learning to believe in sunspots a number of authors have shown that competitive economies may possess sunspot equilibria that is rational expectations equilibria in which purely extrinsic uncertainty affects equilibrium prices and allocations 2 such results demonstrate that it does not require a lack of faith in the rationality of market participants to believe that competitive markets may be subject to purely speculative fluctuations driven solely by expectations 3 the mere existence of sunspot equilibria as solutions to a system of marketclearing conditions however might not be judged sufficient to indicate that competitive markets with rational participants could ever be subject to speculative instability the sunspot equilibria represent states of affairs in which agents act differently in the case of different realizations of the sunspot variable and it is rational for each agent to do so but it might be thought unlikely that the beliefs of all the participants in the market could ever come to be coordinated so as to bring about an equilibrium of that kind it is rational to believe that sunspots convey information about future states of affairs once the economy is in a sunspot equilibrium but why would rational agents ever begin to believe in such a thing so as to create the conditions under which the belief is rational in order to address such a question one must go beyond the mere statement of the conditions for equilibrium and discussion of what states of affairs satisfy them one must specify an explicit dynamic process according to which the beliefs of agents adjust when out of equilibrium any exercise of this kind is necessarily unsatisfactory as there is no univocal meaning for the postulate of rational behavior outside of an equilibrium it may well be the case that

the causes of preference reversal observed preference reversal cannot be adequately explained by violations of independence the reduction axiom or transitivity the primary cause of preference reversal is the failure of procedure invariance especially the overpricing of low probability high payoff bets this result violates regret theory and generalized nonindependent utility models preference reversal and a new reversal involving time preferences are explained by scale compatibility which implies that payoffs are weighted more heavily in pricing than in choice copyright 1990 by american economic association

effects of profitability and liquidity on r d intensity japanese and u s companies compared this study investigates the proposition that japanese companies have a greater propensity than u s companies to sustain commitment to r d in the face of fluctuating profits and liquidity the anal

in search of appropriate methodology from outside the people s republic of china looking in choosing a methodology determines what we can study as well as the range of possible results and conclusions this study took an instrument that had been developed in the west and used extensively in europe and north america to investigate managerial behavior in the people s republic of china for a number of reasons it failed to produce a valid and reliable description of chinese managerial behavior this paper investigates some of the methodogical issues involved in extending western organizational knowledge to the east it raises some fundamental questions about being outside looking in

international marketing policy a discussion of the standardization construct and its relevance for corporate policy a fundamental question in international marketing concerns the desirability and feasibility of standardizing marketing programs and procedures internationally the primary objective of this paper is to present an overview and evaluation of the standardization debate central issues of interest include a discussion of the standardization construct and an evaluation of the evidence regarding corporate implementation of standardization strategies

international sourcing and supply chain stability an international supply chain is conceptualized as a complex dynamic system in which disruptions interact with long shipping and lead times to generate costs findings from a case study and simulation model indicate that demand related disruptions created substantial and unexpected costs in terms of expedited shipping high inventories and lower demand fulfillment production related disruptions declined over time but demand related disruptions did not implications for management are discussed

firm level determinants of political csr in emerging economies evidence from india multinational companies mncs frequently adopt corporate social responsibility csr activities that are aimed at providing public goods and influencing the government in policymaking such political csr pcsr activities have been determined to increase mncs socio political legitimacy and to be useful in building relationships with the state and other key external stakeholders although research on mncs pcsr within the context of emerging economies is gaining momentum only a limited number of studies have examined the firm level variables that affect the extent to which mncs subsidiaries in emerging economies pursue pcsr using insights from resource dependence theory institutional theory and the social capital literature we argue that mncs subsidiaries that are critically dependent on local resources have greater ties to managers of related businesses and to policymakers and that those that are interdependent on the mncs headquarters and other foreign subsidiaries are more likely to be involved in pcsr we obtain support for our hypotheses using a sample of 105 subsidiaries of foreign firms that operate in india our findings enhance our understanding of the factors that determine mncs political csr in emerging economies

comparative statics by adaptive dynamics and the correspondence principle the intuition behind comparative statics results is usually dynamic in nature the economic explanation for why differences in endogenous variables result from variations in exogenous variables often takes the form of some sequential adjustment process for example consider the account by milgrom qian and roberts 1991 of technological and organizational changes in modern manufacturing the falling costs of high speed data communication data processing and flexible multitask equipment lead to increases in the directly affected activities which through a web of complementarities then lead to increases in a set of related activities as well despite the prevalence of dynamic economic explanations the formal analysis is static in games of strategic complementarities gsc topkis 1979 vives 1990 parameterized by a variable that is complementary to the choice variables the existing results on monotone comparative statics of equilibria are summarized by a theorem of milgrom and roberts 1990 mr hereafter the largest and smallest equilibria in a parameterized gsc

a cross national comparison of consumer research measures the impact of three factors that affect the psychometric rigor of cross national consumer research comparisons is measured in this study conclusions are also drawn about the interactions among these factors and the resultant deterioration in the psychometric quality of the data

