Trade openness,income levels,and economic growth: The case of developing countries, 1970–2009

This paper attempts to investigate the extent to which trade openness has had an impact on the levels of income and rates of growth in a sample of 115 developing countries for the period 1970–2009. Additionally, to assess whether there is an income level threshold for a country to benefit from international trade, the sample is broken down into three mutually exclusive groups of countries: low-income, lower middle-income, and upper middle-income countries. The main novelty of the paper lies on the use, on the one hand, of a new and better trade openness measure and, on the other hand, of non-stationary heterogeneous panel cointegration techniques to cope with the problem of cross-sectional dependence. The results show a positive bi-directional relationship between trade openness and income level in the long run, thus suggesting that trade openness is both a cause and a consequence of the level of income. The results for the short run, that is, the link between openness growth and economic growth, go in the same direction.     

The moderating impact of internal social exchange processes on the entrepreneurial orientation–performance relationship

This paper applies a social exchange perspective to understand the internal contingencies of the relationship between entrepreneurial orientation (EO) and performance. It focuses on two aspects of social interactions among functional managers (procedural justice and trust), as well as on their organizational commitment, as potential enhancements to the firm's successful exploitation of entrepreneurial opportunities. A study of 232 Canadian-based firms finds several positive moderating effects: The EO–performance link is stronger for higher levels of procedural justice, trust, and organizational commitment. In addition, consistent with a systems approach to organizational contingencies, the EO–performance relationship is stronger when the organization's social context comes closer to an “ideal” configuration of procedural justice, trust, and organizational commitment that is most conducive to knowledge exchange within the organization. The study's implications and future research directions are discussed.     

The impact of country-of-origin on the acceptance of foreign subsidiaries in host countries: An examination of the ‘liability-of-foreignness’

This paper examines the relationship between an organization's country-of-origin and the acceptance into a host country environment by constituents such as vendors, suppliers, and distributors. This study contributes to the literature by proposing the examination and ultimate measurement of various tangible and intangible sources of the ‘liabilities of foreignness’. Additionally we show that are these sources are internal and external moderators of perceived acceptance in the host country. Manager must recognize the country-of-origin strategic options to address the negative overshadowing of the liability-of foreignness. We conclude that not doing so can create a stigma that may be attached to the overall organization, its image, products, brands, and to its employees. Further, negative attribution may be caste upon all the identifying characteristics of the foreign entity. The management of the firm must note the potential resistance to accept the organization and its products/services and must develop a proactive set of strategies to address the negativism of the host country constituents.     

Morality or economic interest? The impact of moral motives and economic factors on the purchase of fair trade groceries

In this article, we compare the impact of moral motives and economic factors on the purchase of fair trade groceries. Moral motives are measured by three different constructs, which are derived from different theoretical perspectives: one from the classical theory of attitude, one from the subjectively expected utility theory and one from the norm‐activation model. The empirical results of the analysis show that moral motives as well as economic factors are important determinants for explaining the purchase of fair trade groceries. Furthermore, the study indicates that the impact of moral motives is greater than that of economic factors, and among the moral factors, the personal norm is especially explanatorily powerful.     

The impact of home–host cultural distance on foreign affiliate sales: The moderating role of cultural variation within host countries

Research on how multinational firms deal with home–host cultural differences argues that cultural differences are minimized and assumes that foreign cultures are homogenous. In this paper we relax the cultural homogeneity assumption. In the presence of cultural variation in host countries the minimization of cultural differences leads existing mean-based indices of cultural differences to overestimate the actual cultural differences these firms have to deal with. We test this argument in a 25-year panel analysis of total US multinationals' foreign sales in 54 host countries. At the sample average of cultural variation, the use of mean cultural difference indices yields a 74% overestimate of the actual cultural difference effect. This suggests that home–host cultural differences are a substantially smaller barrier to multinational sales than hitherto assumed. The assumption of cultural homogeneity leads to conclusions in which a too large role is attributed to cultural differences.     

