coping with uncertainty in international business international business as compared with domestic business is usually characterized by increased uncertainty a study of 10 multinational companies uncovered several methods of coping with uncertainty this paper focuses on 2 methods which may not be apparent control and flexibility a framework of analysis suggesting appropriate methods for coping with uncertainty is also developed

compensation policy and worker performance identifying incentive effects from field experiments the role of field experiments in evaluating the effect of compensation policies on worker productivity is considered particular attention is paid to the ability of a field experiment to identify the effect of a permanent change in firm policy while field experiments solve endogeneity problems through randomization they do so within a specific and at times artificial environment that may not be replicated by a permanent policy change as such rather than providing a basis for the unrestricted identification of incentive effects experiments are better thought of as providing exogenous variation with which to identify structural parameters these parameters can in turn be used to predict the effects of policy changes jel j3 l2 c9

carbon dioxide emissions and economic growth panel data evidence from developing countries in this paper we test the environment kuznet s curve ekc hypothesis for 43 developing countries we suggest examining the ekc hypothesis based on the short and long run income elasticities that is if the long run income elasticity is smaller than the short run income elasticity then it is evident that a country has reduced carbon dioxide emissions as its income has increased our empirical analysis based on individual countries suggests that jordan iraq kuwait yemen qatar the uae argentina mexico venezuela algeria kenya nigeria congo ghana and south africa approximately 35 per cent of the sample carbon dioxide emissions have fallen over the long run that is as these economies have grown emissions have fallen since the long run income elasticity is smaller than the short run elasticity we also examine the ekc hypothesis for panels of countries constructed on the basis of regional location using the panel cointegration and the panel long run estimation techniques we find that only for the middle eastern and south asian panels the income elasticity in the long run is smaller than the short run implying that carbon dioxide emission has fallen with a rise in income

a framework for integrated risk management in international business treatments of risk in the international management literature largely focus on particular uncertainties to the exclusion of other interrelated uncertainties this paper develops a framework for categorizing the uncertainties faced by firms operating internationally and outlines both financial and strategic corporate risk management responses

seasonal adjustment in a market for female agricultural workers this article explores seasonal adjustment in the market for temporary agricultural labor we estimate a model of participation allowing for unobserved heterogeneity and endogeneity selection bias using daily observations from chilean panel data and a model of daily earnings results indicate that seasonal wage variation is an important aspect of labor market adjustment contributing to a large change in labor force participation the labor force participation rate of women is significantly more elastic to changes in the expected wage than is that for men nonetheless we find evidence of substantial open unemployment during the slack season especially for females probably due to frictional and efficiency wage effects

method of pay in finnish industry in this paper a dynamic economic model of the method of pay is derived to serve as a background to an empirical study the model gives for example a prediction that employees who have a short attachment to a firm are apt to engage in incentive work special attention is paid to unobserved heterogeneity across workers in a logit model of the method of pay a new estimator based on a small variance approximation of unobserved heterogeneity is derived

examining the link between carbon dioxide emissions and the share of industry in gdp modeling and testing for the g 7 countries abstract in this paper the relationship between per capita co 2 emissions and the share of industrial value added in gross domestic product gdp for the g 7 countries is discussed using a novel approach it is assumed that per capita co 2 emissions are correspondent to the share of industrial value added in gdp a model is developed using hidden markov process to search this initial assumption in the model the data for industrial share in gdp are assigned to be the observations while the data for per capita co 2 emissions represent the hidden process which may be then predicted using the ratio of industrial value added to gdp the data set covers the period from 1970 to 2008 and the model is tested for the g 7 countries the study findings show that except in the case of canada the hidden markov model performs reasonably well in tracking per capita co 2 emissions the study results provide also a basis for a number of policy implications

earnings productivity and performance related pay jobs with performance related pay prp attract workers of higher ability and induce workers to provide greater effort we construct an integrated model of effort and sorting that clarifies the distinction between observable and unobservable ability and the relationship between earnings and productivity predictions are tested against data from the british household panel survey bhps the prp raises wages by 9 for men and 6 for women theoretical calculations show that these estimated earnings differentials represent average productivity differentials net of monitoring costs at the marginal firm using prp but not of the disutility of additional effort expended by workers

