Offshore Outsourcing and Non‐production Workers: Firm‐level Relationships Disaggregated by Skills and Suppliers

In analysing the impact of offshoring on the skill composition, previous empirical studies have established that offshoring firms employ more non‐production workers. However, not all non‐production workers are highly skilled. This paper disaggregates non‐production workers into the following three categories: (i) skilled non‐production workers, (ii) unskilled non‐production workers and (iii) non‐production workers with special skills for offshoring and other overseas business management. By linking our offshoring survey data with firm‐level data for Japanese manufacturing firms, this paper finds that the share of skilled non‐production workers tends to be significantly high in offshoring firms but that of unskilled non‐production workers is not. As offshoring has expanded from production to non‐production tasks, this result implies that the distinction between skilled versus unskilled workers becomes critical among non‐production workers. Using our unique data on supplier types in offshoring, this paper finds that the share of non‐production workers for the management of overseas activities tends to be high in foreign direct investment firms and in firms outsourcing to foreign independent suppliers, but not in Japanese firms outsourcing to offshore suppliers located abroad but owned by other Japanese firms. This difference indicates that coordination burdens are likely to be at least partly mitigated by common languages or shared business practices. These findings suggest that offshoring has different impacts on employment depending on suppliers and the worker’s skill. The principal results are confirmed robust even after various firm characteristics are controlled for in panel regressions, though we should not give any causal interpretations.     

Using Games in Community Disaster Prevention Exercises

Currently, there is a growing interest in disaster prevention exercises such as games, debates, workshops, and “town walks” that involve the active participation of community members as an alternative to seminars in which disaster prevention experts simply share their knowledge and skills. We have developed a disaster prevention game called Crossroad for use in local disaster prevention programs. It is a group learning game, in which players read cards with a scenario written on each card. The scenarios were derived from extensive, focus-group interviews with disaster veterans of the Kobe Earthquake of 1995 that killed more than 6400 people and described the dilemmas faced by these veterans. To deal with the dilemma, each player was required to make a “Yes” or No decision on two conflicting alternatives. We used Crossroad as a part of tsunami disaster prevention, community-building workshops for citizens of Kishiwada city in Osaka, Japan. The results suggested the importance of motivating local people to find a socially “viable” solution through their own strength, rather than forcing a community to accept a universally “correct” solution prescribed in advance by outsiders. It is concluded that the Crossroad game can be used effectively as a new communication medium to promote the active participation of community members.     

Remittances and the Dutch Disease: Evidence from the Republic of Moldova

This paper analyzes the linkage between exports, real effective exchange rates, and workers’ remittances in the Republic of Moldova based on impulse response functions through a vector autoregressive model. We find that an inflow of remittances leads to an appreciation of real exchange rate and a decline of exports, but the magnitude is small. Another finding is that the exchange rate appreciation does not affect remittance transfers for the first three-quarters.     

Feeling Vulnerable? Disclosure of Vulnerability in the Charismatic Leadership Relationship

The current conceptual paper explores the role of vulnerability in the charismatic leadership relationship. “Sharing vulnerability” is defined as communicating an experience to followers, in which the leader was hurt emotionally, physically, or spiritually. We argue that sharing vulnerability may be an important mechanism through which leaders develop relationships with their followers and increase attributions of charisma. We also note several likely preconditions for sharing vulnerability, including humility, self‐awareness, and the courage to acknowledge imperfections. Further, we highlight that when leaders disclose emotions, it creates opportunities for followers to connect with leaders at an emotional level. Followers, in turn, may perceive increased psychological safety, be more willing to trust the leader, and be more motivated to engage in building a more egalitarian leader–follower relationship. Therefore, we propose sharing vulnerability as a potential avenue for building more compassionate and caring leader–follower relationships.     

Surfing the waves of globalization: Asia and financial globalization in the context of the trilemma

Using the “trilemma indexes” developed by Aizenman et al. (2010) that measure the extent of achievement in each of the three policy goals in the trilemma—monetary independence, exchange rate stability, and financial openness—we examine how policy configurations affect macroeconomic performances, with focus on the Asian economies. We find that the three policy choices matter for output volatility and the medium-term level of inflation. Greater monetary independence is associated with lower output volatility while greater exchange rate stability implies greater output volatility, which can be mitigated if a country holds international reserves (IR) at a level higher than a threshold (about 20% of GDP). Greater monetary autonomy is associated with a higher level of inflation while greater exchange rate stability and greater financial openness could lower the inflation rate. We find that trilemma policy configurations affect output volatility through the investment or trade channel depending on the openness of the economies. Our results indicate that policy makers in a more open economy would prefer pursuing greater exchange rate stability while holding a massive amount of IR. Asian emerging market economies are found to be equipped with macroeconomic policy configurations that help the economies to dampen the volatility of the real exchange rate. These economies’ sizeable amount of IR holding appears to enhance the stabilizing effect of the trilemma policy choices, and this may help explain the recent phenomenal buildup of IR in the region.     

Semi-Static Hedging Based on a Generalized Reflection Principle on a Multi Dimensional Brownian Motion

On a multi-assets Black-Scholes economy, we introduce a class of barrier options, where the knock-out boundary is a cone. In this model we apply a generalized reflection principle in a context of the finite reflection group acting on a Euclidean space to give a valuation formula and the semi-static hedge. The result is a multi-dimensional generalization of the put-call symmetry by Bowie and Carr (Risk (7):45–49, 1994), Carr and Chou (Risk 10(9):139–145, 1997), etc. The important implication of our result is that with a given volatility matrix structure of the multi-assets, one can design a multi-barrier option and a system of plain options, with the latter the former is statically hedged.