HOW ROBUST ARE ESTIMATES OF EQUILIBRIUM REAL EXCHANGE RATES: THE CASE OF CHINA

Abstract.  Assessments of a country's real exchange rate relative to its 'equilibrium' value as suggested by 'fundamental' determinants have received increasing attention. Using China as an example, the present paper illustrates models commonly used to derive equilibrium real exchange rate estimates. The large variance in the estimates raises serious questions about the robustness of these results. The basic conclusion is that, at least for China, small changes in model specifications, explanatory variable definitions, and time periods used in estimation can lead to very substantial differences in equilibrium real exchange rate estimates. Therefore, such estimates should be treated with great caution.     

Linking corporate sustainability and innovation in supply chain management – evidence of a Taiwan leading glass recycling company

This empirical study presents a combination of insights from corporate sustainability practices, supply chain management, and innovation literature, and a case study to discover new understandings on factors influencing firms to incorporate sustainable innovation initiatives into their supply chain practices. There is an apparent lack of literature in this field due to its modernity and evolving nature. Also, there is a lack of insights into how firms could translate sustainable innovation initiatives into practice. This study addresses this gap by examining a successful glass recycling company through the lenses of sustainable innovation context and the Global Reporting Initiative G3 Guideline framework. Primary data are collected through observations and in-depth interview before it is coded and analysed using nVivo. The findings show that sustainable innovation practices are mainly directed at improving the technological processes, resource sharing, and reduction of production cost among supply chain partners. A conceptual sustainable innovation framework is also proposed. This study contributes to sustainable innovation literature by providing insights into the evaluation of a firm's innovative sustainability efforts.     

Reassessing the productivity gains from trade liberalization

This paper reassesses the impact of trade liberalization on productivity. We build a new, unique database of effective tariff rates at the country‐industry level for a broad range of countries over the past two decades. We then explore both the direct effect of liberalization in the sector considered, as well as its indirect impact in downstream industries via input linkages. Our findings point to a dominant role of the indirect input market channel in fostering productivity gains. A 1 percentage point decline in input tariffs is estimated to increase total factor productivity by about 2 percent in the sector considered. For advanced economies, the implied potential productivity gains from fully eliminating remaining tariffs are estimated at around 1 percent, on average, which do not factor in the presumably larger gains from removing existing non‐tariff barriers. Finally, we find suggestive evidence of complementarities between trade and FDI liberalization in boosting productivity. This calls for a broad liberalization agenda that cuts across different areas.     

外资进入中国银行业热潮分析

近期外资对中国银行业的投资热潮以及在WTO承诺下中国进一步开放银行业的未来前景表明,外资银行将在中国发挥日益重要的作用。本文借鉴其他国家的经历分析外资进入中国银行业的情况。虽然在其他大多数国家,外资进入是以直接收购或者取得控股权的形式,但外资在中国银行业至今只占很小的股份,管理方面的参与也非常有限。本文的结论是中国可以从进一步对外开放银行业中获得更多收益。国际经验显示:面对外资银行的更多参与和引发的更激烈竞争,东道国如果建立合适的激励机制和创造充分的机会,将从总体上带来重要收益。     

Stakeholder Perceptions of Offshoring and Outsourcing: The Role of Embedded Issues

We contribute to the study of offshoring and outsourcing by examining how stakeholders’ ethical evaluations of these decisions are influenced by both their roles and the issues embedded within the decisions. Although offshoring and outsourcing have been studied from a transactional perspective, the moral issues embedded within these decisions can profoundly affect how the organization is perceived by outside stakeholders. First, we contend that investors use different moral paradigms compared with consumer stakeholders, as a result the stakeholder role an individual occupies significantly influences their ethical evaluation of offshoring and outsourcing decisions. Next, we examine whether embedded issues of product quality and information security increase the moral intensity of offshoring and outsourcing decisions, thereby negatively influencing ethical evaluations. Using vignettes, we find that respon- dents viewed either offshoring or outsourcing less favorably than relocation. Surprisingly, respondents viewed offshoring with data security risks more negatively than offshore outsourcing with quality risks, suggesting that the issue of information security has a greater moral intensity than the issue of product or service quality for both consumer and investor stakeholders. Thus, we show that that embedded issues play a significant role in stakeholders’ ethical judgments of business decisions, such as offshoring and outsourcing.     

Catch-up strategy of latecomer firms in Asia: a case study of innovation ambidexterity in PC industry

ABSTRACT

Over the last decade, more and more East Asian firms have moved beyond imitation and are delivering innovative products and services to the market. This study examines (a) how a latecomer firm in East Asia transformed its business model in pursuit of manufacturing its own brand and (b) how it managed its exploration and exploitation of the market and technology in response to growth and competition. Given the lack of research on firms transitioning from contract manufacturing (CM) to own-brand manufacturing (OBM), this study offers fresh insights into how Acer, a leading Taiwanese original equipment manufacturer (OEM), has pursued new ways of creating value using an innovation ambidexterity strategy to maximise its customer value and boost performance.

Acer is chosen for this case study because of its significance and impact in the global PC industry. Data were collected through interviews and secondary data analysis. Our findings show that innovation ambidexterity is a deliberate transition process, taking firms years to reshape their business models. Our findings also present a viable solution to sustainable competitive advantage and keys to firms’ renewal in face of environmental change. This study contributes to the innovation management literature, and the use of the innovation ambidexterity framework examines how firms explore new ways of creating and capturing value and face challenges.     

R&D investment dynamics in agglomerations under weak appropriability regimes: Evidence from Indian R&D labs

What are the dynamics of R&D investment when firms agglomerate in environments with weak intellectual property rights protection? Specifically, do foreign and domestic firms present equal opportunities for free riding by domestic firms in such environments? We examine the impact on local firms' R&D investment from knowledge spillovers originating from co‐located foreign and domestic firms within and across industries. Building on fieldwork in India, we predict free riding by local firms on nearby foreign and local firms. Furthermore, we expect local firms to free ride more from other local firms within their industry and from foreign firms across industries. Analyzing a sample of 3,475 R&D lab investment decisions during 2003–2010 in India, we find that local firms free ride from other local firms both within and across industries. Copyright © 2014 John Wiley & Sons, Ltd.