The Baltics: Continuing Boom or Bursting Bubble?

Since the late 1990s, the economies of Estonia, Latvia and Lithuania have experienced unprecedented economic growth, which has attracted a large number of foreign investors. American companies were among the first to seek business opportunities and have invested over $1 billion in the three countries as of 2008. However, the boom—partly financed on a loose credit policy—has recently created a fragile economic situation due to soaring wages, double-digit inflation, and high current account deficits. The resulting economic deceleration in the first half of 2008 has led analysts to comment that the “Baltic Bubble” is about to burst, potentially leading to a long-term recession. Other experts, nevertheless, maintain that the three countries are only experiencing a natural consolidation, which does not seriously endanger business opportunities in the long run. The purpose of this paper is to analyze the current condition of the Baltic economies and the environment for businesses there in order to determine if the three countries will still be attractive destinations for foreign direct investment (FDI) in the future.     

The Effects of Initial Location,Aspirations, and Resources on Likelihood of First Sale in Nascent Firms*

The formation of a new venture includes initial choices that affect the process of start‐up. Primary among these decisions is the choice of location whether to start from home or from an away location. This paper examines the impact of initial firm location choices and aspirations of the entrepreneur on the resource assembly process and the likelihood of first sale. Results show that home‐based businesses assemble different types of resources from their away‐based counterparts. Higher aspirations were associated with greater accumulation of organizational resources. The combined influence of location and aspirations showed that home‐based firms with high aspirations were less likely to achieve first sale. A post hoc analysis examined these affects within a subgroup of service firms and confirmed the previous results. This study suggests that in the initial stages of the new venture, there are processes and routines that home‐based businesses engage in that lead them to achieve first sales in a timelier manner than those businesses that are located away from home. Furthermore, high aspirations are associated with greater scale of organizational resources but not necessarily with achievement of sales. Implications are discussed.     

Codes of Ethics and the Pursuit of Organizational Legitimacy: Theoretical and Empirical Contributions

The focus of this paper is to further a discussion of codes of ethics as institutionalized organizational structures that extend some form of legitimacy to organizations. The particular form of legitimacy is of critical importance to our analysis. After reviewing various theories of legitimacy, we analyze the literature on how legitimacy is derived from codes of ethics to discover which specific form of legitimacy is gained from their presence in organizations. We content analyze a sample of codes to consider the question of whether a strategic, self-interested rationale lies behind the adoption of a code of ethics. We propose that the process of employing codes of ethics in this strategic manner has become, through isomorphism, an institutionalized practice that itself confers a cognitive form of legitimacy to the organization and further distances the codes from their moral foundation.     

The Russian Tax System and Its International Competitiveness

The last several years were very favourable to the development of the Russian economy. While this has partly been the consequence of favourable conditions on the international markets for raw materials, the economic policy of President Vladimir Putin, including the tax reforms initiated at the end of the 1990s, also played a major role. Our authors examine in detail the effects of the tax reforms to date and point out the room for further improvements under Putin’s successor, Medvedev.     

On the Optimality of a GCC Monetary Union: Structural VAR,Common Trends,and Common Cycles Evidence

The suitability of the proposed monetary union among the members of the Gulf Cooperation Council (GCC) is examined. The authors identify the underlying structural shocks that these economies are subject to and assess the extent to which the shocks are symmetric. Alternatively, the authors test for common trends and common business cycles among the GCC economies. They find that while the transitory demand shocks are typically symmetric, the permanent supply shocks are asymmetric. Furthermore, they do not find synchronous long‐run and short‐run movements in output. Despite the progress that has been made in terms of integration, the findings indicate that the conditions for forming a GCC monetary union have not as yet been met.     

International Terrorism: Causes,Consequences and Cures

A popular view is that international terrorism is on the increase, that it is religiously motivated and that it has important adverse consequences. This paper investigates this view. It examines the empirical evidence on the causes of international terrorism from the late 1960s to the early 2000s and discovers that, while religion has had a part to play, explanations based on economics and politics appear to be consistent with the facts. Terrorists come from relatively poor and undemocratic countries and commit attacks in relatively rich and democratic ones. The paper then examines the micro, macro and global economic effects of international terrorism from both a theoretical and empirical angle, and discovers that the negative effect on domestic aggregate demand is temporary and the effect on aggregate supply insignificant. Finally, the paper explores policies to deal with international terrorism and demonstrates that this is complex. Analogies with conventional crime may be unhelpful.     

Understanding how technology paradoxes affect customer satisfaction with self‐service technology: The role of performance ambiguity and trust in technology

This study examines the role of consumer technology paradoxes within the context of self‐service technology and the routes by which these paradoxes influence customer satisfaction evaluation. Analysis of survey data from online banking customers indicates that three paradoxes operate in this context: control/chaos, fulfill needs/create needs, and freedom/enslavement. The study reveals further that the effects of these paradoxes on customer satisfaction are mediated by consumer performance ambiguity and consumer trust in technology. Theoretical and managerial implications of consumer paradoxical experiences for technology‐based services are discussed. © 2008 Wiley Periodicals, Inc.     

Ethnic-immigrants in founding teams: Effects on prospector strategy and performance in new Internet ventures

We investigated differences in strategy and performance between new Internet ventures with ethnic-immigrant members in the founding team and a matched set of Internet ventures with non-ethnic-non-immigrant team members. Results showed that new ventures with an ethnic-immigrant presence in the founding teams tended to pursue a more aggressive prospector strategy than those with non-ethnic-non-immigrant founding team members. Still, performance of the two groups of ventures was comparable. However, the positive effects of ethnic-immigrant presence on founding teams depended on team size and average age of the founding team members.