network externalities technological progress and the competition of market contracts abstract network externalities are used to describe the fact that many modern products become more valuable the more users adopt products of the same technology where network externalities and technological progress exist the various kinds of inefficiencies discussed in the recent literature can be explained by different types of contracts the main categories analysed are simple market contracts update contracts and service contracts it is shown that these types of contract emerge endogenously from the incentive structure of profit maximizing firms competition between these contracts may substantially reduce inefficient allocations caused by network externalities

money demand and quantity constraints evidence from the soviet interview project i introduction there are more than 500 studies of money demand that use time series or pooled data but less than twenty studies that use cross section data time series studies use a limited number of aggregate variables such as income and wealth cross section studies supplement income and wealth with socioeconomic and demographic variables to provide insights that cannot be detected in aggregate data most studies of money demand are for capitalist countries only a few studies exist for socialist countries there are no cross section studies of the demand for money for socialist countries due to lack of data population censuses of the former soviet union did not provide information on household money and wealth pickersgill 1970 and millar 1987 however the soviet interview project sip survey conducted in 1983 provides a large cross section data set of former soviet citizens sip is a retrospective survey of 2793 former soviet citizens who left the soviet union for the united states during the late 1970s and early 1980s the sip survey asked respondents about their last normal period of life in the soviet union for most respondents this was in the late 1970s a period of normal functioning of the administrative command system sip provides a rich database of conventional variables and includes information on rationing eiar variables and other soviet specific variables eiar variables measure shortages participation in the underground economy and access to privileges we examine the effects of eiar factors on the demand for money in addition to conventional variables to obtain a picture of money demand near the end of the administrative command era this paper makes two contributions it is the first to examine the demand for money in a centrally planned economy using cross section data which tests variables other than income and interest rates second this study empirically investigates the effects of income on the marginal utility of income under rationing by studying how quantity constrained respondents may use trade in convertible foreign currencies or barter when income increases thereby lessening money s role as the medium of exchange the ongoing transformation of the former soviet union to a market economy and political pluralism is not an easy process for policymakers the findings of this study of the behavior of households may be useful in setting monetary policies see also collier and mokhtari 1989 ofer and vinokur 1992 mokhtari and gregory 1993 and mokhtari and asgary 1993 policymakers must know the responses of households to changes in quantity constraints underground economic activity and privileges and to other factors during the transition period and beyond moreover our findings may be useful for researchers who investigate the behavioral differences in the money demand of households in two different economic systems ii past research in the administrative command economy money is held for transaction and precautionary purposes private capital markets are absent investment decisions are made by the government money serves as a medium of exchange and income should be the prime determinant of the demand for money under these conditions money should be a necessity and the income elasticity of demand for money should be positive and less than or equal to one other than income we would expect the demand for money in the soviet union to have different determinants than in capitalist countries first capital markets are absent the interest rate is not the opportunity cost of money second consumer good shortages quantity constraints should affect the transaction and the precautionary demand for money 1 households may substitute money for goods to be able to purchase goods in the future at state prices purchase goods from the underground economy at higher prices or reduce their labor supply barro and grossman 1971 1974 1976

institutional change and the velocity of money a century of evidence we study common features in the income velocity of money income and interest rates for canada the u s the u k sweden and norway using annual data from 1870 the recently developed and refined techniques of testing for cointegration are employed the evidence suggests there is a unique long run relationship in velocity but not in income and interest rates moreover we find that only a model which includes institutional change proxies is properly specified we argue that the evidence is best interpreted in the context of common historical developments in the respective countries financial systems

down with mne centric theories market entry and expansion as the bundling of mne and local assets both anderson and gatignon and the uppsala internationalization model see the initial mode of foreign market entry and subsequent modes of operation as unilaterally determined by multinational enterprises mnes arbitraging control and risk and increasing their commitment as they gain experience in the target market oli and internalization models do recognize that foreign market entry requires the bundling of mne and complementary local assets which they call location or country specific advantages but implicitly assume that those assets are freely accessible to mnes in contrast to both of these mne centric views i explicitly consider the transactional characteristics of complementary local assets and model foreign market entry as the optimal assignment of equity between their owners and mnes by looking at the relative efficiency of the different markets in which mne and complementary local assets are traded and at how these two categories of assets match i am able to predict whether equity will be held by mnes or by local firms or shared between them and whether mnes will enter through greenfields brownfields or acquisitions the bundling model i propose has interesting implications for the evolution of the mne footprint in host countries and for the reasons behind the emergence of dragon mnes

