ASYMPTOTICS OF IMPLIED VOLATILITY IN LOCAL VOLATILITY MODELS

Using an expansion of the transition density function of a one‐dimensional time inhomogeneous diffusion, we obtain the first‐ and second‐order terms in the short time asymptotics of European call option prices. The method described can be generalized to any order. We then use these option prices approximations to calculate the first‐ and second‐order deviation of the implied volatility from its leading value and obtain approximations which we numerically demonstrate to be highly accurate.     

Aid Allocation by German NGOs: Does the Degree of Official Financing Matter?

Using a new data set for 41 German non‐governmental organisations (NGOs), we analyse the allocation of NGO aid across recipient countries in a Tobit regression framework. By identifying for each NGO the degree of official financing, we address the largely unresolved issue of whether financial dependence on the government impairs the targeting of NGO aid. It turns out that German NGOs are more active in poorer countries, while they do not complement official aid by working under difficult local conditions. Beyond a certain threshold, rising financial dependence weakens their poverty orientation and provides an incentive to engage in ‘easier’ environments. In addition, we find that the NGOs follow the state as well as NGO peers when allocating aid. This herding behaviour is, however, hardly affected by the degree of official financing.     

Host–home country linkages and host–home country specific advantages as determinants of foreign acquisitions by Indian firms

This paper examines the complementarity of country-specific linkages with country-specific advantages in explaining the foreign acquisitions by Indian MNEs by testing and extending further the Eclectic Paradigm. The approach to internationalisation dominated by the Eclectic Paradigm has constantly faced challenges in gaining acceptance as a holistic framework in explaining outward foreign direct investment (OFDI). In 2006 Dunning acknowledged that the role of networks and linkages (Dunning, 2006a). In this paper we explore the view that linkages between host and home country should be included in the Eclectic Paradigm as institutional assets. Country-specific linkages add to richness and improve explanatory power of the Eclectic Paradigm. Linkage variables are shown to be an adjunct to the Eclectic Paradigm, not an alternative to it.     

Cross-country differences in attitudes to business associations during the 2007–2010 recession

This paper uses empirical data gathered through an on-line survey of 206 small and medium-sized enterprises (SMEs), conducted in France, Sweden and the UK. The paper examines cross-country differences in SME managers’ perceptions of business associations as sources of political intelligence and their ability to influence policy responses to financial crises. Findings demonstrate that the respondents’ countries of origin are significantly correlated with (1) their use of information sources to gather political intelligence, (2) their perceptions regarding the effectiveness of business associations in influencing policy outcomes, and (3) their perceptions regarding policymakers’ appreciation of information provided by SME associations.     

A passage to India: A dual case study of activities,processes and resources in offshore outsourcing of advanced services

Research has shown that offshore outsourcing processes may influence the behavior and strategic choices of firms, but little is known about the determining factors that influence the evolution and outcomes of those processes. Furthermore, longitudinal studies able to generate such insights are lacking. This paper suggests a detailed, activity-based approach to the study of the process of offshore outsourcing of high-value, advanced service activities. While earlier research has considered either firm-internal or firm-external sources of resource building, this study offers a more comprehensive theoretical model that combines resource-based theory and international business network theory. It aims to investigate how determinants of the offshore outsourcing process contribute to the resource stocks of client firms. Based on two longitudinal case studies of offshore outsourcing to India, the study finds that offshore outsourcing operations, in general, make positive contributions to the resource stocks of client firms. Some determinants contribute to the building of resources (partnership commitment decisions, knowledge creation and learning, trust building, the interconnectedness of resources) while others impede resource building (time compression diseconomies, lack of resource mass efficiencies). Notably, the interconnectedness among onshore activities, offshore activities and the underpinning knowledge resources reduces the risk of erosion of client firm resources, although this remains a long-term risk.     

Servant leadership across cultures

Servant leadership is anchored in the human drive to bond with others and contribute to the betterment of the society. An emphasis on service motivation, as demonstrated by empowering and developing people with empathy and humility, differentiates servant leadership from other leadership frameworks. In this study, we analyzed the degree to which five aspects of servant leadership, Egalitarianism, Moral Integrity, Empowering, Empathy and Humility were endorsed as important for effective leadership across cultures. While each of these dimensions was found to be associated with effective leadership, there was considerable variation in degree of endorsement of components of servant leadership across different GLOBE culture clusters. The dimensions of Egalitarianism and Empowering were endorsed more strongly in Nordic/European cultures but less so in Asian and similar cultures. On the other hand, servant leadership dimensions of Empathy and Humility were more strongly endorsed in Asian cultures than European cultures. Further, significant relationships were found between several societal cultural values and aspects of servant leadership which help us understand why nations differ in endorsing this leadership construct.     

Emerging economies' attraction of foreign direct investment

This paper uses a composite measure to examine why some countries attract more foreign direct investment (FDI) than others. The measure considers all identified, measurable, and comparable socioeconomic aspects that affect FDI decisions on an aggregated country level. As a result, we can rank 127 countries with respect to their FDI attraction. The measure allows detailed strength and weakness analyses and enhances the discussion of why FDI flows are concentrated in advanced economies. Additionally, the findings reveal the areas in which emerging countries should improve in order to narrow existing gaps. Our robustness checks indicate that the composite measure accurately tracks real FDI activity.     

Reward strategy: Time for a more realistic reconceptualization and reinterpretation?

This article focuses on organizations' continued struggles to design and implement successful and credible reward strategies. We argue that a major and neglected factor that accounts for this is how reward strategies are designed and executed with insufficient attention given to employee preferences for different types of reward. We argue that this is both a problem of process in the way reward systems are designed and a problem of how models of reward strategy are built. Developing more effective reward strategies requires a better understanding of holistic rewards and greater attention to line management roles in their implementation. © 2010 Wiley Periodicals, Inc.