impact of adverse selection on managers project evaluation decisions agency theory can be used to explain decisions to continue a failing project the results of a decision making experiment provide empirical support for the proposition that when the conditions for adverse selection exist an agent has private information and an incentive to shirk such decisions apparently irrational from a principal s perspective may be rational from the agent s perspective the traditional approach to rational decision making derived from economic theory assumes a firm s managers will reach decisions that maximize the profitability of their firms managers should invest resources in the projects projected to provide the greatest profits to a firm and then periodically evaluate the economic performance of those projects they should continue the projects projected to be profitable and to avoid losses discontinue those projected to be unprofitable horngren foster 1991 366 380 1 prior research has provided empirical support for the proposition that managers who initiate projects that become unprofitable are more likely to continue supporting those projects than managers who did not initiate them arkes blumer 1985 staw 1976 1981 staw fox 1977 staw ross 1978 the rationale given for this seemingly irrational behavior is that the

national and organizational culture differences and international joint venture performance this study examines the effect of dimensions of national and organizational culture differences on international joint venture ijv performance based on data from a survey of executives from joint ventures between indian partners and partners from other countries we found that the presumed negative effect from culture distance on ijv performance originates more from differences in organizational culture than from differences in national culture

importer behavior the neglected counterpart of international exchange international exchange is a two sided coin involving exporters and importers however a systematic search of the academic literature reveals a striking imbalance while exporter behavior has been extensively studied importer behavior remains a largely neglected area of study even though importers are playing an ever more important often dominant role in consummating trade transactions in this article we assert that this neglect stems from two critical but flawed assumptions the first is that exporters are the driving force behind international trade transactions and the second is that importers follow the neoclassical economics theory of rational choice in international sourcing

multinationality and firm performance the moderating role of r d and marketing capabilities researchers in international business have long been interested in understanding the relationship between the multinationality of a firm and its market performance this article contributes to this research stream by incorporating firm heterogeneity in examining the multinationality performance relationship the findings based on a time series cross sectional analysis of firms from 12 different industries over a seven year period indicate that the impact of multinationality on both financial and operational performance is moderated by firm s r d and marketing capabilities

product and international diversification among japanese multinational firms this paper examines the relationship of performance with product and international diversification on japanese multinational firms from 1977 to 1993 we show the relationships between diversification and performance change over time through the use of multiple time periods and accounting for keiretsu membership results show that while diversity strategies vary between keiretsu and non keiretsu firms performance is not much different across time periods performance varies considerably but strategies are less variable product diversity has weak effects on firm performance only in one time period while international diversification has negative profitability and positive growth consequences in in some periods these results suggest first that diversification strategies and their effects on performance vary across time periods and generally produce some unexpected findings we do not find strong interactive diversity effects copyright 2000 john wiley sons ltd

purchase bidding strategy for a retailer with flexible demands in day ahead electricity market the paper aims to determine the day ahead market bidding strategies for retailers with flexible demands to maximize the short term profit it proposes a short term planning framework to forecast the load under dynamic tariffs and construct biding curves stochastic programming is applied to manage the uncertainties of spot price regulating price consumption behaviors and responsiveness to dynamic tariffs a case study based on data from sweden is carried out it demonstrates that a real time selling price can affect the aggregate load of a residential consumer group and lead to load shift toward low price periods the optimal bidding curves for specific trading periods are illustrated through comparing the bidding strategies under different risk factors the case study shows that a risk averse retailer tends to adopt the strategies with larger imbalances the benefit lies in the reduction of low profit risk however the aversion to risk can only be kept in a certain level a larger imbalance may lead to a quick reduction of profit in all scenarios

implicit understandings in channels of distribution formal agreements can be used to achieve coordination among channel members these agreements work by exerting explicit control over the members who make the agreements however implicit understandings can be used as a partial substitute for more formal agreements in this paper we show that implicit understandings can develop as channel members learn about each other s behavior we show that this learning leads to the use of the implicit influence each channel member has over the other s behavior the learning leading to an implicit understanding requires some form of experimentation or historical observation this learning results in an oscillating retail price when only one channel member learns the other s behavior both channel members obtain greater profits than when neither member learns and both channel members obtain less profits than when both members learn however the member who does not learn obtains more profits than the member who learns we also show that implicit understandings r

the determinants of efficiency and productivity in the swiss insurance industry abstract using state of the art frontier efficiency methodologies we study the efficiency and productivity of swiss insurance companies in the life property casualty and reinsurance sectors from 1997 2013 in this context we provide the first empirical analysis of internationalization strategies of insurance companies a topic of high interest in the business and economics literature but one that has to date not been the focus of efficiency studies in the insurance sector we find that productivity and efficiency have improved with regard to property casualty and reinsurance in the case of life insurance productivity and efficiency diminished however life insurance firms with higher levels of international business exhibit superior efficiency levels we observe that diversification strategies directed to the european market are more beneficial compared to those targeting markets outside of europe

a four nation study of thee relationship between marketing effectiveness corporate culture corporate values and market orientation the aim of this study was to establish the ways in which senior executives in four countries which shared a common language united kingdom united states australia and new zealand characterized both their firm s marketing effectiveness and corporate culture and beliefs results give support to those theorists who advance cultural specificity as the primary moderator of top managerial attitudes but also emphasise that the best predictor of marketing effectiveness is similar in all four nations the primacy of the importance of people and with quality