the expansion of foreign direct investments discrete rational location choices or a cultural learning process it is recognized in the literature that experience may affect the cost and the uncertainty of operating in foreign markets and experience and market knowledge may therefore influence the location decisions of fdis economic theory does not however predict a general expansion pattern of fdis across industries on the other hand the theory associated with the internationalization process approach highlights the importance of cultural distance and predicts a movement from close to more distant markets as more experience is acquired by the firm the internationalization process approach is rooted in a behavioral theory of the firm

experiential knowledge and cost in the internationalization process using a behavioral approach this study identifies and delineates components of experiential knowledge in the internationalization process three hypotheses are developed and tested they center ar

the demand for money in secular perspective abstract this paper presents some evidence from norwegian data on some of the long standing empirical issues of money demand the choice of a scale variable and the issue of simultaneous equations bias is subjected to some recently developed statistical tests the outcome favours a permanent income model of money demand no significant simultaneity bias was detected various specifications of explanatory variables like the own yield on money interest rates and price expectations as well as the issues of price level homogeneity and stability between subperiods are also considered in the paper

foreign entry cultural barriers and learning this paper examines the longevity of foreign entries hypotheses are developed on the mode start ups vs acquisitions and ownership structure wholly owned vs joint ventures in relation to cultural distance the hypotheses are tested within a framework of organizational learning using data on 225 entries that 13 dutch firms carried out from 1966 onwards results show that the presence of cultural barriers punctuates an organization s learning cultural distance is a prominent factor in foreign entry whenever this involves another firm requiring the firm to engage in double layered acculturation we also identify locational paths of learning the longevity of acquisitions is positively influenced by prior entries of the firm in the same country similarly the longevity of foreign entries in which the firm has a majority stake improves whenever the expanding firm engaged in prior entries in the same country and in other countries in the same cultural block

income velocity and the variability of money growth evidence from less developed countries this paper examines whether the variability of money growth caused changes in income velocity of money in 30 less developed countries time series data show year to year variations in income velocity of money in these countries for the 1961 1990 period empirical results based on causality but complemented by variance decomposition tests show that money growth is the most important determinant in explaining the variability in income velocity in at least 20 of the 30 developing countries examined in this study in addition the causality results show that inflation rate granger causes income velocity of money in 21 countries but the variance decomposition results show inflation rate to be relatively more important in explaining the variability of velocity in eight countries similarly while real income granger causes velocity of money in 18 countries the results of the variance decomposition tests show real income to be relatively more important as a determinant of income velocity in two countries over

technological expectations and adoption of improved technology abstract attention is focused upon the adoption demand rather than the creation supply of new technology which improves from time to time based on the expected flow of technological progress over which the firm demander has no control it must decide either to adopt the current best available technology or to postpone adoption the distinguishing features of the model are that more than one technological innovation is anticipated and expectations about the likelihood of such innovations are revised as time passes since the last innovation our analysis shows that the firm will adopt the current best practice if its technological lag exceeds a certain threshold moreover as time passes without new technological advances it may become profitable to purchase a technology that has been available even though it was not profitable to do so in the past

international technology licensing monopoly rents transaction costs and exclusive rights as firms increasingly use licensing to exploit knowledge based assets in global technology markets appropriate structuring of these agreements has become an important line of research inquiry one area that has received less attention is the nature of rights granted in inter firm licensing relationships although it is an important clause that has implications for profit generation from licensing of proprietary assets conceptualizing licensing rights in terms of number of licenses granted and exclusivity rights given to a licensee in a foreign market this paper examines the determinants of these rights based on monopoly rents and transaction costs associated with different types of licensing contracts hypotheses are empirically tested through two studies one based on large us manufacturing firms and the other on a cross national sample of medium sized firms actively involved in international technology licensing results from both studies show a greater propensity to use non exclusive multiple licensing when the licensed technology has greater potential to produce differentiated products or when there is greater threat of substitutive technologies entering the market on the other hand innovative technologies and a higher degree of asset specific investments required of the licensee for the technology are related to the use of single exclusive licensing agreements

