an overview of hofstede inspired country level culture research in international business since 2006 kirkman lowe gibson s 2006 jibs article summarized and critiqued international business research inspired by the most cited book in the field hofstede s 1980 culture s consequences international differences in work related values hofstede 1980 2001 they identified a number of issues in this research and offered several recommendations for improving it in the future thus laying a strong foundation for hofstede related work since 2006 in this commentary we assess kirkman et al s 2006 impact on the field our review shows that their ideas have informed and inspired their own and other scholars work and have led to significant progress in the way in which hofstede s framework has been used in international business in the last decade here we specifically focus on the country level culture studies and assess how research has implemented kirkman et al s three main recommendations to explore cultural dimensions beyond those introduced by hofstede to distinguish between country effects and cultural effects and to show not only if culture matters but also how much it matters in addition to the overview we provide a comprehensive test of these recommendations showing how they can be put into research practice underscoring the theoretical and empirical relevance of the original 2006 article our commentary concludes with additional ideas on further strengthening hofstede inspired research at the country level of analysis

generalized expected utility analysis of multivariate risk aversion this paper extends m j machina s generalized expected utility analysis to preferences over multivariate distributions within the extended framework the relation more risk averse than is defined characterized and applied to the analysis of consumption saving decisions under risk the notion of decreasing risk aversion is also characterized the paper shows that standard results obtained within the framework of expected utility theory can be extended if the restrictions imposed on the utility function in expected utility theory are imposed on the local utility functions in machina s theory copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

conceptualizing and measuring cultures and their consequences a comparative review of globe s and hofstede s approaches this paper explains why globe used a set of cultural values and practices to measure national cultures we show why there is no theoretical or empirical basis for hofstede s criticism that globe measures of values are too abstract or for his contention that national and organizational cultures are phenomena of different order we also show why hofstede has a limited understanding of the relationship between national wealth and culture furthermore we explain why hofstede s reanalysis of the globe data is inappropriate and produces incomprehensible results we also show the validity of managerial samples in studying leadership finally we explain why hofstede s claim that globe instruments reflect researchers psycho logic reveals ignorance of psychometric methodologies designed to ensure scale reliability and construct validity

a revised tobin effect from inflation relative input price and capital ratio realignments usa and uk 1959 1999 the paper studies the realignments induced by inflation within an endogenous growth monetary economy accelerating inflation raises the ratio of the real wage to the real interest rate and so raises the use of physical capital relative to human capital across all sectors we find cointegration evidence for the us and uk economies consistent with a general equilibrium tobin type effect of inflation on input prices and capital intensity even while the growth rate of output is reduced by inflation

living with risk living with risk can lead to anticipatory feelings such as anxiety or hopefulness such feelings can affect the choice between lotteries that will be played out in the future choice may be motivated not only by the static risks involved but also by the desire to reduce anxiety or to promote savouring this paper provides a model of preference in a three period setting that is axiomatic and includes a role for anticipatory feelings it is shown that the model of preference can accommodate intuitive patterns of demand for information such as information seeking when a favourable outcome is very likely and information aversion when it is more likely that the outcome will be unfavourable behavioural meaning is given to statements such as individual 1 is anxious and 2 is more anxious than 1 finally the model is differentiated sharply from the classic model due to kreps and porteus copyright 2008 wiley blackwell

a framework to update hofstede s cultural value indices economic dynamics and institutional stability this study offers an update of the hofstede cultural value dimensions we argue that changes in economic conditions are the source of cultural dynamics while the endurance of institutional characteristics provides the foundation for cultural stability it is found that national wealth measured by gdp per capita has a curvilinear relationship with individualism long term orientation and power distance scores relatively speaking uncertainty avoidance and masculinity mainly reflect some rather stable institutional traditions such as language religion climate ethnic homogeneity and legal origin and are less likely to change over time

random choice and private information we consider an agent who chooses an option after receiving some private information this information however is unobserved by an analyst so from the latter s perspective choice is probabilistic or random we provide a theory in which information can be fully identified from random choice in addition the analyst can perform the following inferences even when information is unobservable 1 directly compute ex ante valuations of menus from random choice and vice versa 2 assess which agent has better information by using choice dispersion as a measure of informativeness 3 determine if the agent s beliefs about information are dynamically consistent and 4 test to see if these beliefs are well calibrated or rational

beyond hofstede and globe improving the quality of cross cultural research journal of international business studies 2010 41 1259 1274 doi 10 1057 jibs 2010 41 overview of 41 8 hofstede and globe in cross cultural research while hofstede s work was not the first systematic study on crossnational cultures his seminal book culture s consequences international differences in work related values 1980 succeeded in putting cross cultural analysis at the forefront of international business ib research in a later paper he boldly asserted that the business of international business is culture 1994 1 despite the criticisms that have been voiced against his work see mcsweeney 2002 oyserman coon kemmelmeier 2002 hofstede s influence on the fields of ib and management is undeniable according to harzing s publish or perish citation index as of june 2010 there were over 54 000 citations to his work this is a remarkable record that attests to first the growing popularity of cross cultural research in light of continued internationalization of the world economy and second hofstede s personal impact on scholarly research this jibs issue brings together 10 articles on culture and ib all of which were submitted to the editorial team led by jibs editorin chief lorraine eden while the articles were independently submitted through the regular double blind reviewing process the decision to join them in one collection creates in effect a special issue on culture in international business research which the jibs editors hope will be widely read and cited by ib scholars in general terms the papers in this collection fall into one of two categories 1 articles and commentaries about conceptual and methodological issues associated with hofstede s oeuvre vs the global leadership and organizational behavior effectiveness globe project s cultural dimensions and 2 articles and perspectives that use culture and or cultural dimensions as well as the operational measurement thereof to explain differences in behavior and practices across countries the common feature of all these scholarly pieces is that they challenge particular assumptions often made too easily in conventional cross cultural research the first paper in this collection is a perspective written by franke and richey that cautions against questionable generalizations from small numbers of countries in international business research using statistical analysis to support their assertion franke and richey argue that in order to draw credible generalizations in ib a minimum of 7 10 countries must be used this is an important message researchers should never formulate strong conclusions about the impact of cultural dimensions on journal of international business studies 2010 41 1259 1274 2010 academy of international business all rights reserved 0047 2506