innovation and bureaucracy under soft and hard budget constraints because of the inherent uncertainty promotion of innovation critically depends on screening mechanisms to select projects this paper studies the relationship between bureaucracy and financial constraints as two such mechanisms the lack of commitment to hard financial constraints interferes with its ex post screening capability ex ante bureaucratic screening is optimally chosen as a substitute however bureaucracy makes mistakes by rejecting promising projects and delays innovation and the efficiency loss due to soft financial constraints increases as prior knowledge becomes worse and as research stage investment requirements become lower in a centralized economy bureaucracy may reduce the number of parallel projects particularly for projects with higher uncertainties and less research stage requirements this theory fits much of the evidence and in particular it explains why the computer industry but not the nuclear or aerospace industries has fared so poorly in centralized economies the fundamental importance of innovation to the survival and evolution of economic systems and organizations has long been recognized marx 1978 schumpeter 1950 innovation is characterized by its inherent uncertainty because it is a process whose every element takes considerable time in revealing its true features and ultimate effects schumpeter 1950 p 83 and people are unable to anticipate the future impact of successful innovations even after their technical feasibility has been established rosenberg 1994 an understanding of how different systems and organizations deal with the uncertainties associated with innovation and the resultant consequences is crucial for understanding alternative economic systems and organizations in this paper we provide a theory to analyse how different systems screen uncertain innovative projects and the impact of the various screening mechanisms on those systems we distinguish two alternative screening mechanisms the bureaucratic screening mechanism vs the market screening mechanism the latter is directly linked to financial constraints with this perspective our theory explains why centralized economies did well in certain areas of innovation but fared poorly in others for instance in the early 1960s the west was frightened by the ussr s great success in launching the first unmanned satellite and the first manned space capsule while in the 1980s in contrast the centralized system

influence of formalization on role stress organizational commitment and work alienation of salespersons a cross national comparative study organizations rely on formalization to coordinate the efforts of employees however this practice has been found to have a negative influence on role stress organizational commitment and work alienation of salespersons though the negative influence of formalization in the united states has been known for some time we still cannot predict if similar relationships would should be observed in other countries because the rationale developed to explain these relationships in the united states did not consider the cultural factors that influence them with such knowledge it would become possible to anticipate the nature of the relationship in different cultural environments such an approach to developing cross national models has been often suggested but seldom implemented by emphasizing the role of culture this study generates practical guidelines for both practitioners and theorists

the e correspondence principle we present a new application of samuelson s correspondence principle to the analysis of comparative dynamics in stochastic rational expectations models our version which we call the e correspondence principle applies to rational expectations equilibria that are stable under least squares and closely related learning rules with this technique it is sometimes possible to study without explicitly solving for the equilibrium how qualitative properties of the equilibrium are affected by changes in the model parameters applications to overlapping generations and new keynesian models illustrate the potential of the technique

empirical research in international marketing 1976 1982 this paper reviews empirical research in international marketing published during the period 1976 82 the review focuses on what has been researched and how the research has been conducted this research is evaluated a cooperative multidisciplinary empirical research program in international marketing is then proposed

edwin mansfield s contributions to the economics of technology abstract edwin mansfield s contributions to the economics of technology are summarized from the early 1960s through his death in 1997 mansfield s methodology is discussed as are his contributions on the diffusion of technical innovation the effect of firm size on innovation the role of academic and basic research in increasing innovation and productivity international technology transfer and the inaccuracy of technological forecasts the economics profession s evaluation of the relative importance of mansfield s work is presented using as evidence citation counts of his works collected from the social science citation index ssci identified as among mansfield s most important contributions are his work on the importance of academic research for industrial innovations his empirical estimation of the rates of diffusion of different innovations and his estimation of the private and social returns from investments in industrial innovations finally we present mansfield s advice on the future of the economics of technology

the global correspondence principle a generalization this paper generalizes the global correspondence principle by extending in two major ways samuelson s 1971 analysis of the exchange rate response to an international purchasing power transfer first the authors analyze the price effect of a shift in anyparameter not necessarily a transfer second the authors explore the resulting adjustments in any nonprice variable such as welfare as the analysis shows the direction of these adjustments depends neither on whether they are small or large nor on whether equilibrium is locally stable or unstable thus the authors generalize the conventional algebra of comparative statics which typically assumes small shifts from a stable equilibrium copyright 1987 by american economic association

the effects of american and japanese style employment and compensation practices on innovation success in the global marketplace increasingly requires that firms develop capabilities in innovation in this paper we argue that firms can use employment and compensation practices to foster innovation and support for innovation by employees conversely some employment and compensation systems will inhibit innovation a system that allows gain sharing by employees and provides employment assurance will foster innovation in the firm however a system that compensates employees with a fixed wage and allows for termination at will contains anti innovative incentives the former system is the prototypical japanese system particularly in large firms while the latter system is the prototypical american system the commercial success of japanese firms is increasingly attributed to successful innovation particularly in processes we argue that this success is partly attributable to the japanese style system of employment and compensation none of this suggests however that the japanese style practices c

offshore outsourcing of services an evolutionary perspective abstract offshore outsourcing is gaining increasing importance and attention in both theory and practice the purpose of this research is to use nine in depth case studies to analyze the evolution of offshore services outsourcing with regard to how expectations and governance structures change over time five testable propositions are presented building on institutional theory transaction cost and resource based perspectives the cases demonstrate that offshore outsourcing is initiated because of increasing internal and external pressure to conform and reduce costs moreover companies chase efficiency improvements in other geographic locations but after reducing costs companies discover more strategic benefits such as the potential to increase quality and market share importantly as buyer supplier relationships move from tactical to more strategic expectations and governance structures change

