Non-homothetic preferences and growth

We observe that countries at low levels of income invest at lower rates than those at higher levels of income. This paper explains this fact as a consequence of Engel's law, i.e. that there is an inverse relation between expenditure and its proportion spent on food. It introduces non-homothetic preferences based on Engel’s law in a simple Solow model. These preferences imply rates of net investment that increase with the level of income as we approach the steady state. Increasing investment rates imply a positive correlation between growth rates and the level of income, at low levels of income, rather than an inverse relation, as the usual Solow model implies. The existence of a positive correlation between income growth rates and income levels, at low levels of income in the presence of this type of preference, has already been shown in a previous paper for a closed economy. The purpose of this paper is to show that this positive correlation persists when we introduce trade into the model.     

Agrifood Safety Standards,Market Power,and Consumer Misperceptions

This article analyzes how the public regulation of food safety influences a firm's strategic behaviour in a food chain. In this context, we provide an original theoretical framework to show how, regardless of the level of standard, food safety regulation may have unexpected harmful effects. Namely, the level of compliance costs alone cannot explain the producer exclusion due to a high level of standard. We highlight how upstream producers' involvement in the market also depends on the strategic interest of the downstream firm to remunerate their compliance process. Finally, we show how the actual level of risk does not necessarily decrease when the standard is reinforced.     

Measuring image: shopping centre case studies

The first goal of the paper is to define the concept of micro-marketing, overcoming the 'specialized' perspectives and definitions that have prevailed so far. Micro-marketing relates to ways of controlling environment complexity, facilitated by information technology and required by highly competitive markets. Such control has three forms: segmentation , which reduces complexity to a controllable number of variables; organization , which absorbs a certain amount of complexity by modelling the structure onto the environment; technology , which explores complexity and dominates it through simplification. The second goal is to demonstrate that micro-marketing can build a sustained competitive advantage. Finally, the theoretical implication of the diffusion of a micromarketing approach in the retailing industry is discussed. The areas of strategy, organization, channel relationships, and customer satisfaction are examined. Should micro-marketing become widespread in the retailing industry, we argue that its final result would be increased welfare for the consumer, as long as retailers capitalize on the power of information and stand as a 'countervailing power' to suppliers in the channel.     

Brazilian OFDI Determinants

Recently, the global economy assumed a new setting in which emerging economies began to make substantial investments in the international market. This study aimed to investigate the determinants of outward foreign direct investment from Brazil from 2002–2011. The proposed models developed included attractiveness of the host country, characteristics of home country, and firms’ strategies. The results corroborate the existing argumentations concerning adaptation of mainstream theory with respect to the realities of emerging economies. Brazilian multinationals do not internationalize their activities in pursuit of cost reduction, efficiency, or to explore new markets or natural resources of the host countries. Results show that Brazilian investments were attracted by the availability of skilled labor, openness of the host market, geographic proximity, improved financial conditions of Brazilian companies, and national companies’ strategy of reaffirmation and consolidation as global players.     

Mergers and Acquisitions and Market Volatility of Brazilian Banking Stocks: An Application of GARCH Models

The main objective of this research was to investigate the impacts caused by announcements of mergers and acquisitions (M&As) on the volatility of the returns of Brazilian bank stocks from 1994 to 2015. In order to achieve the proposed objective, this study applied Generalized Autoregressive Conditional Heteroscedastic (GARCH) class models to the series to model their volatility. Our results confirmed the impact of the announcement of M&As on volatility. They suggest that M&A announcements are expected to cause a negative reaction if related to an expansion or a deal involving a less-well known bank, and a positive reaction if it involves well-known bank with good reputation—a higher level of confidence and a lower level of information asymmetry for investors.     

Intermediate units in multinational corporations: A resource dependency view on coordinative versus entrepreneurial roles

Due to the dispersion of headquarters’ activities across organizational and geographical boundaries, intermediate units (IUs) are emerging as a key actor of international business. IUs are intermediate structural layers between headquarters (HQ) and local subsidiaries with specific HQ responsibilities. Our study relies on original data of 67 IUs and, taking on a Resource Dependence approach, explores empirically the two HQ roles attributed to IUs: coordinative versus entrepreneurial. According to our results, the main differences between both roles relate to external network embeddedness, internal network position and autonomy. We argue that these differences arise from the dominant sources of power in each role. These findings have signi?cant relevance for theory development and managerial practice as we provide a starting point for understanding the dispersion of complex HQ systems as well as how those systems are discharged and add value.     

Why and How Does Social Responsibility Differ Among SMEs? A Social Capital Systemic Approach

Research suggests that organizational justice (procedural, distributive, and interactional justice) has important impacts on work-related attitudes and behaviors, such as organizational citizenship behavior (OCB). In this article, we explore the extent to which individualism moderates the relationship between organizational justice and OCB (organizational obedience, participation, and loyalty) among citizens in Kyrgyzstan. We make additional contributions to the literature because we know very little about these constructs in this former Soviet Union country, Kyrgyzstan, an under-researched and under-represented region of the world. Results of our data collected from 402 managers and employees in Kyrgyzstan offer the following new discoveries. All three justice constructs are related to OCB. Individualism moderates only the distributive and interactive justice to OCB relationships. We develop an intricate theory with provocative implications: Procedural justice produces obedience. For “individualists,” interactional justice inspires loyalty and, interestingly, distributive justice “can only buy” participation, but “can’t buy” loyalty. Therefore, for individualists, interactional justice outweighs distributive justice for organizational loyalty. Based on Kyrgyz citizens’ justice, OCB, and individualism, our theory reveals novel insights regarding culture, money attitude, and intrinsic motivation and provides critical and practical implications to the field of business ethics.     

VALUATION OF BARRIER OPTIONS VIA A GENERAL SELF‐DUALITY

Classical put–call symmetry relates the price of puts and calls under a suitable dual market transform. One well‐known application is the semistatic hedging of path‐dependent barrier options with European options. This, however, in its classical form requires the price process to observe rather stringent and unrealistic symmetry properties. In this paper, we develop a general self‐duality theorem to develop valuation schemes for barrier options in stochastic volatility models with correlation.     

Subsidiary-specific advantages for inter-regional expansion: The role of intermediate units

This paper explores the distinctive deployment of resources and capabilities by subsidiaries in order to develop an intermediate role within the MNC. Based on the regional management perspective, we focus on a specific intermediate role—the springboard subsidiary—that helps overcome the liability of inter-regional foreignness. Our results, which are based on a dataset covering 188 subsidiaries, show that the probability of taking on this role is contingent upon experiential knowledge about the target region, as well as a rich knowledge base derived from a wide range of activities and a broad geographical scope. Our findings also show that possession of slack resources does not necessarily mean that a subsidiary will take on this role, as such slack must be combined with experiential knowledge. This paper serves as a first step in helping MNCs plan resource allocation to handle inter-regional expansion.     

“Do You Use English in Your Daily Life?” Undergraduate Students’ Perceptions of Their Extramural Use of English

The aim of this research is to analyse the students’ perceptions about their extramural use of English, comparing undergraduates studying their degree in English (EMI) with those studying theirs in their native language (non-EMI) within a span of five academic years. Data collected from a Spanish University suggest that the students´s interest and perception of their possibilities of working abroad in English differ. Results also reveal key differences in the use of extramural English and suggest that exposure to reading books or watching English-language films will eventually contribute to the formation of global mindset in students. The trend of the importance of English during a five year span is also considered, for both strands of students. This study makes a contribution in the field of teaching in international business settings for high education institutions.