an institution based view of international business strategy a focus on emerging economies leveraging the recent research interest in emerging economies this perspective paper argues that an institution based view of international business ib strategy has emerged it is positioned as one leg that helps sustain the strategy tripod the other two legs consisting of the industry and resource based views we then review four diverse areas of substantive research 1 antidumping as entry barriers 2 competing in and out of india 3 growing the firm in china and 4 governing the corporation in emerging economies overall we argue that an institution based view of ib strategy in combination with industry and resource based views will not only help sustain a strategy tripod but also shed significant light on the most fundamental questions confronting ib such as what drives firm strategy and performance in ib

consumer expectation and output growth the case of china abstract this study shows that china s consumer expectation index contains useful information about pure expectation shocks which are unrelated to economic fundamentals it turns out that such shocks are likely to be an important independent driver of industrial output growth

what s theoretically novel about emerging market multinationals we review the classic theory of the mne and past attempts to use it to understand the internationalization of firms from emerging markets we offer two criteria to determine whether emnes modify classic theory or not 1 establishing appropriate theoretical reference points and 2 distinguishing between theoretical constructs and empirical variables we suggest that the literature can benefit from moving beyond comparing emnes to dmnes and focusing instead on more fruitful issues specifically emerging markets offer the opportunity to observe the origin of the capabilities of mnes in general and the development of the institutional ecosystem that supports internationalization

foreign direct investment mode choice entry and establishment modes in transition economies in this study we bridge two streams of foreign direct investment literature specifically studies on establishment mode choice i e the choice between an acquisition and a greenfield establishment and studies on entry mode choice i e the choice between a wholly owned outlet and a subsidiary with shared ownership we arrive at a conceptual synthesis for an examination of the effects of the same predictors on the dual entry establishment mode choice made in the context of a single foreign investment we demonstrate that a parent firm s technological intensity international strategy and experience determine both establishment and entry mode choices moreover we apply williamson s new institutional economics to investigate the influence of institution building on multinational enterprises dual investment choice in the context of transition economies we test empirically the possible moderating effect of a host country s institutional environment we conclude that the degree of the host country s institutional advancement moderates the effect of both technological intensity and international strategy on the establishment and entry mode choice

does consumer sentiment forecast household spending if so why in the three months following the iraqi invasion of kuwait the university of michigan s index of consumer sentiment ics fell an unprecedented 24 3 index points to its lowest level since the 1981 1982 recession this collapse in household confidence became the focus of a great deal of economic commentary and indeed frequently was cited as an important if not the leading cause of the economic slowdown that ensued concern was fueled by the well known contemporaneous correlation between the ics and the growth of household spending figure 1 shows quarterly averages of the index 1978 1993 together with the quarterly growth in real personal consumption expenditures as measured in the national income accounts bureau of economic analysis the correlation is impressive of course it is not surprising that sentiment and the growth of spending are positively correlated this correlation may simply reflect that when economic prospects are poor households curtail their spending and also give gloomy responses to interviewers thus the contemporaneous correlation between sentiment and spending does not refute traditional life cycle or permanentincome models of consumption nor does it necessarily make the job of forecasting changes in consumption any easier from the point of view of an economic forecaster the questions of interest are first whether an index of consumer sentiment has any predictive power on its own for future changes in consumption spending and second whether it contains information about future changes in consumer spending aside from the information contained in other available indicators in section i we present evidence that the answer to the first question is a clear yes we find that lagged values of the ics taken on their own explain about 14 percent of the variation in the growth of total real personal consumption expenditures over the post1954 period further investigation shows that the answer to the second question is probably yes as well though here the margin is narrower and the evidence more murky the ics contributes about 3 percent to the r2 of a simple reduced form equation for total personal consumption expenditures in the longer of the two sample periods we examine but nothing in the shorter sample period though the latter result is heavily influenced by the observation for 1980 2 for the major subcategories of spending the contribution generally ranges between 1 percent and 8 percent overall we read the evidence as pointing toward at least some significant incremental explanatory power therefore we take as given for the remainder of the paper that sentiment forecasts spending and we turn to the issue of how that statistical relationship should be interpreted one possible interpretation is that sentiment is an independent driving factor in the economy and that changes in carroll division of research and statistics stop 80 federal reserve board washington dc 20551 fuhrer research department federal reserve bank of boston boston ma 02106 wilcox division of monetary affairs stop 71 federal reserve board washington dc 20551 we have benefited from the research assistance of stephen helwig and christopher geczy and the comments of an anonymous referee the views expressed in this paper are those of the authors and not of the federal reserve board the federal reserve bank of boston or the other members of the staff of either institution ithe conference board s consumer confidence index also plunged at the same time

fickle consumers durable goods and business cycles abstract this paper develops a three sector dynamic general equilibrium model with the specific aim of evaluating the role of consumer durables in the generation and propagation of business cycles the model displays indeterminacy at commonly considered realistic parameter restrictions and basically constant returns to scale if calibrated at modest increasing returns to scale the sunspots driven model version produces a close match to moments of aggregate u s data journal of economic literatureclassification numbers e00 e32

macropartisanship a replication and critique mackuen erikson and stimson 1989 1992 argue that the aggregate distribution of party identification or macropartisanship shifts significantly over short periods in response to changes in presidential popularity and consumer sentiment their results are based on a subset of gallup surveys available from 1953 to 1988 and only those cbs new york times surveys conducted during the reagan administration we replicate this analysis using a more extensive inventory of gallup and cbs new york times data and find considerably less evidence of partisan fluctuation the amount of partisan change caused by short term movements in consumer sentiment and presidential popularity is found to be two to three times smaller than initially reported by mackuen et al 1989 our results indicate that macropartisanship adjusts to short term shocks in a limited and gradual fashion consistent with traditional views of partisan realignment

consumer sentiment and consumer spending decomposing the granger causal relationship in the time domain it is often believed that the consumer sentiment index has predictive power for future consumption levels while granger causality tests have already been used to test for this no attempt has been made yet to quantify the predictive power of the consumer sentiment index over different time horizons in this article we decompose the granger causality at different time lags by looking at a sequence of nested prediction models since the consumer sentiment index turns out to be cointegrated with real consumption we resort to error correcting models four consumption series are studied namely total real consumption real consumption of durables non durables and services among other findings we show that the consumer sentiment index granger causes future consumption with an average time lag of 4 5 months furthermore it is found that the consumer sentiment index has more incremental predictive power for consumption of services than for consumption of durables or non durables and that the index is not

