Offshoring in the global economy: microeconomic structure and macroeconomic implications

This article analyses the trade balance effects of Europe agreements (EA) between the EU-15 and four new EU members from Central and Eastern Europe (CEEC-4) using both static and dynamic panel data approaches. Specifically, the system generalised method of moments (GMM, Blundell, R., and S. Bond. 1998. Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics 87, no. 1: 115–43) and recently developed econometric methods such as the Correlated Common Estimation Pooled–Hausman-Taylor (CCEP–HT, Serlenga, L., and Y. Shin. 2007. Gravity models of intra-EU trade: Application of the CCEP-HT estimation in heterogenous panels with unobserved common time-specific factors. Journal of Applied Econometrics 22: 361–81) are applied to analyse the effects of the agreement variable. Our estimation results indicate a positive and significant impact of EA on trade flows. However, there is an asymmetric impact of the agreement variable on the trade balance, exports and imports being affected in different ways, which results in a trade balance deficit in the CEEC-4.     

Family firms’ identity communication and consumers’ product involvement impact on consumer response

The purpose of this study is to determine whether the image transfer theory and the elaboration likelihood model can provide a theoretical framework capable of assessing the influence of consumers’ product involvement and family firms’ identity communication through websites on consumer responses. This research conducted an experiment using an eye‐tracking technique measuring attention to family and nonfamily corporate websites. The procedure involved 120 participants. Consistent with the image transfer theory, family firms’ identity through websites positively impacts attitude toward the website and intention to buy. Additionally, the attitude toward the website affects the relationship between family firms’ identity through websites and the intention to buy. In line with the elaboration likelihood model, consumers’ product involvement negatively impacts the relationship between family firms’ identity through websites and intention to buy.     

How Norway’s sovereign wealth fund negative screening affects firms’ value and behaviour

This paper examines the impact of negative screening by responsible sovereign wealth funds on the value of excluded firms. We focus on the main sovereign wealth fund, the Government Pension Fund Global of Norway, which excluded 149 firms from its portfolio during the period 2006–2018. Using an event study methodology, we document a significant decrease in excluded firms’ stock prices. Moreover, we find that the nature of screening matters: norm‐based exclusions suffer from a significant and permanent decrease in their stock value, suggesting that market participants reacted to the Government Pension Fund Global of Norway exclusions. Overall, it can be asserted that the Norwegian fund has a strong signalling effect on financial markets, in terms of social and environmental information. We conclude that sovereign wealth funds could be used by governments as investment vehicles in order to promote responsible investments on a large scale.     

One size doesn’t fit all: How institutional complexity within the state shapes firms’ environmental innovation

This study investigated how firms respond to conflicting demands within the state. Using Chinese listed firms data, we found that firms linked with central government relate positively to environmental innovation, while firms located in provinces with gross domestic product (GDP) priority exhibited a negative influence on environmental innovation. Beyond the independent roles of central and local government expectations, we found that central and local government demands work interdependently to negatively affect firms’ environmental innovation, such that firms located in GDP priority regions lower the positive impact of the central government on environmental innovation. The present study added to the existing literature by unpacking government roles into two competing sets of expectations, independently and interdependently.     

Consumers’ perspectives on online banking services

The forces of economic change, coupled with advancements in technology, prompt banks to rethink their use of traditional branches and begin forming new partnerships to deliver financial services. The Internet seems to be the new delivery channel in the banking sector. Factors such as the security of personal data or the reliability of a financial institution have been identified by previous studies as the determinants of electronic‐banking adoption. In this paper, a series of new factors, such as the difficulties of using the Internet, are shown to play a crucial role in the consumer’s attitude – adoption or rejection – of this new alternative channel. We examine consumer behaviour by modelling multivariate categorical response data using a generalized linear model. Our choice model is based on the assumption that an individual’s decision to use electronic services depends on a number of explanatory variables, and we try to estimate the factors that affect an individual’s decision to use online services.     

