dealing with consumer default bankruptcy vs garnishment abstract what are the positive and normative implications of eliminating bankruptcy protection for indebted individuals without bankruptcy protection creditors can collect on defaulted debt to the extent permitted by wage garnishment laws the elimination lowers the default premium on unsecured debt and permits low net worth individuals suffering bad earnings shocks to smooth consumption by borrowing there is a large increase in consumer debt financed essentially by super wealthy individuals a modest drop in capital per worker and a higher frequency of consumer default average welfare rises by 1 of consumption in perpetuity with about 90 of households favoring the change

a multi society examination of the impact of psychological resources on stressor strain relationships this paper sequentially addresses a conceptual and an empirical goal our conceptual goal was to develop a globally relevant model of the relationship between work role stressors and strain using conservation of resources cor theory as our foundation stressors included in the model are role conflict and role ambiguity with three resources mastery optimistic orientation and self esteem as moderators on the stressor strain relationship with this conceptual framework developed we explored our empirical goal a test of the model using both societal level and individual level indicators first we pan culturally tested the model across our seven society sample next we split these societies into high and low gross national income categories likewise we split the respondents in our sample regardless of their country into high and low idiocentrism individualism and allocentrism collectivism categories and tested at these group levels our findings showed that personal resources mastery optimistic orientation and self esteem generally served to buffer the experienced strain due to work role ambiguity and conflict this study provides specific information that can assist the global business community in understanding how stress pervades their workforces overall our findings offer substantial evidence that a global model of stress is truly viable providing direction for future research on stress in the global workforce

wealth distribution in life cycle economies abstract this paper compares the age wealth distribution produced in life cycle economies to the corresponding distribution in the us economy the idea is to calibrate the model economies to match features of the us earnings distribution and then examine the wealth distribution implications of the model economies the findings are that the calibrated model economies with earnings and lifetime uncertainty can replicate measures of both aggregate wealth and transfer wealth in the us furthermore the model economies produce the us wealth gini and a significant fraction of the wealth inequality within age groups however the model economies produce less than half the fraction of wealth held by the top 1 percent of us households

business ethics in china first i briefly review the emergence and development of business ethics following three stages 1978 1984 1984 1994 1994 to the present and driven by four factors the inheritance of chinese traditional ethics the influence of marxist philosophy and ethics the reflections on the economic reform and the influence of business ethics from abroad then from a practical and a theoretical perspective i discuss the main challenges for business ethics in china issues of the economic system of corporate ethics and of management after commenting on the role of business ethics for the social development in china i offer some reflections about what china can contribute to and learn from other peoples

product stereotypes strategy and performance satisfaction the case of chinese exporters does following a product strategy of price leadership result in superior performance satisfaction for chinese exporters does branding products and targeting less developed countries significantly improve chinese exporters satisfaction with export performance results indicate performance satisfaction decreased when chinese firms pursued price leadership product strategies while performance satisfaction increased when chinese exporters used a branding product strategy branding products and targeting other less developed countries with these brands significantly increased performance satisfaction over branding alone

the un importance of chapter 7 wealth exemption levels this paper examines the effects of the chapter 7 wealth exemption level on welfare bankruptcy filings debt and on asset holdings i build a heterogeneous agent life cycle model which features uninsurable income and expense shocks moreover households can borrow and save simultaneously when a borrower defaults on her debt by filing for chapter 7 bankruptcy she can keep her assets up to the wealth exemption level wealth exemption levels are important for two reasons first they explain the extensive and intensive margin of the credit card debt puzzle around thirty percent of borrowers both in the model and in the data who borrow at high interest rates simultaneously save at low interest rates however these borrowers borrow and save only relatively small amounts a few thousand u s dollars second ignoring the exemption level biases results because it overstates the costs of defaulting the welfare gains from chapter 7 compared to the european system where debt is not discharged are twice as high when exemption levels are positive compared to when they are ignored at the same time wealth exemption levels are unimportant in the sense that they have an impact only at low exemption levels the effects of increases in the exemption level fade out very quickly there is no strong positive relationship between exemption levels which vary across u s states and default rates in the model this is in contrast to the previous literature but consistent with the data the reason is that those borrowers who might default do not own much wealth therefore only very few households are affected by increases in the exemption level

unsecured credit markets are not insurance markets abstract we study the extent to which unsecured credit markets have altered the transmission of increased income risk to consumption variability over the past several decades we find that unsecured credit markets pass through increased income risk to consumption irrespective of bankruptcy policy and the information possessed by lenders if risk sharing has indeed improved over this period the reasons do not therefore lie in the unsecured credit market

converging or diverging a comparative analysis of trends in contingent employment practice in europe over a decade this paper makes a unique contribution to the hrm convergence divergence debate by examining whether organisations operating in europe over the 10 year time period preceding 2000 are converging in their adoption of contingent employment practice the susceptibility of contingent employment practice to both convergent and divergent pressures acts as a useful analytical lens data are drawn from organisations operating in germany spain sweden the netherlands and the uk in 1991 2918 organisations 1995 2048 organisations and 2000 1555 organisations the results suggest that convergence is limited by the institutional embeddedness of organisations

