declining values and the afternoon effect evidence from art auctions we study the order of sale in art auctions the final bid relative to the auctioneer s estimated price declines throughout the course of an auction a theoretical model shows that in an auction ordered by declining valuation even in the presence of risk neutral strategic bidders the price received relative to the estimate for later items in an auction should be less than the price relative to the estimate for earlier items furthermore ordering heterogeneous items by value maximizes revenue for the auctioneer

bidding behavior at sequential first price auctions with out supply uncertainty a laboratory analysis abstract we report on a series of experiments that test the effects of an uncertain supply on bidding behavior and prices in sequential first price auctions with private independent values and unit demands supply is assumed uncertain when buyers do not know the exact number of units to be sold i e the length of the sequence we observe an important overbidding in all but the last stage of a sequence no matter whether supply is certain and a non monotone behavior when supply is certain yet the data qualitatively support most stage to stage bid predictions and the price trend predictions for risk neutral bidders

global factors and emerging market spreads this paper shows that a large fraction of the variability of emerging market bond spreads is explained by the evolution of global factors such as risk appetite as reflected in the spread of high yield corporate bonds in developed markets global liquidity measured by the international interest rates and contagion from systemic events like the russian default this link has remained relatively stable over the history of the emerging market class is robust to the inclusion of country specific factors and helps provide accurate long run predictions overall the results highlight the critical role played by exogenous factors in the evolution of the borrowing cost faced by emerging economies

testing for price anomalies in real estate auctions this paper reports on the results of an auction sale of 83 condominium apartment units in new jersey at the auction every unit was hammered down but unknown to the 2 348 registered bidders 40 of the sales fell through prices in the subsequent sale of condominium units in face to face negotiations resulted in identical units selling for 13 less than they fetched at auction and the discount was largest for those units hammered down early in the auction these results are inconsistent with the usual predictions from the theory of common value auctions and suggest that uninformed bidders in this auction may have been the subject of a winner s curse which generated considerable profit for the seller this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from ano this abstract was borrowed from another version of this item

agents ability to manage information in centralized markets comparing two wholesale fish markets abstract in this paper we perform an empirical investigation to detect if and how agents behavior changes with the amount of available information they have to this aim we use data from two wholesale fish markets of different thicknesses we tackle the issue by investigating features such as the dynamics of the structure of attendance in auctions the varieties of fish presentations during the seller s turn and the presence of long term relationships between buyers and sellers we perform the investigation in this way instead of focusing on the dispersion and dynamics of prices to prevent unobserved quality differences of the traded fish varieties from biasing the results of the analysis the results of our investigation are consistent with a situation in which the magnitude of phenomena like buyers loyalty to sellers and agents following rules of thumb increases with the market thickness

debt maturity and the international financial architecture this paper presents a theory of the maturity of international sovereign debt and derives its implications for the reform of the international financial architecture the analysis is based on a model in which the need to roll over external debt disciplines the policies of debtor countries but makes them vulnerable to unwarranted debt crises due to bad shocks the paper presents a welfare analysis of several measures that have been discussed in recent debates such as international lending in last resort or the establishment of a mechanism for suspending payments on the external debt of crisis countries jel f34 o19

creation adoption and diffusion of innovations by subsidiaries of multinational corporations this paper reports some of the findings of a multi phased and multi method study on the organizational attributes that facilitate creation adoption and diffusion of innovations by subsidiaries of multinational companies comparison of results obtained through case research in nine companies multiple respondent questionnaire surveys in three companies and a single respondent survey in 66 north american and european multinationals reveal unambiguous and positive impacts of normative integration through organizational socialization and dense intra and inter unit communication on an mnc subsidiary s ability to contribute to the different innovation tasks the findings are less consistent with regard to the effects of local resources and autonomy and it appears that the influences of these two attributes are strongly mediated by the levels of normative integration and organizational communication

excessive volatility in capital flows a pigouvian taxation approach this paper analyzes prudential controls on capital flows to emerging markets from the perspective of a pigouvian tax that addresses externalities associated with the deleveraging cycle it presents a model in which restricting capital inflows during boom times reduces the potential outflows during busts this mitigates the feedback effects of deleveraging episodes when tightening financial constraints on borrowers and collapsing prices for collateral assets have mutually reinforcing effects in our model capital controls reduce macroeconomic volatility and increase standard measures of consumer welfare

micro processes of translation in the transfer of practices from mne headquarters to foreign subsidiaries the role of subsidiary translators recent research has increasingly emphasized the micro foundations of knowledge transformation in multi national enterprises mnes although the literature has provided ample evidence of the enablers of and barriers to the translation of practices less is known about the activities and efforts of translators that lead to specific types of translation in the context of the transfer of practices initiated at a mne s headquarters hq to foreign subsidiaries we apply a scandinavian institutionalist approach to examine the translation of corporate social responsibility reporting an hq initiated practice that is transferred to five foreign subsidiaries of a uk based mne our paper builds from a preliminary framework based on extant research to develop an extended framework of the micro processes of translation by theorizing the sequence of the micro processes undertaken by translators identifying the conditions under which they occur and connecting them to the three types of translation we provide a deep understanding of the micro foundations of translation when transferring practices from hq to subsidiaries our paper shows that translation is an evolving phenomenon and illuminates the importance of attending to the social spatial and temporal situatedness of translators it also brings insights into the individual experience of institutional distance and its effects on translation

