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

dynamic asset allocation with event risk major events often trigger abrupt changes in stock prices and volatility we study the implications of jumps in prices and volatility on investment strategies using the event risk framework of duffie pan and singleton 2000 we provide analytical solutions to the optimal portfolio problem event risk dramatically affects the optimal strategy an investor facing event risk is less willing to take leveraged or short positions the investor acts as if some portion of his wealth may become illiquid and the optimal strategy blends both dynamic and buy and hold strategies jumps in prices and volatility both have important effects

the role of non economic endowments introduction to the special section on what we know and what we should know about international knowledge sourcing recent developments in the pattern of international knowledge sourcing have highlighted a new international division of labor in knowledge production which now is affecting emerging as well as advanced countries the source of this division of labor has been identified as residing in the changing economic endowments of these countries we extend this by suggesting that the new international allocation of knowledge related activities is related strongly to a country s non economic endowments our arguments provide context to the papers in this special section

cluster or capture manufacturing foreign direct investment external economies and agglomeration phelps n a cluster or capture manufacturing foreign direct investment external economies and agglomeration regional studies this paper reviews the nature and significance of external economies associated with multinational enterprise mne participation in the manufacturing industries of host economies it argues that the balance of forces of internalization and externalization is currently skewed towards the former and the interests of mnes rather than the latter and the interests of local and national communities and governments a stylized comparison of developmental and competition state interventions in relation to mnes and their foreign direct investment fdi suggests that in the absence of co ordinated interventions by governments there will commonly be a failure of the logic of internalization to permit localized processes of externalization indeed the experiences of the competition states of the uk and the usa highlight the potential for the partial internalization or capture of loc

new perspectives on the innovation strategies of multinational enterprises lessons for technology policy in europe abstract the aim of this contribution is to learn more about changes in the innovation strategies of large multinational corporations whereby one focus is on internationalization aspects as sources for our analyses we reviewed the main empirical studies and gathered information and insights from 21 corporations our results show firstly that the internationalization of research and technology is still characterized by triadization involving companies from the us the european union and japan secondly qualitative motives are increasingly driving r d location decisions like learning from technological excellence and lead markets and dynamic interactions within the value chain thirdly the process of internationalization in research and technology has been accompanied by an increasingly selective focus on a very few locations and the concentration of innovation activities on worldwide centers of excellence we conclude that these changes in the innovation strategies of large multinational companies put several topics on the agenda for technology policy in europe 1 a stronger focus on extra european collaboration and mobility 2 strengthening the attractiveness of the european union to foreign r d investment and 3 the absorptive capacities of r d organizations in europe 4 a stronger integration of different policy areas and of indirect policy measures 5 as well as the establishment of a transparent and global framework for policy coordination and priority setting worldwide

the economic modeling of strategy process clean models and dirty hands we argue that our model of learning in alliances khanna gulati and nohria 1998 is an economic model of strategy process we discuss implications of this view for the strategy process vs content debate for the appropriate testing of models of strategy process and for the role of economics in helping understand strategy process we propose that the clean models from economics and dirty hands of traditional process inquiries offer research designs that are complementary rather than incompatible hirsch michaels and friedman 1987 copyright 2000 john wiley sons ltd

theoretical relations between risk premiums and conditional variances many statistical models of time varying risk premiums including the autoregressive conditional heteroscedasticity arch in mean attempt to exploit a relation between risk premiums and conditional variances or covariances of asset returns we examine this relation in numerical versions of a dynamic asset pricing theory and show that it can be increasing decreasing flat or nonmonotonic its shape depends on both the preferences of the representative agent and the stochastic structure of the economy without additional structure the theory does not provide either a general foundation for arch in mean specifications or a simple interpretation of their parameters

patterns of internationalisation of corporate technology location vs home country advantages given the trends towards increasing globalisation of markets and of production the globalisation of technology remains a subject of considerable interest to analysts and policy makers in the 1990s this paper provides some new empirical observations for debate and discussion on the patterns of technological activities of large firms outside their home countries it is based on a systematic analysis of the us patenting activities of 220 of the most internationalised firms in terms of their technology in the 1990s although firms are active outside their home countries in the high technology fields such as computers pharmaceuticals telecommunications image and sound and materials quite a sizeable proportion of their foreign activities are concerned with process and machinery technologies moreover a comparison of the technological advantage of the company at home and the advantage of the location shows that in a large majority of cases firms tend to locate their technology abroad in their core areas where they are strong at home these results suggest that adapting products and processes and materials to suit foreign markets and providing technical support to off shore manufacturing plants remain major factors underlying the internationalisation of technology they are also consistent with the notion that firms are increasingly engaging in small scale activities to monitor and scan new technological developments in centres of excellence in foreign countries within their areas of existing strength however there is little evidence to suggest that even these most internationalised firms routinely go abroad to compensate for their weakness at home

resistance to reform status quo bias in the presence of individual specific uncertainty comment why do governments so often fail to adopt policies which economists consider to be efficiency enhancing our answer to this question relies on uncertainty regarding the distribution of gains and losses from reform we show that there is a bias towards the status quo and hence against efficiency enhancing reforms whenever some of the individual gainers and losers from reform cannot be identified beforehand there are reforms which once adopted will receive adequate political support but would have failed to carry the day ex ante the argument does not rely on risk aversion irrationality or hysteresis due to sunk costs jel d72 f13 why do governments so often fail to adopt policies that economists consider to be efficiency enhancing this is one of the fundamental questions of political economy the answer usually relies on what may be

alliances in international governmental organizations regional trade agreement formation and multinational enterprise regionalization strategy abstract drawing from political science alliance theories we explain why countries are likely to enter regional trade agreements we argue that the probability that this will happen is higher if the countries are allies in the same international governmental organizations igos as such alliances can help build trust and reduce political risk our results show that igo scope and also partner reliability and influence in the igo network play important roles our findings provide guidance to multinational enterprises in formulating regionalization strategies

