THE REAL INTEREST RATE DIFFERENTIAL: INTERNATIONAL EVIDENCE BASED ON NON-LINEAR UNIT ROOT TESTS

This paper aims at testing international parity conditions by using non-linear unit root tests advocated by Kapetanios et al . (2003, KSS). Results from the KSS tests based on 17 countries (G7 and 10 Asian countries) overwhelmingly show that the adjustment of real interest rates towards real interest rate parity (RIP) follows a non-linear process except for the Taiwan, Hong Kong and Philippines relationships with both the USA and Japan. Overall, the empirical results are in favour of RIP using the USA and Japan as the centre countries but only if non-linearities are accounted for in the data-generating process. Our findings confirm that interest rate differentials, like the real exchange rates reported in recent literature, display a non-linear mean reversion process.     

The association between training and organizational commitment among white‐collar workers in Malaysia

The exploration of the relationship between organizational commitment and training is still in its early stages. Although there have been several studies reported on training and organizational commitment in Western countries, very little has been done in respect of the local professionals in Malaysia. This research investigates the association between five training variables (availability of training, support for training, motivation to learn, training environment and perceived benefits of training), and various aspects of organizational commitment (affective commitment, normative commitment, continuance commitment and overall organizational commitment). The availability of training, support for training, motivation to learn, training environment, perceived benefits of training were all significantly correlated with affective commitment, normative commitment and overall organizational commitment. The training environment and perceived benefits were also significantly correlated with continuance commitment. However the availability of training, support for training and motivation to learn were not significantly correlated with continuance commitment. This suggests that despite other forms of commitment, Malaysian workers do not feel that they need to remain in an organization that has made available the training, given support for the training and were motivated to learn. Otherwise, results suggest that on the whole, training does seem to have an influence on organizational commitment. The practical implication of this is that managers, who are so desirous of enhancing organizational commitment among their subordinates, should pay more attention to training. Annual income was found to correlate positively with affective commitment and overall commitment. Age and tenure were not significant predictors of overall organizational commitment contradicting studies in the West. This demonstrated that Malaysians might have different attitudes towards organizational commitment. The older they are and the longer they stay within an organization do not imply that they will be committed towards their organization. This phenomenon can be attributed to the uncertain business environment in Malaysia.     

Greenfield Entry Strategy of Multinational Enterprises in the Emerging Markets: Influences of Institutional Distance and International Trade Freedom

This article addresses greenfield entry strategy of multinational enterprises in emerging markets by analyzing the influences of formal and informal institutional distance as well as international trade freedom. The empirical analysis is based on a sample of 263 greenfield market entries in manufacturing sector undertaken by Finnish firms during 1990–2013. The study results revealed that high formal and informal institutional distances led to the preference of greenfield JVs. The study also found that high level of international trade freedom moderates the influences of formal and informal institutional distances on greenfield entry strategy.     

Ranking the strategic actions of Iran mobile cellular telecommunication using two models of fuzzy QFD

Mobile cellular telecommunication success in target markets first requires ranking the customer’s expectations and then prioritizing the engineering characteristics (ECs) to meet the expectations. In this paper, two prioritization models based on quality function deployment (QFD) are developed to rank the strategic actions (SAs), or the ECs of Iran mobile cellular telecommunication. QFD is a widely used customer-driven tool for which the success of its applications may be the result of some of its benefits, such as greater customer focus. It uses a matrix called House of Quality (HOQ) to translate Customer Attributes (CAs) into ECs. However, due to the high degree of subjectivity in constructing the HOQ, the application of fuzzy logic provides an efficient tool to handle the subjective assessments. On the other hand, taking into consideration the gap between the current state and the positive ideal state for each CA, TOPSIS is used to rank CAs in a first model. In addition, in a second model, using the analytic hierarchy process (AHP), more criteria are taken into consideration in ranking CAs. Also, a fuzzy utility factor, B_j, is used to rank SAs in both models. Both presented models have the ability to capture the vagueness of human thinking style, and let customer oriented organizations, such as MCI, derive benefits from the voice of the customer (VOC) in a more expressive way.     

Informal institutions and managers’ earnings management choices: Evidence from IFRS-adopting countries

In this study, we investigate the role of informal institutions (religiosity and culture) in determining managers’ choices of earnings management methods (accruals vs. real activities), after controlling for formal institutions (investor protection, enforcement quality and equity market development). Using an ethical perspective, we find that managers tend to choose an earnings management strategy that meets the prevailing social (informal) norms of the environment where the firm is headquartered. Specifically, our analysis shows that firms domiciled in countries with strong religious adherence and high-power-distance cultures prefer to manage their earnings ‘upwards’ through real activities rather than accruals. Overall, our results suggest that informal institutions determine managers’ earnings management choices at least as strongly as formal institutions do. It would therefore be misleading to analyze managers’ choices in managing earnings solely from the formal rules perspective without considering the role of informal constraints or vice versa.     

