Trade, technology, and unemployment: the role of endogenous skill formation

Abstract .  This paper analyses trade in an asymmetric  2 × 2 × 2  world, where the two countries ('Europe' and 'America') differ in their preferences towards wage inequality. Fair wage considerations compress wage differentials in both countries. European workers are more averse to wage inequality, and Europe is characterized by lower wage differentials and higher unemployment. Allowing for endogenous skill formation, the effects of a globalization shock, global technological change, and a change in the educational capital stock on skill premia and employment levels are derived. In contrast to a model with exogenous factor supplies, international wage and unemployment differentials are affected by global shocks.     

Has the International Fragmentation of German Exports Passed Its Peak?

In the second half of the nineties the import content of German exports (intermediate inputs for the production of exports and imports destined for immediate re-export) increased considerably. The following article examines whether this trend has continued up to the present.     

New firm survival: the interdependence between regional externalities and innovativeness

Small Business Economics - Many studies have shown that regional externalities play a crucial role for the survival prospects of newly founded companies. However, recent research provides evidence...     

Towards a Strategic Model of Global Franchise Expansion

This paper develops the first global index of international franchise expansion that ranks countries according to their attractiveness to US-based franchise firms. A quantitative model combining insights from academic research and business practice generates a ranking of 143 potential expansion target countries according to their risk/opportunity profiles. The rankings suggest that countries with large markets and strong political and legal systems (large European countries, and Canada, Japan, and Australia) are the most attractive for US-based franchisors, while the small, unstable African countries are the least attractive. China (and the other BRIC countries—Brazil, Russia, India) though attractive from a market opportunity perspective, is nevertheless not highly ranked due to their significant risks and large cultural and geographic distances. This study reaffirms the importance of a strategic approach to international franchising decisions, underscores the importance of properly assessing the relative importance of key determinants in internationalization decisions, highlights the importance of a comprehensive and systematic assessment of the various risks in international franchising decisions, shows the usefulness of quantitative modeling in international franchising, and advocates the development of effective risk management methods in order to cope with rapid changes in the global marketplace.     

Children's influences on in-store purchases

Relatively little is known about the influence children have on their parents’ purchases in a retail setting. This study investigates which factors affect children's purchase requests and their parents’ subsequent purchases. It was found that factors influencing the number of children's purchase requests were the freedom of a child's movements, the product's visibility, and the child's developmental stage. The latter variable together with the suitability of the good for consumption on the premises, the linguistic form of child's request, the parent's household income, and the price of the good determine the number of purchases following a child's request.     

Resolving the Credibility Problem of an Honest Government: A Case for Foreign Investment Subsidy

We develop a simple model of direct foreign investment where the host country government cannot credibly signal its honest intention such as to stick to the contracted tax rate. The foreign firm has some prior belief regarding the ex post discretionary policies of the local government. Since the investment is completely irreversible, such a belief pattern might not induce the firm to invest in a country which badly needs it. It is shown that the host government can design a subsidy scheme which might attract foreign investment by removing the credibility problem.     

FOREIGN DIRECT INVESTMENT,CREDIBLE POLICY: The Role of Risk Sharing

This article constructs a model of international joint ventures with risk sharing as the main motivation. A foreign firm decides whether to undertake full ownership foreign direct investment, or to form a public-private joint venture with the host country government in an economy in transition. In our framework uncertain taxation is the source of risk. It is demonstrated that start-up investment cost sharing by the host country government encourages foreign investment. Joint financing of investment can act as insurance for the multinational firm because cost sharing serves as a means to sustain the credibility of government policy.     

Virale Informationsverarbeitung — Mit System den Faktor Zufall minimieren

Zusammenfassung  Die Auswahl der in der Praxis (erfolgreich) eingesetzten nicht-klassischen Instrumente zur F?rderung sozialer Interaktion ist gro?. Virale Informationsverbreitung wird dabei oft als Wunderheilmittel dargestellt. Ob diese Beeinflussungsformen nun als Guerilla Marketing, Buzz Marketing, Seed Marketing, Mitmach- oder Viral Marketing bezeichnet werden: Nur durch die zielgerichtete, systematische und aufeinander abgestimmte Kombination mehrerer Instrumente — und nicht der einen Wunderwaffe — k?nnen Weitergabesequenzen zwischen potenziellen Konsumenten gef?rdert werden.     

Exchange Rate Volatility and International Trade

The purpose of this note is to show that a positive effect of exchange rate volatility on export production has a theoretical basis. The key to this claim is that, as the exchange rate volatility increases, so does the value of the real option to export to the world market. Higher volatility increases the potential gains from trade. This may explain part of the mixed empirical findings regarding the effects of exchange rate risk on international trade.