Patterns of foreign direct investment in poor countries

This paper introduces endogenous adoption costs for productive assets in a Ramsey-type growth model with international capital flows. There are two classes of productive assets: owner-specific and location-specific. Adoption costs are an increasing function of the level of technology embodied in the investor's owner-specific assets and a declining function of the host country's location-specific assets. In this setting, the observed pattern of international capital flows is consistent with diminishing returns to capital. Further, our model predicts that the sectoral allocation of foreign direct investment is similar in rich and poor countries.     

Forecasting with Monetary Aggregates: Recent Evidence for the United States

We investigate the out-of-sample forecasting performance of various monetary aggregates in four-variate models of real output growth, inflation, changes in an interest rate, and nominal money growth from 1992 to 2004 using vector autoregressive (VAR) and regime-switching (RS) VAR models. We consider both Divisia and simple sum monetary aggregates for M1, M2M, M2, and M3 as well as sweep-adjusted M1 measures. We find little evidence that either aggregation method or level of aggregation has a big impact on the forecasting performance of our model with respect to inflation and real output growth. Our results indicate that VAR models with monetary aggregates appear to produce at best marginal improvements in RMSE over VAR models that omit money growth altogether. We also find that RS-VAR models usually provide better one quarter ahead forecasts than comparable VAR models, but often did worse when forecasting inflation four quarters ahead.     

Investment with a Conscience: Examining the Impact of Pro-Social Attitudes and Perceived Financial Performance on Socially Responsible Investment Behavior

This article addresses the growing industry of retail socially responsible investment (SRI) profiled mutual funds. Very few previous studies have examined the final consumer of SRI profiled mutual funds. Therefore, the purpose of this study was to, in an exploratory manner, examine the impact of a number of pro-social, financial performance, and socio-demographic variables on SRI behavior in order to explain why investors choose to invest different proportions of their investment portfolio in SRI profiled funds. An ordinal logistic regression analysis on 528 private investors revealed that two of the three pro-social variables had a positive impact on how much the consumer invested in SRI profiled funds. Moreover, there was proof of a non-altruistic motive for investing in SRI as consumers who perceive that financial return of SRI is equal or better than “regular” mutual funds, invested a greater proportion of their portfolio in SRI profiled mutual funds. Furthermore, the results showed that women and better-educated investors were more likely to invest a greater proportion of their investment portfolio in SRI. Overall, the findings indicate that both financial perceptions and pro-social attitudes are connected to consumer investment in SRI.     

Advertising “like a girl”: Toward a better understanding of “femvertising” and its effects

This paper investigates the impact of femvertising (female empowerment advertising). More specifically, it hypothesizes that femvertising (vs. traditional portrayals of females in advertising) will reduce ad reactance among a female target audience, and that this in turn will enhance ad and brand attitudes. The results of three experimental studies indicate that this is indeed the case, and that the results hold across print and digital media, for five different product categories, and for femvertising focusing on challenging female stereotypes in terms of physical characteristics as well as the roles and occupations used to portray women in advertising. Although previous studies of the effects of female portrayals tend to focus on social comparison and self‐identity, the current paper considers the role of psychological reactance to (more or less) stereotypical portrayals in explaining these effects. The results suggest that marketers have much to gain from adapting a more proactive and mindful approach to the female portrayals they use in their ads.     

In search of corporate governance in franchising

Abstract

A firm’s governance structure and business model might explain the firm’s failure or success. Franchising is a business model that has not received much attention within the corporate governance (CG) literature even though it obviously brings several unique CG challenges. Therefore, we review articles at the interface of CG and franchising. We identify and thematize the literature in four focus areas, each with a different relationship to CG: 1) traditional CG, 2) governance challenges unique to franchising, 3) governance modes, and 4) contracts. We find that the literature largely ignores the traditional view of CG when examining many aspects of franchising. We also find that the franchising literature covers governance topics when discussing governance modes, which provides a basis for developing CG theories. Altogether, our findings open a promising avenue for future research that incorporates CG into studies of franchising.     

Relationship commitment and value creation in sponsorship relationships

Purpose: The sponsorship industry has evolved considerably in recent years due to the strategic business opportunities that it provides. Despite increased interest in sponsorship, analysis of the relationship between relationship commitment and value creation and of relationship commitment as comprising multiple types or components in the context of sponsorship relationships is lacking. To address these gaps, this paper analyzes relationship commitment (in terms of affective commitment and value-based commitment) as a significant mediating variable, and value creation in the context of sponsorship relationships.

Methodology/approach: A questionnaire was sent to Swedish Hockey League sponsors to collect data and to verify the study’s conceptual model and relationships. The response rate for the survey was 19.8%, that is, 122 completed questionnaires out of 616 sent. The respondents represented the most common industries in Sweden, but most of them belonged to the construction, repair, and electronics industries (18.0%), manufacturing and production industry (13.1%), and commerce industry (11.5%). Most sponsoring companies (30.3%) were categorized as medium-sized (50–249 employees). Most respondents (38.5%) had invested EUR 4300–15,000, whereas 11.5% had invested less than EUR 4300. Moreover, we found that most sponsors had been in their sponsorship relationships for more than 10 years (32.8%). Structural equation modeling (SEM) was used for the data analysis.

