Some information on the sampling performance of Stein's new estimator

This paper considers the sampling performance of Stein's modified version of the James-Stein estimator under both normal and non-normal specification.     

The future of leadership: reframing the unknown

Accepting the arguments of Donald Michael's article, this essay focuses on the need to understand patterns of denial and affirmation as they affect efforts at consensus formation. Leadership is presented as an interface role, orchestrating the exposure to light and shadow, between that which can be communicated (to followers) and that which cannot. The challenge for leadership is portrayed as one of navigating through shifting patterns of affirmation and denial. This challenge is represented in terms of four zones ranging from simple consensus, through situations undermined by unwritten rules, to a zone in which neither assertion nor denial is relevant. The latter is seen as more typical of Eastern approaches to governance. It is argued that complementary patterns of affirmation and denial are essential to the processes of sustainable communities.     

Does peripheral knowledge complement control? An empirical test in technology outsourcing alliances

While the normative logic for forming technology outsourcing alliances is that such alliances allow outsourcing firms to specialize deeper in their domain of core competence without being distracted by noncore activities, recent empirical studies have reported the puzzling phenomenon of some firms continuing to invest in R&D in domains that are fully outsourced to specialized alliance partners. An underlying—and widely made—assertion that can potentially reconcile this contradiction is that ‘peripheral’ knowledge (specialized knowledge in the domain of outsourced activities) complements control in technology outsourcing alliances. However, this assertion is untested; and empirically testing it is the objective of this research study. Using data from 59 software services outsourcing alliances, we show that such peripheral knowledge and alliance control are imperfect complements: peripheral knowledge complements outcomes‐based formal control but not process‐based control. Thus, outsourcing firms might sometimes need knowledge outside their core domain because such knowledge facilitates effective alliance governance. Our theoretical elaboration and empirical testing of the assumed complementarities between peripheral knowledge and control in technology outsourcing alliances has significant implications for strategy theory and practice, which are also discussed. Copyright © 2007 John Wiley & Sons, Ltd.     

Why and How UK Firms Hedge

This paper attempts to differentiate among the theories of hedging by using disclosures in the annual reports of 400 UK companies and data collected via a survey. I find, unlike many previous US studies, strong evidence linking the decision to hedge and the expected costs of financial distress. The tests show that this is mainly because my definition of hedging includes all hedgers and not just derivative users. However, when the tests employ the same hedging definition as previous US studies, financial distress cost factors still appear to be more important for this sample than samples of US firms. Therefore, a secondary explanation for the strong financial distress results might be due to differences in the bankruptcy codes in the two countries, which result in higher expected costs of financial distress for UK firms. The paper also examines the determinants of the choice of hedging method distinguishing between non‐derivative and derivatives hedging. My evidence shows that larger firms, firms with more cash, firms with a greater probability of financial distress, firms with exports or imports and firms with more short‐term debt are more likely to hedge with derivatives. Thus, differences in opportunities, in incentives for reducing risk and in the types of financial price exposure play an important role in how firms hedge their risks.     

Managerial ownership and the role of privatization in transition economies: The case of China

Within transition economies, a popular tactic for revitalizing large and inefficient stateowned enterprises (SOEs) is to privatize them. Unfortunately, the empirical evidence related to this issue is equivocal. This study, therefore, explores more deeply what the relationship may be between privatization efforts of SOEs and their financial performance in transition economies. Specifically, we seek to better understand whether privatization reforms per se, or other corporate governance mechanisms that complement or substitute for this effort, are most effective. Using a panel sample of Chinese state-owned public firms over an eight year period from 1999 to 2006, we find that managerial ownership has a more significant impact on firm performance than privatization does. This finding suggests that internal incentives to managers may be more effective than external market mechanisms in economies transitioning from centralized planning to market control. Our results are robust using a wide variety of performance measures and different model specifications.     

FDI distribution within China: An integrative conceptual framework for analyzing intra-country FDI variations

The literature on foreign direct investment (FDI) has evolved in separate theoretical silos and a holistic conceptualization is yet to emerge. Research has focused mostly on inter-country differences and not much on explaining intra-country FDI variations. Traditionally FDI locations have been evaluated through country-level FDI determinants even though provinces differ widely in infrastructure and other attributes. Further, neither is the varying importance of FDI determinants to different industries factored in, nor are the differing FDI incentives from national and provincial governments integrated into a single framework. To address these gaps this study synthesizes insights from three streams of FDI research and develops an integrative conceptual framework that can comprehensively analyze intra-country FDI inflows. We demonstrate the usefulness of the framework by empirically analyzing FDI trends within China’s 31 provinces. The study thus makes a substantive contribution by offering scholars, policy-makers, and practitioners a holistic conceptual and methodological approach for understanding FDI trends within a country.     

Non‐linear effect of exchange rate volatility on exports: the role of financial sector development in emerging East Asian economies

This paper empirically examines the role of financial sector development in influencing the impact of exchange rate volatility on the exports of five emerging East Asian countries – China, Indonesia, Malaysia, the Philippines and Thailand – using a GMM‐IV estimation method. The results indicate that the effect of exchange rate volatility on exports is conditional on the level of financial sector development. The less financially developed an economy, the more its exports are adversely affected by exchange rate volatility. In addition, a stable exchange rate seems to be a necessary condition to achieve export promotion via a currency depreciation in these economies.