fifty years of methodological trends in jibs why future ib research needs more triangulation we analyze methodological trends in empirical research in jibs from 1970 2019 our results point to the prevalence of the following patterns there has been an increase in the use of 1 large scale longitudinal cross national datasets 2 complex analytical techniques including the incorporation of multiple analytical techniques within the same study but 3 a decline in the diversity of methods in use we relate these trends to the underlying social technical and communicative conventions in the journal during the 50 year period the observed patterns are consistent with theory that posits scientific fields entrench a dominant paradigm over time resulting in a restricted set of methodological options being selected such restrictions jeopardize the quality of research because the study of any phenomenon requires the use of multiple methodological procedures to avoid the systematic biases errors omissions and limitations introduced by any single option therefore we propose the use of triangulation as a strategy for building methodological alternatives into research designs institutionalization of this principle in the field of international business has the potential to enhance both the rigor and scope of inquiry of future research

country familiarity in the initial stage of foreign market selection focusing on the initial stage of foreign market selection i e narrowing a set of potential countries from which to make a final choice we theorize that manager s country familiarity influences both the decision making process and outcome we hypothesize that with increasing country familiarity a manager investment of cognitive effort process first increases and then decreases and b the likelihood of a country being included for further consideration outcome also increases and then decreases we further hypothesize that the effects of country familiarity are contingent on the managers international experience empirical evidence from verbal protocol analyses of managers provides strong support to our arguments these findings contribute to the emergent literature on the critical role of cognition in decision making about foreign markets manager cognition potentially influences sequential non sequential entry decision making possibly explaining some previously observed exceptions to internationalization process theory the contingent role of international experience further stresses that the influence of cognition in internationalization decision making is both important and complex involving at least innate cognitive processes idiosyncratic knowledge and international experience we discuss the theoretical implications along with practice implications of country familiarity and intuitive decision making in foreign market selection

estimation of real gdp and unrecorded economy in turkey based on environmental data abstract this paper estimates the real gross domestic product gdp and unrecorded economy for turkey using the kalman filter technique using different tests most of the research articles on energy policy investigate the causal relationship between energy consumption and gdp for different countries on the other hand other studies on climate change try to show the effects of both energy consumption and gdp on carbon dioxide co2 emission since the unreported economy has an important weight in developing countries where the recorded or official gdp suffers from considerable measurement problems investigation of the relationship between the recorded gdp and energy consumption may lead to biased results in this paper the economic variables gdp country population as well as environmental variables co2 emission forest area are used in order to estimate gdp which is an unobserved variable in our model the results clearly indicate that first the true gdp in turkey that our model estimates is higher than the observed recorded gdp in the whole period of observation 1973 2003 and the size of unrecorded economy varies between 12 and 30 percent of the observed gdp second the gap between the true gdp and the observed gdp has an increasing trend third if the change in gdp per primary energy supply is smaller than the change in co2 per primary energy supply then there may exist unrecorded economy

salaries and piece rates compensation can take many forms remuneration can come as pecuniary payments as fringes such as health and pension benefits or as a nonpecuniary reward such as plush office furniture that costs the firm less than it benefits the worker a significant literature has examined the trade offs between pecuniary and nonpecuniary compensation the modern work having been pioneered by rosen 1974 more recently another body of literature has examined the selection of method of total compensation ignoring the distinction between pecuniary and nonpecuniary payment this work has focused on risk and incentive factors it has resulted in comparisons of compensation based on absolute output levels to that based on relative performance it has also led to explorations of the relation of compensation to experience over the work life 2 little attention has been paid to what may be among the most important and obvious distinction in methods of compensation namely the choice between a fixed salary for some period of time that is paying on the basis of input and some workers receive compensation that is specified in advance and not directly contingent on performance instead it depends on an input measure such as hours worked for others compensation is directly related to output this essay is an attempt to predict a firm s choice of compensation method piece rates are defined more rigorously among the more important factors discussed are worker heterogeneity incentives sorting considerations monitoring costs and asymmetric information one result is that salary workers tend to be of lower quality and more homogeneous than are their piece rate counterparts numerous additional results are provided helpful comments by victoria lazear and yoram weiss are gratefully acknowledged support was provided by the department of labor and the national science foundation 1 see lazear and rosen 1981 stiglitz 1981 holmstrom 1982 green and stokey 1983 2 see lazear 1979 1981 and harris and holmstrom in press