state capitalism and performance persistence of business group affiliated firms a comparative study of china and india business groups emerged in developing economies through direct or indirect support from the state in order to overcome a variety of institutional voids and or to further state objectives of economic growth however the efficacy of this organizational form and its associated governance structures have been debated given the dual possibility of business groups to allocate resources among its affiliates for cross subsidization or winner picking we argue that elements of the institutional environment comprising of the state s approach to organizations and the political context of these interactions vary across countries thereby influencing business groups resource allocation strategies and affecting the persistence of affiliated firms superior performance contrasting the types of state capitalism in china and india we develop and test our hypotheses we find that the effect of business group affiliation on firms superior performance persistence is stronger in a state led system of state capitalism e g china than in a co governed system e g india and that this divergence of the business group effect is weakened as affiliated firms internationalize our findings have implications for understanding business groups across institutional contexts and the influence of diversity in the types of state capitalism on organizational strategies

an equilibrium model with involuntary unemployment at flexible competitive prices and wages this paper presents a general equilibrium model in which all prices and quantities transacted are the direct choices of econom ic agents there is no walrasian auctioneer multiple subgame perfect equilibria exist with prices and wages at their walrasian levels among the equilibrium allocations are the walrasian ones but there a re also outcomes in which price and wage taking workers are rationed in the labor market and are unable to sell all the labor they want a t the prevailing wage this involuntary unemployment results from sel f fulfilling expectations of inadequate excess demand as in some inte rpretations of keynes s ideas copyright 1987 by american economic association

what makes a good economy evidence from public opinion surveys analysis of 35 years of previously unstudied survey data shows how the american public evaluates the health of the macroeconomy survey responses are multidimensional distinct from indexes of consumer sentiment and based mostly on genuine perceptions of economic conditions not media reports of economic statistics as such they contain unique information about current and future values of these statistics particularly consumption growth a longstanding focus of the literature both intangibles and macroeconomic fundamentals explain substantial variation in the survey data the public equates 2 to 5 percentage points of inflation with 1 percentage point of unemployment jel e32 e27 eo1 i introduction traditional business cycle measurement and theory tends to downplay the role of public perceptions the health of the macroeconomy is evaluated with a lag through formal measurement of fundamentals like gross domestic product gdp growth rather than by the opinion of the public the objective functions employed by models of macro policy derived from theory or prescribed ad hoc are similarly unshaped by public opinion on the attractiveness of various states of the economy for a profession that is enamored of consumer sovereignty and cognizant of the value of idiosyncratic decentralized information this is a little surprising it probably reflects in part a lack of available data in the united states prior research on the macroeconomic perceptions of the public has almost exclusively employed the widely available michigan index of consumer sentiment or its counterpart from the conference board the consumer confidence index to predict future consumption but these measures are not intended to be and have not been interpreted as general assessments of the national macroeconomy they combine responses to a variety of questions about personal finances and the macroeconomy about employment consumption and profitability about current conditions and the change in those conditions these questions are sufficiently disparate that it is unclear what exactly either index measures or how it should be interpreted see merkle langer and sussman 2004 this ambiguity has probably contributed to a decades long debate over the usefulness of such indices which has been compounded by divergent findings on their ability to forecast future consumption see golinelli and parigi 2004 manski 2004 to surmount these data limitations 35 years of responses were assembled from three reputable national u s polls that ask about the current state of the national economy and or whether economic conditions are getting better or worse all are conceptually and we show statistically distinct from indexes of consumer sentiment and none has been previously studied as shown in this article these poll data enrich our understanding of the business cycle in three ways they contain information about fundamental macroeconomic variables which are reported with a lag and often subsequently revised they establish the role of various macroeconomic fundamentals and of intangibles in determining the public s satisfaction with the economy which informs policy and suggests simple summary measures of economic conditions and they reveal the multifaceted nature of consumers macroeconomic perceptions which span four dimensions across a total of nine survey questions section ii introduces these surveys and shows how they relate to each other and to the michigan and conference board indices in section iii we examine how macroeconomic conditions influence the assessments reported therein their predictive power is examined in section iv section v concludes ii polling on the state of the economy for decades american news organizations have asked respondents to assess the national macroeconomy table 1 lists the questions time spans sample periods and response options for each

consumer confidence and rational expectations are agents beliefs consistent with the theory consumer confidence is found to have predictive content for a wide range of macroeconomic variables including consumption growth contrary to standard repih we find that on uk data the repih is rejected due to the predictive content of consumer confidence and not labour income we explain this finding in terms of precautionary behaviour extending the hansen and singleton consumption capm model to allow a conditional variance we find a high level of confidence is associated with both greater optimism about the level of consumption and greater uncertainty about the forecaster variance once allowance is made for time aggregation the over identifying restrictions implied by this model are accepted we estimate a small but statistically significant intertemporal elasticity of substitution

confidence and the real economy the japanese case this paper empirically analyses whether consumer confidence has an effect on the real economy in japan this paper uses vector autoregressions including variables which represent consumer confidence it is shown that in the cases of quarterly and monthly data consumer confidence has a significant effect on gdp fluctuations whereas in the case of semiannual data it has no effect in other words consumer confidence has an effect on only short term economic fluctuations

partisan preferences electoral prospects and economic expectations research shows that economic expectations reflect partisan preferences those who support the current government tend to think the future will go well at least by comparison with those who oppose the government but there always is uncertainty surrounding the political future especially in the period before elections this article considers whether the uncertainty matters specifically it examines whether people s economic expectations are conditional on their own estimates of who will win the analysis relies on data from five election study panels in the united states and the united kingdom both majoritarian systems where the effects of partisan winning and losing are most likely the results imply that people in these countries do anticipate election outcomes that is economic expectations prior to elections reflect both the political present and future this tells us not only that expectations in these systems are substantially rational but that politics plays a much bigger role in our economic

does confidence data help forecast business cycles new evidence from canada abstractthis paper assesses the contribution of confidence or sentiment data for predicting canadian economic slowdowns a probit framework is applied to an indicator of the status of the canad

whole country of origin network development abroad the support that networks offer during the internationalization process is well documented in the international business literature however this work has primarily focused on firm level networks while underappreciating the cooperative behaviors that may emerge among organizations in the pursuit of common network level goals to better understand these concerted and coordinated actions we engaged in a qualitative examination of two clusters of italian organizations abroad we observed that goal directed and governed networks emerged in these clusters bounded by their common desire to support italian firms internationalization this insight underlies our contributions to the international business and whole network literatures we offer a process model outlining the emergence of a particular type of whole network the country of origin network this process is much more distributed emergent and context dependent than previously theorized our model illustrates that network development involves the active and coordinated efforts of diverse actors working to create infrastructure that can be accessed by and shared between new and existing organizations our finding that both networks were governed utilizing a distinct but context appropriate governance structure provides new insight into how networks support internationalization furthermore it illustrates that whole network level support is distinct from but complementary to the firm to firm support highlighted in previous studies