modal choice in a world of alliances analyzing organizational forms in the international hotel sector in the new management landscape where interfirm collaborations are common international companies today have fully owned operations and equity joint ventures as well as non equity alliances which in the service sector include franchising and management service agreements what determines the optimum choice of organizational mode the new syncretic theory developed in this paper combines concepts from transaction costs theory agency theory corporate knowledge and organizational capability theories to answer this question the paper then tests these concepts to explain the incidence of these modes in the international hotel business using canonical discriminant analysis as well as logistical regression using a generalized logit model the choice of entry mode is shown to be determined by both country or environmental variables as well as firm specific variables

implications of consumer heterogeneity in time series estimates of us money demand the money demand function has traditionally been estimated with income and interest rates typically employing quite lengthy time series controversy however surrounds the importance of heterogeneous agents in monetary economics and throughout macroeconomics more generally in particular if proportions of agents with different traits and hence different money demands are changing over time ignoring those changes may bias estimated income and interest elasticities this concern as well as that of appropriate functional form is explored here controlling for consumer heterogeneity has surprising effects on the estimated elasticities of traditional variables

use of minority and 50 50 joint ventures by united states multinationals during the 1970s the interaction of host country policies corporate strategies this article examines geographical sectoral and corporate trends in the use of minority and 50 50 joint ventures by u s multinational manufacturing and mining firms in less developed countries ldcs during the 1970s it is based primarily on data found in the harvard multinational enterprise data base as updated through the mid 1970s and supplemented with corporate performance data for the 1975 1980 period from a new international competitive analysis ica database developed with support from the general electric foundation

wholly owned subsidiary versus technology licensing in the worldwide chemical industry this paper empirically analyzes the determinants of the choice between wholly owned subsidiary and technology licensing as a strategy for expansion abroad we use a new and comprehensive database on worldwide plant level investments in the chemical industry during the 1981 1991 period we find that both cultural distance and the presence of other potential licensors favor the use of licensing as a strategy for expanding abroad whereas prior experience favors the choice of wholly owned subsidiary an implication of this study is that competition in the market for technology can foster the international diffusion of technology through the use of arm s length agreements

cross country estimates of the demand for money and its components the demand for money aggregates m1 m2 and their components currency demand deposits and time deposits are estimated using a sample of 103 countries at two time periods money demand is found to be affected by age literacy industrial development and political structure as well as income and inflation this expanded demand function helps to explain the considerable changes in money demand that have occurred over long periods and the large variation in money demand found across countries the knowledge thus gained is useful for understanding differences in monetary and taxation policies across countries

modeling monetary trends in italy using historical data the demand for broad money 1861 1990 in this paper we estimate a stable demand for money relationship for italy using a long series of historical data we extend previously available data sets to obtain a sample for the years 1861 to 1990 and use cointegration analysis and two stage estimation procedures to obtain a dynamic model for m2 demand by employing a small number of explanatory variables and a nonlinear error correction model we find a stable demand for money relationship our model incorporates significant inflation and interest rate effects in contrast to previous studies of this type

the impact of culture on the strategy of multinational enterprises does national origin affect ownership decisions this paper tests the proposition that national origin affects the strategies of multinational enterprises by looking at the determinants of the choice they make between entering the united states through partially versus wholly owned subsidiaries we pool entries into the united states made by firms based in two countries japan and finland which differ both in their cultural characteristics and in their cultural distance to the united states after carefully controlling for the known firm and industry level determinants of subsidiary ownership strategies we find that cultural distance between the home base of the investor and the target country or perhaps political risk exerts a powerful influence on ownership of subsidiaries but cultural characteristics of the home base do not

