Financial factors in foreign direct investments: A dynamic analysis of international data

In contrast to existing empirical foreign direct investment (FDI) studies that examine the static effects of strategic or real economic variables, this paper focuses on the impacts of financial variables on FDI outflows for four largest industrial countries using dynamic time series methods. The results show that FDI outflows are non-stationary but have a long-run cointegrating relationship with real exchange rates. In addition, there are causal effects of exchange rates on direct investments in the short run. Multivariate cointegration analysis shows the significance of financial channels such as cost of capital and real wealth through which the real exchange rate effects operate. The effects of financial channels are comparable to those of the real wage rate channel. Overall, the present paper provides significant and methodologically consistent international evidence for dynamic interactions between FDIs and financial variables.     

An analytic network process approach to partner selection for acquisition and development

To cope with rapid technological change and the increasing R&D costs during a period of decreasing technology and product life cycles, acquisition and development (A&D) has been suggested to be an important method for high-tech firms to achieve higher economic returns. However, few studies have examined the operational problems of choosing a compatible A&D candidate from a pool of potential A&D candidates. To address this limitation, this study proposes an approach based on the analytic network process (ANP) to rank a set of potential A&D candidates within a multivariate set of attributes systematically. A total of 25 criteria were identified and used to construct the ANP model in which the final selection is based on the resulting priorities assigned to the A&D candidates. A case study of a semiconductor manufacturing company was conducted to illustrate the application of the proposed approach. The results indicated that the proposed ANP method can aid in A&D decision-making problems systematically.     

The Benefits of Diverse Preferences in Library Consortia

We study the case in which a library consortium increases the aggregate payoff of the member libraries. We find that libraries with similar preferences are likely to lose from building a consortium and that those with diverse preferences are likely to gain by doing so. Combining libraries with diverse preferences implies that their valuation for different publishers' journals is more symmetric, which intensifies competition among publishers for scarce combined budgets. A tension between short term and long term considerations might generate a ‘library consortium trap.’ Our insight can be applied to other buyer groups as long as competition is generated by buyers' budget constraints.     

Destination marketing organization website visitors’ flow experience: an application of Plog’s model of personality

ABSTRACT

This study investigates the relationships among website features (i.e. informativeness, design, and interactivity), flow experience, and the user’s intention to seek and use travel information provided on destination marketing organization (DMO) websites. It incorporates the moderating effects of personality into those relationships. Respondents (n = 433) were asked to visit and explore a DMO website and then to respond as if they were planning to travel to the destination. The results show that three website features relate positively to flow experience and that flow experience contributes to behavioral intention. This study also finds that personality moderates the link between web features (informativeness and interactivity) and flow experience, the implications of which are discussed at the end of the paper.     

The Efficient Mechanism for Downsizing the Public Sector

This article analyzes the efficient mechanism for downsizingthe public sector, focusing on adverse selection in productiveefficiency. Each worker is assumed to have two type-dependentreservation utilities: the status quo utility in the publicsector before downsizing and the utility that the worker expectsto obtain by entering the private sector. The efficient mechanismconsists of a menu of probability (of remaining in the publicsector) and transfer pairs that induces self-selection. A worker'sfull cost is defined by the sum of production cost in the publicsector and reservation utility in the private sector. It isoptimal to start by laying off the agents with higher full cost.When the public sector before downsizing is discriminating asthe differential of private information about productive efficiencysuggests, there are countervailing incentives. This makes thesize of downsizing smaller under asymmetric information thanunder complete information.     

When is the optimal lending contract in microfinance state non-contingent?

Whether a microfinance institution should use a state-contingent repayment or not is very important since a state-contingent loan can provide insurance for borrowers. However, the classic Grameen bank used state non-contingent repayment, which is puzzling since it forces poor borrowers to make their payments even under hard circumstances. This paper provides an explanation to this puzzle. We consider two modes of lending, group and individual lending, and for each mode we characterize the optimal lending and supervisory contracts when a staff member (a supervisor) can embezzle borrowers’ repayments by misrepresenting realized returns. We identify the main trade-off between the insurance gain and the cost of controlling the supervisor's misbehavior. We also find that group lending dominates individual lending either by providing more insurance or by saving audit costs.     

The effects of emotional intelligence on service recovery and organizational loyalty: a case of flight attendants of South Korean airlines

Due to the paucity of empirical studies conducted thus far regarding the effects of flight attendants’ emotional intelligence on service recovery and organizational loyalty, this study examined the relationships among those three constructs. The results of this study demonstrated that emotional intelligence exerted positive effects on service recovery and organizational loyalty, respectively. Namely, flight attendants with a high level of emotional intelligence outperform in service recovery, and tended to be more loyal to an organization. The positive relationship between organizational loyalty and service recovery was also significant. Finally, there was a mediating effect of organizational loyalty between emotional intelligence and service recovery.     

Reward for being an immigrant: Earnings gap between immigrant and native-born West Indians

Motivated by recent findings of a diminishing earnings gap between the West Indians and other black workers, this study examines the earnings processes of immigrant and native-born West Indians in an effort to find the role of culture traits in their earnings. The decomposition of the earnings difference between immigrant and native-born West Indians indicates that a significant amount of the gap is unexplained by the observable labor market characteristics. Most of the observable human capital endowments of the immigrants are treated unfavorably by the market compared to those of the native-born West Indians. The earnings advantage of immigrants attributable to unobserved factors, however, turns out to be more than sufficient to overcome their market treatment adversity.     

A retail benchmarking approach to efficient two‐way access pricing: no termination‐based price discrimination†

We study access pricing rules that determine the access prices between two networks as a linear function of marginal costs and (average) retail prices set by both networks. When firms compete in linear prices, there is a unique linear rule that implements the Ramsey outcome as the unique equilibrium, independently of underlying demand conditions. When firms compete in two‐part tariffs, there exists a class of rules under which firms choose the variable price equal to the marginal cost. Therefore, the regulator can choose among these rules to pursue additional objectives such as increasing consumer surplus or promoting socially optimal investment.