what drives deregulation economics and politics of the relaxation of bank branching restrictions this paper investigates private interest public interest and political institutional theories of regulatory change to analyze state level deregulation of bank branching restrictions using a hazard model we find that interest group factors related to the relative strength of potential winners large banks and small bank dependent firms and losers small banks and the rival insurance firms can explain the timing of branching deregulation across states during the last quarter century the same factors also explain congressional voting on interstate branching deregulation while we find some support for each theory the private interest approach provides the most compelling overall explanation of our results

campaign contributions and congressional voting a simultaneous probit tobit model m any citizens and scholars have been troubled by the influence that special interest groups appear to exert over policymaking as a result of their roles in the financing of political campaigns these concerns inspired the enactment of a number of election law reforms in the 1970s and have led to increasing popular support for public financing of electoral campaigns despite the public attention these issues have attracted few social scientists have attempted to analyze the financial relationships between interest groups and policymakers empirically 1 one such study was reported by durden and silberman 1976 who included contributions from the afl cio political action committee as an independent variable in an equation explaining congressional voting on minimum wage legislation their results indicated that campaign contributions significantly affected voting on that issue the work i have done differs substantially from that of durden and silberman in two ways first i have chosen to examine issues which were of considerably narrower concern than the minimum wage issue in the interest of simplicity i examine issues of concern to just one or a few groups i have also used a different econometric technique if campaign contributions are actually endogenous as seems plausible the single equation estimation technique employed by durden and silberman is subject to a possible simultaneous equations bias for each issue studied i have therefore jointly estimated a two equation system explaining both votes on the bill and contributions from an associated interest group the simultaneous probit tobit model which i use takes into account the dichotomous nature of the variable indicating a congressman s vote the non negativity constraint imposed on the contribution variable and the possibility of correlation between the error terms for the equations explaining these two variables 2 full information maximum likelihood fiml estimates for the model are consistent and asymptotically efficient

stochastic equilibria existence spanning number and the no expected financial gain from trade hypothesis stochastic equilibria under uncertainty with continuous time security trading and consumption are demonstrated in a general setting a common question is whether the current price of a security is an unbiased predictor of the future price of the security plus intermediate dividends this is the hypothesis of no expected financial gains from trade the relevance of this hypothesis in multi good economies is called into question by the following demonstrated fact for each set of probability assessments there exists a corresponding equilibrium one with the original agents original equilibrium allocations and no expected financial gains from trade under the given probability assessments the spanning number of the economy is defined as the fewest number of security markets required to sustain a complete markets equilibrium in a dynamic sense made precise in the paper the spanning number is linked directly to agent primitives in particular the manner in which new information resolves uncertainty over time the spanning number is shown to be invariant under bounded changes in expectations several examples are given in which the spanning number is finite even though the number of potential states of the world is infinite

country of origin effects on product evaluations this article reviews the literature regarding the effect of country of origin on buyer evaluations of products the issue is important for countries especially resource poor developing countries that need to increase manufactured exports and for firms that source products in countries different from where sold marketing inferences are drawn and implications for future research are developed

national animosity and cross border alliances we extend the cross border strategic alliance knowledge base by introducing dyad specific antagonism animosity between nation pairs and hold that the formation and the type of firm level cross border alliances are nontrivially impacted by conflicting relations and animosity between their home nations we examine the formation of alliances between firms among nation dyads with and without a history of conflicts the frequency and magnitude of conflicts increase the perception of likelihood of opportunism and dyad specific risks materially affect the context in which firms make alliance decisions as animosity between two nations increases the number and the probability of forming alliances within the dyad the nations form decreases conditional on the expected number of alliances increased antagonistic actions of nations outside the dyad and dissimilarity in the historical conflicts that each nation has engaged in outside the dyad i increase the number of equity alliances and ii decrease the number of nonequity alliances as a proportion of total alliances we find positive main effects of learning to contract through prior experience only for equity vs nonequity alliances the reputation effects of antagonism based on relationships with nations outside of the dyad negatively moderate the positive learning effects of prior equity alliance experience abstract from author