unions and cooperative behavior the effect of discounting using union contract and industry wage survey data this article examines the effect of discounting on cooperative bargaining behavior by unions and firms game theory predicts that higher discount rates raise the temptation to defect from cooperation measures of cooperative behavior included the presence of merit pay incentive pay wage employment guarantees or labor management study committees discount rates were proxied by the relevant industry s failure rate failure rates generally had negative effects on cooperation industry wage survey results showed larger effects for union than non union establishments providing support for the union bargaining framework

outward direct investment by indonesian firms motivation and effects as part of indonesia s opening to the world economy over the past several years indonesian firms have begun to invest abroad this study compares indonesian firms that have invested abroad and those that have not and with third world multinationals and other mnes it found that the performance of indonesian firms that invested abroad improved dramatically after their investment in terms of management expertise exports quality and costs relative to their past performance and relative to the other firms in the sample these results support a conclusion that indonesian multinationals have gone abroad not only to exploit their ownership advantages but also to access and develop ownership advantages they did not previously possess

higher and higher performance pay and wage inequality in germany performance pay is of growing importance to the wage structure as it applies to a rising share of employees at the same time wage dispersion is growing continuously this leads to the question of how is the growing use of performance pay schemes related to the increase in wage inequality german socio economic panel soep data for the years 1984 2009 confirm the large increase in the application of performance pay schemes this in turn led to an upward shift of the wage distribution by about one log point however it did not contribute to the growth in wage inequality even though wage inequality grew within the group of employees who receive performance pay it grew even more so within the group who do not still the wage difference between both wage schemes remained flat over the distribution the empirical analysis employs sequential decompositions in a quantile regression framework

mnc subsidiary channel relationships as extended links implications of global strategies foreign subsidiaries of multinational corporations mncs rely on external partners such as channel partners to achieve global objectives we conceptualize the subsidiary s channel partner as an extended link of the mnc s internal network thus the subsidiary s adaptation and execution of the mnc s global strategies should influence the subsidiary s channel relationship and performance building on the strategy environment alignment framework we study the influence of mnc global strategies global efficiency multinational flexibility and worldwide learning on a subsidiary s channel commitment and the moderating influence of the host country environment survey data from german and japanese mncs in the united states indicate the importance of global strategies to a channel relationship for example we find that an emphasis on multinational flexibility is detrimental but worldwide learning benefits the subsidiary s channel commitment we also find that the host country environment plays a contingent role for example a global efficiency strategy is beneficial for channel commitment in a stable environment but detrimental in a dynamic environment our research offers key implications for mncs we suggest that when mncs decide to lay emphases on global strategies the mncs should consider not just their internal subsidiary network but also their extended channel partner links that function in foreign markets

the trade off between supervision cost and performance based pay does gender matter the study adds to the literature by providing new empirical evidence consistent with efficiency wage theory and by providing estimates of the average cost of supervising a worker by industry this research uses the 1996 wave of the nlsy and incorporates estimates of supervision cost computed from industry classifications we further detect presence of no gender differences neither in risk averseness nor in productivity gains associated with cost of supervision and performance based pay while the findings imply that employers should consider the incentive effects of supervision and performance based pay when constructing pay schemes there is no need for employers to devote resources to constructing gender specific payment mechanisms our evidence suggests that profit maximizing firms should treat males and females equally and develop gender neutral pay schemes

the use of process and output controls in foreign markets this study builds upon previous control research to propose a model of formal controls used in managing activities performed in foreign markets theoretically derived contingency relationships are also proposed to assess the performance consequences of different formal control types the findings support the importance of internal and external sources of uncertainty in determining the type of control used partial support was also found for the premise that the fit between the type of control used and the type of uncertainty perceived will contribute to superior performance

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

moral hazard and risk spreading in partnerships partnerships provide a classic example of the tradeoff between risk spreading and moral hazard the degree to which firms choose to spread risk and sacrifice efficiency incentives depends upon risk preferences for which data are typically unavailable we use a unique dataset on medical group practice to investigate this tradeoff risk aversion leads to compensation arrangements which spread risk through greater sharing of revenues we find that compensation arrangements with greater degrees of revenue sharing significantly reduce physician effort the results imply that changing the method of physician payment from fee for service to capitation will dramatically reduce physician effort