risk based pricing of interest rates for consumer loans abstract by focusing on observable default risk s role in loan terms and the subsequent consequences for household behavior this paper shows that lenders increasingly used risk based pricing of interest rates in consumer loan markets during the mid 1990s it tests three resulting predictions first the premium paid per unit of risk should have increased over this period second debt levels should have reacted accordingly third fewer high risk households should have been denied credit further contributing to the interest rate spread between the highest and lowest risk borrowers for people obtaining loans the premium paid per unit of risk did indeed become significantly larger after the mid 1990s for example for a 0 01 increase in the probability of bankruptcy the corresponding interest rate increase tripled for first mortgages doubled for automobile loans and rose nearly six fold for second mortgages additionally changes in borrowing levels and debt access reflected these new pricing practices particularly for secured debt borrowing increased most for the low risk households who saw their relative borrowing costs fall furthermore while very high risk households gained expanded access to credit the increases in their risk premiums implied that their borrowing as a whole either rose less or sometimes fell

bankruptcy and delinquency in a model of unsecured debt this article documents and interprets a fact central to the dynamics of informal consumer debt default we observe that for individuals 60 90 days late on payments i 85 make payments during the next quarter and ii 40 reduce their debt to understand these facts we develop a quantitative model of debt delinquency and bankruptcy our model reproduces the dynamics of delinquency and suggests an interpretation of the data in which lenders frequently reset loan terms for delinquent borrowers typically offering partial debt forgiveness instead of a blanket imposition of the penalty rates most unsecured credit contracts specify

the cross cultural research imperative the need to balance cross national and intra national diversity this paper provides a brief overview of the evolution of comparative management theories paradigms and highlights the contribution of the cross vergence construct despite progress most studies of work values across countries continue to suffer from two primary limitations the first is the fallacious assumption of cultural homogeneity with nations given the growing diversity of the workforce within country intra national variations can often be as significant as cross national differences the second is the fallacious assumption of cultural stability over time since cultures evolve albeit slowly it is important to take these changes over time into consideration and be aware of the paradoxes inherent within any given society hence the paper calls for the need to balance cross national and intra national diversity in order to truly understand cross cultural phenomena and thus further improve the quality of cross cultural research

the nature of precautionary wealth abstract this paper uses the panel study of income dynamics to provide some of the first direct evidence that wealth is systematically higher for consumers with predictably greater income uncertainty however the apparent pattern of precautionary wealth is not consistent with a standard parameterization of the life cucle model in which consumers are patient enough to begin saving for retirement early in life wealth is estimated to be far less sensitive to uncertainty than implied by that model instead our results suggest that over most of their working life time consumers behave in accordance with the buffer stock models of saving described in carroll 1992 1997 or deaton 1991 in which consumers hold wealth principally to insulate consumption against near term fluctuations in income

enhancing international customer supplier relationships through it resources a study of taiwanese electronics suppliers the growing popularity of outsourcing and offshore partnering activities raises the issue of what strategies are appropriate for firms to successfully manage customer supplier relationships in the international context little has been written about how information technology it systems may impact on international exchange relationships in the present study we report on how suppliers use it as a strategic resource to govern their international exchange relationships with multinational enterprise customers taking the supplier s perspective we propose that two types of it resources it advancement and electronic integration create value for suppliers with respect to innovativeness and market performance we argue that this value creation process is mediated by three specific forms of governance cooperativeness output monitoring and behavior monitoring to test these arguments primary data obtained from 240 taiwanese electronics suppliers are used for hypothesis testing the survey results provide evidence that suppliers it resources enable them to work effectively with their international key customers importantly of the three governance mechanisms cooperativeness has the strongest impact on supplier performance owing to supplier electronic integration post hoc analysis revealed that cultural distance does not play a role in moderating the relationship between it resources and governance mechanisms in international exchange

national business ideology and employees prosocial values employees prosocial values have been shown to foster helping cooperating and volunteering behaviors which in turn increase firm performance however despite the importance of prosocial values there is a general neglect of this area in the international arena as more trade occurs globally interest in cross cultural prosocial values is growing we therefore build on socialization theory and introduce national business ideology as a country level determinant of employees prosocial values we thus argue that transformational leadership and professional altruism are key elements of a national business ideology s stimulation of employees prosocial values while corporate corruption is considered to be an impediment based on 19 026 individuals from 17 countries our cross level analyses point to the national business ideology explaining national level variances above and beyond cultural aspects results support our hypothesis that national business ideology including transformational leadership and professional altruism is positively related to employees prosocial values the hypothesis on corporate corruption however was not supported instead results indicate that employees apply rationalization strategies to justify corruption with prosocial values being important for organizational performance as well as social welfare in general we thus draw attention to socialization processes in national corporate work contexts

differences in managerial values a study of u s hong kong and prc managers in this study of convergence divergence of managerial values four western developed measures machiavellianism locus of control intolerance of ambiguity and dogmatism and the four dimensions of the eastern developed chinese value survey confucian dynamism human heartedness integration and moral discipline were the measures used the findings indicate that often times both culture and the business environment interact to create a unique set of managerial values in a country

country and organizational level adaptation to foreign workplace ideologies a comparative study of distributive justice values in china russia and the united states drawing from concepts of cultural distance and cultural propensity to change we predict the convergence divergence or crossvergence of distributive justice values in china and russia as compared with us managers using institutional theory we predict responses by organizational type joint ventures foreign owned vs state owned enterprises soes lastly we develop predictions based on the interaction of culture and organizational type results indicate divergence in china regardless of organizational type in contrast differences by organizational type were observed among russian managers with convergence among managers in joint ventures but continuing divergence among managers in soes implications for theory are discussed