national institutional differences and cross border university industry knowledge transfer abstract does inter national institutional difference hamper technology transfer from the foreign university to the business enterprises a multinational study on institutions suggests that some elements of institutions of nations positively influence international technology transfer some other elements of institutions negatively influence the international technology transfer and yet some other elements of institutions of nations have no influence on the international technology transfer the empirical analysis on six institutional dimensions reveals variegated results i religious distance has a positive effect on international technology transfer when listed companies are controlled ii social distance has a positive effect when listed firms are not controlled iii education distance has a positive effect when listed companies are not controlled iv political distance has no effect on international technology transfer and vi industrial distance has negative effect on international technology transfer however hofstede s measures on national cultural dimensions show no significant effects the non significant results could be due to the measurement of national cultures characteristics of the biopharmaceutical industry or due to changes in the patterns of national cultures over time

licensee technological potential and exclusive rights in international licensing a multilevel model granting of exclusive rights is an important consideration for firms using licensing as a mode of entry into foreign markets as exclusive contracts reduce licensors flexibility in a given market during the term of the agreement by granting exclusivity to a licensee with greater technological potential the exchange partners can increase the potential transactional value of the licensing agreement at the same time a licensee with strong technological potential will increase the threat of transactional hazards due to underinvestment and rent appropriation in this paper we develop and empirically test a model that evaluates the balancing of transactional value and transaction costs in exclusive licensing in particular we identify the conditions under which exclusive contracts are likely to be granted to foreign licensees with strong technological potential empirical results from a multilevel model based on 375 international licensing agreements of us firms in high technology industries during 1995 2008 show that licensees with a stronger technological potential are more likely to be granted exclusive rights in countries with strong intellectual property rights protection and in industries with a high rate of technological change but are less likely to be granted exclusive rights when there is a high degree of overlap between licensor and licensee products

ideas for rent an overview of markets for technology this article surveys some of the recent literature on technology markets and summarizes its main issues and insights we structure our analysis in three parts the supply and demand of technology the factors that condition the formation and growth of technology markets industry structure and dynamic issues in addition we summarize some of the studies that have tried to document the size and growth of these markets we find that the literature has focused mainly on the supply of technology but several other aspects of these markets remain under studied including the demand for external technology the role of uncertainty in technology markets and the dynamic interaction between industry structure and the market for technology understanding these will illuminate whether markets for technology will continue to grow or remained confined to pockets of the economy copyright 2010 the author 2010 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

some aspects of the monetary economics of richard cantillon abstract this article examines several key aspects of the monetary economics in richard cantillon s essai sur la nature du commerce en general 1755 viewed from a modern monetarist perspective with special focus on monetary dynamics after establishing the quantity theory framework of cantillon s analysis the article reviews the following aspects of his work his theory of monetary disequilibrium his analysis of the open economy his treatment of the interest rate his treatment of expectations and information and his analysis of monetary induced business fluctuations and the use of monetary policy

patents learning by doing and market structure in the chemical processing industries for a sample of 24 chemical products count data models are used to evaluate firms propensity to patent and the link between patented process innovations and output prices the results show that process patenting was largely an outgrowth of learning by doing propensity to patent increased with firm size but decreased with market concentration reductions in output prices were strongly linked to learning by doing and more weakly to the rate of patenting producer firms appear to have been more successful than non producers in appropriating the value of patented process innovations

transaction cost determinants and ownership based entry mode choice a meta analytical review entry mode choice is a critical ingredient of international entry strategies and has been voluminously examined in the field the findings however are very mixed especially with respect to transaction cost related factors in determining the ownership based entry mode choice this study conducted a meta analysis to quantitatively summarize the literature and empirically generalize more conclusive findings based on the 106 effect sizes of 38 empirical studies the meta analysis shows that the findings of the existing studies are moderated to varying degrees by both study setting factors and statistical artifacts although the combined overall effects of transaction cost based determinants are consistent with the predictions of transaction cost economics we extensively discuss the implications of meta analytical results especially moderating effects of location country of origin industry type and statistical artifacts highlight the measurement adequacy equivalence and multidimensionality of transaction cost determinants and present our suggestions to improve theoretical inquiries and empirical verifications on entry mode choice

