exchange rate changes and inflation in post crisis asian economies vector autoregression analysis of the exchange rate pass through macro economic consequences of large currency depreciations among the crisis hit asian economies varied from one country to another inflation did not soar after the asian currency crisis of 1997 98 in most crisis hit countries except indonesia where high inflation followed a very large nominal depreciation of the rupiah the high inflation meant a loss of price competitive advantage a key for economic recovery from a crisis this paper examines the pass through effects of exchange rate changes on the domestic prices in the east asian economies using a vector autoregression analysis the main results are as follows i the degree of exchange rate pass through to import prices was quite high in the crisis hit economies ii the pass through to consumer price index cpi was generally low with a notable exception of indonesia and iii in indonesia both the impulse response of monetary policy variables to exchange rate shocks and that of cpi to monetary policy shocks were positive large and statistically significant thus indonesia s accommodative monetary policy coupled with the high degree of cpi responsiveness to exchange rate changes was an important factor in the inflation depreciation spiral in the wake of the currency crisis

positioning jibs as an interdisciplinary journal journal of international business studies 2011 42 1 9 doi 10 1057 jibs 2010 50 it is with great honor and pleasure as well as in keen anticipation of what we are confident can be achieved by the journal that we begin this three year term as the new editors of the journal of international business studies we are both long term members of the academy of international business aib and readers of jibs for almost as long as we can remember over the years we have watched the ever more promising development of jibs of which we now enjoy more issues per year and in which the gradual progression in the depth and breadth of its content has laid the foundations for what we hope and believe will be a new phase in the flourishing of the journal in the period that now lies ahead in this respect we must begin by paying tribute to all the editorsin chief of the journal that have preceded us whose conscientious efforts have not gone unrewarded naturally enough we owe a debt of gratitude especially to our two most recent predecessors arie lewin and lorraine eden before arie jibs was the long established leading specialist journal within the field of international business ib studies a partially hidden gem for those of us in the know after arie it was recognized much more widely as a top a journal among scholars of business and management even outside the ib field arie raised the stature of jibs in business schools as a whole an achievement that was crucial not just for the journal but for the continued vitality of our field before lorraine if we are brutally honest jibs had remained a rather shambolic affair in terms of its administrative structure and procedures in fact it is a credit to the earlier editors that they managed to achieve so much with such limited resources and systems of support most of which were concentrated in a single office that used to hold responsibility for everything after lorraine jibs has become an exemplar of efficient organizational systems and well managed and clearly understood procedures for conduct including a pioneering code of ethics we should also acknowledge here with warm appreciation the critical contributions that have been made by the aib executive secretariat and especially by managing editor anne hoekman as well as by david bull and his wonderful staff at palgrave whose degree of commitment to the journal and support for it has been second to none when we look at how radically jibs has been transformed under arie s and lorraine s leadership suffice to say that but for the sea changes which they have brought about we would have had to think very hard before offering our services as editors but with the firm foundation that they have given us and with the resulting opportunities that the journal now has in front of it stepping forward as editors is a decision we have made with ease as well as pride journal of international business studies 2011 42 1 9 2011 academy of international business all rights reserved 0047 2506

commodity price pass through and inflation regimes abstract does an increase in the energy and commodity prices drive consumer prices the energy and commodity markets affect the inflation process through international trade this poses policy implications for monetary policy to forecast inflation and also smooth the impact of international relative price movements we investigate the pass through of a broad range of agricultural and energy commodity prices to inflation across different inflation regimes our distinctive regime varying methodology captures asymmetric response of inflation to the world commodity prices we establish the first evidence of the pass through of commodity prices to inflation across different periods of low and high inflation regimes and also stable and unstable inflation regimes the results show that the duration of staying in an unstable inflation regime is smaller in the commodity markets both short run and long run pass through of agricultural food and energy commodities are higher compared to other commodities the energy commodity particularly drives the inflation process for advanced economies emerging economies and also the european union countries overall the dynamics of inflation and commodity prices change in the inflation environment pointing to implications for conducting optimal monetary policy

