Are There Such Things as International Property Rights?

This paper argues that the process of economic globalisation is to remain partial, because of its continued reliance upon the national institutions in charge of the definition and enforcement of private property rights. Emerging economies often face critical enforcement problems, but the experience of the European Single Market also suggests that, in this respect, institutional convergence remains extremely slow. Second, the globalisation process since 1990 has seen a sharp growth in private inter‐temporal contracts, exemplified by private financial transactions and by contracting on intellectual property rights; both are much more vulnerable to local institutional failures than trade in tangible goods and sovereign credits, which were the hallmark of previous phases of international liberalisation. Thus the ‘frontier’ of globalisation now makes markets more exposed to the underlying fragmentation of national property institution than before. This suggests that multilateral negotiation, as an instrument for the coordination of State institutions, will remain the backbone of international economic integration.     

International business under sanctions

Sanctions are a tool used by political actors to induce foreign countries, firms or individuals to alter their behavior. As nonmilitary coercive measure, they have the potential to disrupt the international business environment, often on short notice, and change the rules of the game. Synthesizing the available evidence on the economic and political impacts of sanctions, we explore how sanctions disrupt the institutional framework for international business and how firms respond to sanctions. Based on a review of available scholarly evidence, we discuss how theories of international business, such as institution-based view, resource- and knowledge-based view, resource dependency theory, and behavioral theories of the firm, can contribute to explaining the impact of sanctions. At the same time, we discuss how sanctions, as politically motivated disruptions, challenge some assumptions underlying these theories. Going forward, our research agenda on sanctions is likely to help firms and governments to strategize in a geopolitically sensitive world.     

Multinational Enterprises: Their Private and Social Benefits and Costs

Government policy‐makers in many countries compete to attract FDI because they believe that FDI will generate knowledge spillovers in the local economy. However, there is surprising little empirical evidence in favour of substantial spillovers. This raises the question of what benefits can be appropriated by host countries when spillovers are small. This paper analyses the issue using a simple model of the global strategy of a profit‐maximising MNE. It is based on a partial equilibrium model of the firm; although less sophisticated than the general equilibrium approach, it provides a sharper focus on fundamental policy issues. It shows that the principal social benefit conferred by an MNE is measured by the profit its subsidiary generates. This reflects the fact that, according to standard theory, the MNE is an institutional arrangement for appropriating rents from innovation. Other rents may also accrue to local factors of production. The model is used to appraise a range of alternative policy instruments for maximising national benefit from FDI.     

The Prospect of Infrastructure Public‐Private Partnerships in Kuwait,Saudi Arabia,and Qatar: Transforming Challenges into Opportunities

This article examines the prospect of using infrastructure public‐private partnerships (PPPs) within Kuwait, Saudi Arabia, and Qatar in light of the drastic drop in oil prices since mid‐2014. It argues that, while PPPs appear to be a strategic policy option for the three Gulf Cooperation Council (GCC) states to tackle growing fiscal deficits, these states are constrained by numerous governance‐related, administrative, and regulatory challenges that make PPPs problematic. Effective implementation of the inherently complex and contractual PPP policy requires addressing the existing institutional, economic, bureaucratic, and cultural constraints within these three states. This article concludes with recommendations to mitigate these challenges, that require serious political will and sufficient time to yield positive results, and to attract international investors and contractors to the Gulf region. © 2016 Wiley Periodicals, Inc.     

Top income shares in OECD countries: The role of government ideology and globalisation

This paper investigates how government ideology and globalisation are associated with top income shares in 17 OECD countries over the period 1970 to 2014. We use top income shares of the World Wealth and Income Database (WID ). Globalisation is measured by the KOF index of globalisation. Static and dynamic panel model results show that the top income shares increased more under right wing governments than under left wing governments. The ideology‐induced effect was stronger when globalisation proceeded more rapidly. Globalisation was positively correlated with income shares of the upper‐middle class (P99–P90), but negatively with income shares of the rich (top 1%) in the overall sample. We show that the relationship differs between Anglo‐Saxon countries and other OECD countries. Globalisation was more pro‐rich in Anglo‐Saxon countries than in other OECD countries. Government ideology does not turn out to have a statistically significant effect on top income shares in Anglo‐Saxon countries after the 1980s, whereas ideology‐induced differences in the distributional outcomes continued in other OECD countries.     

