the role of non economic endowments introduction to the special section on what we know and what we should know about international knowledge sourcing recent developments in the pattern of international knowledge sourcing have highlighted a new international division of labor in knowledge production which now is affecting emerging as well as advanced countries the source of this division of labor has been identified as residing in the changing economic endowments of these countries we extend this by suggesting that the new international allocation of knowledge related activities is related strongly to a country s non economic endowments our arguments provide context to the papers in this special section

structural estimation of the affiliated private value auction model we consider the structural estimation of the affiliated private value apv model in first price sealed bid auctions the model allows for bidders individual efficiencies and opportunity costs while permitting dependence among bidders private values through affiliation we establish the nonparametric identification of the apv model characterize its theoretical restrictions and propose a computationally convenient and consistent two step nonparametric estimation procedure for estimating the joint private value distribution from observed bids using simulated bid data we provide a step by step guide on how to implement our procedure and show the good behavior of our estimator in small samples

equilibrium in auctions with entry the authors model entry incentives in auctions with risk neutral bidders and characterize a symmetric equilibrium in which the number of entrants is stochastic the presence of too many potential bidders raises coordination costs that detract from welfare the authors show that the seller and society can benefit from policies that reduce market thickness i e the relative abundance of buyers their analysis extends well known revenue equivalence and ranking theorems but also demonstrates that variations in the auction environment affect optimal policies e g reservation prices in ways not anticipated by models that ignore entry copyright 1994 by american economic association

the impact of bse on the demand for beef and other meats in great britain indices of media coverage of bse are incorporated in a dynamic aids model of meat demand the publicity which bse has received is found to have had significant effects on the allocation of consumer expenditure among the meats a short run impact has been identified which accounts in large part for the discernible drop in the market share of beef in the early 1990s and more important there also appears to be a significant long run impact of bse which by the end of 1993 has reduced the beef market share by 4 5

new perspectives on the innovation strategies of multinational enterprises lessons for technology policy in europe abstract the aim of this contribution is to learn more about changes in the innovation strategies of large multinational corporations whereby one focus is on internationalization aspects as sources for our analyses we reviewed the main empirical studies and gathered information and insights from 21 corporations our results show firstly that the internationalization of research and technology is still characterized by triadization involving companies from the us the european union and japan secondly qualitative motives are increasingly driving r d location decisions like learning from technological excellence and lead markets and dynamic interactions within the value chain thirdly the process of internationalization in research and technology has been accompanied by an increasingly selective focus on a very few locations and the concentration of innovation activities on worldwide centers of excellence we conclude that these changes in the innovation strategies of large multinational companies put several topics on the agenda for technology policy in europe 1 a stronger focus on extra european collaboration and mobility 2 strengthening the attractiveness of the european union to foreign r d investment and 3 the absorptive capacities of r d organizations in europe 4 a stronger integration of different policy areas and of indirect policy measures 5 as well as the establishment of a transparent and global framework for policy coordination and priority setting worldwide

a study of collusion in first price auctions this paper examines the bidding for school milk contracts in florida and texas during the 1980s in both states firms were convicted of bid rigging the data and legal evidence suggest that the cartels in the two states allocate contracts in different ways one cartel divides the market among members while the other cartel also uses side payments to compensate members for refraining from bidding we show that both forms of cartel agreements are almost optimal provided the number of contracts is sufficiently large in the auction the cartel bidder may face competition from non cartel bidders the presence of an optimal cartel induces an asymmetry in the auction the selected cartel bidder is bidding as a representative of a group and has on average a lower cost than a non cartel bidder the data support the predicted equilibrium bidding behaviour in asymmetric auctions in accordance with optimal cartels

the distribution of dairy farm size in poland a markov approach based on information theory this article sets out to analyse the evolution of the dairy farm structure of poland during the post socialist period after focusing on how the farm structure has changed over time an instrumental variable generalized cross entropy estimator is used to develop and estimate a markov model in order to explore how farm structure will probably develop in the coming decade the estimator exploits both sample data and prior information including general and plausible information on farm mobility and structural adjustments based on independent literature next several statistical indicators are computed for farm mobility and for which farms are likely to survive finally milk projections are made and related to policy scenarios the projections show that the number of dairy farms will continue to decline but the number of medium and large farms will increase in the coming decade subsistence dairy farms are expected to leave the sector slowly milk projections show that under the status quo milk quotas w