conflict management style accounting for cross national differences a problem in joint ventures between u s and asian firms is that cultural differences impede the smooth resolution of conflicts between managers in a survey of young managers in the u s china philippines and india we find support for two hypotheses about cultural differences in conflict style and the cultural values that account for these differences chinese managers rely more on an avoiding style because of their relatively high value on conformity and tradition u s managers rely more on a competing style because of their relatively high value on individual achievement

the cyclical and secular behaviour of the labour input comparing efficiency units and hours worked summary a monthly labour input series designed to correct for the fact that all hours worked are not of the same quality is constructed and its properties compared with unadjusted hours worked this efficiency units series is constructed from bls data on hours worked and earnings by age and sex the cyclical fluctuations displayed by the efficiency units series are smaller on average than those displayed by hours worked although the difference is not large however the secular behaviour of the series is quite different hours worked per capita displays a significant positive trend while efficiency units per capita does not

consumer bankruptcy a fresh start consumer bankruptcy provides partial insurance against bad luck but by driving up interest rates makes life cycle smoothing more difficult we argue that to assess this trade off one needs a quantitative model of consumer bankruptcy with three key features life cycle component idiosyncratic earnings uncertainty and expense uncertainty exogenous negative shocks to household balance sheets we find that transitory and persistent earnings shocks have very different implications for evaluating bankruptcy rules more persistent shocks make the bankruptcy option more desirable larger transitory shocks have the opposite effect our findings suggest the current us bankruptcy system may be desirable for reasonable parameter values jel d14 d91 k35

assessing the effects of culture on managerial attitudes a three culture test cross cultural studies are inherently difficult because the typical research design fails to differentiate cultural from other environmental influences the present study uses a research design that attempts to isolate the influence of culture japanese chinese and mexican managers their ethnic american counterparts and anglo americans are used to test the model results indicate unique persistent cultural characteristics with the cultural effect varying among the three groups of managers

two views of inequality over the life cycle data on the life cycle profiles of inequality in wages earnings hours worked and consumption contain precious information for answering questions about the ability of households to insure labor market risk and about the sources of this risk this paper demonstrates that the choice of whether to control for cohort effects or for time effects has a drastic impact on the estimated age profiles for inequality and thus on the answers to those questions it also shows that time effects are required to account of the observed trends in inequality in 30 years of u s data whereas there is no evidence that cohort effects have been important jel c13 d31 d91 j22 j31

a comparative study of the work values of north and south vietnamese managers we examine managerial work values and subsequent behaviors of vietnamese managers that foreign investors may face doing business in vietnam to establish a global reference point we compare the managerial values of vietnamese managers with those of chinese and u s managers the findings from this exploratory study while not always intuitive should help foreign investors to better understand vietnam furthermore the study raises important theoretical issues concerning individualism and collectivism as cross cultural measures

cronyism a cross cultural analysis the devastating economic effects of the asian financial crisis and us corporate scandals have underscored the need to strengthen corporate governance provisions although cronyism has been suggested as a leading cause of the two crises it has received little attention from scholars in this paper we analyze the concept of cronyism and argue that it comes in various guises arising from different motivational bases and power dependence relations we distinguish cronyism from related constructs and posit that it is a form of corruption with different dynamics from other forms we advance propositions on its likelihood of occurrence across cultures and develop a typology of cronyist exchanges

cross cultural interaction the international comparison fallacy international management studies have been based primarily on the comparison of managerial behavior in countries around the world often these studies have implied that business people behave similarly with their domestic colleagues as with their foreign counterparts in questioning that assumption this study tests whether intra cultural behavior accurately predicts cross cultural behavior using a negotiation simulation and a sample of 462 japanese american and canadian businesspeople behaviors in cross cultural negotiations were found to differ in some important ways from those in intra cultural negotiations

political economy of pension plans impact of institutions gender and culture abstract national pension systems are an important part of financial intermediation and worker welfare in most countries but how and why do they differ internationally controlling for important political economic and social institutions we document that international differences in pension progressivity or how pensions reflect lifetime earnings are negatively related to masculinity uncertainty avoidance individualism long term orientation employment rights average pension levels social trust and economic inequality we also find that pension progressivity is positively related to the economic and societal role of women the extent of catholicism as well as political voice and accountability these results provide important insights for both public policy and mnc managers

social security and unsecured debt abstract in this paper we use a calibrated life cycle model to explore quantitatively ways of reducing the burden of social security in a world populated by both optimizing and rule of thumb consumers social security contributions force young households with upward sloping income profiles to save a sizeable portion of their income for retirement when their optimal consumption plan would likely have them either saving little or borrowing we first use household data to document that young households have accumulated social security contributions that are large relative to debt holdings then using a calibrated life cycle model we show that both allowing households to use social security wealth to pay off their debt and exempting young households from social security contributions but in both cases requiring higher contributions later mitigate many of the inefficiencies of social security from the perspective of life cycle financial planning specifically in our preferred experiment which exempts households whose heads are under 30 from making social security contributions we find that certainty equivalent consumption increases by 3 4 for optimizing households and by 3 3 for rule of thumb households

the importance of household asset diversity for livelihood diversity and welfare among small farm colonists in the amazon taking a small farm colony on the amazon frontier as a case study this article examines the relationships among household assets livelihood diversity and welfare the findings show that 1 few

