthermore bumpass and lu 2000 point out that a substantial part of the increase in single parenthood in the last three decades can be accounted for by a rise in the presence of children with cohabiting parents but child outcomes are worse in cohabitation than marriage other things equal

welfare rules incentives and family structure we reexamine the effects of welfare on family structure emphasizing that afdc and tanf rules are based more on the biological relationship of the mother s children to any male in the household than on marriage or cohabitation we find that many 1990s welfare reform policies did not affect family structure but that several work related reforms increased single parenthood and decreased marriage to biological fathers these effects are most evident when work related reforms are bundled and examined over a longer time period we hypothesize that these effects stem from increased earnings of single mothers and factors specific to biological fathers

balancing subsidiary influence in the federative mnc a business network view the contest for intra organisational power in the multinational corporation mnc has gradually become a prominent issue on the research agenda as long as 25 years ago hedlund 1980 investigated the strategic roles of subsidiaries in mncs and doz and prahalad 1981 raised the issue of how difficult it is for headquarters to remain in control of its subsidiaries and to influence their strategies over time since then several researchers have suggested that mncs can be considered to be dispersed structures of power in which the top management s authority does not necessarily result in hierarchical power being the ultimate control mechanism hedlund 1986 forsgren 1989 ghoshal and bartlett 1990 doz and prahalad 1993 ferner and edwards 1995 kristensen and zeitlin 2001 morgan and whitley 2003 birkinshaw and hood 1998 examined the evolution of capabilities at the subsidiary level and recognised that in most corporations there is an internal competition for charter that implies a process of change in subsidiary roles birkinshaw and hood 1998 782 case research has also indicated that changes in the charters of divisions or subsidiaries in mncs constitute a strong feature of horizontal or vertical competition in the corporate marketplace galunic and eisenhardt 1996 birkinshaw and fry 1998 the tension between the headquarters and overseas laboratories caused by the laboratories desire for autonomy and influence is an example of such a competition asaka wa 2001

the impact of language barriers on trust formation in multinational teams this study systematically investigates how language barriers influence trust formation in multinational teams mnts on the basis of 90 interviews with team members team leaders and senior managers in 15 mnts in 3 german automotive corporations the authors show how mnt members cognitive and emotional reactions to language barriers influence their perceived trustworthiness and intention to trust which in turn affect trust formation the authors contribute to diversity research by distinguishing the exclusively negative language effects from the more ambivalent effects of other diversity dimensions their findings also illustrate how surface level language diversity may create perceptions of deep level diversity furthermore their study advances mnt research by revealing the specific influences of language barriers on team trust an important mediator between team inputs and performance outcomes it thereby encourages the examination of other team processes through a language lens finally their study suggests that multilingual settings necessitate a reexamination and modification of the seminal trust theories by mayer davis and schoorman and by mcallister in terms of practical implications the authors outline how mnt leaders can manage their subordinates problematic reactions to language barriers and how mnt members can enhance their perceived trustworthiness in multilingual settings

from a distance and generalizable to up close and grounded reclaiming a place for qualitative methods in international business research journal of international business studies 2011 42 573 581 doi 10 1057 jibs 2011 19 it is exhilarating to write the introduction to this special issue as it presents an important opportunity for qualitative research to reclaim its position as an integral part of international business ib research the field of ib was founded on a rich qualitative research legacy e g bartlett 1979 crozier 1965 fayerweather 1969 johanson vahlne 1977 kindleberger 1956 prahalad 1975 wilkins 1970 1974 over time however such methods have been progressively marginalized in our field as quantitative methods have become the norm this shift in emphasis has mirrored the broader trend toward more positivistic empirical methods in the social sciences the field of ib is multidisciplinary in scope and interdisciplinary in content and methodology statement of jibs editorial policy however as our respective home disciplines came under growing pressure to solidify their legitimacy as scientific endeavors that merit scholarly attention it is not surprising that we began to take on the norms propagated within our own academic communities that typically equated quantitative data with hard science while there are clear merits associated with quantitative methods the multi cultural multi dimensional and dynamic nature of the field of ib lends itself to a broad range of research methodologies qualitative methods being one of them in order to understand the complexities of emergent and evolving phenomena scattered over distance and the differentiated contexts typical to many topics under investigation in ib it is often inappropriate to engage in large scale cross sectional studies or reductionist methods in the absence of well developed theory rather thick description exploratory research and comparative case analysis that focus on inductive theory building and hypotheses generation may be more suitable

