Can deunionization lead to international outsourcing?

We analyze unionized firms' incentives to outsource intermediate goods production to foreign (low-cost) subcontractors. Such outsourcing leads to increased wages for the remaining in-house production. We find that stronger unions, which imply higher domestic wages, reduce incentives for international outsourcing. Though somewhat surprising, this result provides a theoretical reconciliation of the empirically observed trends of deunionization and increased international outsourcing in many countries. We further show that globalization - interpreted as either market integration or increased product market competition - will increase incentives for international outsourcing.     

Can you sense without being human? Comparing virtual and human influencers endorsement effectiveness

As AI increasingly permeates digital spaces, virtual influencers are operating in similar ways as human influencers. However, given their recent introduction, the effectiveness of virtual influencers is unclear, and there is limited managerial guidance regarding when and how they should be used. Across four studies, including an empirical investigation using secondary data analysis and three scenario-based experiments spanning two cultural contexts, we find that virtual influencers are less effective than human influencers as endorsers in terms of brand attitude and purchase intention. Furthermore, we identify perceived sensory capability and credibility as the serial mechanism. Lastly, we introduce the salience of sensory cues within the ad as a theoretically important and managerially relevant moderator, which attenuates the negative effect of virtual influencers. This research extends virtual influencer literature by focusing on business-related outcomes. Our theoretical model highlights essential differences in advertising outcomes between human and virtual influencers and provides important managerial implications.     

Are we who we follow? Computationally analyzing human personality and brand following on Twitter

Abstract

In this study, we present a computational method for analyzing the congruence between personality of a brand’s Twitter account and the personality of their followers. We investigated attachment to brands on Twitter by computing personalities through a machine-learned computational analysis of Twitter postings rather than traditional personality tests. By studying three different brands, results revealed that on average, brand followers have personalities that are more congruent with the personality of brands they follow compared to users that do not follow those brands. Taking these findings into consideration, we discuss some considerations for advertising researchers and practitioners, as well as provide a new tool, the Brand Analytics Environment (BAE), to allow individuals without computer programming backgrounds to conduct this method themselves.     

Pray local and act global? Christian religiosity in the U.S. and human rights

This study examines the influence of Christian religion on corporate decisions related to human rights in the United States. Specifically, it examines the empirical association between a company's human rights practices and the Christian religiosity in its local community, as well as individual CEO religiosity in the United States, both of which have not been tested in prior studies. Employing a large sample from the United States, we find a congruent association between the “human rights friendly” practices of a company and the Christian religiosity of the local community. This novel finding is robust to a diverse set of tests. In addition, we find that the association between Christian religiosity in the United States and human rights is more significant in reducing human rights concerns, than it improves human rights strengths. This study interprets these results as upholding the religious morality hypothesis, namely, that companies located in areas with higher religiosity are likely to engage in more human rights‐friendly practices, and the United States. Christians consider religion as an influencing factor that encourages managers to embrace human rights. Furthermore, this study finds that individual religious managers tend toward more human rights‐friendly practices, supporting our religious manager hypothesis.     

Can we send her there? Maximizing the success of western women on global assignments

This paper examines factors affecting the performance of Western women on global assignments. Four categories of causal agents that affect female expatriates' success are: their individual characteristics, their organizations, their families, and the host nationals with whom they work. Along with these factors, the paper offers 15 strategies for multinational organizations to maximize the likelihood of success of their female expatriates.     

Does intellectual property rights reform spur industrial development?

An extensive theoretical literature generates ambiguous predictions concerning the effects of intellectual property rights (IPR) reform on industrial development. The impact depends on whether multinational enterprises (MNEs) expand production in reforming countries and the extent of decline in imitative activity. We examine the responses of U.S.-based MNEs and domestic industrial production to a set of intellectual property rights reforms in the 1980s and 1990s. Following reform, MNEs expand the scale of their activities. MNEs that make extensive use of intellectual property disproportionately increase their use of inputs. There is an overall expansion of industrial activity after reform, and highly disaggregated trade data indicate higher exports of new goods. These results suggest that the expansion of multinational activity more than offsets any decline in imitative activity.     

Can austerity be self-defeating?

With European governments cutting back on spending, many are asking whether this could make matters worse. In the UK for instance, recent OECD estimates suggest that “austerity” will lead to another recession, which in turn may lead to a higher debt-to-GDP ratio than before. As the debate heats up, the following two articles attempt to provide some cool economic logic.     

Can the Euro Survive?