business ethics index measuring consumer sentiments toward business ethical practices the present study describes the development of an ongoing and systematic index to measure consumers sentiments towards business ethical practices the business ethics index bei is based on the well established measurements of consumer sentiments namely the ics index of consumer sentiment and cbcci conference board consumer confidence index the bei is comprised of 4 measurements representing the dimensions of personal vicarious and past future data from 503 telephone interviews were used to calculate a bei of 107 this indicates an overall positive consumer sentiment towards the ethical behavior of business future calculations of the bei are planned which will allow for the estimation of the latent dynamics of trends in consumer sentiments toward american business ethics

emerging themes in international business research this study is motivated by two research questions 1 which recent contributions have been driving the research agenda in international business 2 which emerging themes in the literature are likely to set the stage for future work to examine these questions the study examined scholarly work in international business over the time period 1996 2006 in six leading international business journals journal of international business studies management international review journal of world business international marketing review journal of international marketing and international business review next a delphi study of the most prolific authors in these journals over the same time period was conducted to delineate a future research agenda in international business addressing these two research questions provides us with a more complete understanding of the progress made to date in international business research and provides a glimpse of the future

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

crossvergence 10 years on impact and further potential the 1997 jibs paper by ralston holt terpstra and yu was instrumental in anchoring and extending the construct of crossvergence in cross cultural research ten years on the paper has lost none of its relevance and continues to offer important opportunities for further theory development and attendant empirical research scope for further work seems to exist especially in three areas the meaning of crossvergence national culture and economic ideology and processes of change

capitals and capabilities a framework for analyzing peasant viability rural livelihoods and poverty abstract on the basis of themes emerging in current debates on rural development in latin america this paper develops an analytical framework for analyzing rural livelihoods in terms of their sustainability and their implications for rural poverty the framework argues that our analyses of rural livelihoods need to understand them in terms of a people s access to five types of capital asset b the ways in which they combine and transform those assets in the building of livelihoods that as far as possible meet their material and their experiential needs c the ways in which people are able to expand their asset bases through engaging with other actors through relationships governed by the logics of the state market and civil society and d the ways in which they are able to deploy and enhance their capabilities both to make living more meaningful and to change the dominant rules and relationships governing the ways in which resources are controlled distributed and transformed in society particular attention is paid to the importance of social capital as an asset through which people are able to widen their access to resources and other actors

culture meaning and institutions executive rationale in germany and japan this paper contributes rare primary empirical evidence to one of the major research questions in the social sciences today namely the linkage between national cultures and institutional structures of national business systems drawing on the work of redding we explore the thinking or rationale of senior executives of leading german and japanese firms about the ideal structure of the economy we find considerable variation in rationale across the two countries and in comparison with the shape of the business system of the united states our study has implications for our understanding of the meaning of economic activity in different countries and of the evolutionary trajectories of national business systems

the persistence of financial distress using recently available proprietary panel data we show that while many 35 us consumers experience financial distress at some point in the life cycle most of the events of financial distress are primarily concentrated in a much smaller proportion of consumers in persistent trouble roughly 10 of consumers are distressed for more than a quarter of the life cycle and less than 10 of borrowers account for half of all distress events these facts can be largely accounted for in a straightforward extension of a workhorse model of defaultable debt that accommodates a simple form of heterogeneity in time preference but not otherwise

globalization and household saving is there a link abstractthis article proposes that globalization can affect household saving in the long run in a number of ways social interactions between different cultures can induce value changes which can result in shifts in consumption and saving behaviour international trade allows consumers to have easier access to status goods stimulating consumption and dampening saving extending from veblen s conspicuous consumption theory saving may also decrease when globalization leads to greater population mobility and fosters urbanization thus enhancing the importance of consumption as a way to display wealth in addition financial globalization reduces credit constraints and allows households to save less using cross country data from the united nations un the oecd and other sources this article finds evidence that household saving declines as globalization deepens especially in the social and cultural dimensions

unsecured debt with public insurance from bad to worse abstract in u s data income interruptions the receipt of public insurance and the incidence of personal bankruptcy are all closely related the central contribution of this paper is to evaluate bankruptcy protection and public insurance in a unified setting where each program alters incentives in the other our analysis delivers two striking conclusions first we find that u s personal bankruptcy law is an important barrier that prevents the public insurance system from improving welfare second contrary to popular belief we find that increases in the generosity of public insurance will lead to more not less bankruptcy

cultural stability or change among managers in indonesia in this study we directly measure culture along two of hofstede s 1980 dimensions individualism collectivism and power distance which we argue are potentially more malleable than stable at least within the developing nation of interest indonesia we compare these direct measures from indonesia with those from a developed country the united states to gauge the degree to which the culture of this emerging economy remains stable despite strong foreign influences utilizing english and back translated indonesian language versions of the 1994 values survey module we find statistically significant support for a narrowing of the differences in these two cultural dimensions between indonesian and u s managers compared to earlier findings by hofstede 1991

the socio cultural environment for entrepreneurship a comparison between east asian and anglo saxon countries this study uses a theory of face to identify predictors of interest in entrepreneurship in six east asian and four anglo saxon countries at the cultural level social status of entrepreneurship and shame from business failure predict interest in entrepreneurship better in east asian than anglo countries at the individual level social status predicts interest in entrepreneurship in the entire sample

determinants and effects of income diversification amongst farm households in burkina faso using four years of household data from three agroecological zones in burkina faso sahelian sudanian and guinean the article examines the determinants and effects of household income diversification harvest shortfalls and terms of trade are found to drive diversification but land constraints do not income diversification is associated with higher incomes and food consumption and more stable income and consumption over years