macroeconomic policies and performance in latin america abstract this paper provides new evidence on macroeconomic policies and results in latin america and the caribbean results are i credibility allows adoption of counter cyclical macroeconomic policies ii accuracy in meeting inflation targets depends on central bank independence and country risk iii intermediate exchange rate er regimes have become less persistent iv er regimes matter for inflation and growth v real er trends are not explained by productivity growth and supply reforms do not resolve real er misalignments vi financial integration has increased significantly vii foreign shocks are a major growth determinant and viii composition of foreign capital inflows matters for growth

u s real interest rates and default risk in emerging economies we empirically analyse the appropriateness of indexing emerging market sovereign debt to us real interest rates we find that policy induced exogenous increases in us rates raise default risk in emerging market economies as hypothesised in the theoretical literature however we also find evidence that omitted variables which simultaneously increase us real interest rates and reduce the risk of default dominate the hypothesised relationship we can only conclude that it s not a good idea to index emerging market bonds to us real interest rates

why and how does shared language affect subsidiary knowledge inflows a social identity perspective extending existing international business ib research we conceptualize shared social identity as an outcome rather than only an antecedent of multinational enterprise knowledge flows to provide an alternative reason for why such knowledge flows occur we further argue that shared language among subsidiary and headquarters hq managers is an insufficient condition for subsidiary knowledge receipt accordingly we develop a moderated mediation model at the subsidiary level to examine how shared language affects subsidiaries tacit knowledge inflows from hq specifically we study 1 whether this relationship is mediated by the extent to which subsidiary managers share hq goals and vision and the extent to which human resources decisions are centralized at hq and 2 whether subsidiary type greenfields vs acquisitions moderates these mediated relationships such that in both cases the mediation will be stronger in foreign acquisitions compared with foreign greenfields building on a sample of 817 subsidiaries in 9 countries regions and a novel subjective measure of shared language we find support for our model implications for research on hq subsidiary knowledge flows social identity theory and the literature on sociolinguistics and international human resource management are discussed and managerial implications outlined

evolving market structure an ace model of price dispersion and loyalty we present an agent based computational economics ace model of the wholesale sh market in marseille two of the stylized facts of that market are high loyalty of buyers to sellers and persistent price dispersion although it is every day the same population of sellers and buyers that meets in the same market hall in our ace model sellers decide on quantities to supply prices to ask and how to treat loyal customers while buyers decide which sellers to visit and which prices to accept learning takes place through reinforcement the model explains both stylized facts price dispersion and high loyalty in a coevolutionary process buyers learn to become loyal as sellers learn to o er higher utility to loyal buyers while these sellers in turn learn to o er higher utility to loyal buyers as they happen to realize higher gross revenues from loyal buyers the model also explains the e ect of heterogeneity of the buyers we analyze how this leads to subtle di erences in the shopping patterns of the di erent types of buyers and how this is

financial globalization and debt maturity in emerging economies this paper studies how financial globalization affects debt structure in emerging economies we find that by accessing international markets firms increase their long term debt and extend their debt maturity in contrast with financial liberalization long term debt decreases and the maturity structure shifts to the short term for the average firm these effects are stronger in economies with less developed domestic financial systems the evidence is consistent with financial integration having opposite effects on the firms that are able to integrate with world markets and obtain financing globally relative to the firms that rely on domestic financing only

subsidiary absorptive capacity and knowledge transfer within multinational corporations the paper reviews extant literature on subsidiary absorptive capacity and knowledge transfer within multinational corporations mncs and proposes an agenda for future research on the relationship between these two constructs it suggests that motivation should be viewed as a moderating factor between subsidiary absorptive capacity and mnc knowledge transfer and that future research should make a clear distinction between the choices of mnc headquarters and those of subsidiaries regarding knowledge transfer the paper proposes that a more comprehensive multi level framework and dynamic model of the determinants of subsidiary absorptive capacity and mnc knowledge transfer be developed in future studies

emerging local currency bond markets in this article the authors assess local currency bond markets in emerging market economies emes supported by policies and laws that helped improve macroeconomic stability and creditor rights local currency eme bond markets have grown substantially over the past decade and have provided usd based investors with attractive returns u s investors have responded by sharply increasing their holdings of eme local currency bonds especially in emes with investor friendly institutions and policies

collective moral hazard maturity mismatch and systemic bailouts the paper elicits a mechanism by which private leverage choices exhibit strategic complementarities through the reaction of monetary policy when everyone engages in maturity transformation authorities haver little choice but facilitating refinancing in turn refusing to adopt a risky balance sheet lowers the return on equity the key ingredient is that monetary policy is non targeted the ex post benefits from a monetary bailout accrue in proportion to the number amount of leverage while the distortion costs are to a large extent fixed this insight has important consequences first banks choose to correlate their risk exposures second private borrowers may deliberately choose to increase their interest rate sensitivity following bad news about future needs for liquidity third optimal monetary policy is time inconsistent fourth macro prudential supervision is called for we characterize the optimal regulation which takes the form of a minimum liquidity requirement coupled with monitoring of the quality of liquid assets we establish the robustness of our insights when the set of

the federal reserve the emerging markets and capital controls a high frequency empirical investigation in this paper i use weekly data from seven emerging nations four in latin america and three in asia to investigate the extent to which changes in fed policy interest rates have been transmitted into domestic short term interest rates during the 2000s the results suggest that there is indeed an interest rates pass through from the fed to emerging markets however the extent of transmission of interest rate shocks is different in terms of impact steady state effect and dynamics in latin america and asia the results also indicate that capital controls are not an effective tool for isolating emerging countries from global interest rate disturbances changes in the slope of the u s yield curve including changes generated by a twist policy affect domestic interest rates in emerging countries i also provide a detailed case study for chile