The impact of institutional distance on the international diversity–performance relationship

We investigated the impact of institutional distance on the international diversity–performance relationship. We first discussed the international diversity–performance relationship for large multinational firms and later showed the moderation effect of regulative and normative institutional distance. Based on a sample of Fortune 500 firms, we found an inverted U-shaped curve. Regulative institutional distance has a negative moderating effect on the international diversity–performance relationship, while normative institutional distance shows a positive effect.     

The bank–firm relationship during economic transition: The impacts on bank performance in emerging economies

We analyze the lending relationships between 1011 banks and 17,284 client borrowers across 11 emerging economies. We first demonstrate that a state-owned bank's risk appetite increases as its number of family business group-owned borrowing partners increases. Second, we show that a non-financial firm-owned bank's risk appetite also increases as its number of family business group-owned borrowing partners increases. Finally, we show that a bank is more likely to reduce its risk appetite and improve its operational cost efficiency as its foreign ownership ratio increases, regardless of the bank's lending partner. These findings suggest that, in the post-privatization period, the ownership structure changes of banks and/or borrowers affect the lending relationship and the bank's risk appetite and cost efficiency.     

The economic impact of small business development center counseling activities in the United States: 1990–1991

This article reports the results of the first national study of the economic impact of Small Business Development Center (SBDC) counseling activities. The study analyzed the performance improvements of long-term clients who indicated that the SBCD's assistance was beneficial. Results suggest that the satisfied established business owners and aspiring entrepreneurs who received counseling in 1990 generated over $3.7 billion in new sales and almost 65,000 new jobs in 1991. These performance improvements generated approximately $2.61 in incremental tax revenues for every dollar expended on the entire SBDC program in the US.     

The saving rate and the upgrade of the trade commodity structure in developing countries: A dynamic H–O model under an oligopolistic market structure

This paper constructs an oligopolistic dynamic Heckscher–Ohlin (H–O) model of a small open economy to analyze the relationship between the saving rate and the upgrade of the trade commodity structure. The analysis shows that the saving rate determines the trade commodity structure of a country in the long-run equilibrium. Furthermore, a developing country with a low capital–labor ratio in the initial state will change from exporting labor-intensive goods in the initial state to exporting capital-intensive goods in the long-run equilibrium if it has a higher saving rate, and this upgrade of trade commodity structure has a social welfare effect under an oligopolistic market structure. The effect of trade policy on the upgrade of the trade commodity structure is uncertain in our model; therefore, a high saving rate is the irreplaceable driving force for trade commodity structure upgrades in developing countries.     

Primary commodity prices and the real exchange rate: the case of Australia 1900–91

How do real exchange rates of primary commodity exporters react to changes in the relative price of these exports? The relationship between these variables is examined using ninety-two years of Australian data. There is a significant positive correlation. However, the Australian real exchange rate does not display the downward trend that has been observed in the relative price of primary commodities. This is consistent with the hypothesis that the apparent long-run decline in the relative price of primary commodities is an artefact of inadequate quality adjustment in the price series for manufactures.     

Testing the asymmetric effects of exchange rate pass‐through in BRICS countries: Does the state of the economy matter?

This paper investigates not only the question of whether there is exchange rate pass‐through (ERPT) but also the extent to which the pass‐through is asymmetric or state‐dependent in the BRICS countries. Using monthly data from 1999:M1 to 2019:M12 and non‐linear smooth transition vector autoregressive (STVAR) model, our results provide evidence of period‐specific ERPT between the upper and lower regime periods, governed by the selected transition variables. The results further suggest that the pass‐through of exchange rate is higher when the economy is experiencing large appreciations and expansions as well as large depreciations and recessions. Theimplication for these findings is that ERPT is strongly affected by the state of the economy.     