an examination of consumer heterogeneity in a stochastic model of consumer purchase dynamics with explanatory variables abstract a stochastic model of brand choice and purchase incidence is proposed that relates marketing variables including advertising exposures to brand performance measures such as market share penetration and depth of repeat purchase dynamics over time the approach considers various aspects of consumer heterogeneity including individual differences in brand loyalty levels advertising exposures and purchase rates for a population of consumers a major focus of this study is on the evaluation of the impact of consumer heterogeneity in alternative models on the basis of single source scanner panel data for an actual market situation in particular we demonstrate the critical importance of considering heterogeneity over a consumer population as a means of enhancing descriptive and predictive model fit as well as for allowing the analysis of advertising media schedules

knowledge transfer capacity and its implications for the theory of the multinational corporation this study updates and extends research on foreign entry modes by examining the impacts of knowledge transfer capacity and knowledge tacitness research on international corporate expansion has long emphasized that deploying intangible knowledge based assets is required for successful international expansion more recently research from a knowledge based perspective has addressed the role of tacitness in constraining a firm s ability to transfer knowledge internationally we combine these perspectives to describe how knowledge tacitness affects the relative suitability of four archetypal entry modes exporting licensing establishing an alliance and wholly owned entry we then examine and develop conceptually a seldom studied firm characteristic knowledge transfer capacity we offer predictions that describe the combined effects of knowledge tacitness and transfer capacity on entry mode choice we distinguish between the transfer capacity of the organization that develops knowledge source transfer capacity and that of the organization that seeks to access that knowledge recipient transfer capacity the discussion addresses how our model generalizes to knowledge seeking strategies and to the study of ongoing multinational networks the study enriches and reconciles multiple theoretical perspectives on entry strategy it brings together the study of knowledge characteristics and firm heterogeneity in the theory of the multinational corporation and in international and strategic management more generally journal of international business studies 2003 34 356 373 doi 10 1057 palgrave jibs 8400037

a diffusion model incorporating product benefits price income and information we start by assuming that a major benefit of many new durable products such as dishwashers and microwave ovens is time savings others such as vcrs also enhance the value of our leisure time using a household production framework we demonstrate that a utility maximizing individual will have a reservation price for the product which is a function of the product benefits and his wage rate by assuming that the wage rate has an extreme value distribution across the population we are able to derive for the aggregate process an income price dependent logistic adoption equation we then allow for the possibility that certain eligible consumers may delay their purchase of the product because they are unaware that it exists are suspicious of its quality or expect its price to fall unawareness uncertainty and hope for further price declines are assumed to decrease with the increase in the number of previous adopters the resulting diffusion model has the property that the product life cycle phenomenon can be explained jointly or separately by the income price process and the awareness uncertainty expectations process using data on household income on durable penetration within different income classes and on first purchase sales the aggregate diffusion model and its premises are tested and supported it is found that both the income price and awareness uncertainty expectations processes are at work however the dependence of the awareness uncertainty expectations delay process on the number of previous adopters e g word of mouth type effect exists only in certain product categories and is usually relatively weak it is demonstrated that if the word of mouth type effects are weak a price skimming strategy is optimal for a monopolist and also is likely to be implemented by oligopolists the sales forecasting implications of the model also are pursued