sudden stops are global and local investors alike the main goal of this paper is to characterize the determinants of sudden stops caused by domestic vis a vis foreign residents are the decisions of domestic investors to invest abroad or of foreign investors to cut off funds from the domestic economy governed by the same set of determinants given the distribution of different types of sudden stop episodes over time and its different macroeconomic consequences the authors argue that the determinants may not be alike using an effective sample of 82 countries with annual information over the period 1970 2007 the analysis finds that global investors are less likely to stop bringing their capital when their economy is growing and the world interest rate is lower domestic agents are more willing to invest abroad if the macroeconomic performance of the domestic economy is poor high inflation the financial system is weak and there are high external savings current account surpluses increasing financial openness makes the domestic country more vulnerable to sudden stops caused by either local or global investors finally countries with higher shares of foreign direct investment are less prone to inflow driven sudden stops whereas the opposite holds for outflow driven sudden stops

mnc knowledge transfer subsidiary absorptive capacity and hrm based on a sample of 169 subsidiaries of multinational corporations mncs operating in the usa russia and finland this paper investigates the relationship between mnc subsidiary human resource management hrm practices absorptive capacity and knowledge transfer first we examine the relationship between the application of specific hrm practices and the level of the absorptive capacity second we suggest that absorptive capacity should be conceptualized as being comprised of both employees ability and motivation further results indicate that both ability and motivation absorptive capacity are needed to facilitate the transfer of knowledge from other parts of the mnc

managing the mne subsidiary advancing a multi level and dynamic research agenda abstract multinational enterprise mne subsidiaries abroad are important organizations in their own rights they typically hold some of the mne s most critical resources and operate at the forefront of complex international environments in this review we identify and organize theoretical and empirical research on subsidiary management based on over 600 articles in leading academic journals we develop a conceptual framework that integrates complementary streams of theoretical and empirical research with the subsidiary as its focal unit of analysis in particular we review six lines of research on subsidiary scope practices knowledge management engagement with local market and nonmarket actors performance and individuals within subsidiaries we highlight theoretical perspectives that have contributed to and been advanced by research on mne subsidiaries based on the review we explore future research agendas linking the contemporary research themes with two main thrusts first subsidiary management is a multi level phenomenon that would benefit from more microfoundational research second subsidiary management operates at key interfaces of technology paradigm shifts and of disruptions in the political and institutional environment research into the dynamics of subsidiary management would thus enhance our understanding of international business in a volatile global economy

knowledge sharing and social interaction within mnes social interaction between managers from different units of a multinational enterprise mne has been shown to be an important factor stimulating intra mne knowledge sharing face to face social interactions form a communication channel particularly conducive to the transfer of tacit non codified knowledge but intensive social interaction also provides opportunities for social construction of knowledge in a learning dialogue the first explanation sender receiver makes us expect social interaction to moderate positively the effects of the factors giving rise to knowledge flows in the first place such as differences in capabilities between mne subsidiaries the second perspective social learning also grants an independent effect to social interaction as a main factor stimulating intra mne knowledge flows we formulate hypotheses based on both perspectives and test these on data from 169 mne subsidiaries our findings show a considerable main effect of social interaction on all intra mne knowledge flows confirming the expectations based on the social learning model interaction effects based on the predictions of the sender receiver model are only partly confirmed these findings suggest that future research should devote more attention to the social constitution of mne knowledge

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

market organisation and trading relationships in this paper we give a theoretical model of buyers behaviour on a market for a perishable good where no prices are posted we show that if buyers learn from their own previous experience there is a sharp division between those who learn to be loyal to certain sellers and those who continue to shop around this feature remains in more general models which are simulated and is consistent with empirical data from the marseille fish market

a learning approach to auctions we analyze a repeated first price auction in which the types of the players are determined before the first round it is proved that if every player is using either a belief based learning scheme with bounded recall or a generalized fictitious play learning scheme then for sufficiently large time the players bids are in equilibrium in the one shot auction in which the types are commonly known

banks debt maturity and financial crises abstract we develop a model in which the maturity of external debt of banks their level of international reserves and the term structure of interest rates are jointly determine self fulfilling runs may occur and banks take this possibility into account when choosing the structure of their assets and liabilities if the probability of a run is sufficiently small banks will deliberately choose an illiquid asset liability position and expose themselves to a run in that case short term debt will be cheaper than long term debt and the maturity structure of foreign debt will depend on attitudes towards risk

catalogue vs order of sale effects in sequential auctions theory and evidence from a rare book sale we examine bidding in a rare book sequential auction that has features of a natural experiment lots were arranged in alphabetical order the reserve set non strategically and half the bids placed by mail in bidders we distinguish between the effects induced by the print order of the catalogue from those by the sequential nature of the sale we document the existence of distinct catalogue effects on prices number of bids and price variability and determine their causes we demonstrate that these catalogue effects also influence floor bidder behaviour we derive a theoretical model that generates key aspects of floor bidder behaviour copyright 2004 royal economic society

equilibrium reserve prices in sequential ascending auctions abstract we study a model where bidders have perfectly correlated valuations for two goods sold sequentially in two ascending price auctions the seller sets a reserve price before the beginning of each auction despite the lack of commitment by the seller we characterize an equilibrium and study its properties strategic non disclosure of information takes the form of non participation in the early auction by low valuation bidders while high valuation bidders bid up to their true valuations some buyers who would profitably buy at the reserve price refrain from participating in order to decrease the second auction reserve price