The determinants of households’ repayment difficulties on mortgage loans: evidence from Italian microdata

This article investigates the main determinants of households’ repayment difficulties on mortgage loans in Italy. We contribute to the empirical literature on household financial vulnerability by assessing the joint impact of socio‐demographic factors, loan characteristics and institutional variables on the likelihood of mortgage insolvency and on the intensity of arrears. Using data from the Italian component of the 2008 European Union‐Statistics on Income and Living Conditions (EU‐SILC) survey, we firstly identify which types of households are more vulnerable to unexpected adverse events that may trigger repayment difficulties. Specifically, households whose head is young, unemployed or immigrant show a higher probability of arrears and emerge as those suffering more from the adverse economic conditions connected to the crisis. Moreover, household repayment behaviour is affected by mortgage characteristics and, in particular, having modified contract terms significantly increases current arrears probability. Finally, regional institutional and credit market factors mainly impact on the conditional intensity of arrears. This evidence suggests that, although repayment difficulties mainly arise from a genuine inability to repay, households are less likely to pay on time when institutions are less effective at punishing default, confirming the existence of some strategic behaviour.     

The impact of inward FDI on local companies’ labour productivity: evidence from the Italian case

The article aims to investigate the impact of inward foreign direct investment (FDI) occurring through acquisition upon the local target company’ performance, as measured by labour productivity. It relies upon the idea that multinational enterprises (MNEs) act as a device to transfer firm‐specific proprietary assets, thus causing their subsidiaries to exhibit better performance than their host country rivals. Specifically, our results show that foreign acquisitions generally increase the local target companies’ labour productivity in the medium term after the acquisition. The empirical evidence refers to foreign acquisitions that occurred in Italy in the period 1994–1997.     

The contribution of vocational training to employment,job‐related skills and productivity: evidence from Madeira

In this paper, we analyse the transition to the labor market of participants in vocational training in Madeira in Portugal. The analysis is in two stages. First, we investigate how the employment status at different dates (1 month, 1 year, and 2 years after the completion of the training program) depends on relevant variables, such as age, gender, education and the content and duration of the training. Second, we use individuals' self‐assessment of the effectiveness of the training program along three dimensions: employment, job‐related skills and productivity. The respondents score training activities high on every dimension. Moreover, we find that training is more effective among the educated, indicating that vocational training is far from being remedial. We also find that long training programs and training related to tourism are particularly effective.     

‘It’s the identification,stupid’: profiling senior public service managers for training and development

A review of practices of senior management development across the upper echelons of the public services of major jurisdictions shows that while the need to develop leaders is universally recognised by governments, there are still considerable gaps in the development function. One of the key gaps the article argues that is central to the training and development function is that of identification and targeting of individuals. A profiling protocol is presented that is argued could be an appropriate tool for governments to consider as they seek to link the desired competencies with the career aspirations of their public service senior managers.     

A tale of two life stages: The imprinting effect of macroeconomic contractions on later life entrepreneurship

Studies argue that macroeconomic contractions create immediate incentives for individuals to pursue entrepreneurship. However, research has not addressed whether past macroeconomic contractions imprint on individuals and influence their future entrepreneurship. Integrating literature on the business cycle and imprinting with insights from lifespan psychology, we develop and test competing theoretical arguments aligned to two distinct life stages about when a macroeconomic contraction will imprint on individuals to influence their future entrepreneurship, and how such effects are imprinted. Our findings show that only contractions experienced during early adulthood influence entrepreneurship and this effect is transmitted culturally via country-level preferences for time discounting.     

The manager’s role in enhancing the transfer of training: a Turkish case study

The process of the transfer of training has a great impact on job productivity, effectiveness and satisfaction. Studies focusing specifically on the role of managers in the process have, however, been limited in number. The general aim of this study is to determine the impact of managers’ reinforcement on participants’ job attitude, productivity, effectiveness and satisfaction in the process of the transfer of knowledge, skill and attitude to be acquired through a training programme into the workplace. The study involves a group of sales representatives participating in the Basic Sales Training Program for Sales Representatives and their supervisors in the Coca‐Cola Bottlers of Turkey. Using experimental and control groups, the study is based on Kirkpatrick’s four–stage evaluation model. The findings obtained are discussed and evaluated with respect to the roles of managers in the transfer of training.     