cross cultural examination of the fishbein behavioral intentions model most of the principal theories associated with consumer behavior have been developed and tested in the united states a question that has been posed by some consumer researchers concerns the applicability of these theories outside of the united states the study reported in this paper is a cross cultural examination of the applicability of the fishbein behavioral intentions model in korea and the united states korea can be characterized as a collectivist culture that is different from the individualist culture dominant in the united states the findings of the study suggest that the fishbein model can be employed to explain consumers behavioral intentions formation in a confucian culture as well as in the united states

determinants and performance impacts of external technology acquisition abstract an important issue technology managers face today and a vital component of any coherent technology strategy concerns the decision to chose between developing technical capabilities internally or acquiring them through external means while there is a clear indication in the literature of a greater reliance on external sources of technology the factors driving this phenomenon and the potential benefit to firm performance have received limited empirical attention this study addresses these issues by testing the relationships between several potential determinants of external technology sourcing and the differential impacts of external vs internal sourcing on firm performance the study addresses three potential determinants of external technology sourcing discontinuous technological change life cycle stage the stage of the resulting life cycle patterns developed around radical technological changes or dtc life cycle intellectual property protection and internally available resources dtc life cycles and the industries built around them are characterized by patterns of competitive behavior and a few key milestones particularly the emergence of a dominant design for example the early stages of the life cycle are characterized by a focus on product technologies as firms compete to develop the technical standard for the industry while the later stages are more concerned with process technologies as firms compete to produce the standard at the lowest cost we argue that dtc life cycle analysis can inform the internal vs external decision and that the evolution from a product based competition to a cost based competition will affect not only the focus of that external sourcing but also the benefits received as a result further we suggest that perceived intellectual property protection and the level of resources available internally to the firm will also impact the decision to source technology externally the growing interest in external technology acquisition would appear to reflect a positive effect on firm performance the literature however is equivocal and often anecdotal focusing only on a limited perspective of firm performance we investigate the relationship between external technology acquisition vs internal technology development and firm performance from three perspectives product market and finance based measures of performance further given that the focus of external technology acquisition will be driven in part by life cycle stage earlier stages focus on product technology and later stages focus on process technology we also study the effect that focus has on related firm performance measures i e how will product related external technology acquisition affect product based performance measures and how will process related external technology acquisition affect cost or finance based measures finally we investigate the impact of internal resource capability on the existing relationship between external technology acquisition and firm performance i e the absorptive capacity argument data collected from 188 u s subsidiaries of both domestic u s and foreign firms were used to test hypothesized relationships among these variables dtc life cycles intellectual property protection internally available resources external technology acquisition and firm performance while not all hypotheses were supported the results on the relationship between external technology acquisition vs internal technology development and the three firm performance perspectives warrant caution for technology managers considering or currently utilizing external sources of technology the more salient results and implications for managers are presented below first regarding the potential drivers for external technology acquisition the results varied with theoretical expectations contrary to theory neither dtc life cycle nor intellectual property protection exhibited a significant relationship to external sourcing in general however consistent with expectations the level of available internal resources did exhibit a direct and negative relationship to external acquisition firms with greater internal resources are less inclined to source externally second technology managers would be well advised to consider a number of issues when approaching the decision to acquire technology externally or develop it internally in all cases where a statistically significant relationship between external technology acquisition and firm performance was found the direction was negative indicating that acquiring technology externally detracts from firm performance further in limited cases that negative relationship is compounded in the presence of internal technology capabilities also a significant relationship was found between external product technology acquisition and product performance measures and not for financial performance measures and between external process technology acquisition and finance performance measures and not for product performance measures as expected and were both negative in other words the dimension of performance most hindered by external technology acquisition is precisely that dimension that managers might strategically target at a given stage in the technology life cycle the availability of technical resources internal to the firm was in all cases positively associated with product market and financial performance measures these results taken together suggest that firm performance is negatively impacted by external technology acquisition firms with internally available resources typically do not tend to seek external technology and when they do in some cases the negative relationship between external sourcing and performance is increased clearly external technology acquisition is not a panacea and great care must be taken to ensure firm success and our findings suggest that all else equal firms may want to err on the side of internal development

the global integration of business functions a study of multinational businesses in integrated global industries the way that multinational businesses in integrated global industries coordinate and control r d manufacturing and marketing functions across borders has significant implications for performance we propose that in such global industries certain integrating modes will be more effective than others in integrating a function globally we show that each function has a different combination of effective integrating modes for global r d integration people based and information based modes are more effective than formalization based and centralization based modes for manufacturing people information and formalization are more effective than centralization with respect to marketing information and centralization are more effective than people and formalization we also demonstrate that the co alignment between actual and ideal profiles configurations or patterns of integrating modes results in superior performance our results reveal that people based and information based modes are generally more effective than formalization based and centralization based modes in coordinating and controlling business functions worldwide