the international business ethics index asian emerging economies the systematic measurement of consumers sentiments toward business ethical practices is expanded to two emerging economies in asia china and india the chinese were very optimistic about the future ethical behavior of businesses while the indians recorded the lowest bei scores yet chinese consumers were very concerned with product issues while indians were concerned equally about low quality products and excessive prices

understanding why high income households save more than low income households abstract we use a calibrated life cycle model to evaluate why high income households save as a group a much higher fraction of income than do low income households in us cross section data we find that 1 age and relatively permanent earnings differences across households together with the structure of the us social security system are sufficient to replicate this fact 2 without social security the model economies still produce large differences in saving rates across income groups and 3 purely temporary earnings shocks of the magnitude estimated in us data alter only slightly the saving rates of high and low income households

management and ownership effects evidence from five countries despite the growing recognition in the corporate governance literature that the relationship between ownership concentration and profitability is context dependent this issue has not yet been subjected to direct empirical investigation using a single cross national sample this study empirically examines the ownership concentration performance relationship across the nations of canada france germany the united kingdom and the united states essentially we argue that the correlation if any between ownership concentration and firm profitability differs across countries in a systematic way determined by the national system of corporate governance results indicate that important and statistically significant differences do in fact exist across the countries studied 1998 john wiley sons ltd

firm networking and bribery in china assessing some potential negative consequences of firm openness economic openness both in terms of increased international trade exposure and enhanced inter firm networking has been a key element of china s economic emergence since the implementation of market reforms and the opening up policy over 30 years ago unfortunately these changes have also coincided with the increased incidence of bribery and corruption both in general and in the specific context of china research on the relationship between a firm s tendency toward openness and its propensity to engage in bribery is scarce this study seeks to fill this gap based on empirical evidence provided by a large sample of chinese firms the findings of the study reveal that firms increased networking and openness tend to occur contemporaneously with greater bribery and corruption we suggest that this may be due to the misuse of guanxi based networks that coincide with the presence of firms open network strategies heightened by the potential loss of resource and capability heterogeneity and hence reduced competitive advantages in the context of openness we further find that firms paying bribes do so as an attempt to overcome unnecessary bureaucratic processes and ineffective institutional support that might tend to hinder their development

the impact of natural culture and economic ideology on managerial work values a study of the united states russia japan and china this study assesses the impact of economic ideology and national culture on the individual work values of managers in the united states russia japan and china the convergence divergence crossvergence cdc framework was used as theoretical framework for the study while the schwartz value survey svs was used to operationalize over investigation of managerial work values across these four countries the findings largely support the crossvergence prospective while also confirming the role of national culture implications from the findings are drawn for the convergence divergence crossvergence of values as well as for the feasibility of multidomestic or global strategies for a corporate culture

the international business ethics index european union the present study expands the systematic measurement of consumers sentiments towards business ethical practices to the international arena data for the business ethics index bei were gathered in three countries of the european union uk germany spain the germans were the most pessimistic while the british were the most optimistic about the future ethical behaviour of businesses

moral choice and the declining influence of traditional value orientations within the financial sector of a rapidly developing region of the people s republic of china this paper describes the results of a field experiment involving 400 employees from ten financial institutions operating within the shenzhen special economic zone of the people s republic of china it was found that when faced with an agency based problem employees indicated they would be less inclined to advise management of the existence of unethical work practices younger employees without supervisory experience displayed significant risk aversion traditional chinese values associated with confucian work dynamism were shown to be poor predictors of moral choice response a parsimonious regression model was developed that provides evidence that the universal trait masculinity femininity human heartedness acted to offset the negative influence of the agency problem on the other hand an operative s level of education attainment exerted a negative influence on moral response scores

default risk and private student loans implications for higher education policies abstract in recent years the proportion of students facing a binding constraint on government student loans has grown this has led to substantially increased use of private loans as a supplementary source of finance for households higher education investment a critical aspect of the private market for student loans is that loan terms must reflect students risk of default college investment will therefore differ from a world in which government student loans whose terms are not sensitive to credit risk are expanded to no longer bind moreover beyond simply crowding out private lending expansions of the government student loan program will feed back into default risk on private loans the goal of this paper is to provide a quantitative assessment of the likely effects of the private market for student loans on college enrollment we build a model of college investment that reflects uninsured idiosyncratic risk and a well defined life cycle that is consistent with observed borrowing and default behavior across family income and college preparedness we find that higher government borrowing limits increase college investment but lead to more default in the private market for student loans while tuition subsides increase college investment and reduce default rates in the private market consequently higher limits on government student loans have small negative welfare effects while tuition subsidies increase aggregate welfare

does cultural background of tourists influence the destination choice an empirical study with special reference to political instability abstract political instability is a complex and multidimensional term with various conceptualisations and interpretations this paper investigates the cross cultural differences of the perceptions of travel agents concerning the impact of political instability on tourism to capture the impact a composite index of political instability indicators was developed and was subsequently distributed to 2000 travel agents in six major tourism generating countries an integrated empirical framework has been developed which allows the analysis of the survey data using repeated measures anova the results of the study demonstrates the existence of significant differences on the way that travel agents perceive the impact of the various types of political instability on the tourism industry the results might be of some interest to tourism policy makers and marketing agents