i hate where it comes from but i still buy it countervailing influences of animosity and nostalgia drawing from negativity bias fading affect bias and ambivalence literature we provide evidence that consumer nostalgia acts as a countervailing force to consumer animosity in historically connected markets hcms that is trading countries that previously were part of the same country but are now independent for both soviet era and new russian brands our findings show that nostalgia can compensate for the negative effects of animosity on product judgment and product ownership in hcms characterized by intense negative past events lithuania in contrast in hcms experiencing current recent negative events ukraine animosity is a stronger predictor of product judgment and ownership than nostalgia importantly in both hcm settings consumer ethnocentrism only plays a minor role when both nostalgia and animosity are simultaneously considered as predictors in the model theoretical and managerial implications of the findings are considered and future research directions are identified

assessing the impact of country of origin on product evaluations a new methodological perspective a new methodological approach for examining the impact of country of origin on product evaluations is proposed it takes the form of a multiattribute attitudinal model analyzed by means of a system

electoral outcomes with probabilistic voting and nash social welfare maxima abstract this paper provides unexpected support to nash s view of how bargaining determines the social choice we first present a spatial model of electoral competition with probabilistic voting and a very close relation between voters preferences and their choice probabilities the outcome of the electoral competition game is then shown to be precisely the social alternative that maximizes a nash type social welfare function theorem 1 this electoral outcome is also interpreted as a unanimity likelihood maximum corollary 1 within our framework existence and uniqueness of such an outcome are guaranteed corollaries 2 and 3

a quick algorithm for pricing european average options an algorithm is described that prices european average options the algorithm is tested against monte carlo estimates and is shown to be accurate the speed of the algorithm is comparable to the black scholes algorithm a closed form solution is derived for european geometric average options

finance and politics the wealth effects of special interest group influence during the nationalisation and privatisation of conrail conrail nationalised in 1976 and privatised in 1987 was the most significant nationalisation and privatisation by the us government in recent years it was created from six bankrupt railroads under the pressure of interest groups formed by customers existing claimants employees and related companies we document the gains and losses to these special interest groups at key points in the nationalised and privatised time periods over this period the us government had outlays of 6 59 billion and cash inflow of 6 15 billion and internal return of 6 4 the paper provides evidence that a state owned firm with good governance could deliver superior performance

escaping the iron cage liabilities of origin and csr reporting of emerging market multinational enterprises this article examines the link between the condition of institutional voids in emerging markets and the use of the practice of corporate social responsibility csr reporting by emerging market multinational enterprises em mnes based on neo institutional theory and in light of the specificity of emerging markets we propose a positive relationship between institutional voids and csr reporting home country institutional voids push companies to internationalize as a way to escape the institutional constraints and inefficiencies in their own markets but at the same time create legitimacy challenges for these companies abroad in particular em mnes from less institutionally developed countries are likely to face liabilities of origin negative perceptions in host countries about these firms willingness and ability to conduct legitimate business csr reporting is an effective strategy to overcome such liabilities and barriers to legitimation as it conveys to host countries and global stakeholders alignment with global meta norms and expectations internationalization listing on developed country stock exchanges and time further magnify em mnes legitimacy challenges and thus the use of csr reporting to mitigate them our hypotheses are supported in a longitudinal study of 157 of the largest em mnes ranked by the united nations conference on trade and development unctad between 2004 and 2011

pricing european average rate currency options abstract this paper develops a simple methodology that yields closed form analytical approximations for valuing european option claims involving the arithmetic average of future foreign exchange rates the main advantage of the approach is that it avoids the need to adopt time consuming numerical procedures the precision of the resulting formula and the distributional assumption that underlies it is examined by way of monte carlo simulations jel f31

a general equilibrium model of congressional voting in this paper we specify a model in which congressmen constituents and campaign contributors simultaneously decide on behavior constituents and contributors desire to influence the voting behavior of congressmen congressmen on the other hand want to be elected and vote accordingly we empirically test this model using roll call voting on eight bills dealing with economic regulation and find support for the model our results indicate that part of the voting behavior of congressmen may be explained by noneconomic factors we also find that unions and businesses as campaign contributors are sometimes influential unions are more often influential than is business ideological factors are also important in explaining voting

a dynamic programming procedure for pricing american style asian options pricing european style asian options based on the arithmetic average under the black and scholes model involves estimating an integral a mathematical expectation for which no easily computable analytical solution is available pricing their american style counterparts which provide early exercise opportunities poses the additional difficulty of solving a dynamic optimization problem to determine the optimal exercise strategy a procedure for pricing american style asian options of the bermudan flavor based on dynamic programming combined with finite element piecewise polynomial approximation of the value function is developed here a convergence proof is provided numerical experiments illustrate the consistency and efficiency of the procedure theoretical properties of the value function and of the optimal exercise strategy are also established

