Senior expatriate leadership's effects on innovation and the role of cultural intelligence

We propose that senior expatriates’ visionary–transformational leadership influences the rate of innovation adoption in the organizations or units they head, but cultural intelligence moderates this relationship. Our hypotheses were tested with data from 153 senior expatriate managers and 695 subordinates from companies in all 27 countries of the European Union. We found a direct influence of senior expatriates’ visionary–transformational leadership on the rate of innovation adoption. Cultural intelligence moderates the effect of senior expatriates’ leadership on organizational innovation, but not on product-market innovation. Implications for academic research and business practice are discussed.     

Spatial Aspects of ICT Development in Russia

The paper investigates the potentials of ICT in Russia for tackling the challenges of huge territory, strong regional disparities, segmentation of economic space and over-centralisation by Moscow. The Internet currently imposes a definite regional discrimination in Russia based on complex criteria, which are not limited to household incomes. After initial polarisation in Moscow and Saint Petersburg, Internet use is now concentrated in a dozen Russian regions, marking a shift to polycentric polarisation, but Internet service activities remain concentrated in Western Russia. A new wave of centrifugal trends is starting thanks to offshore outsourcing in software development, in which Russia is preferred to China and India.     

Evaluation of drought management in irrigated areas

This paper focuses on the economic consequences of droughts for the irrigation sector. We develop a dynamic‐recursive mathematical programming farm model that assumes imperfect mobility of capital and labour as well as rational expectations about future water availability. The model is calibrated to 12 representative farms belonging to three irrigation communities of the Guadalquivir Basin (south Spain) and used to simulate the 1991–1997 period, which included 3 years of intense drought. Results indicate that the drought imposed significant costs on farmers, but show also that water managers partly exacerbated these costs by allocating excessive amounts of water to irrigators in the abundant years. The model is also used to evaluate the benefits of a perfect water supply forecast and to simulate the economic gains of a voluntary water banking scheme. Results show that the benefits resulting from the perfect forecast of water supply 1 year ahead would represent a relative gain of 5%. However, a voluntary banking system would allow farmers to increase their benefits by 32–82% depending on the supply system.     

Pricing of the time-change risks

We develop an equilibrium endowment economy with Epstein-Zin recursive utility and a Lévy time-change subordinator, which represents a clock that connects business and calendar time. Our setup provides a tractable equilibrium framework for pricing non-Gaussian jump-like risks induced by the time-change, with closed-form solutions for asset prices. Persistence of the time-change shocks leads to predictability of consumption and dividends and time-variation in asset prices and risk premia in calendar time. In numerical calibrations, we show that the risk compensation for Lévy risks accounts for about one-third of the overall equity premium.     

Perceptions of Change in Business Relationships and Networks

Our research deals with the role of actors in change in business relationships and networks. In this study, we explore how cognitive elaboration of experience of a relationship affects the relationship development. The link between behaviors and cognitive elaborations has been the object of recent research in marketing, but little attention has been given to the issue of cognition and behaviors when actors interact in business relationships. Given the role of relationships and their dynamics for the development of business networks, we believe that the issue deserves more attention. Also, compared to the interest in the space dimension of business networks, i.e., network pictures, perceptions of time have been under-investigated. We report findings from 84 bilateral interviews with managers involved as customers or suppliers in 21 relationships with ICT Security at two points in time. We collected their interpretations and reinterpretations of past developments, outcomes, and desired outcomes of the relationships in which they were involved. Our data suggest that the link between managers' cognitive elaborations and relationship dynamics is less direct than commonly assumed. We argue that evolution of a relationship cannot be explained by individual interpretations of the parties involved in the relationship; a preliminary finding is that actors' intentions appear more to shape the interpretations, rather than the contrary.     

Preparing Russian Small Innovative Enterprises for International Competitiveness: A Scoping Study

Russian small innovative enterprises (SIEs) are emerging as an important force behind the restructuring of the Russian economy and its industrial and commercial infrastructure. The research presented in this paper suggests that there are at least three categories of factors that impact the move of Russian SIEs into international markets: (i) macro-economic obstacles (ii) lacking managerial and business competencies and (iii) differences in culture and business practices. The first factor cannot be directly influenced by the individual SIE, while the latter two represent opportunities of a developmental nature. The work of this paper purports to lay the groundwork for more theoretical follow-up analyses.     

Two-Sided Bounds for Ruin Probabilities when the Adjustment Coefficient does not Exist

In this paper, we derive two-sided bounds for the ruin probability in the compound Poisson risk model when the adjustment coefficient of the individual claim size distribution does not exist. These bounds also apply directly to the tails of compound geometric distributions. The upper bound is tighter than that of Dickson (1994). The corresponding lower bound, which holds under the same conditions, is tighter than that of De Vylder and Goovaerts (1984). Even when the adjustment coefficient exists, the upper bound is, in some cases, tighter than Lundberg's bound. These bounds are applicable for any positive distribution function with a finite mean. Examples are given and numerical comparisons with asymptotic formulae for the ruin probability are also considered.     

Temporal aggregation of an ESTAR process: some implications for purchasing power parity adjustment

Nonlinear models of deviations from PPP have recently provided an important, theoretically well motivated, contribution to the PPP puzzle. Most of these studies use temporally aggregated data to empirically estimate the nonlinear models. As noted by Taylor ( 2001 ), if the true DGP is nonlinear, the temporally aggregated data could exhibit misleading properties regarding the adjustment speeds. We examine the effects of different levels of temporal aggregation on estimates of ESTAR models of real exchange rates. Copyright © 2006 John Wiley & Sons, Ltd.     

Labor market equilibria under limited liability

This paper explores the impact of limited liability on labor market equilibria. Assuming risk-neutrality, the effect of limited liability on production decisions is neutral. It is demonstrated that neutrality of the production decision will not hold under safety-first type of risk aversion. In particular limited liability generally decreases usage of capital. The changes in the quality of labor depend on the magnitude of complementarity between capital and labor and on whether the output clasticity of labor is greater or less than unity. Hence it is possible for limited liability to decrease the usage of labor and capital and hence reduce output.