Multinational enterprises and technological spillovers: An evolutionary model

This paper analyses the determinants of the impact of foreign multinational enterprises on the technological development of domestic firms. It argues that the consequences of the foreign presence change according to market and technological conditions. An evolutionary model of technological competition between foreign and domestic firms is developed which is able to generate both vicious and virtuous circles of development in locations affected by foreign MNE activities. Theoretical analysis is tested against the empirical evidence for the UK economy (1983–1989).     

Managing human resources in the Latin American context: the case of Chile

In this article several aspects of human resource management (HRM) in Chile will be examined. Initially Chile will be analysed in the context of Latin American culture and history, as it shares a number of common features with the rest of the countries of the region. Secondly, the arrival of HRM to Chile is explored, as well as how it is affected by the particular characteristics of the country. Thirdly, HRM research literature in the specific context of Chile is reviewed and analysed. Finally, some consequences are discussed, and it is concluded that Chile shares a unique history, culture, social particularities and problems with the other countries of the region, affecting the way in which HRM is deployed in organisations. It is also concluded that more research in this context is urgently needed.     

Business cycle affiliations in the context of European integration

We study affiliations for the countries of the European Economic and Monetary Union (EMU) with Germany and the USA, using various business cycle measures derived from quarterly real GDP. These measures are Hodrick-Prescott and Baxter-King filtered series and annual growth rates. By using rolling contemporaneous and maximum (over a short lead/lag interval) correlations, we document increasing correlations of EMU countries with Germany, with these typically being largest during the 1990s. We also document a strong leading role for the USA in relation to these countries in the period since 1993, thereby correcting the fallacy that the European business cycle was disjointed from the USA for most of the 1990s.     

Supermarket responses to Wal-Mart Supercenter expansion: a structural approach

The impact of Wal-Mart in lowering incumbents’ retail prices has been well documented by previous studies using reduced form models. This article uses a structural model to examine the pricing behavior and promotion responses of incumbent supermarkets to a rapid expansion of Wal-Mart Supercenters (WMS) using the Dallas–Fort Worth milk market as a case study. Empirical results verify that WMS expansion disciplines incumbent supermarkets by decreasing oligopoly power and numbing consumer responsiveness to promotion. In addition, WMS expansion lures away price-sensitive consumers, leaving incumbent supermarkets to face more price-inelastic but lower demands for milk.     

Short-run forecasting of the euro-dollar exchange rate with economic fundamentals

We propose a fundamentals-based econometric model for the weekly changes in the euro-dollar rate with the distinctive feature of mixing economic variables quoted at different frequencies. The model obtains good in-sample fit and, more importantly, encouraging out-of-sample forecasting results at horizons ranging from one-week to one month. Specifically, we obtain statistically significant improvements upon the hard-to-beat random-walk model using traditional statistical measures of forecasting error at all horizons. Moreover, our model obtains a great improvement when we use the direction of change metric, which has more economic relevance than other loss measures. With this measure, our model performs much better at all forecasting horizons than a naive model that predicts the exchange rate as an equal chance to go up or down, with statistically significant improvements.     

The sustainable growth rate: the elephant in the room of deficit reduction

The sustainable growth rate (SGR) is a formulaic approach intended to restrain the growth of Medicare spending on physician services. Permanently replacing the SGR will cost $300 billion to $400 billion. Ten years of congressional overrides have contributed to higher Medicare spending on physician services. The absence of a replacement for the SGR leaves the federal government with a significant budget deficit exposure.     

Nudging using the ‘dish of the day’ strategy does not work for plant‐based meals in a Danish sample of adolescent and older people

Adequate nutrition is an important factor for health and well‐being in adolescents and later years. Fruits and vegetables are part of a healthy diet as important source of nutrients, but their intakes are lower than the recommendations in European countries. This study aimed to compare the choices made by adolescents and older people between three similar dishes, one based on meat, one on fish and one on vegetables, in two different conditions: a neutral (control) situation and an intervention situation in which the vegetable‐based meal was designated ‘dish of the day’. The comparisons of choices will be made within the same age group (adolescents in the control group vs. adolescents in the intervention group; older people in the control group vs. older people in the intervention group). A quasi‐randomised field trial design was used with a sample of 94 adolescents (aged 10–19 years) and 97 older people (aged ≥65 years), who were randomly allocated to intervention or control groups. In the control situation participants were asked to choose between three similar meals, one meat, one fish and one the VeggiEat dish. In the intervention, the VeggiEat dish was labelled the ‘Dish of the day’. All dishes were provided free of charge, displayed side by side in the same order and served in same portions. The dish choices showed no differences between the control and intervention groups in both age groups, and no differences were found among the other variables analysed. This nudging strategy, ‘dish of the day’, seems not to work for the Danish sample of adolescents and older people. Future nudging studies with these populations are needed in order to find the best strategy to move adolescents' and older people's food habits toward a healthier pattern.     

Ritual legitimation, de-coupling and the budgetary process: managing organizational hypocrisies in a multinational company

The study of participation in the budgetary cycle has formed a prominent part of the research literature concerned with the budgetary process. More recently there has emerged a body of literature concerned with exploring the political and symbolic nature of the budgetary process. The paper reports upon the outcomes of an empirical study of the introduction of `budgetary participation' in a division of a European subsidiary of a large North American car manufacturer. We detail the long process of consultation and negotiation within the subsidiary, and between it and the European Headquarters. The study provides a revealing instance of the roles of formal budget participation as a ritual of control and legitimation without the substantive involvement of middle managers and suggested to us the introduction of de-coupling and organizational hypocrisy alongside the introduction of budget participation. The study pays close attention to the contingent effects of the wider political context of the division and the relationships between the division, its organizational context and organizational environment, and how this context played upon the budgetary process in the division. The outcomes that we analyse at `Delta' reflect the de-coupling strategies and organizational hypocrisies commonly found in public sector organizations. In this wider setting the corporation persists with the ritual of `tight' budget negotiation and target setting and apparent underachievement in performance. Yet we conclude that the complex technological and political context to the formation and siting of Delta continued and may continue to support its existence.$g0     

Building new plants or entering by acquisition? Firm heterogeneity and entry barriers in the U.S. cement industry

I estimate a model of entry for the cement industry that considers two options of expansion: building a plant or acquiring an incumbent. The model takes into account that there is a transfer of the buyer firm‐level characteristics to the acquired plants, which affects profits from the acquisition. Estimates show that a less‐permissive Reagan–Bush administration's merger policy would decrease the number of acquired plants by 71%, greenfield entry would increase by 9.2% and consumer surplus would decrease by 23.5%. Results suggest that regulators should be concerned about policies that negatively affect the efficient reallocation of assets between incumbents and entrants.