optimal monetary policy and determinacy under active passive regimes abstract should one expect inflation to be stable when monetary policy is passive according to the workhorse model for monetary policy analysis the answer should be no if the passive spell is too long in this paper i develop a new keynesian model in which monetary policy is optimal subject to a loose commitment constraint i show that there is a threshold degree of commitment such that the equilibrium is locally unique when monetary policy switches between active and passive stances regardless of the length of the passive spell this result also holds for a version of the model where the passive spell is endogenous and due to a demand shock driving the economy to the zero lower bound

boundary work an interpretive ethnographic perspective on negotiating and leveraging cross cultural identity the complexity of global organizations highlights the importance of members ability to span diverse boundaries that may be defined by organization structures national borders and or a variety of cultures associated with organization nation based societal and work cultures industries and or professions based on ethnographic research in a japan us binational firm the paper describes and analyzes the boundary role performance of the firm s japanese members it contributes toward theory on boundary spanning by introducing a cultural identity negotiation conceptual framework we show boundary spanning as a process shaped through the interplay of the contextual issues that make a boundary problematic an individual s multiple repertoires of cultural knowledge and the individual boundary spanner s negotiation through interaction with others of his her cultural identities the sense of who i am as a cultural being that is fundamental to an individual s self concept at the same time we make transparent the epistemological and methodological foundations of an interpretive ethnographic approach demonstrating its value for understanding complex organizational processes research findings have practical implications for the selection and training of an organization s employees particularly of persons who may be considered bicultural

were there regime switches in u s monetary policy working paper 2004 14 june 2004 abstract a multivariate model identifying monetary policy and allowing for simultaneity and regime switching in coefficients and variances is confronted with u s data since 1959 the best fit is with a model that allows time variation in structural disturbance variances only among models that also allow for changes in equation coefficients the best fit is for a model that allows coefficients to change only in the monetary policy rule that model allows switching among three main regimes and one rarely and briefly occurring regime the three main regimes correspond roughly to periods when most observers believe that monetary policy actually differed and the differences in policy behavior are substantively interesting though statistically ill determined the estimates imply monetary targeting was central in the early 80s but was also important sporadically in the 70s the changes in regime were essential neither to the rise in inflation in the 70s nor to its decline in the 80s jel classification e52 e47 c53 key words counterfactuals lucas critique policy rule monetary targeting simultaneity volatility model comparison i the debate over monetary policy change in an influential paper clarida gali and gertler 2000 cgg presented evidence that us monetary policy changed between the 1970 s and the 1980 s indeed that in the 70 s it was drastically worse they found that the policy rule apparently followed in the 70 s was one that when embedded in most stochastic general equilibrium models would imply non uniqueness of the equilibrium and hence vulnerability of the economy to sunspot fluctuations of arbitrarily large size their estimated policy rule for the later period on the other hand eliminated this indeterminacy these results are a possible explanation of the volatile and rising inflation of the 70 s and of its subsequent decline the cgg analysis has two important weaknesses one is that it fails to account for stochastic volatility us macroeconomic variables and particularly the federal funds rate have gone through periods of tranquility and of agitation with forecast error variances varying greatly from period to period ignoring such variation does not lead to inconsistent estimates of model parameters when the forecasting equations themselves are constant but it strongly biases toward a finding of changed parameters tests of the stability of the forecasting equations the other weakness is that the cgg analysis rests on powerful and implausible identifying assumptions they require that we accept that the response of the monetary authority to expected future inflation and output does not depend on the recent history of inflation money growth or output it is hard to understand why this should be so especially in the 70 s when monetarism was a prominent theme in policy debates congress was requiring reports from the fed of projected time paths of monetary aggregates and financial markets were reacting sensitively to weekly money supply numbers the requirement for existence and uniqueness of equilibrium in dynamic models is that the monetary policy rule show a more than unit response of interest rates to the sum of the logs of all nominal variables that appear on the right hand side of the reaction function if we force a particular measure of expected future inflation to proxy for all the nominal variables that actually appear independently in the reaction function we are bound to get distorted conclusions on the one hand because expected future inflation will be a noisy measure of the full set of nominal influences on policy we might get downward bias in our estimates from the usual errorsin variables effect on the other hand to the extent that expected future inflation like most expected future values shows less variation than current nominal variables we could find a mistaken scaling up of coefficients

