operating flexibility global manufacturing and the option value of a multinational network the multinational corporation is a network of activities located in different countries the value of this network derives from the opportunity to benefit from uncertainty through the coordination of subsidiaries which are geographically dispersed we model this coordination as the operating flexibility to shift production between two manufacturing plants located in different countries a stochastic dynamic programming model treats explicitly this flexibility as equivalent to owning an option the value of which is dependent upon the real exchange rate the model is extended to analyze hysteresis effects and within country growth options we show that the management of across border coordination has led to changes in the heuristic rules used for performance evaluation and transfer pricing

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

estimating the benefits of farm animal welfare legislation using the contingent valuation method abstract this paper presents the method and findings of a contingent valuation cv study that aimed to elicit united kingdom citizens willingness to pay to support legislation to phase out the use of battery cages for egg production in the european union eu the method takes account of various biases associated with the cv technique including warm glow part whole and sample response biases estimated mean willingness to pay to support the legislation is used to estimate the annual benefit of the legislation to uk citizens this is compared with the estimated annual costs of the legislation over a 12 year period which allows for readjustment by the uk egg industry the analysis shows that the estimated benefits of the legislation outweigh the costs the study demonstrates that cv is a potentially useful technique for assessing the likely benefits associated with proposed legislation however estimates of cv studies must be treated with caution it is important that they are derived from carefully designed surveys and that the willingness to pay estimation method allows for various biases

the relative value of farm animal welfare abstract this paper examines the viability of an alternative to willingness to pay method of eliciting values for farm animal welfare improvements the matching method common in the health and safety literature appears to perform well generating results that as might be expected are driven both by scheme specific variables and individual respondent characteristics however the results do not converge well with equivalent willingness to pay based values from the same population one interpretation of this result is that benefit cost ratios from stated preference studies are arbitrary phenomena with obvious implications for any policymaking based on such findings

learning to carry the cat by the tail firm experience disasters and multinational subsidiary entry and expansion we investigate whether firm experience with discontinuous risks particularly high impact disasters that are episodic and difficult to anticipate moderates the relationship between disasters foreign entry and expansion decisions using a panel data set with 57 500 observations from 106 large european multinational corporations and their subsidiaries operating across 109 countries from 2001 to 2007 we find that although discontinuous risk was negatively related to firm entry and expansion firms that had experience with high impact disasters were more likely to expand in countries experiencing disasters

estimating local welfare generated by an nfl team under credible threat of relocation this study offers the opportunity to examine the welfare contribution of the minnesota vikings to minnesota households in the context of a credible threat of team relocation we find the credibility of the threat of relocation is essential to providing unbiased estimates of welfare this study utilizes contingent valuation methodology cvm and a random utility model rum to analyze minnesotans decision making mechanisms for supporting a new stadium initiative while previous studies have attempted to measure the welfare associated with a sports franchise we develop and discuss bias that may be imparted to estimates when the researcher fails to calculate a choke price further we develop an unbiased approach to identify welfare when respondents perceive a risk of losing the franchise the range of welfare contribution by the vikings to households in minnesota is 445 3 million to 1 571 3 million according to a 95 confidence interval based on our study

treating respondent uncertainty in contingent valuation a comparison of empirical treatments this research examines the impact of uncertainty on contingent valuation responses using 1 a survey of canadian landowners about willingness to accept compensation for converting cropland to forestry and 2 a survey of swedish residents about willingness to pay for forest conservation five approaches from the literature for incorporating respondent uncertainty are used and compared to the traditional random utility model with assumed certainty the results indicate that incorporating uncertainty has the potential to increase fit but could introduce additional variance while some methods for uncertainty can be an improvement over traditional approaches it is imperative to exercise caution when making systematic judgments about the effect of uncertainty on contingent valuation responses

