Expatriates in their own home: A new twist in the human resource management strategies of japanese mncs

Liaison positions in an overseas subsidiary represent a vital link to the parent company. Staffing this position constitutes a critical HRM decision. Based on exploratory interviews conducted with personnel managers and foreign employees, we examine an emerging approach to meeting this staffing need which entails hiring non-Japanese as employees of the parent company, retaining them at headquarters in Japan for three to four years, then assigning them back to their own countries as expatriates. We discuss this approach's underlying rationale, its advantages and disadvantages, and its potential implications for future IHRM developments within Japanese MNCs.     

The Twin Deficits Hypothesis: An Empirical Examination

Open Economies Review - The ‘twin deficits hypothesis’ (TDH) claims that there is a connection between fiscal and current account deficits. In its most extreme form, popularized by the...     

How do investors react under uncertainty?

It has long been accepted that risk plays an important role in determining valuation where risk reflects that investors are unsure of future returns but are able to express their prior expectations by a probability distribution of these returns. Knight (1921) introduced the concept of uncertainty where investors possess incomplete knowledge about this distribution and so are unable to formulate priors over all possible outcomes. One common approach for making uncertainty tractable is to assume that investors faced with uncertainty will base their decisions on the worst case scenario (i.e. follow maxmin expected utility). As a consequence it is postulated that investors will become more pessimistic as uncertainty increases, upgrading bad news and downgrading good news. Using Australian data, we find evidence that investors react to bad news at times of high market uncertainty but largely ignore good news which is consistent with them taking on a pessimistic bias. However, we also find evidence of the reverse when market uncertainty is low with investors taking on an optimistic stance by ignoring bad news but reacting to good news. We also find that the impact that market uncertainty has on the reaction of investors to new information is modified by the prevailing market sentiment at the time of the announcement. Besides throwing light on the question of how uncertainty impacts on investor behaviour, our findings seriously challenge the common assumption made that investors consistently deal with uncertainty by applying maxmin expected utility.