Dispute resolution in international trade

Internationalization of a company's operations creates new uncertainty and risk for the company, including political and legal issues. This article discusses some of these problems, examines alternative solutions for these problems, and makes recommendations as to what solutions a company should give priorty to. Specifically, the study argues that in international business arbitration and litigation should be used as lust resort and only when all other alternatives have been exhausted.     

The role of evaluation in SMMEs’ strategic decision-making on new technology adoption

ABSTRACT

The complex nature of small business operations has led to adopting IT as a tool to enhance the productivity, efficiency and growth of Small, Medium and Micro Enterprise (SMMEs). Despite the increased spend on IT, many SMMEs do not understand the importance of IT investment evaluation, which adversely impacts their technology and decision-making ability to realise benefits. The study explores the role evaluation plays in SMMEs’ decision-making to adopt the technology, and the ability to evaluate technology potentials thereof. Case studies were conducted, data collected analysed using the thematic analysis, with hermeneutics employed to derive deeper and richer meanings from the findings. SMMEs often base their decision to adopt the technology on speculative and empirical knowledge from personal judgement, communication preferences and individual experiences. Implications of TE potential may lead to the adoption of inappropriate or non-adoption of the technology, with adverse effects on business sustainability.     

The Impact of Downward Rating Momentum

Rating downgrades are known to make subsequent downgrades more likely. We analyze the impact of this “downward momentum” on credit portfolio risk and bond portfolio management. Using Standard&Poor’s ratings from 1996 to 2005, we apply a novel approach to estimate a transition matrix that is sensitive to previous downgrades and contrast it with an insensitive benchmark matrix. First, we find that, under representative economic conditions, investors who rely on insensitive transition matrices underestimate the momentum-sensitive Value-at-Risk (VaR), on average, by 107 basis points. Second, we show that bond portfolio managers should use our downgrade-sensitive probabilities of default as they seem to be better calibrated than momentum-insensitive estimates.     

Measuring wage discrimination in Italy: a random-coefficient approach

Using data from a representative 1989 household survey for Italy we estimate random-coefficient earnings frontiers by gender, marital status and location. These estimates are used to calculate discrimination indices. Our results show that fixed coefficients can be rejected in all cases. A wide range on the estimated coefficients indicates a high degree of variation in the quality of the observed human-capital variables as well as different degrees of ability as perceived by the employer. We find reverse discrimination for single females in the South and the North. For married females there is evidence of discrimination, particularly in the South. We isolate the effects of tenure and education on discrimination and find that these reduce discrimination for Southern-married females.     

The political economy of services trade liberalization: a case for international regulatory cooperation?

Little progress has been made since the creation of the WTOon expanding and deepening the coverage of services liberalizationcommitments. This paper identifies and discusses five hypothesesthat may explain the absence of dynamism: (i) technologicalchanges allowing ever more services to be traded cross-borderunaffected by policy; (ii) strong incentives to pursue liberalizationon an autonomous basis (unilaterally); (iii) perceptions thatbilateral or regional cooperation are a good substitute forthe WTO; (iv) standard political-economy factors, such as adjustmentcosts and resistance by incumbents to erosion of rents; and(v) concerns that the WTO will affect the ability of regulatorsto enforce national norms. We argue that all of these explanationsplay a role, and that some of these factors significantly impedethe scope for reciprocal exchanges of ‘concessions’—theengine of WTO negotiations.     

Conflict, Distribution and Population Growth

This paper studies an optimal foraging model where distributive conflicts among foragers emerge from population growth. It investigates distributive rules set to resolve the conflicts. Efficient distributive rules are the ones associated with the most efficient productive decisions. Unequal societies, where the ruling class or King maximizes the surplus, engender the choice of more efficient productive combinations and to a smaller population relative to egalitarian societies.     

The influence of sponsor,servicer, and underwriter characteristics on RMBS performance

This paper assesses how the default frequencies of RMBS loan portfolios vary depending on sponsor, servicer, and underwriter characteristics. We find that the larger and healthier the sponsor of the transaction, the lower the default frequency of the securitized loans. This finding is consistent with the hypothesis that banks with a longer market perspective are less willing to risk their good reputation for a gain in short-term profits. More surprisingly, we find that there is a negative relationship between the market share of the lead underwriter and default frequency. In contrast to reputational capital theory, it appears that investment banks with high market shares in the securitization business exploit their reputational capital.     

Agile Stage-Gate Management (ASGM) for physical products

We present a qualitative study of Agile Stage-Gate Management (ASGM),: a hybrid new product development methodology that combines Agile and Stage-Gate Management (SGM) approaches for the coordination of new product development. When applied to software projects, Agile is expected to deliver reduced development times, improved resource utilization, and greater financial success. We examine whether ASGM practitioners realize similar outcomes in a sample of global firms developing complex electro-mechanical products (e.g., automobile components, railway propulsion systems, and medical devices). Our grounded theory approach articulates an understanding of ASGM through extensive interviews of experienced professionals. Our thematic analysis supports many expected benefits (i.e., speed to market, innovation enabling), but also does not encourage others, and reveals new pitfalls that deserve recognition (i.e., resource inefficiency). ASGM is not a panacea for all product development. Overall, physical product firms adopting this method can expect reduced development times and higher levels of innovation but will expend more resources to complete development projects, but a dichotomy exists. Physical product developers using ASGM experience a negative impact on project resource efficiency due to the need for dedicated resources, frequent product demonstrations, and duplicative management structures.