exchange rate pass through in developing and emerging markets a survey of conceptual methodological and policy issues and selected empirical findings abstractglobal integration has increased the international linkages of financial markets for emerging market countries a key channel for the international transmission of inflation and economic cycles is from exchange rate movements to domestic prices known as exchange rate pass through erpt this article reviews the conceptual methodological and policy issues connected with erpt in emerging market and developing countries and critically surveys selected empirical studies a key contribution is to categorise and compare the heterogeneous methodologies used to extract erpt measures in the empirical literature single equation models and systems methods are contrasted frequent misspecifications that produce unreliable erpt estimates are highlighted the discerning policy maker needs to ascertain by which methods erpt measures were calculated the controls and restrictions applied and the time frame and stability of the estimates

best of both worlds how embeddedness fit in the host unit and the headquarters improve repatriate knowledge transfer knowledge transfer within multinational enterprises is a source of competitive advantage however we know little about repatriates role in reverse knowledge transfer upon their return to headquarters hq using an organizational embeddedness perspective we conceptualized how embeddedness fit individuals perceived match between their knowledge and skills and the job requirements during the expatriation assignment and upon repatriation predicts repatriate knowledge transfer to test the hypotheses we collected multi wave survey data from 129 repatriates and their supervisors and developed a repatriate knowledge transfer scale the results show that perceived organizational support from hq positively influences embeddedness fit both in the host unit during expatriation and in the hq upon repatriation further embeddedness fit in the hq upon repatriation has a direct effect while embeddedness fit in the host unit during expatriation has an indirect effect on repatriate knowledge transfer via increased communication frequency with the former host unit in addition we found that knowledge transfer is particularly pronounced for repatriates with both high levels of embeddedness fit in the hq upon repatriation and frequent communication with colleagues in their former host unit our results highlight the critical importance of helping expatriates increase their perceived embeddedness fit for reverse knowledge transfer to occur

exchange rate pass through to consumer prices in south africa evidence from micro data abstracta sizeable literature examines exchange rate pass through to disaggregated import prices but few micro studies focus on consumer prices this article explores exchange rate pass through to consumer prices in south africa for 2002 2007 using a unique data set of highly disaggregated data at the product and outlet level the empirical approach allows pass through to be calculated over various horizons for different goods and services the heterogeneity of pass through for food sub components is considerable switches between import and export parity pricing of maize are found significant for five out of ten food sub components using actual weights from the cpi basket overall pass through to the almost 63 per cent of the cpi covered is about 30 per cent after two years and higher for food

how to effectively stabilize china s commodity price fluctuations abstract the bulk commodities are basic goods and their price fluctuations are directly related to the stability of a country s macro economy investigating the main driving forces of the commodity price fluctuations is the key to stabilizing the macro economy ignoring the objective facts that there are a large number of nonlinear relationships between economic variables most of the existing scholars use the linear models to commodity price fluctuations to compensate for the shortcomings of existing research this paper uses the nonparametric additive regression model with data driven features to investigate the main driving forces of china s commodity price fluctuations the results show that exchange rate has an early promotion late inhibition inverse u shaped nonlinear effect on commodity price fluctuations because the renminbi appreciates in the early stages but depreciates in the later stages the nonlinear impact of the real economy also appears an inverted u shaped pattern due to the changes in growth mode of the real economy similarly international oil price produces an inverted u shaped nonlinear effect owing to the rise in international oil prices in the early stages and the decline in the later stages however the money supply has an early inhibition late promotion positive u shaped nonlinear effect on commodity prices therefore government departments should formulate targeted policies over time to effectively stabilize china s commodity prices