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

ownership patterns of u s joint ventures abroad and the liberalization of foreign government regulations in the 1980s evidence from the benchmark surveys data from the benchmark surveys of the commerce department show the beginning of a global liberalization in government restrictions on foreign equity in the 1980s this was manifested in a small but unmistakable across the board reduction in the share of 50 50 and minority affiliates out of all u s affiliates in a country across countries there remains a huge variation in this proportion and the second part of the paper seeks to statistically explain this variation in a cross sectional regression analysis

technology adoption in the presence of network externalities we analyze technology adoption in industries where network externalities are significant the pattern of adoption depends on whether technologies are sponsored a sponsor is an entity that has property rights to the technology and hence is willing to make investments to promote it key findings include the following 1 compatibility tends to be undersupplied by the market but excessive standardization can occur 2 in the absence of sponsors the technology superior today has a strategic advantage and is likely to dominate the market 3 when one of two rival technologies is sponsored that technology has a strategic advantage and may be adopted even if it is inferior 4 when two competing technologies both are sponsored the technology that will be superior tomorrow has a strategic advantage

new ventures or acquisitions the choice of swedish multinational enterprises this study examines the factors influencing the multinational enterprises choice between the takeover of already existing firms and investments in new ventures as a means of entering a foreign market the results suggest that the degree of industrial diversification of the parent company and the host country s per capita income seems to have a positive influience on the propensity for takeovers this propensity appears to be negatively related to the rate of growth of industrial production in the industry entered further we found that the more recent the entry into a foreign market the greater the probability for choosing acquisition

the role of tax bases and collections costs in the determination of income tax rates seigniorage and inflation a growing theoretical literature on optimal taxation predicts that governments will set the tax rates on money holdings and on more traditional tax bases to minimize the deadweight losses of collecting government revenue under the presumption that relative collection costs and tax bases have not changed significantly over time the empirical time series seigniorage literature has focused on the theory s tax smoothing implication finding only weak support we show that changes in collections costs and tax bases played an important role in the determination of tax composition and find stronger support for tax smoothing when this is taken into account

the structure of payments as a way to alleviate contractual hazards in international technology licensing this article proposes an empirical model in which the option of choosing between royalties fixed payments or a combination of the two is made to mitigate contractual hazards in licensing contracts we examine licensing contracts between spanish and foreign firms during the 1960s and early 1970s using a new data source of 925 contracts the link between patenting and licensing is also analyzed the work provides evidence to support the hypothesis that the moral hazard problem truly influences the type of payment established in arm s length contracts when there is an important technological gap between unaffiliated firms this study also shows that the payment chosen depends on the size of the licensee firm copyright 2009 the author 2009 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

the effect of cultural distance on entry mode choice international diversification and mne performance a meta analysis although a growing literature indicates that cultural distance that is differences between national cultures is an important determinant of organizational actions and performance both empirical and theoretical concerns abound in this study the relationships of cultural distance with entry mode choice international diversification and mne performance are examined by meta analyzing data from 66 independent samples with cumulative sample sizes ranging from 2 255 to 24 152 regression results failed to provide statistical evidence of significant relationships between cultural distance and entry mode choice international diversification and mne performance the examination of moderator effects however yielded important results we found a strong negative association between cultural distance and entry mode choice for us based mnes the cultural distance international diversification relationship was negative for high technology industries while it was positive for other industries cultural distance also had a strong positive effect on mne performance for developed country investments a similar strong positive relationship was found between cultural distance and international diversification in studies with more recent samples results of this study indicate that substantial additional research is needed before the role of cultural distance is fully understood

a high tech product market share model with customer expectations in a product category based on dynamic technology new products enter the market in rapid succession and the competitive situation changes almost daily because technological features of available products tend to improve while prices tend to decline customers develop expectations that may influence their purchase decisions we model the impact of customer expectations regarding price and technology on product market share in the personal computer industry finding significant nonlinear effects of both these effects are observed when actual product price and or technology differ from expectations by a threshold amount our results suggest implementable implications for high tech product managers in particular price and technology should meet but not exceed customer expectations this does not mean that managers should strive for mediocrity rather continuous improvement should be implemented so that product development efforts lead customer expectations

the interactive and causal relationships involving precious metal price movements an analysis of the gold and silver markets to explain the interactive and causal relationships between gold and silver price movements time series procedures are used to identify reduced form parameters corresponding to a general arbitrage model enveloped in a framework of expectations about capital gains current price changes are conjectured to be functions of lagged and present values of the substitute precious metal prices and the interest rate plus lagged values of its own price to determine the appropriate number of lags to identify the appropriate interaction and to examine the exogeneity between the gold and silver prices and the rate of interest we use schwarz s bayesian information criterion and akaike s final prediction error criterion the resultant estimated model is simultaneous and provides information on participants average lead times in forming these expectations