new silicon valleys or a new species commoditization of knowledge work and the rise of knowledge services clusters this paper explores knowledge services clusters kscs as a distinct and increasingly important form of geographic cluster in particular in developing countries kscs are defined as geographic concentrations of lower cost skills serving global demand for increasingly commoditized knowledge services based on prior research on clusters and services offshoring and data from the offshoring research network orn major properties and contingencies of ksc growth are discussed and compared with both high tech clusters and low cost manufacturing clusters special emphasis is put on the ambivalent effect of commoditization of knowledge work on ksc growth it is proposed that kscs attract most client projects if service commoditization is medium whereas higher or lower commoditization either increases global competitive pressure or lowers demand and economies of scale and scope ksc attractiveness is further related to the perceived availability of skills at relatively low costs and cluster connectedness with client economies through corporate networks and professional communities findings not only advance current debates on clusters global services sourcing and the geography of knowledge production but also have important policy implications

the maximum entropy distribution of an asset inferred from option prices this paper describes the application ofthe principle of maximum entropy to the estimation of the distribution of an underlying asset from a set of option prices the resulting distri bution is least committal with respect to unknown or missing information and is hence the least prejudiced the maximum entropy distribution is the only information about the asset that can be inferred from the price data alone an extension to the principle of mini mum cross entropy allows the inclusion of prior knowledge of the asset distribution we show that the maximum entropy distribution is able to accurately fit a known density given simulated option prices at different strikes

patterns of internationalisation of corporate technology location vs home country advantages given the trends towards increasing globalisation of markets and of production the globalisation of technology remains a subject of considerable interest to analysts and policy makers in the 1990s this paper provides some new empirical observations for debate and discussion on the patterns of technological activities of large firms outside their home countries it is based on a systematic analysis of the us patenting activities of 220 of the most internationalised firms in terms of their technology in the 1990s although firms are active outside their home countries in the high technology fields such as computers pharmaceuticals telecommunications image and sound and materials quite a sizeable proportion of their foreign activities are concerned with process and machinery technologies moreover a comparison of the technological advantage of the company at home and the advantage of the location shows that in a large majority of cases firms tend to locate their technology abroad in their core areas where they are strong at home these results suggest that adapting products and processes and materials to suit foreign markets and providing technical support to off shore manufacturing plants remain major factors underlying the internationalisation of technology they are also consistent with the notion that firms are increasingly engaging in small scale activities to monitor and scan new technological developments in centres of excellence in foreign countries within their areas of existing strength however there is little evidence to suggest that even these most internationalised firms routinely go abroad to compensate for their weakness at home

credible enticements can host governments tailor multinational firms organizations to suit national objectives abstract this article discusses the impact of host government policy inconsistency on multinational corporations relationships with local suppliers that benefit from public funding empirical findings suggest that such relationships suffer from transactions cost disadvantages due to concerns that unexpected losses of funding may cause the suppliers to demand new contracts the findings reflect statistical tests on a structural equation latent variable model using data from a survey of 111 affiliates of mncs operating in 36 countries

an organizational model for understanding internationalization processes we propose an organizational model for understanding internationalization processes we argue that these processes differ with the type of organization we compare the internationalization processes of three organization types the mass production organization the disaggregated production organization and the project based organization each organization type responds differently to critical elements of the internationalization process namely the focus of entry the degree of presence and physical presence requirements in the foreign market which in turn influence what modal forms are adopted as the process progresses consequently we observe different approaches to resource commitment in the foreign market over time

multidivisional vs metanational governance of the multinational enterprise the effective and efficient management of diversified business firms that supply multiple products and operate in multiple dynamic markets especially large multinational enterprises mnes builds upon a number of specific governance principles these governance principles allow the alignment of environmental characteristics strategy and organization given the rising need to learn from the world doz et al in their influential harvard business school press book entitled from global to metanational have proposed a new set of governance principles described under the metanational umbrella concept this paper revisits the metanational using a comparative institutional perspective here we contrast multidivisional and metanational governance principles a comparative institutional analysis suggests that the metanational s application potential in terms of actually improving the effectiveness and efficiency of mne governance may be subject to more qualification than suggested by doz et al senior mne management must therefore reflect carefully before substituting metanational governance principles for the more conventional multidivisional ones with established contributions to managerial effectiveness and efficiency