gains of integrating sector wise pollution regulation the case of nitrogen in danish crop production and aquaculture abstract this paper extends the orani g computable general equilibrium model with an externality market the externality market is modelled with a limited number of pollution permits that are traded between representative firms in different sectors the model is applied to identify the gains of a common nitrogen regulation system for danish agriculture crop and aquaculture production common regulation across the two sectors is found to increase gdp by euro 32 million corresponding to 2 2 of their initial gdp contribution the direct effect in the two sectors is euro 39 million where the spill over effect is 7 million full use of recirculation technology in aquaculture entails a further increase in gdp to 106 million the introduction of a common regulatory system and recirculation technology simultaneous with a reduction of the common nitrogen cap of 17 6 corresponding to the current policy objectives is found to increase gdp by 52 million 4 1 of their initial contribution hence introducing a common regulatory system and taking advantage of the new technology more than counterbalances the negative socio economic effect of a cap reduction the analysis points to the importance of introducing more coherent regulatory frameworks that include all polluters under the same regulatory system

is ecommerce boundary less effects of individualism collectivism and uncertainty avoidance on internet shopping from publicly available data we identified two national culture dimensions individualism collectivism and uncertainty avoidance and their interaction that influences internet shopping rates across a wide spectrum of countries together these factors accounted for 14 of the explained variance on top of the combined variance of 63 explained by national income level educational level economic growth rate unemployment rate and crime rate in predicting internet shopping rates for countries lower in uncertainty avoidance individualist cultures show higher internet shopping rates than do collectivist cultures implications for national and internet firm level web design strategies are discussed

strategy and control in supplier distributor relationships an agency perspective this paper examines the influence of competitive strategy on the relationship between suppliers and their distribution networks drawing on agency theory hypotheses are developed specifying the appropriate match between manufacturer strategies and systems of control within distribution channels cluster analysis is used to show distinct differences in channel management and structure for the three generic strategies of cost leadership differentiation and focus results suggest that variation in control relationships may be explained by the demands posed by manufacturers competitive strategies this study therefore extends the applicability of porter s typology to the specific structure of distribution channels and shows that agency theory can provide insights into the economic basis of interorganizational relationships

buyer seller negotiations around the pacific rim differences in fundamental exchange processes the determinants of buyer seller negotiations in four cultures are investigated in a laboratory simulation one hundred thirty eight american 54 chinese 42 japanese and 38 korean business people participated in a two person buyer seller intracultural negotiation simulation in negotiations between americans the use of more problem solving bargaining strategies positively influenced negotiation outcomes in negotiations between chinese more competitive strategies led to better results in japanese and korean negotiations buyers achieved higher economic rewards than sellers in all four cultures bargainers were more satisfied with negotiation outcomes when partners were rated more attractive

corporate combinations and common stock returns the case of joint ventures the gain to stockholders from mergers is well documented however there is little evidence as to whether the source of the gain is due to synergy or management displacement merger is just one of an almost limitless variety of ways in which firms combine resources to accomplish some objective a joint venture is another in addition to being of interest as an independent phenomenon because the original managements of the parent firms remain intact under a joint venture investigation of wealth gains from joint ventures provides an opportunity to isolate the management displacement hypothesis from the synergy hypothesis as the source of gains in corporate combinations our results are 1 there are significant wealth gains from joint ventures 2 the smaller partner earns a larger excess rate of return while the dollar gains are more equally divided and 3 the gains scaled by resources committed yield premiums similar to those in mergers we are inclined to interpret our results as supportive of the synergy hypothesis as the source of gain from corporate combinations this paper is an empirical investigation of the common stock returns of u s companies that enter into joint ventures with other u s companies we consider joint ventures in the context of what is by now a burgeoning literature examining the security returns of companies involved in intercorporate mergers and tender offers 1 in this context our objective is to provide evidence as to the source of the well documented gains to stockholders of firms involved in mergers and tender offers in addition joint ventures are an interesting economic phenomenon in their own right they are undertaken by many of the largest u s companies involve billions of dollars in capital expenditures annually and are subject to considerable scrutiny in the popular press in this regard our analysis provides data on what is as yet a relatively unexplored area of economic activity 2 a corporate merger represents the joining together of all the resources of two companies under a single management to accomplish some set of objectives empirical studies have found that mergers generally result in significant increases in the total market values of the merging firms with the stockholders of the

the marketing channel as an equilibrium set of contracts nash bargaining theory and recent developments in economic contract theory are employed in the analysis of the marketing channels individual dyadic contracts involving payment schedules between members of a simple 3 level channel are investigated with particular reference to monitoring problems and intrachannel power relations the interrelations between individual contracts are examined and the equilibrium set of contracts constituting the channel derived the performance of the channel in terms of risk sharing allocative efficiency and the distribution of gains is then evaluated it is found that the risk aversion of channel members and the cost of monitoring and enforcement affect channel efficiency and that under certain types of interdependencies and externalities the nature of the power structure is crucial to channel efficiency

optimal bidding strategy of a plug in electric vehicle aggregator in day ahead electricity markets under uncertainty with a large scale introduction of plug in electric vehicles pevs a new entity the pev fleet aggregator is expected to be responsible for managing the charging of and for purchasing electricity for the vehicles we approach the problem of an aggregator bidding into the day ahead electricity market with the objective of minimizing charging costs while satisfying the pevs flexible demand the aggregator places demand bids only no vehicle to grid is considered the aggregator is assumed to potentially influence market prices in contrast to what is commonly found in the literature specifically the bidding strategy of the aggregator is formulated as a bilevel problem which is implemented as a mixed integer linear program the upper level problem represents the charging cost minimization of the aggregator whereas the lower level problem represents the market clearing since the bids of other market participants are not known to the aggregator ex ante a simple strategy is used to estimate them based on historical data an aggregated representation of the pev end use requirements as a virtual battery with time varying power and energy constraints is proposed derived from individual driving patterns since driving patterns cannot be perfectly forecasted we introduce a probabilistic virtual battery model we compare the results of the proposed bidding strategy with those of a bidding strategy assuming exogenous prices uncontrolled charging and a central dispatch of the fleet we also explore the impacts of different sources of uncertainty results show that with the proposed bidding strategy costs are significantly lower than under inflexible charging and are lower than assuming exogenous prices moreover the approach also performs well under uncertainty results also suggest that the aggregator only has limited market power potential at moderate pev penetrations

