On the measurement of product quality in intra-industry trade: An empirical test for China

A relatively recent development in the intra-industry trade (IIT) literature is the measurement of the simultaneous import and export of quality-differentiated products, commonly known as vertical and horizontal IIT. A recent paper from Azhar and Elliott [Azhar, A. K. M. & Elliott, R. J. R. (2006), On the Measurement of Product Quality in Intra-Industry Trade, Review of World Economics, Vol 142 no 3, pp 476–495] analyses various approaches for disentangling vertical and horizontal IIT and suggests a complementary methodology. To investigate the robustness and sensitivity of the existing approaches we examine data on the nature of trade flows between China and its East Asian neighbours and show that in 2002 China tended to export low quality versions of its manufactured goods to Malaysia, Thailand and the Philippines.     

Strategic investments in Japanese corporations: do foreign portfolio owners foster underinvestment or appropriate investment?

This paper investigates the effect of foreign ownership on strategic investments in Japanese corporations. Foreign owners are typically portfolio investors who frequently buy and sell shares and hold diversified portfolios of small stakes in many firms. Prior research has presented two conflicting perspectives on the role of such investors: (a) their frequent trading leads to pressure for short‐term returns that fosters underinvestment; (b) their active trading fosters appropriate investments. We investigated the relationship between foreign ownership and strategic investments using dynamic panel data analysis of a sample of 146 Japanese manufacturing firms from 1991 to 1997. We found that foreign ownership enhances strategic investments (in R&D and capital intensity) to a greater extent when firms have growth opportunities than when they lack such opportunities. We conclude that foreign ownership fosters appropriate investment. Copyright © 2006 John Wiley & Sons, Ltd.     

Enhancing Poultry Industry Competitiveness: Consumer Perspective on Chicken Meat Quality Based on Sensory Characteristics

The increasing demand for chicken meat has caused producers to increase their productivity through enhanced production techniques. Further increase in demand for quality meat products has been predicted in the country. This study seeks to investigate factors that influence consumer perception toward chicken meat quality. Face-to-face interviews were carried out with 569 consumers at selected shopping malls located in Klang Valley areas. The majority of the respondents perceived quality as an important criterion for buying decisions. The finding revealed that nine factors have influenced consumer perception on meat quality, namely color, size, springiness, chicken aroma, fatty/oily taste, sweetness, visible fat, tenderness, and fibrousness. Among these factors, tenderness was found to be the most important criterion that influenced consumer preference toward chicken meat quality during buying decisions. Good production practices and proper marketing strategies are among recommendations to poultry industry players toward fulfilling consumer demand for good quality chicken meat.     

What price loyalty? A fresh look at loyalty programs in the credit card industry

There is controversy about the effects of loyalty programs in the customer relationship management literature. Although some managers and researchers believe that customer loyalty created through loyalty programs leads to higher firm profits, others have found evidence that loyalty programs do not have a positive effect on firm's profits. In this article, we present our findings regarding the effect of reward cards and affinity cards on customer profitability in the context of credit card industry. We find surprising evidence that customers who own either a reward card or an affinity card generate significantly less profit than those customers who do not have these cards. Equally puzzling is the fact that these customers also have lower average lifetime with the firm. This leads us to a puzzle as to why these practices are widely prevalent in the industry. We find that loyalty cards provide value to the issuers in terms of risk management. They serve as a mechanism to reduce the risk associated with more profitable customers by attracting less risky customers. Thus, through loyalty cards the financial institution is able to balance out the total risk of the portfolio of customers by acquiring customers, who although less profitable, are less risky.     

Impact of institutions on social network formation: communist party membership and social network investment in China

Using the 2003 wave of China General Social Survey (2003CGSS), we study the influence of the communist party on individual’s social networks in urban China and, thereby, present a case of socio-political institutions being an important ingredient in social network formation. We adopt a counterfactual framework and estimate the effect of communist party membership on social network investment as an average treatment effect. We find the treatment to be significant.     

Governance and growth of professional service firms

We argue that partnerships are the optimal governance structure for professional service firms (PSFs) based on our analysis of their need for collegial controls, the use of tacit knowledge, and an investigation of agency costs. However, these factors and the resulting choice of partnership as a governance structure constrain the ability of PSFs to successfully pursue growth strategies. In addition, their growth potential is further circumscribed by diversification limitations, as well as reputational and resource constraints.     

The Effects of Currency Depreciation on Industry Trade Flows between Malaysia and China

ABSTRACT

This article investigates the impact of real depreciation of ringgit/yuan on Malaysian bilateral trade with her largest trading partner, China, over the period of 1987 to 2013. Using disaggregated import and export data from 39 industries, the results from the bounds testing approach to co-integration and error-correction model reveal that the real bilateral exchange rate has short- and long-run effects in the majority of the industries. However, the short-run effects shift into the long run in nine out of 20 import industries and in 13 out of 20 export industries. Most of these are small industries producing intermediate goods.     

Colonialism and environmental perception in Northern Nigeria

Concern about the environment in colonial northern Nigeria developed out of a series of controversies and practices, particularly those relating to agriculture. Increasingly, local practices that have sustained the population and the environment for centuries are subjected to “scientific” scrutiny. Though many of these practices were either misunderstood or not understood at all, this did not stop the subjugation of local practices to “science”. However, this “scientific” enterprise was often conflict-ridden, with important questions being resolved only after the intervention of political authorities. The resulting colonial practices in the fields of irrigation, forest management and the application of chemical fertilizer continue to dominate the thinking of state officials in post-colonial Nigeria, leading to unsustainable policies. An earlier colonial tradition of investigating the practices of local farmers and the constraints therein would have been a more appropriate basis for post-colonial policy.