Foreign Direct Investment in Sub-Saharan Africa: Motivating Factors and Policy Issues

Sub-Saharan Africa's (SSA) foreign direct investment (FDI) share has persistently averaged 1% of global flows. The location decision and perceptions of investors are therefore instructive for policy making. This article factor analyses a survey of perceptions, operations, and motivations of 758 foreign investors in 10 SSA countries. We find that the provision of transaction cost–reducing information on industries and markets and utility services to investors before and after a firm's FDI decision are significant factors. FDI location decision in SSA is influenced strongly by political economy considerations. Labor and production input variables are not influential.     

The Research Field “Modeling Business Information Systems”

The research field “Modeling business information systems” has a long tradition in the scientific discipline of Business and Information Systems Engineering (BISE). The present paper highlights research shaping the research field, discusses challenges impairing the development of the research field in the coming years, and outlines elements of a future research agenda.     

(Un)Ethical Behavior and Performance Appraisal: The Role of Affect,Support, and Organizational Justice

Performance appraisals are widely used as an HR instrument. This study among 332 police officers examines the effects of performance appraisals from a behavioral ethics perspective. A mediation model relating justice perceptions of police officers’ last performance appraisal to their work affect, perceived supervisor and organizational support and, in turn, their ethical (pro-organizational proactive) and unethical (counterproductive) work behavior was tested empirically. The relationship between justice perceptions and both, ethical and unethical behavior was mediated by perceived support and work affect. Hence, a singular yearly performance appraisal was linked to both ethical and unethical behaviors at work. The finding that ethical and unethical aspects of employee behavior share several of the same organizational antecedents, namely organizational justice perceptions, has strong practical implications which are discussed as well.     

Market integration and convergence to the Law of One Price: evidence from the European car market

This paper exploits the unique case of European market integration to investigate the relationship between integration and price convergence in international markets. Using a panel data set of car prices, we examine how the process of integration has affected cross-country price dispersion in Europe. We find surprisingly strong evidence of convergence towards both the absolute and the relative versions of the Law of One Price (LOOP). Our analysis illuminates the main sources of segmentation in international markets and suggests the type of institutional changes that can successfully reduce it.     

Why are IPOs underpriced? Evidence from Japan's hybrid auction-method offerings

We document discretionary underpricing and partial adjustment of IPO prices in the public offer tranche of Japan's hybrid auction regime, in which investor information differences are not important, there are no roadshows, preferential allocations are negligible, institutional investing is low, and the public offer tranche cannot fail. The magnitude and variation of underpricing in our sample, which spans relatively hot and cold markets, are similar to those reported for US IPOs. The evidence is most consistent with underpricing arising from an implicit contract to allocate risk related to initial mispricing where, in exchange for guaranteeing a minimum price, the underwriter participates indirectly in upside performance. The results raise important questions about interpretations of IPO underpricing in the US.     

Hedging emerging market bonds and the rise of the credit default swap

On October 5, 2001, when credit spreads were widening, the Chicago Mercantile Exchange CME de-listed the full menu of emerging market Brady bond futures contracts. This is intriguing because at a time when interest in hedging and speculating in emerging market sovereign credit risk should be at its peak, the CME de-listed precisely the sort of contract designed to hedge and speculate in sovereign credit risk. This paper finds statistical evidence suggesting that the developing over the counter CDS contract acted as a substitute product for the Brady bond futures contract thereby undermining the Brady bond futures contract and contributing to its demise.     

Loving my local business as my neighbor: Religiosity's influence on local business support during a crisis

Many local businesses have and are continuing to struggle as a result of the pandemic crisis due in part to reduced consumer spending. However, the motives behind why some consumers are more supportive than others toward local businesses in such a crisis are not adequately understood. We address this gap in the literature through three experimental studies where we examine how the core consumer value of religiosity explains consumer response to the crisis as consumers seek to act in ways that align with their value system. Study 1 (257 adults from MTurk) shows a positive relationship between religiosity and support for local businesses but only during a pandemic. Study 2 (307 adults from MTurk) shows that this relationship is greatest for local (vs. non-local) businesses, and caring for one's neighbors mediates this effect. Finally, Study 3 (200 adults from MTurk) uses advertising to prime focus on one's neighbors, revealing that a neighbors-focused ad increases local business support to similar levels for consumers of all religiosity levels. Findings build on belief congruence theory with implications for marketing practitioners in the current pandemic crisis and other crises of medical, environmental, and other origins.