environmental compliance and energy exploration and production application to offshore oil and gas an integrated investment production regulatory model is developed to examine the economic consequences of proposed environmental regulations on firms in the offshore oil and gas industry ocs related environmental regulatory issues the general modeling approach and selected simulation results are discussed the results show that the impacts of these regulations on ocs firms can be significant in terms of the reduction in after tax net present value the distribution of economic rent and minimum field size results also indicate that at the firm level the influences of different sets of regulatory proposals vary significantly with more stringent regulations having bigger effects

offshoring administrative and technical work new fields for understanding the global enterprise in this paper we introduce the journal of international business studies special issue on offshoring administrative and technical services ats in doing so we have attempted to locate the topic within the international business research tradition as well as suggest challenges and opportunities that the phenomenon offers to theoretical and empirical research in the field we examine the interplay of costs knowledge and innovation in the evolution of ats offshoring from modest beginnings to its current stature as an accepted business practice we suggest that understanding the continuing evolution of ats offshoring requires researchers to take into account not only the business imperative of cost saving but also a more complex set of underlying factors and potential outcomes we argue that the rapid growth of ats offshoring has brought about an accumulation of resources including financial flows knowledge infrastructure and human capital to create new platforms for knowledge creation and innovation low costs may characterize the initial conditions for offshoring but they also provide the basis for up market moves as firms increasingly pursue innovation based strategies we introduce the papers in the special issue as integral elements in our discussion contributing new ideas that stimulated our thinking and hopefully will do the same for others seeking to understand this emerging area of globalization and international managerial practice journal of international business studies 2009 40 887 900 doi 10 1057 jibs 2009 22

outsourcing and offshoring implications for productivity of business services this paper reviews the implications of outsourcing and offshoring for the productivity of business services in the uk official statistics indicate that business service productivity has grown by over 20 per cent in the last 7 years at the same time as employment grew by 20 per cent the paper considers possible factors that account for the simultaneous growth of employment and productivity first we discuss outsourcing and offshoring and their role in enhancing productivity through greater specialization standardization and consolidation of business processes and a shift to higher value added services outsourcing of business services is interpreted as part of corporate restructuring namely as the unbundling of corporate functions as well as vertical disintegration second as some services become more like products both low skilled and high skilled jobs are subjected to productivity growth through standardization and digitization it is argued however that the future of business service productivity is on a knife edge depending on the mix of two sources of productivity enhancement namely greater standardization and capturing value from customized solutions copyright 2006 oxford university press

market versus technology drive in r d internationalization four different patterns of managing research and development research and development are subject to different location drivers the analysis of 1021 r d units each distinguished by its main orientation towards either research or development work reveals that research is concentrated in only five regions worldwide while development is more globally dispersed our research is based on 290 research interviews and database research in 81 technology intensive multinational companies we identify two principal location rationales access to markets and access to science as the principal determinants for four trends that lead to four archetypes of r d internationalization national treasure market driven technology driven and global their organizational evolution is characterized by four trends the model is illustrated with short cases of international r d organization at kubota schindler xerox and glaxo wellcome differences in rd separation seems to contradict this trend we argue that this need not be the case for there are good reasons to maintain some independence between research and development

the role of path dependency and managerial intentionality a perspective on international business research several decades of research in the field of international business have advanced various theories and studies on the internationalization of firms our assessment of the literature on internationalization shows that the focus has been primarily on path dependency and learning based aspects of internationalization while managerial intentionality and the possibility of managers making deliberate strategic choices towards further internationalization have not been very prominent in the ib literature we argue that internationalization paths and processes should be approached as a joint outcome of management intentionality and experience based learning in other words managers are assumed to have the ability and the intention to influence the evolutionary paths of the firm we derive a future research agenda that calls for the pursuit of this promising and emergent research stream moreover we develop a model integrating managerial intentionality knowledge experience and other factors institutional and selection forces to explain heterogeneous outcomes of internationalization positions paths and processes