Innovation through Experience Staging: Motives and Outcomes

There is a growing recognition of the opportunities of innovation through experience staging. The literature, however, tends to focus on high‐profile examples of firms from largely hedonic sectors, such as entertainment and hospitality. These cases provide vivid and persuasive examples, but they fail to address how firms outside these sectors can join the experience economy—a term coined in 1998 by Pine and Gilmore—by developing new products and services with experiences at their core. The paper reports on two studies undertaken to examine why firms that do not belong to sectors that are largely hedonic innovate through experience staging and how they benefit from doing so. The first study is an in‐depth case study of 15 diverse firms, which examines these firms' motives for pursuing innovation through experience staging. The second study is a two‐year longitudinal quantitative survey of 131 small‐ and medium‐sized firms (SMEs) to address the question of the benefits that firms that do not have strong brands can gain by from innovation through staging experiences. The first study provides the basis for classifying firms along two dimensions depending on the nature of the new products or services (referred to collectively as offerings) they create. The first dimension has to do with whether new offerings have a functional or experiential core. The second dimension has to do with the degree of experiential augmentation applied to offerings. The first study suggests that firms adopt an experience‐staging strategy to innovation based on both outward‐facing and inward‐facing motives. The outward‐facing motives include improving a firm's image in its market, entering new markets, and attracting new customers. The inward‐facing motives include improving a firm's attractiveness to employees and increasing profitability. The results of the second study suggest that creating offerings with an experiential core can contribute to success by enhancing a firm's image, its attractiveness to employees, and its ability to enter new markets. Moreover, experiential augmentation contributes to profitability, new customer attraction, and employee attractiveness. This research has important implications for theory and practice. In the first place, this research extends existing theory about experience staging to firms outside sectors that are largely hedonic. In the second place, the managerial implications are that innovation through experience staging can be an effective way for SMEs, even those outside industries, such as entertainment or hospitality, to create competitive advantage.     

New Product Development: Impact of Project Characteristics and Development Practices on Performance

Concurrent product development process and integrated product development teams have emerged as the two dominant new product development (NPD) “best practices” in the literature. Yet empirical evidence of their impact on product development success remains inconclusive. This paper draws upon organizational information processing theory (OIPT) to explore how these two dominant NPD best practices and two key aspects of NPD project characteristics (i.e., project uncertainty and project complexity) directly and jointly affect the NPD performance. Contrary to the “best practice” literature, the analysis, based on 266 NPD projects from three industries (i.e., automotive, electronics, and machinery) across nine countries (i.e., Austria, Finland, Germany, Italy, Japan, Korea, Spain, Sweden, and the United States), found no evidence of any direct impact of process concurrency or team integration on overall NPD performance. Instead, there is evidence of negative impact of the interaction between project uncertainty and concurrent NPD process and positive impact of the interaction between project complexity and team integration on overall NPD performance. Moreover, the study found no evidence of any direct negative impact of project uncertainty or complexity on overall NPD performance as suggested in the literature, but found evidence of a direct positive relationship between project complexity and overall NPD performance. The practical implications of these results are significant. First, neither process concurrency nor team integration should be embraced universally as best practice. Second, process concurrency should be avoided in projects with high uncertainty (i.e., when working with unfamiliar product, market, or technology). Finally, team integration should be encouraged for complex product development projects. For a simple product a loosely integrated team or a more centralized decision process may work well. However, as project complexity increases, team integration becomes essential for improved product development. There is no one‐size‐fits‐all solution for managing NPD projects. The choice of a product development practice should be determined by the project characteristics.     

Modeling tourists' visiting intentions toward ecofriendly destinations: Implications for sustainable tourism operators

The previous literature has overlooked the examination of tourists' visiting intentions for ecofriendly destinations. Hence, anchored in Schwartz (1992) personal values and the theory of planned behavior (TPB), the present study aims to develop a research model for application in Chinese settings. Survey findings from 467 tourists reveal significant positive relationships between tourists' values of resultant self‐transcendence and conservation and TPB factors (i.e., attitude, subjective norms, and perceived behavioral control), with the exception of the relationship between conservation and perceived behavioral control. Moreover, TPB factors and perceived green image were found to have positive effects on tourists' intentions to visit ecofriendly destinations. In addition, environmental consciousness positively moderates the relationships between the two Schwartz values and attitude. Theoretical implications are provided, and the study's findings have strategic practical implications for business managers. We acknowledge the study's limitations and offer research directions for future ecofriendly tourism scholars.     

Fiscal and External Deficits Nexus in GIIPS Countries: Evidence from Parametric and Nonparametric Causality Tests

International Advances in Economic Research - This paper investigates the relationship between fiscal and external deficits in five European Union countries (Greece, Ireland, Italy, Portugal, and...