managing channel profits a channel of distribution consists of different channel members each having his own decision variables however each channel member s decisions do affect the other channel members profits and as a consequence actions a lack of coordination of these decisions can lead to undesirable consequences for example in the simple manufacturer retailer consumer channel uncoordinated and independent channel members decisions over margins result in a higher price paid by the consumer than if those decisions were coordinated in addition the ensuing suboptimal volume leads to lower profits for both the manufacturer and the retailer this paper explores the problems inherent in channel coordination we address the following questions what is the effect of channel coordination what causes a lack of coordination in the channel how difficult is it to achieve channel coordination what mechanisms exist which can achieve channel coordination what are the strengths and weaknesses of these mechanism what is the role of nonprice variables e g manufacturer advertising retailer shelf space in coordination does the lack of coordination affect normative implications from in store experimentation can quantity discounts be a coordination mechanism are some marketing practices actually disguised quantity discounts we review the literature and present a simple formulation illustrating the roots of the coordination problem we then derive the form of the quantity discount schedule that results in optimum channel profits this article was originally published in marketing science volume 2 issue 3 pages 239 272 in 1983

price maker bidding in day ahead electricity market for a retailer with flexible demands this study develops a short term planning model to determine the bidding curves on a day ahead market for a price maker retailer with flexible power demand it concerns the interactions between the spot price and the flexible demand both conditional value at risk and volume deviation risk are taken into account a numerical study using the data from the nordic electricity market is performed to investigate the influence of risk factors on the retailer s profit risk levels average spot price and total consumption three types of price elasticity are compared to show that the retailer can benefit from the flexibility in demand side in some cases the flexibility also leads to lower spot prices so that the customers in real time price based demand response can face a lower electricity price for per unit power consumption

modified benders decomposition for solving transmission investment game with risk measure this paper proposes a mathematical model for transmission investment game where there are several transmission planners tps the model is developed assuming a simultaneous move game between tps each tp maximizes the total surplus producers consumers and transmission surplus minus the investment cost of its region given the investment decisions of rival tps the transmission investment risk is also considered using the probability of shortfall measure we assume one market operator who dispatches the generators in all tp s regions the risk constrained nash equilibria model is formulated as a mixed integer linear program milp to solve the proposed milp a solution algorithm is proposed that combines the standard branch and bound algorithm bb with a proposed modified benders decomposition algorithm mbd the proposed bb mbd algorithm is also parallelized to improve the computation performance to improve the coordination between tps a supporting budget mechanism is also mathematically modeled in the milp the numerical results are carried out using the 9 bus 3 area and the ieee three area rts 96 networks the computational performance of proposed bb mbd is compared with standard bb algorithm

learning curve spillovers and market performance this paper examines the effect of learning curve spillovers on market structure and performance we derive a simple characterization of the true marginal cost for a broad class of learning curves and use calculated examples to show that spillovers substantially undercut the barriers to entry erected by proprietary learning unlike the case of cost reducing research and development spillovers also tend to improve market performance the increased efficiency of the industrywide reduction process typically outweighs the decrease in firms incentives to reduce costs by expanding output

integrated water and economic modelling of the impacts of water market instruments on the south african economy a static computable general equilibrium model of south africa is adapted to compare new taxes on water demand by two industries namely forestry and irrigated field crops comparisons are made with respect to both the short and the long run in terms of three target variables namely i the environment ii the economy and iii equity since the taxes on the two industries do not raise the same amount of revenue the target variables are calculated per unit of real government revenue raised by the new taxes also referred to as the marginal excess burdens of the taxes the model results are robust for moderate values of the water elasticity of demand in the two industries in both the long and the short run the tax on irrigated field crops performs better in terms of all three the target variables in the short run in the long run the tax on irrigated filed crops is better in terms of water saving but reduces real gdp and the consumption by poor households

firm specific assets multinationality and financial performance a meta analytic review and theoretical integration through a meta analysis of 120 independent samples reported in 111 studies we test the predictions of internalization theory in the context of the multinationality performance relationship findin

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

how much do your co opetitors capabilities matter in the face of technological change firms often lose their competitive advantage when a technological change renders their existing capabilities obsolete an important question that has received little or no attention is what happens to these firms competitive advantage when the technological change instead renders obsolete the capabilities of their co opetitors the suppliers customers and complementors whose very success may underpin that of the firm and with whom it must collaborate and compete this paper explores the effects on a firm of the impact of a technological change on its co opetitors it argues that a firm s post technological change performance decreases with the extent to which the technological change renders co opetitors capabilities obsolete it uses detailed data on the adoption of risc reduced instruction set computer technology by computer workstation makers to demonstrate the need to view resources as residing in a network and not in the firm alone copyright 2000 john wiley sons ltd