bringing the world back into international business ib is a field constrained not only in time but also in economic model institutional country level and developmental variation and intellectual direction we need more a transformation of ib that involves a synthesis and integration of temporal spatial and developmental data from around the world

voting collective action and liberalisation in latin america the rise and fall of the hillinger paradox chile s economic and political evolution after the 1982 83 financial crisis has been offered as a model for the rest of latin america this paper interprets the 1973 military coup and national recovery during the 1980s and 1990s in terms of the presence and absence respectively of the hillinger 1971 paradox the paradox arises when democratic voting on platforms consisting of several issues leads to majority support for a platform itself consisting of issues none of which is supported by the majority in the early 1970s a particular expression of the hillinger paradox led chile to the verge of a bloody civil war and to a prolonged military dictatorship in the mid 1980s an important policy question that of differentiated industrial protection versus free trade was solved by a stable compromise in favour of the latter this avoided the hillinger paradox and eventually made electoral politics possible again

the determinants of asymmetric volatility volatility in equity markets is asymmetric contemporaneous return and conditional return volatility are negatively correlated in this article i develop an asymmetric volatility model where dividend growth and dividend volatility are the two state variables of the economy the model allows both the leverage effect and the volatility feedback effect the two popular explanations of asymmetry the model is estimated by the simulated method of moments i find that both the leverage effect and volatility feedback are important determinants of asymmetric volatility and volatility feedback is significant both statistically and economically the relationship between stock price and its volatility has long interested financial researchers empirically returns and conditional variance of next period s returns are negatively correlated that is negative positive returns are generally associated with upward downward revisions of the conditional volatility this empirical phenomenon is often referred to as asymmetric volatility in the literature see engle and ng 1993 zakoian 1994 and wu and xiao 1999 the presence of asymmetric volatility is most apparent during stock market crashes when a large decline in stock price is associated with a significant increase in market volatility formal econometric models have been developed by researchers to capture asymmetric volatility for example asymmetric arch models of nelson 1991 and glosten jagannathan and runkle 1993 have been found to significantly outperform their counterparts that do not accommodate the asymmetry moreover continuous time stochastic volatility models generally produce estimates of a negative correlation between return and return volatility bakshi cao and chen 1997 and bates 1997 for a review of the literature on asymmetric volatility see bekaert

r d offshoring and the productivity growth of european regions the recent increase in r d offshoring has raised fears that knowledge and competitiveness in advanced countries may be at risk of hollowing out at the same time economic research has stressed that this process is also likely to allow some reverse technology transfer and foster growth at home this paper addresses this issue by investigating the extent to which r d offshoring is associated with productivity dynamics of european regions we find that offshoring regions have higher productivity growth but this positive effect fades with the number of investment projects carried out abroad a large and positive correlation emerges between the extent of r d offshoring and the home region productivity growth supporting the idea that carrying out r d abroad strengthens european competitiveness

safe nests in global nets internationalization and appropriability of r d in wireless telecom this paper documents the case of the wireless telecom industry to bring new empirical evidence to the debate on the internationalization of research and development r d activities us patent statistics on the four industry leaders ericsson motorola nokia and qualcomm illustrate the growing trend of the internationalization of r d over the 1990s yet we show that the most critical r d projects related to the development of wireless standards remain homebound the paper then leverages qualitative data collected through interviews with informed managers to provide a fresh interpretation for the homeboundedness of critical industrial r d the stickiness of core r d projects to domestic locations is related not only to organizational inertia and the unripe maturation of subsidiaries as suggested by prior literature but particularly to the headquarters centralization of intellectual property ip management which offers a high level of appropriability of r d results the unequal distribution of appropriability across corporate r d networks is at the base of the formation of safe nests domestic r d centers that are sheltered from the forces of globalization because they offer a desirable setting for the exploitation of technologies deriving from a stronger coordination of inventive activities with the management of ip

the internationalisation of r d by multinationals a trade off between external and internal proximity overseas production is frequently seen as a force inducing the decentralization of rd it should on the contrary be completed by the implementation of relations of proximity internal to the firm which they refer to as internal proximity from this perspective the multinational firm that manages dispersed r d units is seen as facing a tension an organizational trade off between external proximity and internal proximity copyright 1999 by oxford university press

national scientific capacity and r d offshoring abstract this paper presents new evidence regarding the role of national scientific capacity in driving patterns of r d offshoring using a larger and more comprehensive dataset than has hitherto been used and applying it in a gravity model framework our results unambiguously support the importance of inventor country scientific capacity in attracting offshored r d as expected the home country s scientific capacity is also found to play a positive role we find that in fact on average firms source technology from less technologically advanced nations suggesting that firms offshore to access niche skills

the king and i monarchies and the performance of business groups large highly diversified business groups are a prominent feature of the industrial landscape of most emerging economies their competitiveness has been the topic of much debate in the international business literature this paper intervenes in this debate by utilising data from thailand and demonstrating that whereas business groups create value by filling institutional voids the political context of a country and the investment of powerful actors in particular groups can cause great variance across business groups performance copyright oxford university press

