Chinese companies＇ outward internationalization to emerging countries： The case of Latin America

This paper aims to review and analyze the literature on the expansion of Chinese firms to Latin America. In order to achieve this objective, it first reviews the literature on the internationalization of Chinese MNCs, the theoretical frameworks discussed in the literature and the principal features of companies from China. Second, it describes the economic and political relations between the countries, specifically the threats and opportunities for Latin America and the trade and investment trends. The review shows that the majority of the current literature on Chinese MNCs has a focus on their expansion to developed countries, on the conceptual framework needed to understand this expansion, and on the competition for foreign investments from developed countries. As a result, the analysis makes evident that research gaps seem to exist in the following areas： （1） the relative value of Chinese companies＇ existing advantages, （2） the sustainability of these advantages once the lead, probably given by OEMs or JVs, had been exhausted, （3） research works based on quantitative and comparative data, （4） the motives for FDI, （5） the entry mode, configuration, control and strategy of Chinese companies investing in Latin America, and （6） the potential opportunities presented to European companies operating in Latin America.     

The global financial crisis: Explaining cross-country differences in the output impact

What explains differences in the crisis impact across developing countries and emerging markets? Using cross-country regressions to assess the factors driving the growth performance in 2009 (compared to pre-crisis forecasts for that year), we find that a small set of variables explain a large share of the variation in the growth impact. Countries with more leveraged domestic financial systems, stronger credit growth, and more short-term debt tended to suffer a larger effect on economic activity, although the relative importance of these factors differs across country groups. For emerging markets, this financial channel trumps the trade channel. For a broader set of developing countries, however, the trade channel seems to have mattered, with more open countries affected more strongly and those exporting food commodities being less hard hit. Exchange-rate flexibility helped in buffering the impact of the shock, particularly for emerging markets. There is also some evidence that countries with a stronger fiscal position prior to the crisis were impacted less severely. We find little evidence for the importance of other policy variables.     

BRIDGING TRADE THEORY AND LABOUR ECONOMETRICS: THE EFFECTS OF INTERNATIONAL MIGRATION*

Abstract This paper surveys current theoretical and empirical research on international migration with a particular emphasis on the links between trade theory and labour empirics.     

Tax policies and agency costs

We show that when large corporations are subject to a different tax system than smaller firms, the agency cost of under- and overinvestment is significantly altered. In contrast to the findings in the literature, the gap between the first- and second-best investment trigger prices do not move in lockstep with variations in the corporate tax rate, as in the case of a linear tax system. We show that the gap can either widen or shrink, depending on the tax policy design and regime. In addition, we find that the agency cost under a progressive tax regime is considerably larger than the agency cost under a regressive tax regime when equityholders have to bear all the investment costs. These results are reversed when managers have the ability to issue additional debt to finance the firm's expansion and transfer part of the investment costs to bondholders.     

A dimension-invariant cascade model for VIX futures

We propose a new stochastic volatility model by allowing for a cascading structure of volatility components. The model, under a minor assumption, allows us to add as many components as desired with no additional parameters, effectively defeating the curse of dimensionality often encountered in traditional models. We derive a semi-closed-form solution to the VIX futures price, and find that our six-factor model with only six parameters can closely fit spot VIX and VIX futures prices from 2004 to 2015 and produce out-of-sample pricing errors of magnitudes similar to those of in-sample errors.     

Salaires et mobilité de l'emploi des professionnels de santé dans les milieux urbains du Cameroun

The objective of this study was to analyse the influence of wages on health professionals' job mobility. Based on health professionals data collected in urban areas of Cameroon, a binomial logit model was estimated. Our results show that wages are negatively correlated with the likelihood of health professionals to consider an imminent departure from the current health facility for another job in or outside the health sector. The increase of one unit of the residual potential wage gain decreases the probability to consider a voluntary departure from the current job of 4 per cent to 8 per cent for another job in the health sector or outside. Wage improvement can then be considered as a retention policy of health professionals in their current health facility. This strategy can be used to curb the migration problems of health professionals and strengthen a health system which is already suffering the pangs of the human resource crisis for health. However, this wage improvement strategy expresses the complexity of retention policies for health professionals based on wages in the public sector, as it can induce adverse effects linked to the loss of human resources.     

Access regulation and infrastructure investment in the mobile telecommunications industry

While mobile virtual network operators (MVNOs) increase competition in the mobile telecommunications industry, granting market access to MVNOs may have unwanted consequences. In particular, infrastructure investment by incumbent mobile network operators (MNOs) may be smaller. This paper examines the effects of MVNO entry and access regulation on the investment behavior of MNOs. It uses firm-level data for 58 MNOs in 21 OECD countries during 2000–2008. The results suggest that mandated provision of access is related to lower investment intensity of MNOs, while voluntary access provision has no effect. Although reduced investment incentives do not necessarily correspond to under-investment, this underscores the need for those countries where MVNOs are provided access to address the issue of investment incentives.     

Dynamics of social factors in technological substitutions

Diffusion models of technological innovations are often based on an epidemic structure which has a good fit to historical data but whose communication assumptions lack explanatory power. They assume a simplified decision process, uniform decision criteria across adopters categories, and a fully interconnected social structure. The objective of this paper is to show that the dynamics of social factors during technological substitutions have significant effects on substitution patterns. The success of a paradigmatic shift is not only a function of technological characteristics but also depends on change agents and many social dynamics. Such complexity requires analysis at several levels of granularity. We start with cognitive processes at the individual level using concepts from cognitive psychology and decision making under uncertainty and then move to interpersonal communications at the aggregate social level. We show that population heterogeneity generates different decision criteria and a social topology which greatly affect perceptions and the formation of expectations. The structure of interpersonal networks also explains how the relevance and credibility of information impact the critical mass dynamics of technology adoption. A more complete model accounting for social interactions provides a useful framework for understanding complex substitution patterns and reducing the risk of misreading the market.