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

organizational entrainment and international new ventures from emerging markets organizational entrainment captures the temporal fit in the activity cycles between exchange partners we argue that organizational entrainment between international new ventures invs and their most important international customers positively moderates the relationship between the degree scope and speed of internationalization and performance of invs we test our hypotheses on invs from china india and south africa the results support the contingent role of entrainment for degree and scope of internationalization but not for speed findings suggest that when invs attain temporal fit with their most important international customers they can implement their strategic goals in international markets more effectively

bio economic modeling of water quality improvements using a dynamic applied general equilibrium approach an integrated bio economic model is developed to assess the impacts of pollution reduction policies on water quality and the economy emission levels of economic activities to water are determined based on existing environmental accounts these emission levels are built into a dynamic economic model for the dutch economy and subsequently coupled to a national water quality model the modular approach has the advantage that the impacts on the economy and water quality are evaluated simultaneously but each within their own domain based on the appropriate scale and level of detail the dynamic nature of the economic model allows us to also evaluate a derogated water policy as foreseen in the european water framework directive the indirect costs of different water quality improvement policy scenarios are at least as high as the direct costs related to investments in pollution abatement technology the stricter the policy scenario the more important the role of economic adjustment and restructuring mechanisms at the macro economic level significant water quality improvements can be achieved through stringent domestic emission reductions however reaching water quality standards is highly dependent on water quality improvement policy in surrounding river basin countries and climate change

do firms learn to create value the case of alliances we investigate whether firms learn to manage interfirm alliances as experience accumulates we use contract specific experience measures in a data set of over 2000 joint ventures and licensing agreements and value creation measures derived from the abnormal stock returns surrounding alliance announcements learning effects are identified from the effects of unobserved heterogeneity in alliance capabilities we find evidence of large learning effects in managing joint ventures but no such evidence for licensing contracts the effects of learning on value creation are strongest for research joint ventures and weakest for marketing joint ventures these results are consistent with the view that learning effects are more important in situations characterized by greater contractual ambiguity copyright 2000 john wiley sons ltd

a typology of management studies involving culture as a methodological review this paper delineates 6 approaches to researching cross cultural management issues parochial ethnocentric polycentric comparative geocentric and synergistic for each approach assumptions are discussed concerning the similarity and difference across cultures and the extent to which management phenomena are or are not universal the primary types of management questions which can be addressed using each approach are clarified main methodological issues which must be addressed are listed

the role of country alliances in reducing the transaction costs of internationalisation evidence from indian multinational enterprises this paper analyses the role of home host country alliances in reducing transaction costs in the internationalisation process we test hypotheses about the role of country level alliances and firm internationalisation with comprehensive longitudinal multi industry data on 623 acquisitions made by indian multinational enterprises mnes between 2000 and 2007 on a panel of 65 host countries the results show that country alliances reduce the transaction costs arising from the distance between home host countries thereby positively influencing the internationalisation of indian mnes however the extent of that influence depends upon the nature of the alliance our findings have significant implications for public policy and theory

economies of scale in services a study of multinational insurers this study investigates whether multinational insurers achieve economies of scale using a time series cross sectional design it analyzes the relationship between expenses and output of multinational insurers the study finds that multinational insurers achieve economies of scale only up to a point and rather than benefitting from scale the most internationally diverse insurers suffer diseconomies the conclusion is that the benefits of extensive foreign acquisitions by insurers are questionable

state government promotion of manufacturing exports a gap analysis this study empirically examines the level of the export related expertise of manufacturing firms in a midwestern state of the united states various problems they face in export business and types of government assistance desired by their stage of export involvement it also investigates the appropriateness of government export assistance and the gap between governmental export promotion efforts and private sector needs it is shown that the identification of expertise problems and government assistance needs by export stage can help government agencies develop a systematic approach to export promotion

exploring relationship satisfaction between global professional service firms and local clients in emerging markets extending the perspective of agency theory this study incorporates both professional and local knowledge asymmetry into a model of relationship satisfaction between global professional service firms and their local clients the model also includes learning orientation and adaptation that are theorized to regulate the impact of knowledge asymmetry on goal incongruence which ultimately affects relationship satisfaction china was selected as the setting of the study because it is the largest emerging market has seen double digit growth of advertising expenditures for the past two decades and is home to many multinational advertising agencies that have increasingly pursued local clients as revenue sources multiple informants from 177 domestic chinese firms and their multinational advertising agencies were personally interviewed and the dyadic data were used to test the model results show that both types of knowledge asymmetry lead to goal incongruence which causes client dissatisfaction the role of learning orientation varies as does the role of adaptation in moderating the impact of knowledge asymmetry on goal incongruence and the impact of goal incongruence on relationship satisfaction theoretical and managerial implications of the findings are discussed along with the limitations of the study and future research directions

managing foreign subsidiaries agents of headquarters or an interdependent network in this study two different theoretical perspectives are used to develop sets of hypotheses regarding the mechanisms used to manage foreign subsidiaries of multinational corporations first agency theory serves as the basis for a model that predicts the use of monitoring mechanisms and incentive compensation then it is argued that these mechanisms are insufficient for managing subsidiaries characterized by high levels of intra firm international interdependence the management of which is critical to many of today s complex global firms a second set of hypotheses is argued linking international interdependence to several social control mechanisms primary and secondary data from u s based multinational corporations were used to test both sets of hypotheses the results indicate that agency theory although a useful foundation for studies of control within mncs is limited in its ability to explain fully the phenomenon of foreign subsidiary control however the model based on intra firm interdependence had much greater predictive ability copyright 2000 john wiley sons ltd

measuring the degree of internationalization of a firm in spite of both positivistic and instrumental research the reliability of measuring the degree of internationalization of a firm remains speculative we collected data on nine attributes of seventy four american manufacturing mncs alpha factor and frequency analyses revealed a linear combination of five variables with a reliability coefficient of 79 as a measure of the degree of internationalization of a firm we discuss the statistical and conceptual properties of the scale and their implications for content and construct validity

escalation errors and the sunk cost effect an explanation based on reputation and information asymmetries this paper is concerned with explaining a paradox of human behavior consider the following example a department manager makes a large investment in new production equipment and soon after learns of different equipment that could perform the same operations at lower cost incremental analysis favors switching but the manager refuses saying he does not want to waste the investment already made such real world examples have been extensively documented and studied by social scientists see thaler 1980 and staw 1981 in these examples the decision maker having commited to a course of action subsequently discovers new information that indicates that continuing the earlier commitment would likely result in worse consequences than switching in spite of this he clings to and even escalates his earlier