increasing returns and animal spirits the purpose of this note is to simply point out that the multiplicity intrinsic of course to the presence of non convexities characterizes the models of growth with external increasing returns which have been studied recently and more importantly to show that the many competitive equilibria which often arise in those models can be interpreted as animal spirits equilibria that is equilibria indexed by the consumers optimism or pessimism this multiplicity of competitive equilibrium paths can be viewed as providing a new foundation upon which to build a theory of self fulfilling prophecies one which relies solely on the existence of external effects and does not rest on the overlapping generation structure or on back ward bending offer curves the conclusion that multiple animal spirits competitive equilibria are likely to arise in a model of external increasing returns would survive the generalization of the framework used in this paper to many period environments be they overlapping generation or representative agent infinite horizon structures this abstract was borrowed from another version of this item

sticky prices as coordination failure this paper links the coordination failure and menu cost approaches to the microeconomic foundations of keynesian macroeconomics if a firm s desired price is increasing in others prices then the gain from price adjustment after a nominal shock is greater if others adjust this strategic complementarity leads to multiple equilibria in the degree of rigidity welfare may be much higher in the equilibria with less rigidity thus nominal rigidity arises from a failure to coordinate price changes jel e12 e30 keynesian macroeconomics waned in the 1970 s because economists grew disenchanted with its weak microeconomic foundations the central difficulty was that keynesian models were based on ad hoc rigidities in nominal wages and prices the 1980 s produced two approaches to reviving keynesian theory the menu cost literature n gregory mankiw 1985 george akerlof and janet yellen 1985 seeks to provide rigorous explanations for nominal rigidities these papers argue that small frictions in price setting are enough to produce large nominal rigidities in contrast the coordination failure literature russell cooper and andrew john 1988 abandons nominal rigidities and seeks alternative foundations for keynesian models the central idea is that many economic activities such as production e g john bryant 1983 trade e g peter diamond 1982 and investment e g nobuhiro kiyotaki 1988 exhibit synergism or strategic complementarity one agent s optimal level of activity depends positively on others activity strategic complementarity can lead to multiple equilibria with high activity equilibria superior to low activity equilibria thus an economy may be stuck in an underemployment equilibrium even though a superior equilibrium exists models with nominal rigidities and models with coordination failures are often presented as competing paradigms 1 this paper shows that this view is incorrect we take a step toward unifying the foundations of keynesian economics by showing that the two sets of ideas are highly complementary nominal rigidity arises from a failure to coordinate price changes this failure has the essential features of coordination failures in previous models flexibility in one firm s price increases the incentives for other firms to make their prices flexible this strategic complementarity leads to multiple equilibria in the degree of nominal rigidity equilibria with less rigidity more active price adjustment are often pareto superior to equilibria with more rigidity these results contribute to our understanding both of coordination failure and of nominal rigidity the range of keynesian phenomena explained by coordination failures is greatly expanded previous coordination failure models contain only real variables and thus ascribe no role to monetary policy or other determinants of nominal spending our results suggest that coordination failure is at the root of inefficient nonneutralities of money theories of nominal rigidities gain new empirical and policy im

domestic alliance network to attract foreign partners evidence from international joint ventures in china partner selection is a critical issue in building international joint ventures ijvs we argue that foreign firms are more likely to select local firms with unique network structural advantages within a local alliance network we frame structural advantages as two network position traits centrality and brokerage specifically network centrality acts as a stronger network trait than brokerage in attracting foreign ijv partners however such a relationship may be moderated by foreign firms local experience and perceived capabilities we contend that when foreign firms have a high level of local market experience and perceived capabilities they may prefer a local broker over a centrally located local firm data on the domestic alliance network in china s electronics and information technology it industries largely support our hypotheses we conclude that as foreign investors become strategic insiders they may not only seek a local partner s capability attributes but also more critically pay attention to a local partner s domestic network

animal spirits the effect of economic expectations on economic output the public is characterized as able forecasters of future economic performance they engage in rational expectations empirical evidence exists to bolster the claim this article considers the possibility that the public does more than predict economic output they may engage in a self fulfilling prophecy where belief about the future economy translates into personal financial behaviour e g consumption and investment that actually drives economic performance after controlling for rational expectations with elite forecasts leading indicators and past economic performance it is shown that between 5 and one third of the variance in economic output can be explained by prospective economic sentiment this result has broad implications for electoral behaviour research

willingness to consume and ability to consume abstract george katona 1960 introduced the distinction between ability to buy and willingness to buy ability to buy refers to the objective factors determining actual purchases whereas willingness to buy captures subjective factors such as attitudes or moods i show that katona s theory can be reconciled easily with standard models of intertemporal utility maximization if one allows for a time varying preference parameter that is exogenous to the consumer and determined by the social environment such a willingness to consume model is tested against standard alternatives using data from seven european countries the empirical evidence rejects the permanent income hypothesis and supports the willingness to consume model

international expansion of emerging market enterprises a springboard perspective in this article we present a springboard perspective to describe the internationalization of emerging market multinational corporations em mnes em mnes use international expansion as a springboard to acquire strategic resources and reduce their institutional and market constraints at home in so doing they overcome their latecomer disadvantage in the global stage via a series of aggressive risk taking measures by aggressively acquiring or buying critical assets from mature mnes to compensate for their competitive weaknesses we discuss unique traits that characterize the international expansion of em mnes and the unique motivations that steer them toward internationalization we further delineate peculiar strategies and activities undertaken by these firms in pursuit of international expansion as well as internal and external forces that might compel or facilitate their propulsion into the global scene we finally explain the risks and remedies associated with this international springboarding strategy and highlight major issues meriting further investigation

formal and informal institutional legacies and inward foreign direct investment into firms evidence from china this paper explores the influence of informal institutional legacy on contemporary foreign direct investment fdi this study is situated in the context of china s treaty port era 1842 1943 hypotheses are posited and tested related to how the treaty port policies and overseas chinese communities of cities established during that period created formal and informal institutional legacies that positively influence the likelihood and volume of contemporary inward fdi firms receive this research suggests that despite and because of the cultural revolution s traumatic shock informal institutions helped formal institutions morph into informal rules and thus created a lingering legacy effect drawing on a longitudinal sample of chinese firms data and historical materials that provide information about treaty ports and overseas chinese communities this study finds supporting evidence that informal institutional legacy is important for contemporary fdi and brings history back into the international business literature this study provides practical implications by suggesting that given the increasing turbulence and uncertainties in emerging markets and transnational economies building and maintaining connections with transnational community actors of these countries could take advantage of the informal institutions to mitigate risks and sustain international business activities international investors could also benefit by investing in locales with rich transnational community connections

