Welfare implications of international financial integration

Focusing on technology spillover from foreign direct investment (FDI) inflows, this paper investigates the welfare implications of financial integration. Calibrations of a neoclassical growth model with international technology diffusion show that when technology catch-up due to FDI inflows is considered, the welfare gains from financial integration substantially increase, which contrasts with the small gains from additional, capital-accumulation effects of financial integration. The estimates suggest that by further enhancing financial integration, emerging Asian economies, such as the People's Republic of China (PRC) and the largest four Association of Southeast Asian Nations (ASEAN) countries, will experience substantial welfare gains.     

Asymmetric trade protection leading not to productivity but to export share change

This article revisits a classical theme in economics, that is, the relationship between trade protection and economic performance, with an improved treatment of the endogeneity of tariffs and with consideration of alternative performance criteria. This paper also considers the effects of asymmetric protection, such as higher tariffs on consumer goods and lower tariffs on producer goods. Using sectoral data on Korean manufacturing during the period from 1967 to 1993, this study finds that the effect of trade protection by tariff tends to show up not in terms of total factor productivity but in terms of revealed comparative advantage and export shares of sectors. Such an effect tends to be greater in consumer goods, which are the main targets of promotion by higher tariffs. This study verifies the potentially positive role of tariffs under certain conditions, especially under discipline from world markets.     

Impact of Sales Call Adaptiveness and Customer Willingness on Sales Call Length: A Cross-Country Study of India,China, Korea,and Philippines

ABSTRACT

In this empirical study across four countries (India, China, Korea, and Philippines), we examine the impact of sales call adaptiveness and customer willingness on sales call length (duration) of salespersons in these four countries. Sales call length as well as sales call quality—although important constructs in sales—are still underresearched in the domain of sales management. Our study in these four emerging markets sheds new light on enhancing sales force effectiveness. Using survey data from 847 salespersons in four countries, we analyze using multivariate analysis, and our results suggest that sales force effectiveness can be enhanced by giving them the autonomy to decide the sales call length based on the prospect quality. We also demonstrate that salespeople indulging in sales-oriented behaviors may be detrimental to the long-term relationship with customers. Emphasis on relational sales approaches would reduce sales practices such as pitching products or services to unwilling customers. Our study also highlights the interactive role of customer willingness and sales adaptiveness. We found several inter-country differences across sales practices in four countries, which have several meaningful managerial implications.     

Entrepreneurial applications of the lean approach to service industries

Service industries have grown significantly in recent years, especially in the advanced economies. The applicability of the Toyota system for manufacturing excellence to other industries has been widely studied. This paper seeks to contribute to this growing body of research by exploring the applications of the Toyota approach, particularly the lean system in the service sector. The paper examines the information systems that have enabled benefit in the service industries, to include vendor-managed inventory systems and variants, and then compares the benefits from information systems in support of supply chains. We also review why enterprise systems provide more opportunities in aiding the implementation of the lean systems. We present a case study of a South Korean supply chain system to demonstrate the entrepreneurial application of such approaches.     

The importance of understanding the shape of diverse ethnic female consumers for developing jeans sizing systems

This study has been conducted to investigate the fit issues related to the current apparel pants and jeans sizing system for diverse consumers, identifying body shape differences among ethnic groups. A total of 1335 women in a certain size range (Misses figure type sizes 2–20) were selected in the study. A Misses figure type size category is commonly used for adult women of average proportion and height. First, the body dimension differences among ethnic groups were examined with a single factor analysis of variance. Second, the fit of pants and jeans for the diverse consumers within the same size category was examined with the current standard sizing system, ASTM D5585 for adult female Misses figure type sizes 2–20. Three cases were programmed within a database: When each consumer selects a size for a pair of jeans based on (1) waist size; (2) hip size; and (3) waist height (usually pants length). And last, the results were analysed with fit comparison plots. Current jean consumers are racially diversified in the US and globally as well. This study revealed that ethnic groups had different fit problems and significant body shape differences. Even within the same figure type size category, a variety of body dimensions existed in each ethnic group. According to the fit problem assessment in this study, consumers within the same body figure type size category could not find the right fit of the pants and jeans within the current sizing system. Half of the female consumers could not find a garment to fit based on waist height (pants length) because the current sizing systems overlooked the effect of diverse consumers. This study will be useful for standardizing organizations to modify current sizing systems for diverse ethnic consumer groups as a demographic factor so that apparel companies could provide better quality of fit for their consumers in the global and local market.     