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

foreign direct investment and investment under uncertainty we show that in uncertain environments ownership and internalization advantages may be negatively rather than positively associated with fdi this reversal from extant theory occurs because ownership advantages often serve to make fdi delayable while internalization advantages often serve to make it less reversible when fdi becomes either more delayable or less reversible it is less likely to occur at a point in time our approach enriches the who where and why explanations offered by current fdi theory to incorporate the question of when

place space and geographical exposure foreign subsidiary survival in conflict zones this study focuses on the role of geography in foreign subsidiary survival in host countries afflicted by political conflict we argue that survival is a function of exposure to conflicts and depends on the characteristics of place the conflict zone and space geographic concentration and dispersion of other home country firms the roles of place and space are explored using street level analysis of geographic information systems data for 670 japanese multinational enterprises mne subsidiaries in 25 conflict afflicted host countries over 1987 2006 through dynamic modeling of conflict zones as stretchable and shrinkable places relative to subsidiary locations we develop a means of characterizing a foreign subsidiary s exposure to multiple threats in its geographic domain our results show that greater exposure to geographically defined threats in both a static and a dynamic sense reduces the likelihood of mne survival the findings indicate moreover that both concentration and dispersion with other firms affect survival however the effects depend on where the firm is spatially located whether the firm is in a conflict zone and with whom home country peers or sister subsidiaries

the ghost of extinction preservation values and minimum viable population in wildlife models abstract the inclusion of a minimum viable population in bioeconomic modeling creates at least two complications that are not resolved by using a modified logistic growth function the first complication can be dealt with by choosing a different depensational growth function the second complication relates to the inclusion of the in situ benefits of wildlife into the analysis knowledge about the magnitude of the in situ benefits provides no guide for policy about conservation management simply knowing that people are willing to pay a large amount each year to protect a species says nothing about whether one should manage habitat to protect or enhance the species numbers unless the species is in imminent danger of extinction if willingness to pay is to be a guide it needs to be better tied to population numbers especially the minimum viable population

the curse of natural resources in fractionalized countries abstract this paper develops a model that can explain why natural resources are a blessing for some countries but a curse for others in this model natural resources cause fighting activities between rivalling groups fighting reduces productive activities and weakens property rights making productive activities even less attractive the aggregate production decrease exceeds the natural resources direct positive income effect if and only if the number of rivalling groups is sufficiently large the model thus predicts that natural resources lower incomes in fractionalized countries but increase incomes in homogenous countries empirical evidence supporting this prediction is provided

a bayesian approach to double bounded contingent valuation in this paper we propose a bayesian approach to model double bounded contingent valuation data the double bounded elicitation method is interpreted as a two tier iterated process in which the subject is allowed to have a second thought about his her valuation for the environmental good prior information is modelled from the answers to the first dichotomous choice question the model is quasi bayesian q b in that the prior distribution refers to mean willingness to pay while the likelihood function refers to the proportions of a multinomial distribution this model is applied to empirical data from a contingent valuation survey involving the valuation expressed by european tourists for access to natural areas in the canary islands results show that point estimate of consumer surplus computed with the q b model does not differ substantially from single bounded model estimation in addition double bounded seems to be quite robust to the choice of the prior model of willingness to pay responses comparison with open ended suggests that the q b model might be useful to control for strategic response and starting point biases

optimal bid selection for dichotomous choice contingent valuation surveys abstract this paper develops a model for optimal survey design for the dichotomous choice contingent valuation method that finds the bid amounts as well as the sample sizes corresponding to each bid the model uses an iterative procedure to select the survey design that minimizes the mean square error of the welfare measure a set of monte carlo simulations shows that the model produces significantly lower mean squared errors for the welfare estimate than the next best model produces survey design under alternative assumptions regarding the statistical distribution of the welfare measure is also addressed the model produced significantly different survey designs depending on whether the distribution was assumed to be symmetric or asymmetric

choice of foreign market entry mode impact of ownership location and internalization factors firms interested in servicing foreign markets face a difficult decision with regards to the choice of an entry mode the options available to a firm include exporting licensing joint venture and sole venture several factors that determine the choice of a specific foreign market entry mode have been identified in previous literature these factors can be classified into three categories ownership advantages of a firm location advantages of a market and internalization advantages of integrating transactions this study examines the independent and joint influences of these factors on the choice of an entry mode multinomial logistic regression model is employed to test the hypothesized effects