expectations and the stability problem for optimal monetary policies eine auf den fundamentaldaten beruhende regelbindung der geldpolitik ohne selbstverpflichtung die bei vollkommen rationalen erwartungen der privaten akteure optimal ware ist instabil wenn diese akteure de facto den ublichen regeln des adaptiven lernens folgen dieses problem lasst sich dadurch beheben dass die erwartungen privater akteure berucksichtigt und in geeigneter weise in die optimale geldpolitik einbezogen werden diese eindeutige schlusfolgerung gilt auch dann wenn sich der geldpolitische entscheidungstrager und die privaten akteure in einem simultanen lernprozess befinden unsere ergebnisse zeigen wie wichtig es ist die geldpolitik angemessen zu gestalten und dabei nicht nur die fundamentaldaten sondern auch direkt die beobachteten erwartungen privater haushalte und unternehmen zu berucksichtigen

comparative marketing the first twenty five years this article reviews the field of comparative marketing in terms of scope types and depth of studies methodological issues conceptual and managerial payoffs and teaching approaches after its first quarter of a century as an international business topic comparative marketing is still relatively green

measuring globalization of industries using a national industry approach empirical evidence across five countries and over time this paper presents an objective measurement of industry globalization although crucial in understanding firm strategies industry globalization has been largely subjectively measured consisting of mostly case studies this research develops a two pronged measure of industry globalization based on a the extent of an industry s international linkages lit and b the integration of value added activities within the industry iit in addition of providing a quantitative equivalent to porter 1986 and bartlett and ghoshal s 1989 conceptual industry categorizations this measure permits the examination of important but previously untested notions regarding globalization using data for chemical and manufacturing industries for five major trading nations we find that 1 chemical industries are less global than manufacturing industries despite high levels of fdi found in chemical industries 2 u s globalization frequently assumed to be representative of worldwide globalization of industries is less than that of other major industrial countries and 3 industries in both sectors are globalizing over time consistent with the literature

imprecision as an account of the preference reversal phenomenon many individuals choices and valuations involve a degree of uncertainty imprecision this paper reports an experiment designed to obtain some measure of imprecision and to examine the extent to which it can explain preference reversals of two opposite forms one of which appears not to have been reported previously the model of imprecision we examine not only predicts both patterns but also provides an account of earlier results that are otherwise not well explained the results suggest that any successful descriptive theory of choice and valuation will need to allow in some way for the imprecision surrounding people s decisions

industrial governance structures innovation strategies and the case of japan sectoral or cross national comparative analysis in comparative research on industrial policy strategies attention has shifted from national level variables to sectoral variables in both the description and the explanation of policy the sectoral literature however lacks analytic focus and has provided little systematic insight into the causes of cross sectoral variance in governance structures and policy strategies based on recent contributions to the economics and sociology of formal organizations this article attempts to sharpen the concept of industrial sector and to provide a rationale for why sectoral structures and strategies vary next it develops a synthetic explanatory framework that combines sectoral analysis and national domestic structuralism in order to account for industrial innovation strategies in advanced capitalist countries in the final section the fruitfulness of this approach is illustrated by developing a new account of japan s success and failure in industrial innovation an account that overcomes the contradictions among the main alternatives offered in the past the key objective of the article however is to develop a new set of theoretical hypotheses for cross national research not a rigorous empirical test of its main propositions

innovating in the periphery the impact of local and foreign inventor mobility on the value of indian patents abstract we examine the impact of local and foreign labor mobility in india by modeling one regional and one global network each of which captures the inter organizational mobility of inventors our analysis of the regional network shows that within india the productivity of inventors does not improve when they move from foreign to indian organizations in the global network we find that indian organizations remain located in the periphery as a result of employing a small number of inventors from foreign organizations however in the instances when inventors are hired from foreign organizations they are able to produce patents with a higher impact in comparison to inventors hired from other indian organizations furthermore when the inventors are hired from abroad the impact of their patents is even higher in comparison the implications of these findings for innovation and policy in the emerging economy context are discussed

the coordination of manufacturing interdependence in multinational companies many companies have recently adopted global manufacturing rationalization programs in order to realize the full benefit of these internationally integrated manufacturing strategies however companies need to overcome the problem of coordinating operations where interdependence exists among subsidiaries this article which is based on a field study of 25 multinational companies provides insights on how manufacturing interdependence among country subsidiaries is coordinated specifically the study examined the relationships between increasing manufacturing interdependence with the use of 4 coordination modes impersonal methods use of organization members who have a system sensitive outlook executive compensation systems based on a subsidiary s performance and personal communication and with the use of 3 communication patterns communication between managers of different country subsidiaries communication with top management and communication with a central manufacturing staff group findings suggest that although there is an extensive use of impersonal methods of coordination with increasing interdependence there is a change in coordination mix towards greater use of system sensitive members and personal communication increasing interdependence is also significantly associated with greater communication among country subsidiary managers and greater communication with a central manufacturing staff group although the relationships between increasing interdependence and communication with top management through the formal hierarchy was not found to be statistically significant interviews with managers suggested the importance of this channel when communication among country subsidiary managers and communication with the central manufacturing staff group are inadequate for managing the manufacturing interdependence implications are drawn for companies planning to increase the international integration of their manufacturing operations

consumer preferences and product and process r d firms often conduct both product and process r d consumer preferences typically play a vital role in determining these r d choices the economics literature however has mostly ignored the interrelationship between the r d choices of firms and consumer preferences istudy product and process r d from the perspective of their relationship with consumer preferences in doing so i find a novel distinction between the two kinds of r d this distinction can explain several empirical observations regarding firms choices of the two and can also potentially enable us to better empirically identify the two

the impact of journals and authors on international business research a citational analysis of jibs articles in this paper we use citational analysis to examine the influence of individuals and disciplines on international business research we collected citational data over the ten year period 1984 to 1993 from every issue of the journal of international business studies we found that management economics marketing and finance disciplines have had significant influence on international business research and identified researchers such as dunning porter vernon casson rugman and hofstede as having made significant contributions to international business research

stabilizing competitive business cycles abstract we study how stylized monetary proportional money transfers fiscal lump sum money transfers and public expenditure policies may eliminate endogenous deterministic cycles and stationary markov sunspot equilibria in a simple version of the overlapping generations model we also present new constructive methods for analyzing stationary markov sunspot equilibria in such a framework

