regional diversification and firm performance this study examines how regional diversification affects firm performance the results indicate that regional diversification has linear and curvilinear effects on firm performance regional diversification enhances firm performance linearly up to a certain threshold and then its impact becomes negative the results also show that firms of developed countries maximize their performance when they operate across a moderate number of developed regions and a strictly limited number of developing regions this explains why internationalization by most international firms is regional rather than global

a market performance comparison of u s firms active in domestic developed and developing countries direct foreign investment dfi may benefit investors through superior cash flows or lower risk relative to purely domestic firms this paper considers three groups of u s firms those without significant international operations those with international operations in developed countries and those with international operations in developing countries after performing risk return performance analysis on the three groups the findings show developing country dfi results in inferior performance but that there are no statistically significant differences in market performance among the three

how resilient are labour markets to natural disasters the case of the 1998 bangladesh flood abstract natural disasters devastate economies as they impede capital accumulation the resilience of labour markets is crucial for the poor who rely on labour to reduce risk we evaluate how the 1998 flood of the century affected wages in bangladesh we find short term declines in agricultural and non agricultural wages agricultural workers who moved towards non agricultural employment to cope benefitted through a lower percentage reduction in short term wages endowed with human capital salaried workers were unable to mitigate income risk extending the eligibility of credit access or relief programmes may preserve local businesses and their employees in the years following a flood

an efficiency explanation for why firms second source firms facing research costs and demand uncertainty may engage in second sourcing in which potential suppliers agree to pool production facilities i show how sellers and buyers both can benefit from the practice second sourcing allows firms to meet a wider range of possible rates of demand and often to supply a given rate of demand at a lower total cost than under non cooperation buyers benefit through a reduced probability of stock outs and frequently a lower purchase price semiconductor industry data are found to be consistent with the paper s predictions i introduction the practice of second sourcing is frequently observed among firms facing technological and demand uncertainty second sourcing encompasses agreements between buyers and sellers requiring that a firm license its proprietary technology to rivals as well as agreements among potential suppliers to pool production facilities the first type of agreement is often explained as guaranteeing buyers a secure supply at a fair price in this type of second sourcing agreement control over production and pricing decisions resides with each supplier the second arrangement where the owner of the production technology controls production and pricing has largely been overlooked by the literature despite its adoption by firms in a wide range of technologically dynamic industries including semiconductors robotics and biotechnology a primary motivation for this second form of secondsourcing i will argue is to achieve a more efficient matching between the industry s productive capacity and market demand this paper indicates how second sourcing of this form may benefit both purchasers and suppliers and identifies the conditions making second sourcing profitable for firms the existing literature has offered two explanations for second sourcing according to the first explanation second sourcing is sought by prospective buyers purchasers may require that a developer license alternative suppliers to force revelation of private cost information in the contract bidding process or to discipline the eventual supplier s pricing behavior examples of this line of reasoning are found in riordan and sappington 1989 anton and yao 1987 demski sappington and spiller 1987 and rob 1986 if this motivation is correct however it is sufficient for firms to compete at the contract bidding stage demsetz 1968 in contrast we often observe competition at the production stage with active second sourcing and a large number of licensed alternative suppliers in a single industry see section v this explanation s exclusive focus on the gains to buyers from second sourcing also is inconsistent with swann s 1987 observation that many manufacturers have actually sought second sources the literature s alternative explanation suggests that second sourcing may be preferred by producers farrell and gallini 1988 and shepard 1987 show how a monopoly supplier can use second sourcing as a commitment not to raise price or lower product quality in the future either of which would debase the value of sunk investments made by prospective purchasers if credible this commitment may stimulate industry demand sufficiently to yield higher profits for the former monopolist despite increased product market competition an important shortcoming of this second explanation is its apparent incongruity with the existence of five six or more second sourced suppliers in a single industry shepard 1987 for example shows that a single licensed alternate supplier will provide the monopolist with its desired credible commitment to future price and quality this paper suggests an alternative explanation that is consistent with observed trends in second sourcing i depart from the existing literature s focus upon principal agent problems to analyze secondsourcing in a market flamework the paper indicates why sellers may secondsource voluntarily explains why multiple second sources will be preferred and shows how both sides in the agreement may benefit

product and international diversification among japanese multinational firms this paper examines the relationship of performance with product and international diversification on japanese multinational firms from 1977 to 1993 we show the relationships between diversification and performance change over time through the use of multiple time periods and accounting for keiretsu membership results show that while diversity strategies vary between keiretsu and non keiretsu firms performance is not much different across time periods performance varies considerably but strategies are less variable product diversity has weak effects on firm performance only in one time period while international diversification has negative profitability and positive growth consequences in in some periods these results suggest first that diversification strategies and their effects on performance vary across time periods and generally produce some unexpected findings we do not find strong interactive diversity effects copyright 2000 john wiley sons ltd