international acquisition success social community and dominant logic dimensions international acquisitions intended to achieve knowledge transfers and improvements of innovation capacity can only be successful if the acquirer devotes balanced attention to a building a unified social community and b achieving requisite commonality in dominant logic the balance between these two dimensions of success depends on the activity class considered in some activity classes imposing the acquiring firm s dominant logic will be dysfunctional and therefore the post acquisition managerial focus may need to shift towards social community building bresman birkinshaw and nobel s 1999 acclaimed jibs paper should be commended for identifying the social community dimension as a critical driver of international acquisition success

do international acquisitions by emerging economy firms create shareholder value the case of indian firms while overseas acquisitions by emerging economy firms are gaining increased attention from the business press our understanding of whether and why this inorganic mode of international expansion creates value to acquirer firms is limited we argue that international acquisitions facilitate internalization of tangible and intangible resources that are both difficult to trade through market transactions and take time to develop internally thus constituting an important strategic lever of value creation for emerging economy firms furthermore the magnitude of value created will be higher when the target firms are located in advanced economic and institutional environments country markets that carry the promise of higher quality of resources and therefore stronger complementarity to the existing capabilities of emerging economy firms an event study of 425 cross border acquisitions by indian firms during 2000 2007 supports our predictions

managerial cognition and internationalization how do the senior decision makers within a multinational enterprise mne think through and determine an internationalization decision despite the cognitive foundations of several key constructs standard internationalization models do not explicitly incorporate managerial cognition we argue that the boundedly rational decision maker is underspecified in international business models and this oversight contributes to weak empirical findings on experience learning internationalization strategy and mne performance drawing on these extant models we identify seven knowledge domains and interdependencies that may make up decision makers mental models granted rare access to senior executives and board members engaged in a foreign direct investment decision we find substantial heterogeneity in the mental models these individuals used to make sense of the opportunity this variance aligns with differences in individuals experience along four dimensions international breadth depth diversity and prior strategic decision making we argue these cognitive processes how individuals exercise judgment about information search parameters assessment and decision integration and how decision teams coalesce in their thinking are crucial microfoundations for modeling heterogeneity in firm level internationalization strategies and performance

evaluating threshold effects in consumer sentiment 1 introductionthe consumer sentiment index published by the university of michigan hereafter the um index is one of the two most commonly monitored measures of consumer sentiment in the united states the other one being the consumer confidence index issued by the conference board sentiment indexes which are constructed from answers to survey questions are popular with the media newspaper articles and commentaries abound following their release the analysis often confers a primary role to consumer sentiment in determining economic fluctuations the view among economists however is more equivocal as early as 1965 adams and green found that the information contained in the um index encompasses the information included in standard government statistics on employment and financial conditions many economists think that consumer sentiment is endogenous and is a reflection of current macroeconomic conditions other economists in line with keynes notion of animals spirits argue that psychological factors which are not captured by economic variables can influence consumers decisions thus the willingness to consume may be an important factor affecting consumption few studies have found that sentiment indexes have significant explanatory power once fundamental economic factors are taken into account garner 1991 and throop 1992 however performed event studies and suggested that these indexes could be helpful during major economic or political events as they then tend to diverge from a path consistent with other macroeconomic variables drawing on this literature our study provides a new evaluation of consumer sentiment as a predictor of aggregate consumer spending periods of high economic or political uncertainty are usually associated with increased volatility of consumer sentiment suggesting that large swings in sentiment could influence consumption we provide a formal assessment of this possibility by estimating a consumption function in which only large variations of sentiment affect spending we find that consumer sentiment is a statistically important determinant of consumption in periods of high uncertainty even after controlling for other determinants of consumption this article is organized as follows section 2 describes two views of consumer behavior section 3 reviews the relevant empirical literature section 4 introduces our econometric model data and estimation methods section 5 summarizes the estimation and forecasting results section 6 evaluates the predictive power of the um index within the campbell mankiw campbell and mankiw 1990 framework section 7 concludes 2 theorythis section briefly reviews the theory of consumer behavior and discusses possible links to consumer sentiment the permanent income hypothesis pih states that consumers expenditures depend on their permanent income permanent income is defined as the present value of wealth formula omitted see article image where at is the real value of the individual s nonhuman wealth at the beginning of period t is the discount factor ylt is real disposable labor income and et is the expectation operator conditional on information available to the individual at time t campbell and mankiw 1990 test hall s 1978 random walk hypothesis by separating consumers into two groups a proportion of households rule of thumbers simply set consumption equal to income in each period while a fraction 1 life cyclers behave according to the pih in this framework the only reason any lagged variable could have predictive power for current consumption growth is because that variable has predictive power for current income growth and the consumers do not spend that income until it arrives in that context the usefulness of consumer sentiment should come from the fact that it captures information about expected future income

de globalization theories predictions and opportunities for international business research de globalization now a distinct possibility would induce a significant qualitative shift in strategies structures and behaviors observable in international business ib coming to terms with this qualitative shift would require ib research to develop a much deeper integration of politics the key driver of de globalization to support such integration this paper introduces two relevant theories of de globalization from political science liberalism and realism both predict de globalization under current conditions but lead to different expectations about the future world economy liberalism suggests a patchwork of economic linkages while realism predicts the emergence of economic blocs around major countries this paper discusses the resulting opportunities in three areas of ib research political strategies and roles of multinational enterprises mnes global value chains and the role of the national context for political strategies and roles there is a need to explore how regular business activities and deliberate political agency of mnes affect the political sustainability of globalization for value chains questions include their future reach and specialization changes in organizational forms and the impact of political considerations on location decisions research opportunities on national contexts relate to their ability to sustain globalization and their connection with economic and military power

the effect of gnp announcements on fluctuations of gnp growth abstract this paper is an empirical study of the degree in which perceptions affect the evolution of the economy we study the effects of the announcements that the government makes on gnp growth these announcements are subject to a substantial degree of noise and its accuracy improves with time a revised number is published several years after the first announcement was made public we consider that the final revision is the true value of gnp growth we show that once announcements are taken into account the true value of gnp growth at time t has no predictive power in determining growth at any future time all the predictive power lies in the announcements and not in the true level of growth actually we show that the variable that determines future growth is the unexpected part of the announcements we also show that announcements affect growth via aggregate investment

state ownership effect on firms fdi ownership decisions under institutional pressure a study of chinese outward investing firms this study investigates the effect of state ownership on chinese firms foreign direct investment fdi ownership decisions it adopts a political perspective to extend the application of institutional theory in international business research specifically it examines firms heterogeneous responses to external institutional processes during foreign market entry while taking into consideration the political affiliation of firms with the external institutions we argue that state ownership creates the political affiliation of a firm with its home country government which increases the firm s resource dependence on home country institutions while at the same time influencing its image as perceived by host country institutional constituents such resource dependence and political perception increase firms tendency to conform to rather than resist isomorphic institutional pressures we tested our hypotheses using primary data for 132 fdi entries made by chinese firms during 2000 2006 and we found that the effects of home regulatory host regulatory and host normative pressures on a firm to choose a joint ownership structure were stronger when the share of equity held by state entities in the firm was high