Exploring the comparative importance of online hotel reviews’ heuristic attributes in review helpfulness: a conjoint analysis approach

Online travel reviews have become increasingly important as a result of the intangible and heterogeneous characteristics of the tourism industry as well as the recent diffusion of social media. This exploratory case study intends to examine the comparative importance of the six heuristic attributes (reviewer location, reviewer level, reviewer helpful vote, review rating, review length, and review photo) with respect to review helpfulness in the online hotel review context. Moreover, the salience of the individual levels within each review attribute and the importance of the attributes in positive and negative review-rating groups are compared. In total, 1,158 reviews of a hotel on TripAdvisor were collected and analyzed through conjoint analyses. This study found that the review rating and reviewer helpful vote attributes are the two most important factors. Finally, three major propositions are suggested based on findings of the study, and several theoretical and managerial implications are discussed.     

The Squam Lake Report: Fixing the Financial System*

In these excerpts from The Squam Lake Report, fifteen distinguished economists analyze where the global financial system failed, and how such failures might be prevented (or at least their damage better contained) in the future. Although there were many contributing factors to the crisis—including “agency” problems throughout the financial system and a bankruptcy code poorly suited for reorganizing financial firms—at the core of the problem is a potential conflict between the risk-taking proclivity of financial institutions and the interests of the economy at large that must be managed at least in part through more effective regulation. The Squam Lake Report provides a nonpartisan plan to transform the regulation of financial markets in ways designed to limit systemic risk while preserving—to the extent possible and prudent—the economies of scale and scope that justify the existence of today's large financial institutions. To reduce the risks that large banks will fail, the authors call for higher capital requirements based on more effective assessments of the risks of bank assets and liabilities, as well as a new systemic regulator that should be part of the central bank. To reduce the costs of failure when it occurs, the authors propose that banks be required to create “living wills” laying out their plan to sell assets or shut down operations in the event of financial trouble. As part of that plan, regulators are urged to “aggressively encourage” banks to issue “contingent” debt capital securities that convert into equity.     

Pregnancy outcomes for medicaid patients in mandatory managed care: The Pennsylvania HealthChoices program

A number of states have adopted mandatory managed care to provide health services to Medicaid patients, raising concerns that the care provided may be of lower quality than care provided under traditional fee‐for‐service arrangements. In this article, we study the effect of Pennsylvania's mandatory managed care program, HealthChoices, on health outcomes and the cost of care for pregnant Medicaid patients. Using difference‐in‐differences, we find evidence that the adoption of managed care resulted in fewer preventable complications, particularly for more severely ill mothers, but no general reduction in costs except in the highest decile of the cost distribution.     

An Equilibrium Theory of Wage and Employment Cyclicality by Gender and by Industry

This paper presents an equilibrium theory that accounts for how cyclical patterns of employment and real wages vary between genders and across industries. Workers' self-selection of industrial sectors, gender differences in comparative advantage among sectors, sector-nonneutral shocks, and resulting mobility of workers across sectors play the key roles in explaining wage and employment cyclicality by gender and by industry. Numerical simulations demonstrate that reasonable parameter values exist under which the current model accords with several stylized facts. These parameter values are characterized most importantly by men's comparative advantage in the sector subject to larger cyclical demand shocks.     

Safety,security and peace tourism: The case of the DMZ area

It comes as no surprise that peace and tourism is an important topic today in tourism literature. Despite the strength of global tourist demand, many destinations, especially in the developing world, are facing fluctuations in tourist arrivals, due to unsafe political conditions. This study discusses the symbiosis between tourism and peace and its opposite, war, and the likely impacts of each condition on several tourist destinations. A turbulent security environment, caused by international and civil wars, coup d'etat and terrorist attacks has already demonstrated its negative impact on tourism development in many countries around the world (Taylor & Quayle, 1994). The aim of this study is to examine the relationship between safety, tranquility, peace, and successful tourism, using surveys completed by both international and domestic tourists. More specifically, it is about the effects of the absence of safety, security and peace on domestic and international tourism in the Korean demilitarized zone (DMZ) area. The general findings demonstrate that the subjects of the study view the implication of the existence of a peaceful environment on tourism favourably.