The effect of language use on the financial performance of microfinance banks: Evidence from cross-border activities in 74 countries

This multi-year study examines the relationship between financial performance and language use, observing 405 partnerships between microfinance banks and their international financial partners in 74 countries. Drawing on language research in international business, we find that microfinance banks based in English-speaking, French-speaking, and Spanish-speaking countries have higher performance. Furthermore, the linguistic distance between the home country of a microfinance bank and the home country of its international partner(s) is negatively related to its financial performance. Our large-scale study confirms the effect of language use on organization-level financial performance and extends research on language in multinationals from intra-firm to inter-firm relationships.     

Value-Creation Logic in Supply Chain Relationships

Purpose: This article explores the idea that different types of interaction among supply chain partners entail different value-creation logics (interdependence, objective, focus of coordination, and value-creation initiatives) and that they must, therefore, be managed in different ways.

Approach: The article reviews and synthesises the relevant literature and presents a summary of the findings.

Findings: Four types of value-creation logic are explored: (1) Logistics integration is best managed by undertaking efforts to achieve mutual transparency, adaptations, and appropriate logistical planning; (2) in unilateral learning, management's task is to ensure the efficient flow and processing of information from one party to another; (3) in unilateral development, one party must have good knowledge of the partner's organization and provide the relevant expertise for coaching the latter's problem-solving efforts—management's task is primarily to define relevant projects and facilitate coaching; and (4) in bilateral learning, management's task is to obtain a mutual understanding of the partner's organisations and establish appropriate joint problem-solving arrangements.

Research implications: The article calls for a better understanding of the motivations, effects, and strategic implications of different ways of collaborating with partners in supply chain relationships.

Contribution: The article presents a case for the strategic value of collaboration, rather than merely addressing the tactical aspects of supply chain relationships.     

Niche Firms and the Role of Commitment: An Exploratory Study of Seafood Exporters

The purpose of this research article is to explore the relationships and challenges that export-oriented niche firms experience in terms of commitment to customer firms. The research has been conducted through case methodology, including in-depth interviews with key informants in five firms.

The findings show that these case firms display strong niche firms' characteristics and high affective commitment to their major customers. The relationships are few, close, and long-term. Potential challenges resulting from customer commitment are personal friendships that could hamper sound business decisions, difficulties with terminating long-lasting personal relationships in favor of others, and opportunistic behavior. Further reported challenges are vulnerability due to specific production investments or product adaptation combined with a vulnerable production, challenging price negotiations, and potential conflicts of commitment down the marketing channel.     

Equal Pay for Equal Work? Evidence from Sweden and a Comparison with Norway and the U.S.

Using a new data set covering most privately employed workers in Sweden, we compare gender wage differences to those previously reported for Norway and the U.S. The central finding is that the wage gap is small when comparing men and women working in the same type of occupation for the same employer. Segregation of men and women by occupation accounts for more of the gap in Sweden than in the other two countries. In all three countries, we find that segregation by occupation explains more than segregation by establishment, and that institutional changes over the past two decades aimed at improving the status of women had little effect on the gender wage gap.
JEL classification : J 16; J 71     

Optimal pension insurance design

In this paper we analyze how the traditional life and pension contracts with a guaranteed rate of return can be optimized to increase customers’ welfare. Given that the contracts have to be priced correctly, we use individuals’ preferences to find the preferred design. Assuming CRRA utility, we cannot explain the existence of any form of guarantees. Through numerical solutions we quantify the difference (measured in certainty equivalents) to the preferred Merton solution of direct investments in a fixed proportion of risky and risk free assets. The largest welfare loss seems to come from the fact that guarantees are effective by the end of each year, not only by the expiry of the contract. However, the demand for products with guarantees may be explained through behavioral models. We use cumulative prospect theory as an example, showing that the optimal design is a simple contract with a life-time guarantee and no default option.     

The impact of foreign board membership on firm value

This study examines the effect of foreign (Anglo-American) board membership on corporate performance measured in terms of firm value (Tobin’s Q). Using a sample of firms with headquarters in Norway or Sweden the study indicates a significantly higher value for firms that have outsider Anglo-American board member(s), after a variety of firm-specific and corporate governance related factors have been controlled for. We argue that this superior performance reflects the fact that these companies have successfully broken away from a partly segmented domestic capital market by “importing” an Anglo-American corporate governance system. Such an “import” signals a willingness on the part of the firm to expose itself to improved corporate governance and enhances its reputation in the financial market.     

Measuring potential profits in a bioeconomic model of the mixed demersal fishery in the North Sea

This paper measures for potential profit in the North Sea mixed demersal fishery for cod, haddock and whiting. Dynamic bioeconomic models for three UK fisheries are developed, incorporating both population dynamics and economic structure. Actual profit in 2006, for the three UK fleets included in the analysis, is estimated at ??10.3?million. If the TAC remains unchanged but vessels are allowed to harvest at near efficient levels with fleet size reduced accordingly, potential profit is measured at ??34.5?million. If demersal stocks are allowed to recover to near optimal levels potential UK profit exceeds ??185?million. This indicates substantial profit dissipation due to overcapacity and stock depletion in the fishery. The results of the paper should be of policy interest and will add to the empirical literature on resource profits in mixed demersal fisheries.     

Strategic asset allocation for a country: the Norwegian case

This paper develops a simple strategic asset allocation model for a country with non-tradable assets and liabilities. Contemporaneous correlation does not capture the long-term relationship between the non-tradable items and the financial assets. I apply cointegration and duration matching to better identify the long-term relationship. The model is applied to the case of Norway. Simulations suggest that Norway should implement a strategy which entails a higher proportion (than today’s strategy) invested in stocks. Although the new strategy is superior in several criteria and as Norway reforms its social security system, there is still considerable risk that Norway will fail to meet its liabilities.      

The Demand for Salmon in the European Union: The Importance of Product Form and Origin

This paper addresses the importance of different product forms and their origin when considering the market structure in the European salmon market. The competition between farmed salmon and wild caught Pacific salmon has received some attention previously. However, this was before frozen Atlantic salmon emerged as an important product form in the market. This could be important as frozen Atlantic salmon is more likely to be a close substitute for Pacific salmon, which is mostly marketed frozen, than is fresh Atlantic salmon. In this paper, an almost ideal demand system is used to estimate the demand for fresh Atlantic salmon, frozen Atlantic salmon and frozen Pacific salmon in the European Union.     

International Management Strategies for a Straddling Fish Stock: A Bio-Economic Simulation Model of the Norwegian Spring-Spawning Herring Fishery

In this paper, a three-country dynamic bio-economic simulation model is presented for the spring-spawning herring fishery. The international spring-spawning herring fishery, based on potentially one of the most valuable fish stocks in the world, is currently recovering from a severe depletion of the stock and subsequent harvesting moratorium. Management of the herring fishery is complicated by its multi-nation exploitation, due to the highly migratory behaviour of the species moving between several coastal state zones (exclusive economic zones, EEZs) and the high seas (Ocean Loop). Based on extensive work invested on analysing both the biology of the herring stock and the fisheries economics around its exploitation we study here the profiles of different multi-agent management schemes, simulating catch levels, stock size and profit potentials of alternative management strategies. The stock dynamics are described by a linear discrete-time age-structured population model and the economics are presented by a rent maximising model with constant price of herring catch and different costs of harvesting and efficiency levels for the different national fleets. The simulations, carried out over several decades, show that the benefits of international co-operation far exceed the returns of a competitive open access fishery.JEL Classifications: C7, C15, Q22