a retrospective and agenda for future research on chinese outward foreign direct investment our original 2007 journal of international business studies article the determinants of chinese outward foreign direct investment was the first theoretically based empirical analysis of the phenomenon it utilised internalisation theory to explain the internationalisation of chinese state owned enterprises this paper showed that we had failed to ask sufficiently challenging questions about the effects of home country institutions on outward foreign direct investment ofdi this retrospective builds on the extensive subsequent research to show the importance of context in constructing satisfactory theoretical explanations of ofdi building on these foundations we propose research challenges for the next decade on chinese ofdi that transcend the chinese context and have wider theoretical applicability examining alternative forms of social and economic organisation allows the creation of special theories of foreign direct investment nested within the general theory following such a strategy would enable international business research to make a contribution across the social sciences

internationalization and the performance of born global smes the mediating role of social networks this paper offers a social network explanation for the purported relationship between internationalization and firm performance in the context of born global small and medium enterprises smes we argue that home based social networks play a mediating role in the relationship between inward and outward internationalization and firm performance the mediating mechanism is attributed to three information benefits of social networks 1 knowledge of foreign market opportunities 2 advice and experiential learning and 3 referral trust and solidarity using survey data from smes in the largest emerging economy of china we found some support for this mediating role of social networks in the form of guanxi the results imply that international business managers should consider social networks as an efficient means of helping internationally oriented smes to go international more rapidly and profitably

a note on strategic delegation the market share case we consider a two stage market share delegation game with two competing firms each owner delegates the production decision to a manager each manager s remuneration is a weighted sum of profits and market share the market share delegation game results in higher duopoly profits than the sales delegation game both output delegation models lead to more aggressive managerial behavior than the standard cournot case implying lower profitability and higher social welfare similar results are obtained for the bertrand version of the delegation model market share delegation is the dominant strategy in a game in which owners can choose not to hire a manager or if they do so to pay their manager a bonus based on profits and sales or market share

the impact of conventional and unconventional monetary policy on expectations and sentiment abstract this paper offers evidence on the effect of ecb s conventional and unconventional monetary policy on economic expectations in euro area countries during the us and eu crisis we employ a range of research methodologies in a sample of nine eurozone countries and combine expectations sentiment indicators with a set of macroeconomic and financial variables we find that ecb s conventional monetary policy and fed s monetary policy stance has a positive and significant effect on economic expectations for core eurozone countries and a weak effect on peripheral eurozone countries ecb s unconventional policy measures however have a negative short term effect on core countries economic expectations this result is robust to different methodologies pvar qvar favar and different datasets overall our findings highlight the importance of monetary policy in the determination of economic expectations

anxious periods and bank lending we examine the lending behavior of banks during anxious periods the main characteristic of anxious periods is that the perceptions and expectations about economic conditions worsen for economic agents even though the economy is not in a recession we identify distinct periods of anxiety for consumers ceos firms and analysts subsequently we study the lending behavior of us banks during the anxious quarters from 1985 to 2010 using bank level data the results show that banks lending falls when consumers and analysts are anxious and this effect is more pronounced when banks hold a higher level of credit risk these effects are more pronounced in anxious periods that were followed by recessions and in these periods loan growth also responds negatively to the anxiety of ceos yet these effects are quite less prevalent in the period after 2001

can consumer confidence forecast household spending evidence from the european commission business and consumer surveys 1 introductionthe analysis of the impact of consumer attitudes on consumer spending has been an area of sustained interest in the macroeconomics literature this interest in consumer attitudes reflects a popular belief that macroeconomic outcomes depend heavily on consumers expectations of future economic conditions reinforcing this belief is the fact that consumer spending accounts for 60 to 70 of the gross domestic product of highly industrialized countries such as the g 7 during the past few decades a number of single country investigations have attempted to assess the predictive power of consumer confidence in forecasting household spending for example in the united states mishkin 1978 reports that the index of consumer sentiment ics published by the university of michigan possesses good explanatory power for changes in durable goods carroll fuhrer and wilcox 1994 also find that the michigan ics has good predictive capability with regard to household expenditure but that its forecasting power decreases considerably when the index is used along with other macroeconomic variables 1 kwan and cotsomitis 2004 examine the robustness of carroll fuhrer and wilcox s 1994 findings when alternative measures of consumer confidence are used in their prediction equations they report that use of the michigan index of consumer expectations improves on the estimation results of carroll fuhrer and wilcox 1994 bram and ludvigson 1998 and ludvigson 2004 compare the forecasting performance of the michigan ics and the u s conference board s index of consumer confidence icc their findings indicate that the conference board s index provides additional information about future consumer consumption that is not captured by the michigan index however chopin and darrat 2000 utilizing a multivariate causality framework report that the conference board s icc is an unreliable predictor of u s retail sales as regards other studies using non u s data acemoglu and scott 1994 employ granger causality and regression analyses to determine if consumer confidence as measured by the gallup poll in the united kingdom can predict future consumption they find that consumer confidence is a leading indicator of future consumption growth in a subsequent study delorme kamerschen and voeks 2002 examine whether consumer confidence and rational expectations are the same in the united kingdom as they are in the united states they report that the predictive ability of the u k consumer confidence index is greater than that of the united states belessiotis 1996 using french data also reports that the consumer confidence index provides decent explanatory power for future consumer spending in canada kwan and cotsomitis 2005 find that although consumer sentiment is a reliable predictor of consumer expenditures at the national level results obtained using regional data are quite mixed fan and wong 1998 find that unlike the case in the united states or the united kingdom confidence indicators in hong kong have little or no explanatory power in forecasting household spending the existing studies on the ability of consumer confidence to predict household spending have produced mixed results the results vary depending on the sample period chosen the frequency of observations monthly or quarterly and the different survey methodologies employed to gauge consumer attitudes moreover most of these studies confine their attention to single country investigations given the diversity of results it is important to investigate the predictive power of consumer confidence on the basis of comparable time series data for as many countries as possible this paper presents a first formal attempt to study the ability of consumer confidence to forecast household spending within a multicountry framework to this end we use two confidence indices namely the consumer confidence indicator cci and the economic sentiment indicator esi both of which are derived from the european commission business and consumer survey ecbcs