a pricing method for options based on average asset values abstract in this paper we present a new strategy for pricing average value options i e options whose payoff depends on the average price of the underlying asset over a fixed period leading up to the maturity date such options are of particular interest and importance for thinly traded assets e g crude oil since price manipulation is inhibited and both the investor and issuer enjoy a welcome degree of protection from the vagaries of the market these options are often implicit in a bond contract although they also appear in a straightforward form our results suggest that the price of an average value option will always be lower than that of a standard european option our pricing strategy involves monte carlo simulation with variance reduction elements and offers an enhanced pricing method to both arbitragers and hedgers as well as to the issuers of such bonds

mnc strategy and social adaptation in emerging markets emerging markets experience institutional and social changes over time that present different stakeholder expectations for multinational corporations mncs mncs are often accused of social misdeeds and experience public crises during the changes leaving questions on how they adapt to the local social transition to sustain operations conventional adaptation strategies put too much emphasis on maximizing economic returns by arbitraging national differences and catering to local market and consumer characteristics the economic orientation may fail to address evolving and diverse stakeholder expectations easily leading to public crises this study conceptualizes economic adaptation and social adaptation as two sets of knowledge and capabilities that would have equally important impacts on mncs sustainable operations in emerging markets the empirical testing examines consumer rights related public crises experienced by 180 mncs in china the results suggest that mncs social adaptation activities have significantly positive effects in mitigating public crises while certain aspects of economic adaption such as early entry into china reliance on local leadership and speedy expansion of local employees lead to public crises the significant interaction effects confirm that mncs need to follow a balanced approach paying attention to both economic and social components to avoid public crises and sustain growth in emerging markets

committee assignments constituent preferences and campaign contributions committee assignments constituent preferences and campaign constributions the familiar economic model of regulation as developed by stigler 1971 peltzman 1976 and becker 1983 posits an essentially frictionless market process for regulatory policy formation in which a single regulator legislator chooses policy to maximize net support from competing groups in this paper we extend the supply side of this model by considering the effect of legislative institutions and unorganized constituent preferences on the ability of incumbents in the house of representatives to serve specific interest groups we then test this formulation by examining the recent history of interest group campaign contributions to these legislators our theoretical model concentrates on how a legislator allocates time between serving specific interest groups outside his district and serving his constituency we do not model interest group decisions directly assuming simply that they purchase their desired amount of service from the lowest cost suppliers our model sorts legislators by the supply price at which they can serve a particular group this price depends on the preferences of the voters in the legislators district and the productivity of the legislator in producing policy service for each group 1 the empirical section tests the model by examining the pattern of interest group campaign contributions to house incumbents from 1978 through 1984 our regression analysis tends to confirm both implications of the theory first the pattern of campaign contributions from specific interest groups to legislators is shaped by the division of substantive legislative and regulatory jurisdictions represented by the system of house standing committees second voter preferences influence the pattern of contributions by affecting the supply price at which a legislator can offer policy to interest groups legislators with sympathetic or indifferent constituencies are able to offer a lower price and are therefore able to attract larger sums than those with hostile constituencies these results are important for two reasons first the influence of congressional institutions such as committees on policy is not widely accepted while several studies faith levins and tollison 1982 weingast and moran 1983 weingast 1984 grier 1989 and robert 1990 have documented the effects of changes in a particular committee on policies under its jurisdiction this work considers the jurisdiction of only a single committee in each case 2 by examining the linkages between congressional committees and political action committees pacs we investigate whether interest groups act as if committees have power second while the chicago model of regulation emphasizes correctly in our view that policy is the result of vote maximizing calculations and the incremental balancing nature of any equilibrium the model is imprecise about which sets of preferences are most important in determining the levels of policy or the size of changes in policies focusing on committees promotes a parsimonious specification of both the political players members of the relevant committee rather than the entire congress and the pivotal voters committee members constituencies more than the nation determining specific policy outcomes the paper is organized as follows section i reviews some issues on the nature and sources of committee influence in the u s congress the second section incorporates committee assignments into a theory of decision making by interest group investors sections iii and iv describe our data and estimation technique and present the empirical results the fifth and final section discusses some implications and conclusions of this research i committee power in congress legislators differ substantively by virtue of their committee assignments committees in congress and particularly in the house of representatives possess disproportionate power over the policy areas in their respective jurisdictions have the right to hold hearings and recommend budget allocations for the bureaus in their jurisdiction goodwin 1970

