a note on interest parity and the supply of arbitrage funds the divergence of the actual forward premium on foreign exchange from that dictated by the principle of interest rate parity can arise from two separately identifiable causes 1 an equilibrium position as indicated by the interest parity principle has not been reached or 2 that the principle itself is not a correctly specified equilibrium condition it is the purpose of this note to offer a revised specification of the interest parity condition and to determine whether this version approximates more closely the actual premium as determined in the market it should be made clear however that this is a partial analysis and does not deal with the impact of other forces for example speculation on the forward premium as a result a complete model of the spot and forward markets for foreign exchange such as stein s 1965 is not attempted here in general the principle of interest parity maintains that in equilibrium

does globalization affect growth evidence from a new index of globalization the study develops an index of globalization covering its three main dimensions economic integration social integration and political integration using panel data for 123 countries in 1970 2000 it is analysed empirically whether the overall index of globalization as well as sub indexes constructed to measure the single dimensions affect economic growth as the results show globalization indeed promotes growth the dimensions most robustly related with growth refer to actual economic flows and restrictions in developed countries although less robustly information flows also promote growth whereas political integration has no effect

brand credibility and marketplace globalization the role of perceived brand globalness and localness consumers in western markets are increasingly critical towards globalization and re embrace local values companies thus must decide whether to continue to pursue global branding strategies and or rejuvenate local branding strategies to explore the implications of market globalization for consumer preferences we use signaling theory to investigate the role of perceived brand globalness pbg and brand localness pbl as signals of brand credibility related downstream effects and boundary conditions across two countries with differing levels of globalization in globalized markets pbg is a weaker signal of brand credibility than pbl whereas in globalizing markets the two signals are of equal importance

covered interest arbitrage and market turbulence the covered interest parity theorem states that the covered interest differential between two similar assets denominated in different currencies should be zero this paper utilizes high quality data recorded by the dealers at the bank of england to test covered interest parity during certain historical periods in which there is known to have been turbulence as well as during a relatively calm control period the data is high frequency and allowance is made for the bid offer spread brokerage costs and other considerations the results have three main implications firstly profitable arbitrage opportunities do occasionally occur and sometimes persist during turbulent periods secondly the degree of efficiency of the relevant markets appears to have increased over time thirdly there appears to be a maturity effect whereby the existence and size of profitable arbitrage opportunities appear to be positive functions of the length of maturity a rationalization of this phenomenon is offered in terms of the existence of credit limits copyright 1989 by royal economic society

theoretical justification of sampling choices in international marketing research key issues and guidelines for researchers sampling in the international environment needs to satisfy the same requirements as sampling in the domestic environment but there are additional issues to consider such as the need to balance within country representativeness with cross national comparability however most international marketing research studies fail to provide theoretical justification for their choice of sampling approach this is because research design theory and sampling theory have not been well integrated in the context of international research this paper seeks to fill the gap by developing a framework for determining a sampling approach in international studies the framework is based on an assessment of the way in which sampling affects the validity of research results and shows how different research objectives impact upon a the desired sampling method and b the desired sample characteristics the aim is to provide researchers with operational guidance in choosing a sampling approach that is theoretically appropriate to their particular research aims

from the editors common method variance in international business research jibs receives many manuscripts that report findings from analyzing survey data based on same respondent replies this can be problematic since same respondent studies can suffer from common method variance cmv currently authors who submit manuscripts to jibs that appear to suffer from cmv are asked to perform validity checks and resubmit their manuscripts this letter from the editors is designed to outline the current state of best practice for handling cmv in international business research

a bibliometric analysis of the global branding literature and a research agenda this study examines the citations used in the global branding literature gbl and evaluates the knowledge structure of this area of research to date our bibliometric analysis involves an examination of 120 global branding articles in business related research we employ multidimensional scaling to reveal a range of intellectual influences that have helped shape the gbl the foundation of knowledge in the gbl is uncovered by analyzing co citation data to identify important topical influences in the formation of global branding research the conceptual framework developed incorporates five areas with important implications for the future development of global branding as an area of inquiry these major research topics in the gbl are international branding strategy brand positioning brand country origin brand concept image and brand performance we leverage resource and capability based paradigms and use the five underpinning knowledge groups to propose an agenda for future research that fills existing gaps and offers the potential to advance and enrich the gbl