food preferences and nutrition in rural bangladesh t he dietary choice of households near subsistence levels of nutrient intake is one of obvious policy importance in many countries such as bangladesh national goals are set in terms of nutritional intake and there is heavy intervention in the markets for foods however little is known about the manner in which food preferences vary with food expenditure and nutrient intake the design of efficient programs to aid nutritionally deficient households in attaining minimal levels of nutrient intake requires information on all ownand cross price elasticities for both target and non target groups the net effect of a food price subsidy on the consumption of food nutrients cannot be predicted without knowledge of the complete elasticity matrix results presented below demonstrate that substitution effects can be so strong that the subsidization of certain foods quite often reduces nutrient consumption in this study demand equations for nine foods which allow for extremely flexible consumer price response are estimated from the individual budgets of 5 750 rural bangladeshi households estimation at the household level is preferred because it more readily permits the incorporation of household composition variables into the demand analysis such as household size occupation and employment status that are typically lost in aggregation there is also a greater range and variation in expenditure levels than found in grouped data this is of particular importance in the study of nutritional well being as it is the poorest households which are of special interest moreover the household sample provides sufficient degrees of freedom to estimate a simple varying parameter model which requires the estimation of 270 parameters previous econometric analysis of income class specific dietary choice has been limited and not altogether satisfactory pinstrup anderson de londono and hoover 1976 estimated complete sets of price elasticities for different income strata using frisch s scheme in order to study the impact of changes in relative prices on nutrient consumption their results are suspect because of the assumption of want independence necessary for this methodology to be valid alderman and timmer 1980 who were also concerned with studying the relationship between food price policy and nutrient intake by income classes econometrically estimated separate price coefficients for each income group by including slope dummy variables in their demand equations for rice and cassava in indonesia the inclusion of these dummy variables revealed surprisingly large differences in compensated price response across income groups although their results support the notion that poorer households respond differently to prices than the rich the limitations of their data constrained them to consider only two foods and to specify changes in price response which are discontinuous with respect to income i the formulation and estimation of the food demand equations is discussed in section ii below section iii presents the results of the estimation and discusses the nutritional implications of movements in relative food prices and other exogenous variables section iv summarizes our findings

new venture internationalization strategic change and performance a follow up study abstract although many scholars business experts and government agencies enthusiastically advise all firms including new and small ventures to internationalize such advice does not appear to be based on empirical evidence few researchers have empirically examined the link between new venture performance and the internationalization of new ventures at best the evidence suggests that there is no significant relationship we used a sample of 62 u s new venture manufacturers in the computer and communications equipment industries during the late 1980s these industries were purportedly globalizing and may have been leading other industries into increased international operations we found that higher levels of internationalization percentage of foreign sales to total venture sales were associated with higher relative market share two years later however there was no significant direct relationship between percentage of international sales and subsequent return on investment roi perhaps international operations simply cost more than expected or perhaps as macmillan and day 1987 found in their study of corporate ventures over a 4 year time period increases in market share may be a prelude to higher roi as scale benefits translate into higher profitability however the 2 year time period of our study may simply not be long enough for investments in higher market shares to produce improved profits during the 2 year study period many of the ventures changed their level of internationalization of the 36 ventures who were domestic no international sales in the prior study 10 expanded into international markets over the 2 years of the 26 originally international ventures international sales of at least 5 half increased their percentage of international sales nine reduced it and four stayed the same whereas the average change in international sales percentage of the ventures was only 2 9 percentage points the large standard deviation of 13 0 percentage points and the leptokurtic distribution 9 2 reflected the dramatic changes made by some of the ventures using subgroup analysis we examined these changes in percentage of international sales in conjunction with changes in strategies and performance ventures that had increased international sales relative to those that had not exhibited more positive associations between the degree of strategic change and performance as measured in terms of both relative market share and roi increased international sales in technology based new ventures seems to require simultaneous strategic changes in order to positively impact venture performance this study is a follow up to mcdougall s 1989 finding that technology based new ventures that had sales in foreign markets had significantly different strategies than similar ventures that sold their products only domestically the current study enriches the previous findings by adding consideration of 1 changes in degree of internationalization 2 changes in strategy and 3 venture performance although we found no performance penalty associated with increasing international sales alone indiscriminant advice for new ventures to sell in foreign markets without other supporting strategic actions is inconsistent with our findings internationalization alone did not lead to increased profitability entrepreneurs of young technology based firms who are considering internationalization should take heed of our results internationalization of sales does not appear to be a simple matter of applying established strategies and procedures developed for a domestic arena successful internationalization appears to require changes in the venture s strategy as well

