Why do foreigners invest in the United States?

Why are foreigners willing to invest over $2 trillion per year in the United States? This paper tests various hypotheses and finds that standard portfolio allocation models and diversification motives are poor predictors of foreign holdings of U.S. liabilities. Instead, foreigners hold greater shares of their investment portfolios in the United States if they have less developed financial markets. The magnitude of this effect decreases with income per capita. Countries that trade more with the United States also have greater portfolio shares in U.S. equity and bond markets. These results support recent theoretical work on the role of financial development in sustaining global imbalances and have important implications for whether the United States can continue to attract sufficient financing from abroad without major changes in asset prices and returns, especially in bond markets.     

Why the Chinese color televisions meet attacks in the United States

Although Beijing was busy fighting SARS, all the leaders of China‘s color television export departments were present at the emergency meeting held by the Ministry of Information Industry on May 9.     

Why labor income shares seem to be constant?

Abstract

The common assumptions that labor income share does not change over time or across countries and that factor income shares are equal to the elasticity of output with respect to factors have had important implications for economic theory. However, there are several theoretical reasons for why the elasticity of output with respect to reproducible factors should be correlated with the stage of development. In particular, the behavior of international trade and capital flows and the existence of factor saving innovations imply such a correlation. If this correlation exists and if factor income shares are equal to the elasticity of output with respect to factors then the labor income share must be negatively correlated with the stage of development. The existence of a labor intensive sector that produces non-tradable goods would explain why labor income share has no correlation with income per capita.     

United Celebrates 3,888,888th Passenger Flying From China to the United States

Passenger milestone underscores United＇s achievement in China and contribution to the Sino-US aviation market.     

Who Files for Personal Bankruptcy in the United States?

Who files for bankruptcy in the United States is not well understood. Previous research relied on small samples from surveys or a small number of states from administrative records. Using over ten million administrative bankruptcy records linked to the 2000 Decennial Census and the 2001–2009 American Community Surveys, I document who files for bankruptcy. Compared to the US population, bankruptcy filers are middle income, more likely to be divorced, more likely to be black, more likely to be veterans, less likely to be immigrants, and more likely to have a high school degree or some college. Filers are more likely to be employed. The bankruptcy population is aging faster than the US population as a whole. Lastly, using pseudo‐panels I study what happens in the years around bankruptcy. Individuals are likely to get divorced in the years before bankruptcy and then remarry. Income falls before bankruptcy and rises after bankruptcy.     

Do taxes level the playing field?: How U.S. tax policy affects the investment decisions of foreign affiliates in the United States

Recent research has suggested that tax reforms in the United States in the last decade have increased taxes on U.S. investors, but left foreign investors unscathed, fueling a boom in foreign investment. Other researchers claim that uneven enforcement of U.S. corporate tax laws and the opportunity to shift income to artificially lower tax locations give foreign investors yet another advantage over U.S. domestic firms. Willard examines these theories and shows how reforms can create competitive advantages—or disadvantages—for foreign firms relative to domestic firms.     

Credit Union Legislative Frameworks in the United States of America and the United Kingdom – A Flexible Friend or a Step Towards the Dark Side?

This article questions the findings of several studies which have concluded that the Credit Unions Act 1979 was a factor limiting the growth of credit unions in the United Kingdom (UK). The author’s conclusions are based upon an analysis of the amendments to the Credit Unions Act 1979 introduced by the Financial Services Authority (FSA). As a result, the 1979 Act now reciprocates the controversial, yet flexible United States (US) legislative framework. In particular, the article examines the interpretation of the common bond, the provision of financial services and the regulation of credit unions. The article concludes that these three statutory provisions have assisted the growth of credit unions in both countries and not limited their development. However, the growth of credit unions has come, at the expense of their unique status and philosophy. It has made US credit unions, in particular, indistinguishable from banks. This is a problem which may affect credit unions in the UK. The article concludes that the Credit Unions Act 1979 did not limit their development, but acted as a galvanising factor for credit union expansion.     

Music as a Service as an Alternative to Music Piracy?

