Bi-sourcing in the global economy

In organizing production, many firms conduct bi-sourcing, i.e., acquiring the same set of inputs both by buying from external suppliers (outsourcing) and carrying out in-house production (insourcing). We show that, by adopting the bi-sourcing strategy, firms can use the payoff from one supplier as a backup option in negotiating with the other supplier (the cross-threat effect). When firms conduct bi-sourcing in the global economy consisting of the high-waged North and low-waged South, they need to make the location choice for both insourcing and outsourcing. We find that the low wage in the South can encourage investment by component suppliers (the cost effect). However, firms may achieve a better cross-threat effect by relocating overly strong component supplier from the cost-advantageous South to the cost-disadvantageous North (the balancing effect). The optimal bi-sourcing strategy is determined by the interplay of the cost effect and the balancing effect.     

Slow recovery in world trade

World trade is currently undergoing a period of pronounced weakness. Following average growth of a good 10% in 1997, it increased by only around 4% last year. Yet even this increase was due to the high level at the start of the year; during the course of last year it virtually stagnated. This year, however, recovery is likely to assert itself once more. This paper is based on the results of the Working Group on Foreign Trade of the Association of European Conjuncture Institutes (AIECE) from spring 1999. The working group comprises the following members: COE Chambre de Commerce et d'Industrie de Paris, Paris; CPB Netherlands Bureau for Economic Policy Analysis, The Hague; DULBEA Départment d'économie Appliquée de l'Université Libre de Bruxelles, Brussels; FIRI Foreign Trade Research Institute, Warsaw: Hamburg Institute for Economic Research (HWWA), Hamburg; INSEE Institut National de la Statistique et des études économiques, Paris: ISAE Istituto di Studie e Analisi Economica, Rome; KOPINT Economic Research, Marketing and Computing Co., Budapest.     

Marked recovery in the world economy

With expansion accelerating strongly since last summer, the world economy has overcome an extended period of weakness. The USA, driven by highly expansive fiscal policies, is once again proving to be an important locomotive for global economic development. The strong fiscal stimulus will diminish sharply this year, however. Can the recovery continue nonetheless? This is of importance for the euro area in particular, where exports have so far been the primary foundation of economic resurgence. Is the substantial appreciation of the euro jeopardising prospects of catching up with the rest of the world?     

Lasting recovery in the world economy

Economic recovery has returned to the industrial countries as a whole. However, expansion is moderate. In continental Europe, utilisation of capacity is still below the long-term average. In Japan, under-utilisation of capacity is even more pronounced. At the same time, unemployment has remained high. Elsewhere, though, and particularly in the USA, resources have been exploited to a high degree. Here too, however, wage and price increases remained moderate. Economic convergence is accompanied by a convergence of economic policy—not just in those countries striving to take part in the European Monetary Union. In view of this, how good are the prospects for economic development and for employment in the coming year?     

Hesitant recovery in the world economy

So far there has been no far-reaching recovery in the world economy. While the recession of 2001 was overcome at the beginning of last year, demand and output growth has been restrained in spite of expansive economic policies. This is partly due to a mood of great uncertainty, caused not least by geopolitical tensions and declining confidence on the financial markets. Will the dampening effect of these factors ebb away this year and so lead to a marked upward trend in the world economy?     

Marketing in the global economy: Creditworthiness

The importance of accurate credit information on potential clients and customers is even more critical when doing business overseas—a thorough check before committing resources is always a good idea.     

Delayed recovery of the world economy

The weakness in the world economy, which began in autumn 1990, is lasting longer than expected. While the expansionary forces in Japan and west Germany increasingly lost momentum during the course of last year, the recovery from the recession in North America began to falter again after a short time. Amidst such developments, doubts are being voiced as to whether the global economy is already on the road to recovery. Will 1992 be another weak year?     

Latin American firms competing in the global economy

As part of a cooperative effort between the Journal of Business Research (JBR) and the Business Association of Latin American Studies (BALAS), this special issue brings updated research on the Latin American business environment. Out of 226 papers submitted to the BALAS 2012 conference, which was hosted by the Pontifical Catholic University of Rio de Janeiro (PUC-Rio), 22 were pre-selected to run for publication in this special issue — and only 14 actually were accepted after the demanding three rounds of a double blind review process that was run after the conference. This introduction to the special issue of the JBR on the BALAS 2012 conference brings an overview of the changes that have taken place in the business environment of Latin America, the evolution of the internationalization behavior of Latin American firms and the changes in their strengths to compete both domestically and abroad.     