divestment response to host country terrorist attacks inter firm influence and the role of temporal consistency abstract host country terrorism poses extreme uncertainty to mnes foreign operations however little is known about how mnes respond to host country terrorist attacks and how they make the related decisions drawing on the research on mnes responses to exogenous shocks and the inter firm imitation literature we argue that mnes obtain relevant information from peers actions under terrorist attacks to inform their own responses thus mnes are more likely to divest under host country terrorist attacks when peers also divest furthermore the impact of peers divestments on focal mnes divestments is magnified by the temporal consistency in peers behavioral pattern under terrorist attacks as temporal consistency reduces inferential difficulties empirical evidence based on 93 fortune us companies and their 8698 foreign subsidiaries over 2005 2015 support our hypotheses our study extends the literature on mnes responses to host country exogenous shocks and on inter firm imitation by demonstrating the social amplification of terrorism threat and the role of temporal consistency in inter firm imitation under extreme uncertainty practically we stress that mne executives should always consider their firms idiosyncratic situations when modeling peer mnes actions and be mindful that they are especially likely to imitate peers temporally consistent behaviors under extreme uncertainty

is there an animal welfare kuznets curve abstract the concept of a kuznets curve has been applied to income inequality and to the environment the kuznets curve takes an inverted u shape with income or gdp on the x axis and environmental degradation or inequality on the y axis it is hypothesized here that an animal welfare kuznets curve may exist with harm to animals initially rising with economic growth followed by improvement in the treatment of animals after some peak value why an animal welfare kuznets curve might theoretically exist is explored empirical evidence supporting or refuting the existence of such a curve is also examined the evidence is both quantitative and qualitative in nature since some issues in welfare cannot be easily quantified the evidence and theoretical presentation explores multiple areas of concern to animals including animal agriculture the use of animals in laboratories companion animals pets and the fur industry the conclusion is that evidence is mixed with some measures indicating a turning point while other measures showing no sign of peaking improving animal welfare

do natural resources attract nonresource fdi abstract a new and extensive panel of outward nonresource and resource fdi is used to investigate the effect of natural resources on the different components of fdi our main findings are as follows first for countries which were not a resource producer before a resource discovery causes nonresource fdi to fall 16 in the short run and by 68 in the long run second for countries that were already a resource producer a doubling of resource rents induces a 12 4 fall in nonresource fdi third on average the contraction in nonresource fdi outweighs the boom in resource fdi aggregate fdi falls by 4 if the resource bonanza is doubled finally these negative effects on nonresource fdi are amplified through the positive spatial lags in nonresource fdi we also find that resource fdi is vertical whereas nonresource fdi is of the export fragmentation variety our main findings are robust to different measures of resource reserves and the oil price and to allowing sample selection bias

terrorism and international business a research agenda terrorism threatens international business ib through its direct and indirect effects as governments tighten security at public sites businesses have become more attractive terrorist targets with important implications for the operations and performance of multinational firms while terrorism has been substantially studied in other fields there has been little scholarly research to address terrorism and the distinctive challenges that it poses for ib in this article we conceptualize terrorism in relation to ib we provide background on the dimensions and effects of terrorism and develop a theoretical grounding for terrorism research by drawing on the literature from ib economics political science and other fields after discussing findings from the literature review we offer a comprehensive agenda for future research regarding the relationship between terrorism and ib our agenda emphasizes the effects of terrorism organizational preparedness company strategy and performance global supply chain and distribution channels and human resource issues our review helps establish a baseline for future empirical research consistent with the early stages of research ib scholars are encouraged to offer useful perspectives and effective solutions that shed needed light on terrorism and help reduce its destructive effects for ib and multinational firms

why and how might firms respond strategically to violent conflict the aim of this study is to investigate factors specifically stakeholder pressures that may affect the likelihood that firms will respond to violent conflict survey and archival data on respondents from 471 multinational and local firms operating in 80 countries were used to explore these issues key findings include 1 local stakeholder pressure is associated with the likelihood that firms will respond directly to violent conflict collaborating with other organizations or working alone when doing so and 2 international stakeholder pressure is associated with the likelihood that firms will respond indirectly to violent conflict collaborating with other organizations or working alone

political governance civil liberties and human capital evaluating their effect on foreign direct investment in emerging and developing economies we study the influence of a country s political governance on its attractiveness to foreign direct investors we argue that democracy is not a unidimensional concept and that the effect of host country political governance on incoming foreign direct investment fdi differs depending on whether fdi originates from a democratic or an autocratic country we also hypothesize that the effect of civil liberties depends on the motivations of investing multinational enterprises mnes and that human capital moderates this relationship we test our hypotheses on a sample of 35 000 investments in emerging and developing countries between 2003 and 2013