second sourcing and the experience curve price competition in defense procurement we examine a dynamic model ofprice competition in defense procurement that incorporates the experience curve asymmetric cost information and the availability of a higher cost alternative system we model acquisition as a two stage process in which initial production is governed by a contract between the government and the developer competition is then introduced by an auction in which a second source bids against the developer for remaining production we characterize the class of production contracts that are cost minimizing for the government and that induce the developer to reveal private cost information when high costs are revealed these contracts result in a credible cutoff of new system production in favor of the still higher cost alternative system

an empirical examination of multinational corporate capital structure this paper examines whether there are systematic differences in the traditional capital structure determinants between mncs and dcs and if there are additional uniquely international factors that may help explain the capital structure choice of multinational corporations the results suggest that specific international factors such as political risk and exchange rate risk are relevant to the multinational capital structure decision that multinationals have higher agency costs than purely domestic firms and that international diversification does not lower earnings volatility for multinational corporations

mne subsidiaries versus domestic enterprises an analysis of their ownership and location specific advantages this paper compares the ownership advantages of multinational enterprises mnes subsidiaries and domestic enterprises dmes in greece previous studies have tested the hypothesis that ownership specific advantages oa are a major source of firm differences this study analyses the processed food sector sic 20 the leading industrial sector in greece with the highest inward and outward internationalization degree using a panel data set of 75 firms and 5 years the findings of a probabilistic regression analysis indicate that there are significant differences between the two groups of firms in the degree of possession of observed ownership advantages mne subsidiaries have higher market shares use multiplant operations and have higher advertising and r d to sales ratios compared to dmes dmes use their well established position knowledge of domestic and regional market conditions and size economies in order to compete effectively with mne subsidiaries it is inferred that pursuit of domestic ma

weathering the storms credit receipt and child labor in the aftermath of the great floods 1998 in bangladesh summary in this paper we use data from a unique survey conducted in the aftermath of the 1998 floods in bangladesh to examine how the household shock child labor relationship is affected by credit receipts of households adopting the ratio of assets lost due to the floods as a likely exogenous shock proxy we find that child labor increases with the magnitude of the shock but only if households do not receive credit this suggests that following shocks child labor may be a response to non availability of credit the policy implication suggests a distinct and alternative channel in combating the economic incentives behind child labor access to credit diminishes the immediate financial burden on constrained households reducing their need for child labor

countercyclical safety nets for the poor and vulnerable abstract relatively little is known about how government safety net programs insure against low consumption and stabilize asset bases compared to what is known about their role in transferring income the insurance function requires a flexible budget that can be scaled up rapidly to meet unanticipated circumstances safety nets serving an insurance function also differ from other transfer programs in their targeting they need to determine transitory need rather than more chronic correlates of poverty moreover insurance safety nets need a more flexible implementation strategy than do more permanent programs this paper reviews these issues from the perspective of low income countries

do natural disasters affect the poor disproportionately price change and welfare impact in the aftermath of typhoon milenyo in the rural philippines summary this paper illustrates the sharp contrast in welfare impacts between the rich and the poor caused by typhoon milenyo in a philippine village we find that fish prices dropped sharply due to the damage caused to fish pens near the village leading to positive net welfare gains among the wealthy in contrast the poor do not consume much fish and thus did not gain from the sharp decline in prices finally consumption reallocation played an important role as an ex post risk coping measure albeit only among the wealthy who are relatively well protected against typhoons

are estimates of calorie income fxelasticities too high a recalibration of the plausible range abstract the wide range of calorie income elasticities in the literature results in large part from the particular calorie and income variables used for estimation elasticities across four estimation techniques and four calorie income variable pairs for a sample of philippine farm households ranged from 0 03 to 0 59 estimates associated with calorie availability are biased upwards first because random errors in measuring food purchases are transmitted by construction both to calorie availability and total expenditures and second because the residual difference between family calorie intake and household calorie availability will often increase with income the calorie intake total expenditure variable pair gives the preferred elasticity estimate in the 0 08 0 14 range

the declining price anomaly abstract data from wine auctions indicate that identical products sold sequentially typically follow a decreasing pattern of prices known as the declining price anomaly this is explained for both first and second price auctions by appealing to risk averse bidders earlier bids are then equal to expected later prices plus a risk premium associated with the risky future price we show that this logic rests on the assumption of nondecreasing absolute risk aversion which is necessary for pure strategy equilibrium bidding functions to exist thus decreasing absolute risk aversion implies ex post inefficiency with positive probability data from wine auctions are used to confirm the existence of the declining price anomaly journal of economic literature classification numbers d43 d44 d81 d82 l81