how successfully do we measure capital flight the empirical evidence from five developing countries economists have proposed several different techniques for measuring capital flight each technique differs significantly in its definition of what constitutes capital flight principally on the limits to normal capital flows how to capitalise investment income and the inclusion of long term capital flight consequently estimates of the determinants and remedies for capital flight have been very mixed given that capital flight is not observable it is important to examine the information content and consistency between the different measures this article uses three different techniques over five countries to make that comparison and finds a limited amount of information in each measure but no obvious agreement between them econometric techniques which have been designed for measuring the hidden economy of oecd countries is likely to offer a better way of measuring capital flight

linguistic gender marking and its international business ramifications darwin 1859 considered language a form of memory that stores information in a genome like mode grammar according to cognitive science research boroditsky schmidt phillips 2003 impacts a speakers cognitive framework and mental representation of social reality gender is among the most stable grammatical features wichmann holman 2009 and comparing languages is valuable for understanding their social role corbett 2011 such research should have significant value for international business ib where national variations are of focal interest but where the study of linguistics has mostly been relegated to a subset of culture culture based research currently relies on aggregate values based measures of culture e g hofstede 1980 1998 hofstede hofstede minkov 2010 house hanges javidan dorfman gupta 2004 making it susceptible to endogeneity problems and contemporaneous to gender outcomes in contrast a language s grammatical structure is a stable feature inherited from the distant past unbiased by present social political and economic forces

exchange rate pass through exchange rate volatility and exchange rate disconnect abstract this paper explores the hypothesis that high volatility of real and nominal exchange rates may be due to the fact that local currency pricing eliminates the pass through from changes in exchange rates to consumer prices exchange rates may be highly volatile because in a sense they have little effect on macroeconomic variables the paper shows the ingredients necessary to construct such an explanation for exchange rate volatility in addition to the presence of local currency pricing we need a incomplete international financial markets b a structure of international pricing and product distribution such that wealth effects of exchange rate changes are minimized and c stochastic deviations from uncovered interest rate parity together it is shown that these elements can produce exchange rate volatility that is much higher than shocks to economic fundamentals and disconnected from the rest of the economy in the sense that the volatility of all other macroeconomic aggregates are of the same order as that of fundamentals

exchange rate pass through in south africa panel evidence from individual goods and services abstract this study estimates pass through for south africa using samples of final goods and services and homogenous imports estimated pass through to consumer goods prices is low roughly 16 per cent in the two years following an exchange rate change surprisingly it is somewhat higher for services deviations from long run ppp appear to disappear relatively quickly with a half life of about 16 months for imports pass through estimates are much higher averaging around 60 per cent but with wide source country variation finally there is virtually no support for a simple linear trend change in either pass through or in reversion to ppp during the sample

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

capital flight from latin america abstract this paper focuses on capital flight from latin america during the 1970s and 1980s after estimating the extent of such flight i suggest that capital flight imposes growth costs erodes the tax base and worsens income distribution i then use regression analysis to investigate the causes of capital flight as well as the role of capital controls and imf programs in slowing flight i conclude by criticizing the current policy approach to the capital flight problem and suggesting some new directions

the multifaceted role of language in international business unpacking the forms functions and features of a critical challenge to mnc theory and performance language lies at the heart of international business ib activities yet language as a key construct in the field of ib has not been sufficiently articulated or theorized language presents itself in forms such as national corporate technical or electronic in functions in terms of defining hierarchies exercising power or facilitating integration and in features such as the use of mixed syntax or gender marking understanding the complex interplay between the multiple facets of language and how they affect day to day operations is becoming increasingly critical to global business effectiveness the purpose of this special issue is therefore to catalyze and set a course for the development of a new domain in ib scholarship originating from an explicit focus on language