uncovering the complex relationships between political risk and mne firm legitimacy insights from libya using the before after natural experiment occasioned by the arab spring in libya we explore how market and non market activity affect foreign firm legitimacy in times of political turmoil although all mnes in libya had to cultivate strong ties to qadhafi to succeed during his 40 years of rule we found that those that also invested in social benefit projects and in social ties with families with few ties to the qadhafi family earned a broad based legitimacy that helped them survive qadhafi s overthrow our findings contribute to the political risk and political behavior literature the notion that the pursuit of firm legitimacy in general and especially in the eyes of social sector actors is an effective hedge against political risk more theoretically our findings support the addition of a social sector based path to firm legitimacy in the host country that complements and may at times substitute for the government based path to foreign firm legitimacy practically our findings suggest that mnes facing severe political risk can improve their prospects for survival by investing in relationships with influential social groups and by offering goods or services that are perceived as socially valuable

fdi waves waves of neglect of political risk studies of the impact of local political risk on foreign direct investment inflows overlook that worldwide fdi comes in waves using a simple model we show that the impact of political risk on fdi inflows is likely to be weaker the larger the worldwide amount of fdi which may question standard estimates and their policy implications using a large sample of developing and developed economies we estimate the sensitivity of the distribution of fdi inflows across countries to the local political risk we find that it is a decreasing function of the worldwide amount of fdi this finding has been upheld after many robustness checks

animal welfare and social decisions is it time to take bentham seriously abstract this paper analyzes and questions the standard welfare economics assumption of anthropocentric welfarism i e that only human well being counts intrinsically alternatives where also animal welfare matters intrinsically are analyzed both theoretically and empirically the general public s ethical preferences are measured through a survey of a representative sample in sweden and the responses from a clear majority suggest that animal welfare should indeed carry intrinsic weight in public decision making current legislation in many countries is consistent with this a brief review of moral philosophy on animal welfare indicates that a large majority of philosophers believe that animal welfare should count intrinsically it is moreover demonstrated that it is theoretically and practically possible to generalize welfare economics in order to give intrinsic value also to animal welfare the paper concludes that there are strong reasons to sometimes generalize welfare economics in order to take animal welfare into account directly i e in addition to effects through individual utilities the practical implications of doing so are likely to be more important over time as the scientific methods of measuring animal welfare are gradually improving

political party tenure and mne location choices we develop a theoretical framework to explain how political party tenure affects mne entries into an economy we leverage insights from the upper echelon and public administration literatures to argue that there is a curvilinear relationship between political party tenure and mne entries moreover we argue that political parties with an excessive tenure are less responsive to mnes and more corrupt therefore we further explain the mediating effects of government bureaucratic responsiveness and government corruption on that relationship we test our theory using a sample of manufacturing mnes entering into mexican cities the results support our theory

model selection for the mixed logit with bayesian estimation in this paper the mixed logit ml using bayesian methods was employed to examine willingness to pay wtp to consume bread produced with reduced levels of pesticides so as to ameliorate environmental quality from data generated by a choice experiment model comparison used the marginal likelihood which is preferable for bayesian model comparison and testing models containing constant and random parameters for a number of distributions were considered along with models in preference space and wtp space as well as those allowing for misreporting we found strong support for the ml estimated in wtp space little support for fixing the price coefficient a common practice advocated and adopted in the environmental economics literature and weak evidence for misreporting

measuring farm sustainability and explaining differences in sustainable efficiency abstract a major objective of european agricultural policy is to have a sustainable and efficient farming sector that is applying environmentally friendly production methods policy makers aim to combine a strong economic performance and a sustainable use of natural resources therefore it is important to measure and to assess farm sustainability for a large dataset of flemish dairy farms a valuation method that is based on the concept of opportunity costs is used to calculate and analyze differences among the sample farms with respect to the creation of sustainable value but more important than measuring the creation of sustainable value is to analyze differences in sustainable efficiency therefore sustainable efficiency measures are calculated and differences in sustainable efficiency are explained using panel data an effect model captures the determinants of sustainable efficiency of the studied farms the empirical model shows that in general larger farms have a higher sustainable efficiency also farmer s age and dependency on support payments proved to be determining characteristics for observed differences in sustainable efficiency