does resilience capacity reduce the negative impact of shocks on household food security evidence from the 2014 floods in northern bangladesh abstract using data collected before and after the catastrophic flooding that took place in northern bangladesh in 2014 this paper contributes to the growing evidence on the factors enhancing households resilience to shocks or their resilience capacities the analysis takes into account all three dimensions of resilience capacity absorptive adaptive and transformative as well as a broad range of specific capacities supporting them in addition to disaster preparedness and mitigation it finds suggestive evidence that the following capacities reduced the negative impact of the flooding on household food security social capital human capital exposure to information asset holdings livelihood diversity safety nets access to markets and services women s empowerment governance and psycho social capabilities such as aspirations and confidence to adapt the paper highlights the importance of taking a comprehensive approach to understanding the determinants of resilience in future research one that accounts for the full range of potential capacities it also points to the value of taking a cross sectoral multi intervention approach to on the ground resilience programing in bangladesh and other developing country areas that are increasingly vulnerable to climate shocks

multinational corporations vs domestic corporations financial performance and characteristics the analysis in this paper is composed of two segments first the financial performance of a sample of multinational corporations mncs is compared with that derived for a control group of domestic corporations dmcs using market based performance measures then the paper presents a comparison of selected financial characteristics of the firms in the two groups the results suggest the dmcs appear to have a significantly superior risk adjusted market based performance are significantly less capitalized and have higher total risk as well as higher systematic risk the fact that mncs are substantially larger than dmcs is not found to be a significant factor in explaining the observed difference between the two groups performance

a three stage theory of international expansion the link between multinationality and performance in the service sector it is generally assumed that the performance of a firm improves with greater multinationality yet recent empirical studies have shown both a u shaped relationship which suggests an initially negative effect of international expansion on performance before the positive returns of international expansion are realized and an inverted u shaped relationship which suggests that international expansion beyond an optimal level is again detrimental to performance and results in a negative slope this paper proposes a new unified three stage theory of international expansion that incorporates both concepts in a sigmoid hypothesis it then tests this on data from 11 service industries highlighting the difference between knowledge based and capital intensive service sectors

comparative analysis of the foreign investment evaluation practices by u s based manufacturing multinational companies a large sample of u s based manufacturing multinational companies were surveyed regarding their investment valuation practices it was found that a foreign direct manufacturing investment fdmi is motivated primarily by profit rather than the recently proposed behavioral considerations b the majority of companies practice project by project analysis of the simple accept reject type rather than the comparative project analysis advocated by financial analysts c most of the companies utilized criteria for single investments cash flows and cost of capital that were in general agreement with the analytical literature d companies were concerned more with business risk than currency and political risks moreover all three types of risk were evaluated subjectively and accounted through adjustments in the required rates of return rather than the cash flows of the fdmi as specified in financial research e analysis of demographic and behavioral variables for possible relationships to fdmi evaluation practices yielded interesting but variable specific results the questionnaires were mailed in may 1979 and the personal interviews were conducted during december 1979 and the first six months of 1980

organizational entrainment and international new ventures from emerging markets organizational entrainment captures the temporal fit in the activity cycles between exchange partners we argue that organizational entrainment between international new ventures invs and their most important international customers positively moderates the relationship between the degree scope and speed of internationalization and performance of invs we test our hypotheses on invs from china india and south africa the results support the contingent role of entrainment for degree and scope of internationalization but not for speed findings suggest that when invs attain temporal fit with their most important international customers they can implement their strategic goals in international markets more effectively

from m p to ma p multinationality alignment and performance rather than searching for a universal optimal level of multinationality for all firms we argue that firm specific attributes should result in firm specific optimal levels of multinationality specifically we draw upon transaction cost and internalization theory to argue that there will be different optimal levels of multinationality for individual firms and if firms internalize foreign operations to an extent less than or greater than their individual optimal levels transaction costs will increase and performance will decrease to test this idea we use transaction cost models in the context of large us law firms during the time period from 1986 through 2008 to estimate firm specific optimal multinationality next we test relationships between alignment with or deviations from firm specific optimal levels of multinationality and performance ma p consistent with the ma p hypothesis insufficient and excessive levels of multinationality are both negatively related to financial performance in addition excessive multinationality is positively associated with downside performance risk one key implication is that an ma p approach may offer greater theoretical validity and clarity than traditional multinationality and performance m p approaches

rising food prices food price volatility and social unrest can food prices cause social unrest throughout history riots have frequently broken out ostensibly as a consequence of high food prices using monthly data at the international level this article studies the impact of food prices food price levels as well as food price volatility on social unrest because food prices and social unrest are jointly determined data on natural disasters are used to identify the causal relationship flowing from food price levels to social unrest results indicate that for the period 1990 2011 food price increases have led to increases in social unrest whereas food price volatility has not been associated with increases in social unrest these results are robust to alternative definitions of social unrest to using real or nominal prices to using commodity specific price indices instead of aggregated price indices to alternative definitions of the instrumental variable to alternative definitions of volatility and to controlling for non food related social unrest