how auctions work for wine and art interview auctioneers and even to buy a little wine in the meantime i have also had the opportunity with john abowd 1988 to observe and collect data on the auction sale of impressionist and contemporary paintings this paper reports on some of the empirical regularities that i and others have observed in the actual operation of the auction markets for these items in view of the rich and diverse array of theoretical literature on auctions it seems high time economists began to spell out precisely what facts it is meant to explain 2

investment and time to plan and build a comparison of structures vs equipment in a panel of italian firms time to build models of investment expenditures play an important role in many traditional and modern theories of the business cycle especially for explaining the dynamic propagation of shocks we estimate the structural parameters of a time to build model using annual firm level investment data on equipment and structures for expenditures on equipment we find no evidence of time to build effects beyond one year for expenditures on structures by contrast there is clear evidence of such effects in the range of two to three years the contrast between equipment and structures is intuitively reasonable and consistent with previous results the estimates for structures also indicate that initial period expenditures are low and increase as projects near completion these results provide empirical support for including time to plan effects for investment in structures more generally these results suggest a potential source of specification error for q models of investment and production based asset pricing models that ignore the time required to plan build and install new capital jel d24 g31 c33 c34

the cyclical properties of disaggregated capital flows abstract we analyze the second moment properties of the components of international capital flows and their relationship to business cycle variables output investment and the real interest rate in 22 industrial and emerging countries total inward flows are procyclical with respect to all three macro variables net outward flows are countercyclical with respect to output and investment in most industrial and emerging countries disaggregated inward flows positively comove with output in industrial countries and with investment and the real interest rate in the g7 economies inward foreign direct investment is the only non procyclical type of inward capital flows with respect to output in the developing economies formal statistical tests based on nonparametric bootstrap techniques detect significant variance increases in all g7 countries disaggregated capital flows over exogenous and endogenously estimated breaks

an international comparison of capital structure and debt maturity choices this study examines how the institutional environment influences capital structure and debt maturity choices of firms in 39 developed and developing countries we find that a country s legal and tax system corruption and the preferences of capital suppliers explain a significant portion of the variation in leverage and debt maturity ratios specifically firms in more corrupt countries and those with weaker laws tend to use more debt especially short term debt explicit bankruptcy codes and deposit insurance are associated with higher leverage and more long term debt more debt is used in countries where there is a greater tax gain from leverage

mutual funds flows and the geography of contagion abstract this paper studies the dynamics and geography of investments made by international mutual funds located in advanced markets i identify precise global and regional dynamics in equity and bond flows very few countries receive or lose funding in isolation i also find strong evidence of global contagion when financial conditions in developed markets change emerging markets funding is heavily affected i illustrate this finding by deriving contagion maps showing where contagion spreads and with what intensity in general the results suggest that push effects from advanced market investors affect massively developing countries and expose them to sudden stops and surges

a comparative analysis of multi unit sequential auction under optimal reserve abstract we consider sequential auction of two identical objects under the second price rule when reserves are set optimally we find that bidders bid more in the sequential auction when they are risk averse cara than when they are not the expected revenue is higher under the vickrey rule than under the uniform price rule hence the sequential auction generates higher expected revenue than both the vickrey auction and uniform price auction when bidders have constant absolute risk aversion

knowledge transfer in international acquisitions this paper reports on a multimethod study of knowledge transfer in international acquisitions using questionnaire data we show that the transfer of technological know how is facilitated by communication visits meetings and by time elapsed since acquisition while the transfer of patents is associated with the articulability of the knowledge the size of the acquired unit and the recency of the acquisition using case study data we show that the immediate post acquisition period is characterized by imposed one way transfers of knowledge from the acquirer to the acquired but over time this gives way to high quality reciprocal knowledge transfer

does the u s economic policy uncertainty connect financial markets evidence from oil and commodity currencies abstract we provide novel insight to the emerging literature on the role of u s monetary policy as a driver of a global financial cycle by examining the possible causal effect of u s economic policy uncertainty on the connectedness of crude oil and currency markets using a sample of commodity currencies from advanced and emerging nations a battery of linear and nonlinear granger based causality tests indicate the presence of a causal relationship between economic policy uncertainty and the connectedness of oil and currency markets particularly at low frequencies and more significantly after the outburst of the global financial crisis while crude oil generally serves as a net transmitter of shocks to currencies across all frequency bands the spillover effects from oil are largely concentrated towards the g10 currencies of australian and new zealand dollar that are often used as investment currencies in global carry trade strategies overall our findings suggest the presence of a significant pass through effect of economic policy uncertainty via oil prices spilling over to the currency market in line with the emerging evidence that the monetary policy by the u s fed serves as a major driver of a global financial cycle that describes patterns in global capital flows credit activity and asset prices across financial markets

inefficient foreign borrowing a dual and common agency perspective studying the implications of uncoordinated borrowing the paper first looks at whether and when countries borrow too much in the aggregate it then revisits the original sin debate analyzing whether and when equity portfolio investment international portfolio diversification domestic currency denomination and longer maturities enhance borrowing countries access to international lending the paper thereby relates a country s level and quality of access to international capital markets to a variety of institutional features such as the level of domestic savings their location the extent of control rights held by political authorities and the interests of dominant domestic political forces

