expatriate assignment adjustment and effectiveness an empirical examination of the big picture this study extends the international literature by empirically testing a model of expatriate adjustment that examines the relationships between organizational antecedents i e reasons for assignment a more comprehensive set of adjustment behaviors self reported performance and subordinate rated managerial effectiveness using data from 194 expatriate managers and 505 subordinates working in the multinational hotel industry structural equations modeling results supported the hypothesized model the conceptual and empirical contributions of this study as well as the managerial implications are discussed

price discovery and learning during the preopening period in the paris bourse before the opening of the paris bourse traders place orders and indicative prices are set this offers a laboratory to study empirically the t tonnement process through which markets discover equilibrium prices since preopening orders can be revised or canceled before the opening indicative prices could be noise we test this against the hypothesis that preopening prices reflect learning early in the preopening the noise hypothesis is not rejected as the opening gets closer the informational content and efficiency of prices increase and the learning hypothesis is not rejected we also propose a gmm based estimate of the speed of learning

the influence of parent control structure on parent conflict in vietnamese international joint ventures an organizational justice based contingency approach there has been significant interest in understanding how the distribution of parental control over international joint ventures ijv influences ijv outcomes e g parent conflict survival performance yet the accumulation of research on the relationship between control structure and ijv outcomes has been somewhat inconclusive and even contradictory we contribute to this research stream by developing an organizational justice based contingency model relating parental control structure to parent conflict we suggest that the level of conflict between ijv parents will depend on the consistencies between the control structure and parents contribution of proprietary resources and between control structure and the parents abilities to effectively monitor operations our analysis of vietnamese joint ventures provides some support for our model and suggests that the relationship between parent control structure and ijv outcomes is perhaps more complex than previously thought

a framework for integrated risk management in international business treatments of risk in the international management literature largely focus on particular uncertainties to the exclusion of other interrelated uncertainties this paper develops a framework for categorizing the uncertainties faced by firms operating internationally and outlines both financial and strategic corporate risk management responses

the impact of reduced pre trade transparency regimes on market quality this paper studies the effects of pre trade quote transparency on spread price discovery and liquidity in an artificial limit order market with heterogeneous trading rules our agent based numerical experiments suggest that full quote transparency incurs substantial transaction costs to traders and dampens trading activity in an order driven market our finding reveals that exogenous restriction of displayed depth up to several best quotes does not benefit market performance on the contrary endogenous restriction of displayed quote depth by means of iceberg orders improves market quality in multiple dimensions it reduces average transaction costs maintains higher liquidity and moderate volatility balances the limit order book and enhances price discovery

probing theoretically into central and eastern europe transactions resources and institutions since the 1990s central and eastern europe cee has provided unique societal quasi experiments which represent opportunities to test the applicability of existing theories in international business and management studies and to develop new ones specifically three lines of theorising have been advanced 1 organisational economics theories 2 resource based theories and 3 institutional theories for each of these theories we discuss how they contribute to the understanding of key issues such as entry strategies of foreign investors restructuring strategies of local incumbents and entry and growth strategies of entrepreneurs on this basis we assess how cee research has influenced the overall trajectories of theory development cee research has in particular highlighted the importance of contextual influences such as institutions thus scholars have aimed at incorporating institutions into theories such as organisational economics theories and resource based theories and advancing an institution based view of business strategy as a complementary perspective we outline how future research in cee and other emerging economies may advance this research agenda further

host country policies and mne management control in ijvs evidence from china in international joint ventures ijvs partner firms exert three types of management control output process and social since management control critically influences ijv success it is essential to understand what factors drive the development of the control system prior studies have focused mainly on ijvs internal conditions and have largely neglected external institutional influences on ijv control in this study we explore how host country policies affect mne partners control over their ijvs using a sample of ijvs in china we find that mne partners tend to exercise less output and process control when minority equity restriction is present greater process control when they receive government incentives and less social control when they are required to partner with state owned enterprises in contrast the results of a post hoc analysis show that local partners control activities are not significantly influenced by these policies our findings provide new insights into ijv management by demonstrating the impacts of regulatory institutions on partners control activities