the measurement of the degree of foreign involvement this paper extends errunza and senber 1984 in assessing the relationship between alternative measures of the degree of foreign involvement dfi and the conditions under which the use of a specific measure will not affect the outcome of empirical studies on corporate international diversification the results suggest that among 21 pairs of seven most widely used series of dfi only three series foreign assets foreign earnings and foreign tax ratios in two pairs are equivalent evidence of constant returns to scale between the ratio of foreign to total assets and the ratio of foreign to total earnings is also discussed

designing a private industry government auctions with endogenous market structure abstract this paper considers government mechanisms for auctioning production rights in which both the winners and the market structure doupoly dual sourcing monopoly sole sourcing or government owned production are a function of the bids in designing the optimal mechanism the government considers the tradeoffs among consumer surplus producer surplus and revenue under incomplete information doupoly is implemented less frequently and government production more frequently than under complete information when bidders are symmetric the optimal mechanism can be implemented as a modified second price auction applications to privatization deregulation and defense procurement are discussed

measuring the degree of internationalization of a firm in spite of both positivistic and instrumental research the reliability of measuring the degree of internationalization of a firm remains speculative we collected data on nine attributes of seventy four american manufacturing mncs alpha factor and frequency analyses revealed a linear combination of five variables with a reliability coefficient of 79 as a measure of the degree of internationalization of a firm we discuss the statistical and conceptual properties of the scale and their implications for content and construct validity

effect of flood on agricultural wages in bangladesh an empirical analysis summary this paper analyzes the effects of riverine floods on agricultural wages in bangladesh drawing upon the district wise monthly data over 1979 2000 we model wages as a dynamic process we find that floods have positive implications for wages in the long run in flood months however agricultural wages decline in the inundated districts we obtain difference in difference estimates to show that the magnitude of impact of flood depends on the relative flood proneness of a district and the relative severity of flood conditions our results indicate that favorable demand and supply conditions in the agricultural labor market can mitigate the impact of disasters on wages in bangladesh

bringing institutions into performance persistence research exploring the impact of product financial and labor market institutions this study challenges the implicit assumption of homogeneity in national institutional environments made in past studies of firm performance persistence we propose that home country institutions matter we focus on the impact of formal institutions in the product financial and labor markets arguing that they affect the size of pools of exchange partners and the types of exchanges allowed and condoned ultimately these restrictions affect competitive intensity among firms and firm performance persistence using data for over 10 000 firms from 33 countries over a 10 year time frame we show that antitrust law strength a product market institution designed to prevent collusion among firms is associated with decreases in performance persistence unskilled labor market flexibility a labor market institution that reduces legal constraints imposed on residual claimants managers and owners to take necessary actions to maintain or enhance profitability is associated with increases in performance persistence product liability law effectiveness another product market institution and corporate control market development a financial market institution are positively associated with performance persistence only in the case of mnes the two remaining financial and labor market institutions public equity market development respectively skilled labor market availability have a positive respectively negative impact for domestic firms only

public policy markets and household coping strategies in bangladesh avoiding a food security crisis following the 1998 floods abstract at their peak the 1998 floods covered two thirds of bangladesh causing severe damage to the major rice crop and threatening the food security of tens of millions of households in this paper we first highlight the contribution of government policy interventions including trade liberalization in the early 1990s to stabilization of rice markets during and after the flood then using a panel data set covering 750 households in three rounds over a 13 month period we analyze impacts of the flood on household assets consumption and nutritional outcomes finally we present empirical estimates of the contribution of rice market stabilization and government transfers to household food consumption

will developing country nutrition improve with income a case study for rural south india aggregate estimates of food expenditure are consistent with such a possibility implying income expenditure elasticities close to one however the high degree of aggregation at which such estimates are made means that the considerable increase in price per nutrient as income increases is ignored and the nutrient elasticities are therefore overstated estimates for a rural south indian sample indicate that this bias is considerable and that the true nutrient elasticities with respect to income may be close to zero

coping with flood role of institutions in bangladesh the article examines the coping strategies that rural households adopted during the 1998 flood in bangladesh and assesses its impact on household welfare including coping and vulnerability both vulnerability and poverty have in general declined in bangladesh yet 60 of rural households adopted a coping of one type or another and about half of rural households were both vulnerable as well as found to adopt any coping mechanism during the 1998 flood household level panel data analysis confirms that the flood reduced both consumption and asset and forced many households to adopt some coping mechanisms to mitigate the adverse effects of flood consequently natural disaster such as flooding increases households vulnerability to poverty however post flood bumper crop production and operation of targeted programs such as microfinance helped compensate the losses of flood