managing knowledge transfer in mncs the impact of headquarters control mechanisms in this paper we explore the impact of organisational mechanisms on inter unit knowledge flows in multinational corporations mncs a comprehensive model based on agency theory and socialisation theory is tested on a sample of 134 finnish and chinese mnc subsidiaries our findings indicate that mncs can influence inter unit knowledge transfer by specifying the objectives of the subsidiary and by utilising corporate socialisation mechanisms however we found no support for the hypothesised impact of management compensation systems and the use of expatriate managers on the extent of knowledge transfers from foreign subsidiaries to other parts of the mnc

managing tacit and explicit knowledge transfer in ijvs the role of relational embeddedness and the impact on performance drawing on organizational learning and economic sociology we address how relational embeddedness between the foreign parent and international joint venture ijv managers influences the type of knowledge i e tacit and explicit transferred to the ijv and how the importance of relational embeddedness varies between young and mature ijvs we also examine the influence of tacit and explicit knowledge on ijv performance our results show the importance that tie strength trust and shared values and systems play in the transfer of tacit knowledge especially for mature ijvs our findings are consistent with uzzi s tenets tacit learning is accumulative assists in explaining explicit knowledge and is enhanced by social embeddedness we also find that the influence of transferred tacit knowledge on ijv performance stems principally from its indirect effect on the learning of explicit knowledge

dynamics of the trade balance and the terms of trade the j curve the authors provide a theoretical interpretation of two features of international data the countercyclical movements in net exports and the tendency for the trade balance to be negatively correlated with current and future movements in terms of trade but positively correlated with past movements they document the same properties in a two country stochastic growth model in which trade fluctuations reflect in large part the dynamics of capital formation the authors find that their general equilibrium perspective is essential the relation between the trade balance and the terms of trade depends critically on the source of fluctuations copyright 1994 by american economic association

maturity mismatch and financial crises evidence from emerging market corporations substantial attention has been paid in recent years to the risk of maturity mismatch in emerging markets although this risk is microeconomic in nature the evidence advanced thus far has taken the form of macro correlations we evaluate this mechanism empirically at the micro level by using a database of over 1500 publicly traded firms from fifteen emerging markets with special focus on latin america and east asia while east asia corporates have tended to issue more debt at short maturities than their latin american counterparts we show that this is generally matched by greater holdings of liquid assets as a result the distribution of net shortterm exposure is remarkably similar across regions we attempt to measure the risk of such exposure by estimating at the firm level the eect on investment of short term exposure under capital account volatility for the whole sample and in both regions individually this eect is statistically zero contrary to the prediction of the maturity mismatch hypothesis this conclusion is robust to using a variety of dierent estimators alternative measures of capital flows and controls for devaluation eects and access to international capital

auctions and the price of art the value of most important works of art is established by public auction either directly by an actual sale or indirectly by reference to other sales how the auction system works is thus a critical determinant of how the public s preferences are translated into the evaluation of artistic work the auction system is central in the determination of the incentives for artistic work and the efficiency of the auction system is a key determinant of the cost of creating and distributing works of art this paper contains a review of the burgeoning new research of the last decade that has been designed to shed light on how the art auction system actually works what it indicates about price formation and how well it performs we begin our discussion in section 2 with a short description of the mechanics of the auction system and then organize the remainder of our discussion around two major topics the first topic concerns how auction prices can be used to determine and compare overall price movements within the art market and other markets and the second topic concerns how the auction mechanism influences prices we

uncertainty capital flows and maturity mismatch abstract this paper explores a how the financial uncertainty generated by volatile international capital flows interacts with maturity mismatch on the balance sheets of nonfinancial firms to increase the volatility of output investment and total factor productivity tfp in emerging market economies i build a model of a small open economy in which financial frictions force firms to fund long term projects with short term debt in response to changes in the level of uncertainty regarding the availability of foreign borrowing firms adjust their long term investment contributing to the volatility of investment and output as well as generating endogenous fluctuations in aggregate productivity using data from a panel of major emerging markets i show that the volatility of portfolio debt flows negatively affects output by dampening investment while the volatility of equity flows which do not generate maturity mismatch has no effect consistent with the mechanism in the model the negative impact of capital flow volatility is larger at low levels of financial development and in industries with longer time to build lags my estimates imply that shocks to capital flow volatility account for one fifth of the excess output volatility of the emerging markets in my sample relative to a set of small open advanced economies

centralization in headquarters subsidiary relationships research to date on centralization in mncs has produced many inconsistent findings the present study attempts to add clarity to the situation by re testing many of the existing hypotheses with data from a recent study of centralization in 50 large us uk and european mncs it examines how the degree of centralization inherent in the headquarters foreign subsidiary relationship varies in response to a variety of company wide and subsidiary level conditions the influence of company wide conditions on centralization appears to be much clearer than the influence of subsidiary level conditions the study also identifies several new contingency patterns that appear to be at work in mncs today

home bias at the fund level this paper presents new stylized facts on the distribution of the home bias at the fund level we find i a large heterogeneity in the degree of home bias across mutual funds ii a positive correlation between the size of funds and home bias and iii a positive correlation between the size of funds the number of foreign countries and the number of sectors in which they invest these facts constitute a challenge for existing theories this abstract was borrowed from another version of this item