de globalization theories predictions and opportunities for international business research de globalization now a distinct possibility would induce a significant qualitative shift in strategies structures and behaviors observable in international business ib coming to terms with this qualitative shift would require ib research to develop a much deeper integration of politics the key driver of de globalization to support such integration this paper introduces two relevant theories of de globalization from political science liberalism and realism both predict de globalization under current conditions but lead to different expectations about the future world economy liberalism suggests a patchwork of economic linkages while realism predicts the emergence of economic blocs around major countries this paper discusses the resulting opportunities in three areas of ib research political strategies and roles of multinational enterprises mnes global value chains and the role of the national context for political strategies and roles there is a need to explore how regular business activities and deliberate political agency of mnes affect the political sustainability of globalization for value chains questions include their future reach and specialization changes in organizational forms and the impact of political considerations on location decisions research opportunities on national contexts relate to their ability to sustain globalization and their connection with economic and military power

is globalization reducing absolute poverty summary using data from 114 countries 1983 2007 we examine the relationship between globalization and world bank absolute poverty estimates we find a significant negative correlation between globalization and poverty robust to several econometric specifications including a fixed effect panel a long run first difference and a pooled ols regression introducing two instruments for globalization we also show that results are robust to correction for potential endogeneity we motivate and test the instruments in several ways in particular information flows and more liberal trade restrictions robustly correlate with lower absolute poverty

exchange rate theory and practice this volume grew out of a national bureau of economic research conference on exchange rates held in bellagio italy in 1982 in it the world s most respected international monetary economists discuss three significant new views on the economics of exchange rates rudiger dornbusch s overshooting model jacob frenkel s and michael mussa s asset market variants and pentti kouri s current account portfolio approach their papers test these views with evidence from empirical studies and analyze a number of exchange rate policies in use today including those of the european monetary system

the structural reshaping of globalization implications for strategic sectors profiting from innovation and the multinational enterprise the rapid reshaping of the global economic order requires fundamental shifts in international business scholarship and management practice new forms of protectionist policies new types of internationalization motives and new tools of techno nationalism may lead to what we call bifurcated governance at the macro level and value chain decoupling at the micro level as a result innovation networks will require novel reconfigurations we examine the emerging constraints on multinational enterprises imposed by a bifurcated world order we also discuss how the dynamic capabilities framework can guide scholars and managers alike to achieve new forms of evolutionary fitness

the evidence on globalisation globalisation is blamed for many socioeconomic shortcomings i discuss the consequences of globalisation by surveying the empirical globalisation literature my focus is on the kof indices of globalisation that have been used in more than 100 studies early studies using the kof index reported correlations between globalisation and several outcome variables studies published more recently identify causal effects the evidence shows that globalisation has spurred economic growth promoted gender equality and improved human rights moreover globalisation did not erode welfare state activities did not have any significant effect on labour market interaction and hardly influenced market deregulation it increased however within country income inequality the consequences of globalisation thus turn out to be overall much more favourable than often conjectured in the public discourse

brand origin recognition accuracy its antecedents and consumers cognitive limitations an ever growing literature has reported consumer bias toward national origins of products and has explored factors that moderate such bias researchers have assumed if only tacitly that consumers are knowledgeable of brand origins and that this knowledge is a significant influence that drives judgments of product quality brand attitudes and choice behavior in the marketplace using categorization theory and attribute diagnosticity as the theoretical foundation our research reveals that consumers actually have only modest knowledge of the national origins of brands and that american consumers proficiency at recognizing foreign brand origins is predicted by variables such as socioeconomic status past international travel foreign language skills and gender in the second of two studies we determined that brand origin recognition is based largely on consumers associations of brand names with languages that suggest country origins these studies ultimately lead us to conclude that past research has inflated the influence that country of origin information has on consumers product judgments and behavior and its importance in managerial and public policy decisions

home country bias in product evaluation the complementary roles of economic and socio psychological motives consumers often are positively biased in their evaluations of domestic products vs foreign alternatives this study establishes economic and socio psychological motives for this home country bias building on social identity theory this paper shows that home country bias is in part driven by a need for self enhancement this influence is stronger for consumers who identify more strongly with their own country and is complementary to the effect of consumer ethnocentrism which provides an economic motivation for home country bias the framework is supported in empirical studies conducted in the netherlands and in the usa