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

component sourcing strategies of multinationals an empirical study of european and japanese multinationals this is a study of component sourcing decisions of european and japanese manufacturers for supplying their manufacturing operations in their home countries for export to the u s as well as their operations in the united states specifically employing data from seventy one multinational manufacturers of european and japanese origin operating in the u s the study investigated the determinants of international sourcing decisions the authors found support for the hypothesis that international sourcing could be explained using international plant location theory the significance of this finding is that it offers a new theoretical framework to spur much needed research on the topic of international sourcing

learning about monetary policy rules abstract we study macroeconomic systems with forward looking private sector agents and a monetary authority that is trying to control the economy through the use of a linear policy feedback rule we use stability under recursive learning a la evans and honkapohja learning and expectations in macroeconomics princeton university press princeton new jersey 2001 as a criterion for evaluating monetary policy rules in this context we find that considering learning can alter the evaluation of alternative policy rules

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

cross national comparison of export promotion services the views of canadian and austrian companies export promotion systems in canada and austria are contrasted and their services evaluated from a company perspective the canadian system is government based while the austrian one operates in the private sector apart from the philosophy under which these export support systems operate they differ also in strategic orientation a survey of stratified samples of exporters in canada 271 and austria 312 shows significant differences in perceived usefulness of services given similar exporter needs companies desire more tailored support as well as greater involvement of private sector institutions which are not currently providing export support overall austrian companies appear more inclined to use export support and generally seem more willing to acquire exporting know how externally compared to canadian firms conclusions are offered with respect to improving the respective export promotion systems

international perceptions of cost constraints on voluntary information disclosures a comparative study of u k and u s multinationals the main purpose of this paper is to examine the cost constraints on voluntary information disclosure in a comparative study of the perceptions of financial executives in u k and u s multinationals the study examines the perceived net costs or benefits of disclosing information voluntarily the types of costs involved and the significance of cost constraints in respect of specific items of disclosure the results suggest that while there is substantial agreement on the major cost constraints involved and the individual items giving rise to major net costs there are significantly different perceptions by u k and u s financial executives in terms of the overall emphasis of responses to the issue of cost constraints on voluntary information disclosures

determinants of cross national knowledge transfer and its effect on firm innovation this study examines the determinants of international knowledge flow from a resource based perspective it evaluates the impact of cross national knowledge transfer on firm innovative performance based on 56 027 us patents owned by 53 selected firms in the us based pharmaceutical industry the results suggest that innovative performance is a curvilinear function of the international knowledge content used by a firm to innovate as hypothesized it was found that at 1 low and moderate levels of international knowledge content a firm s strategy to transfer international knowledge improves its innovative performance and at 2 higher levels of international knowledge content there are diminishing marginal returns to transferring knowledge from overseas

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

offshore outsourcing as a source of international competitiveness for smes scholars typically view offshore outsourcing as a means of reducing the cost of manufacturing activities for large corporations yet offshore outsourcing may entail administrative and technical services and may include activities outsourced by small and medium sized enterprises smes drawing on research in international entrepreneurship and services we hypothesize and find evidence that offshore outsourcing of administrative and technical services by smes is associated with greater extent and scope of internationalization of sales offshore outsourcing enhances international competitiveness by enabling smes to reduce costs expand relational ties serve customers more effectively free up scarce resources and leverage capabilities of foreign partners

methodological and theoretical issues and advancements in cross cultural research this paper summarizes the issues and concerns of critics of cross cultural research and discusses how they are being addressed by researchers given the state of the art and the complexity of this field of research the author recommends more inductive research and the pursuit of appropriate but not overambitious sampling designs so as to increase our understanding of cultures and encourage the building of richer theory bases taking an optimistic view of the field the author predicts useful contributions by researchers which will enrich the art and science of cross cultural management

measuring individual risk attitudes when preferences are imprecise there is widespread interest in measuring risk attitudes and incorporating such measures into broader econometric analyses we consider three elicitation procedures currently in use we find considerable variability within and even more between the results they produce we suggest that this reflects the way that different instruments interact with imprecise underlying preferences the short run implication is that such procedures need to be used with caution and are likely to be highly context specific the longer run implication is that adding white noise to deterministic models is inadequate we need to develop models that allow for imprecision and procedural variation

patent pools and cross licensing in the shadow of patent litigation this paper develops a framework to analyze the incentives to form a patent pool or engage in cross licensing arrangements in the presence of uncertainty about the validity and coverage of patents that makes disputes inevitable it analyzes the private incentives to litigate and compares them with the social incentives it shows that pooling arrangements can have the effect of sheltering invalid patents from challenges this result has an antitrust implication that patent pools should not be permitted until after patentees have challenged the validity of each other s patents if litigation costs are not too large

