Potential and recognized boundary spanners in multinational corporations

Boundary spanners play an important role in multinational corporations (MNC), yet it is unclear who these valuable individuals are and why certain individuals, and not others, perform this role. We advance a ‘recognition’ perspective based on whether and how relevant others on both sides on the boundary experience positive impact. A dynamic integrated mixed method analysis of 118 individuals involved in headquarters-subsidiary interactions in four MNCs, shows that only a minority are ‘recognized boundary spanners’, experienced by others to positively impact intergroup relations. We identify different categories and mechanisms of recognition, and make a methodological contribution by integrating qualitative and quantitative analysis.     

An application of the Black–Litterman model with EGARCH-M-derived views for international portfolio management

This paper provides an application of the Black–Litterman methodology to portfolio management in a global setting. The novel feature of this paper relative to the extant literature on Black–Litterman methodology is that we use GARCH-derived views as an input into the Black–Litterman model. The returns on our portfolio surpass those of portfolios that rely on market equilibrium weights or Markowitz-optimal allocations. We thereby illustrate how the Black–Litterman model can be put to work in designing global investment strategies.      

S&P 500 Index Additions and Earnings Expectations

Stock price increases associated with addition to the S&P 500 Index have been interpreted as evidence that demand curves for stocks slope downward. A key premise underlying this interpretation is that Index inclusion provides no new information about companies' future prospects. We examine this premise by analyzing analysts' earnings per share (eps) forecasts around Index inclusion and by comparing postinclusion realized earnings to preinclusion forecasts. Relative to benchmark companies, companies newly added to the Index experience significant increases in eps forecasts and significant improvements in realized earnings. These results indicate that S&P Index inclusion is not an information‐free event.     

TOWARDS DESIGNING AN IDEAL PATENT SYSTEM

An ideal patent system balances the returns to inventors and the dissemination of new technologies. This article examines legal policy instruments - encompassing duration, scope and strength of patent protection, as well as invention disclosure and novelty requirements - and R&D subsidies that help sustain growth in GDP. The paper studies the issues associated with designing an effective patent system, surveys the industrial property literature and delineates the focal points of debate among researchers and policy-makers.     

A framework of successful organizational practices in Western multinational companies operating in Russia

Russian organizations have undergone significant changes since the 1990s. A new generation of Russian managers has come to the fore in Russia, who are eager to learn and open to Western knowledge. In turn, Western multinationals have also learned the fundamentals of doing business in Russia. How these developments are reflected in today's operations of Western multinationals in Russia remains – albeit with a few exceptions – largely unexplored in the academic literature. To address this gap, this paper explores what are the organizational practices and how do Western multinationals utilize them when striving to succeed in today's Russia. Based on two explorative case studies and 64 personal interviews with top and line managers it identifies four organizational practices, such as management training, corporate culture management, intercultural and linguistic training, and HRM practices, and two internalization mechanisms, such as boundary spanning, and reliance on local competence. The analysis elucidates important changes that have occurred in Western-Russian business relations and underscores important practical implications.     

Optimal securitization with moral hazard

We consider the optimal design of mortgage-backed securities (MBS) in a dynamic setting in which a mortgage underwriter with limited liability can engage in costly hidden effort to screen borrowers and can sell loans to investors. We show that (i) the timing of payments to the underwriter is the key incentive mechanism, (ii) the maturity of the optimal contract can be short, and that (iii) bundling mortgages is efficient as it allows investors to learn about underwriter effort more quickly, an information enhancement effect. Finally, we demonstrate that the optimal contract can be closely approximated by the “first loss piece.”     

Gender in international business journals: A review and conceptualization of MNCs as gendered social spaces

The paper reviews 105 contributions published in journals pertinent to the field of International Business (IB) between 1991 and 2014 and details four main conceptualizations of gender: how women are compared against men, how gender is treated as a control variable and a cultural macro variable, and how gender is 'done' in international organizations. The review reveals that positivist epistemological assumptions dominate the IB field and that the current understanding of gender is limited. To advance the research, the paper develops the notion of MNCs as gendered social spaces and explains why the IB field would benefit from a more nuanced understanding and incorporation of gender relations into its analyses and discussions. The paper outlines theoretical and methodological advances associated with the reconceptualization of MNCs as gendered social spaces.     

Asymptotics of the principal components estimator of large factor models with weakly influential factors

This paper introduces a drifting-parameter asymptotic framework to derive accurate approximations to the finite sample distribution of the principal components (PC) estimator in situations when the factors’ explanatory power does not strongly dominate the explanatory power of the cross-sectionally and temporally correlated idiosyncratic terms. Under our asymptotics, the PC estimator is inconsistent. We find explicit formulae for the amount of the inconsistency, and propose an estimator of the number of factors for which the PC estimator works reasonably well. For the special case when the idiosyncratic terms are cross-sectionally but not temporally correlated (or vice versa), we show that the coefficients in the OLS regressions of the PC estimates of factors (loadings) on the true factors (true loadings) are asymptotically normal, and find explicit formulae for the corresponding asymptotic covariance matrix. We explain how to estimate the parameters of the derived asymptotic distributions. Our Monte Carlo analysis suggests that our asymptotic formulae and estimators work well even for relatively small n$n$ and T$T$. We apply our theoretical results to test a hypothesis about the factor content of the US stock return data.