Findings: This study demonstrates that relationship commitment is an important driver of value creation in sponsorship relationships. Furthermore, the various forms of affective commitment and value-based commitment should not be considered merely components or forms but distinct types. Certainly, there is interaction between the two types, but sequentially in such a way that affective commitment is a prerequisite for value-based commitment. This means that a sponsor must have an emotional relationship with the sponsee in order to understand, perceive, and calculate the sponsorship relationship’s future business value in terms of profits and other benefits. This study also finds that value-based commitment is the most significant type of commitment in sponsorship relationships.

Research implications: The study demonstrates that shared values, trust, and affective commitment are fundamental conditions for value-based commitment. If the parties agree on how they should behave in the relationship, the rules and objectives that apply lead to the emergence of mutual trust, which in turn makes the parties want to continue the relationship for emotional reasons. But this is not enough for value creation; they must also see that there are future business benefits from the relationship. Therefore, the parties more or less explicitly make calculations. If the calculations indicate that the long-term benefits of the relationship outweigh the short-term sacrifices, they are prepared to invest in the relationship, and this may lead to value creation. In other words, there is both interplay and tension between shared values, trust, and affective commitment, on one hand, and value-based commitment, on the other. Another theoretical contribution is that previous research has considered the links between relationship commitment and value but has ignored the different types of commitment that play key roles in the value-creation process; this study has addressed that oversight. The study demonstrates that affective commitment and value-based commitment have different roles and meanings. Affective commitment indirectly affects value creation, while value-based commitment directly affects value creation. Affective commitment has the role of partial mediator, while value-based commitment has the role of full mediator. Furthermore, they differ in their basic characteristics: affective commitment is an emotional aspect, while value-based commitment is a calculative aspect.

Originality/value/contribution: Previous studies have not analyzed the relationship between relationship commitment and value creation. However, this study demonstrates that relationship commitment is an important driver of value creation in sponsorship relationships. Furthermore, most previous research argues that relationship commitment consists of various components or forms that interact in parallel with each other. However, this study demonstrates that the various forms of affective commitment and value-based commitment should not be considered merely components or forms but distinct types. Certainly, there is interaction between the two types, but sequentially in such a way that affective commitment is a prerequisite for value-based commitment. Furthermore, previous studies have consistently noted that affective commitment is the most important component, form, or type of relationship commitment. However, this study finds that value-based commitment is the most significant type of commitment in sponsorship relationships.     

Gender Equality and Taxation Policies in the EU

Intereconomics - The persisting gender differences in employment rates and patterns and gender gaps in unpaid care work, employment rates, income, old age security, poverty and wealth are all...     

Attitudes and Donation Behavior When Reading Positive and Negative Charity Appeals

This article tries to clarify whether negative charity appeals (i.e., advertisements emphasizing the bad consequences of not helping) or positive charity appeals (i.e., advertisements emphasizing the good consequences of helping) are more effective. Previous literature does not provide a single answer to this question and we suggest that one contributing reason for this is that different studies have operationalized appeal effectiveness in different ways (e.g., actual behavior, self-rated helping intentions, or expressed attitudes about the ad or the organization). Results from four separate studies suggest that positive appeals are more effective in inducing favorable attitudes toward the ad and toward the organization but that negative appeals are more effective (in studies 1A and 1B) or at least equally effective (in studies 1C and 1D) in eliciting actual donations. Also, although people’s attitude toward the appeal (i.e., liking) was a good predictor for the expected effectiveness in increasing donation behavior (in Study 2), it was a poor predictor of actual donation behavior in all four main studies. These results cast doubt on marketing theories suggesting that attitudes toward an advertisement and toward the brand always lead to higher purchase behavior.     

Allocation of track capacity: Experimental evidence on the use of priority auctioning in the railway industry

Allocation of track capacity concerns multiple users facing demand indivisibilities, running trains over an inelastic supply of railway tracks. The paper suggests a Vickrey-type mechanism to handle incentive aspects of this technically complex optimisation task. Here, the price for operating a train will correspond to the bids foregone by other operators who are pushed off their preferred routes. The paper reports the results of 11 experimental markets using variations of this mechanism where each market includes up to 10 trading periods, and subjects bid for routes over a highly stylised railway network. The experiments generated solutions that capture 90–100% of potential benefits.     

Purchasing by Swedish grocery chains

In this article, the results from a study of the purchasing procedures in the two largest companies in Swedish grocery distribution are presented. Comparisons with similar studies are interwoven throughout the text concerning distribution companies in the U. S. A., Canada, the U. K., Finland and Norway. A tentative conclusion from the comparisons is that there are some general differences in purchasing procedures between North America and Europe. Factors which could explain these differences are market size and the degree of concentration in the food distribution industry.