An ambidextrous learning model for the internationalization of firms from emerging economies

Emerging economies are playing an increasingly important role in the global economy. The rising phenomenon of the internationalization process of firms in emerging economies, or emerging market firms, particularly their capacity to increase their presence in the markets of developed economies, has been insufficiently studied. Because of the unique characteristics of emerging economies, some assumptions of traditional international models are irrelevant. This paper provides a theoretical framework that explains the importance of different types of knowledge and the relationships between them in the internationalization process. We delineate an ambidextrous learning strategy that is contingent on different levels of firm competitiveness.     

DUOPOLISTIC HIRING AND SALES COMPETITION—A THEORETICAL AND EXPERIMENTAL ANALYSIS

Two firms compete in selling as well as hiring, where sales levels depend on the hired workforce. There are two types of workers, mobile and immobile, differing in effort costs, and two workers of each type. The principals offer contracts to all workers, who then select an employer. Finally, the workers determine production levels and profits. Our experimental results show: vanishing cost differences between mobile and immobile workers induce monopolistic hiring but low profits. In contrast, large cost differences result in higher profits and allow for various hiring constellations such as one firm hiring only low‐cost workers.     

Discussion of ADRs,Analysts, and Accuracy: Does Cross‐Listing in the United States Improve a Firm's Information Environment and Increase Market Value?

Lang, Lins, and Miller [2002] investigate the relation between cross‐listing in the United States and information intermediation by analysts. The results suggest that cross‐listing in the United States increases analyst following and forecast accuracy and that both variables are associated with Tobin's Q. These findings are interesting and advance the cross‐listing literature in several ways. This discussion raises two issues. First, I highlight that the sources of cross‐listing effects are not obvious and are difficult to disentangle. To illustrate this point, I replicate the analysis using cross‐listed Canadian firms, for which mandated disclosures are held constant. Thus, if disclosure effects are important for documented cross‐listing effects, I expect to find no relation in the Canadian sample. The findings for forecast accuracy are consistent with this hypothesis. However, analyst following continues to be significantly higher for cross‐listed Canadian firms. These findings suggest that the sources of cross‐listing effects differ for analyst coverage and forecast accuracy. Second, I discuss the link between analyst variables, firm value, and cost of capital. As they are only tenuously related, I draw attention to some unresolved questions and areas for future research.     

Self-enforcing employment contracts and business cycle fluctuations

This paper incorporates risk-sharing employment contracts into an economy in which matching frictions characterize the labour market and in which agents cannot commit. In equilibrium, the terms of ongoing contracts are affected by those being negotiated in the job market because contracts must be self-enforcing. In this context, risk-sharing implies that hours worked and wages are negatively related, while enforcement considerations imply the converse. Overall, the sign of this relationship is ambiguous. Therefore, the existence of such contracts may explain why movements in hours worked appear weakly related to those in real wages in U.S. aggregate data.     

Taxation and Venture Capital Backed Entrepreneurship

In recent years, venture capital has increasingly become a factor in the financing of new firms. We examine how the value of mature firms determines the incentives of entrepreneurs to start up new firms and of venture capitalists to finance and advise them. We examine how capital gains taxes as well as subsidies to start-up costs of new firms affect venture capital backed entrepreneurship. We also argue that dividend and capital gains taxes on mature firms have important consequences for start-up firms as well.