The role of innovation and opportunity in bilateral OECD trade performance

This paper investigates the specialization pattern in terms of technology and exports and examines the role of innovation intensity and technological opportunity in determining bilateral trade at the aggregate and sectoral level. Some of the major findings are: At the aggregate level, innovation intensity and technological opportunity has positive and significant impact on bilateral trade performance especially during the 1990s. At the sectoral level, innovation intensity affects bilateral trade performance positively mainly in the high-technology sectors. There is also a positive and significant relationship between technological opportunity and bilateral trade for five of the eighteen sectors, which are the high-technology sectors. JEL no. F14, C31, O33     

Understanding Hurricane Evacuation Decisions Under Contingent Scenarios: A Stated Preference Approach

We conduct a stated preference analysis to understand the factors that individual households take into consideration to evacuate during hurricanes. In designing the contingent scenarios for evacuation, we randomly assign varying levels of hurricane characteristics (wind speed, lead time for landfall and the height of storm surge) combined with different types of emergency management options (voluntary versus mandatory evacuation order and a voucher with varying amounts to cover evacuation expenses). Findings indicate that individual households respond, in a non-linear fashion, to the intensity of hurricanes when making evacuation decisions. Respondents are also more likely to evacuate when the storm surge reaches a certain threshold. In terms of policy interventions, mandatory evacuation orders are more effective to increase the likelihood of evacuation. The potential intervention in the form of providing evacuation vouchers to assist households to cover their expenses (e.g. for food, water, transportation and lodging) also seems effective. We discuss policy implications of our findings.     

Patterns in international bribery: Violations of the foreign corrupt practices act

An examination of U.S. Department of Justice prosecution of violations of the Foreign Corrupt Practices Act shows that officials in less developed countries are the likely recipients of bribes; that bribery occurs more often in the capital‐intensive industries of energy, construction, telecommunications, and military equipment; that firms more often tend to use intermediaries and agents to consummate illicit transactions rather than directly paying the intended beneficiary; and that the overall motivation for bribing is to secure a particular contract. This article reviews the evolving enforcement of the law and recommends a set of managerial actions to reduce corporate liability and improve governance practices. © 2012 Wiley Periodicals, Inc.     

Nowcasting sales growth of manufacturing companies in India

The performance of private corporate sector is used as an important demand indicator for monetary policy making. As these data are received with a lag, assessing and monitoring of corporate sales on a real-time basis poses a significant challenge to policy makers in India. In this context, this article attempts to nowcast quarterly sales growth of Indian manufacturing companies and GDP growth of India using dynamic factor modelling framework. A multiple-level framework through turning point analysis and elastic net structure is used to overcome the overfitting problem during variable selection. Empirical results show improvement in forecast accuracy for one quarter ahead nowcast using 3-factor and 4-factor models over the benchmark model. However, absolute dominance of 3-factor models over 4-factor models was not established. As such, the article has proposed a forecast combination technique to nowcast sales growth of manufacturing companies in India.     

The Social Clause in Trade Treaties: Implications for International Firms

Various advocacy groups and primarily domestic-focused firms in developed countries have been pushing governments to include a "social clause" in trade treaties with less developed countries. Such a clause is designed to link trading access to markets in developed countries with improvements in working conditions in poor nations. The implications of such a clause for internationally-focused firms and how managers can effectively deal with human rights issues in their foreign operations are examined. Various constituencies in this debate are identified and an integrated response system on the part of firms is presented. It is suggested that the best policy for firms to adopt would be to acknowledge the relevance of the social clause in today's global economy and work closely with the various advocacy groups to ensure continuing public support while avoiding overly restrictive clauses in international trading agreements.     

Determinants of Bribery in International Business: The Cultural and Economic Factors

Corruption Perceptions Index (CPI) scores for 47 countries reported by Transparency International were used to ascertain determinants of bribe taking in international business. Two sets of independent variables – economic and cultural – were used in a multiple regression analysis. Results indicate that bribe taking was more likely to be prevalent in countries with low per capita income and lower disparities in income distribution. Cultural factors such as high power distance and high masculinity in a country were also likely to be associated with high level of bribe taking. Both economic and cultural factors were important explanatory factors of bribery. Implications of the findings for combating bribery are discussed. Rajib Sanyal is an American Council of Education Fellow at George Mason University for 2004–2005, on leave from The College of New Jersey, where he is a professor of management. Dr. Sanyal has published widely, and is the author of a textbook on International Management.     

An Experiential Approach to Teaching Ethics in International Business

Ethics training in academia and corporations have grown as expansion in international business activities has lead to frequent inter-cultural exchanges. An effective instructional tool in theform of an experiential exercise is presented. The exercise using role-playing enables participants to recognize, confront, and understand business quandaries. A scoring system allows participants to compare the ethical standards of employers, employees, customers, and the society-at-large on a set of predetermined ethical events.     

On General and Specific Transfers for Child Support in Divorce

In a post-divorce equilibrium under joint legal custody of a child the paper compares the effect of two different transfer schemes, a general purpose transfer scheme and a specific purpose transfer scheme, from non-custodial parent to the custodial parent of the child on his/her welfare. Surprisingly, it finds that the marginal effects are neutral. The result contributes to the policy framework by suggesting that the lawyers/courts can choose the two alternatives equivalently in settling the child custody cases in a post-divorce situation. The paper also characterizes such transfer schemes and proves that the schemes can never restore the child’s welfare at the ‘happy marriage’ equilibrium level.

     

Female directors on the board and cost of debt: evidence from Australia

We examine whether the presence of female board members has any impact on the cost of debt among Australian listed companies. We find that female presence on the board is negatively associated with the cost of debt. Most importantly, our findings support the argument of critical mass theory that a certain threshold of gender balance is required for enhancing board effectiveness. Our results are valid irrespective of alternate model specifications and endogeneity issues. Overall, the results provide support to the ASX Corporate Governance Principles and Recommendation for the appointment of female directors on corporate boards.     

History Dependence in an Experimental Labor Market

Journal of Quantitative Economics - We examine the possibility that other regarding preferences may change in response to past observations. We use a repeated gift exchange game (an experimental...