environmental and land use regulation in nonrenewable resource industries implications from the wyoming checkerboard this paper examines how the oil and soning that these effects should be similar gas industry responds to changes in environmental to those of production and property taxes and land use regulations pertaining to drilling by like stollery however they do not conexamining differences in regulatory practices on sider the situation where environmental federal and private land a simulation model for regulations directly affect explo ration and wyoming is used to estimate losses of oil and gas development output over the next 60 years because of higher activities in any case the drilling costs found on federal property the pres limited number of studies in this area and ent value of these losses comes to about 800 mil their narrow scope is surprising in light of lion a lso this case study is of interest because it the importance of environmental complishows that future production is more sensitive to ance costs to firms that produce from nonchanges in environmental regulations that apply to renewable resources and because of the drilling than to changes in severance taxes levied observation by jaffe et al 1995 that a on production

numerical analysis of asymmetric first price auctions abstract we propose numerical algorithms for solving first price auction problems where bidders draw independent valuations from heterogeneous distributions the heterogeneity analyzed in this work is what might naturally emerge when subsets of distributionally homogeneous bidders collude bid functions and expected revenues are calculated for two special cases extensions to more general asymmetric first price auctions are discussed journal of economic literature classification numbers d44 c63 c72 d82

the globalisation of technology what remains of the product cycle model this paper reexamines two hypotheses associated with earlier versions of the product cycle model the first hypothesis that innovations are almost always located in the home country of the parent company is rejected on the basis of evidence drawn from one hundred years of u s patent office data the second hypothesis that the international dispersion of activity is led by technology leaders is historically valid however over the last twenty years technology leaders have been ahead instead in the globalization of technology that is in developing internal international networks to exploit the locationally differentiated potential of foreign centers of excellence c 1995 academic press inc copyright 1995 by oxford university press

uniqueness and existence of equilibrium in auctions with a reserve price abstract we prove existence and uniqueness of equilibrium for a general class of two player bidding games we apply our results to the first price auction the combination of first and second price auctions the war of attrition the all pay auction as well as combinations of the latter two auction forms we also treat the first price auction without risk neutrality our results deal with the asymmetric affiliated common values environment in the case where signals are independent our results apply to all equilibria when signals are not independent our uniqueness results hold in the class of nondecreasing strategy equilibria journal of economic literature classification number d44

extending the theory of the multinational enterprise internalization and strategic management perspectives this paper assesses the continued relevance of buckley and casson s 1976 book on the future of the multinational enterprise mne against a background of increasing criticism of transaction cost related scholarly work we demonstrate that the schism that can currently be observed in the field between international business and international management is misguided as the transaction cost internalization school may offer useful insights to both management scholars and managers for this to occur however it is necessary first to extend the empirical scope of transaction cost based reasoning to include the functioning of differentiated network mnes the paper suggests that buckley and casson s book still represents a beacon of clarity and a superb starting point for the study of the mne even if the complexity of this governance structure has grown far beyond what any international business scholar or even international management scholar could have predicted 25 years ago

equilibrium in sealed high bid auctions there is a voluminous theoretical literature on sealed high bid auctions auctions in which bids are sealed and the high bidder pays his bid see for example vickrey 1961 myerson 1981 riley and samuelson 1981 milgrom and weber 1982 matthews 1983 maskin and riley 1984 holt 1980 cox smith and walker 1988 a critical property on which this literature relies is the existence of equilibrium in which buyers bidding strategies are monotonic in their types this enables the analyst to perform comparative statics as the distribution of types changes and to compare the welfare properties of the high bid auction with those of other auction institutions one case in which the existence of monotonic equilibrium is readily established is that in which buyers types are distributed smoothly independently and symmetrically in this case there exists a symmetric equilibrium one in which all bidders share the same bidding behaviour as a function of their valuations and this bid function is the solution to a first order differential equation

econometrics of first price auctions in this paper we propose an estimation method for the empirical study of theoretical auction models we focus on first price sealed bid and descending auctions and we adopt the private value paradigm where each bidder is assumed to have a different private value only known to him for the object that is auctioned following mcfadden 1989 and pakes and pollard 1989 our proposed method is based on simulations specifically the method relies on a simulated nonlinear least squares objective function appropriately adjusted so as to obtain consistent estimates of the parameters of interest we illustrate the proposed method by studying a market of agricultural products where descending auctions are used our analysis takes into account heterogeneity of the auctioned objects and the fact that only the winning bid is observed we estimate the parameters that characterize the distribution of the unobserved private values for each auctioned object