willingness to pay for other species well being abstract benefit cost analysis of environmental policies typically focuses on benefits to human health and well being for other species economists have attempted to measure human wtp for changes in the numbers of individuals for different types of wildlife and to preserve biodiversity when it comes to humans wtp for improvements in the quality of life for other species however the evidence is limited morbidity and quality of life considerations may be particularly important to the task of valuing non fatal harm to wildlife in the wake of an environmental disaster we argue that the other species morbidity reduction component of wtp should be calculated net of any outrage component associated with the cause of the harm this net wtp is likely to be correlated with the premium that people are willing to pay for chicken products from birds for which the quality of life has been enhanced by improved animal welfare measures this paper uses a conjoint choice stated preference survey to reveal the nature of systematic heterogeneity in preferences for humanely raised versus conventionally raised chicken we also use latent class analysis to distinguish between two classes of people those who are willing to pay a premium for humanely raised chicken and those who are not

the erosion of colonial trade linkages after independence high trade between countries with colonial ties may be explained by government policies that establish preferential access or as a consequence of networks formed through social interactions using bilateral trade data from 1948 to 2003 we examine the eect of independence on post colonial trade the severing of formal colonial relations can lead to an immediate reduction in trade as preferential access is eliminated as well as a gradual reduction corresponding to the deterioration of trading networks our results reveal that independence reduces colonial trade with its colonizer metropole the reduction cumulates over a 30 year period and the disruption is particularly severe for hostile separations we also find that overall colonial trade falls subsequent to independence but to a lesser extent than trade with the metropole

valuing health care using willingness to pay a comparison of the payment card and dichotomous choice methods this paper compares willingness to pay wtp estimates generated from the dichotomous choice dc and payment card pc approaches in a split sample wtp experiment concerned with allocating scarce health care resources across three health care interventions the dc approach is shown consistently to generate larger welfare estimates than the pc observed difference between pc and dc experiments cannot be explained by the inclusion of non demanders or methods of statistical analysis but may be partly explained by yea saying no evidence of range bias or mid point bias was found with pc responses data were also collected on respondents ordinal rankings of the three interventions and person trade offs ptos neither of these approaches converged with wtp future work must address the decision heuristics individuals employ when responding to valuation experiments

the effect of political events on united states direct foreign investment a pooled time series cross sectional analysis this paper examines the effect of political events on the manufacturing direct foreign investment mdfi decisions of u s multinational corporations the relationship between political events and nonpolitical factors and mdfi is investigated through regression analysis of pooled time series 21 years and cross sectional 24 countries data and through various tests of the homogeneity of the relationship across groups of countries the study finds that the relationship between political events in mdfi is different for less developed countries as opposed to developed countries for the less developed countries both inter nation and intra nation conflict and cooperation affect mdfi in contrast u s mdfi in developed countries appears to be affected only by inter nation conflict and cooperation

the hassle factor an explanation for managerial location shunning this study investigates the widely overlooked phenomenon of multinational enterprise mne location avoidance utilizing a multi method research design and data on 131 foreign investment locations it complements economic choice based location research by adding contextual dimensions at the country level that matter to managers personally and affect decisions at the firm level we provide a connection between international business research the behavioral stream in economic geography and the microfoundations stream in the strategic management literature the results suggest that in addition to traditional location choice criteria including investment potential internationalization strategy and various geographic and psychic distances foreign location decisions in mnes are influenced by how troublesome it is for managers to travel to or live in certain places an 11 item measure composed of travel inconveniences shows a significant negative moderating effect on the relationship between foreign direct investment potential and investment intensity the effect is stronger for non resource seeking industries we call this phenomenon the hassle factor

investment uncertainty and pre emption this paper examines irreversible investment in a project with uncertain returns when there is an advantage to being the first to invest and externalities to investing when others also do so we show that the possibility of pre emption can have significant qualitative and quantitative effects on the relationship between uncertainty and investment in a single agent real options model the trigger threshold for investment increases without bound as uncertainty grows in contrast the investment trigger of a leader faced with pre emption is bounded above as uncertainty increases in fact we show that under certain parameter values greater uncertainty can lead the leader to invest earlier these findings reinforce the importance of extending real options analysis to include strategic interactions between players applications to industry situations are also discussed