firm ownership preferences and host government restrictions an integrated approach two approaches may explain how multinational enterprises mnes select ownership structures for subsidiaries the first argues that mnes prefer structures that minimize that transaction costs of doing business abroad the second argues that ownership structures are determined by negotiations with host governments whose outcomes depend on the bargaining power of the firm this paper presents a framework integrating these two approaches and uses statistical methods to separate their effects empirically

a dynamic it adoption model for the soho market pc generational decisions with technological expectations thesmall office home office soho professionals comprise the fastest growing segment in the labor force today typically being a one person business based at home soho owners mostly rely on office information technology to single handedly run their entire operation despite the segment s ostensibly growing dependence and influence on the information technology it industry still very little is known about the dynamics between soho and it products with the purpose of addressing this void we investigate the soho professionals adoption patterns of multigenerational it products accordingly we develop and empirically estimate an individual soho levelinitial andrepeat purchase logit model that captures the procurement patterns for successive generations of technological products namely the pc category specifically we find that soho professionals procurement choices are influenced by a number of salient dimensions i e income performance price interpurchase time network externalities furthermore some soho owners are found to have a preference for a future expected generation over a currently available one which is explained via their business dispositions i e technology orientation result orientation search orientation toward accepting technological incertitude

competitive interest payments on bank deposits and the long run demand for money reply this paper tests two assumptions made in previous demand for money studies the first assumption concerns the role assigned to the interest rate in the demand for money function common practice identifies the rate of interest with the opportunity cost of holding money in section i this formulation is shown to blur an important distinction between the price of money and the price of money substitutes and to implicitly assume that the relevant price variable is the difference between these two distinct prices a second assumption is that the current ban on interest payments on demand deposits is fully effective in section ii i operationally define these price variables and estimate perfectly competitive interest payments on commercial bank deposits this is done by crudely measuring commercial bank marginal costs and assuming that all excess profit is passed on to depositors in indirect ways section iii presents estimates of a more complete longrun demand for money relationship which explicitly includes an own price and a cross price as separate influences and assumes that the prohibition of the payment of interest on deposits is totally ineffective although no firm conclusion is reached concerning the proper functional specification of the demand function the results significantly improve upon previous demand for money estimates which assumed that the interest payment prohibition is totally effective in section iv the results are summarized and implications of the analysis for monetary theory are presented my competitive demand for money formulation leads to a reinterpretation of the existing evidence on what is generally referred to as the interest elasticity of demand for money this estimate is shown to be significantly biased downward it also implies that the demand for and supply of money are more interdependent than is usually assumed

investment under uncertainty the case of replacement investment decisions we analyze the determinants of replacement investment decisions in a contingent claims model with maintenance and operation cost uncertainty we find that the optimal time between replacements is increasing in the volatility of cost the purchase price of a new asset and the corporate tax rate and is decreasing in the systematic risk of cost the salvage value of the asset and the investment tax credit the optimal time between replacements can either increase or decrease with an increase in the depreciation rate extensions of the model to examine the effects of technological and tax policy uncertainty on replacement investment decisions give intuitive but striking results uncertainty about the arrival of a technological innovation that would decrease maintenance and operation cost results in a significant decrease in replacement investment uncertainty in a tax law change that would encourage investment decreases current investment and uncertainty in a tax law change that would discourage investment increases current investment

experiential knowledge and costs in the internationalization process using a behavioral approach this study identifies and delineates components of experiential knowledge in the internationalization process three hypotheses are developed and tested they center around the lack of knowledge in the areas of foreign business foreign institutions and firm internationalization as well as the effect that this lack of knowledge has on managers perceived cost in the internationalization process with the help of a lisrel based structural model the three hypotheses are tested on a sample of 362 service firms the analysis shows that lack of internationalization knowledge has a strong impact on the lack of both business and institutionalization but there is no direct effect of lack of internationalization knowledge on perceived cost of internationalization

choice between non equity entry modes an organizational capability perspective many studies have examined the choice between different types of equity and non equity modes however none has focused on the choice between different types of non equity modes that service firms employ routinely this study develops a theoretical framework based on the organizational capability perspective to explain the choice between two non equity modes franchising and management service contracts while previous studies are based on the premise that foreign market entrants choose a mode equity or non equity that offers them most control given their particular circumstances the premise of this study is that foreign entrants choose a non equity mode that in addition offers effective transfer of the firm s capabilities to the host country venture