how non native english speaking staff are evaluated in linguistically diverse organizations a sociolinguistic perspective the aim of this paper is to examine the effects of evaluations of non native speaking staff s spoken english in international business settings we adopt a sociolinguistic perspective on power and inequalities in linguistically diverse organizations in an anglophone environment the interpretive qualitative study draws on 54 interviews with non native english speaking staff in 19 uk business schools we analyze along the dimensions of status solidarity and dynamism the ways in which non native speakers on the basis of their spoken english are evaluated by themselves and by listeners we show how such evaluations refer to issues beyond the speaker s linguistic fluency and have consequences for her or his actions the study contributes to the literature on language and power in international business through offering fine grained insights into and elucidating how the interconnected evaluative processes impact the formation and perpetuation of organizational power relations and inequalities it also puts forward implications for managing the officially monolingual yet linguistically diverse organizations

the structuralist theory of imported inflation an application to south africa this study emphasizes the importance of identifying the origin of inflation in the present context of inflation targeting by many emerging market and transition economies the analysis shows based on south african data how structural supply and demand inflation can be distinguished the results indicate that south africa s inflation experience between 1973q1 and 1998q4 is characterized by two monetary regimes during the first regime 1973q1 1984q4 the long run cause of inflation is demand pull the second regime 1987q1 1998q4 represents major changes to structural imported and cost push inflation the two year period 1985 1986 signifies structural change from the first to the second regime moreover the results in the second regime remain robust when the inflation model is subjected to new out of sample data until 2001q2 evidence of structural imported inflation in the second regime suggests that inflation should not entirely be squeezed out of the system nor should it necessarily be k

low inflation pass through and the pricing power of firms abstract recently there has been a significant decline in the degree to which firms pass through changes in costs to prices a decline that is frequently characterized as a reduction in the pricing power of firms the decline appears to be associated with the decline in inflation in many countries the decline has important implications for monetary policy because it affects both forecasts of inflation and the effects of changes in monetary policy on inflation some have argued that the decline in pricing power helped to keep inflation low in the face of apparently strong demand pressures in the united states in the late 1990s this paper puts forth the view that the decline in pass through or pricing power is due to the low inflation environment that has recently been achieved in many countries first a microeconomic model of price setting is used to show that lower pass through is caused by lower perceived persistence of cost changes evidence is then presented showing that inflation is positively correlated with persistence of inflation suggesting that the low inflation itself has caused the low pass through an economy wide model consistent with the micromodel is then presented to illustrate how such changes in pricing power affect output and inflation dynamics in favorable ways but can disappear quickly if monetary policy and expectations change

mexico s investment collapse debt or oil abstract this paper tests three explanations for mexico s investment collapse in the early 1980s the oil price decline the termination of capital inflows and debt overhang uncertainty effects using previously ignored investment data on private sector industries the data consistently point to the importance of the rise in the relative price of investment goods driven in large part by falling world oil prices but the data also allow a role for the termination of capital inflows however after controlling for these effects the paper finds little evidence for debt overhang effects heightened uncertainty or other commonly cited explanations in the literature jel f34

cultural gap bridging in multinational teams multinational teams are an organizational reality but they present several challenges the literature suggests that individuals with multicultural identities are more likely to show behaviors that aim at improving intercultural interactions in multinational teams though scholars have yet to determine the precise nature of these behaviors we address this research gap in a multimethod two study design by identifying five team cultural gap bridging behaviors cgb behaviors facilitating translating integrating mediating and empathetic comforting in study 1 we draw on one qualitative and two quantitative datasets to identify within team cgb behaviors and develop a measure of cgb behaviors in study 2 drawing from two wave survey data we investigate and find support for the direct relationships between cultural identity plurality and cgb behaviors and the indirect relationships via cultural intelligence