determinants of foreign investment of u s advertising agencies this paper investigates the impact of several factors on the foreign investment of u s advertising agencies by using the theories on the determinants of foreign direct investment by manufacturing firms for the two years examined the hypotheses about the impact of host country market size host country geographic proximity firm size firm s international operations experience oligopolistic reaction and presence of home country customers abroad are all confirmed this paper also investigates the impact of oligopolistic reaction among the top ten and the second ten largest agencies and finds a stronger impact for the former

the experience factor in foreign market entry behavior of service firms the paper examines the effect of international experience on service firms selection of foreign markets and entry modes the investigation utilizes survey date from 151 united states based service firms results on market selection suggest that as their experience increases and becomes geographically more diversified service firms tend to choose markets that are culturally less similar to their home country on entry mode choice the paper departs from traditional linear conceptualizations and hypothesizes a u shaped relationship between experience and propensity for integrated entry modes results generally support the hypothesis the paper explains these findings and describes how service firms resemble and differ from manufacturing firms in their foreign market entry behavior

modeling real time balancing power market prices using combined sarima and markov processes this paper describes modeling of real time balancing power market prices by using combined seasonal auto regressive integrated moving average sarima and discrete markov processes the combination of such processes allows generation of price series with periods where no demand for balancing power exists the purpose of the model is simulation of prices to construct scenario trees representing possible realization of the stochastic prices such scenario trees can be used in planning models based on stochastic optimization to generate bid sequences to the balancing market the spread of the prices in the tree and the shape of the scenarios are of central importance model parameter estimation methods reflecting the demands on scenario trees have therefore been used the proposed model is also applied to data from the nordic power market the conclusion of this paper is that the developed model is appropriate for modeling real time balancing power prices

an assessment of the measurement of performance in international business research a sizeable body of international business ib research is devoted to building knowledge about the determinants of organizational performance a key precursor to accurately diagnosing why some organizations succeed in the international marketplace while others struggle is operationalizing performance appropriately yet to date no systematic investigation has considered how well ib research measures performance we examine the measurement of performance in 96 articles published in the academy of management journal administrative science quarterly journal of marketing journal of marketing research journal of international business studies management science organization science a nd thestrategic management journal between 1995 and 2005 the findings reveal that most studies do not measure performance in a manner that captures the multifaceted nature of the construct we describe the implications of these results and offer suggestions for improving future practice journal of international business studies 2008 39 1064 1080

cross national empirical generalization in business services buying behavior we examine cross national generalization of the relative importance of factors that affect supplier selection and level of usage for global business services providers tests indicate that the majority of the response coefficients for a model of foreign exchange markets are equal across the four countries studied u s canada u k and germany inter country differences in buyer response seem most related to competitiveness and identifiable country specific institutional factors

the influence of retail management s use of social power on corporate ethical values employee commitment and performance recent cases in retailing reflect that ethics have a major impact on brands and performance in turn demonstrating that brand owners employees and consumers focus on ethical values in this study we analyze how various sources of social power affect corporate ethical values retailer s commitment to the retail organization and ultimately sales and service quality multi source data based on a sample of 225 retailers indicated a strong link between power ethics and commitment and that these affected output performance

learning and protection of proprietary assets in strategic alliances building relational capital one of the main reasons that firms participate in alliances is to learn know how and capabilities from their alliance partners at the same time firms want to protect themselves from the opportunistic behavior of their partner to retain their own core proprietary assets most research has generally viewed the achievement of these objectives as mutually exclusive in contrast we provide empirical evidence using large sample survey data to show that when firms build relational capital in conjunction with an integrative approach to managing conflict they are able to achieve both objectives simultaneously relational capital based on mutual trust and interaction at the individual level between alliance partners creates a basis for learning and know how transfer across the exchange interface at the same time it curbs opportunistic behavior of alliance partners thus preventing the leakage of critical know how between them copyright 2000 john wiley sons ltd

the study of international business a plea for a more interdisciplinary approach scholastic efforts to study and teach international business is entirely dependent on our capability to marshal and organise the necessary human and other assets so as to supply a range of end products which are acceptable to the academic community of which we are part our paymasters and the main purchasers of our products viz the business community of course the determinants of success of the practice and study of ib are interrelated and in our particular pursuit for excellence there is no unique or sure fire recipe for success but i observe that in an ever increasingly complex world of international business which is dominated by rapid and far reaching changes in technology and by environmental turbulence this is no less true of successful practitioners rarely in seeking to identify the reasons for business achievement is one able to find a single common denominator sometimes excellence is primarily based on innovatory ingenuity sometimes on the access to or control of key inputs or markets sometimes on aggressive or novel methods of advertising and marketing sometimes on super efficient capital budgeting sometimes on dynamic and imaginative entrepreneurship sometimes on the diversity of operational experiences and capabilities and sometimes on an unusual aptitude to manage human relationships but in most cases success is founded on some amalgam of these and it is the way in which these discrete though increasingly interdependent advantages are ombined with each other and with complementary assets in different countries and cultures which contemporary research suggests is the key competitive advantages of international firms call it what you will e g

retailers risk management and vertical arrangements in electricity markets the failure of the asset light retailer s organizational model is indicative of the incapacity of this organizational structure to manage efficiently the combination of sourcing and market risks in the current market environment because of the structural dimensions of electricity s market risks a retailer s level of risk exposure is unknown ex ante and will only be revealed ex post when consumption is known in contrast to the textbook model of electricity reforms the paper demonstrates through numerical simulations that in the current market context pure portfolios of contracts are incomplete risk management instruments compared to physical hedging the latter is critical to overcome the asset light retailer s curse