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

key characteristics in the choice of international technology transfer mode the choice between licensing and direct investment as a vehicle for international technology transfer is hypothesized to be related to characteristics of the individual technology parent corporation and the host country involved in the transfer a set of hypotheses regarding these relationships are developed and tested in a logit statistical model for a sample of 1 226 technology transfers we find that hypotheses regarding the effects of technology and parents characteristics are strongly supported by this analysis hypotheses regarding the effect of host country characteristics on transfer patterns receive mixed support

a tale of three countries italian spanish and swiss manufacturing operations in china in this paper the choice of joint venture versus wholly foreign owned enterprise wfoe made by italian spanish and swiss multinationals in china as shaped by the risk of dissipation of intangible assets is investigated probit estimates based on an entirely new firm level dataset constructed by the author show that wfoe is more likely to emerge when know how easily spills over namely for firms endowed with more intangible assets or belonging to high tech sectors in line with the theoretical expectations

international price behavior and the demand for money oil prices commodity prices and american monetary policy the last operating through a variety of channels have all figured prominently in explanations of the international inflation process in the late 1960s and early 70s out major purpose in this paper is to test these various hypotheses we do so in the context of a reduced form rational expectations price equation which we estimate for the united states and seven other industrial countries using quarterly data for the period 1955 through 1976 the principal conclusion that emerges from this exercise is that movements in domestic money in these countries served as the key link in the inflation process the factors that produced these monetary changes however differed among countries price shocks of various sorts were clearly of secondary importance the other important set of conclusions concerns the demand for money in place of a traditional stock adjustment model we used gls with a second order correction for autocorrelation we believe this produced more plausible estimates of the parameters of the long run demand function and of the adjustment process itself

the long run behavior of the income velocity of money in five advanced countries 1870 1975 an institutional approach the income velocity of money in canada the united states great britain norway and sweden displays a u shaped pattern over the last one hundred years this paper presents and tests empirically an explanation for this secular pattern emphasizing the influence on velocity of institutional changes the inclusion into a simple velocity function of institutional developments such as the process of monetization the spread of commercial banking financial development and the growth of economic stability improves the explanation of long run movements in velocity provided by a regression of velocity on real permanent income per head and the interest rate

some qualms about the test of the institutionalist hypothesis of the long run behavior of velocity this paper expresses econometric qualms about bordo and jonung s 1981 analysis of long run velocity they did not recognize that for u s and canadian data the log of velocity has a unit root hence estimation of a log level regression may produce spurious regressions when bordo and jonung s velocity equation is reestimated in rate of change form permanent income is significant contrary to their earlier conclusion moreover using this approach gives a stronger result for one of the institutional variables in the velocity function in the sense that the remaining variables become more significant

patent protection and the industrial composition of multinational activity evidence from u s multinational firms using data on u s firms technology licensing to local agents in developing countries this paper examines the impact of patent protection on internal and arms length technology transfer the effects of protection vary across products according to their complexity consistent with theories of internalization we find that patent reforms enable local firms to attract more arms length technology transfer especially of simple products which are relatively easy to imitate affiliated licensing also rises among simple products but falls among complex products the results withstand several robustness checks including controlling for endogeneity by using colonial origin as an instrument and are equally strong whether patent protection is measured by its intensity or by the timing of reforms the results have significance for patent policy in the developing world where access to knowledge is critical through arms length technology contracts proprietary knowledge diffuses beyond firm boundaries enabling local agents to access not only the protected technology but also know how