uneven and combined development understanding india s software exports abstract the evolution of the indian software sector is explained by the larger context of uneven and combined development the imperatives of a market driven global order suggest an open ended process of development making some economic and technological convergence realizable but also generating contradictions at various levels this paper focuses on differential innovative capability the uneven diffusion of technical education in india and the increasing economic integration of the software industry as sources of uneven development the combined nature of the development process is reflected in the coexistence of the successful software sector with several lagging sectors with all of them being functionally integrated as part of indian social formation to cope with the contradictions of such change a balanced development will be critical to make development more inclusive deep structural problems that plague those outside the orbit of the successful software industry must be resolved

an application of maximum entropy estimation the demand for meat in the united kingdom in many econometric studies of demand relationships the design matrix is frequently subject to severe collinearity in this paper the generalized maximum entropy methodology is introduced and used to estimate a set of demand relationships the ability of generalized maximum entropy to estimate economic relationships that are typically subject to a high degree of collinearity among the explanatory variables thus potentially causing traditional methods of estimation to be unreliable is explained the results derived by this alternative method of estimation for a uk meat demand data set are analysed and examined the potential for this emerging estimation methodology is discussed

semiglobalization and international business strategy if markets were either completely isolated by or integrated across borders there would be little room for international business strategy to have content distinctive from mainstream strategy but a review of the economic evidence about the international integration of markets indicates that we fall in between these extremes into a state of incomplete cross border integration that i refer to as semiglobalization more specifically most measures of market integration have scaled new heights in the last few decades but still fall far short of economic theory s ideal of perfect integration the diagnosis of semiglobalization does more than just supply a relatively stable frame of reference for thinking about the environment of cross border operations it also calls attention to the critical role of location specificity in the prospects of distinctive content for international business strategy relative to mainstream business and corporate strategy in addition it flags factors products subject to location specificity as being salient from the perspective of international business finally it highlights the scope for strategies that strive to capitalize on the large residual barriers to cross border integration as well as those that simply try to cope with them

transactions cost economics and the multinational enterprise an assessment abstract this paper applies transactions cost principles to the multinational enterprise in order to ascertain its distinctive properties as a mode of economic organization the analysis helps identify just when and where contractual alternatives to the multinational firm are likely to be viable this turns out to depend upon the nature of the technology the regime of appropriability within which the firm operates and the characteristics of the markets in question transactions cost analysis is also extended to the multinational enterprise host country relationship implications for management and public policy are derived

linking product and process innovations and modes of international sourcing in global competition a case of foreign multinational firms in increasingly complex global competition multinational firms u s and foreign alike have stepped up international sourcing of components and finished products to serve various markets since an increasing portion of global competition is shaped by european and japanese multinational firms with due emphasis on product quality and manufacturing it is an opportune time to examine the like among their product development manufacturing and sourcing activities those european and japanese multinational firms marketing products in the united states are chosen as subjects of this study

foreign direct investment in industrial research in the pharmaceutical and electronics industries results from a survey of multinational firms abstract this paper examines motives location characteristics inter temporal characteristics and modes of entry for foreign direct investment fdi in research and development r d the paper is based on a detailed empirical survey of laboratory sites established by 32 large multinational companies domiciled in 5 countries findings indicate that fdi in r d has risen considerably over the last 40 years and that firms invest in r d sites abroad in order to augment their knowledge base or in order to exploit it the former motive leads to establishment of facilities primarily close to universities while the latter type leads to establishment of facilities close to existing manufacturing facilities and markets the paper also finds that greenfield investments are the dominant mode of entry and that firms establish multiple r d sites in their home countries before investing in such sites abroad

securing access to lower cost talent globally the dynamics of active embedding and field structuration manning s sydow j and windeler a securing access to lower cost talent globally the dynamics of active embedding and field structuration regional studies this article examines how multinational corporations shape institutional conditions in emerging economies to secure access to high skilled yet lower cost science and engineering talent two in depth case studies of engineering offshoring projects of german automotive suppliers in romania and china illustrate how multinational corporations engage in active embedding by aligning local institutional conditions with global offshoring strategies and operational needs multinational corporations thereby contribute to the structuration of field relations and practices of sourcing knowledge intensive work from globally dispersed locations the findings stress the importance of institutional processes across geographic boundaries that regulate and are shaped by multinational corporation activities manning s sydow j and windeler a

