decentralized and concentrated investments in china and the performance of taiwanese listed electronic companies abstractever since china surpassed taiwan to become the largest exporter of electronic products dependence between the two sides has deepened which prompts taiwanese companies to go public in china this study conducted the data envelopment analysis dea and regression analysis to analyse the impacts of the depth and breadth of investments in china on the performance of taiwanese listed electronic companies the empirical results show that the breath of the investments in china has a positive correlation with the performance of taiwanese companies while the depth of investments in china has a negative and significant effect on the performances due to the companies lack of know how which leads to a high learning cost in summary companies should strategize their decentralized and concentrated investments in china

computational analysis of the accession of chile to the nafta and western hemisphere integration we present the results based on the michigan computational general equilibrium model of western hemisphere economic integration it is shown that tariff elimination will have beneficial effects for most countries involved although the benefits as well as the costs of liberalizatio n are small however if a hemispheric treaty were to stimulate an increase in the capital stocks of the major south american economies the welfare gains would be substantial sensitivity tests reveal that the model exaggerates the likely gains from economies of scale due to liberalization but the error is small in this context because the impact of trade liberalization is small when econometric estimates of scale economies are incorporated into the model the welfare gains due to capital flows nevertheless remain robust a comparison of results for chile using different databases indicates that the impact of regional liberalization using a 1980 database may overstate the impact on the nonferrous metals sector in particular and manufacturing more generally nonetheless when using a 1990 database the change in output of the nonferrous metals sector remain larger than for any other sectors in the chilean economy

multinationality and firm performance the moderating role of r d and marketing capabilities researchers in international business have long been interested in understanding the relationship between the multinationality of a firm and its market performance this article contributes to this research stream by incorporating firm heterogeneity in examining the multinationality performance relationship the findings based on a time series cross sectional analysis of firms from 12 different industries over a seven year period indicate that the impact of multinationality on both financial and operational performance is moderated by firm s r d and marketing capabilities

ownership based entry mode strategies and international performance this study examines the relationship between ownership entry modes and performance the ownership entry modes examined are the wholly owned modes of acquisition and new venture entry and the non wholly owned mode of joint venture entry a theoretical relationship is developed for international entry modes that is based on the contingency characteristics of resource requirements and organizational control factors this model suggests that different entry modes have different performance outcomes based upon their resource and organizational control demands the theoretical model although developed using the eclectic theoretical approach is based largely on concepts and relationships previously delineated in contingency theory our hypotheses suggest that new ventures should outperform joint ventures and joint ventures should outperform acquisitions an empirical test using a sample of 321 japanese firms entering the north american market provides supporting evidence

international coordination in the design of macroeconomic policy rules abstract the paper examines international issues that arise in the design and evaluation of macroeconomic policy rules it begins with a theoretical investigation of the effects of fiscal and monetary policy in a two country rational expectations model with staggered wage and price setting and with perfect capital mobility the results indicate that with the appropriate choice of policies and with flexible exchange rates demand shocks need not give rise to international externalities or coordination issues price shocks however do create an externality and this is the focus of the empirical part of the paper using a simple seven country model consisting of canada france germany italy japan the united kingdom and the united states optimal cooperative and non cooperative nash policy rules to minimize the variance of output and inflation in each country are calculated the cooperative policies are computed using standard dynamic stochastic programming techniques and the non cooperative policies are computed using an algorithm developed by finn kydland the central result is that the cooperative policy rules for these countries are more accommodative to inflation than the non cooperative policy rules

globalization derailed multinational investors response to the 1997 denial of fast track trade negotiating authority is globalization being derailed by opponents results of this event study analysis of the 1997 fast track denial suggest that investors 1 may have perceived fast track as a debate on globalization and 2 appear to have expected financial losses to result from the failure to enact fast track regression results further support the event study findings