tax transfer policies and the voluntary provision of public goods abstract the purpose of this paper is twofold first it extends previous models of non cooperative private funding of pure public goods by allowing both for distortionary taxation of private goods and for subsidies based on contributions to the public goods second it clarifies the type of behavioral and informational assumptions which are needed to insure neutrality of both lump sum and distortionary policies the analysis is developed in the context of fiscal federalism

the second dividend and the demographic structure the demographic structure of a country influences economic activity the second dividend modifies growth accordingly in general equilibrium the second dividend and the demographic structure are interrelated this paper aims at assessing empirically the second dividend in a dynamic empirical and intertemporal setting that allows for measuring its impact on growth its intergenerational redistributive effects and its interaction with the demographic structure the paper uses a general equilibrium model with overlapping generations an energy module and a public finance module that distinguishes between non ageing related public spending and a pension regime policy scenarios compare the consequences of different scenarios of recycling a carbon tax through lower proportional income taxes rather than higher public lump sum expenditures they are computed for two countries with different demographics france and germany results suggest that the magnitude of the second dividend is significantly related with the demographic structure the more concentrated the demographic structure on cohorts with higher income and saving rate the stronger the effect on capital supply of the second dividend the second dividend weighs on the welfare of relatively aged working cohorts it fosters the wellbeing of young working cohorts and of future generations the more concentrated the demographic structure on aged working cohorts the higher the intergenerational redistributive effects of the second dividend

who benefits from an open limit order book the nyse opened the limit order book to off exchange traders during trading hours we address the welfare implications of this change in market structure we model a market similar to the auction that the exchange uses to open the trading day we consider two different environments in the first only the specialist sees the limit order book while in the second the information in the book is available to all traders we compare equilibria and find that traders who demand liquidity are better off when the book is open while liquidity suppliers are better off when the book is closed

national culture and expatriate deployment we hypothesize that expatriate deployment is a control function predicted by home country culture dimensions with transaction cost and agency repercussions rather than culture in the aggregate this departure from the traditional conceptualization and measurement of cultural impact also yields a hypothesized asymmetrical effect which is tested for a multi country sample of 236 multinational subsidiaries using multiple measures of national culture hypotheses are supported with assertiveness and power distance confirmed as prime predictors of expatriate deployment

vertical integration in the u s auto industry a note on the influence of transaction specific assets abstract recent refinements in the theory of the firm suggest that organization form may be sensitive not only to the degree to which assets are specific to a transaction but also to the type of capital employed this paper reports evidence regarding the relative influence of transaction specific investments in physical and human capital on the pattern of vertical integration using new data obtained directly from u s auto manufacturers the results support the proposition that investments in specialized technical know how have a stronger influence than those in specialized physical capital on the decision to integrate production within the firm

the dynamics of the liability of foreignness a global study of survival in financial services we study the impact of foreignness on survival in interbank currency trading worldwide over the period 1974 93 in particular we develop hypotheses on the behavior of the liability of foreignness over time and on the consequences of evolving sources of firm level competitive advantage on this liability we test these hypotheses on the population of 2667 market making trading rooms located in 47 countries worldwide that either existed in 1974 or entered the industry between 1974 and 1993 the results show that there is a liability of foreignness and that it changes over time further strategic and organizational factors such as the adoption of technology by these firms and their mode of internal control significantly influenced survival as did location related factors such as the intensity of local and foreign competition 1997 by john wiley sons ltd