De Tocqueville's ‘Dangerous Moment’: The Importance of Getting Reforms Right

Economic reform, on an ongoing basis, is vital if economies are to achieve, and maintain, rapid and sustained economic growth. Yet governments face challenges when introducing economic reforms. Policymakers must judge what reforms are needed; when to introduce them; and how rapidly to pursue their reform programme. Failed reforms can discredit the reform process as a whole, and so make it more difficult, and more costly, to retry in the future. The reform process in emerging market economies provides many lessons that are widely applicable. Perseverance is critical: reforms must be followed through if they are to be successful. Reforms also need to be wide‐ranging, encompassing not just monetary, fiscal and trade policy but reform of the financial sector and of public institutions. Reforms in many countries need to include the protection of property and individual rights; improved tax administration and greater efficiency of public spending; and commercial codes. Reforms can be most easily implemented at times of global expansion. Fiscal consolidation, for example, is more easily accomplished in a more favourable environment partly because it helps deliver future growth and partly because it gives governments scope for counter‐cyclical policy during future downturns.     

Locational Competition: A Neglected Paradigm in the International Division of Labour

Krugman's verdict that competitiveness of countries is a largely meaningless concept is a serious misjudgement of the economics profession. Countries compete for the mobile factors of production, most importantly for capital and technology. The exit‐option of these factors and of firms changes the calculus of national governments. This paper sets out the main elements of the concept of competition between locations – locational competition – and analyses its impact on welfare and employment of the capital‐exporting country. It also looks at whether competition between countries necessarily results in a race to the bottom or whether it can function as a controlling mechanism for governments and as a discovery device. The paper discusses under which conditions common rules are needed to reduce transaction costs and to prevent strategic, opportunistic behaviour of countries and which common rules thus reduce transaction costs. Finally, it deals with the question whether one institutional equilibrium in the world economy can be expected or whether many national equilibriums can coexist.     

Wie weit ist die Verschuldungskrise in der Europäischen Währungsunion überwunden?

In the first years of the eurozone debt crisis, European governments were busy struggling to achieve short-term financial stabilisation of banks and entire countries. Now, after the OMT programme and other stabilisation measures have calmed investors, attention has shifted to two issues: Firstly, are there signs of recovery in the real economy? Secondly, what will be the long-term institutional structure of the eurozone? This paper argues that the economic situation in the periphery countries is still fragile, despite significant adjustments that have taken place. Moreover, the most important institutional challenge is to avoid a situation in which national control over fiscal policy is combined with mutualisation of government debt.     

Globalisation,trade, and growth: A macroeconomic perspective

On the basis of economic theory, what effects can globalisation be expected to have on trade and growth? Does the empirical evidence support this? What developments will the next phase of globalisation bring?     

Global Interdependence, the Corporation and the Changing World

This second of the annual Stockton Lectures starts by reflecting on the achievements of the founding fathers of the modern world economy in the immediate aftermath of World War II. Their legacy has been increasing interdependence and globalisation. Peter Sutherland argues that these have had a positive impact almost throughout the world and that these positive consequences of the market economy system do not necessarily have to be associated with increasing gaps between the rich and poor. He makes the case for multinationals to show commitment to what he calls "the common good" (as opposed only to shareholder returns). He examines the fundamental contradiction between free trade and national sovereignty and argues for more supranational (rather than just intergovernmental) decision-making and implementation. However, he also emphasises that some areas are not appropriate for integration or supranational action, most notably tax and workers' rights. These should remain within the domain of national governments. He concludes by discussing threats to the world economy posed by the tension between the US and the EU on trade-related issues, and argues that inappropriate use of the WTO process threatens to destroy the whole system which has yielded so many economic benefits worldwide since 1945.     