on the fisher effect abstract we use post war quarterly data for belgium canada denmark france germany greece ireland japan the netherlands the united kingdom and the united states to examine the fisherian link between inflation and short term nominal interest rates in doing so we apply the king and watson 1997 methodology paying particular attention to the integration and cointegration properties of the variables since meaningful fisher effect tests critically depend on such properties we conclude that the data are generally rejecting the fisher effect

the globe debate back to relevance this is a critical summary review of the debate about the global leadership and organizational behavior effectiveness globe study in jibs and other journals between november 2006 and the present issue several contributors did not realize that globe used three essential constructs taken from my publications in a sense entirely different from mine values practices and organizational culture not recognizing the ensuing confusion they had no answer for the question in my 2006 review what did globe really measure if you do not know what you are talking about you can continue arguing for ever beyond the fuzziness of what is measured the debate leaves us with an even more fundamental question what is the use of the globe dimensions

international evidence on the neutrality of money the authors use the backus and kehoe 1992 long low frequency data on real gnp gdp and money for australia canada denmark germany italy japan norway sweden the united kingdom and the united states to examine the long run neutrality and superneutrality of money propositions in doing so they applied the king and watson 1992 methodology paying particular attention to the integration and cointegration properties of the variables since meaningful neutrality tests critically depend on such properties

is there one unifying concept of utility an experimental comparison of utility under risk and utility over time the nature of utility is controversial whereas decision theory commonly assumes that utility is context specific applied and empirical decision analysis typically assumes one unifying concept of utility applicable to all decision problems this controversy has hardly been addressed empirically because of the absence of methods to measure utility outside the context of risk we introduce a method to measure utility over time and compare utility under risk and utility over time we distinguish between gains and losses and also measure loss aversion in two experiments we found that utility under risk and utility over time differed and were uncorrelated utility under risk was more curved than utility over time subjects were loss averse both for risk and for time but loss aversion was more pronounced for risk loss aversion over risk and time were uncorrelated this suggests that loss aversion although important in both decision contexts is volatile and subject to framing

generalized utilitarianism and harsanyi s impartial observer theorem harsanyi s impartial observer must consider two types of lotteries imaginary identity lotteries accidents of birth that she faces as herself and the real outcome lotteries life chances to be faced by the individuals she imagines becoming if we maintain a distinction between identity and outcome lotteries then harsanyi like axioms yield generalized utilitarianism and allow us to accommodate concerns about different individuals risk attitudes and concerns about fairness requiring an impartial observer to be indifferent as to which individual should face similar risks restricts her social welfare function but still allows her to accommodate fairness requiring an impartial observer to be indifferent between identity and outcome lotteries however forces her to ignore both fairness and different risk attitudes and yields a new axiomatization of harsanyi s utilitarianism

third down with a yard to go recursive expected utility and the dixit skeath conundrum abstract in two outcome strictly competitive games equilibrium mixed strategies do not depend on ultimate prizes dixit and skeath games of strategy 1999 norton new york find this counter intuitive we show this invariance comes from reduction not independence and provide conditions for intuitive comparative statics under recursive expected utility

performance effects of added cultural distance in the path of international expansion the case of german multinational enterprises this paper contributes to the debate on the performance impact of added cultural distance in the multinational enterprise s mne s expansion path our research focuses on the ability of mnes to handle complexity associated with added cultural distance in international expansion and on the effect this may have on profitability we hypothesise that firms that make expansion moves involving a high level of added cultural distance per unit of time and those that expand in culturally distant countries in an irregular fashion that is with a higher variability will be less profitable we test these hypothesised relationships using detailed data on 2404 expansion moves undertaken by our panel of 91 german mnes whose expansion paths we tracked during periods ranging between 5 and 20 years

do individuals have preferences used in macro finance models an experimental investigation recent financial studies often assume that agents have epstein zin preferences preferences that require agents to care about when uncertainty is resolved under this recursive preference framework the preference for uncertainty resolution is entirely determined by an agent s preferences for risk and intertemporal substitution to test the implications of this model this paper presents an experiment designed to elicit subject preferences on risk time intertemporal substitution and uncertainty resolution results reveal that most subjects prefer early resolution of uncertainty and have relative risk aversion greater than the reciprocal of the elasticity of intertemporal substitution consistent with the predictions by recursive preferences subjects are classified in a finite mixture model by their risk time and intertemporal substitution parameters regression results show that types predicted by the epstein zin model to prefer early resolution choose early resolution with 20 50 higher probabili

managers gender role attitudes a country institutional profile approach in this paper we use the country institutional profile to investigate how selected cognitive normative and regulative aspects of various countries relate to traditional gender role attitudes of managers from these countries our cross level analyses using hierarchical linear modeling control for a number of individual characteristics i e age education gender and social class results support our hypotheses that managers traditional gender role attitudes relate positively to nation level uncertainty avoidance and power distance moreover the results support our predictions that gender egalitarian normative institutions degree of regulation and degree of educational development are negatively related to managers traditional gender role attitudes however results reject our hypotheses regarding nation level religiosity assertiveness and masculinity not showing the proposed relationship with managers traditional gender role attitudes implications for research and practice are discussed

