Asymmetric effects of exchange rate movements on traditional and modern services exports: Evidence from a large emerging economy

The service sector in India has emerged as the ‘new engine of growth’ with an increasing share in output and exports. In this paper we analyse the effect of real exchange rate movements on service exports of India, incorporating goods exports, financial development, FDI inflows, world demand and the role of globalization as drivers. We find that while traditional service exports are negatively and significantly affected by the real exchange rate movements, the modern service exports are negatively but not significantly affected. By applying the asymmetric cointegration approach, the results also confirm the non-existence of any asymmetric relationship between the real exchange rate and service exports in India. Further, the results also show that the supply augmenting and demand-side factors are more dominant than the exchange rate to affect service exports from India.     

When new product development fails in China: mediating effects of voice behaviour and learning from failure

This paper investigates conflicts following a new product development (NPD) failure. Conducted in a Chinese business setting, the study examines whether voice behaviour and learning from failure mediate the relationship between task- and emotional conflict emerging from NPD failure. Our findings indicate that voice behaviour and learning from failure are necessary to effectively reduce task and emotional conflict and thus to enhance future NPD. Specifically, it is revealed that emotional conflict leads to a reduced level; and that voice behaviour and learning from failure are significant mediators that influences the relationships between emotional and task conflicts with it.     

An Exploratory Study on Nonlinear Causality Among the MILA Markets

According to conventional portfolio theory, an increase in the interconnectedness of international financial markets may reduce the potential for constructing diversified portfolios. This article explores the implications of the creation of the Latin American Integrated Market (MILA)¹ over the dependence structure of its members using correlation and cointegration analysis as well as linear and nonlinear Granger causality tests. The creation of MILA aimed to enhance the integration process that Latin American financial markets “naturally” present while still providing diversification opportunities to investors. The results of our empirical analysis suggest that such objective is being achieved. Evidence of a rise in cross-country linear correlations and their linear causal relationship supports the idea of an increasing financial integration process in the region, while the absence of cointegration and the weakening of the nonlinear causal relationship favors the creation of diversified regional portfolios. These findings provide valuable insights for investment portfolio designers, regulators, and supervisors.     

A barrier options approach to modeling project failure: The case of hydrogen fuel infrastructure

Hydrogen fuel cell vehicles have the potential to contribute to a sustainable transport system with zero tailpipe emissions. This requires the construction of a network of fuel stations, a long-term, expensive and highly uncertain investment. We contribute to the literature by including a knock-out barrier option in an n-fold compound real option model to take account of immediate project failure in a multi-stage sequential investment project. Our model allows to explicitly incorporate the default possibility of large-scale energy infrastructure projects. In our case study of hydrogen infrastructure development, we find that even for the least conservative valuation method no profitable business case can be made for the development of hydrogen as a sustainable transportation mode. However, we do provide some suggestive scenarios that plausible tax schedules can be designed to overcome the starting problems for hydrogen infrastructure development.     

Revisiting the expatriate failure concept: A qualitative study of Scandinavian expatriates in Hong Kong

This article advances the understanding of expatriate failure, which remains a contested social phenomenon in international work life as well as scholarly research. The study challenges the definition of expatriate failure and its inherent biases, i.e., the epistemological primacy of the firm level and the failure/success binary. We argue that this qualitative study of 51 Scandinavian expatriates in Hong Kong can contribute to advancing theory on the expatriate failure concept by asking individual expatriates what constitutes failure to them. By applying social constructionist and social anthropological ideas to the expatriate failure concept debate, we develop the internationality thesis which demonstrates a discrepancy between the expatriates’ perceptions of successful international assignments and the actual nature of their lived lives; many expatriates desire to enrich their lives through experiencing an international/intercultural and adventurous lifestyle, but, in fact, living lives with limited intercultural exposure and interaction. We conclude by proposing a reconceptualisation of expatriate failure in terms of offering both a new definition and approach to researching expatriate failure in which time/duration, context, and geographical location need to be taken into account. We believe the new approach can overcome some of the empirical unsoundness of mainstream definitions.     