learning and protection of proprietary assets in strategic alliances building relational capital one of the main reasons that firms participate in alliances is to learn know how and capabilities from their alliance partners at the same time firms want to protect themselves from the opportunistic behavior of their partner to retain their own core proprietary assets most research has generally viewed the achievement of these objectives as mutually exclusive in contrast we provide empirical evidence using large sample survey data to show that when firms build relational capital in conjunction with an integrative approach to managing conflict they are able to achieve both objectives simultaneously relational capital based on mutual trust and interaction at the individual level between alliance partners creates a basis for learning and know how transfer across the exchange interface at the same time it curbs opportunistic behavior of alliance partners thus preventing the leakage of critical know how between them copyright 2000 john wiley sons ltd

price discovery in auction markets a look inside the black box opening mechanisms play a crucial role in information aggregation following the overnight nontrading period this article examines the process of price discovery at the new yorkstockexchange single price opening auction we develop a theoretical model to explain the determinants of the opening price and test the model using order level data we show that the presence of designated dealers facilitates price discovery relative to a fully automated call auction market this is consistent with specialists extracting information from observing the evolution of the limit order book in addition the specialist s opening trade reflects noninformational factors such as price stabilization requirements

manufacturer overseas distributor relations and export performance the export arrangement which makes use of overseas distributors is examined in this article although this method is important for many manufacturers operating in foreign markets there are reservations about the performance levels that are achieved under such arrangements it is suggested that there is an important link between the performance level achieved and the very nature of the relationship that exists between the manufacturer and overseas distributor the authors assert also that the nature of the manufacturer overseas distributor relationship is associated with certain characteristics of the participating companies namely their stake in the relationship their experience and their uncertainty surrounding the relationship these propositions are tested and largely corroborated through analysis of data collected from 41 companies in canada and the uk

institutional differences and the development of entrepreneurial ventures a comparison of the venture capital industries in latin america and asia this paper examines how differences in distinct institutional clusters of countries impact on the vital entrepreneurial activity of venture capital and how individuals organizations and their collective action in turn shape those institutions the focus on venture capital offers researchers the opportunity to view an industry that comes from a common root with strong and consistent traditions in which to examine how the differing institutional settings impact on behaviors in different markets and how the institutions themselves may change in these settings we also focus on emerging economies since such economies offer a natural laboratory to study the impact of institutional change specifically this paper employs an institutional theory perspective to examine venture capital in two regions of the world that form institutional clusters of countries latin america and asia it is found that the venture capital industry exhibits a strong consistency across many dimensions yet institutions in these two distinct settings result in significant differences in industry practice therefore this research is able to contribute to both empirical and theoretical understanding of emerging economies institutions in those environments and venture capital

the effect of national context on perceptions of risk a comparison of planned versus free market managers a model is developed to explain the effect of national context on risk related decisions an essential feature of risk related decisions is substantial uncertainty or inadequate information as well as significant consequences regarding future outcomes we argue that differences in information flows and consequences across national institutional environments affect the perceived uncertainty of decision situations for this reason the institutional environment in which managers reside should play a fundamental and systematic role in influencing their perceptions of risk we test our model on managers from two environments that contrast in terms of information and consequences related to risk a free market economy the u s and a centrally planned economy the czech republic in 1992 our results indicate that the institutional environment does indeed play a strong and systematic role in explaining managers risk related decisions thus national environment appears to be an important contextual condition to which the propensity to take risks is sensitive

island goes dark transparency fragmentation and regulation responding to a september 2002 regulatory enforcement the island electronic communications network stopped displaying its limit order book in the three most active exchange traded funds etfs where it was the dominant venue island s share of trading activity and price discovery fell fragmenting the market etf prices adjust more slowly when island goes dark and there is substantial price discovery movement from etfs to the futures market trading costs increase on island and decrease off island with higher trading costs overall when island later redisplays its orders market quality improves with transparency and the reduction in fragmentation both playing important roles copyright 2005 oxford university press

