A Survey of Exchange Rate Pass-Through in Asia

Exchange rate pass-through (ERPT) refers to the transmission of exchange-rate changes into import (export) prices of goods in the destination-market currency as well as into aggregate domestic prices. This paper examines the analytical and empirical literature on ERPT with particular reference to Asia. It is generally believed that Asian economies are potentially susceptible to ERPT into domestic inflation since they are highly trade-dependent. Particular attention is paid to production sharing—a key characteristic of Asian trade—and its implications for ERPT.     

Budget or target: the choice between input and output strategies

In many competitive environments, players need to commit either to a specific goal they will achieve (an output target) or to the resources they are willing to expend in pursuit of that goal (an input budget). We model this situation as a two‐stage game where players may compete either by setting input and letting their output follow from the environment (“leading input”), or by setting output and letting the input levels required to support the output targets follow (“leading output”). We show that when each player's output is increasing (decreasing) in his rival's input, leading input (output) dominates leading output (input).     

Liberalising the Movement of Natural Persons: A Lost Decade?

Liberalisation of international trade in services through the Movement of Natural Persons (Mode 4) remains one of the least negotiated issues of trade policy among the 144 members of the World Trade Organisation. Economists believe that there is a basic convergence of economic interest between the developed and the developing world for liberalising Mode 4. Yet the multilateral trading system has not facilitated greater worker mobility between the labour‐surplus and labour‐scarce countries. Is there any economic logic as to why cross‐border movements of workers have not followed the pattern predicted by international trade theory? Or are there strong socio‐political barriers that have come in the way of liberalising Mode 4? These are some of the questions the paper attempts to answer. The paper shows that the economic arguments against the free movement of natural persons are based on the narrow perspective of the welfare of domestic workers while ignoring the benefit it brings to the economy as a whole. Further, non‐economic arguments miss the point that the movement of workers under Mode 4 of GATS is temporary in nature, and so unlikely to have any lasting social and cultural spillovers. The paper gives specific illustrations from the recent past where temporary import of workers from labour‐surplus countries has enabled both developed and developing countries sustain their economic growth. It concludes by arguing that the environment for renegotiating WTO commitments under this important sector of international trade in services is better than ever before, even though the current world economic slowdown may delay actual negotiations for a while.     

Agricultural modernization and sustainable agriculture: contradictions and complementarities

This paper explores the relations between agricultural modernization and sustainable agriculture. The point of departure is the observable decrease in the sustainability and social–ecological resilience of agricultural and food systems. We ask where, precisely, the notions of agricultural modernization and agricultural sustainability contradict each other. In more concrete terms we ask what forms of modernization makes agriculture more (or less) sustainable. Our literature review shows that while the term ‘sustainable agriculture’, has been extensively debated, the term ‘agricultural modernization’, while carrying a positive and forward-looking connotation, remains poorly defined. To address this gap, we draw on evidence from real-life cases in fourteen countries in an attempt to interpret how the two concepts are perceived in very different contexts. These case studies show that different understandings of modern and sustainable agriculture coexist and that agricultural development follows diverse pathways. We conclude that the growing demands for an agricultural and food system that is more resilient, equitable and inclusive can be met by providing more support for the many divergent trajectories of agricultural modernization that practitioners are actually pursuing: trajectories that are often more attuned to the imperatives of ecology and to changing socio–economic preferences than the classical modernization trajectory.     

The future of the red metal—scenario analysis

A regional copper scenario model has been developed from the perspective of the generic Intergovernmental Panel on Climate Change framework for greenhouse gas emissions scenarios for the four world regions: OECD90, ASIA, REF, and ALM. A set of three scenarios: Tech World, Green World, and Trend World, each representing the significant driving forces influencing population and economic growth, technological change and environmental consciousness, is presented. Intensities of copper use converge in the long-term in the Tech and Green World as GDP per capita level approaches $100,000. Global copper use, currently 15 Tg Cu/yr, is expected to rise to 30–130 Tg Cu/yr by the year 2100. The rate of copper use in the ASIA and ALM regions exceeds the copper use in the OECD90 and REF regions beyond 2020. A Green World corresponds to per capita global copper use of 4 kg Cu/(capita-yr) as compared to the contemporary global level of 2.6 and 10 kg Cu/(capita-yr) in developed regions, symbolizing the sustainability theme. For the OECD90 region, the results are more sensitive to the copper intensity of use variable whereas for ASIA and ALM regions, variations in GDP per capita can influence copper use.     