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

theorising from case studies towards a pluralist future for international business research the literature on case studies both in the field of international business ib and in the social sciences more generally has tended to focus on the methods of data production and analysis suited to this research strategy in contrast in this paper we investigate methods of theorising from case studies we seek to understand how case researchers theorise and how future ib research might utilise case studies for theorising by means of a qualitative content analysis of case studies published in journal of international business studies academy of management journal and journal of management studies we construct a typology of theorising from case studies two dimensions of the case study namely causal explanation and contextualisation form the basis for our typology we distinguish four methods of theorising inductive theory building interpretive sensemaking natural experiment and contextualised explanation only the first of which has been widely used in jibs in the period that we investigate on the basis of our own qualitative analysis we show the limitations of inductive theory building and argue that greater utilisation of the other methods of theorising would enhance the case study s explanatory power and potential for contextualisation we argue for a more pluralist future for ib research

the pass through effects of oil price shocks on china s inflation a time varying analysis abstract using a time varying parameter structural vector autoregression with stochastic volatility tvp svar sv model we decompose the structural shocks of oil price fluctuations into four types oil supply shocks global demand shocks domestic demand shocks and oil specific demand shocks we then analyze the time varying effects of these oil price shocks on china s inflation at the import production and consumption stages using monthly data from january 1999 to december 2016 the results show that the pass through effects of the four types of oil price shocks on china s inflation at each stage are time varying and that there are significant differences at different time horizons and points in time the analysis of the variance decomposition shows that the effects of oil price shocks on china s inflation at each stage are incomplete and decrease along the price chain the increase in oil prices driven by oil specific demand shocks is the most important cause of china s inflation at the import and production stages during the full sample period while china s inflation at the consumption stage is mainly affected by domestic demand shocks in addition the inflationary effects of oil price shocks have been dramatically weaker since the international financial crisis compared with before the crisis

long run commodity prices economic growth and interest rates 17th century to the present day a significant proportion of the trade basket of many developing countries is comprised of primary commodities this implies relative price movements in commodities may have important consequences for economic growth and poverty reduction taking a long run perspective we examine the historical relation between a new aggregate index of commodity prices economic activity and interest rates initial empirical tests show that commodity prices present a downward trend with breaks over the entire industrial age providing clear support for the prebisch singer hypothesis it would also appear that this trend has declined at a faster rate since the 1870s conversely several gdp series such as world chile china uk and us trend upwards with breaks such trending behaviour in both commodity prices and economic activity suggests a latent common factor like technological innovation to assess the relationships between economic series we apply a stationary var vector autoregression to model movements around trends strikingly there is evidence that commodity prices granger cause income and interest rates whilst interest rates granger cause commodity prices from these results and the related impulse response function analysis the historical perspective provides some useful information for contemporary policy makers for example loose monetary policy has tended to support higher commodity prices more over commodity price movements have an asymmetric country effect on economic activity periods of falling commodity prices will support gdp growth for com modity importers like the us but depress growth for commodity exporters such as chile

inflation responses to commodity price shocks how and why do countries differ this paper relates the inflationary impact of commodity price shocks across countries to a broad range of structural characteristics and policy frameworks over the period 2001 2010 using several approaches the analysis suggests that economies with higher food shares in cpi baskets fuel intensities and pre existing inflation levels were more prone to experience sustained inflationary effects from commodity price shocks countries with more independent central banks and higher governance scores seem to have contained the impact of these shocks better the effect of the presence of inflation targeting regimes however appears modest and not evident during the 2008 food price shock the evidence suggests that trade openness financial development dollarization and labor market flexibility do not significantly influence the way in which domestic inflation responds to international commodity price shocks

exchange rate pass through to import prices and monetary policy in south africa abstractunderstanding how import prices adjust to exchange rates helps anticipate inflation effects and monetary policy responses this article examines exchange rate pass through to the monthly import price index in south africa during 1980 2009 short horizon pass through estimates are calculated using both single equation equilibrium correction models and systems johansen models controlling for both domestic and foreign costs average pass through is incomplete at about 50 per cent within a year and 30 per cent in six months and in the long run from the johansen analysis including feedback effects is about 55 per cent there is evidence of slower pass through under inflation targeting pass through is found to decline with recent exchange rate volatility and there is evidence for asymmetry with greater pass through occurring for small appreciations