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

offshoring administrative and technical work new fields for understanding the global enterprise in this paper we introduce the journal of international business studies special issue on offshoring administrative and technical services ats in doing so we have attempted to locate the topic within the international business research tradition as well as suggest challenges and opportunities that the phenomenon offers to theoretical and empirical research in the field we examine the interplay of costs knowledge and innovation in the evolution of ats offshoring from modest beginnings to its current stature as an accepted business practice we suggest that understanding the continuing evolution of ats offshoring requires researchers to take into account not only the business imperative of cost saving but also a more complex set of underlying factors and potential outcomes we argue that the rapid growth of ats offshoring has brought about an accumulation of resources including financial flows knowledge infrastructure and human capital to create new platforms for knowledge creation and innovation low costs may characterize the initial conditions for offshoring but they also provide the basis for up market moves as firms increasingly pursue innovation based strategies we introduce the papers in the special issue as integral elements in our discussion contributing new ideas that stimulated our thinking and hopefully will do the same for others seeking to understand this emerging area of globalization and international managerial practice journal of international business studies 2009 40 887 900 doi 10 1057 jibs 2009 22

market versus technology drive in r d internationalization four different patterns of managing research and development research and development are subject to different location drivers the analysis of 1021 r d units each distinguished by its main orientation towards either research or development work reveals that research is concentrated in only five regions worldwide while development is more globally dispersed our research is based on 290 research interviews and database research in 81 technology intensive multinational companies we identify two principal location rationales access to markets and access to science as the principal determinants for four trends that lead to four archetypes of r d internationalization national treasure market driven technology driven and global their organizational evolution is characterized by four trends the model is illustrated with short cases of international r d organization at kubota schindler xerox and glaxo wellcome differences in rd separation seems to contradict this trend we argue that this need not be the case for there are good reasons to maintain some independence between research and development

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

applying methodological pluralism to wildlife and the economy abstract methodological pluralism is important when we study complex systems we aim to show that methodological pluralism yields additional insight by applying it to a specific question how are the economy and wildlife related in developed and developing countries we identify three possible ingredients of methodological pluralism 1 using both qualitative and quantitative information 2 tapping the potential of history to illuminate slow moving variables and 3 explicitly synthesizing either individually or in groups by thinking about the corresponding system we illustrate with examples

directly unproductive profit seeking dup activities this paper propses directly unproductive profit seeking dup activities as a general concept that embraces a wide range of recently analyzed economic activities including the subset of rent seeking activities considered by krueger it then proceeds to provide a synthesis and generalization of the welfare theoretic analysis of such activities by developing a fourfold categorization of cases depending on the levels of distortions before and after the dup activity thus a unification and overview of the subject are achieved

domestic alliance networks and regional strategies of mnes a structural embeddedness perspective we draw on a social network perspective to explain multinational enterprises mnes propensity to distribute their operations unevenly across various regions of the world we focus on how the positioning of mnes in their domestic network of strategic alliances affects their geographic scope i e whether they concentrate on their home region or expand beyond it we theorize that embeddedness in alliance networks constitutes a double edged sword to the geographic scope of mnes strong embeddedness in domestic alliance networks drives the development of location bound firm specific advantages fsas which may narrow down mnes geographic scope in contrast moderate embeddedness leads to more non location bound fsas which reduce liability of foreignness and hence motivate mnes to widen their geographical scope we thus predict a non linear relationship between domestic alliance network embeddedness and mne geographic scope furthermore the impact of the domestic alliance network on mne geographic scope hinges on the organizational ability to efficiently and effectively absorb resources stemming from the network we test our hypotheses using fdi data from 302 us mnes in the information and communication technology industry for the period of 2001 2008 and generally find robust support for the hypothesized relationships

shifting mne taxation from national to global profits a radical reform long overdue the current separate accounting taxation of corporations gives governments the right to tax the national incomes of firms operating within their borders however multinational and increasingly digital business models beg the question what is national taxable income we argue that a radical rethink of the corporate taxation moving away from a separate taxation of national corporate income to a taxation of global corporate income allocated via formula apportionment is long overdue global corporate income as a basis for taxation is supported both by recent theoretical developments and corroborating empirical evidence with the eu and emerging economies including china already considering its adoption nor is it new as we relate formula apportionment of global corporate income was used a century ago before commercial and political interests promoted separate accounting thereby providing both precedent and experience to inform its re adoption

the influence of market demand upon innovation a critical review of some recent empirical studies abstract a number of recent empirical studies of technical change at the level of the individual firm have concluded that market demand is the dominant influence upon the innovation process calling forth innovations in market economies the pace of innovation in the private sector heavily influences the growth of national output and productivity and these studies and their conclusions have therefore received much attention having been extensively quoted in discussions of appropriate government policy for the encouragement of innovation this paper reviews a number of these studies and concludes that their findings and the interpretations of their findings in the secondary literature are seriously flawed and in many cases invalid the proposition that market demand governs the innovation process is by no means conclusively demonstrated in these studies and they are therefore inadequate and inappropriate guides for the formulation of policy most of the studies examined employ a working definition of demand factors which is so broad as to embrace a range of possible influences upon innovation which should more properly be classified elsewhere the concept of demand utilized in these studies bears little resemblance to the more restrictive and precise definition of market demand found in economics in addition the phenomena analyzed in these studies are a very heterogeneous lot the studies do not address identical empirical questions and their findings are as a result neither uniform nor unambiguous both demand and supply side influences are crucial to understanding the innovation process and it is the exclusive preoccupation with only one set of these forces which is criticized in this paper some implications of the criticism for government policy toward innovation are discussed in the conclusion

history in perspective comment on jones and khanna bringing history back into international business commenting on jones and khanna we suggest that international business ib needs simultaneously maturing theory and on going rigorous empirical work we advocate careful data collection and develop solid theory based on the rich empirical information the difficulty in the process is the deciphering of causality and that is where historical studies play a significant role historical documents shed light on motivations and exogenous incidents historical studies and large scale data analyses can complement each other in revealing causality while path dependence constraints causal inferences using cross sectional data historical studies can identify differences and similarities in the paths of events across geography and time this advantage is particularly attractive in understanding the relationship between institutions and business behaviour which lies inside the proper domain of ib studies

how national institutions influence technology policies and firms knowledge building strategies a study of fuel cell innovation across industrialized countries abstract the central thesis advanced in this study is that firms knowledge building strategies can be usefully explained by the variations in their national institutional contexts using an inductive approach a study of fuel cell innovation across the u s france japan and norway demonstrates how countries socio political institutions characterized by their levels of statism and corporatism contribute to variations in technology policies pertaining to investment collaboration internationalization and diversity these technology policies are sources of advantages and disadvantages for firms with implications for their knowledge building strategies the proposed theoretical framework is especially relevant in the context of industry emergence and r d internationalization

