FDI Liberalization as a Source of Comparative Advantage in China

Two features of China's trade patterns suggest that elements beyond factor abundance explain its export performance. The high penetration in world markets of labor-intensive products has been accompanied by: (i) a high share in exports of productivity-advanced foreign-invested enterprises (FIEs) and (ii) a high penetration of FIEs in labor-intensive sectors. We show that FDI liberalization endogenously introduces Ricardian features to an otherwise standard endowment-based trade model, strengthening China's natural comparative advantage in labor-intensive products. We discuss how capital accumulation, productivity growth, rural–urban migration, incentives for foreign investment, and distortions in financial markets affect this bias.     

Buyer–Supplier and Supplier–Supplier Alliances: Do They Reinforce or Undermine One Another?

abstract    Previous research has portrayed buyer–supplier and supplier–supplier alliances as important mechanisms to foster learning and exchange efficiencies. Controversy remains, however, as to how these alliances interact. While some propose they reinforce one another (e.g. learning in horizontal ties generates positive spillovers to vertical ties), others propose a negative interplay (e.g. when increasing vertical-tie intensity, suppliers may weaken horizontal ties to avoid retaliation from buyers who wish to preserve bargaining power). We empirically test these competing views using survey data from the Brazilian auto-parts industry. In an attempt at reconciliation, we propose that the positive or negative interaction between vertical and horizontal alliances depends on the level of technological uncertainty of goods exchanged. Vertical ties seem to inhibit horizontal ties when technological uncertainty is low; when technological uncertainty is higher, vertical and horizontal ties do not seem to have any meaningful form of interaction. We discuss implications for theory and practice.     

EXCHANGE RATE MISALIGNMENT IN DEVELOPING COUNTRIES

This article analyzes the theory of equilibrium real exchangerates and defines misalignment as a deviation of the real exchangerate (RER) from its equilibrium level. The role of macroeconomicpolicies is then analyzed under three alternative nominal exchangerate regimes: predetermined nominal exchange rates, floatingnominal rates, and dual or black market nominal exchange rates.This discussion points out how inconsistent macroeconomic policiesoften lead to real exchange rate misalignment. Corrective measures,including nominal devaluations and several alternative approaches,are then evaluated.      

Sources of support and expatriation: a multiple stakeholder perspective of expatriate adjustment and performance in Malaysia

This research tests the role of perceived support from multinational corporations and host-country nationals for the adjustment of expatriates and their spouses while on international assignments. The investigation is carried out with matched data from 134 expatriates and their spouses based in foreign multinationals in Malaysia. The results highlight the different reliance on support providers that expatriates and their accompanying spouses found beneficial for acclimatizing to the host-country environment. Improved adjustment in turn was found to have positive effects on expatriates' performance. The research findings have implications for both international human resource management researchers and practitioners.     

Reforming the international monetary system: a stock-flow-consistent approach

Abstract:

The emergence and persistence of large trade imbalances as well as the volatility of financial flows among countries have been attributed, at least in part, to the inadequacy of the current international monetary system after the breakdown of Bretton Woods. From a different perspective, the current eurozone crisis is also the result, in our view, of a flawed institutional setting. These problems call for reforms to mitigate or avoid the recessionary bias that is the outcome of current systems, as Keynes predicted in the discussion preceding the Bretton Woods agreements. In this paper we briefly review the evidence on international imbalances, and survey the rapidly growing literature on the subject. We introduce a set of models based on the stock-flow-consistent approach pioneered by Godley (1999 Godley, W. “Open Economy Macroeconomics Using Models of Closed Systems.” Working Paper no. 281, Levy Economics Institute of Bard College, 1999. [Google Scholar]) and Lavoie and Godley (2003 Lavoie, M., and Godley, W. “Two-Country Stock-Flow Consistent Macroeconomics Using a Closed Model Within a Dollar Exchange Regime.” CERF Working Paper no. 10, University of Cambridge, 2003. [Google Scholar]). We discuss how to use these models to explore potential reform of the international monetary system.     

The Climate Policy of the European Union

There is now almost universal agreement that climate change, with potentially disastrous consequences, is happening and that it is contributed to by human activities. This Forum is dedicated to the discussion of various aspects of the European Union's climate policy, e.g. the EU's future role in the global effort to combat global warming, the efficiency of its climate strategy, the design of a new rule for sharing the corresponding burdens fairly among member states, and the interrelationships between the Union's climate policies, on the one hand, and its energy and transport policies, on the other. * and member of the German Advisory Council on Global Change (WBGU). The author wishes to thank Helen Bicknell (Mainz University of Applied Sciences), Oliver Deke (WBGU) and Jürgen Schmid (ISET, Department of Efficient Energy Conversion at the University of Kassel) for their helpful comments. ** This contribution is based on a Jean Monnet Lecture held at Aarhus University on 19 March 2007. The author would like to thank Harri Kalimo for valuable comments.     

Leveraging sponsorship with corporate social responsibility

Sponsors increasingly engage in corporate social responsibility (CSR) activities surrounding sponsored events (e.g., the soccer World Cup and Olympic Games). This study examines how linking CSR to sponsorship affects consumer attitudes towards sponsoring brands. Schema theory suggests that consumer CSR perception and brand credibility act as serial mediators. They transfer the positive effects of a CSR-linked sponsorship strategy. These effects only occur for brands with a moderately low congruity to the sponsored event (but not for brands with a moderately high congruity to the sponsored event). Two experiments measuring (Study 1) and manipulating (Study 2) sponsor–event congruity confirm the proposed mediation mechanism for brands with a moderately low sponsor–event congruity. CSR-linked sponsorship (vs. sponsorship without CSR linkage) does not influence attitudes towards brands with a moderately high congruity to the sponsored event. The study develops theoretical and practical implications for sponsorship and CSR strategies.