coordination in split award auctions we analyze split award procurement auctions in which a buyer divides full production between two suppliers or awards all production to a single supplier and suppliers have private cost information an intriguing feature of split awards is that the equilibrium bids are implicitly coordinated because a split award price is the sum of offered split prices each supplier can unilaterally veto a split award by bidding very high for the split the need to coordinate is reflected in a split price that does not vary with private information we also explore conditions under which split award auctions may be preferred to winner take all auctions

averting a food crisis private imports and public targeted distribution in bangladesh after the 1998 flood abstract the 1998 flood in bangladesh caused a shortfall of 2 2 million tonnes mill t in the rice production and threatened the food security of tens of millions of households despite the best efforts of donors and the government the public distribution of rice and wheat was only 188 000 t more than originally planned for july 1998 to april 1999 however a major food crisis was averted as private imports made possible by trade liberalisation in the early 1990s stabilised market prices and supplies the government s direct distribution programs though small compared to private imports nonetheless increased access to food by poor households household survey data indicate that immediate relief efforts were well targeted to flood affected households as were transfers from ngos vulnerable group feeding vgf a medium term program was not targeted well to households directly exposed to the flood though the program was relatively well targeted to poor households more broadly the bangladesh experience with the 1998 flood shows that in a liberalised trade regime where private imports respond to price signals food aid s contribution to the total availability of food may be minimal however foreign assistance in kind or in cash can provide resources for subsidised targeted distribution to food insecure households assistance not possible otherwise under tight government budget constraints

household income strategies and natural disasters dynamic livelihoods in rural nicaragua this paper assesses the impact of hurricane mitch on livelihood strategies of rural households in nicaragua through destruction or distress sales of productive assets a hurricane or another natural hazard could induce people with relatively remunerative livelihoods to choose more defensive strategies which allow them to survive but at a permanently lower welfare level than before using panel data from before and after hurricane mitch we find that livelihood strategies can be grouped into three welfare categories annual farming and farm employment generate low incomes whereas nonfarm wage employment and livestock farming result in relatively high incomes perennial farming nonfarm self employment and annual cropping with nonfarm employment take an intermediate position high welfare strategies were associated with high levels of capital and the number of people involved was very similar between different years suggesting that households following low welfare strategies were trapped in poverty however many households moved actively between strategies of different welfare levels this indicates that there was no absolute poverty threshold but also that being able to initiate a relatively profitable livelihood strategy was no guarantee that this strategy could be maintained there is no evidence that hurricane mitch affected livelihood strategy transitions livelihood mobility was similar for households inside and outside mitch affected areas

market seeking mnes in an emerging market how parent subsidiary links shape overseas success this study extends research on parent subsidiary links applying new theoretical perspectives those of resource dependence and dynamic capability to the new empirical setting of an emerging market we suggest that parent subsidiary links help to mitigate emerging market threats by reducing external dependence and help to capitalize on emerging market opportunities by enhancing local responsiveness

political risk and dividend policy evidence from international political crises we examine the impact of political risk on firms payout policy using a large international sample across 35 countries over the period from 1990 to 2008 we find that global political crises raise the market perceived uncertainty and cost of external financing using crisis events as a proxy for political risk we document that past dividend payers are more likely to terminate dividends and that non payers are less likely to initiate dividends during periods of high political risk these findings suggest a precautionary incentive of managers in response to political shocks further analysis shows that the effect of political risk on payout policy is stronger for multinational corporations but can be attenuated by country specific institutional settings such as more stable political systems and stronger investor legal protection

the performance of rice markets in bangladesh during the 1974 famine recent discussions have further emphasised the role of speculation in foodgrains as a cause of famine hartmann and boyce i 979 sobhan i 980 rashid i 980 sen i98i greenough i982 by this reasoning famine is attributed to the expectation on the part of foodgrain stockholders of a substantial future price increase or future rationing there is a weakness in this explanation as arrow remarks in his review of sen i98i

natural disasters household welfare and resilience evidence from rural vietnam summary the study uses commune fixed effects regressions to estimate the effect of natural disasters on welfare and poverty of rural households in vietnam and subsequently examines household and community characteristics that can strengthen resilience of households to natural disasters we find that all the three disaster types considered in this study including storms floods and droughts have negative effects on household income and expenditure households in communes with higher mean expenditure and more equal expenditure distribution are more resilient to natural disasters access to micro credit internal remittances and social allowances can help households strengthen the resilience to natural disasters