customer involvement and service firm internationalization performance an integrative framework to overcome the costs of doing business abroad researchers have suggested either legitimacy or efficiency based solutions however both types of solutions still treat host country customers as external to the theory we highlight the role of customers in the international professional business service setting and argue that customer involvement is positively related to the perceived internationalization performance of multinational corporations mncs mncs with managers who perceive higher legitimacy pressures and greater needs for local knowledge tend to undertake greater efforts to build customer involvement furthermore we develop a configuration framework between perceived strategic needs and mncs capabilities specifically mncs that match relational capability with legitimacy needs and absorptive capacity with knowledge needs are more likely to engage in customer involvement our survey of 175 chinese mncs provides evidence that customer involvement is positively related to perceived internationalization performance when mncs relational capabilities are stronger the positive relationship between legitimacy pressure and customer involvement increases by contrast mncs with greater perceived market ambiguity improve customer involvement only when they have stronger absorptive capacity we conclude that mncs may simultaneously reduce legitimacy and efficiency costs through customer involvement after considering the fit between perceived environmental pressures and firm capabilities

introducing a demand based electricity distribution tariff in the residential sector demand response and customer perception increased demand response is essential to fully exploit the swedish power system which in turn is an absolute prerequisite for meeting political goals related to energy efficiency and climate chan

measuring the degree of internationalization of a firm a comment sullivan s 1994 suggestion that an index measure of the internationalization construct is superior to single variable measures is critiqued on psychometric content validity criterion validity reliability and utilitarian grounds we argue that internationalization is more complex than envisioned by this index and suggest that further refinement of the construct is necessary before constructing indices

diagnosing measurement equivalence in cross national research many researchers have pointed out that it is necessary to ensure measurement equivalence in cross national comparative research three aspects of measurement equivalence translation metric and calibration equivalence are necessary to establish the cross national reliability and validity of items used to measure theoretical constructs this paper discusses these issues and proposes two recently developed empirical techniques multiple group lisrel and optimal scaling for use in diagnosing cross national measurement equivalence these techniques are illustrated by reanalysis of a pioneering u s and japanese study the two techniques yield convergent results indicating measurement equivalence for some but not all ordinal level items under consideration the findings demonstrate that the proposed methods are useful diagnostic tools for exploring measurement equivalence several suggestions for reducing the likelihood of problems with measurement equivalence and a number of methods for dealing with items where lack of equivalence persists are also discussed

national culture economic development population growth and environmental performance the mediating role of education literature on ethical behavior has paid little attention to the mechanism between macro environmental variables and environmental performance this study aims at constructing a model to examine the relationships which link cultural values population growth economic development and environmental performance by incorporating the mediating role of education the multiple linear regression model was employed to test the hypotheses on a 3 year pooled sample of 51 countries empirical results conclude that national culture economic development and population growth would significantly influence environmental performance directly in addition through the mediating effect of education population growth and national culture would significantly affect environmental performance indirectly these findings provide theoretical and managerial implications for constructing the mechanism of cultural values and ethical behavior in general and environmental management in particular

estimating the structure of industrial water demands the case of canadian manufacturing this study considers water use by canadian manufacturing firms the estimation of water demands is based on a detailed cross sectional survey of establishment level observations on water prices quantities and expenditures industrial water use is modeled as having four components intake treatment prior to use recirculation and discharge average values for the estimated own price elasticity for water intake range from 0 1534 to 0 5885 water recirculation is found to be a substitute for both water intake and water discharge this confirms that expanding the use of economic incentives e g effluent fees may be effective in encouraging firms to reduce their water use while increasing in plant recirculation

new developments in applied general equilibrium analysis 1 introduction john piggott 2 hidden challenges in recent applied general equilibrium exercises john whalley 3 the measurement of waste and welfare in applied general equilibrium models erwin diewert 4 sensitivity analysis for linearized computable general equilibrium models adrian pagan and john shannon 5 the european economic community general equilibrium computations and the economic implications of membership john spencer 6 economic interdependence in the pacific basin a general equilibrium approach glenn harrison and larry kimbell 7 regional impacts of tariffs in canada preliminary results from a small dimensional numerical general equilibrium model richard jones john whalley and randall wigle 8 agricultural protection and market insulation policies applications of a dynamic multisectoral model tony chisholm and rodney tyers 9 a general equilibrium model of taxation that uses micro unit data with an application to the impact of instituting a flat rate income tax joel slemrod 10 consumption taxes foresight and welfare a computable general equilibrium analysis charles ballard and larry goulder 11 special purpose versions of a general purpose multisectoral model tax issues and the australian wine industry tony meagher brian parmenter russel rimmer and ken clements 12 general equilibrium analysis of economic policy dale jorgenson and daniel slesnick 13 the welfare cost of interest rate ceilings in developing countries a general equilibrium approach hasan imam 14 general equilibrium with price rigidities trien nguyen 15 short run macroeconomic closure in applied general equilibrium modelling experience from orani and agenda for further research russel cooper keith mclaren and alan powell 16 new developments in the application of general equilibrium models to economic history john james

does market oriented institutional change in an emerging economy make business group affiliated multinationals perform better an institution based view viewing market oriented institutional change as a two staged process we propose that the effects of market oriented institutional change on two organizational forms business group affiliated and independent firms are different depending on the stage of institutional change specifically we examine how the two distinct periods of market oriented institutional change that is institutional friction and institutional convergence affect business group affiliated firms and independent firms in their abilities to profit from international diversification using data on 140 korean manufacturing multinational firms from 1993 to 2003 we find that emerging economy firms face an international diversification discount a negative relationship between international diversification and firm performance we also find that business group affiliation affects the international diversification discount differently during the two periods of market oriented institutional change particularly when firm performance is measured by the market to book value mbv the moderating effect of business group affiliation on the relationship between international diversification and mbv is negative during the institutional frictions period but becomes positive during the institutional convergence period in the later stage of institutional change our findings warn against viewing market oriented institutional change as a discrete event highlighting the importance of recognizing the qualitatively distinctive nature of different periods of market oriented institutional change in future research