Friends like this: The impact of the US–China trade war on global value chains

This paper considers the indirect impact the recent tariff increases between the United States and China can have on third countries through links in global supply chains. We combine data from input–output relationships, imports and tariffs, to calculate the impact of the tariff increases by both the United States and China on cumulative tariffs paid by third countries. We show that the tariff hikes increase cumulative tariffs for other countries and thus hurt trade partners further downstream in global supply chains. We also show that this is particularly important for tariff increases on Chinese imports in the United States. These are likely to be used as intermediates in production in the United States, which are then re-exported to third countries. The most heavily hit third countries are the closest trade partners, namely the EU, Canada and Mexico. We estimate that the tariffs impose an additional burden of around 500 million to 1 billion US dollars on these countries. China's tariffs on US imports have less of an effect.     

Effect of electromagnetic field accompanying the magnetic resonance imaging on human heart rate variability – a pilot study

The effect of electromagnetic field on cardiovascular system in the literature is defined in ambiguous way. The aim of this study was to evaluate the effect of electromagnetic field on the heart rate variability (HRV) during the examination with magnetic resonance. Forty-two patients underwent Holter ECG heart monitoring for 30 minutes twice: immediately before and after the examination with magnetic resonance imaging (MRI). HRV was analysed by assessing a few selected time and spectral parameters. Is has been shown that standard deviation of NN intervals (SDNN) and very low frequency rates increased, whereas the low frequency:high frequency parameter significantly decreased following the MRI examination. These results show that MRI may affect the HRV most likely by changing the sympathetic-parasympathetic balance.     

The Unification of the Colombian Stock Market: A Step Towards Efficiency–Empirical Evidence

ABSTRACT

The empirical evidence presented in this study shows that there has certainly been a structural change in the Colombian stock market since the merger of the three regional Exchanges (Bolsas) into the Colombian Stock Exchange (Bolsa de Valores de Colombia). This change has been reflected in a greater level of efficiency in that market. Regarding individual assets, the findings coincide with Samuelson (1998) in the sense that the stock market is micro-efficient but macro-inefficient, which means that the efficient market hypothesis performs better for individual stocks than for the aggregated price indexes of the market.

RESUMEN. La evidencia empírica presentada en este estudio muestra que realmente operó un cambio estructural en el mercado accionario colombiano a partir de la fusión de las tres Bolsas regionales en la Bolsa de Valores de Colombia. Este cambio se ha reflejado en un mayor nivel de eficiencia de este mercado. En cuanto a los activos individuales, los hallazgos coinciden con Samuelson (1998) en el sentido de que el mercado bursátil es micro-eficiente pero macro-ineficiente, es decir, que la hipótesis de la eficiencia del mercado se cumple mejor para acciones individuales que para los índices de precios agregados del mercado.

RESUMO. A evidência empírica apresentada neste estudo mostra que, sem dúvida, tem ocorrido uma mudança estrutural no mercado de ações colombiano, a partir da fusão das três Bolsas de Valores regionais, dando origem à Bolsa de Valores de Colombia. Esta mudança refletiu o alto nível de eficiência deste mercado. Quanto aos ativos individuais, percebe-se a coincidência com Samuelson (1998), no sentido de que o mercado de ações é micro-eficiente, mas também é macro-ineficiente, ou seja, que a hipótese de um mercado eficiente atua melhor para as ações individuais do que para os índices de preços agregados do mercado.     

The effect of outward foreign direct investment on home country's export: A case study on Taiwan, 1989–2006

The purpose of this study is to examine the effect of outward foreign direct investment (FDI) on home country's export in Taiwan since the late 1980s. By pooling the time series and cross-section data in a modified gravity model, the study analyzes the effect of outward FDI, both country by country and host groups as a whole, on Taiwan's exports. It is concluded that outward FDI has a complementary effect on home country's export in Taiwan, most significantly evidenced in China-bound investment, which accounted for most FDIs after the 1990s.     