on the relation between ecosystem services intrinsic value existence value and economic valuation various attempts have been made to amalgamate the concepts of intrinsic value and ecosystem services often with a stop over at the economic concept of existence value these attempts are based on a confusion of concepts however in this article two types of non use values are distinguished warm glow value related to the satisfaction people may derive from altruism towards nature and existence value related to the satisfaction people may derive from the mere knowledge that nature exists and originating in the human need for self transcendence as benefits to humans warm glow and existence values can be considered ecosystem services neither warm glow value nor existence value represents benefits to nature itself however intrinsic value lies outside the scope of the wide palette of ecosystem services although the concept of ecosystem services does not cover benefits to nature and the intrinsic value of such benefits intrinsic value is not necessarily incompatible with economic valuation although a deontological ethics does not allow economic valuation of nature as an end in itself consequentialism does in consequentialism however intrinsic value is not attributed to nature itself but to benefits to nature these benefits can be economically valued on the basis of benefit transfer

it s the rents stupid the political economy of the resource curse a number of studies suggest that natural resources can have a negative impact on the developing prospects of countries empirical results suggest that political economy models of patronage and rent seeking are central to understanding why such a resource curse arises in other words the resource curse is created by certain resource rents leading to dysfunctional behaviour this article introduces the term impartiality enhancing institutions to structure policy debates by distinguishing conditions under which negative effects of resources can be mitigated moreover it is argued that viewing institutions as an equilibrium outcome has implications for the analysis of institutional change policy initiatives that do not promote the impartiality of institutions nor attend to the underlying interests and incentives keeping a bad institutional equilibrium in place will not help lift the resource curse

consumption process and multiple valuation of landscape attributes abstract environmental valuation can be seen as a process which evolves as individuals reflect on their consumption experience in this paper we consider how environmental values could change as the subject has reached the end of the consumption process a split sample comparison is conducted for estimating the values tourists give to a set of landscape attributes the first subsample was taken on site as subjects were on a tour contemplating the landscape of the island of gran canaria canary islands the second subsample was contacted at the airport when individuals were about to leave the tourist enclave since landscapes are complex environmental goods we utilize and compare a multiple contingent valuation cv approach with the stated preference approach of contingent ranking the results show that the influence of the consumption experience depends on the valuation method and the consideration of interaction effects in the model the valuation functions were not stable across both sites for most of the models considered and some of the attributes changed their values between the two points of the consumption process interaction effects were more relevant with the contingent ranking model suggesting that cv is a more limited approach in a context of multiple valuation

risk propensity in the foreign direct investment location decision of emerging multinationals a distinguishing feature of emerging economy multinationals is their apparent tolerance for host country institutional risk employing behavioral decision theory and quasi experimental data we find that managers domestic experience satisfaction increases their relative risk propensity regarding controllable risk legally protectable loss but decreases their tendency to accept noncontrollable risk e g political instability in contrast firms potential slack reduces relative risk propensity regarding controllable risk yet amplifies the tendency to take noncontrollable risk we suggest that these counterbalancing effects might help explain prior ambiguous findings on the relationship between experience slack and fdi decisions the study provides a new understanding of why firms exhibit heterogeneous responses to host country risks and the varying effects of institutions

state owned mncs and host country expropriation risk the role of home state soft power and economic gunboat diplomacy expropriation risk has a binding effect on foreign direct investment fdi however state owned multinational corporations may counter the monopoly power of the host state by leveraging the political influence of their home government the magnitude of this counter force we argue may vary depending on the strength of political relations between the home and host state and the level of economic dependence of the host country on the home market we find supporting evidence of our hypotheses using chinese firm level fdi information between 2003 and 2010

do managers behave the way theory suggests a choice theoretic examination of foreign direct investment location decision making many empirical examinations of foreign direct investment location choice have relied on the use of secondary data and surveys on the choices made by firms about the form and location of overseas investment these studies have two inherent and related problems first they rely solely on the location choices made by different firms and assume that the domains of possible options considered were the same second there is an assumption about the rules used by firms to make these decisions yet the decisions are made by boundedly rational managers after reviewing the literature this study examines managers choices about foreign investment location through the use of structured experimentation the results show that in creating sets of investments to consider managers appear to follow fairly rational rules however the choice of actual investments appears less aligned to traditional models