r d reactions to high technology import competition for a seventeen year panel covering 308 u s manufacturers the authors analyze companies r d spending reactions to changes in high technology imports on average r d sales ratios were reduced in the short run as imports rose reactions tended to be more aggressive the more concentrated the markets were in which the firms operated when company r d operations were multinational and with greater company size and diversification reactions were less aggressive when special trade barriers had been erected reactions became more aggressive over the longer run copyright 1992 by mit press

union bargaining power subcontracting and innovation we show that if a firm can subcontract production to an informal sector an increase in union power may either increase or decrease innovation an increase in union power makes the firm worse off irrespective of its effect on innovation however in contrast to the usual belief an increase in union power may increase consumer surplus and decrease union utility by affecting innovation thus suggesting that a union may not want to be too powerful an increase in union power may create an ambiguous effect on social welfare our analysis provides new insights to the relation between union power and innovation

an examination of the psychometric properties of some commonly researched individual differences job and organizational variables in two cultures this study examines the transferability and applicability of selected measures of individual differences job and organizational climate factors across two cultures questionnaires were administered to a sample of 267 white collar bank employees in the u s and 307 bank employees in india the individual difference dimensions examined were four manifest needs sense of competence and locus of control the job factors included variety autonomy identity and feedback the organizational climate factors related to communication stress participation in decision making and self esteem from the workplace the data were analyzed for internal consistency dimensionality and criterion related validity the results showed that the job and organizational climate measures were more reliable and were related more consistently to the criterion measures than the individual difference measures both within and across cultures the results suggested that psychometrically sound measures may be transferable to other cultures

some methodological and analytic considerations in cross national comparative research this article demonstrates one methodological approach to aid in the complex process of making inferences about the meaning and usefulness of observed national differences by using data from an international study of the meaning of working 3 points are made 1 it is important to use multiple methods of measurement for conceptual ideas or domains 2 it is important to use intra country reference group comparisons and 3 it is important to use some form of relative position analysis in addition to score analysis

effects of consumer preferences for foreign sourced products when deciding on overseas production locations the manager must take into account not only resource and cost benefits but the effect that country of origin may have on consumer evaluations an experiment conducted by a telephone survey procedure examined country of origin perceptions of twelve countries and eight products using both perceived quality and choice measures as hypothesized preferences were found to be more product specific for industrialized than less developed countries in addition hypotheses that performance risk and brand moderate the effects of country were upheld under most conditions

japan vs silicon valley quality cost trade off philosophies while japanese manufacturing philosophies are said to be based on quality is free notions it is commonly accepted that u s manufacturing centers on a quality is costly belief this paper provides empirical data that test this conceptual division seeking evidence about the quality tradeoff philosophies of u s and japanese electronics manufacturing managers

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

import sourcing dynamics an integrative perspective the character of import sourcing for manufacturing has changed beyond the reach of current explanatory schemes this study knits several evolving trends in the area of import sourcing into a theoretical framework in order to facilitate research in this under researched topic and expose to practitioners the increasing strategic value of import sourcing

sourcing strategies of european and japanese multinationals a comparison based on a typology of sourcing strategies this study identifies various sourcing patterns adopted by european and japanese multinational manufacturing firms in serving the u s market the study has found that the product s market performance is not at all related to its life cycle stage in world trade or to production location but is positively related to the internal components sourcing and negatively related to the product adaptation the findings strongly support levitt s call for a global product

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

factories or warehouses a welsh perspective on japanese transplant manufacturing munday m morris j and wilkinson b 1995 factories or warehouses a welsh perspective on japanese transplant manufacturing reg studies 29 1 17 critics of japanese direct manufacturing investment have argued that the japanese transplant manufacturing sector tms represents an attempt to circumvent trade barriers rather than a genuine globalization of japanese capital and that host regions will find themselves with warehouses or low value added final assembly plants rather than fully integrated manufacturing operations which will contribute significantly to the development of the local economy this paper presents a detailed study of the economic impact of japanese manufacturing in wales a region within the uk which has one of the highest concentrations of japanese manufacturing investment in europe it finds that there are some problems with japanese investment but although japanese companies do appear to operate their businesses in different ways to other inward investors many of these are be

observing violations of transitivity by experimental methods the preference reversal phenomenon is usually interpreted as evidence of nontransitivity of preference but has also been explained as the result of the difference between individuals responses to choice and valuation problems the devices used by experimenters to elicit valuations and the random lottery selection incentive system this paper reports an experiment designed so that none of these factors could generate systematic nontransitivities yet systematic violations of transitivity were still found the pattern of violation was analogous with that found in previous preference reversal experiments and is consistent with regret theory copyright 1991 by the econometric society

management style and productivity in two cultures global competition has motivated an increasing number of united states firms to set up production facilities in mexico this study examines productivity and management style differences in a mexican maquiladora operation and its u s parent plant likert s system 4 theory was used as the theoretical basis of comparison as hypothesized significant differences were found in the management systems while productivity at the two facilities was equal

the importance of work goals an international perspective the paper probes into the basic question of what individuals seek from working results from a representative sample of the labor force in seven countries n 8192 showed that the two most dominant work goals are interesting work and good pay these were consistent internationally across different organizational levels between the genders and among different age categories