arm breaking consumer credit and personal bankruptcy the consumer credit transaction is analyzed as a contract which provides insurance as well as present consumption for the borrower creditors remedies such as arm breaking are shown to facilitate provision of insurance forgiveness of debts when lenders cannot monitor outcomes alternatively if outcomes are observable but lenders do not ex ante know the risk associated with each borrower the market may generate an excessive amount of arm breaking and agreements to forgo discharge following bankruptcy as low risk borrowers signal their characteristics suggesting that government limitations on such provisions might be efficient the secured credit transaction is shown to be a complex contract which attempts to provide efficient repayment seller incentives for performance and mitigation following default and insurance for the borrower garnishment and discharge of debts following bankruptcy are also considered

network triads transitivity referral and venture capital decisions in china and russia this article examines the effects of dyadic ties and interpersonal trust on referrals and investment decisions of venture capitalists in the chinese and russian contexts the study uses the postulate of transitivity of social network theory as a conceptual framework the findings reveal that referee venture capitalist tie referee entrepreneur tie and interpersonal trust between referee and venture capitalist have positive effects on referrals and investment decisions of venture capitalists the institutional social and cultural differences between china and russia have minimal effects on referrals interpersonal trust has positive effects on investment decisions in russia

cultural differences in conducting intra and inter cultural negotiations a sino canadian comparison a study on conflict resolution strategies of canadian and chinese peoples republic of china executives was conducted responses to two types of joint project conflicts task related and person related with potential partners from their own culture or from the other culture were examined neither group of executives altered its strategy when negotiating across cultures chinese executives were more likely to avoid conflicts but recommended more negative strategies discontinue negotiation withdraw negotiation when conflict emerged person related conflicts were found to generate more negative responses than task related conflicts especially for chinese executives both canadian and chinese executives preferred to negotiate with canadians than with chinese

traversing cultural boundaries in ib the complex relationships between explicit country and implicit cultural group boundaries at multiple levels international business ib scholars continue to struggle to theorize the relationship between country and cultural group boundaries to progress we first consider functional institutional and critical event explanations for cultural characteristics and boundaries second we contrast theories of explicit global structure based on countries with theories based on implicit cultural groups third we consider the implications of explicit country based and implicit culture group based theorizing for the relationship between explicit country boundaries and implicit cultural group boundaries we do so at three levels that are roughly analogous in country based and culture group based theorizing country ethnic group country cluster civilization and within country region subcultural group political science and other fields that help to understand the relationship between countries and cultural groups but that seldom appear in ib discussions of culture are emphasized one main conclusion is that countries remain linked to cultures because of continuing political reasons for cultural groups to seek to be governed by co ethnics political considerations other than cultural identity however also continue to promote important discontinuities between country and cultural group boundaries we suggest that ib scholars and scholarly ib associations should reconsider their traditional way of defining the ib field because of our advancing understanding of the complex mix of correspondence and discontinuity between country and cultural group boundaries

asymmetric information in securitization an empirical assessment abstract asymmetric information in securitization deals is analyzed based on a unique dataset comprising a million mortgages both securitized and not and using a methodology previously applied to insurance data that looks at the correlation between risk transfer and default probability the main finding is that for given observable characteristics securitized mortgages have a lower default probability than non securitized ones we show that this finding is consistent with banks caring about their reputation for not selling lemons

effects of cultural ethnicity firm size and firm age on senior executives trust in their overseas business partners evidence from china we investigate trust relationships between senior business executives and their overseas partners drawing on the similarity attraction paradigm social categorization theory and the distinction between cognition and affect based trust we argue that executives trust their overseas partners differently depending on the partners cultural ethnicity in a field survey of 108 chinese senior executives we found that these executives have higher affect based trust in overseas partners of the same cultural ethnicity as themselves cognition based trust is associated with affect based trust differently when overseas partners are of the same or different cultural ethnicity we also examine the role of relative firm size and age in shaping intra and intercultural trust relative firm size has a stronger negative effect on executives cognition based trust if their partners are of a different cultural ethnicity although firm age does not have a negative effect on executives affect based trust as hypothesized we found firm age to be positively associated with affect based trust for partners of the same cultural ethnicity we discuss theoretical and practical implications of this pattern of inter and intra cultural trust on international business and networking guanxi dynamics in china

competitive irrationality in transitional economies are communist managers less irrational why do marketing managers in the transitional economies of eastern europe and china often engage in competitively irrational behavior choosing pricing strategies that damage competitors profits rather than choosing pricing strategies that improve their firm s profits we propose one possible reason the moral vacuum created by the collapse of communist ideology we hypothesize and find that managers who experienced formal communist moral ideological indoctrination are less likely to be competitively irrational than the post communist managers who did not implications are discussed

the business ethics index as a leading economic indicator theoretical justification for the business ethics index bei from the emerging economics of trust literature is discussed the bei results for 2007 2008 and 2009 are presented while the personal past bei component shows no significant difference from the previous years the vicarious past component shows a dramatic drop to levels previously never recorded however when it came to the perception of the future business ethical behavior respondents were signifi cantly more optimistic than in previous measurements this finding was more than a little surprising given the depth of the economic crisis a possible explanation is that consumers hopefully perceived the economic crisis as already abating and or that at least the worst was over

the impact of societal cultural values and individual social beliefs on the perceived effectiveness of managerial influence strategies a meso approach this paper reports the findings of a 12 nation study designed to test empirically the relationships between societal cultural values individual social beliefs and the perceived effectiveness of different influence strategies the relationships between three types of broad influence strategy persuasive assertive and relationship based and four dimensions of individual beliefs cynicism fate control reward for application and religiosity were examined three of project globe s cultural values in group collectivism uncertainty avoidance and future orientation were selected to investigate their direct effects on the rated effectiveness of influence strategies and their possible interaction with dimensions of individual beliefs results showed that different dimensions of individual social beliefs predict the perceived effectiveness of the three types of influence strategy and that cultural values can moderate the strength of the relationship between these dimensions of individual social beliefs and the perceived effectiveness of influence strategies