an evolutionary approach to understanding international business activity the co evolution of mnes and the institutional environment this paper examines the co evolution of mne activities and institutions external and internal to the firm we develop a theoretical framework for this analysis that draws on the more recent writings of douglass north on institutions as a response to complex forms of uncertainty associated with the rise in global economic interconnectedness and of richard nelson on the co evolution of technology and institutions we link historical changes in the character of mne activities to changes in the institutional environment and highlight the scope for firm level creativity and institutional entrepreneurship that may lead to co evolution with the environment we argue that the main drivers for institutional entrepreneurship are now found in the increasing autonomy of mne subsidiaries thus mne agency derives from more decentralized forms of experimentation in international corporate networks which competence creating nodes of new initiatives can co evolve with local institutions unlike most other streams of related literature our approach connects patterns of institutional change in wider business systems with more micro processes of variety generation and experimentation within and across individual firms this form of co evolutionary analysis is increasingly important to understanding the interrelationships between mne activities and public policy

pro market institutions and global strategy the pendulum of pro market reforms and reversals we review the literature analyzing the impact of pro market institutions on firms global strategy we propose that the ideological tension between whether the government or the market should drive economic development results in a pendulum of pro market reforms and reversals that drive changes in firm strategy and performance much progress has been made in the analyses of pro market reforms and their impact on firms international strategies and performance however there is a need to further learn about four areas 1 the concept of pro market institutions in particular the variety of institutional dimensions the measures and the influence of informal institutions on firm strategies 2 the drivers of changes in pro market institutions especially firms influences and the co evolution of firm strategies and institutional changes 3 the implications of changes in pro market reforms for the interactions among integration diversification and internationalization strategies the causality chains connecting institutions and strategies and the reconfiguration of activities globally and 4 the non traditional moderators that alter the impact of pro market institutional dynamics on firms strategies such as country level political systems industry level competitor reactions and individual level managerial capabilities and perceptions

bringing history back into international business we argue that the field of international business should evolve its rhetoric from the relatively uncontroversial idea that history matters to exploring how it matters we discuss four conceptual channels through which history matters illustrating each with a major example first historical variation is at least a worthy complement to contemporary cross sectional variation in illuminating conceptual issues as an example we show that conclusions reached by the literature on contemporary emerging market business groups are remarkably similar to independently reached conclusions about a very similar organizational form that was ubiquitous in the age of empire second historical evidence avoids spurious labeling of some phenomena as new and by so doing may challenge current explanations of their determinants whereas some firm types today were also present earlier some types have disappeared some have appeared and some have disappeared and reappeared later third history can allow us to move beyond the oft recognized importance of issues of path dependence to explore the roots of penrosian resources we argue that the choices made by jardine s and swire s in asia today for example are an outgrowth of strategic choices first in evidence more than a century ago these would remain obscured absent an historical analysis fourth there are certain issues that are unaddressable except in the really long that is historical run exploring the causal relationship if any between foreign direct investment a staple of the international business literature and long run economic development provides one important example throughout we advocate embracing rigorous methods for analyzing small sample and qualitative data when conventional regression techniques do not apply that is we suggest that re embracing history in the mainstream is not tantamount to sacrificing methodological rigor

the globalisation of technology what remains of the product cycle model this paper reexamines two hypotheses associated with earlier versions of the product cycle model the first hypothesis that innovations are almost always located in the home country of the parent company is rejected on the basis of evidence drawn from one hundred years of u s patent office data the second hypothesis that the international dispersion of activity is led by technology leaders is historically valid however over the last twenty years technology leaders have been ahead instead in the globalization of technology that is in developing internal international networks to exploit the locationally differentiated potential of foreign centers of excellence c 1995 academic press inc copyright 1995 by oxford university press

corruption and development a review of issues in this paper we start with a discussion of some of the different denotations of the problem of corruption we then consider the ways in which the damaging consequences of corruption operate in a developing economy while not ignoring its possible redeeming features in some cases we pursue the question of why corruption is perceptibly so different in different societies and also persistent finally we examine the feasible policy issues that arise in this context

storytelling the internationalization of the multinational enterprise internationalization deals with expansion across space and time researchers have framed internationalization as market growth and expansion through foreign direct investment fdi we use narrative theory to frame a bigger richer picture using mikhail bakhtin s typology of nine space time conceptions and directed observations of mcdonald s corporation we show how multinational enterprises mnes create narratives of internationalization to mitigate the risks of fdi competing space time conceptions in consumers authors and societies stories interact with managerial narratives to affect international product and task environments we increase awareness of mnes storytelling by offering a typology of stakeholders stories across space and time

innovation in international business research a call for multiple paradigms scholars disagree on ib s domain and future prescription yet agree that research will engage topics dealing with dynamic change and hard to explain phenomena this paper builds on these views endorsing a multiparadigmatic perspective that complements ib s scientific and humanist paradigms with that of chaos theory the latter we argue is instrumental in studying the non normal patterns of nonlinear far from equilibrium systems we illustrate our ideas in the context of ngos

transnational firms and the changing organisation of innovative activities it is suggested that a transition is taking place towards new modes of organising transnational corporations innovative activities first different units of multinational firms including foreign based subsidiaries are increasingly involved in the generation use and transmission of knowledge secondly multinationals are developing external networks of relationships with local counterparts through which foreign affiliates gain access to external knowledge sources and application abilities as a result of this evolutionary process multinationals organisation is subject to both centripetal and centrifugal forces considerable efforts are then necessary to innovate coordination procedures and mechanisms in order to enhance the generation circulation and use of knowledge a number of empirical works are reviewed providing some evidence of the evolutionary process discussed in the paper 1 transnational companies as networks of innovators economists have long viewed innovation as being primarily generated by firms in their home countries classic contributions in the economics of multinational corporations have consolidated this view referring mainly to the us based multinationals vernon 1966 kindleberger 1969 and stopford and wells 1972 theorised a quasi colonial relationship between the parent company and foreign subsidiaries wherein the latter are in charge of replicating the former s activities abroad with strategic decisions including r d and innovation strategies being rigidly centralised particularly vernon emphasised that coordinating international innovative activities would be too costly owing to the difficulties of collecting and controlling relevant information across national borders host countries and foreign subsidiaries would then play a role almost exclusively in the adoption and diffusion of centrally created technology this view was supported mainly by us economists and based on us evidence from the early post world war ii period but it was very influential for the development of studies on the economics of transnational companies tncs and the internationalisation of

