Determinants of industrial development: a panel analysis of South Asian economies

Quality & Quantity - A well performing industrial sector plays an important role in poverty mitigation, unemployment reduction, trade promotion, exchange of goods and services, increased per...     

Rethinking the role of private capital in infrastructure PPPs: the experience of Ontario,Canada

Private capital has become a significant feature of infrastructure public–private partnerships (PPPs) on the premise that it incentivizes diligent risk management among private partners. This paper evaluates this claim by examining the PPP programme in Ontario, Canada, where the amount of long-term private capital in PPPs has been reduced. The paper shows that decreasing the amount of private capital after construction does not undermine performance, while producing cost savings for governments. This was achieved by deploying sophisticated procurement and monitoring strategies. These findings suggest that private capital is one of several tools available to achieve positive value for money in PPPs.     

Financial development and asset valuation: The special case of real estate

This paper studies the impact of financial development on asset valuation. We model the agency theoretic perspective of risk-averse investors and financiers in a general equilibrium setting under the framework of rational expectations (i.e., symmetric information). We focus on real estate, as it constitutes a special case of complete market contracting where adverse selection and moral hazard are easily mitigated. Our results illustrate an increase in pareto-efficiency, as financial architecture advances from: (i) banks to capital markets; and (ii) plain vanilla debt to an innovative one with participation clauses. This is attributed to the reduction in agency costs and cross-sectional risk-sharing, leading to an increase in the value of property. Our results predict that an optimal financial system will orient itself towards efficient financial contracts, irrespective of its source of origination. We also rationalize the co-existence of banks and capital markets, and generalize our results under a set of restrictive conditions.     

Talent management in the “new normal”—Case study of Indian IT services multinationals in China

Emerging market multinational corporations (MNCs) are coming under increasing scrutiny for their international performance. While the success of Indian IT multinationals in the West has been extensively researched and reported, there is a lack of research on their relative failure in China. The rise of economic nationalism and the COVID-19 pandemic pose challenges for the mobility of professionals and the global talent management (GTM) strategy of MNCs. Through in-depth interviews with senior managers from four well-known Indian IT services multinationals, this article presents an evidence-based critique of the design and implementation of their GTM strategy both inside and outside China. It focuses specifically on the quality of the IT talent pool in China, control and coordination issues, and the challenges of workforce localization.     

The Macroeconomic Management of Increased Aid: Policy Lessons from Recent Experience

The authors investigate the macroeconomic challenges created by a surge in aid inflows. They develop an analytical framework for examining possible policy responses to increased aid, in terms of absorption and spending of aid—where the central bank controls absorption, through monetary policy and the sale of foreign exchange, and where the fiscal authority controls spending. Different combinations of absorption and spending lead to different macroeconomic consequences. Evidence from five countries that recently experienced an aid surge (Ethiopia, Ghana, Tanzania, Mozambique, and Uganda) shows no support for aid-related real exchange rate appreciation in these countries, but it does indicate that the fear of Dutch disease played an important part in the policy reaction to aid surges. Fiscal and monetary authorities should coordinate their responses to an aid surge, because an uncoordinated response—typically when the fiscal authority wants to spend aid while the central bank wants to avoid exchange rate appreciation—can have serious negative macroeconomic consequences.     

Asymmetric effect of exchange rate volatility on India's cross‐border trade: Evidence from global financial crisis and multiple threshold nonlinear autoregressive distributed lag model

This paper examines the asymmetric effect of exchange rate volatility on India's cross‐border trade with its major trading partners: Japan, Germany, the United States, and China. We extend previous studies in two ways. First, we examine whether global financial crisis changes the asymmetric effect of exchange rate volatility on India's cross‐border trade. Next, we divide exchange rate volatility into quintiles and examine the effect of each quintile on cross‐border trade by using the multiple threshold nonlinear autoregressive distributed lag (MTNARDL) model. Our findings from standard nonlinear ARDL (NARDL) indicate that the asymmetric relationship between exchange rate volatility and cross‐border trade changes as a result of global financial crisis. In addition, findings from MTNARDL indicate that in short‐run, exchange rate volatility symmetrically affects India's cross‐border trade with all sample countries whereas in long‐run it asymmetrically affects cross‐border trade. Overall, these findings are very important for policy implications and open a new dimension to exchange rate volatility and trade flows.     

Chief executive officers' dispositional optimism,host country's rule of law,and foreign market equity mode choice of Ghanaian small and medium‐sized enterprises

Despite a growing interest in the influence of managerial characteristics on firms' strategic decision‐making process, scholarly knowledge is limited with regard to how and when psychological attributes of executives affect firms' foreign entry mode decision. Building on behavioral decision‐making theory, we address this gap by investigating the effect of chief executive officers' (CEOs') optimism on firms' foreign market equity mode choice. In addition, we examine the moderating influence of the host country's rule of law on this relationship. Using primary data from 227 small and medium‐sized enterprises (SMEs) in Ghana, we found that increases in the levels of CEOs' optimism are related to the increases in preference for equity entry mode. This relationship is amplified when CEOs perceive the host country to have stronger rule of law. The findings have theoretical, managerial, and policy implications for SMEs' foreign market entry mode strategy.     

The moderation influence of warranty on customer satisfaction’s antecedents: an empirical evidence from automotive dealerships

The purpose of this article is to investigate the differential influence of product quality and service quality on customer satisfaction (CS) along with the interaction role of warranty presence in the context of automotive dealerships. Survey-based research methodology is adopted in which the population are the car owners who perform repair and maintenance jobs in authorized service centres. It is found that the warranty moderation role is supported wherein the relationship between service quality and CS is strengthened by the warranty presence, contrary to the insignificant relationship between product quality and CS influenced by the warranty moderator; besides, the empirical results provide an evidence that the CS value relies on metrics comprising operational measures for service quality and product quality. The outcome of this study contributes to sensitizing the decision makers from manufacturing and service disciplines to the interdependencies and the prerequisite for overall collaborative development. This study presents the first systematic approach that differentiates the influence of product quality and service quality on CS, wherein the warranty service is primarily introduced as a moderator affecting the antecedent relationship in the context of automotive dealerships.