sudden stops and output drops in recent financial crises and in recent theoretical studies of them abrupt declines in capital inflows or sudden stops have been linked with large drops in output do sudden stops cause output drops no according to a standard equilibrium model in which sudden stops are generated by an abrupt tightening of a country s collateral constraint on foreign borrowing in this model in fact sudden stops lead to output increases not decreases an examination of the quantitative effects of a well known sudden stop in mexico in the mid 1990s confirms that a drop in output accompanying a sudden stop cannot be accounted for by the sudden stop alone to generate an output drop during a financial crisis as other studies have done the model must include other economic frictions which have negative effects on output large enough to overwhelm the positive effect of the sudden stop this abstract was borrowed from another version of this item

organizing knowledge processes in the multinational corporation an introduction this introduction discusses the contrast between on the one hand the current popularity of addressing mnc organization in knowledge terms and on the other the lack of adequate understanding of many of the causal mechanisms and contextual factors in relations between knowledge processes and organizational factors a number of the relevant research challenges are identified and it is clarified how the five articles in this focused issue addresses some of these

volatility and growth credit constraints and the composition of investment abstract how does uncertainty and credit constraints affect the cyclical composition of investment and thereby volatility and growth this paper addresses this question within a model where firms engage in two types of investment a short term one and a long term one which contributes more to productivity growth because it takes longer to complete long term investment has a relatively less cyclical return but it also has a higher liquidity risk the first effect ensures that the share of long term investment to total investment is countercyclical when financial markets are perfect the second implies that this share may turn procyclical when firms face tight credit constraints a novel propagation mechanism thus emerges through its effect on the cyclical composition of investment tighter credit can lead to both higher volatility and lower mean growth evidence from a panel of countries provides support for the model s key predictions

learning to bid in sequential dutch auctions abstract we propose an agent based computational model to investigate sequential dutch auctions with particular emphasis on markets for perishable goods and we take as an example wholesale fish markets buyers in these markets sell the fish they purchase on a retail market the paper provides an original model of boundedly rational behavior for wholesale buyers behavior incorporating learning to improve profits conjectures as to the bids that will be made and fictitious learning we analyze the dynamics of the aggregate price under different market conditions in order to explain the emergence of market price patterns such as the well known declining price paradox and the empirically observed fact that the very last transactions in the day may be at a higher price the proposed behavioral model provides alternative explanations for market price dynamics to those which depend on standard hypotheses such as diminishing marginal profits furthermore agents learn the option value of having the possibility of bidding in later rounds when confronted with random buyers such as occasional participants or new entrants they learn to bid in the optimal way without being conscious of the strategies of the other buyers when faced with other buyers who are also learning their behavior still displays some of the characteristics learned in the simpler case even though the problem is not analytically tractable

dual values based organizational identification in mnc subsidiaries a multilevel study dual organizational identification with both the whole corporation and the local subsidiary is considered valuable for subsidiary employees international assignees and multinational corporations mncs while extant research has examined antecedents of separate targets of identification it has not fully addressed the challenge of identifying factors capable of supporting both simultaneously this study examines the influence of individual and organizational level factors on the dual values based identification of foreign subsidiary employees drawing on acculturation and organizational socialization theory we test hypotheses on multilevel data from 793 managers and professionals in 90 foreign subsidiaries belonging to 11 nordic mncs the results show that dual values based identification is associated with acculturation and first hand contact at the individual level and a supportive social context for affective learning at the organizational level through its emphasis on higher order elements that connect different parts of the mnc rather than those that lead to the formation of in groups and out groups the values based approach to identification contributes to our understanding of dual identification in mnc subsidiaries and represents a more positive treatment of cultural diversity the findings have heightened practical relevance given the emphasis individuals are placing on values congruence in career choices and mnc efforts at instilling shared values

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

nudging farmers to use fertilizer theory and experimental evidence from kenya we model farmers as facing small fixed costs of purchasing fertil izer and assume some are stochastically present biased and not fully sophisticated about this bias such farmers may procrastinate post poning fertilizer purchases until later periods when they may be too impatient to purchase fertilizer consistent with the model many farmers in western kenya fail to take advantage of apparently profit able fertilizer investments but they do invest in response to small time limited discounts on the cost of acquiring fertilizer free deliv ery just after harvest calibration suggests that this policy can yield higher welfare than either laissez faire policies or heavy subsidies

international and domestic collateral constraints in a model of emerging market crises abstract we build a model of emerging markets crises which features two types of collateral constraints firms in a domestic economy have limited borrowing capacity from international investors they also have limited borrowing capacity with respect to each other we study how the presence and changes in these collateral constraints affect financial and real variables a binding international constraint in the aggregate leads to a sharp rise in interest rates and fire sales of domestic assets while limited domestic collateral can lead to wasted international collateral these two collateral constraints can interact in important ways the first is disintermediation a fire sale of domestic assets causes banks to fail in their function of reallocating resources across the economy leading to wasted international collateral the second is a dynamic effect we show that firms in an economy with limited domestic collateral and a binding international collateral constraint will not adequately precaution against adverse shocks increasing the severity of these shocks

fluctuations in uncertainty this review article tries to answer four questions i what are the stylized facts about uncertainty over time ii why does uncertainty vary iii do fluctuations in uncertainty matter and iv did higher uncertainty worsen the great recession of 2007 2009 on the first question both macro and micro uncertainty appears to rise sharply in recessions on the second question the types of exogenous shocks like wars financial panics and oil price jumps that cause recessions appear to directly increase uncertainty and uncertainty also appears to endogenously rise further during recessions on the third question the evidence suggests uncertainty is damaging for short run investment and hiring but there is some evidence it may stimulate longer run innovation finally in terms of the great recession the large jump in uncertainty in 2008 potentially accounted for about one third of the drop in gdp