dyadic military conflict security alliances and bilateral fdi flows although multinationals operate under cross border jurisdictions the relevance of interstate security relations to international business has received little attention despite the impressive accumulation of knowledge in international business and international relations the two intellectual communities have largely ignored the insights from each other in this article we seek to bridge this gap we argue that interstate military conflict and security alliances as two central features of interstate security relations often change both government policies toward international business and investor expectations of political risk from the perspectives of both states and investors military conflict should reduce bilateral investment whereas security alliances increase it our empirical analysis applies the system gmm estimator to a gravity model of bilateral investment flows for 1117 directed dyads among 58 countries from 1980 to 2000 among 18 countries whose per capita real incomes remain consistently above 12 000 constant dollars the security factors do not affect bilateral investment in the high income low income dyads interstate military conflict and security alliances significantly influence bilateral investment as expected the findings depict two separate realms in which international politics does and does not interfere with international business helping us improve political risk assessments and understand the interactions between states and firms

terrorism and the world economy abstract it has been argued that terrorism should not have a large effect on economic activity because terrorist attacks destroy only a small fraction of the stock of capital of a country see e g becker g murphy k 2001 prosperity will rise out of the ashes wall street journal october 29 2001 in contrast empirical estimates of the consequences of terrorism typically suggest large effects on economic outcomes see e g abadie a gardeazabal j 2003 the economic cost of conflict a case study of the basque country american economic review 93 113 132 the main theme of this article is that mobility of productive capital in an open economy may account for much of the difference between the direct and the equilibrium impact of terrorism we use a simple economic model to show that terrorism may have a large impact on the allocation of productive capital across countries even if it represents a small fraction of the overall economic risk the model emphasizes that in addition to increasing uncertainty terrorism reduces the expected return to investment as a result changes in the intensity of terrorism may cause large movements of capital across countries if the world economy is sufficiently open so international investors are able to diversify other types of country risks using a unique data set on terrorism and other country risks we find that in accordance with the predictions of the model higher levels of terrorist risks are associated with lower levels of net foreign direct investment positions even after controlling for other types of country risks on average a standard deviation increase in the terrorist risk is associated with a fall in the net foreign direct investment position of about 5 of gdp the magnitude of the estimated effect is large which suggests that the open economy channel impact of terrorism may be substantial

risky business political instability and greenfield foreign direct investment in the arab world which foreign direct investments are most affected by political instability analysis of quarterly greenfield investment flows into countries in the middle east and north africa during the period from 2003 to 2012 shows that adverse political shocks are associated with significantly reduced investment inflows in the non resource tradable sectors by contrast investments in natural resource sectors and non tradable activities appear insensitive to such shocks political instability is thus associated with increased reliance on non tradables and aggravated resource dependence

environmental sustainability in agriculture diet matters abstract there is no agreement that diet matters for environmental sustainability in the agriculture sector much current agriculture is unsustainable and worsening the environmental impact of agriculture degrades natural capital e g loss of topsoil waste and pollution of water nutrient loss extinction of species cattle raising is one of the most damaging components of agriculture livestock now eat about half of global grain production there is limited scope for improving food supply and what scope there is will further damage the environment all means to improve nutrition especially for the poor will be needed as population increases one such means is to improve diets of the rich by eating lower down the food chain while most people in the world thrive on mainly grain based diets carnivory is high in oecd and is increasing in ldcs in order to reduce food wastage and to improve health and food availability a food conversion efficiency tax is proposed the least efficient converters pork beef would be highly taxed more efficient converters poultry eggs dairy would be moderately taxed most efficient converters ocean fish would be taxed lowest grain for human food would not be taxed while coarse grains might be modestly subsidized non food agriculture also would be taxed highest on tobacco and on starches destined for alcoholic beverages produced from land suitable for food production