the government as a shareholder a case from the united states we study a sample of u s corporations in which the federal government held 35 100 percent of the outstanding common stock for between 1 and 23 years during and following world war ii we find that although the firms experienced abnormally high turnover among corporate board members the tenure of senior management was relatively stable moreover the performance of the government owned companies was not significantly different than that of private sector firms in the same industry hence the interim government custodianship of the firms in our case does not have the effects normally attributed to government ownership

share issue privatizations as financial means to political and economic ends abstract this study examines how political and economic factors affect the offer price share allocation and other terms governments choose when they privatize state owned enterprises via a public share offering using a 59 country sample of 630 share issue privatizations sips with total proceeds of over 446 billion during the period 1977 1997 we find that governments consistently underprice sip offers tilt their share allocation patterns to favour domestic investors impose control restrictions on privatized firms and typically use fixed price offers rather than book building or competitive tender offers all to further political and economic policy objectives

the financial and operating performance of newly privatized firms an international empirical analysis this study compares the pre and postprivatization financial and operating performance of 61 companies from 18 countries and 32 industries that experience full or partial privatization through public share offerings during the period 1961 to 1990 our results document strong performance improvements achieved surprisingly without sacrificing employment security specifically after being privatized firms increase real sales become more profitable increase their capital investment spending improve their operating efficiency and increase their work forces furthermore these companies significantly lower their debt levels and increase dividend payout finally we document significant changes in the size and composition of corporate boards of directors after privatization the last fifteen years have witnessed a significant global shift away from state socialism towards entrepreneurial capitalism one of the most important and visible aspects of this trend has been the enthusiasm with which governments of all political persuasions have sold their state owned enterprises soes to private investors in hopes that the generally unsatisfactory economic performance of these firms can be improved by the discipline of private ownership this denationalization process given its current title of privatization by the conservative government of margaret thatcher in

the pricing of forward starting asian options abstract asian options are path dependent options whose payoff is based on an average in some cases the underlying asset of the option is an average in others the strike price itself is computed as an average of the underlying asset recent prices asian currency options as an example allow corporate users to cover seasonal and so called strategic foreign exchange positions averages are also found in some recent warrant issues where they are mostly used as poison pills to preclude hostile takeovers this paper derives a closed form solution for the valuation of european asian options whose strike price is an average both plain vanilla average options i e those for which the time interval taken into account for the strike average calculation is the life of the option and forward starting average options are considered the valuation formula is obtained by relying upon a slight linear approximation although some previous contributions in the literature already use approximation techniques our approach contrary to others allows the derivation of a formal upper bound to the approximation error the numerical values given by this formula are then compared to those generated by an antithetic variate monte carlo method based on this comparison and the computation of an upper bound to the approximation error it is shown that the closed form solution performs quite well and is obviously computationally efficient

a p d e approach to asian options analytical and numerical evidence abstract we first derive a one state variable partial differential equation easy to implement which characterizes the price of a european type asian option this result is explained and related to previous literature we then derive new results on the hedging of an asian option and propose analytical and numerical analysis on the comparison between asian and european options our methodology which applies to fixed strike asian options as well as to floating strike asian options completes and clarifies various results in the literature in this paper we focus on backward starting asian options our approach is quite general however and we explain how to adapt our main results to the case of forward starting asian options

an integrated anti opportunism system in international exchange building on economic and social exchange theories this study develops an integrated model in which curtailing opportunism in international joint ventures ijvs requires four interrelated sets of suppressing forces 1 contractual ordering contractual inclusiveness and contractual obligatoriness 2 structural ordering managerial governance and equity captiveness 3 relational ordering interparty attachment and boundary spanner ties and 4 justice ordering procedural justice and distributive justice using a sample of 192 ijvs in an emerging market this study finds general support for our theoretical model our research validates that countering opportunism involves a system wide effort that integrates economic and social mandates unifies ex ante and ex post mechanisms controls both egoistic and non egoistic motivations and combines organizational level and individual level forces for partners from individualist cultures economic ordering forces contractual and structural are stronger than social ordering forces relational and justice in relation to opportunism resistance whereas for partners from a collectivistic culture social ordering forces are relatively stronger than economic ordering forces for this end