the next wave of globalization relocating service provision to india summary services offshoring to india has grown dramatically in the last 10 years it is linked to the earlier expansion of indian software services exports but has its own dynamic and workforce although domestic firms were early entrants mncs are central actors already some work done in india resembles that done in developed countries to explain the dynamism and complexity of offshoring a taxonomy of market participants is presented offshoring by small entrepreneurial us firms is highlighted as an emerging phenomenon the conclusion argues that market entry by other developing countries is possible

asymmetry in first price auctions with affiliated private values collusion and heterogeneity across firms may introduce asymmetry in bidding games a major difficulty in asymmetric auctions is that the bayesian nash equilibrium strategies are solutions of an intractable system of differential equations we propose a simple method for estimating asymmetric first price auctions with affiliated private values considering two types of bidders we show that these differential equations can be rewritten using the observed bid distribution we establish the identification of the model characterize its theoretical restrictions and propose a two step non parametric estimation procedure for estimating the private value distributions an empirical analysis of joint bidding in ocs auctions is provided copyright 2003 john wiley sons ltd

joint ventures and offshore oil lease sales alternative explanations of joint bidding for offshore oil tract leases are examined the models suggest that firms undertake joint bids 1 to reduce risk by spreading ownership across tracts 2 to share technical expertise including information and 3 to ameliorate financial constraints these hypotheses are examined empirically using the multiple logit technique and other tests with data constructed from the baltimore canyon sale of 1976 the results suggest that firms behaviors are consistent with the explanations of diversification and sharing of expertise explanations based on financial constraints are shown to be consistent with the data in the risk averse case but not in the risk neutral case implications of these results for research and policy are discussed

task attributes and process integration in business process offshoring a perspective of service providers from india and china this study addresses an important issue in designing and managing business process offshoring bpo process integration between an offshore service provider and its global bpo client we applied the information processing lens in global bpo and developed the logic that internationally disaggregated process integration requires a fit between process integration and bpo s task characteristics i e task complexity and security and task interdependence task connectivity stickiness and dependency this alignment is further moderated by the task context such as the geographic dispersion of the global client s end customers and the type of offshore provider independent vendor vs captive and joint venture finally we suggest that process integration has a positive but curvilinear relationship with the economic returns achieved by offshore providers our analysis of 308 bpo companies in india and china supports our propositions we conclude that international managers monitoring and integrating globally disaggregated activities in bpo should establish a proper alignment with the bpo project s task traits and task interdependence and look closely at the conditioning effect of external complexity by redressing the paucity of research on governing global bpo this study offers some insights into the integration externalization dynamics for growing business knowledge process offshoring

improving hedonic estimation with an inequality restricted estimator economists commonly estimate the value of characteristics not traded in explicit markets by hedonic pricing unfortunately these nonexplicitly traded characteristics often display a lack of independent variation or multicollinearity often some prior information on the value of these characteristics is available from submarkets this paper utilizes this type of prior information to circumvent multicollinearity problems in hedonic pricing models using an inequality restricted bayesian estimator the authors perform a monte carlo experiment and cross validation analysis to demonstrate the superiority of inequality restricted bayesian over ordinary least squares at many margins in a variety of situations typically faced in hedonic estimation copyright 1995 by mit press

risk aversion risk sharing and joint bidding a study of outer continental shelf petroleum auctions collusion and heterogeneity across firms may introduce asymmetry in bidding games a major difficulty in asymmetric auctions is that the bayesian nash equilibrium strategies are solutions of an intractable system of differential equations we propose a

regaining the edge for international business research the key to international business is that it approaches empirical phenomena at a variety of levels of analysis using a variety of theoretical frameworks the most important levels of analysis are the individual manager the firm the industry and the environment in each category there is vast heterogeneity figure 2 1 illustrates this interaction between issues and theories it has levels of analysis on the vertical axis and the basic social sciences on the horizontal axis as systems of thinking about the phenomena it would also be possible to replace fundamental disciplines by the primary management disciplines marketing finance strategy etc