source or storer ib s performance in a knowledge network the absence of systematic assessment of ib s performance as a reference discipline prolongs questioning of the contribution that ib scholarship makes to other business fields put simply do ib journals export more ideas to allied disciplines than they import from them difficulty in evaluating the merits of let alone the need for solutions offered to boost interdisciplinary relevance slows validation of the ontological principles and epistemic standards of ib research this paper begins to fill this gap it establishes a knowledge network composed of 39 high impact journals that represent the domains of management marketing finance economics operations it accounting human resources organizational behavior and ib we collected citation exchanges among these 39 journals from 2000 through 2007 a log multiplicative model evaluated multiple dimensions of association to determine the sources and storers of knowledge within the network the network from pathfinder analysis was used to determine each journal s contribution to network entropy these analyses indicate that ib journals functioned as storers not sources of ideas within the sampled knowledge network over the studied period the results help interpret opposing proposals to fortify ib studies highlight the tradeoff between exploitation and exploration in knowledge development and dissemination and elaborate jibs s boundary spanning performance within the sampled network

accessing vs sourcing knowledge a comparative study of r d internationalization between emerging and advanced economy firms research and development r d internationalization is on the rise for advanced economy multinationals amnes as well as emerging economy multinationals emnes we study emne r d internationalization by comparing it to that by amnes in the context of an emerging knowledge intensive industry we find that these two are fundamentally different processes while the internationalization of amnes r d activities can largely be explained in terms of the twin strategies of competence exploitation and competence creation emne r d internationalization is rooted in the firms overall catch up strategy to get on par with industry leaders an in depth comparison of knowledge flows reveals that within amnes headquarters often serves the primary source of knowledge for r d subsidiaries in contrast within emnes headquarters accesses knowledge from r d subsidiaries in advanced economies for innovation catch up within this dichotomy the innovative capabilities of emne headquarters develop more slowly and with greater difficulty than those of amne subsidiaries

solving endogenous regime switching models abstract this paper solves rational expectations models in which structural parameters switch across multiple regimes according to state dependent endogenous transition probabilities assuming small shocks and smooth transition probabilities we apply a perturbation approach we first provide for conditions under which a unique bounded equilibrium exists we then compute first and second order approximations in a new keynesian model with monetary policy switching we document new effects of monetary policy switching when transition probabilities depend on inflation

mortgage modification and strategic behavior evidence from a legal settlement with countrywide abstract we investigate whether homeowners respond strategically to news of mortgage modification programs we exploit plausibly exogenous variation in modification policy induced by settlement of us state government lawsuits against countrywide financial corporation which agreed to offer modifications to seriously delinquent borrowers using a difference in differences framework we find that countrywide s monthly delinquency rate increased more than 0 54 percentage points a 10 percent relative increase immediately after the settlement s announcement the estimated increase in default rates is largest among borrowers least likely to default otherwise these results suggest that strategic behavior should be an important consideration in designing mortgage modification programs jel d14 g21 k22 r31

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

will extending medicaid to two parent families encourage marriage several welfare programs in the united states restrict eligibility to single parent families this paper asks whether eliminating this restriction for medicaid encourages marriage i identify medicaid s effect through a series of health insurance reforms that were passed in the 1980s and 1990s targeting young children these reforms were associated with an increase in the probability of marriage of 1 7 percentage points while the expansions offered some incentives to become married they also created other incentives to become divorced known as the independence effect after controlling for the outflows from marriage due to the independence effect the estimated effect increases by 10 percent

language policies and practices in wholly owned foreign subsidiaries a recontextualization perspective this study adopts a recontextualization perspective on language policies and practices in wholly owned foreign subsidiaries drawing on a field study of 101 subsidiaries in japan we develop a contingency model that distinguishes between four different types of recontextualization with characteristic language policies and practices developing locally adaptive developing globally integrated established locally adaptive and established globally integrated our analysis shows how each of these four types is accompanied by specific problems and challenges in particular it elucidates five important aspects of language implementation 1 the emergence of language praxis from the interplay of headquarters strategies and local responses 2 the hybridization of language practices 3 the central role of key actors such as subsidiary presidents in recontextualization 4 the pervasive power implications of language policies and practices and 5 the multifaceted implications for strategic human resource management by so doing our analysis opens up new avenues for context specific and practice oriented studies of language in multinational companies

the multinational corporation as a multilingual community language and organization in a global context this paper develops a framework for analyzing the multinational corporation mnc as a multilingual community in which parent functional language and subunit functional languages are concurrently used and recursively linked through an intra corporate communication network the unit breadth and intensity of an mnc s language system are designed to apply global strategies within the context of evolving environmental and organizational realities to the extent that language design is the product of deliberate choice we suggest that headquarters functional language is determined by the mnc s international strategy organizational structure and transnationality while subunit functional language is designed in accordance with organizational form strategic role and expatriate deployment aligning language systems with organizational strategy and dynamics improves mnc communication coordination and knowledge sharing