knowledge transfer from international joint ventures to local suppliers in a developing economy using in depth data from 155 pakistani auto components suppliers we study the role of socialization in knowledge transfer from international joint venture assemblers we find that whereas formal socialization mechanisms enhance the comprehension and speed of knowledge transfer to local suppliers informal socialization mechanisms enhance comprehension but not speed building on structural contingency theory we find that having a mechanistic organizational structure among knowledge recipients is an antecedent to formal socialization leading to improved knowledge transfer

transactions that did not happen and their influence on prices abstract this paper studies data from the wholesale fruit and vegetables market in marseille we have details of counteroffers to the prices that were proposed by the seller even when no transaction took place we analyse the evolution of prices and the relation between the final price struck and the proposals of the two parties periods with no buyer refusals of offers or bargaining with no transaction will lead to a revision of the seller s first price more importantly the sharing of the surplus moves in the buyer s favour during the day these theoretical predictions are confirmed by our data set

extending the internationalization process model increases and decreases of mne commitment in emerging economies the internationalization process model suggests that firms internationalize by building positions in foreign markets and networks following iterative cycles of learning and changes in commitment however as subsidiaries evolve commitments may be decreased as well as increased a phenomenon that has rarely been studied moreover it remains an open question why strategic intentions at the outset of an investment project differ from the actual operations established we address these questions by extending the model and combining it with mintzberg and waters framework of strategy formation specifically we suggest that commitment decisions correspond to statements of intended strategy while network positions correspond to realized strategies the processes of learning opportunity creation and trust building triggered by commitment decisions are however moderated by institutional influences that lead to divergences between realized and intended strategies we test propositions derived from this framework on a survey data set of subsidiaries of multinational enterprises in hungary lithuania and poland and find that institutional voids and institutional uncertainty affect subsidiary strategy implementation but in opposing directions under high institutional uncertainty investors prefer low commitment but flexible modes that enable later commitment increases whereas institutional voids increase up front information search and adaptation costs that reduce the likelihood of early post entry adjustments our analysis reinforces the need for more differentiated theoretical analyses of how institutions affect business strategies over time

a microfoundations approach to transnational capabilities the role of knowledge search in an ever changing world scholars seeking to understand the origin of dynamic capabilities have struggled to articulate specific capabilities and locate their source of variation within the firm we propose that the transnational imperative and a microfoundations approach to knowledge search can help to develop this topic adopting an engaged scholarship approach hypotheses are tested in a global consulting company counter to traditional capabilities arguments we find that drawing from globally dispersed colleagues will more strongly impact local responsiveness than drawing from locals outside the company though both may still be needed efficiency increases when teams draw upon codified knowledge but decreases when they draw upon embedded tacit knowledge finally through continual learning teams can change and re direct the composition of their responsiveness and efficiency activities in ways sensitive to an ever changing world

a retrospective on mnc knowledge transfer subsidiary absorptive capacity and hrm in this retrospective we revisit the goals of the original paper and we review the studies that have used our paper to discuss the concept and the development of absorptive capacity we also propose directions for future research stressing the need to develop thorough theoretical and empirical models of absorptive capacity as a multi level and dynamic construct that is contingent on the context in which it is embedded

what s that got to do with the price of fish buyers behavior on the ancona fish market abstract in this paper we analyze the ancona wholesale fish market meritan where transactions take place in three simultaneous dutch auctions our objective is to characterize the behavior of market participants and in particular that of buyers in such a market structure our analysis shows that buyer seller relationships are less important than in a pairwise bargaining market such as the marseille fish market but that a significant amount of loyalty is still present under the auction mechanism we provide an explanation of the declining price paradox for the fish market of ancona by linking the rule used by the buyers to set their bid to the relationship between the variation in the price of the last transactions in the day and the quantity of fish available on that day in fact the average price tends to increase for the last transactions on days characterized by a limited supply of fish

multiculturalism from a cognitive perspective patterns and implications multiculturalism the internal representation of multiple cultural meaning systems has critical implications for global managers and multinational corporations mncs understanding multiculturalism is becoming increasingly important given that the locations within which mnc activity resides and the composition of the workforce even within a given location are more diverse building on the connectionism perspective we offer a novel cognitive conceptualization of multiculturalism that incorporates the individual s multicultural cognitive content and structure based on that we explain how specific sociocultural experiences interact with existing individual cognitions to form different patterns of multiculturalism specifically we propose five stylized patterns compartmentalization integration inclusion convergence and generalization and explain how they are developed through specific sociocultural experiences we discuss how different patterns of multiculturalism influence specific capabilities of multicultural mnc managers and their effectiveness in a variety of critical mnc tasks we believe the cognitive connectionist perspective which has not been brought before into international business discussions of culture and cultural capabilities holds great promise for better understanding global managers capabilities and development

design of discrete dutch auctions with consideration of time abstract as a departure from much of the existing literature that aims at maximizing the expected revenue from a single auction this research work is concerned with the design of discrete dutch auctions to achieve the optimal balance between the selling price of the object and the auction duration so that the auctioneer s expected revenue per unit of time is as high as possible the new objective is especially important in trading perishable products or services when multiple auctions are to be conducted by the auctioneer for different sellers during a limited period of time our findings indicate that the proposed discrete dutch auction models generate higher average revenues per unit of time for the auctioneer than their counterparts without consideration of time this is achieved by reducing the duration of each auction in exchange for more auctions to be held within the given time frame so that the small decrease in the revenues from the longer auctions is more than compensated for by the large increase in the total revenues from the shorter auctions the numerical results show that the proposed discrete dutch auction design becomes extremely useful when the number of bidders becomes large it is also shown that complete knowledge about the number of bidders in the auction results in a higher auctioneer s expected revenue per unit of time