exchange rate pass through in emerging countries do the inflation environment monetary policy regime and central bank behavior matter abstract in this paper we estimate the exchange rate pass through erpt to import and consumer prices for a sample of 14 emerging countries over the 1994q1 2015q3 period to this end we augment the traditional bivariate relationship between the nominal effective exchange rate and inflation by accounting for monetary stability proxied by the inflation environment monetary policy regime and central bank behavior we show that both the level and volatility of inflation as well as adopting an inflation target or the transparency of monetary policy decisions clearly reduce erpt to consumer prices however uncertainty about domestic monetary policy seems less relevant in explaining the pass through to the price of imports

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

monopolistic competition and the effects of aggregate demand how important is monopolistic competition to an understanding of the effects of aggregate demand on output we ask the question at three levels can monopolistic competition by itself explain why aggregate demand movements affect output can it together with other imperfections generate effects of aggregate demand in a way that perfect competition cannot if so can it give an accurate account of the response of the economy to aggregate demand movements the answers are no yes and yes

brics how important is the exchange rate pass through this paper analyses the exchange rate pass through erpt into domestic consumer prices in brics brazil russia india china and south africa countries from mid 1990s onwards by using three different econometric approaches i e the single equation approach the var approach and the time varying parameter approach it is also studied the role of macroeconomic determinants in erpt our results suggest that a erpt is higher for the emerging markets with mostly floating exchange rates brazil russia and south africa than for the other brics countries b exchange rate explains on average around the 40 of the price variance for brazil russia and south africa and c inflation volatility exchange rate volatility and openness seem to be the key macroeconomic determinants in brics countries

unraveling the effects of cultural diversity in teams a meta analysis of research on multicultural work groups previous research on the role of cultural diversity in teams is equivocal suggesting that cultural diversity s effect on teams is mediated by specific team processes and moderated by contextual variables to reconcile conflicting perspectives and past results we propose that cultural diversity affects teams through process losses and gains associated with increased divergence and decreased convergence we examine whether the level surface level vs deep level and type cross national vs intra national of cultural diversity affect these processes differently we hypothesize that task complexity and structural aspects of the team such as team size team tenure and team dispersion moderate the effects of cultural diversity on teams we test the hypotheses with a meta analysis of 108 empirical studies on processes and performance in 10 632 teams results suggest that cultural diversity leads to process losses through task conflict and decreased social integration but to process gains through increased creativity and satisfaction the effects are almost identical for both levels and types of cultural diversity moderator analyses reveal that the effects of cultural diversity vary depending on contextual influences as well as on research design and sample characteristics we propose an agenda for future research and identify implications for managers

international evidence on the impact of adopting english as an external reporting language this study investigates the economic consequences of non english speaking companies adopting english as an external reporting language we examine a sample of european companies that initiate the voluntary issuance of an annual report in english in addition to the local language annual report to control for self selection we use a difference in differences design with a propensity score matched control sample we find that adoption of english as an external reporting language is associated with increased foreign ownership decreased information asymmetry and increased analyst following we also find that these benefits are not conditional on the use of ifrs for financial reporting our findings hold if we run a number of robustness checks to control for correlated events creation of an investor relations service provision of conference calls and or changes in management these results are consistent with the language used in the annual report acting as a barrier to investment for some investors and with annual reports issued in english reducing investors information processing costs

exchange rate pass through when market share matters the authors investigate the pass through from exchange rates to import prices when firms future demands depend on their current market shares they show that profit maximizing foreign firms may either raise or lower their dollar export prices when the dollar appreciates temporarily i e the pass through may be perverse and that current import prices may be more sensitive to expected future exchange rates than to current exchange rates they present evidence that suggests the behavior of expected future exchange rates may provide a clue to the puzzling recent behavior of u s import prices copyright 1989 by american economic association