Competing successfully in a global economy

This commentary discusses the need for an internationalist approach in today's competitive global markets. Albert C. Bersticker, Chairman and CEO of Ferro Corporation, a US multinational in operation since 1919, draws upon his experience at the helm of a successful and growing manufacturing operation and gives several important lessons for strategic and competitive management of an international corporation. Bersticker elucidates the challenges facing today's global business manager, and puts the overall mission of any company doing business overseas into an appropriate context. Being aware of both the risks and benefits of competing in an ever-changing world is the key to success in the global economy according to the author. © 1998 John Wiley & Sons, Inc.     

Is the global market economy broken?

Governments are reeling. Companies are foundering. People are worrying. The global market economy is stressed to levels not seen in a long time. Des Dearlove has been asking people if the world's economy is broken. He quickly discovered that it's not a yes-or-no question.     

The strategic challenge of the evolving global economy

The world economy is in a period of rapid change. New market forces are emerging as the economic center of gravity continues moving westward toward the Orient. The technological revolution is likely to equal the industrial revolution in its impact on the global economy. How are industrial countries responding to these changing markets and technologies?     

Customer-based execution strategy in a global digital economy

Multinational corporations (MNCs) are continuing to invest more in expanding into new markets around the world. These firms are faced with determining the optimal go-to-market strategy in these heterogeneous new markets to attract and retain profitable customers. This paper provides an organizing framework to help firms develop profitable customer-level strategies across countries in the digital environment. We start by providing a summary of the marketing literature on a customer-based execution strategy. Next, we discuss how the evolving digital landscape is affecting firms’ relationships with customers and describe some of the current digital product and process innovations in the marketplace. We discuss boundary conditions for how these digital product and process innovations might affect profitable customer strategies in a global context. In addition, we discuss implementation challenges that MNCs will likely face in deploying these customer-level strategies and other stakeholders (outside of customers) that will likely play a role in the execution of these customer-level strategies. Finally, we summarize set of research questions to guide future research on customer-level strategies in a global digital context.     

Learning and knowledge diffusion in a global economy

I develop a dynamic general equilibrium model to understand how multinationals affect host countries through knowledge diffusion. Workers in the model learn from their managers and knowledge diffusion takes place through worker mobility. Unlike in a model without learning, I present a novel mechanism through which an integrated equilibrium represents a Pareto improvement for the host country. I go on to explore other dynamic consequences of integration. The entry of multinationals makes the lifetime earning profiles of host country workers steeper. At the same time, if agents learn fast enough, integration creates unequal opportunities, thereby widening inequality. The ex-workers of foreign multinationals also found new firms which are, on average, larger than the largest firms under autarky.     

全球经济失衡与调整的政治经济学分析

美国金融危机爆发以来,全球经济失衡及其调整逐渐成为世界主要国家争论与战略博弈的一个焦点问题。本文在分析全球经济失衡的内涵及其成本的基础上,重点探讨了全球失衡的国内调整与国家间调整,认为寻求国内不同利益集团的利益平衡和主要相关国家之间失衡调整成本分担的平衡是决定全球经济失衡调整能否成功的关键。     

Reconciling the irreconcilable: The global economy and the environment

This paper focusses on the relationship among structural adjustment policies and practices, the business activities of transnational corporations and what Robert Reich has called the coming irrelevance of corporate nationality. The argument presented is that the force of these combined factors makes environmental sustainability impossible.Dr. Deborah Poff is a professor of philosophy and the Dean of Arts and Science at the University of Northern British Columbia. Professor Poff has published extensively in the areas of feminism, equity, violence and applied ethics. She is the editor of theJournal of Business Ethics.     

Spiders and snakes: Offshoring and agglomeration in the global economy

Global production sharing is determined by international cost differences and frictions related to the costs of unbundling stages spatially. The interaction between these forces depends on engineering details of the production process with two extremes being ‘snakes’ and ‘spiders’. Snakes are processes whose sequencing is dictated by engineering; spiders involve the assembly of parts in no particular order. This paper studies spatial unbundling as frictions fall, showing that outcomes are very different for snakes and spiders, even if they share some features. Both snakes and spiders have in common a property that lower frictions produce discontinuous location changes and ‘overshooting’. Parts may move against their comparative costs because of proximity benefits, and further reductions in frictions lead these parts to be ‘reshored’. Predictions for trade volumes and the number of fragmented stages are quite different in the two cases. For spiders, a part crosses borders at most twice; the value of trade increases monotonically as frictions fall, except when the assembler relocates and the direction of parts trade is reversed. For snakes the volume of trade and number of endogenously determined stages is bounded only by the fragmentation of the underlying engineering process, and lower frictions monotonically increase trade volumes.