national culture and dividend policy this interdisciplinary study examines how national culture affects corporate dividend policies the dividend puzzle is one of the most studied yet unresolved issues in financial economics prior theoretical and empirical research has suggested several explanations of the dividend puzzle that are rooted mainly in agency asymmetric information bird in hand and pecking order theories the main intuition behind our analysis is that dividend policy may be determined not only by an objective assessment of the severity of agency and asymmetric information problems within a firm but also by management s and investors subjective perceptions of these problems which hinge on their national culture using schwartz s national culture dimensions conservatism and mastery we find that conservatism is positively related and mastery negatively related to dividend payouts for a sample of 27 462 firm years from 21 countries between 1995 and 2007 these effects are robust to controls for a wide variety of other determinants of dividend policy including investor protection stock market performance financial system configuration tax advantage economic development and dividend catering premium and to alternative culture proxies and sub period windows our findings that national culture affects perceptions of and responses to agency and information asymmetry have important implications for policymakers and multinational enterprises

many good risks an interpretation of multivariate risk and risk aversion without the independence axiom abstract what can be inferred without assuming the independence axiom about an agent s preferences over many good lotteries from knowledge that the agent is income risk averse we show that income risk aversion corresponds to an intuitive substitution property of the many good lottery preferences that is itself equivalent to a standard definition of many good risk aversion we apply our approach to derive some well known results directly from our interpretation of income risk aversion and neutrality

comparative statics and non expected utility preferences abstract researchers have shown that many though not all of the basic results of expected utility analysis can be more or less directly generalized to non expected utility preferences this paper describes the essential difference between results which can be extended in this manner and those which cannot and shows that an important family of comparative statics theorems falls into the former class

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

consequences of cultural practices for entrepreneurial behaviors although national culture is an important regulator of entrepreneurship there is a dearth of studies that 1 explore the effects of national cultural practices on entrepreneurial behaviors by individuals 2 use appropriate multilevel research designs 3 consider the effects of culture on different entrepreneurial behaviors such as entry and post entry growth aspirations we combined global entrepreneurship monitor gem and global leadership and organizational behavior effectiveness globe data from 42 countries for 2005 2008 to address these gaps using a multilevel design we found societal institutional collectivism practices negatively associated with entrepreneurial entry but positively associated with entrepreneurial growth aspirations uncertainty avoidance practices were negatively associated with entry but not with growth aspirations and performance orientation practices were positively associated with entry our analysis highlights the differential effects of cultural practices on entrepreneurial entry and growth aspirations and demonstrates the value of multilevel techniques in analyzing the effect of culture on entrepreneurship

mixed integer programming revealed preference tests of utility maximization and weak separability of consumption leisure and money swofford and whitney 1987 1988 1994 investigated the validity of two key assumptions underlying representative agent models of macroeconomics these assumptions are utility maximization and weak separability using mixed integer programming we check revealed preference conditions for these assumptions we find that m1 money defined by friedman and schwartz 1963 and a broad aggregate are weakly separable we find that consumption goods and leisure and nondurables and services are weakly separable we find that m2 m3 and mzm are not weakly separable finally we find three categories of consumption durables nondurables and services do not form an aggregate

stochastic trends and economic fluctuations are business cycles mainly the result of permanent shocks to productivity this paper uses a long run restriction implied by a large class of real business cycle models identifying permanent productivity shocks as shocks to the common stochastic trend in output consumption and investment to provide new evidence on this question econometric tests indicate that this common stochastic trend cointegration implication is consistent with postwar u s data however in systems with nominal variables the estimates of this common stochastic trend indicate that permanent productivity shocks typically explain less than half of the business cycle variability in output consumption and investment copyright 1991 by american economic association

individualism and stock price crash risk employing a sample of 26 473 firms across 42 countries from 1990 to 2013 we find that firms located in countries with higher individualism have higher stock price crash risk furthermore individualism can be transmitted by foreign investors from overseas markets to influence local firms crash risk and can exacerbate the impact of firm risk taking and earnings management on crash risk moreover the positive relation between individualism and crash risk is amplified during the global financial crisis and attenuated by enhanced country level financial information transparency and the adoption of international financial reporting standards

avoiding uncertainty in hofstede and globe this paper compares the uncertainty avoidance ua dimension of national culture across the hofstede and globe models looking at relationships in both data and analysis rather than mutual support we detail major differences and anomalies across the studies we show how these anomalies are resulting in contradictory explanations in research on national differences across a range of individual firm and country level phenomena we clarify the ua measurement in both hofstede and globe and find that the two models are measuring different components of the ua construct we propose a two component model of ua namely ua stress and ua rule orientation and confirm its validity with national culture data from the hofstede and globe studies and economic data from the world bank we also explain the negative globe ua practices values relationship using motivational theories a way forward in future ua related research is suggested the hofstede ua index the globe ua practices scores and the globe ua values scores should be used within the specific domains that they represent that is stress rule orientation practices and rule orientation aspirations respectively resolving the contradictions in ua between and within hofstede and globe will help cross cultural researchers develop more robust theories and more practical recommendations for international business management

cultural influences on home bias and international diversification by institutional investors abstract we investigate determinants of international diversification in institutionally managed portfolios from more than 60 countries survey based country specific variables on cross cultural behaviors help to explain both home bias and diversification among foreign equities in particular investment funds from countries characterized by higher uncertainty avoidance behavior display greater home bias and are less diversified in their foreign holdings portfolios from countries with higher levels of masculinity and long term orientation display lower levels of home bias and portfolios from countries with higher levels of masculinity are more diversified abroad portfolios from culturally distant countries invest less abroad and underweight culturally distant target markets the economic significance of cultural variables is high and comparable in magnitude to geographical distance a consistent influence on foreign diversification in prior studies culture impacts investor behavior directly and not merely though indirect channels such as legal and regulatory framework

many good choice axioms when can many good lotteries be treated as money lotteries abstract without the independence axiom a weaker substitution axiom adi is necessary for the preferences over money lotteries induced by the money metric utility function to be well behaved given adi the agent s preferences over many good lotteries can be reconstructed from knowledge of preferences over money lotteries and over sure multivariate outcomes moreover other substitution properties of underlying many good lottery preferences are inherited by the money lottery preferences we analyze the formal and intuitive nature of adi and conclude that analysis of choice under uncertainty without adi cannot be one dimensional

