Empirical Tests of the Pollution Haven Hypothesis When Environmental Regulation is Endogenous

The pollution haven hypothesis (PHH) posits that production within polluting industries will shift to locations with lax environmental regulation. While straightforward, the existing empirical literature is inconclusive owing to two shortcomings. First, unobserved heterogeneity and measurement error are typically ignored due to the lack of a credible, traditional instrumental variable for regulation. Second, geographic spillovers have not been adequately incorporated into tests of the PHH. We overcome these issues utilizing two novel identification strategies within a model incorporating spillovers. Using US state‐level data, own environmental regulation negatively impacts inbound foreign direct investment. Moreover, endogeneity is both statistically and economically relevant. Copyright © 2015 John Wiley & Sons, Ltd.     

Rethinking Management Theory and Practice for the Indian Context: An International Management Perspective

The Indian economy characterized variously as a slumbering giant, powerful tiger, and the most promising market has witnessed a slowdown, occasional disturbances in the industrial relations space, and attention of the world in the last five years. In this special issue, we raise pertinent questions and present research on multiple dimensions of the dynamic and rapidly changing business environment of India. The suitability of management models and frameworks developed in the North American contexts in emerging markets like India and China is questioned. One example of how the well‐established models in the literature on success of international joint ventures were insufficient to explain the success of three international joint ventures in the insurance space in India is presented as case in point. Finally, the nine papers that materially contribute to the theme of this special issue are introduced. © 2016 Wiley Periodicals, Inc.     

Choice Consistency and Preference Stability in Test-Retests of Discrete Choice Experiment and Open-Ended Willingness to Pay Elicitation Formats

This study tests the temporal stability of preferences, choices and willingness to pay (WTP) values using both discrete choice experiment (DCE) and open-ended (OE) WTP elicitation formats. The same sample is surveyed three times over the course of two years using each time the same choice sets. Choice consistency is positively correlated with choice certainty and choice complexity. The impact of choice complexity fades away in time, most likely as a result of learning and preference refinement. Although the OE WTP values remain stable over a time period of 2 years as in previous stated preference studies, DCE based WTP measures differ significantly, suggesting their use in benefits transfer may be limited.     

Household Satellite Account for France

We estimate in a household satellite account (HHSA) the value of French domestic production in 2010 and 1998, using the input method and following Eurostat's recommendations. In line with previous studies, we find that extending the system of national accounts (SNA) frontier of production to domestic activities (house chores, cooking, care …) has a sizeable effect on key macroeconomic indicators (+33 percent GDP, ?5 p.p. GDP growth, +50 percent disposable income, +58 percent consumption, and ?10 p.p. of purchasing power growth). We conduct a sensitivity analysis to various methodological issues which have not yet been settled by an international benchmark. Quantitatively, the two most important issues are the boundary of household production—we favor a relatively narrow definition—and the use of a gross or a net wage—we prefer gross wage‐. However, estimates are much less sensitive to otherwise greatly debated issues such as which substitute wage to use.     

Measuring and testing the long-term impact of terrorist attacks on the US futures market

This study compares the accuracy and information content of economic forecasts for G7 countries made in the 1990s by the OECD and IMF. The benchmarks for comparison are the average forecasts of private sector economists published by Consensus Economics. With few exceptions, the private sector forecasts are less biased and more accurate in terms of mean absolute error and root mean square error. Formal tests show these differences are statistically significant for forecasts of real growth and production, less so for forecasts of inflation and unemployment. Overall, there appears little information in the OECD and IMF forecasts that could be used to reduce significantly the error in the private sector forecasts.     

Scale economies and input price elasticities in microfinance institutions

We evaluate the efficiency of microfinance institutions (MFIs) using a structural approach which also captures these institutions’ outreach and sustainability objectives. We estimate economies of scale and input price elasticities for lending-only and deposit-mobilizing MFIs using a large sample of high-quality panel data. The results confirm conjectures that improvements in efficiency can come from the growth or consolidations of MFIs, as we find substantial increasing returns to scale for all but profitability-focused deposit-mobilizing MFIs. Our results support the existence of a trade-off between outreach and sustainability. All inputs are inelastic substitutes, but we find differences in own-price elasticities in lending-only and deposit-mobilizing MFIs.     

Scarcity Appeal in Advertising: Exploring the Moderating Roles of Need for Uniqueness and Message Framing

In this article we examine differences in the impact of message framing and scarcity appeal types in advertisements on consumers with varying levels of need for uniqueness (NFU). Results from two experimental studies support a two-way NFU × scarcity interaction, wherein participants with lower levels of NFU show a greater impact of demand (versus supply) scarcity appeal on their attitudes and purchase intentions; whereas participants with higher levels of NFU show a greater impact of supply (versus demand) appeal. In addition, we found support for a three-way interaction, which shows that, under both gain and loss frames, participants with lower levels of NFU prefer demand over supply appeal; whereas under the loss frame, participants with higher levels of NFU prefer supply over demand appeal. We discuss the conceptual contribution and managerial implications of these findings.     

Regional determinants of ICT new firm formation

The role of regional determinants in new entrepreneurs’ location decisions is analyzed in the French information and communication technologies (ICT) sector. As we focus on the emergence of this industry, our dataset includes every new ICT firm in France in the period 1993–2001. We find evidence for the positive effect of co-location with incumbent ICT firms and some effect of knowledge spillovers. The effects of agglomeration, entrepreneurial capital and human capital are mixed.     

On the (non-)lattice structure of the equilibrium set in games with strategic substitutes

This paper studies models where the optimal response functions under consideration are not increasing in endogenous variables, and weakly increasing in exogenous parameters. Such models include games with strategic substitutes, and include cases where additionally, some variables may be strategic complements. The main result here is that the equilibrium set in such models is a non-empty, complete lattice, if, and only if, there is a unique equilibrium. Indeed, for a given parameter value, a pair of distinct equilibria are never comparable. Therefore, with multiple equilibria, some of the established techniques for exhibiting increasing equilibria or computing equilibria that use the largest or smallest equilibrium, or that use the lattice structure of the equilibrium set do not apply to such models. Moreover, there are no ranked equilibria in such models. Additionally, the analysis here implies a new proof and a slight generalization of some existing results. It is shown that when a parameter increases, no new equilibrium is smaller than any old equilibrium. (In particular, in n-player games of strategic substitutes with real-valued action spaces, symmetric equilibria increase with the parameter.)