Tracing VARDI coefficients: a proposal

ABSTRACT

We propose a new approach for tracing the so-called ‘value-added-(re)distribution-important coefficients’ (in short the VARDI coefficients) in a world input–output model. From the perspective of a selected group of economies, VARDI coefficients may be defined as those elements in world input–output matrix in the case of which a small change in their levels leads to the maximization of a share of this group of economies in value added in global value chains. Due to the rapid development of the World Input Output Database, this approach may be easily applied in empirical research to different groups of countries and sectors in world IO models. In an illustrative empirical case study, we use the new approach in order to answer a question regarding what the main directions of the future macroeconomic policy of the U.S. could be in order to ensure the maximization of the country’s share in global value added.     

Green technology innovation: Anatomy of exploration processes from a learning perspective

This paper examines how established firms use their core competences to diversify their business by exploring and ultimately developing green technologies. In contrast to start‐ups dedicated to a green mission, diversifying into green markets by developing new products based on existing core competences has proven to be challenging. This is because the exploration processes to find a match between green technology opportunities and internal competences is complex and new to most established firms. This paper gains insights into exploration processes for green technologies and the learning modes and outcomes linked to these processes. We examined exploration processes at the microlevel in an embedded case study of an engineering firm using a combination of the “fireworks” innovation process model and organizational learning theory. First, we found that developing green technologies involves a long‐term exploratory process without guarantee of (quick) success and likely involves many exploration failures. Second, as exploration unfolds along multiple technology trajectories, learning occurs in individual exploration paths (on‐path), when new paths are pursued (path‐initiation), and when knowledge from one path is spilled over to subsequent paths (across‐paths). Third, to increase their chances for success, firms can increase the efficiency of exploration by fostering a failure‐friendly organizational culture, deliberately experimenting, and purposefully learning from failures.     

Bilateral Trade Balances of Malaysia with Her 11 Largest Trading Partners: New Evidence from Asymmetry Cointegration

Research on the effects of exchange rate changes on the trade balance is now moving in a new direction, by investigating whether exchange rate changes have symmetric or asymmetric effects. The approach that relies upon separating depreciations from appreciations introduces nonlinearity into the adjustment process and relies upon the nonlinear ARDL approach of Shin et al. [2014. Modelling asymmetric cointegration and dynamic multipliers in a nonlinear ARDL framework, in: R. Sickels and W. Horrace (Eds), Festschrift in Honor of Peter Schmidt: Econometric Methods and Applications, 281–314 (Springer)]. When we applied this new method to the bilateral trade balances of Malaysia with each of her 11 largest partners, we found adjustment asymmetry in all models, short-run impact asymmetry effects and long-run asymmetry effects in the trade balance models between Malaysia and Asian countries.     

Does delaying service-failure resolution ever make sense?

Conventional wisdom suggests that service providers should respond to their failures as quickly as possible. Some research, however, points out that delaying resolutions may produce highly desirable results. The study here investigates these competing views by examining under which conditions an immediate or a delaying resolution produces more positive consumer responses in term of re-patronage and negative word-of-mouth intentions. Based on the concept of service separation, this research identifies an interaction effect between service separation (separated service, non-separated service) and response timing (immediate response, delaying response) on consumers' post-consumption intention. This research also finds that the relationship between service separation-response timing interaction and consumer response is mediated by consumers' negative emotions. This study contributes to refining our understanding of consumer psychology in service recovery. Practically, the studies also enable service providers to better allocate their resources to recover different types of services' failure.     

Short-term safety or long-term failure? Empirical evidence of the impact of securitization on bank risk

Based on a sample of U.S. commercial banks from 2002 to 2012, this paper shows that bank loan securitization has a significant and positive impact on both Z-scores and the likelihood of bank failure, indicating a short-term risk reduction and a long-term risk increase effect. We also find disparate impacts between mortgage and non-mortgage securitization. Loan sale activities are found to have a similar impact to securitization.