what do campaign contributions buy deciphering causal effects of money and votes in the 1987 1988 election cycle political action committees pacs spent 176 6 million on candidates who competed for a seat in the house of representatives what do pacs buy when contributing this money if campaign contributions are rational allocations of a contributor s income campaign expenditures could increase both the probability that the contributor s preferred candidate is elected and the likelihood that if elected the candidate will vote in the interest of the contributor most studies do not find that incumbents expenditures have a significant positive effect on the number of votes incumbents receive 11 14 15 17 29 the evidence that contributions influence congressional votes is mixed most studies find weak or no support for this hypothesis for example kau rubin and keenan 17 find that contributions from businesses mattered in only two of the eight votes they analyzed others argue that campaign expenditures play no important role in the voting decision of congressmen 5 9 12 31 the lack of finding of significant effects of money on votes has been explained with the need for better models to explain campaign contributions 5 however the theoretical developments of for example ben zion and eyton 4 bental and ben zion 3 and baron 2 have not been incorporated in the empirical analysis of the effect of campaign contributions on the voting behavior of legislators empirical models that test this relationship must allow for the endogeneity of campaign contributions for the dichotomous nature of the dependent vote variable and the nonnegativity constraint of campaign contributions most empirical work in this area utilize models that do not incorporate these restrictions in this study i plan to incorporate these aspects of the data generating process into a more detailed model of the effects of campaign contributions on congressional votes of all the reported empirical studies on this issue only chappell 5 uses a model which can properly assess the impact of money on votes chappell finds that campaign contributions do not affect votes in congress when his more detailed econometric technique is used the best test of the theory results if votes have a clear economic payoff to contributors benefits of the votes are concentrated and costs are

small dimension pde for discrete asian options abstract this paper presents an efficient method for pricing discrete asian options in presence of smile and non proportional dividends using an homogeneity property we show how to reduce an n 0 dimensional problem to a one or two dimensional one we examine different numerical specifications of our dimension reduced pde using a crank nicholson method interpolation method grid boundaries time and space steps as well as the extension to the case of non proportional discrete dividends using a jump condition we benchmark our results with quasi monte carlo simulation and a multi dimensional pde

deadweight costs and the size of government abstract we provide a model for analyzing effects of the tax system and spending programs on the determination of government spending and taxpayer welfare an improvement in the efficiency of either taxes or spending would reduce political pressure for suppressing the growth of government and thereby increase total tax revenue and spending we demonstrate the similarity of the political responses to revenue shocks spending shocks changes in tax efficiency and changes in spending program efficiency empirical analysis of oil shocks intergovernmental grants and other autonomous changes in taxes or spending indicates that cause and effect is not only from spending to tax structures

a longitudinal study comparing perceptions of u s and japanese consumer products in a third neutral country finland 1975 to 1985 while substantial research has been done on the competitive struggle between u s and japanese consumer products few studies have examined the u s japan rivalry from a neutral third country perspective this study covering a ten year period 1975 1985 of data collection examines changes in finnish perceptions of u s and japanese consumer products and marketing efforts results indicate that while finnish consumer perceptions of u s products and marketing efforts have improved over time the corresponding perceptions of the japanese alternative have improved substantially more similarly in areas where u s competitors had initial advantages the study results indicate that by 1985 japanese firms were able to overcome such advantages and were perceived as superior in all categories

country of origin effects in developed and emerging markets exploring the contrasting roles of materialism and value consciousness despite growing evidence about differences in the attitudes and behaviors of consumers in emerging and developed markets there is little research on the differences in country of origin coo effects on their evaluation behavioral intentions bis and actual purchase of imported products this paper introduces a new conceptual framework incorporating consumer ethnocentrism cet materialism mat and value consciousness vc to hypothesize several differences in the influence of coo effects on consumers from developed and emerging markets a web based study with 1752 consumers in four countries representing two developed markets the uk and the usa and two emerging markets china and india shows significant differences in the moderating influence of cet mat and vc on the effects of coo on the evaluations and bis for a fictitious passenger car brand and on the actual choice of car brands owned by them the findings highlight the importance of looking beyond cet at other relevant psychographic variables to understand the differences in motivations underlying consumer perceptions and behavior towards imported products

