The determinants of consumers’ online shopping cart abandonment

Despite placing items in virtual shopping carts, online shoppers frequently abandon them —an issue that perplexes online retailers and has yet to be explained by scholars. Here, we identify key drivers to online cart abandonment and suggest cognitive and behavioral reasons for this non-buyer behavior. We show that the factors influencing consumer online search, consideration, and evaluation play a larger role in cart abandonment than factors at the purchase decision stage. In particular, many customers use online carts for entertainment or as a shopping research and organizational tool, which may induce them to buy at a later session or via another channel. Our framework extends theories of online buyer and non-buyer behavior while revealing new inhibitors to buying in the Internet era. The findings offer scholars a broad explanation of consumer motivations for cart abandonment. For retailers, the authors provide suggestions to improve purchase conversion rates and multi-channel management.     

Creating Creditworthiness through Reciprocal Trade

The paper investigates how barter can be used to finance imports and restore the creditworthiness of highly indebted countries when reputation as an enforcement mechanism for credit repayment does not work. The authors argue that payments in goods can be used to collateralize a trade credit and thus improve the creditor's incentives to pursue defaulting debtors. Furthermore, it is shown that barter is particularly advantageous if export revenues of the debtor country are stochastic, even in the absence of risk aversion. The predictions of the model are consistent with data on actual barter contracts.     

Trade liberalization and credit constraints: Why opening up may fail to promote convergence

This paper examines credit constraints as one channel held responsible for hampering economic convergence between countries. Specifically, we extend a Melitz and Ottaviano ( 2008 ) type trade model with variable mark‐ups to allow for endogenous technology adoption. We consider a framework with two countries that potentially differ with respect to credit market development. Firms have the option to adopt a more efficient technology by paying some fixed cost that is more costly to finance for financially constrained firms. We find that technology adoption increases in both countries after trade liberalization but more so in the financially more developed country: the productivity gap widens. Simulations show that the welfare gap widens too. Opening up without sufficient access to external funding thus fails to promote convergence.     

Young Europeans abroad in Scotland: an exploration of how their attitudes to consumer credit reflect dimensions of culture

Nineteen young Europeans from across the Continent took part in in‐depth interviews where a wide range of consumer‐related issues were explored. These issues ranged from specific consumer behaviours and consumer value gained to consumer protection and other aspects of policy. Respondents were postgraduates studying at Scottish universities or young professionals currently working in Scotland. The interviews were structured around a number of key themes that were developed both from the literature and from an in‐depth pilot study. One of these themes was designed to explore the respondents’ attitudes towards saving and borrowing, in particular, consumer credit; and this forms the focus for the current paper. The theme had been developed initially with reference to Hofstede’s cultural dimension of ‘uncertainty avoidance’. However, it also successfully illuminated some of the other cultural dimensions in Hofstede’s typology. As anticipated, respondents tended to benchmark consumer culture in their home country against that of the host country (Scotland). What was surprising was the consensus with which they considered the Scottish/British consumers to be the ‘odd ones out’. This observed convergence appears to indicate that historical cultural differences between continental and Anglo‐Saxon cultures survive and may be stronger and more sustained than any differences between the post‐World War II socialist and market democracies.     

Expropriation and control rights: A dynamic model of foreign direct investment

This paper studies the strategic interaction between a foreign direct investor and a host country. We analyze how the investor can use his control rights to protect his investment if he faces the risk of “creeping expropriation” once his investment is sunk. It is shown that this hold-up problem may cause underinvestment if the outside option of the investor is too weak, and overinvestment if it is too strong. We also analyze the impact of spillover effects, we give a rationale for “tax holidays” and we examine how stochastic returns affect the strategic interaction of investor and host country.