One of the fascinating aspects of the European debt crisis has been the resilience of the euro. For much of 2011, the euro was a key reserve currency, oblivious to the chaos ravaging European economies. Now, however, the gravity of the crisis is finally dragging down the euro. As the Euro zone debt crisis enters its third uncertain year, the question about whether the euro can survive rises. This paper argues that the euro can survive given policymakers still have in hand various tools. These tools include creating exit rules, implementing new stabilisation rules and instruments, adopting new fiscal policy, introducing conditional Eurobonds, using inflation differentials and providing more independence to the European Central Bank.     

A new departure in international commodities policies?

In the course of the last United Nations' World Trade Conference (UNCTAD) the Soviet Union, Ivory Coast and Bulgaria signed the agreement on the Common Fund for Commodities. The Fund, which was conceived as the cornerstone of a new international commodities policy, will thus come into effect in the near future, probably in the course of 1988. Will this leadt o a new departure for international commodities policies?     

How outside directors’ human and social capital create value for corporate international investments

Grounded in theories of resource dependence, vicarious and superstitious learning, information processing, and board group literature, this study examines how outside directors’ human and social capital affect the value of corporate foreign direct investments. We employ the event study approach to examine 1210 international investment cases of 836 US firms over a 13-year period. We find significant but distinct non-linear impacts of board members’ human capital (U-shaped effect) and social capital (inverted U-shaped effect). The quality of board capital is also influential, as demonstrated by the effect of directors’ prior foreign investment performance in addition to size and degree of internationalization of interlocked companies. The performance measures of both abnormal announcement returns and operating ROA yield similar results. Our findings highlight the importance of incorporating factors related to board human and social capital for a more comprehensive analysis of the contribution of outside directors to a firm’s international success.     

Comment on “Can we live without a dog? Consumption life cycles in dog-owner relationships”

The intention in this commentary is to anchor the paper to concepts from the consumer behavior literature and highlight departures from what we might expect.     

Should all firms adapt websites to international audiences?

The authors investigate the moderating roles of brand equity and purchasing risk in the relationships between website cultural congruity (WCC) and two dependent variables: attitude toward the website (A_ST) and trust in the e-vendor. An exploratory study identifies typical French website design elements (graphic design and layout factors) to use in a subsequent experimental study to manipulate WCC. The results reveal that the effect of WCC on A_ST increases when brand equity is weak; for trust, both brand equity and purchasing risk act as moderators. The interaction between brand equity and purchasing risk reveals that WCC only influences trust when brand equity is weak. Overall, the results suggest that strong brand equity outweighs the effects of WCC in terms of improving site attitudes and reducing purchasing risk, with notable managerial and research implications.     

Do credible domestic institutions promote credible international agreements?

We examine the relationship between international policy coordination and domestic policy reputation when both are self-sustaining. We show that domestic policy commitment does not necessarily facilitate international cooperation; rather, efficient policies may be most easily sustained when governments are unable to pre-commit to policy domestically. Moreover, the lack of domestic commitment is more likely to facilitate international cooperation the larger the international spillovers of domestic policies are.     

How should managers treat ethics in international business?

Business ethics concern the consideration of moral in corporate decision making. International managers may be confronted with a variety of ethical dilemmas, usually due to differences among national markets in what constitutes legal or acceptable practice. Beliefs about what constitutes ethical business behavior commonly stem from one of four moral philosophies: teleology, deontology, the theory of justice, and cultural relativism. A framework incorporating all four is presented here which should provide a useful decision tool for international managers. An application of the framework and the complexities associated with it are presented next. We conclude that an effective integration of the company's perspective on ethics and the business behavior of the employees is critical and that it depends on top management, and the entire organization, demonstrating that they are serious about ethical business behavior on an ongoing basis. © 1998 John Wiley & Sons, Inc.     

Can free-shipping hurt online retailers?

Quantitative Marketing and Economics - In this paper, we investigate optimal pricing strategies for an online grocery retailer that derives its profits from delivery fees and grocery sales. We base...     

Can income inequality promote democratization?

The aim of this paper is to study the effect of income inequality on the probability of democratization, in a panel of 51 transition countries during the period 1960–2008. Using a conditional fixed-effect logit estimation, we find robust results suggesting that income inequality (measured by the Gini index of household’s income inequality) has an inverse—U-shaped relation with the probability of transition from autarchy to democracy. We show that there is a turning point at a level of household’s income inequality equal to a Gini index of 40. When income inequality is below 40, then probability of transition is positively related to inequality, but when inequality is higher, a subsequent increase in inequality decreases the probability of democratization. This is consistent with Acemoglu and Robinson’s theory that shows how transitions are likeliest at moderate levels of inequality, while autocracy is likelier at the lowest and highest levels of inequality.