the pricing of options on default free bonds recent developments in the finance literature dealing with the valuation of contingent claims have been triggered by black and scholes 2 with their valuation of european options on corporate stocks the type of valuation model derived by black and scholes is attractive because it is independent of preferences this independence is possible due to the fact that the contingent claims are usually assumed to be contingent on traded assets or traded state variables for example a european call option is a claim contingent on the value of the corresponding stock to maintain the independence of the claim from preferences however some variables have to be discarded and considered as constants for example the rate of interest which is not a traded state variable is considered a constant in most of the literature see black and scholes 2 merton 11 and ingersoll 9 though this approximation might not cause important discrepancies in the case of corporate liabilities and options on corporate liabilities the effect of such an approximation on the value of default free bonds and options on default free bonds is more important since these liabilities depend only on the rate of interest

beyond country image favorability how brand positioning via country personality stereotypes enhances brand evaluations across four lab experiments and a field study we find that brands are evaluated more favorably when the brand is positioned in a manner that is congruent with the brand s home country personality stereotype than when brand positioning is incongruent results demonstrate that cultural authenticity mediates this effect we also uncover a moderating effect whereby brands are viewed more favorably when brand positioning and country personality stereotypes are incongruent rather than congruent under conditions of consumer animosity toward the firm s home country this study is the first to demonstrate how international firms can leverage country of origin personality stereotypes as a brand building advantage

brand origin recognition accuracy its antecedents and consumers cognitive limitations an ever growing literature has reported consumer bias toward national origins of products and has explored factors that moderate such bias researchers have assumed if only tacitly that consumers are knowledgeable of brand origins and that this knowledge is a significant influence that drives judgments of product quality brand attitudes and choice behavior in the marketplace using categorization theory and attribute diagnosticity as the theoretical foundation our research reveals that consumers actually have only modest knowledge of the national origins of brands and that american consumers proficiency at recognizing foreign brand origins is predicted by variables such as socioeconomic status past international travel foreign language skills and gender in the second of two studies we determined that brand origin recognition is based largely on consumers associations of brand names with languages that suggest country origins these studies ultimately lead us to conclude that past research has inflated the influence that country of origin information has on consumers product judgments and behavior and its importance in managerial and public policy decisions

home country bias in product evaluation the complementary roles of economic and socio psychological motives consumers often are positively biased in their evaluations of domestic products vs foreign alternatives this study establishes economic and socio psychological motives for this home country bias building on social identity theory this paper shows that home country bias is in part driven by a need for self enhancement this influence is stronger for consumers who identify more strongly with their own country and is complementary to the effect of consumer ethnocentrism which provides an economic motivation for home country bias the framework is supported in empirical studies conducted in the netherlands and in the usa

using repeat challengers to estimate the effect of campaign spending on election outcomes in the u s house previous studies of congressional spending have typically found a large positive effect of challenger spending but little evidence for effects of incumbent spending those studies however do not adequately control for inherent differences in vote getting ability across candidates high quality challengers are likely to receive a high fraction of the vote and have high campaign expenditures even if campaign spending has no impact on election outcomes to avoid that bias this paper examines elections in which the same two candidates face one another on more than one occasion differencing eliminates the influence of any fixed candidate or district attributes estimates of the effects of challenger spending are an order of magnitude below those of previous studies campaign spending has an extremely small impact on election outcomes regardless of who does the spending campaign spending limits appear socially desirable but public financing of campaigns does not

impact of historical conflict on fdi location and performance japanese investment in china historical relations between countries bring important explanatory power for foreign direct investment fdi decisions yet little is known on whether a home host country relation exhibits heterogeneous effects on fdi across the country s subnational regions in this study we examine the long term impact of historical conflict on fdi location choices and performance using a sample of 8 646 japanese fdi in china we show that civilian casualties in different provinces of china during the second sino japanese war exert deterring effects on japanese fdi location choices furthermore we demonstrate that civilian casualties negatively affect japanese fdi performance and political capital accumulation strategies in the forms of excessive tax payment and local employment can reduce this negative effect this study contributes to the discussion on how within country differences of historical factors affect fdi location decisions and performance the findings on firms political capital accumulation strategies also provide important implications for fdi operation in an environment characterized by historical animosity

celebrity endorsements in emerging markets align endorsers with brands or with consumers this paper investigates country of origin co effects as they relate to celebrity endorsements across multiple studies in emerging markets the authors show that consumers evaluations depend on the match between 1 celebrity co and consumer co termed consumer co fit and 2 celebrity co and brand co termed brand co fit if there is a trade off between consumer co fit and brand co fit the authors identify contingencies e g ethnocentrism levels that determine which type of co fit leads to higher evaluations furthermore the authors develop prescriptions for segmentation in emerging markets and specify when these prescriptions differ from those prescribed by prior international business research