what are the most promising conduits for foreign knowledge inflows innovation networks in the chinese pharmaceutical industry we study innovation networks in emerging markets where foreign actors have been identified as key sources of knowledge spillovers as well as progenitors of industry clusters focusing on connectivity as a channel for international knowledge sourcing we widen our lens beyond mnes to include critical innovative actors such as research institutions i e universities and research centers we examine the geographic dispersion of co inventor networks generated by us patents associated with the chinese pharmaceutical industry previous research has highlighted the role of organizationally driven mne networks as enablers of foreign knowledge inflows to less developed countries however our results emphasize the critical role of individually motivated networks arising from advanced economy research institutions in connecting china to global knowledge networks

new concepts and trends in international r d organization abstract the globalization of markets the regionalization of technical and scientific expertise and the rapid change in technologies are forcing technology based companies to continuously adjust their r d organization our study of 33 companies reveals five different types of r d organization in multinational companies mnc we classified r d organizations according to the dispersion of r d activities and the degree of cooperation between individual r d units and identified the ethnocentric centralized the geocentric centralized the polycentric decentralized the r d hub and the integrated r d network organization five trends of organizational change among these forms of international r d organization were identified 1 stronger orientation of r d activities towards international markets and knowledge centers 2 establishment of tightly coordinated listening posts 3 strengthening and reinforcement of foreign r d sites 4 increased integration of decentralized r d units and 5 tighter coordination and recentralization of r d activities at fewer know how centers the search for the optimal balance between coordination and control is reflected by hybrid structures and intermediary configurations detected in some of the investigated companies since effective changes in behavioral orientation require considerable time successful quantum leaps in multinational r d organization are next to impossible

mutual productivity spillovers between foreign and local firms in china the existing literature treats advanced technology sourcing as the only cause of reverse productivity spillovers from local to foreign firms and implies that mutual spillovers between foreign and local firms can only happen in the developed world this paper argues that the diffusion of indigenous technology and local knowledge helps the productivity enhancement of multinationals so that there can be mutual spillovers even in a developing country the results from a large sample firm level econometric analysis and a comparative case study of seven companies in chinese manufacturing support this new argument as mutual spillovers are identified between local chinese firms and overseas chinese or oecd invested firms

historical origins of firm ownership structure the persistent effects of the african slave trade this paper uses evidence from the historical african slave trade to extend prior theory linking modern firm ownership structure to institutions and social capital we argue that institutions and so

canadian r d abroad management practices in the 1980s canadian industrial r d abroad has grown substantially in 1995 r d expenditures by canadian affiliates only in the united states represented some us 1 4 billion and employed some 6300 persons nearly 60 canadian owned and controlled corporations conduct overseas r d mostly in the us western europe japan and australia canadian corporations are performing commercial r d abroad in order to support their manufacturing subsidiaries and to come closer to customers and markets a secondary motivation is to hire skilled personnel monitor foreign technological development and increase the inflow of new ideas into the corporation they also chose friendly socio political environments from a regulatory point of view technology transfer and adaptation to local markets is also an important mission of the foreign r d establishment foreign r d activities of canadian firms are fairly decentralized and autonomous most of the foreign subsidiaries undertook r d abroad before they were acquired by the canadian corporation also the number of canadian managers was reduced and the r d projects were usually decided in the affiliate three main types of expatriate r d were found a majority of the subsidiaries were producing goods in the same or related industries as in canada such as machines transportation equipment or housing equipment a second group of firms were vertically integrated firms that conducted process research in canada and advanced materials and final products research abroad closer to the markets for this type of goods they were active in the chemical and metal industries only one truly global corporation was found with an international division of labor among its many foreign laboratories the degree of autonomy varied across the three types of expatriate r d units in the last 10 years the internationalization of industrial research and development has increased very rapidly foreign affiliated corporations operating in the united states represented some 9 3 of all company funded r d in that country in 1987 and close to 18 in 1995 dalton and serapio in this issue similarly foreign r d expenditures by us affiliated companies abroad have more than tripled canadian industrial r d abroad has grown at a similar pace it now includes over 100 research facilities owned by some 60 canadian corporations with subsidiaries in the united states western europe japan australia and several developing countries china brazil india mexico and turkey however little is known about the characteristics of this foreign r d missions managerial practices budgets or innovative activity this study is the first to present original data from a survey of these facilities complemented by secondary material from annual reports and the financial and technical press it follows a previous study of canadian patents abroad which concluded that diversification into related activities was the overseas w strategy of canadian multinational corporations mncs with foreign r d activities niosi j 1997 the globalization of

small firm internationalisation unveiled through phenomenography phenomenography is proposed here as a qualitative methodology for investigating how owner managers practise internationalisation in small firms and it is applied in an empirical study of internationalising owner managed small australian wineries the findings show a common internationalisation activity cycle but four qualitatively different ways in which these owner managers practise internationalisation we reveal that this variation in owner manager internationalisation practices is determined by their understandings of internationalisation which produce differences in the ways activities within their internationalisation activity cycle are orchestrated in particular phenomenography has enabled new insights into the multiplicity of firm internationalisation practices not able to be captured through other qualitative methodologies such as ethnography or semiotics as they are not designed to capture such variation based on our findings we propose an understanding based theory to explain the idiosyncratic nature of owner managed small firm internationalisation furthermore we suggest that phenomenography used independently or in conjunction with other qualitative methodologies also has potential to reveal the varying practices of internationalising large mnes by enabling an investigation of the collective or shared understanding of firm internationalisation within mnes finally we point out how phenomenography can be extended beyond firm internationalisation practices to investigate other topics within international business