distance without direction restoring credibility to a much loved construct in this commentary we build on shenkar s 2001 award winning critique of cultural distance arguing that most distance constructs in fact suffer the same flaws because they oversimplify the relationship between countries overlook their subjective and context specific nature and pay insufficient attention to the mechanisms through which distance operates the idea of distance however has intrinsic value moreover its considerable appeal and undeniable effectiveness have made it a well entrenched construct therefore we see merit in redressing its weaknesses and offer several suggestions for doing so these include allowing for the influence of firm level characteristics that either moderate the effects of distance or render distance at least in part subjective with varying consequences for different mnes maintaining directionality by distinguishing between distance and the tendency toward a particular characteristic and acknowledging asymmetry and conceptualizing the effects of distance and the mechanisms through which it operates more carefully by drawing on concepts and measures from a variety of disciplines by offering ways to strengthen both its theoretical foundations and measurement we hope to enhance the usefulness of one of international business theory s most central constructs

values and marginal preferences in international business in a recent paper in this journal maseland and van hoorn argued that values surveys tend to conflate values and marginal preferences this assertion has been challenged by brewer and venaik who claim that the wording of most survey items does not suggest that these elicit marginal preferences this commentary responds to their claim and restates our original argument we stress that the distinction between values and marginal preferences is a conceptual rather than a semantic issue conflation of the two is a problem of stated preferences methods in general regardless of question formats what is more we argue that support for the marginal preferences interpretation of values survey data does not come from the specific wording of questions used in surveys but from a growing number of paradoxical relations between values ratings and outcomes in values research implications are twofold first we argue that in order to measure values we need to look at alternatives to the stated preferences approach such as revealed preferences and experienced preferences of which the latter seems most promising second we find that values surveys eliciting marginal preferences are useful for understanding and predicting differences in behavior in a given context

cultural intelligence a theory based short form measure this article reports the development and validation of a theory based short form measure of cultural intelligence sfcq the sfcq captures the original theoretical intent of a multifaceted culture general form of intelligence that is related to effective intercultural interactions the validity of the scale is established with 3526 participants in five language groups from around the world results provide evidence for construct and criterion related validity of the measure and indicate that cultural intelligence is a single latent factor reflected in three intermediate facets in support of construct validity the measure is modestly related to but distinct from emotional intelligence and personality and correlates positively with several indicators of multicultural experience with regard to criterion related validity it relates as predicted to several dimensions of intercultural effectiveness implications for the measurement and understanding of culture and the influence of culture on management practice are discussed

making book against oneself the independence axiom and nonlinear utility theory an individual with known preferences over lotteries can be led to accept random wealth distributions different from his initial endowment by a sequential process in which some uncertainty is resolved and he is offered a new lottery in place of the remaining uncertainty this paper examines the restrictions that can be placed on an individual s preferences by axioms that stipulate that such a process not be able to generate a new wealth distribution that is prima facie inferior to the original the relationship of these axioms to the independence axiom of von neumann and morgenstern and to the quasi convexity of preferences in the wealth distribution are explored

a theory of subjective compound lotteries abstract we develop a savage type model of choice under uncertainty in which agents identify uncertain prospects with subjective compound lotteries our theory permits issue preference that is agents may not be indifferent among gambles that yield the same probability distribution if they depend on different issues hence we establish subjective foundations for the anscombe aumann framework and other models with two different types of probabilities we define second order risk as risk that resolves in the first stage of the compound lottery and show that uncertainty aversion implies aversion to second order risk which implies issue preference and behavior consistent with the ellsberg paradox

national culture and expatriate deployment we hypothesize that expatriate deployment is a control function predicted by home country culture dimensions with transaction cost and agency repercussions rather than culture in the aggregate this departure from the traditional conceptualization and measurement of cultural impact also yields a hypothesized asymmetrical effect which is tested for a multi country sample of 236 multinational subsidiaries using multiple measures of national culture hypotheses are supported with assertiveness and power distance confirmed as prime predictors of expatriate deployment

think glocally act glocally a culture centric comment on leung bhagat buchan erez and gibson 2005 culture is a critical variable in international business ib and leung bhagat buchan erez and gibson 2005 enrich our understanding of its role however that said their framing of this variable conflates the role of national culture nc a particular form of culture with culture itself a more pivotal holistic and central construct this paper by commenting on and critiquing their approach seeks to shift the theoretical center of gravity from a nc centric paradigm to a culture centric constructivist one and from a top down bottom up view to a flatter glocalized one implications are provided which suggest that research should address cultural processes of patterning and production as well as cultural forms such as global communities and global culture gc which share with or even capture the spotlight from nc as a focus for studying and developing ib cultural theory journal of international business studies 2009 40 237 254 doi 10 1057 palgrave jibs 8400410

relationship between individualist collectivist culture and entrepreneurial activity evidence from global entrepreneurship monitor data this paper examines how one dimension of national culture an individualist collectivist orientation is related to total entrepreneurial activity depending on the level of economic development measured by gdp per capita researchers have traditionally associated individualism with high rates of firm creation arguing that an orientation towards achievement and the pursuit of personal objectives dominant aspects in individualist cultures are determinants of entrepreneurial activity the current analysis shows that a country s culture correlates to entrepreneurship but cannot uphold the idea that higher levels of individualism mean higher rates of entrepreneurship using data from the global entrepreneurship monitor on 52 countries the results show that a country s entrepreneurship rate is negatively related to individualism when development is medium or low and positively related to individualism when the level of development is high thus individualism is not related to entrepreneurship in the same way in countries with differing levels of development