norwegian emissions of co2 1987 1994 a study of some effects of the co2 tax several countries have introduced taxes on fossil fuels with the aim of reducing atmospheric emissions partly because of local environmental goals so2 nox and partly to participate in a global effort to reduce emissions of greenhouse gases many macroeconomic studies based on both global and national models have been made of how emissions can be reduced with the help of taxes and the consequent reduction in gdp following the introduction of such taxes norway has had a co2 tax for five years thereby providing a unique opportunity to evaluate the effects of this tax on emissions the paper provides a counterfactual analysis of energy consumption and emissions if no co2 taxes had been introduced compared with the actual situation in which such taxes exist the effect of a co2 tax on oil consumption and thus co2 emissions is studied on the basis of partial economic models for various sectors of the norwegian economy the study indicates that the co2 tax has had an impact on co2 emissions in norway

umbrella branding as a signal of new product quality an example of signalling by posting a bond i present a signalling model in which a multiproduct firm can use its reputation as a bond for quality by using a brand name for an established product when it introduces a new experience good as out of equilibrium beliefs are specified a false signal may be taken to imply that both the established and the new product are of low quality in contrast the absence of a signal leaves open the possibility that one of the two products is of high quality hence the signal can be credible without excessive sunk costs as long as the bond posted is sufficiently large

foreign exchange market efficiency tests implications of recent empirical findings abstract the recent empirical literature on the efficiency of the foreign exchange market has been characterized by strikingly contradictory conclusions drawn from similar empirical evidence these contradictions result because 1 different maintained hypotheses are held and 2 different criteria e g micro versus macroeconomic are used to judge the evidence in this survey we organize the empirical literature under several headings the presence of risk premiums empirical regularities in regression tests profitable trading rules and advanced econometric techniques in integrating this material we consider the implications of the current evidence for investors forecasters policy makers and theorists

what s in a p reassessing best practices for conducting and reporting hypothesis testing research social science research has recently been subject to considerable criticism regarding the validity and power of empirical tests published in leading journals and business scholarship is no exception transparency and replicability of empirical findings are essential to build a cumulative body of scholarly knowledge yet current practices are under increased scrutiny to achieve these objectives jibs is therefore discussing and revising its editorial practices to enhance the validity of empirical research in this editorial we reflect on best practices with respect to conducting reporting and discussing the results of quantitative hypothesis testing research and we develop guidelines for authors to enhance the rigor of their empirical work this will not only help readers to assess empirical evidence comprehensively but also enable subsequent research to build a cumulative body of empirical knowledge

from the editors student samples in international business research the jibs statement of editorial policy states that empirical submissions utilizing undergraduate student samples are usually discouraged wording is important here usually does not imply always this statement suggests that while student samples are appropriate in principle undergraduate ones are not except in unusual situations the purpose of this from the editors column is to discuss the pros and cons of student samples in international business ib research are student samples appropriate for developing and testing ib theories when are student samples appropriate and when are they not appropriate is there a difference between undergraduate and graduate samples what are the best practices this editorial is intended to provide ib researchers with guidelines as to when student samples and which types of student samples are appropriate in ib research

trade globalization since 1795 waves of integration in the world system the term globalization as used by social scientists and in popular discourse has many meanings we contend that it is important to distinguish between globalization as a contemporary political ideology and what we call structural globalization the increasing worldwide density of large scale interaction networks relative to the density of smaller networks we study one type of economic globalization over the past two centuries the trajectory of international trade as a proportion of global production is trade globalization a recent phenomenon a long term upward trend or a cyclical process using an improved measure of trade globalization we find that there have been three waves since 1795 we discuss the possible causes of these pulsations of global integration and their implications for the early decades of the twenty first century

covered interest parity a high frequency high quality data study profitable deviations from covered interest parity cip represent riskless arbitrage opportunities and so indicate market ineffic iency previous empirical work on cip uses noncontemporaneously sampl ed data and reports mixed results this paper uses high frequency te n minute high quality data gathered personally by the author in th e london foreign exchange market to test the cip condition the resu lts overwhelmingly support the market efficiency hypothesis copyright 1987 by the review of economic studies limited