Establishment mode choice by Chinese firms in Latin America: The role of host country‐specific experience and government official visits

This study addresses establishment mode decisions by emerging‐market multinational enterprises entering other emerging economies. More precisely, we examine the influence of prior host country experience and home government official visits on the choice between the acquisition of a local company and the creation of a new subsidiary from scratch. By analyzing 315 investments carried out by Chinese firms in Latin America, we obtain that they are more likely to enter through an acquisition when they have established prior subsidiaries in the host country. Moreover, recent Chinese government official visits contribute to mitigate the difficulties of an acquisition for those companies with less local experience.     

Introduction to: the euro at twenty

Review of World Economics -     

The dampening effect of iceberg orders on small traders’ welfare

Iceberg orders, which allow traders to hide a portion of their order size, have become prevalent in many electronic limit order markets. This paper investigates, via a real options analysis, whether small traders, who have no use for submitting iceberg orders, are better off submitting their orders to fully transparent markets which have low depth, or to more liquid markets which do permit the placement of iceberg orders by large traders. Surprisingly, we find that in the context of our model, small traders are better off submitting to fully transparent markets in spite of them being less liquid.     

Hard lessons: combat deployment and veteran interest in higher education

Over 2.5 million Americans served in the wars in Afghanistan and Iraq. In this short article, we consider the impact of these experiences on their future welfare. Specifically, we ask if those who served in Afghanistan and Iraq are more or less likely to exploit their GI Bill benefits in order to pursue higher education than service members who did not directly participate in these conflicts. We exploit a comprehensive administrative dataset that the US Armed Forces’ Defense Manpower Data Center (DMDC) provided to us. We find across models that deployment to Afghanistan or Iraq significantly increases the likelihood that veterans will take advantage of their educational benefits, but that exposure to violent combat significantly decreases it.     

Willingness to use mobile application for smartphone for improving road safety

In the last few years mobile devices have reached a large amount of consumers in both developed and high-growth world economies. In 2013, 97% of the Italian population owns a mobile phone, and 62% owns a smartphone. Application software for mobile devices is largely proposed to consumers, and several mobile applications were oriented toward the improvement of road safety and road accident risk reduction. In this paper, we describe the results of a survey oriented to preventively investigate on the willingness to receive and/or to give information about road condition by means of mobile devices. Road users were informed about the characteristics of a mobile application, and then they were invited to complete a questionnaire. Experimental data were used for capturing road user attitudes toward the use of the smartphone to improve road safety, and to establish the preferences for the different features of the proposed mobile application. To this end, we choose to use the ordered probit model methodology. We demonstrate that the adopted methodology accounts for the differential impacts of the willingness to receive and/or to give information about road conditions on the overall willingness to receive and/or to give information through an application software for mobile devices.     

Drivers of clothing disposal in the US: An exploration of the role of personal attributes and behaviours in frequent disposal

Clothing products remain important in today's consumer culture, but the sustainability of that consumption is questionable, as it often leads to excess waste. The purpose of this study was to explore the drivers of clothing waste, and to investigate the influence of demographic factors and personal attributes on disposal frequency. An online survey was conducted to over 500 men and women in the US from three different generational cohorts. The survey investigated fashion trend sensitivity, shopping frequency, quality and price consciousness as well as demographic factors, utilizing 5‐point Likert scales. On the basis of literature, seven hypotheses were developed. Correlational analysis, independent t‐test and one‐way analysis of variance were conducted to test the hypotheses. Results indicate that fashion trend sensitivity, fashion shopping frequency, higher incomes, younger age groups and being female are all positively correlated with frequent clothing disposal. Interestingly, quality consciousness was positively correlated to frequent clothing disposal, while price consciousness was negatively related to clothing disposal frequency. This study contributes to the literature by providing a more specific examination of the drivers of frequent clothing disposal and providing empirical evidence to support previous exploratory studies.     

Consumers’ willingness to pay for green initiatives of the hotel industry

This paper examines hotel guests’ willingness to pay a premium for environmentally friendly and sustainable practices of the U.S. hotel industry. Specifically, the goal of this research is to investigate the relationship between the level of U.S. hotel guests’ environmental concern, measured by the New Ecological Paradigm Scale (NEP) and their willingness to pay (WTP) a premium for hotels’ “green practices.” This study found that U.S. hotel guests with higher degrees of environmental concerns declare a higher willingness to pay premiums for hotels’ green initiatives. This avowed willingness supports the social identity theory and the means-end theory. In addition, based on the affect-based complementarity proposition, this study also examined the effect of hotel type on WTP in the U.S. hotel industry, and found that luxury and mid-priced hotel guests are more willing to pay premiums for hotels’ green practices than economy hotel guests.     

One-dimensional maps with two discontinuity points and three linear branches: mathematical lessons for understanding the dynamics of financial markets

We develop a simple financial market model with heterogeneous interacting speculators. The dynamics of our model is driven by a one-dimensional discontinuous piecewise linear map, having two discontinuity points and three linear branches. On the one hand, we study this map analytically and numerically to advance our knowledge about such dynamical systems. In particular, not much is known about discontinuous maps involving three branches. On the other hand, we seek to improve our understanding of the functioning of financial markets. We find, for instance, that such maps can generate complex bull and bear market dynamics.     

Testing for Fractional Integration Versus Short Memory with Structural Breaks*

Although it is commonly accepted that most macroeconomic variables are non‐stationary, it is often difficult to identify the source of the non‐stationarity. Integrated processes and short‐memory models with trending components, possibly affected by structural breaks, imply similar features in the data and, accordingly, are hard to distinguish. The goal of this article is to extend the classical testing framework of I(1) versus I(0) + trends and/or breaks by considering a more general class of models under the null hypothesis: fractionally integrated (FI) processes. The asymptotic properties of the proposed tests are derived and it is shown that they are very well‐behaved in finite samples. An illustration using US inflation data is also provided.