where ricardo and mill rebut and confirm arguments of mainstream economists supporting globalization most noneconomists are fearful when an emerging china or india helped by their still low real wage rates outsourcing and miracle export led developments cause layoffs from good american jobs this is a hot issue now and in the coming decade it will not go away prominent and competent mainstream economists enter into the debate to educate and correct warm hearted protestors who are against globalization here is a fair paraphrase of the argumentation that has been used recently by alan greenspan jagdish bhagwati gregory mankiw douglas irwin and economists john or jane doe spread widely throughout academia yes good jobs may be lost here in the short run but still total u s net national product must by the economic laws of comparative advantage be raised in the long run and in china too the gains of the winners from free trade properly measured work out to exceed the losses of the losers this is not by mysterious fuzzy magic but rather comes from a sharing of the trade induced rise in total global vectors of the goods and services that people in a democracy want never forget to tally the real gains of consumers alongside admitted possible losses of some producers in this working out of what schumpeter called creative capitalist destruction correct economic law recognizes that some american groups can be hurt by dynamic free trade but correct economic law vindicates the word creative destruction by its proof sic that the gains of the american winners are big enough to more than compensate the losers

trans specialization understanding in international technology alliances the influence of cultural distance in the information age the firm s performance hinges on combining partners specialist knowledge to achieve value co creation combining knowledge from different specialties could be a costly process in the international technology alliances itas context we argue that the combination of different specializations requires the development of trans specialization understanding tsu instead of the internalization of partners specialist knowledge this article examines the extent to which inter firm governance in itas shapes tsu and whether the development of tsu is endangered by cultural distance we hypothesize that relational governance product modularity and cultural distance influence tsu development which in turn influences firm performance we collected data from 110 non equity itas between software and hardware firms participating in the mobile device sector we analyzed the data using partial least squares path modeling our findings suggest that tsu largely depends on product modularity and relational governance in alliances however while cultural distance negatively moderates the path from relational governance to tsu it has no effect on the relationship between product modularity and tsu based on this we conclude that product modularity can substitute for relational governance when strong relational norms are not well developed in international alliances thus cultural distance does not invariably amount to a liability in itas

location versus home country advantages in r d activities some further results on multinationals locational strategies abstract in this paper we study the question of the determinants of the foreign location of technological activities of multinational firms mnfs do they locate their knowledge activities as a consequence of their home country advantages or according to host country strengths we have defined four types of strategy learning according to revealed technological advantages our results based on the 345 mnfs with the greatest patenting activity in europe globally confirm the main findings of patel and vega research policy 28 2 3 1999 145 155 in a great majority of cases nearly 70 mnfs locate their activities abroad in technological areas or fields where they are strong at home strategies 2 and 3 moreover strategy 3 which corresponds with dynamic learning outclasses strategy 2 which corresponds with myopic learning and becomes increasingly important over time the strategy of japanese firms is very different from european and us mnfs in europe japanese firms seek out locations that have complementary strengths to their own strategy 2 in terms of policy implications it can be noted that the national system of innovation in particular the system of academic research should strengthen the technological advantages of local firms and enable them to successfully locate a part of their r d activities abroad

towards a renaissance in international business research big questions grand challenges and the future of ib scholarship in this article we review critiques of international business ib research with a focus on whether ib scholarship tackles big questions we identify three major areas where ib scholars have addressed important global phenomena but find that they have had little influence outside of ib and only limited effects on business or government policy we propose a redirection of ib research towards grand challenges in global business and the use of interdisciplinary research methods multilevel approaches and phenomena driven perspectives to address those questions we argue that ib can play a more constructive and vital role by tackling expansive topics at the business societal interface

offshoring of r d looking abroad to improve innovation performance the offshoring of knowledge services has become a phenomenon of increasing importance for firms but many of its implications are yet to be discussed thoroughly this paper analyzes whether r d offshoring contributes to enhancing firms innovation capabilities specifically the study distinguishes between two governance models of offshoring captive offshoring and offshore outsourcing and two types of innovation outcomes product and process innovations we suggest that r d offshoring has different impacts depending on the innovation results and governance models considered the study empirically tests these relationships using the spanish technological innovation panel this survey contains information on a large sample of firms from diverse sectors for the period 2004 2007 the empirical findings allow us confirm our hypotheses and highlight the strategic importance of r d offshoring the empirical evidence reveals a positive relation between offshoring and innovation performance with a greater effect on product than on process innovations the results for different governance models show that captive offshoring has a greater effect on innovation outcomes than offshore outsourcing these findings lead us to conclude that firms that look overseas can benefit from location specific and specialization advantages to improve innovation performance