repeated auctions of incentive contracts investment and bidding parity with an application to takeovers this article considers a two period model of natural monopoly and second sourcing the incumbent supplier invests in the first period after observing the incumbent s first period performance the buyer may break out in the second period the investment may or may not be transferable to the second source and it may be monetary or take the form of human capital we determine whether the incumbent should be favored at the reprocurement stage and how the slope of his incentive scheme should evolve over time we find that the gains from second sourcing are not so large as one might hope finally we reinterpret the second source as a raider and the breakout as a takeover we discuss the desirability of defensive tactics and obtain a rich set of testable implications concerning the size of managerial stock options the extent of defensive tactics the firm s performance and the probability of a takeover

cultural diversity and the performance of multinational firms we test the hypothesis that culturally related international diversification will have a positive impact on firm performance and that the opposite will be true for culturally unrelated globalization cultural diversity for fortune 500 firms was used to predict performance over a ten year period 1985 1994 controlling for several organizational and industry characteristics regression tests using nine indicators of cultural diversity revealed no significant cultural effects alternate interpretations are offered

determinants of foreign direct investment a tale of nine theoretical models abstract this paper presents a review of nine theoretical models of foreign direct investment fdi discussed are early studies of determinants of fdi 1 as well as determinants of fdi based on the neoclassical trade theory 2 ownership advantages 3 aggregate variables 4 the ownership location and internalization advantage framework 5 horizontal and vertical fdi models 6 the knowledge capital model 7 diversified fdi and risk diversification models 8 and policy variables 9 from each of the nine theories the relevant determinants of fdi are derived empirical studies indicate the importance of these determinants in the real world the paper shows that there is not one single theory of fdi but a variety of theoretical models attempting to explain fdi and the location decision of multinational firms therefore any analysis of determinants of fdi should not be based on a single theoretical model instead fdi should be explained more broadly by a combination of factors from a variety of theoretical models such as ownership advantages or agglomeration economics market size and characteristics cost factors transport costs protection risk factors and policy variables

the demand for food and calories we investigate nutrition and expenditure in rural maharashtra in india we estimate that the elasticity of calorie consumption with respect to total expenditure is 0 3 0 5 a range that is in accord with conventional wisdom the elasticity declines only slowly with levels of living and is far from the value of zero suggested by a recent revisionist literature in these indian data the calories necessary for a day s activity cost less than 5 percent of the daily wage which makes it implausible that income is constrained by nutrition rather than the other way around

auctions for split award contracts the buyer of a homogeneous input divides his input requirements into two contracts that are awarded to different suppliers he uses a sequential second price auction to award a primary and a secondary contract with a fixed number of suppliers the buyer pays a higher expected price than with a sole source auction the premium paid to the winner of the secondary contract must also be paid to the winner of the primary contract as an opportunity cost when entry is endogenous we identify the conditions under which a secondary contract can increase the number of suppliers and lower the expected price

another day another dollar enterprise resilience under terrorism in developing countries this study extends the literature on entrepreneurship in developing countries by offering a two stage explanation for the paradoxical observation that enterprise activities often flourish under extreme adversity our findings complement the base of pyramid and peace through commerce attention to the growing role of business in international development by fleshing out the functions of enterprise resilience under terrorism we first explain how terrorism conditions outbreak escalation and reduction may create psychological incentives for enterprise resilience then we show that controlling for ex ante terrorism conditions enterprise resilience yields more favorable economic payoffs at higher levels of terrorism especially for informal entrepreneurs

price hike of staple food nutritional impact and consumption adjustment evidence from the 2005 2010 rice price increase in rural bangladesh this paper studies the nutritional impact of the rice price increase between 2005 and 2010 on households in rural bangladesh and their resulting adjustment in consumption of rice non rice food and

split awards procurement and innovation in many procurement settings it is possible for a buyer to split a production award between suppliers in this article we develop a model of split award procurement auctions in which the split choice is endogenous we characterize the set of equilibrium bids and allocations for optimizing agents in an environment in which suppliers are fully informed about each other s costs split award equilibria simultaneously exhibit strong collusive features and cost efficiency properties despite the former property of the equilibria upstream investment considerations may lead a buyer to prefer a split award auction format to a winner take all auction format

revenue equivalence in multi object auctions abstract the theory of auctions suggests that under certain conditions seemingly different methods for auctioning a single object will result in the same expected price this result extends quite easily to the case of more than one object