subscribing to transparency abstract the paper empirically explores how more trade transparency affects market liquidity the analysis takes advantage of a unique setting in which the shanghai stock exchange offered more trade transparency to market participants subscribing to a new software package first the results show that the additional data disclosure increased trading activity but also increased transactions costs through wider bid ask spreads thus in contrast to popular policy belief the paper finds that more transparency need not improve market liquidity second the paper finds a particularly strong immediate liquidity impact accompanied by altered trading behavior which suggests a significant impact on institutional traders subscribing relatively early lastly since the effective level of market transparency is bound to depend on how many traders are subscribing to the data the study can empirically establish the functional form between market wide transparency and liquidity the relationship is non monotonic which can explain the lack of consensus in the existing literature where each empirical study is naturally confined to specific parts of the transparency domain

do government subsidies increase the private supply of public goods we study three different models in which public goods are supplied by private contributions in one of these models tax financed government subsidies to private contributions will definitely increase the equilibrium supply of public goods in the other two models government subsidies are neutralized by offsetting changes in private contributions we explain why it is that these models lead to opposite conclusions and we argue on the basis of our first model that a government that wants to use taxes and subsidies to increase total provision of public goods will be able to do so indeed our model yields a surprisingly decisive comparative statics result if public goods and private goods are both normal goods then an increase in the subsidy rate will necessarily increase the equilibrium supply of public goods

spatial geography and control in foreign acquisitions this article examines how spatial geography influences firms choice of control in cross border acquisitions cbas building our arguments on the information asymmetry in cbas we argue that geographic distance affects adverse selection and moral hazard problems in cbas geographic distance hinders acquirers efforts to assess the true value of the target firm prompting them to opt for a partial control at the same time geographic distance hampers acquirers ability to manage contractual relationships and integrate target firms prompting them to opt for a full control we argue that the cost and benefit trade off of full vs partial ownership varies at different levels of geographic distance accordingly we propose a curvilinear u shaped relationship between geographic distance and equity ownership this relationship is contingent on acquisition relatedness and the listing status of the acquirer public vs private as the geographic distance between acquirer and target increases acquirers assume higher equity stakes in related acquisitions than in unrelated acquisitions at greater geographic distances public firms acquire more equity ownership than do private firms findings from 10 181 deals across 52 acquiring and 61 target countries provide robust support for these arguments

the role of expatriates in the management of interdependence complexity and risk in multinational corporations a multilevel analysis of environmental country and organizational affiliate factors is used to explain the differential utilization rates of u s nationals in overseas professional positions of a major u s bank with 84 branches in 43 countries the research suggests that to the extent that the affiliates of a multinational corporation operate in environments with differing levels of political risk cultural distance and competition and have operations with different levels of complexity and interdependence a single staffing policy may be inappropriate

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

the evolutionary view of the mne and the future of internalization theory kogut and zander s 1993 jibs article which developed an evolutionary perspective on the multinational enterprise mne has had three critical impacts on mne research first it has stimulated scholars to conduct more eclectic empirical analyses which should include both transaction cost related parameters and broader learning competence related variables second it has usefully argued that the rigorous study of mne behavior does not need to reply upon the williamsonian behavioral assumption of opportunism third it has implicitly suggested a new path to be followed by internalization theory scholars in order to remain relevant to the field of international business the transaction cost economics lens adopted in internalization theory clearly remains critical to any analysis of mne strategy with impacts on the boundaries of the firm in addition the co evolution of the mne s governance structure and its technological competences determines present and future strategy choices here both transaction cost considerations and learning effects influence strategy selection

the impact of the new wave of financial regulation for european energy markets abstract as the financial and physical markets for energy have increasingly become intertwined energy trade is also covered by financial legislation the european commission wishes to strengthen this financial regulation of energy trade it has put forward a set of regulatory proposals aimed at stabilizing financial markets and limiting volatility of energy prices the most noteworthy are emir mad remit and the revised mifid key elements are transparency new trading venues central clearing obligations and mandatory transaction reporting this article evaluates the likely outcomes for energy markets given the new incentives for market parties it argues that although there is no ground to exempt particular energy market participants such as energy companies from financial legislation increased regulation will not necessarily bring about the effects the commission desires the causal link between derivatives trading and volatility of energy prices is not known precisely and many of the economic effects of the proposed legislation are theoretically and empirically ambiguous moreover potentially conflicting instruments and objectives risk policy inconsistency