price adjustment and exchange rate pass through abstract this paper develops a simple theoretical model that can be used to account for the determinants of exchange rate pass through to consumer prices while recent evidence has found low estimates of pass through in many countries there is little consensus on an explanation for this our paper argues that sticky prices represent a key determinant of exchange rate pass through we make this argument in two stages first holding the frequency of price change constant we show that our model calibrated to data from low inflation countries can reproduce the estimates of very low pass through for these countries the principal determinant of low pass through in this case is the slow adjustment of prices we then extend the model to allow the frequency of price change to be endogenous calibrating to a wider set of countries including both low inflation and high inflation countries we show that our model implies that exchange rate pass through is increasing in average inflation but at a declining rate performing the identical exercise on the data we find a striking correspondence between the predictions of the model and those of the data

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

local food prices and international price transmission world food prices spiked in the periods 2007 8 and 2010 11 the impact of these spikes in world food prices on local food prices and thus on local consumers is determined by the food price pass through pass through is defined as the extent to which changes in world food prices lead to changes in local food prices we examine the determinants of variation in food price pass through from global to local consumer prices in a global sample of 147 countries using fao data on world food prices and ilo data on food prices for consumers while market integration matters our study finds that income per capita is the dominant factor explaining cross country variation in pass through of food prices we estimate an elasticity of about 0 3 of pass through with respect to income per capita this means far greater price transmission of food price shocks at the commodity level to final consumers in low income countries than in high income countries the implication is that future swings in world food prices will in particular jeopardize food security in poor countries trade policy measures of market integration also affect the pass through significantly whereas infrastructure and geography measures play no significant role

inflation target and a symmetries in the oil price pass through to inflation in this paper we employ state space models to estimate the pass through of oil price changes to consumer prices for a large sample of countries from 1970 to 2017 by controlling for self selection bias and endogeneity and allowing for different responses to positive and negative price changes we asses the differences between explicit inflation targeting it countries and a control group surprisingly perhaps our results suggest that the pass through is higher for it countries our main contribution is to show that these is mainly due to it countries having a significant higher pass through than non it countries when the oil price decreases a 10 drop in oil price leads about a 0 11 drop in inflation in iters of which 4pp are explained by the monetary regime importantly we show that adopting it reduces the asymmetry of the pass through we run several robustness checks and conclude that falling oil prices are more welcomed by the central banks with an it framework in particular during deflationary episodes or when inflation is above the target jel classification e31 e42 q43

public debts and private assets explaining capital flight from sub saharan african countries we investigate the determinants of capital flight from 30 sub saharan african countries including 24 countries classified as severely indebted low income countries for the period 1970 1996 the econometric analysis reveals that external borrowing is positively and significantly related to capital flight suggesting that to a large extent capital flight is debt fueled we estimate that for every dollar of external borrowing in the region roughly 80 cents flowed back as capital flight in the same year capital flight also exhibits a high degree of persistence in the sense that past capital flight is correlated with current and future capital flight the growth rate differential between the african country and its oecd trading partners is negatively related to capital flight we also explore the effects of several other factors inflation fiscal policy indicators the interest rate differential exchange rate appreciation financial development and indicators of the political environment and governance we discuss the implications of the results for debt relief and for policies aimed at preventing capital flight and attracting private capital held abroad

