Engaging diasporas as international entrepreneurs in developing countries: In search of determinants

Diaspora has been increasingly recognized by practitioners and scholars as an important factor of development in developing economies. Through their remittances and expertise, diaspora members have become an important source of foreign direct investment and managerial capabilities. Although the literature is glutted with examples of the impact of diaspora in fostering international entrepreneurship and reducing poverty, a theoretical foundation and framework is needed to explain this impact. This study explores a theoretical foundation of the diaspora entrepreneurship. A framework identifying the determinants of the diaspora’s international new venture creation in the country of origin is developed. The study suggests that diaspora international entrepreneurship depends on the level of altruistic motivation, need of social recognition, entrepreneurial opportunities, friendliness and receptivity of the home country, as well as integration of and support to immigrants in the host countries. Propositions for diaspora entrepreneurship are developed.     

Testing neoclassical production theory

In this paper we propose and carry out some tests that help us evaluate the neoclassical theory of production. First, we use the implied relationship between cost (production) and (inverse) derived demand equations to provide a test which can be interpreted as a test for the validity of the theory. Then, using the same relationships we provide a test for the internal consistency of the theory. Finally, we examine the extent to which the primal and dual models yield the same implications. We find that except for one case the theory does not pass the proposed tests and furthermore, the primal and dual do not yield the same implications.     

Partial rank estimation of duration models with general forms of censoring

In this paper we propose estimators for the regression coefficients in censored duration models which are distribution free, impose no parametric specification on the baseline hazard function, and can accommodate general forms of censoring. The estimators are shown to have desirable asymptotic properties and Monte Carlo simulations demonstrate good finite sample performance. Among the data features the new estimators can accommodate are covariate-dependent censoring, double censoring, and fixed (individual or group specific) effects. We also examine the behavior of the estimator in an empirical illustration.     

Fear Linkages Between the US and BRICS Stock Markets: A Frequency-Domain Causality

Abstract

We employ a spectral causality approach to uncover short-, medium-, and long-run causal relations between the US implied volatility index and the five individual implied volatility indexes of BRICS markets from 16^th March 2011 to 31^st January 2018. We show that the volatility causal relations differ between the short and long run in many cases. Although the results indicate the dominant role played by US uncertainty in shaping uncertainty in all BRICS markets, there is also evidence of a feedback effect from Brazil, Russia, and China to the US that differs across the spectrum. The implications for hedging and risk management practices are explored.     

Investment decisions in troubled times: A Bayesian approach applied to Brazilian firms

This study analyses the investment decision of 497 Brazilian firms during a period of unstable macroeconomic conditions. The role of financial constraints is considered in a Bayesian econometric model. We estimate three different models, and the results indicate the presence of financial restrictions, especially for capital-intensive firms. The recursive predictive density criterion indicates that the most preferred model is the one in which firm-specific effects are correlated with cash-flow. Financial restrictions are more important for capital-intensive firms, probably due to their lower profitability indexes, higher fixed costs and higher degree of property diversification.     

Correlates and Consequences of the 1918 Influenza in South Africa

We study the demographic and economic correlates of the 1918 influenza or “Spanish flu” that killed an estimated 6% of South Africa's population. While the pandemic has received some attention in South African historiography and from social scientists in other contexts, little is known about its long-term impact on the country. Bringing together data from a range of new sources, including population and agricultural censuses, household surveys, and the voters’ rolls, we provide analyses that show, first, the factors that (do and do not) predict flu mortality across South Africa's magisterial districts, and, second, suggest some important consequences of the flu. Our results reveal a large but short-lived demographic shock, and detectable, if small scale, long-term economic consequences.     

Exploring B-to-B e-commerce adoption trajectories in manufacturing SMEs

The intent of this paper is to capture the gradual unfolding of business-to-business (B-to-B) e-commerce adoption in small and medium-sized enterprises (SMEs). Empirical evidence was gathered in three separate but complementary phases: first, a pilot study to identify and validate metrics for B-to-B e-commerce adoption; second, an e-survey to gain an in-depth understanding of B-to-B e-commerce adoption and its related benefits; and third, a multiple case study to further validate the e-commerce adoption trajectories we observed and their underlying dynamics. Findings suggest logical evolutionary paths to the penetration of B-to-B e-commerce in SMEs. The cumulative and self-reinforcing nature of both e-commerce initiatives and the benefits derived therefrom points to the existence of e-commerce adoption trajectories.     

Credit constraints and the persistence of unemployment

In this paper, we argue that credit market imperfections impact not only the level of unemployment, but also its persistence. For this purpose, we first develop a theoretical model based on the equilibrium matching framework of Mortensen and Pissarides (1999) and Pissarides (2000) where we introduce credit constraints. We show these credit constraints not only increase steady-state unemployment, but also slow down the transitional dynamics. We then provide an empirical illustration based on a country panel dataset of 20 OECD countries. Our results suggest that credit market imperfections significantly increase the persistence of unemployment.     

The accentuated CEO career horizon problem: evidence from international acquisitions

We develop a conceptual model of the career horizon problem of CEOs approaching retirement and discuss its implications on firm risk taking, specifically in engagement in international acquisitions. Based on prospect theory and agency theory, we emphasize the legacy conservation and wealth preservation concerns of CEOs and investigate how their holdings of in‐the‐money unexercised options and firm equity accentuate or mitigate the career horizon problem. The model is tested in the context of international acquisitions with a sample of 293 U.S. firms over a five‐year period (1995–1999). We find that a longer CEO career horizon is associated with a higher likelihood of international acquisitions. We also find that CEOs nearing retirement with high levels of in‐the‐money unexercised options and equity holdings are less likely to engage in international acquisitions than CEOs with low levels of in‐the‐money options and equity holdings. The study raises important considerations about the implications of CEOs' equity and in‐the‐money option holdings on firm risk taking at various stages of their career horizon. Copyright © 2008 John Wiley & Sons, Ltd.