the role of expatriates in the management of interdependence complexity and risk in multinational corporations a multilevel analysis of environmental country and organizational affiliate factors is used to explain the differential utilization rates of u s nationals in overseas professional positions of a major u s bank with 84 branches in 43 countries the research suggests that to the extent that the affiliates of a multinational corporation operate in environments with differing levels of political risk cultural distance and competition and have operations with different levels of complexity and interdependence a single staffing policy may be inappropriate

monetary policy endogenous inattention and the volatility trade off this paper addresses the output price volatility puzzle by studying the interaction of optimal monetary policy and agents beliefs we assume that agents choose their information acquisition rate by minimizing a loss function that depends on expected forecast errors and information costs endogenous inattention is a nash equilibrium in the information processing rate although a decline of policy activism directly increases output volatility it indirectly anchors expectations which decreases output volatility if the indirect effect dominates then the usual trade off between output and price volatility breaks down this provides a potential explanation for the great moderation that began in the 1980 s

trends in the substitution of production factors to technology empirical analysis of the inducing impact of the energy crisis on japanese industrial abstract japan successfully overcame the energy crises of 1973 and 1979 maintaining productivity in the face of drastically increased energy prices despite the fragile nature of its energy structure this was due to technological innovation efforts that led to rapid improvement in japan s industrial technology as a whole this paper tries to prove this hypothesis on the basis of an examination of the trends in the substitution of production factors by technology as represented by r d investment efforts since the first energy crisis in 1973 there have been a number of attempts to identify the possibility of substitutability of energy by other production factors but none have been successful in taking technology into account this paper tackles this subject on the basis of the measurement of the technological knowledge stock and en empirical analysis using a translog cost function incorporating this stock and shows that over the last two decades all production factors have been substituted by technology in japan s manufacturing industry or have been moving towards that direction

research and development human capital and trade performance in technology intensive manufactures a cross country analysis abstract this paper comprises an extensive examination of the relationship between commonly utilized policy indicators of national technological capability and observed trade success in technology intensive manufactures across 52 countries in the 1980s a central focus is the relative performance of policy indicators which directly measure innovative activity such as patent output and expenditure and employed scientists and engineers in r d versus those measuring general efforts at increasing national levels of human capital the study design is guided by the inter country intrasectoral approach outlined by dosi et al 19 it emphasizes differences in trade performance based on the notion of international competitiveness but also compares results for conventional revealed comparative advantage indices the large number of countries included and the nature of the policy objectives adopted have necessitated a highly aggregated approach using nation wide attributes and trade in one broad technologyintensive sector as the measure of demonstrated international competitiveness simple correlation and multiple regression techniques are used to assess the association of four main sets of national attributes indicators of direct innovative activity general human capital development physical capital formation and natural resource endowment with technology intensive trade performance the empirical findings provide further support for the importance of national differences in technological capability as a determinant of structural and international competitiveness within the technology intensive sector of production they suggest that policy indicators measuring actual innovative activity and physical capital formation have a much closer link to technology intensive trade than the general educational effort or output indicators demand side measures which proxy the actual employment and application of resources for r d purposes demonstrate the strength of association required for reliable policy evaluation of real national differences in technological capability the poor performance of the general human capital supply variables highlights the need for a careful consideration of the optimality of the allocation of substantial levels of scarce national resources to broad based educational output a number of other significant results concerning the link between technology indicators technology intensive trade and economic performance are discussed

partitioning country of origin effects consumer evaluations of a hybrid product recent cases in strategic alliances observed in the u s automobile and numerous other consumer product industries point up an important area of research that has not received enough attention in the literature complex products involving multiple country affiliations have become much more common

why are japanese firms so innovative in engineering technology abstract japanese firms belonging to the electric and electronics industry have been producing a large number of innovations concentrated in the field of engineering technology and directly related to commercial products one reason why japanese firms have such characteristics can be explained by their unique behavior and organization of research and development r d the behavior of the r d division of japanese firms is characterized by less independence from other divisions of the firms a close relationship with other divisions and concerted behavior to maximize total corporate profits these are indicated by the fact that r d funds are allocated flexibly by taking into account the intentions of other operational divisions or the headquarter s office and the fact that there exists a unique career path in a japanese firm by which r d personnel do not always stay in the research division but are frequently assigned to other various divisions as they climb upward however these structural and behavioral characteristics of japanese corporate r d which so far have been efficient in applied research and product development are not adaptable to basic research recently japanese firms are seeking a new r d organization and management system to solve the problem

what is wrong with taylor rules using judgment in monetary policy through targeting rules it is argued that inflation targeting is best understood as a commitment to a targeting rule rather than an instrument rule e ither ageneral targeting rule explicit objectives for monetary policy or a specific targeting rule a criterion for the forecasts of the target variables to be fulfilled essentially the equality of the marginal rates of transformation and substitution between the target variables targeting rules allow the use of judgment and extramodel information are more robust and easier to verify than optimal instrument rules and they can nevertheless bring the economy close to the socially optimal equilibrium

