Multinational enterprises and wage costs: vertical FDI revisited

This study explores how wage costs for high-skilled and less-skilled labor in host countries affect the level of affiliate activities conducted by foreign MNEs. We find support for vertical FDI, in the sense that more FDI is conducted in countries where less-skilled labor is relatively cheap. In addition, we find that skilled-wage cost premia also affect FDI activities previously associated with horizontal FDI, i.e. local affiliate sales. Consequently, the potential effects of relative wage costs on MNE activities are large. Rough calculations suggest that more than 20 percent of US affiliate sales in 1998 can be attributed to skilled-wage cost premia.     

Image feedback effects of brand extensions: Evidence from a longitudinal field study

This paper examines the issue of image feedback effects and potential drivers of these effects by analyzing real-world extensions that have been introduced successfully in the market, using a longitudinal field study. Within the context of typical FMCG extensions, the authors find strong evidence that even for successful extensions, negative image feedback effects can occur, particularly when the perceived quality of the extension fails to meet the quality level of the parent brand. Strong brands tend to be more vulnerable to negative image feedback effects because consumers have a higher reference level for their extensions than for those of weaker brands. The likelihood of negative feedback effects decreases as the level of perceived fit and consumers’ perceptions of the general extendibility of the parent brand increases. But managers cannot, at least in the short run, mitigate negative image feedback effects through increased advertising support. Finally, the findings demonstrate that the feedback effects of a new extension product on parent brand image diminish over time.

Monetary and fiscal policy interactions in a micro-founded model of a monetary union

This paper analyzes in detail the mechanisms behind fiscal stabilization policy and the role of policy commitment in a micro-founded New-Keynesian model of a two-country monetary union, which is hit by supply shocks. We also explore the determinants of the gains from fiscal stabilization. While monetary policy with identical union members is concerned with stabilizing the union-wide economy, fiscal policy aims at stabilizing inflation differences and the terms of trade. Besides exploring optimal policies, we also consider monetary and fiscal rules. We study these rules both under coordination and non-coordination by the fiscal authorities.     

A model to analyse students’ cooperative idea generation in conceptual design

In this article we focus on the co-creation of ideas. Through the use of concepts from collaborative learning and communication theory we suggest a model that will enable the cooperative nature of creative design tasks to emerge. Four objectives of the model are stated and elaborated on in the paper: that the model should be anchored in previous research; that it should allow for collaborative aspects of creative design to be accounted for; that it should address the mechanisms by which new ideas are generated, embraced and cultivated during actual design; and that it should have a firm theoretical grounding. The model is also exemplified by two test sessions where two student pairs perform a time-constrained design task. We hope that the model can play a role both as an educational tool to be used by students and a teacher in design education, but primarily as a model to analyse students’ cooperative idea generation in conceptual design.     

Safety margins versus profit maximization

Under uncertainty, firms risk bankruptcy. We ask, in symmetric duopoly with stochastic demand, what happens when one firm minimizes the probability of negative profits while the other maximizes expected profits. When fixed costs are small, a firm can reduce the likelihood of negative profits. However, under a large fixed cost, the chance of negative profits increases upon deviation from a profit‐maximizing strategy. In any event, if one firm adopts a safety‐first strategy, the other firm has higher profits and a better survival chance by maximizing expected profit. Finally, we compare a profit maximizing to a safety‐first strategy in relation to ownership and control in firms.     

Evaluation of a dairy agri-environmental programme for restoring woody green infrastructure

Pastoral landscape woody vegetation provides ecosystem services, but potentially competes for space, light and nutrients that could provide additional farm production. A questionnaire determined the values and behaviours of New Zealand dairy farmers to evaluate voluntary agri-environmental programmes for restoring woody vegetation. Findings indicate the area is increasing, while the composition and configuration of networks are changing and redistributing. Farms with little are losing more, and those with more are gaining. Farmers are planting new areas to increase their public ecosystem services, but may not provide these services through planting and management. Barriers include insufficient private woody vegetation ecosystem services, and low rates of growth of native plants. Government incentive programmes are ineffective in overcoming barriers. Farmers may be motivated by stronger evidence of valued ecosystem services, information about their benefits and drawbacks and how to support services through planting and management. However, a targeted environmental stewardship scheme is required to overcome barriers to planting, with government and the dairy industry working together to develop and maintain a landscape-scaled woody vegetation network on private and public land. Such networks would build sustainability and resilience into dairy farming, leading to an equitably sharing of benefits and costs of their public ecosystem services.     

Getting a second chance: the role of imagery in the influence of inaction regret on behavioral intent

Prior research has demonstrated that consumers who take an opportunity and are satisfied (satisfied takers) are likely to avail of a future opportunity when it is presented again but those who forsake an opportunity and experience regret (regretful forsakers) are less likely to do so, exhibiting inaction inertia. In this research we demonstrate when and why regret for inaction may result in the intent to avail of a future opportunity and compare this intent with that of satisfied consumers. Specifically, we demonstrate in two studies that (1) when consumers forgo an opportunity and experience regret, they are motivated to avail of a similar opportunity when it is presented in the future, and (2) this intent by regretful forsakers may be more intense than that experienced by satisfied customers due to the elicitation of mental imagery regarding the anticipated consumption episode. All authors contributed equally to this paper.     

BLOCOS URBANISM: Capitalism and Modularity in the Making of Contemporary Luanda

In this article we portray and unpack the fabric of urban expansion in contemporary Luanda. In doing so, we examine interdependencies and complementarities between the organization of oil extraction off the coast of Angola, the emergence of particular modalities of modernist city planning for the expansion of its capital city, and the proliferation of cement blocks in the making of new urban forms throughout its burgeoning peripheries. By showing how urban development has unfolded through the interconnected realization of multiple kinds of systematizing blocks—namely oil blocks, city blocks and cement blocks—we analyse key material components in the production of new markets and urban spaces in the Angolan capital. By tracing forms of capitalism and modularity in the making of contemporary Luanda, we develop the concept of blocos urbanism to draw attention to modes of standardization and the production of legibility in contemporary processes of urbanization. Through this study, we aim to contribute to the conceptual apparatus for deciphering our global urban condition.     

Ponderous,Proficient or Professional? Survey Experience and Smartphone Effects in Stated Preference Research

Environmental and Resource Economics - Stated preference surveys are increasingly conducted online using internet panel samples, where a fast-growing share of respondents answer on smartphones....     

Do asylum-seekers respond to policy changes? Evidence from the Swedish–Syrian case*

Do asylum-seekers respond to policy changes in their destination country, and to what extent? We approach this question by using high-frequency data, and we focus on a sudden liberalization in Swedish policy toward Syrian asylum-seekers, which implied permanent instead of temporary residence. We show a clear and fast, yet temporary, increase in Syrian asylum applications in Sweden after the policy change. Also, the policy caused a shift – not limited to the short term – in the share of individuals arriving without family, and consequently in the share applying for family reunification. Our study adds quasi-experimental evidence to the literature on inter-country asylum flows and migration policy.