Chinese RMB exchange rate and local currency price stability in ASEAN trade

The article uses trade data between China and ASEAN countries to test hypotheses related to pricing to market (PTM) and consequent local currency price stability (LCPS). The degree of price discrimination associated with real RMB exchange rate changes between China and ASEAN + 2 shows evidence of local currency price stability in some industries in which exporters may be less competitive. China's trade policy may have also played a role in the local currency price stability. The article finds no evidence that RMB appreciation creates a larger impact on price adjustment than RMB depreciation.     

Perceived Fairness of the Mystery Customer Method: Comparing Two Employee Evaluation Practices

This study explores differences in the perceptions of fairness between two employee evaluation methods: one based on data collected using the mystery customer method and the other based on supervisor judgment. Fifty eight female sales clerks filled out a questionnaire which assessed their perceptions with respect to the fairness of the two evaluation methods and their job satisfaction. Given apparent differences in the evaluating agent, the extent of process consistency, the breadth of behaviors evaluated, and the extent of employees' awareness of the evaluation process, we hypothesize and find that evaluation procedures conducted by supervisors are perceived as more fair both procedurally and distributively than those conducted by means of the mystery customer method.The expected relationship between perception of fairness and job satisfaction was, however, foundonly in the correlations with supervisor evaluations and not in the correlations with the mystery customer evaluation method. Though the results are limited by the restricted sample, they shed an important light on the perceived fairness of the mystery customer procedure, and suggest that the choice of this procedure should take into account the fairness aspect of it when assessing its effectiveness and value. The data in this study was collected by Idit Malka and Michal Ben-Avi, for a research seminar conducted under the supervision of the second author.     

All that glitters is not gold: The dual effect of activation technique in advertising

The research examines the two paths of influence of activation technique in advertising, defined as engaging in motor activity required to reveal the advertising message. Under the first path, activation technique enhances the perceived creativity of the advertisement, via its structural and design aspects; whereas under the second path it influences processing fluency via its compatibility with the message. In the latter, activation technique may detract from overall evaluations of the advertisement, especially when the motor activity is incompatible with the message. Two experimental designs demonstrate this dual effect and its underlying mechanism.     

Fire‐sale FDI? The Impact of Financial Crises on Foreign Direct Investment

We analyze the evolution of foreign direct investment (FDI) inflows to developing and emerging countries around financial crises. We empirically examine the Fire‐Sale FDI hypothesis and describe the pattern of FDI inflows surrounding financial crises. We also add a more granular detail about the types of financial crises and their potentially differential effects on FDI. We distinguish between mergers and acquisitions (M&A) and greenfield investment, as well as between horizontal (tariff jumping) and vertical (integrating production stages) FDI. We find that financial crises have a strong negative effect on inward FDI in our sample. Crises are also shown to reduce the value of horizontal and vertical FDI. We do not find empirical evidence of fire‐sale FDI; on the contrary, financial crises are shown to affect FDI flows and M&A activity negatively.