foreign direct investment in industrial research in the pharmaceutical and electronics industries results from a survey of multinational firms abstract this paper examines motives location characteristics inter temporal characteristics and modes of entry for foreign direct investment fdi in research and development r d the paper is based on a detailed empirical survey of laboratory sites established by 32 large multinational companies domiciled in 5 countries findings indicate that fdi in r d has risen considerably over the last 40 years and that firms invest in r d sites abroad in order to augment their knowledge base or in order to exploit it the former motive leads to establishment of facilities primarily close to universities while the latter type leads to establishment of facilities close to existing manufacturing facilities and markets the paper also finds that greenfield investments are the dominant mode of entry and that firms establish multiple r d sites in their home countries before investing in such sites abroad

currency hedging for international portfolios this paper examines the benefits from currency hedging both for speculative and risk minimization motives in international bond and equity portfolios the riskreturn performances of globally diversified portfolios are compared with and without forward contracts over the period 1974 to 1990 inclusion of forward contracts results in statistically significant improvements in the performance of unconditional portfolios containing bonds conditional strategies are also implemented both in sample and out of sample and are shown to both significantly improve the risk return tradeoff of global portfolios and to outperform unconditional hedging strategies whether international portfolios should be hedged against currency risks is the subject of an active debate the theoretical side of the debate has been closely associated with two strands in the academic literature international asset pricing and optimal hedging in the futures markets in the international asset pricing model iapm of solnik 1974 optimal portfolios contain positions in forward contracts or equivalently foreign currency denominated bills these positions which can differ from the positions in foreign stocks have since been termed hedges black 1990 shows that under additional assumptions the hedge ratios should be identical for all investors regardless of their nationality universality and that investors should never fully hedge their foreign currency exposures similarly theoretical models from the futures literature produce demands for hedging instruments that contain both speculative and hedging components the empirical issue unanswered so far is whether adding forward contracts to international portfolios significantly improves the risk return profile of global investments empirical research has barely begun to respond to the challenges of theoretical models there exists little empirical evidence on either the relevance of black s universal hedge ratios or the optimality of hedge ratios less than one instead researchers have concentrated on the benefits of fully hedging exchange risk for example eun and resnick 1988 indicate that stock portfolios perform better when fully hedged but offer no statistical tests

a markov model of heteroskedasticity risk and learning in the stock market abstract we examine a variety of models in which the variance of a portfolio s excess return depends on a state variable generated by a first order markov process a model in which the state is known to economic agents is estimated it suggests that the mean excess return moves inversely with the level of risk we then estimate a model in which agents are uncertain of the state the estimates indicate that agents are consistently surprised by high variance periods so there is a negative correlation between movements in volatility and in excess returns

is knowledge power knowledge flows subsidiary power and rent seeking within mncs in recent years as multinational corporation mnc subsidiaries have become more closely linked to international networks their knowledge intensity has risen and some of their r d has gained a more creative role simultaneously and often connectedly many subsidiaries have acquired considerable strategic independence in all aspects of their operations and therefore are able to exercise considerable intra firm bargaining power to influence the distribution of the firm s resources in this context we suggest that intra mnc knowledge flows are a key determinant of subsidiary bargaining power we argue that subsidiary managers can exploit such power to pursue their own ends such rent seeking behavior is implicit in much of the literature on managerialism but our analysis suggests that such behavior can now occur in headquarters subsidiary and subsidiary subsidiary relations thus subsidiary strategic independence designed to enhance the competitiveness of outputs market knowledge and inputs asset seeking and learning can be corroded when the pursuit of subsidiary objectives encourages rent seeking empirical analysis of a sample of high technology subsidiaries in the uk provides strong support for the theory we examine several avenues whereby the incentives of units within the mnc can be aligned

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

broken chain agoa and foreign direct investment in the kenyan clothing industry drawing upon survey and interview research covering 23 of an estimated total of 35 clothing manufacturing establishments operating in kenya as well as interviews with the policy community this paper examines the local economic development impacts associated with the recent agoa prompted re birth of the clothing industry in kenya just after its recent high watermark in 2003 it provides evidence of the characteristics of these manufacturing establishments as well as evidence of the multiple and interconnected failures on the part of government parent companies agents and customers to promote the longer term sustainability of the industry as such it provides further case study evidence of africa s uniquely problematic incorporation into global commodity chains

business groups and social welfare in emerging markets existing evidence and unanswered questions abstract this paper reviews existing studies of the role of emerging market business groups a ubiquitous but poorly understood organizational form i first suggest that understanding the definition of business groups is itself an interesting albeit under studied research issue i then argue that the existing evidence suggests that the performance effects of group affiliation are large and generally positive there is substantial evidence that part of this is due to welfare enhancing functions originating in the idea that groups substitute for missing outside institutions but that part is also due to welfare reducing minority shareholder exploitation evidence is lacking on the extent to which groups facilitate rent seeking or the exercise of market power evidence is also lacking on the extent to which groups hamper the future development of markets the paper identifies areas where research is needed before current competition policy experiments in countries like china india and korea can be evaluated

stock returns and volatility most asset pricing models postulate a positive relationship between a stock portfolio s expected returns and risk which is often modeled by the variance of the asset price this paper uses garch in mean models to examine the relationship between mean returns on a stock portfolio and its conditional variance or standard deviation after estimating a variety of models from daily and monthly portfolio return data we conclude that any relationship between mean returns and own variance or standard deviation is weak the results suggest that investors consider some other risk measure to be more important than the variance of portfolio returns