trade liberalization and national food security rice trade between bangladesh and india abstract following a poor harvest in late 1997 and a massive flood in 1998 private sector traders in bangladesh imported several million metric tons of rice from india this paper presents evidence that this trade made possible by separate trade liberalizations in india and bangladesh in the early 1990s augmented domestic supplies and stabilized prices in bangladesh at import parity levels letters of credit data indicating the participation of hundreds of importers and a close correlation of price movements across the two countries suggest that the trade was competitive a risk of co incident crop shortfalls in the two countries remains though these have occurred rarely in the past two decades bangladesh imports from alternative sources would also enhance food availability if another production shortfall occurs but these imports face higher transport costs and would involve far fewer importing firms given the economies of scale of shipments by sea the positive contribution of trade liberalization to short run food security in bangladesh in recent years does not minimize the importance of increased agricultural productivity and rural economic growth to provide rural poor households with sufficient incomes to acquire food nonetheless the bangladesh experience shows that trade liberalization offers potential benefits for national food security by enabling a rapid increase of food supplies following domestic production shortfalls

multinationality and performance among british manufacturing companies over the period 1972 84 profitability among 304 large british manufacturing companies was positively related to their degree of multinationality moreover increases in overseas production were strongly associated with increases in sales and profitability the profitability of multinational growth over the whole period was independent of its destination supporting the view that the primary source of the superior performance of multinationals was competitive advantage rather than the higher rate of profit in the industries of other countries

liability of foreignness natural disasters and corporate philanthropy this study examines how philanthropy can mitigate liability of foreignness lof in the aftermath of a national disaster a major disaster restructures the social landscape creating an avenue for corporate contributions to play a role in recovery and relief efforts this social restructuring offers a valuable opportunity for multinational enterprises mnes to establish strong local ties in turn mne contributions at such times have a stronger impact on their local acceptance thus mnes can use these events to strengthen their position in the community and mitigate lof using the context of a national disaster in india i test these arguments with a sample of 190 mnes and 660 domestic firms i found that in the aftermath of the disaster the increase in mne contributions was much larger and less strongly tied to promotional activities than the increase in contributions from domestic firms and this difference persisted over time moreover the performance implication of post disaster philanthropy was stronger for mnes than for domestic firms these findings suggest that philanthropy plays a more strategic role for mnes in the aftermath of a disaster and it has a pronounced effect on mitigating lof

curbing agency problems in the procurement process by protest oversight we study a model in which a potential bidder in a government procurement may challenge its exclusion from the procurement before a quasi judicial board in the case of a sole source procurement the excluded vendor does not know whether the decision was justified in terms of expected surplus or alternatively was due to an agency problem we explain the occurrence of i equilibrium protests ii deterrence of inefficient sole sourcing iii overdeterrence the choice of a competitive procurement when sole source would be appropriate iv buyoff settlements which preserve inappropriate sole source procurement and v fedmail settlements which accompany appropriate sole source procurements our normative analysis addresses recent legislative initiatives to reform the protest process

incomplete information and optimal market structure public purchases from private providers abstract market structure is endogenized in a normative model of public procurement featuring a social cost of profit product variety economies of scale and incomplete information about cost depending on parameters either sole sourcing or dual sourcing might be optimal however if the social cost of profit is positive but not too large incomplete information biases optimal market structure in favor of sole sourcing on the other hand this bias in favor of sole sourcing may be reversed if the social cost of profit is large an application to the publicly financed treatment for drug abuse motivates the analysis

food aid domestic policy and food security contrasting experiences from south asia and sub saharan africa abstract food aid both for short term emergency relief and as program food aid that helps address medium term food deficits is often a major component of food security strategies in developing countries this study reviews the experience with food aid of four major recipients of food aid india bangladesh ethiopia and zambia regarding food production trade markets consumption and safety nets as well as the policy responses to food emergencies the widely varying experiences of the study countries suggest that food aid that supports building of production and market enhancing infrastructure is timed to avoid adverse price effects on producers and is targeted to food insecure households can play a positive role in enhancing food security however food aid is not the only or in many cases the most efficient means of addressing food insecurity in many cases private markets can more effectively address shortfalls in food availability and cash transfers may be a viable alternative to food transfers in kind

does trade openness contribute to food security a dynamic panel analysis abstract despite significant progress in the fight against hunger during the last decades food insecurity remains a major problem in many countries especially developing ones in this study we use a large cross country data to investigate the impact of trade openness and other factors on food security measured by dietary energy consumption we employ a system gmm approach to account for unobserved heterogeneity correlated individual effects and potential endogeneity of the explanatory variables the empirical results reveal that trade openness and economic growth exert positive and significant impacts on dietary energy consumption and also contribute to improvements in dietary diversity the results are robust to the inclusion of additional variables capturing specific agro climatic constraints e g weather related and regional country characteristics and to the sample composition most geographical regions are found to have significantly higher food security levels compared to sub saharan africa additional results indicate that besides calorie consumption trade openness also improves dietary diversity and diet quality related aspects of food security