Despite increasing acceptance of digital channels, total sales in the music business decreased by 31 % from 2004 to 2010. Music piracy is still considered one of the main causes for this. However, several studies found no effects or even positive effects of illegal downloading on record sales. In the past, piracy has been counteracted especially by prosecution and legal offers. Music as a Service (MaaS) represents a new, differing distribution approach in digital music. In contrast to the well-known music platforms for so-called à-la-carte downloads, such as the iTunes Store, MaaS possesses two important characteristics: transmission (streaming instead of downloading) and pricing model (flat rate instead of pay-per-download). Therefore, the consumption of music by means of purchasing and downloading is replaced by a monthly payment service (paid MaaS) and an ad-supported (free MaaS) service. First user surveys suggest that many music pirates are making use of these offers. To find out if MaaS is an attractive distribution channel for music pirates, we developed a model to explain the intention to use MaaS based on the Theory of Planned Behavior. To empirically test this model, we surveyed 132 music pirates. Among others, the outcome shows that the intention to use free MaaS is mainly affected by the attitude towards MaaS, while using paid MaaS is predominantly a result of the influence of users’ closest peers. The attitude towards MaaS is positively influenced by the desire to receive music recommendations, the payment type (in the form of a flat rate model), and the relative advantage of MaaS compared to illegal choices.     

Understanding the flow of health policy in the United States: self-interest or ignorance?

Health policy decisions are made in an uneven manner, eluding attempts to explain developments with a coherent theory. Numerous explanations have been suggested to explain individual policy actions, but recently Feldstein has attempted a broader formulation. This Self-Interest Model of Health Policy, however, assumes full knowledge of a policy's benefits and costs. This is an unrealistic assumption, and the model is unable to explain important decisions that have been made in three areas: insurance for long-term care, universal access, and efficiency incentives. This article presents a broader, more powerful formulation of the Feldstein model, specifically incorporating public ignorance as a policy determinant. The vital role of education and health policy research is underscored.     

A race to the bottom? Employment protection and foreign direct investment

A common critique of globalization is that it leads to a race to the bottom. Specifically, it is assumed that multinationals invest in countries with lower regulatory standards and that countries competitively undercut each other's standards in order to attract foreign capital. This paper tests this hypothesis and finds robust empirical support for both predictions. First, a reduction in employment protection rules leads to an increase in foreign direct investment (FDI). Furthermore, changes in employment protection legislation have a larger impact on the relatively mobile types of FDI. Second, there is evidence that countries are competitively undercutting each other's labor market standards.     

What Promotes Online Group-Buying? A Cross-Cultural Comparison Study between China and the United States

Considering the universal prosperity of online group-buying (OGB), this research study used online surveys to gauge the impact of perceived risk, opinion seeking, and hedonistic/recreational and brand conscious decision-making styles on consumers' OGB intention in two diametrically distinguished countries—China and the United States. The research findings indicated both cultural similarities and differences in the mechanisms underlying Chinese and American consumers' OGB intention. Perceived risk emerged as the most important predictor in the U.S. data while brand consciousness was the key driver of Chinese consumers' OGB intention. Promotion and management implications based on the research findings are also presented.     

Why Did Europe Decide to Move to a Single Currency 25 Years Ago?

Many Europeans today ask why the European Community chose the bold strategy of pursuing an Economic and Monetary Union at a time when a number of political and economic issues had not yet been resolved. Many economists like to think that the economic case for EMU was weak and that the decision was taken strictly on political grounds. As someone who had the privilege of being involved in the early preparatory efforts, I would argue that this is a misreading of history. I believe there was both a strong economic case for moving towards a single currency and a rare political opportunity for implementing it around 1990.     

Why do entrepreneurs use franchising as a financial tool? An agency explanation

When and why one type of entrepreneur (franchisor) attracts to its ventures another type of entrepreneur (franchisees) instead of passive investors is a central concern in entrepreneurship literature. Based on the informativeness principle of the principal–agent model, we claim that franchisees are not such an expensive financial tool as has been argued in the literature because their compensation (return) is more efficiently designed: it directly depends on variables which are under franchisees' control. We therefore link agency and financial explanations for franchising. Most of our findings show that, once the agency argument is controlled for, the higher the cost of alternative funds for the franchisor (estimated through different variables), the more the franchisor will rely on expansion through franchising as opposed to company-ownership. We interpret this as a clue that franchising is also used as a financial capital source.     