how much does subnational region matter to foreign subsidiary performance evidence from fortune global 500 corporations investment in china what explains the heterogeneity of foreign subsidiary performance previous studies have emphasized the importance of industry corporate parent and home country effects on the variation of foreign subsidiary performance building on recent international business and economic geography research this study examines the extent to which subnational region effects can also explain such performance variation we empirically decompose the variance of the performance of fortune global 500 corporations subsidiaries in china during 1998 2006 results show that not only are subnational region effects statistically significant in explaining the variation of subsidiary performance but their interactions with industry corporate parent and home country effects are also significant and economically important we further show that subnational region effects tend to be stronger in the period prior to china s wto accession and in the country s less developed subnational regions our findings highlight the importance of considering both the direct and indirect roles of subnational region in shaping firms strategy and performance in international business research

research methods in international business the challenge of complexity international business ib research is designed to explore and explain the inherent complexity of international business which arises from the multiplicity of entities multiplexity of interactions and dynamism of the global economic system to analyze this complexity ib scholars have developed four research lenses difference distance diversity and disparity these four lenses on complexity have created not only unique research opportunities for ib scholarship but also unique research methodological challenges we therefore view complexity as the underlying cause of the unique methodological challenges facing international business research we offer several recommendations to help ib scholars embrace this complexity and conduct reliable interesting and practically relevant research

offshoring of r d looking abroad to improve innovation performance the offshoring of knowledge services has become a phenomenon of increasing importance for firms but many of its implications are yet to be discussed thoroughly this paper analyzes whether r d offshoring contributes to enhancing firms innovation capabilities specifically the study distinguishes between two governance models of offshoring captive offshoring and offshore outsourcing and two types of innovation outcomes product and process innovations we suggest that r d offshoring has different impacts depending on the innovation results and governance models considered the study empirically tests these relationships using the spanish technological innovation panel this survey contains information on a large sample of firms from diverse sectors for the period 2004 2007 the empirical findings allow us confirm our hypotheses and highlight the strategic importance of r d offshoring the empirical evidence reveals a positive relation between offshoring and innovation performance with a greater effect on product than on process innovations the results for different governance models show that captive offshoring has a greater effect on innovation outcomes than offshore outsourcing these findings lead us to conclude that firms that look overseas can benefit from location specific and specialization advantages to improve innovation performance

navigating identity duality in multinational subsidiaries a paradox lens on identity claims at hindustan unilever 1959 2015 multinational subsidiaries do not merely seek legitimacy within their dual institutional contexts they also strive to articulate an organizational identity by drawing on institutional resources embedded in these dual contexts we draw attention to the subsidiary s identity duality and conceptualize it as a paradox i e as the juxtaposition of the contradictory interdependent and persistent characteristics of the global and the local in the subsidiary s identity using 57 years of archival data from hindustan unilever the indian subsidiary of anglo dutch multinational unilever we observe changing patterns in the articulation of identity claims by subsidiary leaders and develop a process model of how subsidiaries navigate identity duality over time we find that subsidiary leaders may use two modes of organizational identity work for this purpose logic ordering the articulation of identity claims that respond to contradictory institutional demands by privileging one and subordinating the other and logic bridging the articulation of identity claims that respond to contradictory institutional demands by effecting a janusian integration of the said demands over time and employing these modes of identity work leaders at hindustan unilever sustained a dynamic balance between the dual cores of the subsidiary s espoused identity

formalizing internationalization in the eclectic paradigm the paper presents a simple general equilibrium model that formalizes internationalization in the eclectic paradigm based on a reconfiguration of concepts taken from the new classical economics literature the model enables us to address simultaneously the role of ownership location and internalization advantages and their interaction in the emergence of the multinational enterprise mne through a set of mathematical inequalities our model offers a bridge between the detached perceptions of the mne often held by international trade economists and international business scholars and makes specific aspects of the eclectic paradigm empirically testable

internationalization trajectories a cross country comparison are large chinese and indian companies different this paper explores whether the internationalization trajectories patterns over time in the level pace variability and temporal concentration of international expansion of large firms from china and india are fundamentally different from those of developed country firms a longitudinal cross country comparative study of 256 large firms for the 1990 2004 period shows that although internationalization trajectories of large and leading chinese and indian firms are indeed different there are also considerable similarities between established developed country firms and the new firms from emerging markets not in the least because they often interact within the same sector

knowledge and competitive advantage the coevolution of firms technology and national institutions this issue of jibs offers reviews of two books that analyse the dynamic interaction between the business environments and business strategies in very different ways the institutional underpinnings for business strategies are a major research topic for comparative management aiming to explain why in different contexts firms pursue different strategies and with different implications for performance j peter murman in knowledge and competitive advantage takes a historical perspective focusing on the co evolutionary processes between national innovation systems business strategies and performance this books thus adds to the industry level longitudinal research reviewed in jibs no 4 2003 tom murtha et al s managing new industry creation and david mckendrick et al s from silicon valley to singapore

the impact of technological innovation on international trade patterns the evidence reconsidered abstract this paper presents some new evidence in relation to the role of technical change in particular industrial innovation on the international competitiveness of the various oecd countries its originality consists primarily of a using a technology output indicator to measure technological performance b presenting and comparing various measures of trade and technological performance for each individual oecd country with the exception of iceland c analysing at a relatively high level of product industry disaggregation the relationship between export performance and technological performance at the same time the very limited scope of the paper has to be emphasized a the analysis is purely static all the evidence presented relates to one year 1977 b most of the results obtained are preliminary and should be further substantiated by more detailed empirical and theoretical research c as a consequence little attention has been paid to policy implications which it was felt could only be discussed properly in a later stage the paper consists of four sections a brief review of the state of the art section 1 a discussion on definitions of technology intensity section 2 the development of the best technology output indicator section 3 and the empirical analysis itself section 4 the following most important results emerge from these various sections a there are serious shortcomings in using average technology intensity as bench mark for classifying products or industries in technology intensive or nontechnology intensive categories b there is a substantial difference between technology intensity as measured on the basis of a technology input proxy rd c yet as between countries the most traditional output and input indicators the number of patents granted and the amount spent on rd d foreign patenting in particular foreign patenting in the united states figs 1 and 2 section 3 is a more reliable technology output proxy than domestic patenting e in terms of technological comparative advantage as opposed to technology intensity it is the small oecd countries as opposed to the large ones which seem to base their trade comparative advantage on technological comparative performance table 7 section 4 1 f at the individual industry level it is found that i for most technology intensive industries defined however in a less restrictive way than us r d intensities a close relation exists between technological performance and export performance and ii that as compared to other country specific resource variables technological performance is the most important trade explanatory variable its elasticity increasing with the technology intensity of industries tables 11 and 12 section 4 2 space constraints prevented us from presenting the data in relation to the inter industry and inter country analysis these can however be obtained from the author