a comparison of canadian and japanese cognitive styles implications for management interaction many american and canadian companies seeking to form joint ventures and alliances with japanese companies or to negotiate contracts with them have discovered that the interaction can be difficult and frustrating value differences and preferences for different management practices have been identified that contribute to these interaction problems however little research has investigated potential differences in cognitive style that might also contribute to intercultural conflict this study compares samples of canadian and japanese mba students using the myers briggs type inventory mbti and links the findings to interaction difficulties reported in the literature

the welfare impact of self supplied water pricing in canada a computable general equilibrium assessment this paper uses a computable general equilibrium model to assess the welfare cost of changing the method of water allocation in canada towards one that uses prices to ration demand we model the introduction of a price on both water that is abstracted as well as water that is consumed that is abstracted and not returned to the source we estimate that reducing water consumption by 25 would require imposition of a price on water consumption of around 0 21 text m 3 similarly introduction of a water abstraction charge of about 0 013 text m 3 would be sufficient to reduce water abstraction by 25 we find that if revenues from water pricing are returned in lump sum to households the introduction of water pricing would result in a modest welfare loss when revenues from water pricing are used to offset existing taxes we find a gain in welfare corresponding to a strong double dividend

understanding the structural characteristics of a firm s whole buyer supplier network and its impact on international business performance building on the network theory and the concept of organizational ambidexterity we investigate the impact of structural characteristics of a firm s whole buyer supplier network network density betweenness centralization and average clustering coefficient on its international business ib performance we also explore the moderating roles of average path length and pagerank centrality using a manually collected dataset and a robust empirical methodology we find that while network density is negatively related betweenness centralization and average clustering coefficient have an inverted u shape and a u shaped relationship with ib performance respectively we also find significant moderation effects and in the process we show the economic importance of firms whole buyer supplier network to their ib performance we contribute to the international business and whole buyer supplier network literature

multinational corporation internationalization in the service sector a study of japanese trading companies this paper extends chang s 1995 sequential investment theory to include multinational corporations mncs in service industries given this sector s large and growing impact on the global economy to facilitate an examination of service mnc internationalization patterns we develop a new typology of service investment i e core global related local unrelated global and unrelated local based on business relatedness and location specificity we test this typology on a sample of large japanese trading companies our results suggest that the initial investments of service mncs are closely related to their core businesses and are less location specific but that subsequent investments are less related to firms core services and are more location specific a pattern similar to the traditional view on manufacturing mncs we extend our analysis to examine several case studies to provide a richer context for these findings in addition we examine the performance implications of internationalization our findings suggest that firms that internationalize through early investments that are closely related to their core activities outperform those in unrelated businesses over time but that this performance gap between related and unrelated foreign investments diminishes in more advanced stages of internationalization

an empirical examination of the form of the relationship between multinationality and performance this paper reports findings from a study that systematically evaluated the form of the relationship between multinationality and performance in contrast to most of the prior conceptualizations that rely on linear monotonic models of the linkage this study examined a curvilinear model that addresses both the costs and benefits associated with multinationality it used time series techniques to capture both the static and dynamic components of the relationship results show that increasing levels of multinationality bring significant performance benefits up to a certain optimum level beyond which benefits begin to decelerate while costs accelerate

social ties and foreign market entry the social dynamics which precede international exchange are considered in light of data collected on 133 foreign market entries from a sample of highly internationalized manufacturing firms consistent with research done in the social network field the findings support the hypothesis that knowledge of foreign market opportunities is commonly acquired via existing inter personal links rather than collected systematically via market research this study thus contributes towards an understanding of those antecedent conditions that lead to the formation of export exchange relationships

can a water market avert the double whammy of trade reform and lead to a win win outcome abstract this paper focuses on the linkages between water and trade policies using morocco as a case this country is typical of many in that policy protects its import competing agricultural and industrial sectors while water in irrigated agriculture is priced below its marginal value product changing water policy without correcting for these other distortions leads to a more inefficient allocation of water on the other hand reforming trade policy alone can make farmers growing crops protected pre reform worse off using an intertemporal applied general equilibrium model we find that trade reform actually creates an opportunity to pursue water policy reform creating a water user rights market post trade reform not only compensates for the decline in farmers profits caused by the trade reform but also raises the efficiency of water allocation and hence benefits the economy as a whole

brazilian japanese and american business negotiations the determinants of the outcomes of business negotiations in 3 cultures are investigated in a laboratory experiment the outcomes of negotiations between japanese businessmen result primarily from a situational constraint the role of the negotiator buyer or seller representational problem solving oriented bargaining strategies a measure of the process of the interaction is the most important variable in american negotiations in negotiations between brazilian business people deceptive bargaining strategies also a process measure is the key variable affecting outcomes

circadian rhythms the effects of global market integration in the currency trading industry this essay assesses the impact of global market integration in the currency trading industry as the market interfaces with states with firms and with individuals and raises questions for research from a variety of disciplines issues discussed include the question of state control in global markets the impact of globalization on firm structures and processes how firms can derive competitive advantage from global circadian rhythms and the influences of the circadian rhythms of the global market on the individuals who work in this industry

modes of foreign entry a transaction cost analysis and propositions a frontier issue in international marketing is the appropriate choice of entry mode in foreign markets the objective of this paper is to offer a transaction cost framework for investigating the entry mode decision this framework provides 1 a theoretical basis for systematically interrelating the literature into propositions 2 propositions about interactions which resolve the apparently contradictory arguments advanced to date specifically the paper illustrates the feasibility of clustering 17 entry modes into the degree of control the mode provides the entrant proposes that the most appropriate i e most efficient entry mode is a function of the tradeoff between control and the cost of resource commitment advances testable propositions delimiting the circumstances under which each mode maximizes long term efficiency