Performance appraisal politics from appraisee perspective: a study of antecedents in the Indian context

Appraisee's perception of appraisal politics (APAP) is conceptualized to be formed by three perceptual dimensions. First is appraiser's manipulation of ratings to achieve their self-serving ends such as own reputation, maintaining good relationships, building in-groups, and handling dependency threats from appraisees. Second dimension constitutes fellow appraisees' upward influence behaviors to get higher ratings and rewards. Third dimension relates to the outcome of appraisal, i.e. pay and promotion decisions that can be discriminatory when performance is ignored. Such actions are detrimental for good performers and performance culture. Drawing from the organizational justice theories, it is proposed that APAP can be mitigated by those appraisal-related structural (e.g. criteria), process (e.g. voice) and contextual antecedents (e.g. relation with appraiser) that enhance appraisee's perceived control, understanding, and prediction of appraisal decision and process. These hypotheses were tested in the Indian family-owned organizations. The data were collected using survey questionnaire method from six organizations. Multivariate and structural equation modeling (SEM) analyses revealed that overall APAP had significant negative correlation with downward communication, and appraiser–appraisee relations. Importantly, these are appraiser-centric or appraiser-driven variables, thus implying appraiser's criticality in influencing perceptions. Post hoc SEM analysis revealed that communication processes (such as feedback) mediated effect of structural variables (such as criteria relevance), implying criticality of procedures over structural variables. The significance of communication processes implemented by appraiser implies that understanding cultural context is important when studying perceptual reactions such as APAP. Interestingly, post hoc analysis revealed that downward communication mediated the effect of voice on APAP, a result that may be idiosyncratic to the Indian cultural context. Specifically, higher appraiser–appraisee power distance in the Indian context may influence the perceived relevance and utility of processes such as voice (e.g. appeal), which may put appraisee in a slightly adversarial situation with appraiser. Further, higher paternalistic orientation may make processes like downward communication more desired by appraisee because these processes project superior as a guide and a coach, who is keen to handhold and support their subordinates. The implications of these results for practitioners are discussed.     

Firm boundaries matter: Evidence from conglomerates and R&D activity

This paper examines the impact of the conglomerate form on the scale and novelty of corporate Research and Development (R&D) activity. I exploit a quasi-experiment involving failed mergers to generate exogenous variation in acquisition outcomes of target firms. A difference-in-differences estimation reveals that, relative to failed targets, firms acquired in diversifying mergers produce both a smaller number of innovations and also less-novel innovations, where innovations are measured using patent-based metrics. The treatment effect is amplified if the acquiring conglomerate operates a more active internal capital market and is largely driven by inventors becoming less productive after the merger rather than inventor exits. Concurrently, acquirers move R&D activity outside the boundary of the firm via the use of strategic alliances and joint ventures. There is complementary evidence that conglomerates with more novel R&D tend to operate with decentralized R&D budgets. These findings suggest that conglomerate organizational form affects the allocation and productivity of resources.     

A Comparative Analysis of Export Price Pass-through in Three Open Asian Economies: Korea,Singapore and Thailand

Abstract

The degree of exchange rate pass-through is of paramount importance to small and open economies as it has a direct impact on domestic inflation as well as the effectiveness of exchange rate as an adjustment tool. High exchange rate pass-through (ERPT) is often cited as a reason for a “fear of floating”. This article analyzes the degree of ERPT into the export prices of three Asian economies—Korea, Thailand and Singapore for the period 1980: Q1–2006: Q4 using both US dollar bilateral rates as well as nominal effective exchange rates. The study also examines whether there are asymmetries in ERPT between exchange rate appreciation and depreciation.     

The Impact of Smokers' Group‐Membership and Activist Gender on Tolerance for Smoking,Receptiveness and Perceived Susceptibility to Anti‐Smoking Messages,and Likelihood of Anti‐Smoking Activism

Using two experiments we demonstrate that people have lower tolerance for smoking and higher anti‐smoking activism likelihood when in‐group versus out‐group members smoke. The likelihood of anti‐smoking activism toward in‐group smokers was greater for men than women. Moreover, as social distance declined, men showed greater anti‐smoking message receptiveness, message susceptibility and activism likelihood, whereas, women displayed no significant differences in tolerance for smoking, message receptiveness, message susceptibility, and activism likelihood. Open‐ended responses indicated generally negative cognitive reactions to smokers, yet a broad unwillingness to confront them. While feelings of personal relevance and caring facilitated anti‐smoking activism intentions, beliefs in the freedom of personal choice and polite interpersonal interactions hindered these intentions.     

Management of Perceived Risk in the Context of Destination Choice

ABSTRACT

The primary objective of this study was to examine how perceived risk could be managed in the destination choice context. Relationships among risk perceptions, uncertainty (information quality), and price premium were explored by using ordinal logistic regression. Eight types of perceived risk were investigated: health/life risk, financial risk, personal satisfaction risk, social risk, time risk, technical risk, political risk, and terrorism risk. Findings showed that perceived risks were decreased by information quality but various patterns were identified for different types of perceived risk. Results additionally suggested that travelers were willing to pay extra for products and services if more safety and security are provided. Managerial implications for how the findings can be incorporated into risk management strategies are also presented in this paper.