the drivers of foreign direct investment into research and development an empirical investigation this paper examines the determinants of foreign direct investment fdi in research and development laboratories by 32 multinational enterprises in the pharmaceutical and electronics industries the paper applies a dichotomous set of motives for fdi results from an econometric analysis of 136 laboratory investments show that relative market size and relative strength of a country s science base determine whether fdi in research and development is carried out in order to exploit existing firm specific advantages or in order to build up new firm specific advantages this holds true in similar form for japanese european and u s firms and across the two industries

how important is intertemporal risk for asset allocation how important is merton s intertemporal risk for asset allocation decisions to address this question we jointly estimate and test a conditional asset pricing model which includes long term interest rate risk as a potentially priced factor for four broad classes of assets large stocks small stocks long term treasury bonds and corporate bonds we find that the premium for long bond risk is the main component of the risk premiums of treasury bond and corporate bond portfolios while it represents a small fraction of total risk premiums for equities our results suggest that investors perceive stocks and especially small stocks as hedges against variations in the investment opportunity set since these four asset classes represent some of the most important for investors we proceed to use our estimates to compute the optimal asset allocations for investors who optimize with or without taking into account the intertemporal risk we provide a set of measures to investigate the importance of this risk we find that at average market volatility levels investors can earn annual premiums between 3 6 during expansions and 5 8 during recessions for bearing intertemporal risk alone these results underscore the importance of explicitly considering intertemporal risk in asset allocation decisions especially during down markets and business recessions

the persistence of innovative activities abstract this paper examines the persistence of innovative activities at the firm level in a comparative perspective a new data set is used composed of six panel data one for each of the following countries france germany italy uk japan and the usa for each country we use data on patent applications to the european patent office in the period 1978 1993 by 1200 1400 manufacturing firms using a transition probability matrix tpm approach we find evidence for the existence of persistence in innovative activities although it is not very high in the aggregate and it declines as time goes by however both great innovators and non innovators have a high probability to remain in their state and persistent innovators originate a disproportionate share of innovative activities in this sense persistence in innovative activities is quite strong these tendencies apply to all countries considered here although clear country specific properties are observed moreover there is heterogeneity also across industrial and size classification intersectoral differences are invariant across countries suggesting that persistence is at least partly a technology specific variable persistence tends to increase with firm size but the relationship between firms size and persistence is strongly country specific and it is not a simple one

internalization in practice early foreign direct investments in malaysian tin mining this paper looks at the historical record of early foreign direct investment in malaysian tin mining and draws its implications for the theory of the mne

organizational innovation in the multinational enterprise internalization theory and business history this article engages in a methodological experiment by using historical evidence to challenge a common misperception about internalization theory the theory has often been criticized for maintaining that it assumes a hierarchically organized mne based on knowledge flowing from the home country this is not an accurate description of how global firms operate in recent decades but this article shows it has never been true historically using longitudinal data on individual firms from the nineteenth century onwards it reveals evidence of how entrepreneurs and firms with multinational activity faced with market imperfections changed the design of their headquarters and their organizational structures

how do regimes affect asset allocation international equity returns are characterized by episodes of high volatility and unusually high correlations coinciding with bear markets this article provides models of asset returns that match

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

innovation organizational capabilities and the born global firm we investigate born global firms as early adopters of internationalization that is companies that expand into foreign markets and exhibit international business prowess and superior performance from or near their founding our explication highlights the critical role of innovative culture as well as knowledge and capabilities in this unique breed of international entrepreneurial firm case studies are analyzed to better understand the early internationalization phenomenon and reveal key orientations and strategies that engender international success among these innovative firms case findings are then validated in a survey based study despite the scarce resources typical of young firms our findings reveal that born global firms leverage a distinctive mix of orientations and strategies that allow them to succeed in diverse international markets findings have important implications for the internationalization of contemporary firms

modeling asymmetric comovements of asset returns existing time varying covariance models usually impose strong restrictions on how past shocks affect the forecasted covariance matrix in this article we compare the restrictions imposed by the four most popular multivariate garch models and introduce a set of robust conditional moment tests to detect misspecification we demonstrate that the choice of a multivariate volatility model can lead to substantially different conclusions in any application that involves forecasting dynamic covariance matrices like estimating the optimal hedge ratio or deriving the risk minimizing portfolio we therefore introduce a general model which nests these four models and their natural asymmetric extensions the new model is applied to study the dynamic relation between large and small firm returns article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

conditional coskewness in stock and bond markets time series evidence in the context of a three moment intertemporal capital asset pricing model specification we characterize conditional coskewness between stock and bond excess returns using a bivariate regime switching model we find that both conditional u s stock coskewness the relation between stock return and bond volatility and bond coskewness the relation between bond return and stock volatility command statistically and economically significant negative ex ante risk premiums the impacts of stock and bond coskewness on the conditional stock and bond premiums are quite robust to various model specifications and various sample periods and also hold in another major developed country the united kingdom the findings also carry important implications for portfolio management