Foreign Direct Investment,Economic Growth,and the Human Capital Threshold: Evidence from US States*

The United States has experienced a dramatic increase in foreign direct investment (FDI) in recent years. While foreign firms bring immediate benefits of high‐paying jobs, data limitations have prevented detailed study on FDI's long‐term effects on the states receiving it. By creating a new stock measure of FDI based on employment, we are able to capture these long‐term effects. Results demonstrate that FDI has a greater impact on per capita output growth than domestic investment for US states that meet a minimum human capital threshold. Ironically, the most active states in the recruitment of FDI tend to fall below this threshold.     

Insider trading in credit derivatives

Insider trading in the credit derivatives market has become a significant concern for regulators and participants. This paper attempts to quantify the problem. Using news reflected in the stock market as a benchmark for public information, we find significant incremental information revelation in the credit default swap market under circumstances consistent with the use of non-public information by informed banks. The information revelation occurs only for negative credit news and for entities that subsequently experience adverse shocks, and increases with the number of a firm's relationship banks. We find no evidence, however, that the degree of asymmetric information adversely affects prices or liquidity in either the equity or credit markets.     

Local public goods and private suppliers: Musical suburbs replayed

This paper deals with the existence of private market suppliers in a standard local public goods model. The result of this modification can be a cycling process instigated by rich households rather than poor households. The theoretical model provides empirical implications for capitalization studies and policy implications for the provision and financing of local public goods including education.     

Do What Consumers Say Matter? The Misalignment of Preferences with Unconstrained Ethical Intentions

Nearly all studies of consumers’ willingness to engage in ethical or socially responsible purchasing behavior is based on unconstrained survey response methods. In the present article we ask the question of how well does asking consumers the extent to which they care about a specific social or ethical issue relate to how they would behave in a more constrained environment where there is no socially acceptable response. The results of a comparison between traditional survey questions of “intention to purchase” and estimates of individuals willingness-to-pay for social attributes in products reveal that simple survey questions are too “noisy” to provide operationally meaningful information and overstate intentions to a considerable extent. Pat Auger is Associate Professor at the Melbourne Business School. Timothy M. Devinney is Professor and Professorial Research Fellow at the Australian Graduate School of Management.     

Product Location with Foresight

Traditional location literatureconcludes that firms will optimally differentiate inorder to alleviate a tendency toward competitivepricing. However, it has recently been shown thatfirms will minimally differentiate if they (correctly)anticipate an absence of price competition. Thispaper examines the relationship between productlocation and the sustainability of cooperativepricing, in horizontally and vertically differentiatedmarkets. Further, it describes equilibrium locationswhen firms are able to choose their locations jointlyand when they must choose independently.     

Reducing uninformed responses: The effects of product‐class familiarity and measuring brand knowledge on surveys

Consumers often give answers to survey questions about which they are uninformed. Although research has documented this phenomenon and examined the conditions under which it occurs, the current research project is the first to examine how survey researchers might reduce uninformed response bias through the use of additional questions added to surveys that measure knowledge of brands for which consumers might be uninformed. In the current study, adding brand knowledge questions pertaining to an unknown (fictitious) brand reduced the likelihood of respondents providing uninformed responses when later asked to evaluate that brand. However, the effects of asking for brand familiarity on uninformed response rates differed by consumers' level of product‐class familiarity and the relative placement of the brand knowledge and brand attitude questions on the survey. Brand knowledge questions can suggest the existence of brands, placing them within a knowledge schema, thus leading to more uninformed responses from consumers low in product‐class familiarity. These results, coupled with recent other research findings suggest that researchers must consider the effects of related knowledge on what have been previously considered completely uninformed responses. © 2007 Wiley Periodicals, Inc.     

A systems approach to integrate manpower planning and operation

Manpower planning frequently involves aggregated planning. This paper addresses the importance of linking manpower planning with operational process. We developed a systems approach to integrate the gross level of manpower planning and the detailed level of policy execution. This integrated system could improve the effectiveness of policy making.