ethical preferences for influencing superiors a 41 society study with a 41 society sample of 9990 managers and professionals we used hierarchical linear modeling to investigate the impact of both macro level and micro level predictors on subordinate influence ethics while we found that both macro level and micro level predictors contributed to the model definition we also found global agreement for a subordinate influence ethics hierarchy thus our findings provide evidence that developing a global model of subordinate ethics is possible and should be based upon multiple criteria and multilevel variables

self interest and business ethics some lessons of the recent corporate scandals the recent accounting scandals at enron worldcom and other corporations have helped to fuel a massive loss of confidence in the integrity of american business and have contributed to a very sharp decline in the u s stock market inasmuch as these events have brought ethical questions about business to the forefront in the media and public consciousness as never before they are of signal importance for the field of business ethics i offer some observations and conjectures about the bearing of the recent scandals on the literature on business ethics i defend the following contentions 1 recent events reveal serious weaknesses of the stakeholder theory about the social responsibilities of business which lacks prohibitions against fraud and deception this is a glaring deficiency of standard versions of the stakeholder theory but it is easily remedied by adding explicit prohibitions against fraud and deception in addition recent events highlight the stakeholder theory s very naive and unrealistic hopes and expectations for business executives as moral arbiters and agents of social improvement 2 recent events do not constitute an objection to the shareholder theory about the social responsibilities of business however these events make evident the implausibility of strong versions of the invisible hand theory 3 schemes of payment and reward often create perverse incentives for individuals to engage in unethical conduct 4 both the shareholder theory and the stakeholder theory need to add a constraint that requires executives to respect the professional obligations of employees

opening the black box of the relationship between hrm practices and firm performance a comparison of mne subsidiaries in the usa finland and russia this paper investigates the extent to which different human resource management hrm practices work better in different countries we also try to open the black box between hrm and multinational enterprise mne subsidiary performance by considering mechanisms through which hrm practices affect mne subsidiary performance the study utilizes a unique data set consisting of subsidiaries of 241 mnes operating in russia usa and finland in the partial least square analysis used to examine our hypotheses we demonstrate that different hrm practices are preferable in different countries and that motivation and ability are important mediating variables in the hrm mne subsidiary performance relationship

farm nonfarm linkages in rural sub saharan africa this paper is an accumulation over the past 25 years of a body of detailed work examining the structure of africa s rural nonfarm economy first it systematically reviews empirical evidence on the nature and magnitude of the african rural nonfarm economy it then explores differences across locality and size across countries and over time in an effort to assess likely patterns of growth a subsequent review of key production and consumption parameters allows an estimate of the magnitude of the agricultural growth multipliers in africa the paper concludes with a brief discussion of policies and programs that will be necessary if farm nonfarm growth linkages are to achieve their full potential

consumption and risk sharing over the life cycle a striking feature of u s data on income and consumption is that inequality increases with age this paper asks if individual specific earnings risk can provide a coherent explanation we find that it can we construct an overlapping generations general equilibrium model in which households face uninsurable earnings shocks over the course of their lifetimes earnings inequality is exogenous and is calibrated to match data from the u s panel study on income dynamics consumption inequality is endogenous and matches well data from the u s consumer expenditure survey the total risk households face is decomposed into that realized before entering the labor market and that realized throughout the working years in welfare terms the latter is found to be more important than the former

smallholder timber sale decisions on the amazon frontier abstract we use data from a survey of 2401 households living along the transamazon highway to study timber sales decisions of smallholders settling in amazon native forests we develop an econometric approach to study both the decision to harvest timber and the volume of timber sold that corrects for limited access to loggers leading to possible selection bias incomplete labor markets and differences in property rights regimes that characterize the area we find that irrespective of distance to markets smallholders that have either been settled by incra or have access to credit are more likely to sell wood but those with outside income sources are less likely to sell higher timber prices decrease the likelihood of timber sales the results suggest that timber sales are viewed only as a means for smallholders to reduce immediate cash constraints with some exceptions these results hold across property rights regimes

the crossvergence perspective reflections and projections in this retrospective i chronicle the development of the crossvergence theory of values evolution which states it is the dynamic interaction of the sociocultural influences with the business ideology influences that provides the driving force to precipitate the development of new and unique values systems in societies crossvergence theory was introduced in our 1993 jibs paper and was the focus of our 1997 decade award paper as well as of a series of subsequent papers thus i discuss the purpose and findings for six papers that have contributed to our present level of knowledge concerning crossvergence theory i conclude my comments with a discussion of the relevance of longitudinal and multilevel research measures found to be useful and methodologies to consider as well as identifying research topics in need of exploration

consumer ethics an assessment of individual behavior in the market place a national sample of 362 respondents assessed the ethical predisposition of the american marketplace by calculating a consumer ethics index the results indicate that the population is quite intolerant of perceived ethical abuses the situations where consumers are ambivalent tend to be those where the seller suffers little or no economic harm from the consumer s action younger more educated and higher income consumers appear more accepting of these transgressions the results provided the basis for developing a four group taxonomy of consumers which retailers should find insightful in assessing potential consumer actions in a variety of situations