computational analysis of the menu of us japan trade policies we have used the michigan computable general equilibrium cge model of world production and trade to calculate the aggregate welfare and sectoral employment effects of the menu of us japan trade policies the menu of policies encompasses the various preferential us and japan bilateral and regional free trade agreements ftas negotiated and in process unilateral removal of existing trade barriers and global multilateral free trade the welfare impacts of the ftas on the united states and japan are shown to be rather small in absolute and relative terms the sectoral employment effects are also generally small but vary across the individual sectors depending on the patterns of the bilateral liberalisation the welfare effects on the fta partner countries are mostly positive though generally small but there are some indications of potentially disruptive employment shifts in some partner countries there are indications of trade diversion and detrimental welfare effects on non member countries for some of the ftas analysed in comparison to the welfare gains from the us and japan bilateral ftas the gains from both unilateral trade liberalisation by the united states japan and the fta partners and from global multilateral free trade are shown to be rather substantial and more uniformly positive for all countries in the global trading system the us and japan ftas are based on hub and spoke arrangements we show that the spokes emanate out in different and often overlapping directions suggesting that the complex of bilateral ftas may create distortions of the global trading system

valuation of the operating flexibility of multinational corporations the returns to multinationality are estimated as the value of operating flexibility empirical measures of the return of multinationality require a precise specification of the extensiveness of the mnc s transnational network to measure the degree of multinationality this precise empirically grounded definition of multinationality has been absent from the academic literature to date we address this omission and we find that two characteristics of the transnational network its breadth number of foreign countries in which the mnc has operations and depth the concentration of foreign subsidiaries in a few countries are significant in explaining the value of operating flexibility in particular we find that the returns to multinationality are maximized for firms with networks that have breadth but not depth the role of market intangibles such as r d and advertising on mnc market valuation is shown to depend on the flexibility regime

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

foreign direct investment in the united states an analysis by country of origin given the large size and rapid growth of foreign direct investment in the united states this subject is a central concern of u s firms and u s government policymakers this study explores the factors that contribute to the explanation of fdi in the united states by country of origin of investment evidence from the past twelve years shows that the main significant positive influences are home country s exports to the united states and home country market size significant negative influences include the home country s imports from the united states the cultural and geographic distances of the home country from the united states and the exchange rate fx

solving for optimal simple rules in rational expectations models this paper presents algorithms that solve for optimal simple monetary policy rules in rational expectations models with precommitment and discretion the algorithms are applied to the models in fuhrer j money credit banking 29 1997 214 clarida et al j econ lit 37 1999 1661 and rudebusch econ j 112 2002 402 to examine the efficiency properties of operational policy rules we show that optimized taylor type rules preform well in these models but that aside from the fuhrer moore model this result is sensitive to whether the central bank can respond to current period shocks taylor type rules that are operational in the sense that they do not respond to current period information are found to be highly inefficient in the rudebusch model and in the clarida et al 1999 model

the eclectic paradigm of international production a restatement and some possible extensions this article reviews some of the criticisms directed towards the eclectic paradigm of international production over the past decade and restates its main tenets the second part of the article considers a number of possible extensions of the paradigm and concludes by asserting that it remains a robust general framework for explaining and analysing not only the economic rationale of economic production but many organisational and impact issues in relation to mne activity as well

comparing the global performance of alternative exchange arrangements abstract this paper presents and applies a methodology useful for studying the operating characteristics of a number of alternative monetary arrangements using a large scale simulation model of the world economy we consider the performance of the regimes when policymakers do or do not observe the shocks and when policymakers infer the shocks using an optimal filtering rule although the results are model specific and at best illustrative of the issues involved the approach does have the advantage of providing a richer framework of analysis than is possible in simple models of international interdependence

bargaining power of multinationals and host governments one of the outcomes of negotiation between multinationals and host governments in developing countries the extent of foreign ownership of subsidiaries is influenced by the bargaining power of the two parties foreign ownership measured in various ways appears to be affected by the level of technology of the multinational the degree to which a multinational attempts to differentiate its products the extent to which a subsidiary s output is exported to other parts of the multinational the diversity of products offered by the multinational and the extent of competition by other multinationals the relationship between some of these variables and ownership is not a simple one one variable that others have mentioned as probably affecting bargaining power size of the investment in question appears not to play a significant role in government policies toward ownership but many large projects tend to be located in countries that have lenient ownership policies