efficiency and formation of expectations evidence from the european investment survey the european commission conducts an annual survey regarding planned and realized business fixed investment across various manufacturing sectors in euroland in this study we investigate the predictive content of survey based expectations on investment in addition we empirically test the rationality of respondents both in a time series as well as in a panel context according to our results based on pooling the data efficiency is rejected since expectations are biased predictors of actual outcomes furthermore expectations revisions are found to be correlated with components of the information set known at the time of decision making finally our results qualify regressive expectations as the mechanism that more adequately describes the formation of expectations

what is chinese about chinese multinationals buckley et al s j int bus studi 38 4 499 518 2007 pioneering work concluded that the determinants of outward foreign direct investment ofdi from china were similar to those observed in developed countries but with a few modifications in this commentary we suggest continuing their effort to understand what is distinctive about chinese multinational enterprises cmnes we look for underlying explanations that are analytically useful and potentially generalizable unlike a firm s nationality which is a catch all variable with no analytical value based on prior research and ramamurti glob strategy j 2 1 41 47 2012a we argue that the following variables help explain distinctive aspects of cmne internationalization 1 their stage of evolution as a multinational enterprise with most cmnes being infant mnes rather than mature mnes 2 the global context for internationalization which has helped cmnes internationalize faster than it was possible in earlier decades 3 government created advantages which complemented china s natural endowments and for the most part improved cmnes international competitiveness and 4 leapfrogging advantage which allowed late mover chinese firms to gain a competitive advantage in smokestack industries and some sunrise industries these variables may also explain the behavior of mnes from other emerging economies and are therefore candidates for inclusion in general models of the internationalization process

welfare distribution effect of a price reduction in the dutch gas transport market a scenario analysis of regulatory policy market form and rent allocation as part of the larger energy market deregulation program the dutch energy authority dte has developed the habit to force the dutch gas transport enterprise gas transport services or gts to lower its prices dte s key argument is that lower gas transport prices will benefit the end user indeed that might well be the case this policy in general is in line with european legislation on the liberalization of the gas market we model and simulate the domestic welfare effects of a 5 percent transport price reduction from this we conclude that at least three observations complicate matters substantially first gts is government owned and the dominant shipper gasunie trade supply or gasterra as it was recoined recently is partly so 50 second shippers enter into the competitive game to make profits third not only is the majority of gas transported in the netherlands exported to foreign end users but also foreign owners have a large stake in dutch shippers as a result part of the rents will always be distributed or will leak away to foreign consumers and shippers or their shareholders these three observations together have three important implications first state ownership implies that much rent allocation is simply a matter of circulating money from one government sub budget to the other second given that the industry is imperfectly competitive part of the rents will not be passed on to the end consumers third it is unavoidable that a substantial part of the rents are transferred abroad a general conclusion for policy makers is that market liberalization might not bring ex post what they expected ex ante

consumer confidence and economic fluctuations if consumers become pessimistic about the state of the economy can there be a slowdown in output even if their pessimism is not based on economic fundamentals recent macroeconomic models show the answer is yes if there are strategic complementarities and multiple equilibria we investigate the link between consumer confidence and economic fluctuations using vector autoregressions in all models after controlling for economic fundamentals the hypothesis that consumer sentiment does not cause gnp in the granger sense can be rejected variance decompositions suggest that consumer sentiment accounts for between 13 and 26 percent of the innovation variance of gnp

internalization and experience japanese banks international expansion 1980 1998 we use an interdisciplinary approach to investigate multinational banks foreign activities we bridge core concepts from the stages theory of internationalization to internalization theory to extend the literature on the defensive expansion hypothesis unlike the primarily aggregate levels of analysis employed in previous research on multinational banking we utilize a firm level analysis of the internationalization experiences of 21 japanese banks in the period 1980 1998 we find that banks undertake foreign direct investment to secure internalization benefits by following their existing clients and to achieve economies of scale in the application of their intangible assets in international markets the magnitude of these relationships however is contingent upon the level of a bank s experience in the host countries consistent with predictions from internationalization theory we find that the motivations for international expansion can change over time

transforming disadvantages into advantages developing country mnes in the least developed countries we analyze the advantages and disadvantages of developing country multinational enterprises mnes in comparison with developed country mnes developing country mnes tend to be less competitive than their developed country counterparts partly because they suffer the disadvantage of operating in home countries with underdeveloped institutions we argue that this disadvantage can become an advantage when both types of mne operate in countries with difficult governance conditions because developing country mnes are used to operating in such conditions the empirical analysis shows that although developing country mnes rarely appear among the largest mnes in the world they are more prevalent among the largest foreign firms in the least developed countries ldcs especially in ldcs with poorer regulatory quality and lower control of corruption

unemployment and foreign capital the relative opportunity costs of domestic labour and welfare the consequences of increased foreign capital for an economy with unemployment are analyzed under different assumptions that influence the relative oportunity costs of domestic labor the investigation suggests that the implications of the literature on the welfare effect of increased foreign capital are misleading the paper shows that welfare gains result from increased foreign capital if the opportunity costs of labor are sufficiently low relative to the wages earned by laborers employed by new foreign capital a number of cases where this occurs are presented the findings of the paper suggest that cases where increased foreign capital must be welfare harming represent extreme parameterizations in the set of possibilities copyright 1991 by the london school of economics and political science

psychology consumer sentiment and household expenditures the aim of this article is to assess the role of the italian consumer sentiment index csi as an autonomous driving force of consumption decisions we test for the presence of rule of thumb consumers as originally proposed by campbell and mankiw 1991 using sentiment measures distinguished by respondent s working condition and consumption data disaggregated according to durability over the period 1982 2004 the consumption sentiment relationship is found to be stronger for some groups of households and for some particular categories of expenditures moreover sentiment seems to be not well explained by economic fundamentals alone capturing also the effects of the political cycle and exceptional circumstances

mnes as border crossing multi location enterprises the role of discontinuities in geographic space spurred by the classic work of dunning mne location has become the focus of a growing body of research in the field in this paper we argue that international business ib research examining the spatial dimension has serious weaknesses stemming from its traditional assumption of the country as the location unit of analysis while border crossing remains the key research context of ib placing it within a general spatial framework that recognizes both international and subnational spatial heterogeneity opens up vast new vistas for research analyzing mnes as border crossing multi location enterprises allows the researcher to distinguish between discrete border effects and continuous distance effects and undertake a more fine grained analysis of location within such analysis national borders may appear as qualitative discontinuities in space that is points at which spatial heterogeneity changes abruptly however subnational spatial heterogeneity is often the characteristic that drives firm strategy as mnes decide to locate in particular agglomerations and not at random locations within a country the complex firms that ib scholars study typically include multiple units within the same country so that a complete analysis requires considering both subnational distance effects as well as international border effects