default insurance and debt over the life cycle abstract the widespread use of debt and default suggests that unsecured credit markets play an important role in consumption smoothing in this paper i address two previously unanswered questions first how does policy towards debt default affect the evolution of consumption and net worth over the life cycle second how does debt default policy interact with social insurance over the life cycle the findings are as follows first us default policy appears lax in the sense that it creates severe credit constraints especially for the young second eliminating default will lower consumption inequality among the young but will increase it among the old third social insurance alters default risk and in turn loan pricing and therefore matters for purely intertemporal smoothing

face and favor the chinese power game western research on interpersonal behavior patterns and rules of exchange needs to move beyond the assumption of isolated individuals socialized to make rational decisions on the basis of self inte

the effect of human resource management practices on mnc subsidiary performance in russia this study investigates the relationship between human resource management hrm and the performance of 101 foreign owned subsidiaries in russia the study s results provide support for the assertion that investments in hrm practices can substantially assist a firm in improving performance further different hrm practices for managerial and non managerial employees are found to be significantly related to firm performance only limited support however is obtained for the hypothesized relationship between efforts at aligning hrm practices with firm strategy and subsidiary performance

losers winners and biased trades when faced with sequential information consumers tend to fall prey to one of two well known heuristics the hot or cold hand and the gambler s fallacy the authors relate these two traditionally separate heuristics to differences in accepting buy versus rejecting sell decisions they identify trend length as a contextual moderating variable and show an asymmetry between buying and selling frames when applied to a stock market context a consistent finding is that consumers prefer to buy past winners and sell past losers even when neither should be preferred this behavior violates the normative rule of buy low and sell high

cultural differences convergence and crossvergence as explanations of knowledge transfer in international acquisitions in spite of the proliferation of research on cultural differences in international mergers and acquisitions we lack systematic analyses of the impact of cultural factors on knowledge transfer in this paper we argue that both national and organizational cultural differences and cultural integration in the form of cultural convergence and crossvergence affect knowledge transfer in acquisitions we develop specific hypotheses concerning the nature of these effects and test our hypotheses with data on international acquisitions carried out by finnish corporations the analyses performed show that national cultural differences provide great potential for knowledge transfer in international acquisitions furthermore organizational cultural convergence and crossvergence have a significant positive impact on knowledge transfer in particular convergence and crossvergence moderate the impact of national cultural differences on knowledge transfer

conceptualizing and measuring distance in international business research recurring questions and best practice guidelines distance is a central concept in international business research yet there is debate about the construct as well as its operationalization in this editorial we address three of the most important recurring questions posed by authors editors and reviewers by examining the theory methods and data of distance research we discuss 1 how to theorize on distance and 2 what method and 3 what data to use when constructing a distance index we develop practical recommendations grounded in theory illustrating and supporting them by calculating cross country distance indices for all available country pairs and two of the most used distance indices cultural and institutional we show that whereas a specific method to calculate distance may matter to some extent the choice for a specific cultural or institutional framework to measure cultural or institutional distance has a major impact on country pair distances overall this editorial highlights the importance of matching data and method to the theoretical argument

the ethical wealth of nations michael porter argues that some nations manifest a competitive advantage deriving from key elements of their economic structure some nations are thus disposed by structure to possess what porter calls a competitive advantage of nations porter 1990 in this paper i examine the prospect of an ethical advantage of nations and in particular of a set of advantages that extend far beyond the simple dimension of trust so often discussed i consider further how such a range of ethical features would be structured and what the implications of those features would be three conclusions are reached 1 morality may create economic advantages for nations in ways that extend beyond the notion of an idealized market 2 in order for ethics to drive economic advantage ethical concepts must rise to the status of intrinsic value and 3 if claims for national ethical success factors are true then nations should attend to the issue of moral education

pay for performance in emerging markets insights from china with the rapid increase in the application of western hr practices in emerging markets it is crucial to investigate how non western employees react to western hr practices such as pay for performance pfp we investigate employee reactions to pfp in emerging markets using china as a case our multilevel analyses based on data from 574 engineers in 22 domestic firms and eight foreign firms in china demonstrated that pfp was positively associated with conscientiousness at the individual level in contrast pfp was negatively related to employees organizational commitment and interpersonal helping at the organization level this study suggests that the impact of culture distance associated with western hr practices may be more likely to manifest itself in the collective entity than at the individual level employees of domestic firms reported significantly higher levels of performance appraisal satisfaction and justice perceptions than employees of foreign firms which might explain why pfp was more widely implemented in domestic firms in china the present results demonstrated that in addition to the culture distance the context distance between domestic and foreign firms may play a critical role in accruing benefits from pfp indicating that pfp can be more beneficial to domestic firms than to foreign firms the present findings provide practical implications for foreign firms operating in emerging markets

credit incentives and reputation a hedonic analysis of contractual wage profiles a hedonic analysis of principal agent employment contracts is developed in which workers and employers exchange labor services and contractual payment patterns within this framework tests of alternative hypotheses are formulated and applied to contract data from a unique household level survey of economic activity in rural china in 1935 the results indicate that credit market constraints motivated workers and employers contract choices that shirking by workers rather than by employers was the dominant incentive issue that reputational concerns rather than threats of termination were the key worker disciplining device and finally that the contract s third party acted as an enforcement device rather than as a matchmaker subject to the availability of matched agent principal data this structural approach to modeling agency relationships can also be used in contemporary settings

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