measurement of multiperiod aggregative efficiency abstract this article proposes a new method for measuring an aggregative efficiency of multiple period production systems every organization or firm generates a time series of data that represent its performances in the resource utilization and output production over multiple periods and often desires an aggregated measure of efficiency for several periods of interest data envelopment analysis dea has become an accepted and well known approach to evaluating efficiency performance in a wide range of cases however most of the dea studies have dealt primarily with ways to gauge the efficiency of production in only a single period so this efficiency reflects the insufficient or partial performance of multiple period productions the new method is developed through extensions of the concept of debreu farrell technical efficiency and is applied to evaluating the efficiency of cable tv service units with 3 year data

network linkages and location choice in foreign direct investment this paper shows that network linkage is an important determinant of location choice in foreign direct investment fdi network linkages are divided into internal intra firm and external inter firm linkages external linkages are further separated into strategic and relational linkages we found that taiwanese firms are keen on making external linkages but are indifferent to or incapable of making internal linkages through fdi strategic linkages motivate taiwanese fdi in the united states while relational linkages facilitate taiwanese fdi in southeast asia and china small firms are more sensitive to relational linkages than large firms in their choice of fdi location

small firms as international players in this paper using aggregate data from the u s bureau of economic analysis the author explores the strategies small u s based foreign investing firms follow in their international activities the aggregate study supports the findings of an earlier study of a few small firms with international activities these firms have a lower than expected tendency to form minority owned affiliates abroad an analysis of the industries in which these small foreign investing firms operate supports the notion that these firms follow specific strategies uncovered in the small scale study finally the paper ties the findings to alliance strategies of small firms

specification of policy rules and performance measures in multicountry simulation studies abstract much recent analysis of international monetary and fiscal policy issues has been conducted by stochastic simulations with multicountry econometric models in these studies it has become standard practice to consider alternative policy rules of a form that calls for departures of a policy instrument from some baseline reference path that are proportional to deviations of a specified target variable from its own baseline path the present paper argues that this standard rule form is seriously defective for such issues because th eimplied rules often fail to be operational and have associated performance measures that can be misleading in important cases jel c50 f30

exchange rate management and macroeconomic policy a national perspective this paper reviews the literature on alternative exchange rate arrangements for a small economy it discusses exchange rate management for short run stabilization purposes and the choice of exchange rate regimes to foster policy discipline recent research has emphasized that the appropriate degree of exchange rate flexibility depends on the nature of disturbances exchange rate movements provide information about shocks and can serve as a basis for intervention rules empirically operational guidelines have not yet been provided floating rates are said to be desirable because they allow policy makers greater autonomy recent research has questioned the implicit assumption that autonomy is always useful rules that prevent discretionary policy may be preferable what role if any the exchange rate should play in such rules has not yet been resolved

a dynamic decision model of smes fdi many scholars generally believe that small and medium sized enterprises smes in comparison to large firms are at a disadvantage in foreign direct investment fdi however new evidence suggests that smes also play an important role in fdi why do they undertake risk in other countries we are interested in what factors significantly motivate them to go abroad taiwan s smes play a vital role in her economic development and outward fdi and this study therefore focuses on the outward fdi of taiwan s smes we apply the hazard rate approach to perform an empirical analysis taking into consideration the conditional probability of the element of time among smes the lower the degree of capital intensities the larger the firm sizes the higher the export ratios or the larger the level of r d intensities are the greater the intention will be to undergo fdi the major factors motivating taiwanese smes to conduct fdi in recent years are utilizing local labor expanding markets and following major clients

computational analysis of the us ftas with central america australia and morocco we use the michigan model of world production and trade to assess the economic effects of the us bilateral ftas negotiated with central america australia and morocco the model covers 18 economic sectors in each of 22 countries regions and is based on version 5 4 of the gtap database for 1997 together with specially constructed estimates of services barriers and other data on sectoral employment and numbers of firms the distinguishing feature of the model is that it incorporates imperfect competition in the manufacturing and services sectors including monopolistic competition increasing returns and product variety the modelling focus is on the effects of the bilateral removal of tariffs on agriculture and manufactures and services barriers rules of origin and other restrictive measures and the non trade aspects of the ftas are not taken into account due to data constraints the computational results indicate that the benefits of bilateral ftas for the united states and partner countries are rather small in both absolute and relative terms and that far greater benefits could be realised if the united states and its fta partners adopted unilateral free trade and especially if multilateral free trade was adopted by all countries regions in the global trading system