The impact of buyer–seller relationships and reference prices on the effectiveness of the pay what you want pricing mechanism

Pay what you want (PWYW) is a new participative pricing mechanism that delegates the whole price determination to the buyer. Previous research on PWYW suggests that the final prices paid are not only affected by consumer characteristics but also by varying conditions, such as social distance within buyer–seller relationships and the provision of reference prices. Through an online survey and two field experiments, we test varying conditions of PWYW, such as social distance (buyer–seller relationship), provision of external reference price, product value, level of reputation, and duration of an application of PWYW. The results indicate that the provision of an external reference price is advantageous for the seller as the prices paid increase. The seller should also avoid offering products with high product value under PWYW conditions. Furthermore, increasing social distance may decrease the prices paid. Finally, a high level of reputation may be beneficial.     

The economic impact of the Trans‐Pacific Partnership: What have we learned from CGE simulation?

The Trans‐Pacific Partnership (TPP ) trade agreement, if were it to be successfully implemented, would be one of the largest regional agreements ever seen. It is the only exemplar to date of a “mega‐regional” FTA for which negotiations have been successfully concluded, and a landmark in evolving approaches to Asia–Pacific integration. As such, quantitative assessments of its potential effects are of considerable interest. One of the most widely used techniques for evaluating the economic impact of regional trading agreements is numerical simulation with computable general equilibrium, or CGE , models. There have now been a large number of papers written that use CGE methods to analyse the potential economic impact of the TPP agreement under varying theoretical and policy assumptions. In this paper we provide a synthesis of the key results that have emerged from the literature, and introduce some new simulation results of our own to anchor the discussion.     

Internationalisation choices of Polish firms during the post-socialism transition period: The role of institutional conditions at firm’s foundation

The purpose of this paper is to investigate how the home country radical change of institutional conditions influences the firm-level internationalisation process understood as exporting. In particular, we aim to broaden our understanding of how changing institutional conditions affect the internationalisation process of Polish firms founded in different institutional conditions; i.e. under the communist regime (before 1990), in the transition period (1990–2003), and in the post-transition period (2004 and later). We compare and contrast in each period three crucial aspects describing the internationalisation process: time to internationalisation, direction and degree of internationalisation. We find support for the assertion that the institutional conditions at a firm’s birth influence the internationalisation paths of emerging market firms in terms of speed, direction and degree of internationalisation. Firms founded either in the transition (1990–2003), or in the post-transition phase (2004 and later) are more likely to: (1) make the decision about internationalisation earlier in their life cycle, (2) enter developed markets, and (3) achieve a higher degree of internationalisation than firms founded under the communist regime (before 1990).     

The impact of supply disruption risk on a retailer’s pricing and procurement strategies in the presence of a substitute product

Retailers often experience stockouts when a supplier fails to deliver an order. In this paper, we identify the optimal procurement policy of a multi-product retailer in the presence of possible supply disruptions. Our analysis reveals that, in anticipation of potential supply disruptions, a retailer would typically benefit from ordering more units from a reliable supplier and fewer units from an unreliable one. Furthermore, the total number of units ordered may increase when there is supply disruption risk. As a result, the retailer may overstock some items. However, there are situations in which a retailer would optimally respond to supply uncertainty by consolidating its selling strategy around the unreliable supplier’s product. Under such a strategy, we find the surprising result that the retailer reduces the amount it orders from a reliable supplier as an unreliable seller becomes even less reliable. We also explore how supply disruptions can affect a retailer’s optimal pricing strategy. We find that under certain conditions, it is beneficial for a retailer to lower its price of a substitute product when one supplier fails to deliver its product. Finally, we find that, on net, consumers may benefit from supply uncertainty even though supply disruptions eliminate access to a desirable product.     

The impact of venture capital on the productivity growth of European entrepreneurial firms: ‘Screening’ or ‘value added’ effect?

We aim to ascertain to what extent the better performance of European venture capital (VC)‐backed firms in high-tech industries is due to either ‘screening’ or ‘value added’ provided by VC investors. We compare portfolio firms' productivity growth before and after the first VC round, using a matched control group as benchmark. We show that productivity growth is not significantly different between VC and non-VC-backed firms before the first round of VC financing, whereas significant differences are found in the first years after the investment event. We also find that the value-adding services provided by VC investors ‘imprint’ the portfolio firm.