microfoundations in international management research the case of knowledge sharing in multinational corporations microfoundations have become an important theme in recent macro management research however the international management im field is an exception to this we document the lack of attention on microfoundations in im research by focusing on knowledge sharing a key im research field which we investigate by means of a keyword based literature study of the leading im and general management journals we discuss possible reasons why microfoundations have so far met with less resonance in im research we point to the training and background of im scholars as possible reasons we also highlight the significance that im scholars place on context and structure in explanation these may be seen as contrary to a microfoundations perspective a view that we show is incorrect we end by identifying several microfoundational issues in im research calling for a sustained effort with respect to theory heuristics and empirics

aid dutch disease and manufacturing growth abstract we examine the effects of aid on the growth of manufacturing using a methodology that exploits the variation within countries and across manufacturing sectors and corrects for possible reverse causality we find that aid inflows have systematic adverse effects on a country s competitiveness as reflected in the lower relative growth rate of exportable industries we provide some evidence suggesting that the channel for these effects is the real exchange rate appreciation caused by aid inflows we conjecture that this may explain in part why it is hard to find robust evidence that foreign aid helps countries grow

capital account liberalization financial development and industry growth a synthetic view this paper synthesizes studies analyzing the effects of capital account liberalization on industry growth while controlling for financial crises domestic financial development and the strength of institutions we find evidence that financial openness has positive effects on the growth of financially dependent industries although these growth enhancing effects evaporate during financial crises further analysis indicates that the positive effects of capital account liberalization are limited to countries with relatively well developed financial systems good accounting standards strong creditor rights and rule of law it suggests that countries must reach a certain threshold in terms of institutional and economic development before they can expect to benefit from capital account liberalization

volatility and development why is gdp growth so much more volatile in poor countries than in rich ones we identify four possible reasons i poor countries specialize in more volatile sectors ii poor countries specialize in fewer sectors iii poor countries experience more frequent and more severe aggregate shocks e g from macroeconomic policy and iv poor countries macroeconomic fluctuations are more highly correlated with the shocks of the sectors they specialize in we show how to decompose volatility into these four sources quantify their contribution to aggregate volatility and study how they relate to the stage of development we document the following regularities first as countries develop their productive structure moves from more volatile to less volatile sectors second the level of specialization declines with development at early stages and slowly increases at later stages of development third the volatility of country specific macroeconomic shocks falls with development fourth the covariance between sector specific and country specific shocks does not vary systematically with the level of development we argue that many theories linking volatility and development are not consistent with these findings and suggest new directions for future theoretical work

the declining price anomaly in dutch dutch rose auctions in symmetric independent private value auctions of a single object with risk neutral bidders the english second price auction has strategic simplicity it is optimal for bidders to reveal their valuation of the object and make bids accordingly in that case the auction is won by the person with the highest valuation who pays a price equal to the second highest valuation in a dutch first price auction this simplicity vanishes here winning bidders have to pay their bid to make a profit they shade their bids and bid below their valuation of the object somewhat loosely one may state that an english auction is truth revealing whereas a dutch auction requires strategic behavior the simple structure of the one unit english auction vanishes if two identical objects are auctioned sequentially now in the first round it is optimal for bidders to shade their bids to account for the option value of participating in the subsequent second round robert j weber 1983 bidders with a higher valuation also have a higher option value therefore they shade their bids in the first round by a greater amount than do bidders with a lower valuation as the auction proceeds the number of bidders decreases over the sequence of auctions the number of objects decreases as well the first fact has a negative effect on the competition for an object and the second has a positive effect both effects cancel out and prices follow a martingale as a result all gains to waiting are arbitraged away and the expected prices in both rounds are the same the latter result also holds for sequential auctions of more than two objects and does not depend on whether the auction is english or dutch this neat theoretical result is not supported by empirical research which usually finds price declines orley ashenfelter 1989 found a mild price decrease in sequential auctions of identical units of wine mcafee and daniel vincent 1993 also present empirical evidence on sequential wine auctions they found that on average the second unit of wine was sold at a price 1 4 percent lower than the price of the first unit victor ginsburgh 1998 uses data from wine auctions in which the auctioneer acted as an agent for bidders who were not present at the auction he found price declines but apparently the absent bidders entered bids that did not fit with the theory empirical studies by ashenfelter and david genesove 1992 see also jean jacques laffont 1997 and alan beggs and kathryn graddy 1997 concern heterogeneous objects they also detected price declines because of the contradiction between theory and empirical studies the declining price phenomenon is regarded to be an anomaly

financial development and openness evidence from panel data abstract this paper addresses the empirical question of whether trade and financial openness can help explain the recent pace in financial development as well as its variation across countries in recent years utilising annual data from developing and industrialised countries and dynamic panel estimation techniques we provide evidence which suggests that both types of openness are statistically significant determinants of banking sector development our findings reveal that the marginal effects of trade financial openness are negatively related to the degree of financial trade openness indicating that relatively closed economies stand to benefit most from opening up their trade and or capital accounts although these economies may be able to accomplish more by taking steps to open both their trade and capital accounts opening up one without the other could still generate gains in terms of banking sector development thus our findings provide only partial support to the well known rajan and zingales hypothesis which stipulates that both types of openness are necessary for financial development to take place