interest group competition and the organization of congress theory and evidence from financial services political action committees we develop a positive theory of how interest group competition shapes the organization of congress and use it to explain campaign contribution patterns in financial services since interest groups cannot enforce fee for service contracts with legislators legislators have an incentive to create specialized standing committees which foster repeated dealing between interests and committee members the resulting reputational equilibrium supports high contributions and high legislative effort for the interests contribution patterns by competing interests in the congressional battle over whether banks can enter new businesses support the theory which also has implications for term limits and campaign reform

acting on anger cultural value moderators of the effects of consumer animosity the recent rise in protectionism and demonization of foreign countries has increased the risk of brands falling victim to the negative effects of consumer animosity or strong negative affect directed at a foreign country we investigate the role of cultural values as moderating the relationship between consumer animosity and willingness to buy the combined results of a meta analysis and six experiments in the us and china offer strong evidence that collectivism and long term orientation mitigate the negative effects of consumer animosity and support the contention that animosity s effect on willingness to buy is much stronger than on product judgments

us versus them or us versus everyone delineating consumer aversion to foreign goods this paper presents evidence that international animosity and consumer ethnocentrism are distinct constructs that play different roles depending on the set of products available to consumers results show that animosity toward a foreign nation is related to choices between foreign goods while consumer ethnocentrism is related to choices between domestic and foreign goods further the study finds animosity effects even though anger levels are generally low thus extending the boundaries of the animosity model of foreign purchase the study focuses on u s consumer views of japan and japanese products implications for decisions concerning global versus local branding strategies are discussed

legislators and interest groups how unorganized interests get represented this paper derives a supply price for public policy using a constrained maximization model in the model three sets of agents each have preferences over outcomes organized interest groups offer campaign contributions to improve their own wealth voters offer votes to obtain outcomes closer to their most preferred outcomes and legislators seek both campaign contributions and votes to obtain reelection a given legislator s supply price for policy is shown to depend on the productivity of his effort as determined by committee assignments priority and ability and by the preferences of his unorganized constituency in the home district two extreme assumptions about the effectiveness of campaign spending in eliciting votes are used to illustrate the comparative statics properties of the model the prediction of the model is that interest groups will in general seek out legislators whose voters are indifferent to the policy the interest group seeks thus voters who do have preferences over policy are in effect represented even though they are not organized

public offerings of state owned and privately owned enterprises an international comparison we compare initial offer prices in privatizations to initial prices in public offerings of private companies the evidence indicates that government officials in the united kingdom underprice ipos significantly more than their private company counterparts in canada and malaysia however the opposite is true there does not appear to be a general tendency for privatizations to be underpriced to a greater degree than private company ipos we provide additional evidence on the determinants of privatization initial returns our findings indicate that initial returns are significantly higher in relatively primitive capital markets and for privatized companies in regulated industries

are contributors rational untangling strategies of political action committees empirical public choice literature and casual observation suggest that the behavior of political action committees is remarkably unsophisticated meaning that pacs give to those legislators who would support their interests anyway thus it is suggested that contributor behavior deviates from rational behavior which is a cornerstone of economic analysis in this paper a switching regression model is estimated that allows for strategies of pacs to vary for different contribution recipients i analyze the behavior of farm pacs over three election cycles in contrast to previous findings i find that contributor behavior is not inconsistent with rational behavior contributors who attempt to influence the voting behavior of members of congress give the most money to legislators whose constituency interest suggests that they are likely to be undecided on how to vote and pacs give less money to legislators who represent districts with larger farm populations because those legislators are likely to vote in con

consumer animosity in the global value chain the effect of international production shifts on willingness to purchase hybrid products the escalation of international offshoring and outsourcing in recent years has resulted in a proliferation of hybrid products for the typical multinational enterprise with multiple country affiliations for branding design manufacture assembly and parts sourcing however little has been written regarding the impact of consumer animosity on such hybrid activities or the role of universal values in a hybrid production animosity model in this paper we extend the consumer animosity literature to a firm s global integration activities for hybrid products we posit that consumers willingness to purchase wtp a complex hybrid product is negatively affected by partial production shifts to an animosity evoking country and that self reported animosity toward the country predicts lower wtp above and beyond consumer ethnocentrism and perceived product quality in addition we hypothesize a negative relationship between conservation values and wtp hybrid foreign products and a positive relationship between openness values and wtp hybrid foreign products a study of 319 us consumers revealed consistent support for these hypotheses with the exception of the conservation values wtp relationship practical implications and future research directions are discussed

