Quality cut-offs in procurement auctions

Recently the Government of India used procurement auction mechanisms with endogenously determined minimum quality. We find these auctions have no equilibrium in continuous symmetric monotonic pure strategies. This may substantiate the use of auction mechanisms with exogenously determined minimum quality.     

Bilateral J-curve between the UK vis-à-vis her major trading partners

Currency depreciation is said to worsen the trade balance first before resulting in an improvement, yielding a short-run pattern labelled the J-curve phenomenon. While early studies tested the J-curve by using aggregate trade data, a few recent studies have employed bilateral data, mostly between the US and her major trading partners. In this paper we extend the literature by considering the experience of the UK. We test the phenomenon between the UK and her twenty major trading partners by employing data over 1973Q1–2001Q3 period. In most instances, we find no support for the J-curve in the short-run. In the long run, only in five cases has the exchange rate had significant impact on the bilateral trade balance.     

Boards of directors and substitution effects of alternative governance mechanisms

Research on the determinants and effects of various governance mechanisms typically assumes that these mechanisms operate independently. However, since a variety of mechanisms are used to achieve alignment of the interests of shareholders and managers, we propose that the level of a particular mechanism should be influenced by the levels of other mechanisms which simultaneously operate in the firm. We examine the substitution effects between alternative internal governance mechanisms for a sample of 81 bank holding companies in the postderegulation period. Specifically, we consider the relationship between monitoring by outside directors and the following mechanisms: monitoring by large outside shareholders, mutual monitoring by inside directors, and incentive effects of shareholdings by managers. Our results provide evidence consistent with the substitution hypothesis. We examine the implications of our findings for future research in the area of corporate governance.     

Military spending and the black market premium in developing countries

Researchers who have been concerned with the economic implications of military spending have mostly concentrated on its impact on economic growth, corruption, real exchange rate and inflation. In this paper we investigate the impact of military spending on black market premium, an area that has not been tackled so far. After adding a measure of military spending to a well established model of black market premium form the literature, we estimate the model by pooling annual data over the 1985 – 1998 period across 61 developing countries. Results from five panel specifications provide considerable evidence that higher military spending leads to higher black market premium.     

The catharsis of male consumption: Reimagining masculinity in India

Research on alternate masculinity from India that emphasize consumption and consequent subjective well-being (SWB) is primarily about gay men. However, our research points to different marginal masculinity, alternate consumption, and consecutive SWB. The present study uses in-depth interview methods to uncover the “marginal” masculinity of a group of urban, upper-middle-class, heterosexual Indian men. We probe their consumption as a part of their identity project referred to as cathartic. Such consumption leads to a sense of high subjective consumer well-being amidst an otherwise patriarchally defined Indian consumptionscape. This almost fledgling group of men relates itself to the shifting world order of normative masculinity, denounces the patriarchal norms, betrays the cause of male privilege, empathetically responds to the paradigms of femininity, accepts the fall of hegemonic forms of masculinity, and is sensitive toward “others” and ecological/sustainability issues. We further argue that this “cathartic masculinity,” as evident through their consumption, may impact the fledging gender-fluid marketplace of tomorrow.     

Pooled Mean Group Estimation of the Bilateral Trade Balance Equation: USA vis‐à‐vis her Trading Partners

The autoregressive distributed lag model (ARDL), even though it distinguishes between the short run and the long run effect, allows both the intercepts and slopes to vary across countries. Static panel estimations, such as fixed‐effects estimation (FE), cannot distinguish between the short run and the long run behavior. To address the issue of short run heterogeneity as well as long run homogeneity of the estimated coefficients in a panel framework, the pooled mean group (PMG) estimator has gained popularity since 1999. In this paper, we estimate the bilateral trade balance model for the USA vis‐à‐vis her 19 OECD trading partners for the period 1973q1–2004q4 using the PMG estimator and find that PMG performs better than ARDL, FE, and MG estimators and provides significant and theoretically consistent results.     

The bilateral J‐curve: Canada versus her 20 trading partners

There is a common belief that currency depreciation worsens the trade balance in the short run and improves it in the long run resulting in the so called J‐curve phenomenon. Early studies employed aggregate data and provided mixed results. Recent studies, however, have employed disaggregated data to remove any aggregation bias from their analysis. In this article we consider the Canadian experience and test the phenomenon between Canada and her 20 major trading partners. Using quarterly data and the bounds testing approach to cointegration, and error‐correction modelling we were able to provide support for the J‐curve in 11 out of 20 cases.     

Can Quality‐Oriented Firms Develop Innovative New Products?

Research suggests that a strong focus on quality improvement can adversely affect exploration and thus the development of innovative new products. The focus on quality improvement including total quality management (TQM) has been termed quality orientation. The literature suggests that one way to reduce the adverse effect of a quality orientation on innovativeness is to adopt ambidextrous or dual organizational forms. However, dual organizational forms are cumbersome and expensive to implement. This paper argues that a less demanding structural arrangement for developing innovative products in quality‐oriented organizations involves the creation of cross‐functional teams that are explicitly encouraged to take risk and granted autonomy. In this model, the two dimensions of innovativeness—namely, novelty and appropriateness— are treated separately because quality orientation and encouragement to take risk can have differential effects on these two dimensions. A survey of 141 new product development projects reveals that quality orientation does not adversely affect product novelty in cross‐functional product development teams. However, encouragement given to cross‐functional teams to take risk leads to more novel products. On the other hand, while a quality orientation improves product appropriateness, encouragement to take risk affects it adversely. Quality orientation is able to mitigate the adverse effect of encouragement to take risk on appropriateness. But encouragement to take risk does not influence the relationship between a quality orientation and novelty. Autonomy improves the positive effect of encouragement to take risk on new product novelty but does not influence the effect of a quality orientation on novelty. Both novelty and appropriateness enhance a new product's performance, and both these dimensions of innovativeness partially mediate the effect of quality orientation and fully mediate the effect of encouragement to take risk on new product performance.     

Vertical Foreign Direct Investment versus Outsourcing: A Welfare Comparison from the Perspective of a Host Country

In the offshoring literature, there is a huge disconnect between the alternative modes of organizing offshore production and their relative welfare impact on a host country. We bridge this gap by comparing the welfare of a host country from vertical foreign direct investment (VFDI) vis‐à‐vis international outsourcing. Our model finds that the ability to maximize welfare in the alternative modes of organizing offshore production is contingent on the absorptive capacity of the host country. If a host country's absorptive capacity is above a critical threshold, outsourcing is more welfare enhancing vis‐à‐vis VFDI; while even with an absorptive capacity lower than this critical threshold, outsourcing being welfare improving over VFDI cannot be ruled out.