sourcing patterns of foreign owned multinational subsidiaries in europe tavares a t and young s 2006 sourcing patterns of foreign owned multinational subsidiaries in europe regional studies 40 583 599 this paper investigates the determinants of the international sourcing propensities of foreign owned multinational mne subsidiaries in four european union host countries major findings concern the impact of subsidiary roles and economic integration on international sourcing patterns regional and global integration are leading to a greater import orientation among mne subsidiaries including product mandate firms that are assumed to be strongly embedded within host economies the results cast doubts on existing criteria for inward foreign direct investment fdi attraction policy implications are developed relating to the attraction of inward fdi and to corporate development policies tavares a t et young s 2006 la distribution des sources d approvisionnement des filiales multinationales a capital etranger en europe regional studies 40 583 599 cet article che

strategic and financial performance implications of global sourcing strategy a contingency analysis using a contingency model of global sourcing strategy this study investigated the moderating effects of sourcing related factors on the relationship between sourcing strategy and a product s strategic and financial performance the results lent some support to the contingency model of global sourcing strategy in that product innovation process innovation and asset specificity were significant moderator variables for financial but not strategic performance however the results provided no support for bargaining power of suppliers and transaction frequency as moderator variables in other words in achieving high financial performance for a product whether a particular sourcing strategy should be used for a particular product depended on the levels of product innovation process innovation and asset specificity

asset profiles for technological innovation abstract this paper proposes a conceptual distinction between four generic categories of assets for technological innovation 1 scientific research assets 2 process innovative assets 3 product innovative application assets and 4 aesthetic design assets technological innovation may sometimes require the activation of only one asset type but more often a specific constellation of more asset types has to be mobilized the asset categories differ profoundly with respect not only to their respective competence bases but also with respect to their functional contribution to industrial innovation and mostly also to their organizational attachment this way of conceiving technological innovation is opposed to the one dimensional r d conception that tends to view r d as one functional asset along with others like manufacturing or marketing it is argued that the different innovative assets are often located in different organizational settings within the corporation the coupling between assets is discussed in terms of inter asset specificity we illustrate the great variation of innovative asset profiles across a wide spectrum of product categories the concept of technological trajectories is reinterpreted in terms of asset profile oscillations and regroupings finally the framework is related to recent efforts to formulate a resource based theory of the firm and the implications for innovation strategy is discussed

do preference reversals disappear when we allow for probabilistic choice the preference reversal phenomenon a systematic disparity between people s valuations and choices poses challenges for theory and policy using a very general formulation of probabilistic preferences we show that the phenomenon is not mainly due to intransitive choice we find a high degree of regularity within choice tasks and also within valuation tasks but the two types of tasks appear to evoke very different cognitive processes even when the experimental environment tries to minimise differences we discuss possible implications for modelling and eliciting preferences data as supplemental material are available at http dx doi org 10 1287 mnsc 2015 2333 this paper was accepted by manel baucells decision analysis

an imperfect competition theory of the mne the multinational firm as the central actor in international business has been studied extensively across countries and intensively within companies no single theoretical structure can deal with all important aspects of these firms nonetheless some powerful explanatory tools such as the international product cycle and the transactions cost internalization theory have shed substantial light on mne activities the imperfect competition theory presented here explains 6 major mne decisions for example production location and market servicing methods with a simple model which can be extended to explore other important issues

the relationship between offshore sourcing and innovativeness of u s multinational firms an empirical investigation in increasingly complex global competition u s multinational firms have stepped up imports under items 806 30 and 807 00 of the tariff schedules of the united states as a part of offshore sourcing of components and finished products to serve the u s market

relative efficiency of r d activities a cross country study accounting for environmental factors in the dea approach abstract this paper applies the production framework associated with the data envelopment analysis dea method to evaluate the relative efficiency of r d activities across countries r d capital stocks and manpower are treated as inputs while patents and academic publications are considered as outputs a three stage approach which involves using dea for evaluating efficiency and using tobit regressions for controlling the external environment is applied to 30 countries in recent years the results show that less than one half of the countries are fully efficient in r d activities and that more than two thirds are at the stage of increasing returns to scale most countries have a more significant advantage in producing sci cum ei publications than in generating patents

dynamics in innovation systems evidence from japan s game software industry in contrast to the us and recently europe japan appears to be unsuccessful in establishing new industries an oft cited example is japan s practical invisibility in the global business software sector literature has ascribed japan s weakness or conversely america s strength to the specific institutional settings and competences of actors within the respective national innovation system it has additionally been argued that unlike the american innovation system with its proven ability to give birth to new industries the inherent path dependency of the japanese innovation system makes innovation and establishment of new industries quite difficult however there are two notable weaknesses underlying current propositions postulating that only certain innovation systems enable the creation of new industries first they mistakenly confound context specific with general empirical observations and second they grossly underestimate or altogether fail to examine the dynamics within innovation systems this paper will show that it is precisely the dynamics within innovation systems dynamics founded on the concept of path plasticity which have enabled japan to charge forward as a global leader in a highly innovative field the game software sector 2008 elsevier b v all rights reserved

organizational changes in emerging economies drivers and consequences organizational change in emerging economies although difficult is inevitable the authors study the drivers and consequences of organizational changes in an emerging economy china the results of a firm level survey show that organizational changes in technical vs administrative areas are differentially driven by firms motivation to change past performance opportunity to change firm location and market orientation and capability to change firm ownership managers change attitude and leader charisma furthermore technical and administrative changes affect firm performance through distinct paths technical changes have a direct positive impact on performance whereas administrative changes enhance firm performance indirectly through technical changes and the effect of administrative changes on performance is strengthened by the presence of a participative culture