An exploratory case study of hotel e‐marketing in Ho Chi Minh City

Many developing countries have made tourism their top national priority for economic development, and e‐tourism is being promoted due to its relatively low start‐up costs and its high potential to attract foreign capital. However, with a low overall level of e‐readiness, deploying e‐tourism is a rather overwhelming endeavor. This article presents a case study that uses extensive field data collection to assess the effectiveness of Web technology in promoting tourism in Ho Chi Minh City, Vietnam. This city was selected because its tourism industry has been recognized for making a concerted effort to target foreign visitors and its hotels have been among the most important adopters of e‐commerce in the country. This study assists in better understanding the opportunities, challenges, and guidance necessary for e‐tourism to be effective in developing economies. Most interestingly, e‐commerce—intended to be the enabler of a seamless, highly competitive economy—can be a key competitive advantage for those who use it effectively in a less than perfect e‐market. © 2006 Wiley Periodicals, Inc.     

Anti‐dumping at 100 Years and Counting: A Canadian Perspective

The world's first anti‐dumping measure was introduced by Canada as a ‘special duty’ that could be levied administratively rather than being enacted. This paper describes the features of this first measure in light of subsequent evolution of anti‐dumping practice and sets it in its historical context – an era that was a high season of globalisation but also an era marked by an awakening of economic nationalism in newly industrialising countries, and by growing angst over the power of large corporations that were emerging to exploit the economies of scale allowed by mass production, as evidenced by the concurrent evolution of anti‐combines legislation. Anti‐dumping's early integration into economic theory as an international counterpart of domestic competition policy has received some official ratification in international treaties, and governments see it as a legitimate policy, albeit one in need of international disciplines. However, analysis of the pattern of its use reveals it to be an instrument of political economy, as a convenient alternative to the WTO safeguard option. The paper explores contextual reasons why today, in another high season of globalisation, marked by concerns over corporate globalism that evoke those of the earlier era, anti‐dumping actions are proliferating where they did not then.     

The Evidence on Globalisation

Globalisation is blamed for many socioeconomic shortcomings. I discuss the consequences of globalisation by surveying the empirical globalisation literature. My focus is on the KOF indices of globalisation that have been used in more than 100 studies. Early studies using the KOF index reported correlations between globalisation and several outcome variables. Studies published more recently identify causal effects. The evidence shows that globalisation has spurred economic growth, promoted gender equality and improved human rights. Moreover, globalisation did not erode welfare state activities, did not have any significant effect on labour market interaction and hardly influenced market deregulation. It increased, however, within‐country income inequality. The consequences of globalisation thus turn out to be overall much more favourable than often conjectured in the public discourse.     

Globalisation and Policy Effects in Africa

Globalisation or market integration in Sub‐Saharan Africa is closely linked to the structural adjustment programmes. In this paper we focus on their dependence on the politics and institutional characteristics of the countries concerned. In particular, we argue that one important explanation for the dismal performance of many African countries, in spite of all the measures taken towards market liberalisation, is the combination of, first, a magnification of the effects of policy and, second, a lack of willingness or ability on the part of politicians to respect the restrictions imposed on their behaviour and policy choices by the liberalised markets. We look at how the increased exposure to international prices and returns on assets make the economic equilibrium relations – the law of one price and uncovered interest parity – relevant guidelines for economic policy. The argument is illustrated by the case of Zimbabwe, where lack of respect for the restrictions imposed by international markets has led to an economic crisis with negative growth rates and a departure from globalisation.     

Towards A Framework For The Comparative Analysis Of National Systems Of Skill Formation

This article builds on earlier attempts to develop a conceptual framework for the comparative analysis of training and skill formation systems. Following a critical review of previous approaches, the article identifies the main underlying relationships which shape national systems of skill formation. We identify four such ‘models’ of the skill formation process. These models show how such a framework can help us understand why societies have different approaches to the provision of education, training and skill formation and why there are significant differences in government policies towards training as they at tempt to respond to the challenges of globalisation.     