a north american free trade agreement analytical issues and a computational assessment abstractthe following sections are included introductionissues in analyzing the economic impact of the naftathe computational modelcomputational resultsconclusionsstudy questionsreferencessuggested further reading this abstract was borrowed from another version of this item

excess market value the multinational corporation and tobin s q ratio the results of this study show that there is a positive and significant relationship between excess market value of multinational corporations and the degree of international involvement as measured by foreign sales percentage however the excess market value is not determined by the number of foreign subsidiaries nor the interaction between foreign sales and the number of foreign subsidiaries the relationship between excess market value and the two frequently used measures of monopoly power concentration ratio and the lerner index was also examined this study found that the lerner index contributes significantly in explaining excess market value but concentration ratio does not furthermore the positive and significant coefficients of advertising and r d intensity serve as evidence that product market imperfections appear to play a bigger role in explaining the excess market value experienced by mncs during our sample period

the international transmission of economic shocks in a three country world under mixed exchange rates the international transmission of economic disturbances is analysed in a three country world where two countries have no macroeconomic impact on a third country but are large enough to influence each other under a system of mixed exchange rates a system that combines the fixed exchange rates fers among two ec member countries germany and france and the flexible exchange rates flers towards a third country the rest of the world usa we find that a positive output demand shock originating in germany or france has a positive effect on domestic output but due to a special third country effect is likely to produce a contractionary impact on foreign output negative transmission while the total effect on the world economy is expansionary money supply shocks in either germany or france have identical effects on the output of the two countries the fler component of the mer regime serves as an important tool for dampening the impact of us shocks on the output of the ec

modes of foreign entry a transaction cost analysis and propositions a frontier issue in international marketing is the appropriate choice of entry mode in foreign markets the objective of this paper is to offer a transaction cost framework for investigating the entry mode decision this framework provides 1 a theoretical basis for systematically interrelating the literature into propositions 2 propositions about interactions which resolve the apparently contradictory arguments advanced to date specifically the paper illustrates the feasibility of clustering 17 entry modes into the degree of control the mode provides the entrant proposes that the most appropriate i e most efficient entry mode is a function of the tradeoff between control and the cost of resource commitment advances testable propositions delimiting the circumstances under which each mode maximizes long term efficiency

multilateral regional and bilateral trade policy options for the united states and japan we have used the michigan model of world production and trade to simulate the economic effects on the united states japan and other major trading countries regions of the doha round of wto multilateral trade negotiations and a variety of regional bilateral free trade agreements ftas involving the united states and japan we estimate that an assumed reduction of post uruguay round tariffs and other barriers on agricultural and industrial products and services by 33 per cent in the doha round would increase world welfare by 686 4 billion with gains of 164 0 billion for the united states 132 6 billion for japan and significant gains for all other industrialised and developing countries regions if there were global free trade with all post uruguay round trade barriers completely removed world welfare would increase by 2 1 trillion with gains of 497 0 billion 5 5 per cent of gnp for the united states and 401 9 billion 6 2 per cent of gnp for japan regional agreements such as an apec fta an asean plus 3 fta and a western hemisphere fta would increase global and member country welfare but much less so than the doha multilateral trade round would separate bilateral ftas involving japan with singapore mexico chile and korea and the united states with chile singapore and korea would have positive though generally small welfare effects on the partner countries but potentially disruptive sectoral employment shifts in some countries there would be trade diversion and detrimental welfare effects on some non member countries for both the regional and bilateral ftas analysed the welfare gains from multilateral trade liberalisation are therefore considerably greater than the gains from preferential trading arrangements and more uniformly positive for all countries