offshore sourcing reaction maturation and consolidation of u s multinationals the authors conducted a quasi longitudinal investigation of u s multinationals r d manufacturing offshore sourcing strategies and resultant global market performance implications utilizing comprehensive data collected by the 1977 1982 and 1989 benchmark surveys of u s direct investment abroad hypotheses were tested in a path analytic framework despite increased competition at home and abroad causing their global market share positions to weaken in recent years u s multinationals have maintained and even may have improved their global consolidated profitability levels by skillfully exploiting their technological prowess through technology transfer and off shore sourcing rapidly changing roles of u s parent firms and their foreign affiliates in technology development and global sourcing relationships portend a maturing yet arduous shift toward a global rationalization

altruism voluntary contributions and neutrality the case of environmental quality this paper develops an intertemporal model wherein production generates pollution which is viewed by consumers as a public bad there are two types of consumer those who are altruistic and leave bequests to their children and those who are pure life cyclers both types voluntarily contribute to the quality of environment through environmental groups it appears that if bequests by altruists and voluntary contributions by all are positive redistribution is neutral which does not mean that pollution abatement and capital accumulation are optimal to achieve optimality one needs a tax on inheritance and a differential subsidy on all consumer contributions

informed speculation with imperfect competition competitive rational expectations models have the unsatisfactory property dubbed the schizophrenia problem by hellwig that each trader takes the equilibrium price as given despite the fact that he influences that price an examination of information aggregation in a non competitive rational expectations model using a nash equilibrium in demand functions shows that the schizophrenia problem is avoided by having each trader take into account the effect his demand has on the equilibrium price given a distribution of private information across traders prices reveal less information than in the competition equilibrium and prices no longer become fully informative in the limit as noise trading vanishes or as traders become risk neutral with small traders the model may become one of monopolistic competition not perfect competition in contrast to the competitive model a reasonable model of endogenous acquisition of costly private information is obtained even when traders are risk neutral

pareto optimal redistribution and private charity abstract when private charity exists and is motivated by utility interdependence a non pareto optimal outcome the free rider problem typically arises nevertheless incremental fiscal redistribution cannot achieve a paretian welfare improvement so long as private charity continues at positive levels donors respond to incremental fiscal redistribution by reducing their voluntary contributions by exactly a dollar for every dollar transferred in this way no net transfer is achieved unless incremental fiscal redistribution is pursued to the point where private contributions have been driven to zero alternatively a net transfer may be achieved by fiscal measures which affect donors marginal incentives to donate

offshoring innovation to emerging markets organizational control and informal institutional distance the literature on innovation offshoring has focused on the dichotomous choice between two distinct investment strategies captive offshoring and outsourced offshoring we use the concept of organizational control to investigate how differences in the informal institutions that prevail in the home and host countries influence multinational enterprise mne strategy or the organizational control decision with respect to subsidiaries established to offshore innovation while the relationship between formal institutions and mne strategy has been the subject of considerable academic scrutiny less is known about the role of informal institutions we propose that the type of uncertainty precipitated by informal institutions is critical to understanding the strategic behavior of foreign investing mnes we hypothesize that an mne s organizational control over a subsidiary will be contingent upon the type of informal institutional uncertainty encountered by the subsidiary more specifically we disaggregate the informal institutions construct and develop three new more explicit latent constructs behaviorally oriented informal institutions boii technology oriented informal institutions toii and demand oriented informal institutions doii our theory posits that while an increase in boii distance will precipitate a preference for greater organizational control heightened toii and doii distances will induce the opposite outcome a preference for lower levels of organizational control