Native language,spoken language,translation and trade

We construct new series for common native language and common spoken language for 195 countries, which we use together with series for common official language and linguistic proximity in order to draw inferences about (1) the aggregate impact of all linguistic factors on bilateral trade, (2) the separate role of ease of communication as distinct from ethnicity and trust, and (3) the contribution of translation and interpreters to ease of communication. The results show that the impact of linguistic factors, all together, is at least twice as great as the usual dummy variable for common language, resting on official language, would say. In addition, ease of communication plays a distinct role, apart from ethnicity and trust, and so far as ease of communication enters, translation and interpreters are significant. Finally, emigrants have much to do with the role of ethnicity and trust in linguistic influence.     

Human resource management in Asian subsidiaries: comparison of French and Japanese MNCs

European and Japanese multinational corporations (MNCs) have expanded their activities in Asia, usually through massive mobilization of various human resources from head offices, whether expatriated or on short-term assignments, and a reliance on diverse categories of local employees. Because expatriation is costly, difficult and often limited in its results, MNCs have developed localization strategies for management positions to support their regional development. This contribution addresses such a scenario by comparing Japanese and French MNCs in eight Asian countries, based on 53 interviews across subsidiaries of 17 MNCs. We find that Japanese MNCs have not localized management positions as much as French MNCs, but they have grown more willing to do so. To compensate for the lack of local capabilities without sending more expatriates, both French and Japanese MNCs frequently send experts on short-term assignments. Finally, though human resource practices vary widely across countries, even for a given MNC, some harmonizing principles have been introduced to regional HRM strategies recently.     

Innovation in food firms: contribution of regional networks within the international business context

This paper explores the role of regional networks in processes of innovation within an international business context. It is hypothesized that firms participating in regional networks demonstrate a stronger innovation competence. Data are drawn from a survey among food firms in the region of Meetjesland, Belgium, and reflect the relation between the firm and a number of regional characteristics. After restructuring the data through factor analysis and cluster analysis, the important role of regional networking is revealed using discriminant analysis. The analysis marks out two factors having the strongest power to discriminate between the clusters: firms are classified as having a stronger innovation competence when networking within the region, and when orienting towards the international market. Results demonstrate that internationally operating firms benefit from regional networking. Further, it is argued that regional networking is not contradictory to an international market orientation, and that firms gain innovation competence by searching for external knowledge on different geographical scales. As these networks have the potential to enhance the innovation competence of firms, support to regional networking is promoted as a policy tool.     

Contracts offered by bureaucrats

We examine the power of incentives in bureaucracies by studying contracts offered by a bureaucrat to her agent. The bureaucrat operates under a fixed budget, optimally chosen by a funding authority, and she can engage in policy drift, which we define as inversely related to her intrinsic motivation. Interaction between a fixed budget and policy drift results in low‐powered incentives. We discuss how the bureaucrat may benefit from stricter accountability as it leads to larger budgets. Low‐powered incentives remain even in an alternative centralized setting, where the funding authority contracts directly with the agent using the bureaucrat to monitor output.     

Unit roots,interest rate spreads,and inflation forecasts

Recent research suggests that long-term interest rate spreads provide information that can be useful in forecasting inflation, but that the spread between the three-month and six-month Treasury bill rates appears to have little forecasting ability. This paper uses the concepts of unit roots and cointegration to examine the failure of the short-term T-bill spread to forecast inflation. The results suggest that the interest rate spread has little forecasting value because inflation and the interest rate spread exhibit distinctly different time-series properties.