the hunt vitell general theoryof marketing ethics can it enhance our understanding of principal agent relationships in channels of distribution this paper advances the hunt vitell general theory of marketing ethics as a framework for enriching current understanding of both long term marketing relationships in general and principal agent associations specifically under economic models of agency theory manufacturer distributor relationships are conceptualized as principal agent associations where both parties are assumed be motivated exclusively by short term financial self interest within the logical constraints of zero sum game conditions as a general model of ethical decision making and behavior in marketing the hunt vitell theory illustrates how ethical decisions are predicated not only upon estimations of potential benefits or outcomes using teleological criteria but also deontological evaluations which invoke norms and values furthermore the recent ideas advanced in relationship marketing perspectives suggest that distribution channel associations premised upon non zero sum or symbiotic assumptions may be more effective and more jointly profitable based upon the hunt vitell model propositions are formulated that complement the understanding of agency theory within the context of marketing channel relationships and thus may represent a basis for more effective agency selection and interaction in marketing practice

project escalation and sunk costs a test of the international generalizability of agency and prospect theories previous north american research suggests that aspects of agency theory and prospect theory may explain decisions to escalate commitment to failing projects this study explores the universality of these theories in this context the willingness of north american and asian managers to escalate commitment to losing projects was measured using four go no go decision cases we hypothesized that asian managers would be less willing to act in their self interest a lower agency effect and would be more willing to escalate a decision in the face of negative framing a stronger framing effect we found that agency theory had strong explanatory power for project in our asian sample framing effects were significant in both but they were not significantly different

developed country mnes investing in developing economies progress and prospect this study reviews research from 1970 through 2016 on developed country multinational enterprises dmnes entering and competing in developing economies to identify the current state of knowledge of this research and push it further we review the literature using bibliometric and qualitative content analyses covering leading journals and books we articulate frontier issues that are understudied yet critical to both theorization and practice of dmnes in developing economies we discuss the findings and conclusions from prior research along five key areas 1 entering developing economies 2 organizing local activities 3 managing alliances and joint ventures 4 competing in dynamic environments and 5 dealing with institutions governments and society we offer prospective insights into future agenda that have important implications for mne strategies and decisions and propose frontier directions that encompass strategic localization reverse transfer and adaptation co evolution with local business ecosystems reorganizing and restructuring and strategic responses to institutional and market complexity

understanding the domain of cross national buyer seller interactions cross national face to face selling has thus far received very little scholarly treatment in marketing literature with few notable exceptions most existing research in this area has been fragmentary and opportunistic these problems are largely because of the lack of a broad generalizable framework within which to conceptualize and execute research studies in offering such a conceptual framework this article looks at buyer seller interactions from a communication perspective

service multinationals conceptualization measurement and theory the application of mne definitions measurements and theories to international services is still in its infancy despite the considerable size and growth of this sector there are problems in defining classifying measuring comparing and explaining service mnes but they do not require special definitions and theories still research to date suggests 1 delinking the concepts of multinational enterprise and foreign direct investment under certain conditions and 2 qualifying the nature of ownership internalization and location advantages in fdi theory as far as service mnes are concerned

building capabilities for international operations through networks a study of indian firms in this study we seek to explain how firms from emerging markets build capabilities to operate in international markets through learning from parental networks the building of these capabilities is of particular interest as firms from emerging markets may not necessarily possess the monopolistic advantages commonly referred to in ib literature which allow a firm to succeed in international markets using lagged cross sectional regression models on a sample of 794 indian firms we found that firms draw on the international experience of their parental and foreign networks to build such capabilities findings also indicate that network scope is beneficial for increasing exposure to international markets only in the case of networks that are either small or medium sized additionally we found that firms lacking market power in their home market benefit through foreign partnerships when internationalizing operations

the relationship between international diversification and performance in service firms international diversification is a growth strategy that has a major potential impact on firm performance the relationship between international diversification and firm performance has been extensively studied in the international strategy literature a major gap in the literature has been the non existence of studies that have examined the effect of international diversification on performance in service firms previous studies that have tested the international diversification performance relationship were based on samples of manufacturing firms we argue that the form of the relationship between multinationality and performance is different in service firms we provide a theoretical argument for this claim and hypothesize that there is a u shaped curvilinear relationship between multinationality and performance in service firms our sample consists of 81 major german service firms spanning across four industries results show that there is support for a u shaped curvilinear relationship based on the findings implications and directions for future research are provided

diversification ricardian rents and tobin s q according to prevailing theory firms diversify in response to excess capacity of factors that are subject to market failure by probing into the heterogeneity of these factors we develop the corollary that firms that elect to diversify most widely should expect the lowest average rents an empirical test with tobin s q as the measure of rents is consistent with this theory

multinationality and performance among british manufacturing companies over the period 1972 84 profitability among 304 large british manufacturing companies was positively related to their degree of multinationality moreover increases in overseas production were strongly associated with increases in sales and profitability the profitability of multinational growth over the whole period was independent of its destination supporting the view that the primary source of the superior performance of multinationals was competitive advantage rather than the higher rate of profit in the industries of other countries

the globalization of service multinationals in the triad regions japan western europe and north america in this study we empirically investigate the determinants of foreign direct investment of service multinationals based in the triad regions japan western europe and north america foreign investment decisions of 168 of the largest service firms in nine service industries over the period 1976 1986 are analyzed and hypotheses that are developed based on findings of manufacturing fdi and studies of single service industries are tested using a logistic regression model the applicability of the mne fdi theories to service mnes is tested empirically over a broad range of mne home countries and service industries differences in the international behavior of service mnes based in different countries are uncovered and analyzed