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

media choice in multilingual virtual teams this study investigates the impact of language barriers on multilingual virtual teams members choice between different communication media in their inner team interactions through interviewing team leaders and members in both mono and multilingual virtual teams we discover discrepancies in media choice and media performance between these two settings and identify foreign language induced cognitive load as a key reason for these divergences our study advances research on communication and knowledge exchange in multilingual virtual collaboration by showing how language barriers alter the process of converging different viewpoints through team interaction by suggesting language related modifications to the seminal media synchronicity theory and by demonstrating the benefits of new media in multilingual settings it also broadens the disciplinary scope of language research in international business by introducing theories from communication studies and cognitive research in practical terms it highlights the benefits of redundant communication the need for an adequate media infrastructure in multinational corporations and the importance of motivating team members to use new media

evaluating price transmission between global agricultural markets and consumer food price indices in the european union this paper uses error correction models to evaluate the extent to and speed at which world agricultural commodity price movements affect consumer food prices in the european union member states we consider three types of world commodity price indices each containing different commodities and weighting criteria results reveal a long run relationship between world agricultural commodity and consumer food prices in over half of the member states consumer prices in different member states and categories of member states respond differently to specific world price indices suggesting that there are disparities in the structure and the efficiency of their food markets the eurozone founders generally have lower transmission elasticities this should be taken into account when predicting the impacts of extreme world price volatility and consumer food price rises prompting governments to pay attention to the most vulnerable households

inflation dynamics and food prices in ethiopia during the global food crisis ethiopia experienced an unprecedented increase in inflation among the highest in africa using monthly data over the past decade we estimate models of inflation to identify the importance of the factors contributing to cpi inflation and three of its major components cereal prices food prices and non food prices our main finding is that movements in international food and goods prices measured in domestic currency determined the long run evolution of domestic prices in the short run agricultural supply shocks affected food inflation causing large deviations from long run price trends monetary policy seems to have accommodated price shocks but money supply growth affected short run non food price inflation our results suggest that when analyzing inflation in developing economies with a large food share in consumer prices world food prices and domestic agricultural production should be considered omitting these factors can lead to biased results and misguided policy decisions

frequency of price adjustment and pass through we empirically document using u s import prices that on average goods with a high frequency of price adjustment have a long run pass through that is at least twice as high as that of low frequency adjusters we show theoretically that this relationship should follow because variable mark ups that reduce long run pass through also reduces the curvature of the proflt function when expressed as a function of the cost shocks making the flrm less willing to adjust its price lastly we quantitatively evaluate a dynamic menu cost model and show that the variable mark up channel can generate signiflcant variation in frequency equivalent to 37 of the observed variation in the data on the other hand the standard workhorse model with constant elasticity of demand and calvo or state dependent pricing has di culty matching the facts

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

an econometric method of estimating the hidden economy united kingdom 1960 1984 estimates and tests in this paper a method of estimating the unrecorded part of the gnp based on a modified reset procedure applied to a currency demand equation is proposed the model passes all standard diagnostic tests and the estimates of the unrecorded economy provide plausible answers when used as a proxy for the tax evaded income the method is easily applicable to most countries with minor modifications copyright 1990 by royal economic society

the taylor rule and opportunistic monetary policy we investigate the possibility that the taylor rule should be formulated as a threshold process such that the federal reserve acts more aggressively in some circumstances than in others it seems reasonable that the federal reserve would act more aggressively when inflation is high than when it is low similarly it might be expected that the federal reserve responds more to a negative than a positive output gap although these specifications receive some empirical support we find that a modified threshold model that is consistent with opportunistic monetary policy makes significant progress toward explaining federal reserve behavior

globalization macroeconomic performance and monetary policy the paper argues that many of the exaggerated claims that globalization has been an important factor in lowering inflation in recent years just do not hold up globalization does however have the potential to be stabilizing for individual economies and has been a key factor in promoting economic growth the paper then examines four questions about the impact of globalization on the monetary transmission mechanism and arrives at the following answers i has globalization led to a decline in the sensitivity of inflation to domestic output gaps and thus to domestic monetary policy no ii are foreign output gaps playing a more prominent role in the domestic inflation process so that domestic monetary policy has more difficulty stabilizing inflation no iii can domestic monetary policy still control domestic interest rates and so stabilize both inflation and output yes iv are there other ways besides possible influences on inflation and interest rates in which globalization may have affected the transmission mechanism of monetary policy yes