money real interest rates and output a reinterpretation of postwar u s data this paper reexamines both monthly and quarterly u s postwar data to investigate if the observed comovements between money real interestrates prices and output are compatible with the money real interest output link suggested by existing monetary theories of output which include both keynesian and equilibrium models the major empirical findings are these 1 in both monthly and quarterly data we cannot reject the hypothesis that the ex ante real rate is exogenous or granger causally prior in the context of a four variable system which contains money prices nominal interest rates and industrial production 2 in quarterly data there is significantly more information con tained in either the levels of expected inflation or the innovationof this variable for predicting future output given current and lagged output than in any other variable examined money actualinflation nominal interest rates or ex ante real rates the effect of an inflation innovation on future output is unambiguously negative the first result casts strong doubt on the empirical importance of existing monetary theories of output which imply that money should have a causal role on the ex ante real rates the second result would appear incompatible with most demand driven models of output in light of these results we propose an alternative structural model which can account for the major dynamic interactions among the variables this model has two central features i output is unaffected by money supply and ii the money supply process is motivated by short run price stability this abstract was borrowed from another version of this item

political aspects of mne theory political behavior by mnes has usually been ignored downplayed or passively treated in dominant economic models of the multinational enterprise in order to remedy this lacuna dunning s eclectic paradigm is expanded to integrate political dimensions in the analysis of ownership internalization and location advantages

tariffs foreign capital and immiserizing growth with urban unemployment and specific factors of production abstract in this note we show that a recent observation of brecher alejandro as regards tariff induced capital inflows essentially extends to a setting with urban unemployment three factors of production and a variety of labor market conditions in the urban sector

a geographic relational perspective on the internationalization of emerging market firms the growth of outward foreign direct investment from emerging markets has led to increased scholarly attention on the internationalization of emerging market firms emfs we break from the recent strategic approach on internationalizing emfs to develop a problematization approach which permits us to introduce a geographic relational perspective we use this perspective to highlight process thinking complex social realities and relational practice as means by which to better develop theory on the internationalization of emfs our emergent approach emphasizes the need to view emf internationalization as deeply situated in multifaceted contextual influences as influenced by path dependence and as manifested in practice these three relational tenets contextuality path dependence and practice are central to our geographic relational approach s ability to generate new challenging research questions for understanding emf internationalization consequently we add novelty to the international business domain by bringing space and process to the forefront of the emf research agenda

monetary policy and stock prices cross country evidence from cointegrated var models abstract this study applies the cointegrated vector autoregressive cvar model to analyze the long run relationships and short run dynamics between stock markets and monetary policy across five developed and three emerging economies our main aim is to check whether monetary policy plays an important role for stock market developments as an innovation monetary policy enters the analysis from three angles in the form of a broad monetary aggregate short term interest rates and net capital flows based on this framework we analyze whether central banks are able to influence stock market developments our findings suggest different patterns and causalities for emerging and industrial economies with the stock markets of the former economies more frequently related to monetary aggregates and capital flows a direct long run impact from short term interest rates on stock prices is only observed for 3 out of 8 economies

turns in consumer confidence an information advantage linked to manufacturing this research shows that the manufacturing sector contains private information advantages for consumer confidence it examines the consumer confidence manufacturing link by comparing the u s national level index of consumer sentiment with identically constructed confidence indices from a key manufacturing state and a nonmanufacturing state granger causality analysis shows that the manufacturing state s confidence index leads the national index whereas the nonmanufacturing state s confidence index lags it factors influencing confidence include percentage manufacturing employment equity markets indicators and disposable income fitting a consumption function to confidence measures for the three confidence indices shows the strongest relationship to be in the manufacturing state jel d12 copyright 2006 oxford university press

towards a renaissance in international business research big questions grand challenges and the future of ib scholarship in this article we review critiques of international business ib research with a focus on whether ib scholarship tackles big questions we identify three major areas where ib scholars have addressed important global phenomena but find that they have had little influence outside of ib and only limited effects on business or government policy we propose a redirection of ib research towards grand challenges in global business and the use of interdisciplinary research methods multilevel approaches and phenomena driven perspectives to address those questions we argue that ib can play a more constructive and vital role by tackling expansive topics at the business societal interface

multiple expectational equilibria under monopolistic competition this paper shows that a monopolistically competitive economy with real investment can have multiple rational expectations equilibria one is associated with entrepreneurs optimistic expectations about future demand another with entrepreneurs pessimism it also shows that an optimistic expectational equilibrium pareto dominates a pessimistic equilibrium an investment subsidy can be beneficial both by reducing the original underinvestment distortion and by changing firms expectations from pessimistic to optimistic the most important assumption is increasing returns to scale and monopolistic competition makes increasing returns consistent with each producer s optimization

international venturing by emerging economy firms the effects of firm capabilities home country networks and corporate entrepreneurship past literature on foreign direct investment generally supports an economics perspective that there is a direct relationship between firm specific ownership advantages and international expansion however in emerging economies with their institutional environment context characterized by low resource munificence and continuous economic liberalization a theoretical extension of the current perspective is needed this paper introduces new parameters by focusing on specific ownership advantages and strategic actions that firms have to develop in response to the institutional characteristics of the emerging economies when they decide to pursue outward fdi the focus here is on international venturing that requires a firm to engage in activities for new business creation in a foreign country rather than simply seek to distribute a product in another nation it is shown empirically that the relationship between firm specific ownership advantages and international venturing is moderated by the degree of home industry competition and export intensity in addition such a relationship is mediated by the intensity of corporate entrepreneurial transformation in the form of innovation new business creation and strategic renewal

information animal spirits and the meaning of innovations in consumer confidence we show that unexplained innovations in several variables representing survey responses to forwardlooking questions on the michigan survey of consumers have powerful prognostic implications for the future paths of macroeconomic variables we attempt to distinguish the hypothesis that these impulse responses indicate a causal channel from autonomous movements in sentiment to economic outcomes the animal spirits view from the alternative interpretation that the surprise confidence movements summarize information about future economic prospects the information view in natural rate models animal spirits shocks are associated with overshooting of among other variables consumption that attenuates when agents come to grips with their overreaction while information shocks about the long future are followed by gradual movements in macroeconomic variables that are not subsequently reversed in a baseline vector autoregression involving consumption income and confidence the data come down sharply in favor of the information view the impulse responses of consumption and gdp show no tendency to attenuate even after a number of years further confidence innovations have strong implications for labor productivity many quarters into the future in somewhat larger vars with an information block that includes inflation and or stock prices the impulse responses to confidence innovations continue to have the permanent shape that defines information shocks but they are smaller in magnitude we demonstrate that this is due to the fact that both inflation and stock price innovations have prognostic implications for future productivity that are very similar to the implications of innovations in confidence addition of unemployment to the system induces a transitory component that changes the shape of the impulse responses and somewhat weakens the previously airtight case against animal spirits but it does not provide constructive evidence of such effects