A Social and Economic Model for Europe

The problems that social and labour market institutions are facing today are often attributed to globalisation and ageing. This article argues that globalisation merely exposes inherent weaknesses in social institutions while ageing aggravates them, but that neither of the two phenomena is the fundamental cause of the challenges. Moreover, there is no inherent trade-off between social and economic policies, but to reconcile the policies comprehensive modernisation is needed. Each country can face the challenges should they wish to do so and converging to a single social model is neither needed nor wanted. Finally, European (economic) and national (social) policies become increasingly intertwined and this calls for a new role for Europe. * Bureau of European Policy Advisers, European Commission. The authors would like to thank Tassos Belessiotis for his valuable comments. The authors would also like to thank their colleagues Declan Costello, Georg Fischer, Agnes Hubert, Frédéric Lerais, Mattias Levin, Roger Liddle and Jér?me Vignon. In addition valuable comments by Lans Bovenberg, Gosta Esping-Andersen, Ruud de Mooij, Frederick van der Ploeg and Fritz Scharpf were appreciated. The views expressed in this article are the views of the authors and do not bind the European Commission.     

Promoting sustainable financial behaviour: implications for education and research

The current financial crisis has clearly shown that national financial health is strongly tied to the household financial well‐being, and that most consumers were not well equipped with knowledge they needed to cope with this crisis. The failure of markets, institutions, businesses and households during the current financial crisis also revealed the serious economic risks posed by widespread unethical and irresponsible behaviour. The focus of this paper is to explore how, through financial education, we can improve the economic performance of individuals in the economy, both for their own well‐being and for the well‐being of society at large. However, for that to happen, the current approach to financial education will have to include the discussion of attitudes, values and beliefs that enable us to make financial decision that promote long‐term security for families and communities. After establishing the importance of financial education, the challenges and opportunities of the current status of financial education, with emphasis on the complexity of human and financial behaviour, are discussed. It, then, argues for the promotion of responsible behaviour by integrating fundamental values in financial education. Discussion of how selected learning theories can be used to develop effective teaching approaches and the implications for future research conclude the paper.     

Introduction. The Internationalisation of the Innovation Process

The international economics of business and management has focused - both in the academic literature and in corporate and public policy discussions - increasingly on issues of globalisation, innovation and 'competitiveness'. These issues, and in particular their interrelation, are analysed in detail in this Special Issue of the International Journal of the Economics of Business. This opening article aims to set the scene by considering how the rather distinct literatures around the above three topics can best be drawn upon in order to focus on what implications the new global economic environment has for the economics of business and public policy.     

Setting standards for Shariah application in the Islamic financial industry

The global growth of Islamic banking is taking advantage of the diversity and flexi‐bility in the fiqh opinions (often referred to as Shariah) to meet the challenges of growth. While the flexibility in fiqh opinion is presently contributing to global growth, it may soon become a constraining factor in the global growth of the industry if the challenges arising out of the use of diversity and flexibility in fiqh are not properly rec‐ognized and regulated. Though the infrastructure for standardizing the supervision and monitoring of the global expansion of the Islamic finance industry is rapidly growing, institutional arrangement for a regulated use of diversity and flexibility in Shariah rules is still a missing link. Such an institutional arrangement is needed not only to prepare the industry to play a bigger role in the development of global economy but also to ensure the adherence to the very specific element that makes the industry an “Islamic” industry. © 2007 Wiley Periodicals, Inc.     

The impact of economic globalisation on unemployment: The Malaysian experience

Malaysia plans to emerge as one of the high-income economies by 2020 through the Economic Transformation Programme. A key component of this programme is to adopt more trade liberalisation policies that can generate a variety of economic activities, particularly more jobs. Although the integration with the world market bears the promise of prosperity for the developing and transitional economies, such integration may also adversely affect such economies. Preceding studies regarding labour market and international trade policies are still inconclusive and raise questions that require further examination; particularly in terms of whether exposure to the external sector can create or destroy jobs. The present study evaluates how Malaysia labour market has responded to the economic globalisation of the country. The study focuses on the long-run impact of economic globalisation on unemployment within the period between 1980 and 2014. The study uses autoregressive distributive lags method to examine the pattern of the relationship. The results show that economic globalisation have significant and positive impact on reducing unemployment in Malaysia in the long run. These findings indicate that policy-makers in Malaysia should facilitate the economy globalisation to maintain the current low level of unemployment rate.