farm animal welfare and food policy abstract legislation has been the main policy approach for protecting the welfare of farm animals the use of legislation raises issues such as whose preferences the legislation reflects and whether the preferences of some people in society should constrain the food consumption choices of others the paper outlines a survey in great britain which sought to measure people s willingness to pay to support legislation to ban the use of battery cages for egg production in the european union eu it discusses the implications of the survey findings for animal welfare and food policy it concludes that legislation which constrains food consumption choices may be justified where there are significant negative animal welfare externalities as a result of livestock product consumption however the combination of legislation and producer subsidies may provide an appropriate policy which improves animal welfare without directly constraining food consumption choice and could help to achieve other policy aims regarding agriculture in the eu

dodging bullets the heterogeneous effect of political violence on greenfield fdi the relationship between political violence and greenfield foreign direct investment is contingent on the type of violence characteristics of the investment receiving sector and extent to which the investing firm is geographically diversified this paper presents an analysis with a dynamic fixed effects model for a panel of 90 developing countries from 2003 to 2012 the analysis shows that nationwide political conflict is negatively associated with total and non resource related greenfield foreign direct investment but not with resource related greenfield foreign direct investment the insensitivity to political conflict of multinational firms in the resource sector is associated with the high profitability of natural resource extraction and the companies geographic constraints on location choice during the period of estimation in the non resource sector the less geographically diversified firms are most sensitive to the risk of conflict

learning design contingent valuation ldcv noaa guidelines preference learning and coherent arbitrariness we extend the contingent valuation cv method to test three differing conceptions of individuals preferences as either i a priori well formed or readily divined and revealed through a single dichotomous choice question as per the noaa cv guidelines k arrow r solow p r portney e e leamer r radner h schuman report of the noaa panel on contingent valuation fed reg 58 1993 4601 4614 ii learned or discovered through a process of repetition and experience j a list does market experience eliminate market anomalies q j econ 2003 41 72 c r plott rational individual behaviour in markets and social choice processes the discovered preference hypothesis in k arrow e colombatto m perleman c schmidt eds rational foundations of economic behaviour macmillan london st martin s new york 1996 pp 225 250 iii internally coherent but strongly influenced by some initial arbitrary anchor d ariely g loewenstein d prelec coherent arbitrariness stable demand curves without stable preferences q j econ 118 1 2003 73 105 findings reject both the first and last of these conceptions in favour of a model in which preferences converge towards standard expectations through a process of repetition and learning in doing so we show that such a learning design cv method overturns the stylised facts of bias and anchoring within the double bound dichotomous choice elicitation format

democracy foreign direct investment and natural resources abstract empirical studies that examine the impact of democracy on foreign direct investment fdi assume that the relationship between democracy and fdi is the same for resource exporting and non resource exporting countries this paper examines whether natural resources in host countries alter this relationship we estimate a linear dynamic panel data model using data from 112 developing countries over the period 1982 2007 we find that democracy promotes fdi if and only if the value of the share of minerals and oil in total exports is less than some critical value we identify 90 countries where an expansion of democracy may enhance fdi and 22 countries where an increase in democratization may reduce fdi we also find that the effect of democracy on fdi depends on the size and not the type of natural resources

governance infrastructure and us foreign direct investment this paper examines the statistical importance of governance infrastructure as a determinant of us foreign direct investment fdi in broad terms governance infrastructure represents attributes of legislation regulation and legal systems that condition freedom of transacting security of property rights and transparency of government and legal processes our econometric analysis uses a two stage estimation procedure in the first stage the probability that a country is an fdi recipient is estimated the results indicate that countries that fail to achieve a minimum threshold of effective governance are unlikely to receive any us fdi countries that receive no us fdi are typically countries that do not promote free and transparent markets that have ineffective governments and that often have legal systems that are not rooted in english common law in the second stage the analysis is restricted to those countries that did receive fdi flows the estimated equations focus on the determinants of the amount of fdi received given that a country is a recipient of us fdi governance infrastructure including the nature of the legal system is an important determinant of the amount received

international investment location decisions abstract in international location tournaments governments compete for foreign investment with tax and other short run incentives such tournaments can be won if agglomeration economies are sufficiently powerful to overcome investors desire to spread investments as a hedge against risk we focus on manufacturing investments by u s multinationals in the 1980s our econometric results suggest that agglomeration economies are indeed the dominant influence on investor calculations paradoxically short run incentives have limited apparent impact on location choice we conclude that high cost tournament play is unnecessary for countries with good infrastructure development specialized input suppliers and an expanding domestic market

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