a general theory of springboard mnes the springboard view has become one theoretic lens to analyze emerging market multinationals emnes in the past decade a decade after its first introduction in 2007 new developments offer keen insights on these firms and mnes in general that aggressively engage in critical asset seeking we compare this view with other ib theories highlighting their differences as well as complementarity we articulate unique strengths and weaknesses of emnes including their vulnerability and complexity caused in part by home country institutions we discuss amalgamation ambidexterity and adaptation advantages that differentiate springboard mnes from more established advanced country mnes and explain why and how springboard acts should be analyzed along with global competitiveness augmentation we introduce an upward spiral concept to advance our understanding of linkages between springboard and post springboard activities and explain some critical cross cultural and human resource management issues in the process to help continued research on springboard mnes we highlight macro and micro management issues that are particularly worth exploring

the macroeconomic effects of false announcements suppose that the government were to announce the economy will be booming in six months and this announcement is based on false data what effect would such an announcement have on future aggregate activity this paper employs revisions of the series of leading economic indicators to test the hypothesis that such an announcement would have a positive effect on future activity we find that the evidence is generally consistent with the hypothesis and that for the time period 1976 1988 the expectational shocks measured by these revisions explain over 20 percent of the fluctuation in the quarterly growth rate of industrial production

consumer confidence and rational expectations in the united states compared with the united kingdom this paper examines the relationship between consumer confidence and the rational expectations permanent income hypothesis in the usa and compares the results with those obtained for the uk the study expands previous analysis by defining consumption as motor vehicles goods excluding motor vehicles and services the results suggest that predictive ability of the usa s consumer confidence is less than that of the uk but that contrary to the uk study confidence does not predict future consumption growth of services and is therefore consistent with rational expectations permanent income hypothesis

rationalizability learning and equilibrium in games with strategic complementarities we study a rich class of noncooperative games that includes models of oligopoly competition macroeconomic coordination failures arms races bank runs technology adoption and diffusion r d competition pretrial bargaining coordination in teams and many others for all these games the sets of pure strategy nash equilibria correlated equilibria and rationalizable strategies have identical bounds also for a class of models of dynamic adaptive choice behavior that encompasses both best response dynamics and bayesian learning the players choices lie eventually within the same bounds these bounds are shown to vary monotonically with certain exogenous parameters we study the class of noncooperative supermodular games introduced by topkis 1979 and further analyzed by vives 1985 1989 who also pointed out the importance of these games in industrial economics supermodular games are games in which each player s strategy set is partially ordered the marginal returns to increasing one s strategy rise with increases in the competitors strategies so that the game exhibits strategic complementarity 2 and if a player s strategies are multidimensional marginal returns to any one com ponent of the player s strategy rise with increases in the other components this class turns out to encompass many of the most important economic applications of noncooperative game theory in macroeconomics diamond s 1982 search model and bryant s 1983 1984 rational expectations models can be represented as supermodular games in each of these models more activity by some members of the economy raises the returns to increased levels of activity by others in oligopoly theory some models of bertrand oligopoly with differentiated products qualify as supermodu lar games in these games when a firm s competitors raise their prices the marginal profitability of the firm s own price increase rises a similar structure is present in games of new technology adoption such as those of dybvig and spatt 1983 farrell and saloner 1986 and katz and shapiro 1986 when more users hook into a communication system or more manufacturers adopt an interface standard the marginal return to others of doing the same often rises similarly in some specifications of the bank runs model introduced by diamond and dybvig 1983 when more depositors withdraw their funds from a bank it is more worthwhile for other depositors to do the same in the warrant exercise

crazy explanations of international business cycles international real business cycle models have been unable to provide a good explanation for the consumption output anomaly in theoretical economies consumption is more strongly correlated across countries than is output whereas the opposite is the case in the data this paper examines an increasing returns to scale model in which the economy is subject to belief shocks that affect the consumption euler equations rather than productivity under the assumption that there are no contingent claim markets on the realizations of sunspots the belief driven model can account for the consumption output anomaly even with a separable period utility function copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

an institution based view of global ipr history leveraging the use of history to advance international business research this article focuses on the crucial debate over intellectual property rights ipr between the united states and china ironically during the 19th century the united states was not a leading ipr advocate as it is today but was a leading ipr violator developing an institution based view of ipr history we identify three underlying theoretical mechanisms that help to explain ipr in the two countries path dependence long term processes and institutional transitions we argue that both the us refusal to protect foreign ipr in the 19th century and the current chinese lack of enthusiasm to meet us ipr demands embody rational responses to their respective situations however given long term processes with intensifying isomorphic pressures institutional transitions in favor of better ipr protection are quite possible finally going above and beyond these two countries we draw on the ipr history in over ten other countries to develop a more globally generalizable framework which in turn contributes to the key question of how history matters

foreign capital income inequality and welfare in a harris todaro model abstract the effects of an inflow of foreign capital on social welfare are analysed in a mobile capital harris todaro economy in which all income earned by foreign capital is repatriated and in which there is no tariff we consider the welfare measure of sen 1974 which incorporates the gini coefficient of the income distribution it is shown that an inflow of foreign capital worsens the income distribution and lowers social welfare according to sen s measure even in the absence of a tariff if the manufacturing sector is capital intensive relative to the agricultural sector in employment adjusted terms

the uppsala internationalization process model revisited from liability of foreignness to liability of outsidership the uppsala internationalization process model is revisited in the light of changes in business practices and theoretical advances that have been made since 1977 now the business environment is viewed as a web of relationships a network rather than as a neoclassical market with many independent suppliers and customers outsidership in relation to the relevant network more than psychic distance is the root of uncertainty the change mechanisms in the revised model are essentially the same as those in the original version although we add trust building and knowledge creation the latter to recognize the fact that new knowledge is developed in relationships

theoretical foundations of emerging economy business research in probing theoretically into central and eastern europe transactions resources and institutions we outlined the contributions of research in central and eastern europe cee to theoretical debates in business research in this retrospective we reflect upon the evolution of the field over the past decade with the fading impact of cee s distinct shared history we suggest that cee best be analyzed as emerging economies rather than as a distinct geographic entity emerging economy business research is converging on common themes and shared theoretical ideas while identifying critical variations that constrain generalizations among and beyond emerging economies this research thus highlights the need to develop a better understanding of the boundary conditions of scholarly theories of business knowledge over the past decade the institution based view has emerged from distinct intellectual traditions in institutional economics organizational theory and the analysis of business government bargaining research in these converging lines of theorizing places contextual variations at the center of explanations of business phenomena around the world we suggest that the institution based view is evolving toward a paradigm and offer suggestions on how to advance this research agenda further in particular by exploring how firms engage with different sets of potentially conflicting institutions at multiple levels and locations