The Foundations of International Business: Cross‐Border Investment Activity and the Balance between Market‐Power and Efficiency Effects

The foundational international business (IB) scholarship grappled with whether multinational enterprises (MNEs) are largely efficiency‐enhancing or market‐power inducing institutions. Contemporary scholarship, however, often associates foreign direct investment (FDI) with efficiency‐enhancing properties and thus neglects the market‐power interpretation of the MNE. Such an imbalance is problematic given that the theoretical and empirical justifications behind the field's embrace of the efficiency interpretation are not fully evident. Instead, both efficiency and market‐power effects are seemingly present in cross‐border investment activity. Based on a comprehensive sample of up to 4,361 cross‐border investments materializing between 1986 and 2010, we present theoretically‐grounded hypotheses with regard to when market‐power effects will tend to dominate efficiency effects. We find that cross‐border investments undertaken by emerging‐market MNEs in both developed and emerging markets tend to involve substantial efficiency effects and minimal market‐power effects when compared with the cross‐border investments undertaken by developed‐country MNEs in both developed and emerging markets.     

Counterfactual analysis of bank mergers

We introduce a counterfactual analysis of banks mergers, combining the pre-merger equilibrium setting with post-merger environmental characteristics, while accounting for endogenously propagated changes in market structure. Using this procedure we are able to estimate the effects on loan flows and interest rates that would have been observed if the pre-merger equilibrium was not altered. Results are obtained for firms, households, and banks inside and outside the merging circles separately. We find that mergers increased firms’ access to credit, but had an opposite effect on households and led to a widespread decrease in interest rates.     

Estimating Willingness to Pay for the Development of a Peace Park Using CVM: The Case of the Korean Demilitarized Zone

Conflicts remain an integral part in shaping the world. Tensions on the Korean Peninsula are no exceptions. The Korean DMZ (Demilitarized Zone) World Peace Park has been proposed to help obtain peace by erasing the memories of war and creating new beginnings of trust, cooperation, and unity on the Korean Peninsula. With their ties to geographical space and conflict, peace park research provides an excellent platform for both activism and research in positive peace. Little, however, is known about peoples’ willingness to pay (WTP) for the creation of peace parks, in general, and specifically for the development of the Korean DMZ World Peace Park. Using contingent valuation methods, the weighted average WTP for development of the Peace Park is $49.03 per household per year. It appears South Koreans are willing to pay not only for the conservation of the DMZ, but also for the peace and unification of the Korean Peninsula the Peace Park may bring to the area.     

Leisure corrupted: an artist's portrait of leisure in a changing society

Theoretical arguments that leisure is the basis of any culture are available. Yet, scarcity in the literature of serious consideration of leisure in non-Western societies demonstrates that the topic has been neglected. One possible explanation for the failure to achieve progress in cultural comparisons of leisure is the lack of data. At least three approaches permit this type of comparison. This paper focuses on a literary approach by investigating how East Africa's most prominent creative writer, Ngugi wa Thiong'o, treats leisure in his most important English language novels. This analysis centers on two of his novels, A Grain of Wheat and Petals of Blood. The two novels are complex, intricate stories drawing heavily on Western philosophy and literature as well as African folklore. Although Ngugi suggests that leisure is the foundation of civilization, the fibre that makes the cloth of society, he portrays leiusre distinctively in social terms likely to surprise those familiar with Western traditions of leisure.     

The Impact of In‐Store Greenery on Customers

The incorporation of greenery in retail areas has scarcely been explored in environmental psychology studies. In a 2 × 2 experimental design, the effect of in‐store vegetation on consumer emotions and responses toward the store was studied, considering the moderating role of the information rate of the retail setting. While introducing foliage in the store environment did not evoke feelings of excitement, it was found to elicit pleasure and to reduce stress in a “complex” store interior. Given the impact of pleasure and stress on consumers’ approach/avoidance responses, these findings support the potential of integrating greenery, particularly in “spatially dense” stores.     

Comparative advantage and unemployment

Worker heterogeneity in productivity and labor supply is introduced into a matching model. Workers who earn high wages and work high-hours are identified as those with strong market comparative advantage—high rents from being employed. The model is calibrated to match separation, job finding, and employment in the SIPP data. The model predicts a big drop in employment for workers with weak comparative advantage during recessions. But the data show that workers with strong comparative advantage also display sizable employment fluctuations, implying that aggregate employment fluctuations are not explained by the responses of workers with small rents to employment.     

Group-based pay-for-performance plans and firm performance: The moderating role of empowerment practices

As the popularity of group-based pay-for-performance plans persists, compensation researchers are exploring the conditions under which these plans contribute to the financial performance of firms. Based on a sample of 1,933 employees from 415 companies in South Korea, we found that group-based pay-for-performance plans enhance both objective and subjective measures of firm performance. Furthermore, consistent with the contingency perspective of fit, we found that empowerment practices positively moderate the relationship between group-based pay-for-performance plans and firm performance. These findings suggest that empowerment can enhance the effectiveness of such pay plans. We discuss implications for research and practice.     

An examination of the nature of the relationship between Leader-Member-Exchange (LMX) and turnover intent at different organizational levels

The present study investigates the nature of the relationship between Leader-Member-Exchange (LMX) quality and turnover intent in the South Korean hospitality industry. Self-administered survey questionnaires were collected from 232 frontline workers as well as 88 supervisors employed in hotel properties. Prior research has produced mixed results, finding linear relationships between LMX quality and turnover intent in some studies and non-linear relationships in others. Traditional hierarchical regression analyses were performed to test the nature of the relationship in these two samples. We found evidence for a U-shaped curvilinear relationship between LMX and turnover intent for non-supervisory employees, but only a linear relationship for supervisory employees. Conceptual and practical implications and recommendations for future research are provided.     

An acceptance model for an Internet protocol television service in Korea with prior experience as a moderator

This study examines the effect of users' prior experience on the adoption behaviour in the Internet protocol television (IP TV) service domains. This article proposes a new acceptance model for an IP TV service considering the moderating effect of experience and verifies the model with an empirical study. Respondents are classified into either experienced or inexperienced groups according to their prior experience with the IP TV service. The results indicate that motivational factors used in our study affect behavioural intention. In addition, this study shows that the influence of extrinsic motivational factors on the behavioural intention are stronger for the experienced group than the inexperienced group and the influence of intrinsic motivational factors on the behavioural intention are stronger for the inexperienced group than the experienced group. This article concludes with study implications, as well as limitations and future research directions.     

Korea's first industrial revolution, 1911–1940

We estimate output and population of colonial Korea to show that per capita output grew 2.3% with population expanding 1.3% per year from 1911 to 1940. Growth accounting indicated that productivity advance accounted for roughly one half of the per capita output growth. Primary production as a share of GDP fell from 69% to 42% during the period. Rapid productivity improvement caused nontradable sectors to become increasingly important, while capital accumulation drove industrialization. Demographic expansion, per capita output growth, and structural change occurred at considerably faster rates in northern than in southern provinces.