when elephants fight the grass gets trampled the globe and hofstede projects four aspects of the debate between hofstede and javidan et al are highlighted first it is shown that characterizing cultures either on the basis of aggregated self perceptions or on the basis of aggregated perceptions of others in one s society are not equivalent procedures each has inherent errors and neither can be considered as providing the one best way to denote national cultures furthermore the number of dimensions of national culture that can be usefully studied must be proportional to the limited number of nations available for comparative analyses third although hofstede and javidan et al appear to differ on optimal ways of aggregating individual level data to the nation level both appear to have done so in a way that does not prevent detection of differing relations between items at different levels of analysis finally we need greater clarity as to the ways in which national wealth relates to other aspects of culture it is a major component of contemporary national cultures and must be retained as an element within nation level analyses

commitment across cultures a meta analytical approach the present study reports two sets of meta analyses of employee commitment across cultures first using three level hierarchical linear modeling differences in mean levels of commitment were investigated we examined the effects of individualism collectivism and power distance values and practices hofstede globe while controlling for study and industry effects the findings showed that affective commitment across 48 countries continuance commitment 31 countries and normative commitment 30 countries were influenced by country level individualism and power distance greater collectivism was associated with higher normative commitment and greater power distance was associated with higher continuance and normative commitment economic variables were found to exert a strong influence on affective and normative commitment means second relationships between affective commitment and turnover intentions across 26 countries were found to be somewhat stronger in individualistic settings whereas the normative commitment turnover intentions relationships across 10 countries were stronger in collectivistic settings overall absolute cross cultural differences in all analyses were relatively small compared with differences due to study and industry effects but country level predictors accounted for substantive proportions of the variance between countries implications for commitment and cross cultural research are discussed and particular attention is drawn to the need to explore the meaning of commitment across cultural and economic contexts

divisia monetary aggregates the great ratios and classical money demand functions king et al 1991 evaluate the empirical relevance of a class of real business cycle models with permanent productivity shocks by analyzing the stochastic trend properties of postwar u s macroeconomic data they find a common stochastic trend in a three variable system that includes output consumption and investment but the explanatory power of the common trend drops significantly when they add money balances and the nominal interest rate in this paper we revisit the cointegration tests in the spirit of king et al using improved monetary aggregates whose construction has been stimulated by the barnett critique we show that previous rejections of the balanced growth hypothesis and classical money demand functions can be attributed to mismeasurement of the monetary aggregates

the demand for divisia money in the united states a dynamic flexible demand system this paper applies the anderson and blundell 1982 approach to the analysis of the demand for money and attempts to establish the nature of the relationship between divisia money defined from narrow to broad and the nested like assets at different levels of aggregation this is achieved by conducting the analysis within a microtheoretical framework utilizing the demand system approach and by estimating a sequence of nested dynamic specifications and performing tests of the nested structures as well as on economic theory to establish the most restrictive dynamic specification acceptable to the data copyright 1991 by ohio state university press

a theory of anticipated utility abstract a new theory of cardinal utility with an associated set of axioms is presented it is a generalization of the von neumann morgenstern expected utility theory which permits the analysis of phenomena associated with the distortion of subjective probability

quantile maximization in decision theory this paper introduces a model of preferences in which given beliefs about uncertain outcomes an individual evaluates an action by a quantile of the induced distribution the choice rule of quantile maximization unifies maxmin and maxmax as maximizing the lowest and the highest quantiles of beliefs distributions respectively and offers a family of less extreme preferences taking preferences over acts as a primitive we axiomatize quantile maximization in a savage setting our axiomatization also provides a novel derivation of subjective beliefs which demonstrates that neither the monotonicity nor the continuity conditions assumed in the literature are essential for probabilistic sophistication we characterize preferences of quantile maximizers towards downside risk we discuss how the distinct properties of the model robustness and ordinality can be useful in studying choice behaviour for categorical variables and in economic policy design we also offer applications to poll design and insurance problems

economic creativity and innovation implementation the entrepreneurial drivers of growth evidence from 63 countries this paper examines the effect of culture on national innovation and prosperity because culture shapes the way people think about and behave in regard to risk opportunities and rewards it should influence the nature of entrepreneurial activity and by extension economic outcomes using structural equation modeling on a sample of 63 countries we propose and test a comprehensive explanation of how culture as an umbrella construct as opposed to an analysis of its constituent parts affects innovation and national prosperity we propose a two stage model of innovation and find support for our hypothesized relationship that economic creativity influences innovation implementation at the national level we find that culture does indeed influence economic creativity we also find that innovation implementation explained some of the variation in prosperity across countries by establishing that big picture culture matters to innovation the door has opened for researchers to evaluate this relationship using data from any one of a number of rival culture frameworks moreover these empirical finding buttress the theoretical arguments that culture powerfully shapes the character of national innovation

the optimal level of monetary aggregation in this paper i have three objectives 1 to describe the aggregation theoretic procedure for selecting the optimal monetary aggregates 2 to survey the available empirical evidence for information on the optimal aggregates and 3 to describe the procedures that should be followed to complete a redefinition of the monetary aggregates although all of the federal reserve board s current official aggregates are rejected as targets some newer aggregates are found to be substantially preferable to the official aggregates the board s staff recently completed the official redefinition of its monetary aggregates in a manner largely unrelated to aggregation and index number theory my own research in recent years has sought to remedy that shortcoming except for monetary aggregates most of the data provided by governmental agencies are constructed in accordance with aggregation and index number theory since aggregation theory can be applied to monetary aggregation 1 i constructed new monetary aggregates that are consistent with the economic theory 2 recently the empiri

international evidence on the long run impact of inflation in this paper i use a structural vector autoregression framework to analyze the effects of a permanent change in inflation on the long run real interest rate and real output level in 14 industrialized countries long run monetary superneutrality is rejected for all 14 countries using annual data the results indicate that a permanent increase in inflation lowers the long run real interest rate in each country a permanent increase in inflation also increases the long run real output level in a number of countries long run monetary superneutrality is also rejected for four out of the five countries examined using quarterly data under long run monetary superneutrality lrsn a per