the determinants of industry political activity 1978 1986 c ampaign contributions made by corporate political action committees pacs are increasingly important and controversial in u s elections influence purchasing is often alleged by pundits and campaign finance reform is continually debated in congress in the academy social scientists have analyzed the allocation of interest group monies and have looked for possible impacts on legislation few however have tried to explain the total contributions of economic interest groups we shall analyze variations in contributions across industries and over time with an empirical model based on organizationally constrained profit maximizing behavior we assume that corporate pac contributions in an industry are raised to enhance industry profits subject to the constraints of organization costs and freeriding incentives our empirical work covers 124 industries over five election cycles from 1978 through 1986 both the costs and benefits of political activity vary across industries we argue that the benefits of political action are determined by direct contact with the government as a regulator or purchaser of industry output by government s ability to ameliorate adverse market conditions and by the industry s ability to solve collective action problems without government assistance the costs of industry political action arise mainly from collective action problems because effective political activity often requires concerted action by the constituent firms in each industry we also make a methodological contribution previous studies use statistical techniques that suffer from sample selectivity bias or else force the probability of acting politically to be explained by the same set of coefficients as is the amount of action taken we explain and employ a technique that accounts for both problems the results are consistent with the theses that industries follow investment oriented goals in deciding the amount of political action to undertake and that collective action problems are important constraints on industry political activity we can explain between 60 and 80 of the variation in contributions in our sample first we review existing work on corporate political activity particularly papers examining patterns of aggregate pac spending by industry then we present an organization cost constrained industryprofit maximizing model based on a comparison between an idealized zero organization cost industry and the more realistic case where organizing collective action is difficult the independent variables used in the analysis are also discussed and defined next we discuss the dependent variable and total industry contributions and explain our statistical method then the results are presented followed by a discussion of industry structure and political activity to make clear how our results can explain different contribution patterns we give examples using five actual industries

a simple test of the thesis that committee jurisdictions shape corporate pac contributions the results presented in the previous section tend to confirm the hypothesis that committee assignments shape the pattern of corporate pac contributions this note corroborates existing research on corporate pacs at a significantly lower level of aggregation than the samples on which existing research has been conducted further because a nonparametric test was used rather than the more standard regressional analysis these results should increase our confidence that the essential institutions of government affect and engender responses by economic agents

judicial lobbying the politics of labor law constitutional interpretation this paper links the theory of interest groups influence over the legislature with that of congressional control over the judiciary the resulting framework reconciles the theoretical literature of lobbying with the negative available evidence on the impact of lobbying over legislative outcomes and sheds light to the determinants of lobbying in separation of powers systems we provide conditions for judicial decisions to be sensitive to legislative lobbying and find that lobbying falls the more divided the legislature is on the relevant issues we apply this framework to analyze supreme court labor decisions in argentina and find results consistent with the predictions of the theory

interpreting common stock returns around proxy statement disclosures and annual shareholder meetings numerous studies have analyzed the stock market reaction to information released in proxy statements two possible biases in proxy statement research are suggested frequently misspecification of the return benchmark and a sample selection bias from analyzing only clean events this paper presents evidence that most of the conclusions of existing studies are not affected by these potential biases a significantly positive abnormal return was found around a random sample of shareholder meeting dates the result indicates that interpreting event study results for announcements occurring around annual shareholder meetings must be conducted carefully the results are consistent with the findings of kalay and loewenstein 14 who argue that risk and expected return can increase around predictable information producing events alternatively the study can be viewed as being consistent with several recent studies that find anomalous results using daily return data and large samples

understanding consumer animosity in an international crisis nature antecedents and consequences the nature antecedents and consequences of consumer animosity during the 1997 asian economic crisis are investigated based on a large scale survey of 2000 adult consumers representative of five affected nations indonesia malaysia singapore south korea and thailand an animosity model was developed and tested with the us and japan as target countries as predicted stable and situational animosity reduced willingness to buy products from a perceived hostile national entity affective evaluations and cognitive judgments were negatively influenced by situational animosity but not by stable animosity as expected situational animosity was increased by external attribution perceived external control and stable animosity implications of these findings are discussed and directions for future research suggested