The complementarity effect of exporting,importing and R&D on the productivity of Ukrainian MNEs

After two decades of research on Emerging Market Multinational Enterprises (EMNE), the debate still concerns the antecedents and strategies of their foreign expansion. However, much less has been said on the effects of international participation on their productivity. Building on insights from the Resource-Based View of the firm and agency theory, we develop hypotheses on the presence of complementarities among export, import and R&D and their impact on productivity. Our empirical analyses on a panel of 23,000 time-year observations of Ukrainian MNEs over the period 2000–2006, confirm that: (i) EMNEs benefit from complementarities stemming from the assimilation and integration of knowledge from international external sources (import and export) with internal knowledge (own R&D investment); (ii) the effect is more pronounced for private-owned enterprises (POEs) rather than state-owned enterprises (SOEs), and (iii) especially when they trade with partners in/from advanced markets.     

Beyond endorsements: The effect of celebrity Creative Directors on consumers’ attitudes toward the advertisement

Marketers are beginning to expand the roles that celebrities play in support of brands. Connections now go beyond the typical endorsement relationship to employing celebrities as Creative Directors. Study 1 demonstrates celebrity Creative Directors, as opposed to merely endorsers, result in increased attitudes toward the advertisement; an effect mediated by consumer perceptions of celebrity expertize and attenuated by skepticism toward advertising. Study 2 further investigates this phenomenon by considering whether it is the title of Creative Director that results in increased attitudes toward the advertisement or if consumers need to be made aware of the responsibilities associated with such a role. Results from Study 2 suggest that merely bestowing a celebrity with the title of Creative Director is not sufficient to enhance attitudes, the duties performed by the celebrity Creative Director must be made explicit.     

The European Redemption Pact: Implementation and macroeconomic effects

One possible solution to the sovereign debt crisis is the European Redemption Pact (ERP) proposed by the German Council of Economic Experts. The ERP provides sustainable financing conditions for participating sovereigns to facilitate bringing public debt ratios below the reference value of 60% within the next 20 to 25 years. In this paper, we describe one possible way of implementing the ERP and analyse the fiscal effects of participating in the ERP. The macroeconomic impact of the proposal is illustrated with the multi-country model NiGEM.     

The influence of ‘low-balling’ on buyers' compliance: Revisited

Central to the low-ball strategy is the revocation and subsequent alteration of an integral part of an offer after a target subject accepts. Allegedly used to some extent in the automobile industry, it has drawn criticism as an unethical and characteristically deceptive practice. Yet, is such a strategy really effective in increasing customer compliance in real commercial settings? Using a sample of 160 subjects, the low-ball procedure was again tested. Although effective, its predicted superiority over several competing strategies was unconfirmed.     

The Impact of Family Involvement on SMEs’ Performance: Theory and Evidence

By complementing agency theory with behavioral assumptions, we explore the effects of family involvement on small and medium enterprises’ (SMEs) performance. We identify three separate dimensions of family involvement and hypothesize nonlinear, direct, and interaction effects on the performance of an SME. The evidence on 787 SMEs suggests that an inverted U‐shaped relationship exists between family ownership and performance, and ownership dispersion among family members negatively affects performance. Balancing family and nonfamily members in the top management team (TMT) is found to be beneficial to SMEs’ performance, but the family ratio in the TMT becomes crucial only at high levels of family ownership.     

Business failures,macroeconomic risk and the effect of recessions on long-run growth: A panel cointegration approach

This paper uses panel data on Italian regions to test two competing theories of long-run productivity dynamics: the opportunity-cost model, according to which productivity-enhancing activities have a comparative advantage during recessions; and the risk-aversion model, which predicts a negative relationship between transitory disturbances and productivity growth. Panel ECM estimates suggest that macroeconomic risk factors impinge on business failures on the same direction both in the short and in the long-run, and that the adjustment to the steady-state relationship is quite slow. Thus, our findings lend support to the risk-aversion theory of productivity growth and indicate that bankruptcy risks play a significant role in the propagation of macroeconomic shocks.     

The impact of macroeconomic announcements on emerging market bonds

This paper examines how emerging market bonds react to macroeconomic announcements. Global bond spreads respond to rating actions and changes in U.S. interest rates rather than domestic data and policy announcements. All announcements affect market volatility. Macroeconomic data and policy announcements reduce uncertainty and stabilize spreads, while rating actions cause greater volatility. Results are robust to country-specific and panel analyses, assuming conditional variance and controlling for the surprise content of news. In subsamples, announcements matter less for countries with more transparent policies and higher credit ratings. In a crisis, rating actions become less important, and investors focus on simple and timely indicators.