psychological expected utility theory and anticipatory feelings we extend expected utility theory to situations in which agents experience feelings of anticipation prior to the resolution of uncertainty we show how these anticipatory feelings may result in time inconsistency we provide an example from portfolio theory to illustrate the potential impact of anticipation on asset prices

the becker degroot marschak mechanism is not necessarily incentive compatible even for non random goods abstract this paper uses results from karni e safra z 1987 preference reversals and the observability of preferences by experimental methods econometrica 55 675 685 and karni e 1989 generalized expected utility analysis of multivariate risk aversion international economic review 30 297 305 to show that the becker degroot marschak mechanism is not always incentive compatible even when the item to be valued involves no uncertainty contrary to several recent assertions

anticipated inflation and the capital stock in a cash in advance economy abstract an economy is constructed in which the steady state capital stock is inversely related to the rate of inflation as a result that is directly opposite the usual conclusion

unraveling the effects of cultural diversity in teams a meta analysis of research on multicultural work groups previous research on the role of cultural diversity in teams is equivocal suggesting that cultural diversity s effect on teams is mediated by specific team processes and moderated by contextual variables to reconcile conflicting perspectives and past results we propose that cultural diversity affects teams through process losses and gains associated with increased divergence and decreased convergence we examine whether the level surface level vs deep level and type cross national vs intra national of cultural diversity affect these processes differently we hypothesize that task complexity and structural aspects of the team such as team size team tenure and team dispersion moderate the effects of cultural diversity on teams we test the hypotheses with a meta analysis of 108 empirical studies on processes and performance in 10 632 teams results suggest that cultural diversity leads to process losses through task conflict and decreased social integration but to process gains through increased creativity and satisfaction the effects are almost identical for both levels and types of cultural diversity moderator analyses reveal that the effects of cultural diversity vary depending on contextual influences as well as on research design and sample characteristics we propose an agenda for future research and identify implications for managers

risk aversion in the theory of expected utility with rank dependent probabilities expected utility with rank dependent probability theory is a model of decision making under risk where the preference relations on the set of probability distributions is represented by the mathematical expectation of a utility function with respect to a transformation of the probability distributions on the set of outcomes this paper defines based on g teaux differentiability measures of risk aversion for such preferences which characterize the relation more risk averse and applies these measures to the analysis of unconditional and conditional portfolio choice problems

inflation investment and growth a money and banking approach output growth investment and the real interest rate in long run evidence tend to be negatively affected by inflation theoretically inflation acts as a human capital tax that decreases output growth and the real interest rate but increases the investment rate opposing evidence this paper resolves this puzzle by requiring exchange for investment as well as consumption inflation then decreases the investment rate and still decreases both output growth and real interest up to some moderately high rate of inflation above which increasingly low investment finally causes capital to fall relative to labour and the real interest rate to rise

the demand for assets and optimal monetary aggregation this paper uses a highly disaggregated demand system to estimate the degree of substitutability among monetary assets and to address the issue of optimal monetary aggregation in the united states we address the problems of dimensionality and nonlinearity estimating a very detailed monetary asset demand system encompassing the full range of assets based on the locally flexible normalized quadratic expenditure function we treat the concavity property as a maintained hypothesis and provide evidence consistent with neoclassical microeconomic theory statistical tests reject the appropriateness of the aggregation assumptions for all the money measures published by the federal reserve as well as for a large number of groupings suggested by earlier studies this supports and reinforces barnett s 2016 assertion that we should employ the broadest m4 monetary aggregate published by the center for financial stability

what did globe really measure researchers minds versus respondents minds the globe research program expanded the hofstede model of five dimensions of national cultures to 18 a re analysis based on globe s 2004 summary book produced five meta factors one was significantly correlated with gnp capita and from the hofstede dimensions primarily with power distance three more correlated significantly with hofstede s individualism uncertainty avoidance and long term orientation the fifth included the few globe questions that related to hofstede s dimension of masculinity versus femininity globe s respondents minds classified the questions in a way that the researchers minds did not account for and which closely resembles the original hofstede model

performance based vs socially supportive culture a cross national study of descriptive norms and entrepreneurship this paper is a cross national study testing a framework relating cultural descriptive norms to entrepreneurship in a sample of 40 nations based on data from the global leadership and organizational behavior effectiveness project we identify two higher order dimensions of culture socially supportive culture ssc and performance based culture pbc and relate them to entrepreneurship rates and associated supply side and demand side variables available from the global entrepreneurship monitor findings provide strong support for a social capital ssc and supply side variable explanation of entrepreneurship rate pbc predicts demand side variables such as opportunity existence and the quality of formal institutions to support entrepreneurship

choice under uncertainty problems solved and unsolved ffifteen years ago the theory of choice under uncertainty could be considered one of the success stories of economic analysis it rested on solid axiomatic foundations it had seen important breakthroughs in the analytics of risk risk aversion and their applications to economic issues and it stood ready to provide the theoretical underpinnings for the newly emerging information revolution in economics 1 today choice under uncertainty is a field in flux the standard theory is being challenged on several grounds from both within and outside economics the nature of these challenges and of our profession s responses to them is the topic of this paper

an institutional approach to cross national distance cross national distance is a key concept in the field of management previous research has conceptualized and measured cross national differences mostly in terms of dyadic cultural distance and has used the euclidean approach to measuring it in contrast our goal is to disaggregate the construct of distance by proposing a set of multidimensional measures including economic financial political administrative cultural demographic knowledge and global connectedness as well as geographic distance we ground our analysis and choice of empirical dimensions on institutional theories of national business governance and innovation systems in order to overcome the methodological limitations of the euclidean approach we calculate dyadic distances using the mahalanobis method which is scale invariant and takes into consideration the variance covariance matrix we empirically analyze four different foreign expansion choices of us companies to illustrate the importance of disaggregating the distance construct and the usefulness of our distance calculations which we make freely available to managers and scholars

