Renminbi： the Next International Reserve Currency？

Currency is an iconic expression of a country＇s economic dominance. Even if the economic benefits of currency dominance are questionable, countries and their governments do seem to prize that status. E...     

Choice in Computer-Mediated Environments

In the last several years, the increased diffusion of computer andtelecommunications technologies in businesses and homes has produced newways for organizations to connect with their customers. These computermediated environments (CMEs) such as the World Wide Web raise new researchquestions. In this paper, we examine the potential research issuesassociated with CMEs in five areas: (1) decision processes, (2) advertisingand communications, (3) brand choice, (4) brand communities, and (5)pricing.     

Bhagwati and Ramaswami: Why it is a Classic

This paper expounds on a well‐known and widely influential paper ‘Domestic Distortions, Tariffs and the Theory of Optimum Subsidy’ (1963) by Bhagwati in collaboration with V. K. Ramaswami. The message of the paper, which set in trail a number of publications, was that in the case of a small open economy, distortions that steer the economy away from Pareto‐optimal outcomes should be dealt with at their source. The Bhagwati and Ramaswami paper established the case for free trade in the presence of domestic distortions, and proved wrong the received wisdom of the day that in the presence of distortions such as externalities, wage rigidities and distorted factor and product markets, a move from free trade to autarky might improve welfare. The article succinctly demonstrated that the correct policy intervention which avoided welfare losses was one which rectified a distortion at its source and is justly regarded as a classic. But in the profession of economics those who question received wisdom are regarded with scepticism at first and then with the riposte that it is all old wine served in new bottles. The Bhagwati‐Ramaswami breakthrough was met with the remark ‘it is all in Meade’. This paper takes issue with this judgement. The paper not only refutes the suggestion that the Bhagwati‐Ramaswami article has its origins in Meade but also provides a lucid and succinct exposition of Meade's analysis of divergences and shows how Bhagwati and Ramaswami's analysis is vastly different.     

Injury Investigations in Antidumping and the Super-Additivity Effect: A Theoretical Explanation

Empirical evidence shows that in injury investigations in antidumping cases conducted by the United States International Trade Commission, the probability of a positive finding is higher when the number of defendant firms is larger, holding constant their total market share. In the paper we offer a theoretical explanation of this finding. We show that the presence of many exporters exacerbates the free-rider problem, which leads every firm to invest less on defense. Thus for the same market share, injury finding is more likely to be positive for many small sellers than a few large sellers. JEL no. F13, L13     

An experimental study of alternative preparation aids for international negotiations

We test the relative effectiveness of alternative preparation aids in the context of an international negotiation. We consider three forms of training: reading material, a course on negotiation, and an expert system (NEGOTEX) expressly designed to train negotiators. We conducted a laboratory experiment involving 66 pairs of negotiators—one of each pair being American and the other Chinese. Results suggest that in this context, the course had the greatest effect on performance, followed by NEGOTEX, and then followed by reading material. In addition, we found that training effects were additive: multiple forms of training lead to better results than individual forms of training, suggesting that (1) training forms complement and do not substitute for one another, and (2) multiple forms of training should be considered, especially when stakes are high.     

Why India Lags Behind China and How It Can Bridge the Gap

Though India has been growing at six per cent annually since the late 1980s, it trails behind China, which has been growing at ten per cent per annum since 1981. The single most important factor explaining this difference is the relatively poor performance of Indian industry. Whereas the share of industry in China's GDP rose from 42 per cent in 1991 to 51 per cent in 2001, it remained virtually stagnant in India. By contrast, services grew rapidly in India, expanding from 42 per cent in 1991 to 48 per cent in 2001. With the information technology sector less than two per cent of the GDP, services growth was largely in the informal sector. Approximately 77 per cent of India's workers live in rural areas. To bring a large chunk of this workforce into the modern sector, India must achieve a much higher growth in the traditional, unskilled‐labour‐intensive industry. Growth in the information technology sector gives India an extra lever but cannot be the main engine of transformation. Therefore, the right approach is to walk on two legs: traditional labour‐intensive industry and the modern IT industry. Both legs need strengthening through further reforms. The paper suggests four specific reforms, three for industry and one for IT, necessary to achieve the transformation to a modern economy.     

What contributes to the enhanced use of customer, competition and technology knowledge for product innovation performance? : A survey of multinational industrial companies' subsidiaries operating in China

This study extends an emerging research area in knowledge management to new product development by empirically examining the factors associated with the use of different types of knowledge flows from various sources and product innovation performance (i.e., market success of new products) in the multinational companies' subsidiaries in China. The findings seem to indicate the vitality of considering a broad spectrum of knowledge management related variables such as a subsidiary's product development strategy, market conditions it faces, its knowledge capacity and knowledge support structure. Furthermore, we found that subsidiaries with better performance are generally excel in the use of competition knowledge flow, the development of moderate innovative products, communication among different functional departments or product development groups, the codification of knowledge, and a supportive culture.     

A fixed point algorithm with economic applications

A new fixed point algorithm applicable to large scale economic problems is developed. Motivated by successive approximation the algorithm iterates on a convex combination of the traditional price to price map and the identity map. The actual combination used is determined from the convergence error of the previous iteration. The specified convex combination is guaranteed to be a contraction if the original map is Lipschitz continuous and antitonal. These sufficient conditions are shown to be weaker than the contraction requirement. A simple supply-demand example is presented to show the advantages of this algorithm over successive approximation.     

SHAREHOLDER WEALTH EFFECTS OF MANAGEMENT CHANGES

This paper analyzes the direction and magnitude of changes in stock prices resulting from the announcement of various types of changes in senior corporate management over a twelve-year period. We find support for the view that instability resulting from executive succession adversely affects organizational performance. Furthermore, our results imply a clear preference by the market for a change in composition of the previous management team over its further entrenchment and a perception by the market that senior corporate executives and the board of directors may not be solely motivated by considerations of shareholder wealth maximization.     

The Total Product Design Concept and an Application to the Auto Market

As traditional sources of competitive advantage shrink, firms seek new ones. One such source of competitive advantage is product design because of its effects on customer experience. To understand the role and impact of product design on customer experience, we propose an integrated, customer‐based framework for product design that we call the total product design concept (TPDC). We define a product's TPDC as consisting of three elements, namely functionality, aesthetics, and meaning, each of which arises from more elemental product characteristics. We elaborate on the structure of a product's TPDC, its three elements, and the links between those elements and customers' experience with a product. We provide an illustrative application of the TPDC using data from the U.S. auto market. The findings from that application support the proposed three‐dimensional view of the TPDC, and demonstrate heterogeneity both in the TPDC's structure and its effects on customer satisfaction. For all three segments, functionality enhances customer satisfaction. For the largest segment of customers, functionality is the most important factor, followed by aesthetics. For the other two segments, customer satisfaction is most influenced by the meaning element of TPDC. We discuss the implications of these findings for the auto industry in particular, and the potential use of the TPDC more generally.