global delivery models the role of talent speed and time zones in the global outsourcing industry global delivery models gdms are transforming the global it and business process outsourcing industry gdms are a new form of client specific investment promoting service integration with clients by combining client proximity with time zone spread for 24 7 service operations we investigate antecedents and contingencies of setting up gdm structures based on comprehensive data we show that providers are likely to establish gdm location configurations when clients value access to globally distributed talent and speed of service delivery in particular when services are highly commoditized findings imply that coordination across time zones increasingly affects international operations in business to business and born global industries

knowledge and competitive advantage the coevolution of firms technology and national institutions this issue of jibs offers reviews of two books that analyse the dynamic interaction between the business environments and business strategies in very different ways the institutional underpinnings for business strategies are a major research topic for comparative management aiming to explain why in different contexts firms pursue different strategies and with different implications for performance j peter murman in knowledge and competitive advantage takes a historical perspective focusing on the co evolutionary processes between national innovation systems business strategies and performance this books thus adds to the industry level longitudinal research reviewed in jibs no 4 2003 tom murtha et al s managing new industry creation and david mckendrick et al s from silicon valley to singapore

optimal pricing use and exploration of uncertain natural resource stocks abstract units of natural resources to be called mines are assumed distributed over an unexplored territory according to a poisson process in space at any moment total reserves and unexplored land are given society can determine the rate of consumption and the rate of exploration reserves are drawn down by consumption and increased by discoveries made during exploration the amount of unexplored land is decreased by exploration at any moment the payoff of society is a concave function of consumption less a linear function of exploration with future payoffs discounted optimal policies are considered and in particular it is shown for a large amount of unexplored land the shadow prices of reserves and of unexplored land move in random cycles but show only a slight upward tread thereby casting some light on the failure of mineral prices to rise at the market rate of interest

on comparing monopoly and competition in exhaustible resource exploitation abstract it is widely believed that exhaustible resource monopolies do not enjoy as much market power as standard non resource monopolies and may even produce in a socially optimal way we argue that this paradoxical result arises from an inappropriate comparison methodology when similar assumptions are applied to the resource and the conventional cases we show that the resource monopoly behaves as expected i e restricts supply

the drivers of foreign direct investment into research and development an empirical investigation this paper examines the determinants of foreign direct investment fdi in research and development laboratories by 32 multinational enterprises in the pharmaceutical and electronics industries the paper applies a dichotomous set of motives for fdi results from an econometric analysis of 136 laboratory investments show that relative market size and relative strength of a country s science base determine whether fdi in research and development is carried out in order to exploit existing firm specific advantages or in order to build up new firm specific advantages this holds true in similar form for japanese european and u s firms and across the two industries

large firms in the production of the world s technology an important case of non globalisation us patenting by 686 of the world s largest manufacturing firms shows that their share of the world s production of technology is less than their share of r d activities and varies greatly amongst sectors in most cases the technological activities of these large firms are concentrated in their home country the characteristics of which influence the volume and trends in their technological activities much more strongly then the international component of these activities at the same time these large firms are major elements in the volume and the pattern of sectoral specializations in their home countries technological activities

bidder collusion at forest service timber sales allegations of bidder collusion at forest service timber sales in the pacific northwest were common in the 1970s of course prices may be low for reasons other than collusion we formulate an empirical model that allows for both bidder collusion and supply effects and in which we control for demand conditions noncooperative behavior in which a single unit is sold the standard auction model is a special case it is found to be definitively outperformed by a model of collusion we also find that supply effects are dominated by collusion in determining the winning bids in the market

why are different services outsourced to different countries the tradability revolution in services has led to a dramatic expansion of offshore outsourcing of services allowing firms to take advantage of lower production costs in foreign countries however production costs alone cannot explain the location determinants of offshore outsourcing of services in this paper we argue that minimizing transaction costs is also an important determinant of the location of offshore outsourcing of services we empirically analyze characteristics of services and characteristics of foreign countries that may impact on transaction costs in an outsourcing relationship and hence determine where services will be outsourced offshore we derive measures of service characteristics routineness complexity and interactiveness based on the tasks required to provide them further we posit that there are interaction effects between service and country characteristics using bureau of economic analysis data on us service outsourcing across 11 types of services to 31 countries between 1992 and 2005 we find that 1 services that are more routine less complex or less interactive are outsourced more to foreign countries 2 services are outsourced more to countries with higher institutional quality and greater cultural proximity 3 non routine complex and interactive services are outsourced relatively more to countries with a better institutional quality