determinants of non life insurance expenditure in developed and developing countries an empirical investigation the determinants of non life insurance expenditure in a panel data set covering 36 developed countries and 31 developing countries for the period 2000 2011 are analysed results of our instrumental variable analysis indicate that economic freedom income bank development urbanization culture and law systems are the key drivers of the non life insurance expenditure across countries however their impacts differ significantly between the groups of developed and developing countries suggesting that the heterogeneity among countries in terms of the level of development plays an important role the global financial crisis is also found to influence the direction of those effects especially in developed countries the article yields useful policy and economic implications for governments and multinational non life insurance companies with regard to the development of the non life insurance sector an important engine for economic growth and prosperity

the market for sweepstakes this paper studies the market for monopolistically supplied sweepstakes we derive equilibrium demands for fixed prize and variable prize sweepstakes and determine the profit maximizing prize level and pay out ratio respectively it can be profitable to offer each type of sweepstake when there is a large enough number of weighted utility consumers who have constant absolute risk attitudes are strictly averse to small as well as symmetric risks and display longshot preference behaviour moreover for the variable prize sweepstake the supplier will generally find it profitable to combine sweepstakes targeting two smaller populations and offer a single sweepstake to the combined population this implication is corroborated by the recent spate of mergers of smaller state lotteries into larger ones

individualism collectivism in hofstede and globe this paper examines the individualism collectivism i c dimension of national culture in the hofstede and globe models we identify major contradictions between the two culture models which result in contradictory relationships with external variables such as economic prosperity we critically evaluate the content validity of the items used to measure this construct in both models based on our analysis we suggest that hofstede s individualism collectivism index be relabelled as self orientation vs work orientation and globe s in group collectivism as family collectivism we demonstrate how the proposed alternative conceptualizations of the individualism collectivism dimensions in both the hofstede and globe models can help reconcile the anomalous relationships between these two models of national culture and between their dimension scores and other external variables of interest to researchers we recommend a way forward for future research incorporating the collectivism dimensions that identifies which of the hofstede globe scores is appropriate for differing purposes this will help to make future research findings clearer and to reduce contradictions and anomalies implications drawn from such research should also be clearer as a result

temporal risk and the nature of induced preferences abstract it has been known since the work of h markowitz portfolio selection efficient diversification of investments yale univ press 1959 and j mossin amer econ rev 59 1969 172 174 that even an individual whose underlying preferences satisfy the von neumann morgenstern axioms will not choose over delayed i e temporal risky prospects in a manner which can be modelled as expected utility maximizing since most economically important instances of risk taking insurance real investment agriculture career training involve delayed as opposed to immediately resolved risk the standard use of expected utility theory to model such decisions must be questioned in this paper the technique of generalized expected utility analysis m j machina econometrica 50 1982 277 323 and the theory of support functions r t rockafellar convex analysis princeton univ press 1970 are applied to exactly model and hence determine the nature of preferences over temporal risky prospects

explaining the negative correlation between values and practices a note on the hofstede globe debate this note provides an explanation for the presumably counterintuitive negative correlations between values and practices reported by the global leadership and organizational behavior effectiveness project we argue that such results are compatible with basic microeconomic insights concerning diminishing marginal utility this explanation implies that values surveys as they are generally elicit marginal preferences rather than underlying values therefore they are a problematic instrument for the measurement of cultures and need to be improved so as to discriminate between the importance attached to an objective in general and that attached to it given current levels of satiation

leading cultural research in the future a matter of paradigms and taste the styles and approaches used in cross cultural organizational research are nearly as varied as the cultures under study we see two variations of one dominant style in the work of hofstede and the globe research consortium in this commentary i shall place these approaches in context and discuss alternatives that seem to be highly promising but largely overlooked based on this analysis i conclude that it may well be time that this form of large scale multi country survey be set aside for the development of alternative mid range theories having a more direct application and explanation for organizational phenomena in a cultural and national context

functional monetary aggregates monetary policy and business cycles abstract in this paper we take the economic approach to monetary aggregation in the context of highly disaggregated demand systems encompassing the full range of monetary assets in the united states we estimate the effectively globally regular minflex laurent ml and normalized quadratic nq flexible functional forms we produce the ml and nq functional monetary aggregates consistent with neoclassical microeconomic theory also addressing the issue of optimal monetary aggregation we highlight the influence of measurement on statistical inference by investigating whether the ml and nq functional monetary aggregates are of importance in resolving paradoxes associated with the measurement of money in doing so we also provide a comparison between the functional monetary aggregates and the fed s broad sum m2 aggregate and the center for financial stability broad divisia m3 and divisia m4 aggregates our detailed statistical analysis favors the functional monetary aggregates

a normalized value for information purchases consider agents who are heterogeneous in their preferences and wealth levels these agents may acquire information prior to choosing an investment that has a property of no arbitrage and each piece of information bears a corresponding cost we associate a numeric index to each information purchase information cost pair this index describes the normalized value of the information purchase it is the risk aversion level of the unique cara agent who is indifferent between accepting and rejecting the purchase and it is characterized by a duality principle that states that agents with a stronger preference for information should engage more often in information purchases no agent more risk averse than the index finds it profitable to acquire the information whereas all agents less risk averse than the index do given an empirically measured range of degrees of risk aversion in a competitive economy with no arbitrage investments our model therefore comes close to describing an inverse demand for information by predicting what pieces of information are acquired by agents and which ones are not among several desirable properties the normalized value formula induces a complete ranking of information structures that extends blackwell s classic ordering