Trade Policy and Export Diversification: What Should Colombia Expect from the FTA with the United States?

Sectoral concentration of exports has been a longstanding matter of concern for policymakers in developing countries. According to economic theory and recent empirical evidence, improved market access through trade agreements is likely to favor export diversification. In this article, it is assessed whether this has been the case for Colombian exports to the United States and whether an FTA with the United States would help Colombia diversify their exports. We find that lower tariffs have indeed favored exports of new products from Colombia. Predictions suggest that the FTA is likely to induce further diversification, but only up to a certain point.     

Antecedents to Online Purchasing–An Exploratory Comparison of Anglo versus Hispanic Consumers in the United States

ABSTRACT

This exploratory research investigates whether or not Anglo versus Hispanic consumers in the United States (US) differ with respect to purchase behavior on the Internet. As a new, ground-breaking innovation, the Internet represents an entirely new medium of exchange. In this study, we address whether or not the Internet has been adopted to the same extent and in the same way(s) among Anglo and Hispanic US consumers. Anglos and Hispanics represent the two largest segments of the US population and, curiously, little if any marketing research has compared and contrasted these two groups with respect to using the Internet to make commercial purchases. Extant theory and research in electronic commerce provide a basis to suggest that there may, in fact, be differences across these two US sub-cultures. Our findings reveal that the two groups do actually differ in this regard; the data also offer insights into these differences.     

Is it better to give than to receive? Exploring gender differences in the meaning of memorable gifts

Research on gift-exchange behavior has generally found that women are more concerned and involved with giving gifts than are men. Moreover, the consumer behavior literature has focused almost exclusively on gift-giving behavior, offering few insights regarding gift-receiving roles. As an initial step toward understanding gift receiving, 89 men and 85 women from the United States (n = 124) and Europe n = 50) completed written narratives regarding their most memorable gift experiences. An interpretive analysis of the texts uncovered several themes associated with giving and/or receiving gifts, and correspondence analyses generated distinct gift-receiving and gift-giving profiles for men and women. Surprisingly, given the more prominent role of women in gift giving, four of the five female profiles involved memories of receiving rather than giving gifts. It was the men that tended to report gift-giving experiences; two of the three male profiles that emerged involved giving gifts. The texts then were reexamined and further interpreted to acquire a deeper understanding of each profile and how giving and receiving profiles of both men and women might be related to one another. © 1998 John Wiley & Sons, Inc.     

Sustainability as a marketing tool: To be or to appear to be?

While sustainability is an ethical issue, it is also becoming relevant from a marketing standpoint and can be particularly decisive in stakeholder relationships. Companies can approach this issue in different ways, choosing whether to publicize their good conduct or to project a responsible attitude that does not reflect what they effectively achieve. In this context, the authors propose a self-assessment matrix that identifies a better way to make sustainability a source of competitive advantage through a transparency-based approach. By way of a geological metaphor, four types of companies are presented that are distinctive based on two variables: sustainable commitment and communication. Costs and benefits are analyzed for each quadrant, as well as problems resulting from a lack of transparency. In the final section of the article, the authors discuss whether the choice to communicate sustainability can be considered ethical or whether it is only a question of business. Reflections are reported.     

From the ‘Hindu rate of growth’ to ‘unstoppable India’: has the services sector played a role?

India shifted from an import substitution growth strategy (ISS) to an export-led-growth strategy (ELGS) in July 1991. Consequently, liberalisation was promulgated not only in the industrial sector but in the services sector too in the post-1991 period. ‘services-led-growth strategy’ – a concomitant of ELGS – has led to an improvement in the revealed comparative advantage in the export of commercial services during the period 1990–2005. Furthermore, the openness of services and foreign direct investment in services have emerged as important determinants of gross domestic product growth during the period 1995–2005. The author therefore argues that if ISS led to the ‘Hindu rate of growth’ in the first three decades of planning, it is the services-led growth which has made ‘India unstoppable’ on the economic front.