Market Structure and Foreign Direct Investment

During the last decade the extent of inward foreign direct investment (FDI) in the US has increased dramatically. An important aspect of industries where most FDI takes place is their high level of concentration. This paper investigates how strategic interactions among domestic and foreign producers influence the structure of the industry. Especially, it focuses on the foreign firms' choice between exporting versus servicing these markets by investing in a plant located in the host country when facing competition from a domestic oligopoly. The empirical investigation reveals that the relationship between FDI and tariffs is not as simple as previously thought. In highly concentrated industries, where strategic behavior may play an important role, high tariffs rather than low tariffs may lead to less FDI and more imports.     

Word of mouth activity as information search: A reappraisal

Studies on the diffusion of new products show that word-of-mouth activity WOMA) is an important influencer of consumer acceptance. WOMA has usually been defined primarily as information seeking behavior aimed at risk reduction prior to the purchase decision. To test this hypothesis, data on a new milk additive brand were used from a 1,100 state-wide sample conducted longitudinally. The findings were consistent in rejecting the hypothesis, therefore casting doubt on the exclusive information search nature of WOMA. The main implication is to view WOMA as a multiform communication activity including conversation types other than information search.     

Performance Management in a Decentralized Setting: Monitoring and Gaming in the Financial Services Industry

This paper addresses the problems of untruthful reporting, distortion and gaming of data and performance measures. It explores this relatively neglected area in the principal‐agent framework and also tries to assess whether the level of organizational decentralization has some effect on the scope of these problems. We develop a multi‐level game theoretical model showing that agents are key players, and that monitoring and sanctioning for gaming should be included in the explicit contract between principals and subordinates in every level of the organization. We apply the model and its insights to the financial services industry where misconduct flourishes. Copyright © 2016 John Wiley & Sons, Ltd.     

The role of HR practices in developing employee resilience: a case study from the Pakistani telecommunications sector

Abstract

There has been increasing interest in understanding the factors that contribute to the development of employee resilience. Despite such interest, there is a dearth of research examining the contributory role played by HR practices in enhancing employee resilience. Looking at the context of Pakistan’s telecommunications sector and deploying a qualitative methodology, this paper examines the impact of HR practices on employee resilience. The findings indicate that four key areas of HR practices – job design, information sharing and flow within an organisation, employee benefits (monetary as well as non-monetary), and employee development opportunities – enable the development of employee resilience. Consequently, the effective implementation of HR practices in these areas has been the key factor for the development of employee resilience.     

Project food aid and equitable growth: Income-transfer efficiency first!

This paper discusses the income transfer properties of food aid in order to shed light on the inputs necessary to ensure a contribution to equitable growth, particularly with reference to the alleviation of poverty and malnutrition. The author defines the concepts of income-transfer efficiency and nutrition efficiency and shows that food aid which is income-transfer efficient is usually also nutrition efficient. Some empirical evidence of the income-transfer efficiency of different commodities supplied to various countries is reviewed and policy implications for the selection of food aid commodities and projects are discussed. The author concludes with some working propositions designed to stimulate further debate on the selection and administration of food aid projects.     

A core equivalence theorem with an arbitrary communication structure

We formalize the concept of a communication structure by identifying it with a partition of the set of agents. Thus, a coalition can form if and only if it belongs to the given partition. Within this framework we are able to show that for every integer J≧2, if we put the uniform distribution on the space of partitions that contain exactly (or, no more than) J coalitions, the probability that such a partition will contain a blocking coalition for any Pareto optimal allocation which is bounded away from being competitive, is arbitrarily close to 1, as the number of individuals increases.     

The stability threshold and two facets of polarization

In this paper we introduce the stability threshold that quantifies the minimal returns to size sufficient to prevent credible secession threats by regions of the country. Severity of internal tension has been linked to degree of polarization of citizens’ preferences and characteristics. We show that the increasing degree of polarization does not, in general, raise the stability threshold, even though this hypothesis holds in some asymptotic sense. We also examine the question of the number of smaller countries to be created if the unity of the large country is not sustainable, and investigate the link between this number and the degree of the country polarization. JEL Classification Numbers H20, D70, D73     

On blocking coalitions: Linking Mas-Colell with Grodal–Schmeidler–Vind

In this paper we investigate the question of how many coalitions of a given relative size would block a non-Warlasian allocation in large finite economies. It is shown that in finite economies, if a Pareto optimal allocation is bounded away from being Walrasian, then, for any two numbers α$\alpha$ and β$\beta$ between 0 and 1, the proportion of blocking coalitions in the set of all coalitions with relative size between α$\alpha$ and β$\beta$, is arbitrarily close to 1/2, as the number of individuals in the economy becomes large.     

Individual-rational and group-rational inflation expectations: Theory and cross-section evidence

A distinction is drawn between individual-rational and group-rational inflation expectations. Survey data for Israel show that individual inflation expectations are influenced by socioeconomic and psychological variables — specifically, interpersonal trust, age and income.     

The “Make‐up” of a Regression Coefficient: Gender Gaps in the European Labor Market

We provide a comprehensive picture of the relationship between labor market outcomes and age by gender in the 28 European countries covered by the European Statistics on Income and Living Conditions. The analysis is based on a somewhat unconventional approach that refers to concentration curves in the Gini regression framework. It allows identification of ranges in the explanatory variables where local slopes change sign and/or size, i.e. the components that “make up” a regression coefficient. Gender is a crucial factor differentiating participation among workers, although employment–age profiles do not substantially differ. Relevant differences in age profiles concern working‐hours patterns: some countries are characterized by an almost specular behavior in men and women; other countries instead show similar patterns. Generally, earnings increase with age for both men and women. However, local regression coefficients are not monotonic over the entire age range and can even be locally negative in some countries.