the deadweight loss of christmas when economists comment on holiday gift giving it is usually to condone the healthy effect of spending on the macroeconomy however an important feature of gift giving is that consumption choices are made by someone other than the final consumer a potentially important microeconomic aspect of gift giving is that gifts may be mismatched with the recipients preferences in the standard microeconomic framework of consumer choice the best a gift giver can do with say 10 is to duplicate the choice that the recipient would have made while it is possible for a giver to choose a gift which the recipient ultimately values above its price for example if the recipient is not perfectly informed it is more likely that the gift will leave the recipient worse off than if she had made her own consumption choice with an equal amount of cash in short gift giving is a potential source of deadweight loss this paper gives estimates of the deadweight loss of holiday gift giving based on surveys given to yale undergraduates i find that holiday gift giving destroys between 10 percent and a third of the value of gifts while these recipients may be unrepresentative of the u s population their gifts are not necessarily unrepresentative holiday expenditures average 40 billion per year implying that a conservative estimate of the deadweight loss of christmas is a tenth as large as estimates of the deadweight loss of income taxation i also explore how deadweight loss and the tendency to give cash gifts vary with the relationship and age difference between giver and recipient i find that gifts from friends and significant others are most efficient while noncash gifts from members of the extended family are least efficient and destroy a third of their value i develop a simple expected utility model to explain the decision to give cash as opposed to in kind gifts the data are consistent with the model cash gifts are most common from the sorts of givers whose noncash gifts have the lowest expected value to recipients given their cost and high variability in recipient valuation

conceptualizing and measuring culture in international business and management from challenges to potential solutions understanding the influence of culture on business operations has been one of the most enduring components of international business ib and international management im theorizing and empirical investigation while several critiques and debates questioned the significant progress made in this domain the special issue we introduce here is meant to demonstrate that further advancement on how we conceptualize and measure culture is not only needed but also possible we provide an overview of past and current approaches in the measurement of culture in ib im and the challenges associated with these approaches and emphasize the important yet insufficiently acknowledged link between the theoretical conceptualization of culture and its measurement we then introduce the four articles included in the special issue and highlight how they break away from the addiction to approaches that have been very useful in getting where we are today but that might not always be useful in advancing knowledge beyond what we already know last but not the least we offer our own perspective on promising directions in conceptually and methodologically rethinking the study of culture in ib and im

genetic testing in competitive insurance markets with repulsion from chance a welfare analysis a central theme in the international debate on genetic testing concerns the extent to which insurance companies should be allowed to use genetic information when offering insurance contracts we provide a welfare analysis of this issue within a model of an insurance market with asymmetric information having the following crucial feature in addition to a state contingent consumption profile a person s well being depends on her attitude towards resolution of future health uncertainty and this attitude varies across the population we present stylized facts that motivate this approach in the formal analysis we find that both tested high risks and untested individuals are equally well off whether or not test results can be used by insurers individuals who test for being low risks on the other hand are made worse off by not being able to verify this to insurers this implies that in terms of welfare a regulatory regime in which the use of genetic information by insurers is allowed is better than one in which it is not allowed

intrinsic preference for information abstract suppose agents value information not only to make contingent plans but also intrinsically how are such attitudes toward information related to attitudes toward risk we generalize the kreps porteus recursive expected utility model dropping both recursivity and expected utility there is a geometric analogy between risk and information we characterize intrinsic information loving in general by a substitution property analogous to multivariate risk loving and for smooth preferences by the convexity of gateaux derivatives even with recursivity preference for information does not imply expected utility we provide an example we examine connections between information loving and risk aversion for early and late resolving risks journal of economic literatureclassification numbers d80 d81

explaining diversity in the worldwide diffusion of codes of good governance extending earlier literature on diffusion of codes of good governance cggs by integrating the effect of national culture this study offers a novel perspective on cross national diversity in the worldwide diffusion of corporate governance best practices we argue that particular cultural dimensions affect the indicators i e total number of codes per country and identity of issuing organizations of such diffusion for a sample of 67 countries our analysis reveals that individualist cultures have a stronger tendency to develop cggs in cultures with a high receptivity to power differences there is a higher probability that the first issuers are the government directors or professional associations whereas with low receptivity the stock exchange and investors groups of issuers are more likely to initiate the first code the effects of culture remain significant even after accounting for differences in legal systems and economic institutions indicating that national culture may serve as a comprehensive indicator of the regulatory stance with respect to good governance indeed the effect size is large enough to give pause e g to a location choice and possibly has relevance for strategic decision making by international companies

negative practice value correlations in the globe data unexpected findings questionnaire limitations and research directions the study of culture and cultural values continues to be hotly debated among cross cultural researchers worldwide starting with the seminal work of kluckhohn and strodtbeck and hofstede and continuing with more recent efforts researchers have continued to develop and empirically examine cultural value frameworks in an attempt to understand how cultural differences affect work related behaviors and attitudes the purpose of this commentary is to briefly describe the interesting and counterintuitive findings from the global leadership and organizational behavior effectiveness globe project summarize the different interpretations of these findings offered by maseland and van hoorn and by brewer and venaik provide a critique of their arguments and finally offer a list of possible alternative interpretations and explanations for the conflicting findings in the globe study

a culture theory commentary on meyer and peng s theoretical probe into central and eastern europe meyer and peng s decade award article and retrospective integrate economic and sociological theories of transaction costs firm resources and institutions and apply them to firms in central and eastern europe in ways that can inform and be informed by culture theory culture theorizing in ib typically uses dimensions of values and norms to analyze the ib implications of the underlying logics that characterize patterns of thought action and interaction of countries and other large societies transaction cost theorizing helps explain the social forces that link cultural group boundaries with country boundaries firm resource theory can be informed by the toolbox metaphor to understand cultural patterns in the resources that firms in a particular locale have most readily available neo institutional theory particularly its political science thread cautions ib scholars to represent governmental arrangements and policies as arising from cultural norms and values rather than as independent variables that spring de nova from government leaders integrative analyses like the decade award article and retrospective point out links and complementarities among diverse theories but need to take care lest superficial similarities in how terms like institution and culture are used in different theories mask fundamental conceptual differences