MNC foreign investment and industrial disasters: The moderating role of technological,safety management,and philanthropic capabilities

Research Summary: We investigate how industrial disasters can discourage FDI and how MNCs' technological, safety management, and philanthropic capabilities can moderate these effects. Using two unique panel data sets of entry and expansion of U.S. wholly‐owned manufacturing subsidiaries overseas, we found that industrial disasters are associated with reduced foreign entry of wholly‐owned subsidiaries in the disaster industry, but not for all firms in the host country experiencing the disaster. We also found that MNCs' technological, safety management, and philanthropic capabilities can, in some cases, positively moderate the negative relationships between industrial disasters and the foreign entry and expansion of wholly‐owned subsidiaries. Additionally, three‐way interactions with government stability suggest that technological and safety management capabilities substitute government stability in managing industrial disasters, while philanthropic capability complements government stability. Managerial Summary: How can MNCs' technological, safety management, and philanthropic capabilities overcome the effects of industrial disasters such as chemical spills and explosions in host countries? Our results show that industrial disasters are associated with reduced foreign entry of wholly‐owned subsidiaries in the industry in which the industrial disaster occurs, but not for other firms operating in the country experiencing the disaster. However, an MNC's technological capability can, in general, lower the negative consequences of industrial disasters in both the entry and expansion of its wholly‐owned subsidiaries. Regarding the institutional quality of a host country, the results imply that MNCs should develop philanthropic capability when the government stability of the host country is strong, and develop technological and safety management capabilities when the government stability is weak.     

International Trade and the Equilibrium Rate of Unemployment in a Heckscher-Ohlin World Economy

This paper develops a (stylized Asia-America) Heckscher-Ohlin world economy in which the equilibrium rate of unemployment is endogenous. We examine the impact of various economic shocks on unemployment in the global economy. Harrod-neutral or Hicks-neutral technical progress across all industries in Asia leads to a terms of trade improvement for America but raises America's unemployment rate. Introducing a third country such as the block of former socialist economies results in higher unemployment for both Asia and America. Protection in America lowers American equilibrium unemployment but raises Asia's unemployment. [E24]     

The Link Between Organizational Ethics and Job Satisfaction: A Study of Managers in Singapore

Based on a survey of 237 managers in Singapore, three measures of organizational ethics (namely, top management support for ethical behavior, the organization's ethical climate, and the association between ethical behavior and career success) are found to be associated with job satisfaction. The link between organizational ethics and job satisfaction is argued from Viswesvaran et al.'s (1998) organizational justice and cognitive dissonance theories. The findings imply that organizational leaders can favorably influence organizational outcomes by engaging in, supporting and rewarding ethical behavior.     

Effects of time processing orientation, agreement preferences and attitude towards foreign businessmen on negotiation adaptation

An experiment was conducted among Singaporean executives to determine how they adapt to a foreign partner depending on the partner's time processing orientation and agreement preferences, and their attitude towards businessmen from the country the foreign partner was from. Results showed that Singaporean executives tended to have monochronic time processing and preferred written to oral agreements. Further, when a foreign partner exhibited a monochronic processing orientation, these executives had greater liking for and were more willing to accept this trait than when he had a polychronic processing orientation. Liking for the foreign partner was also enhanced. In terms of agreement preferences, the executives showed greater liking for and willingness to accept the trait when the foreign partner had a written than an oral preference. Finally, willingness to accept the foreign partner as a business partner was enhanced once they knew where the foreign partner came from, regardless of their attitude towards businessmen from that country. Implications are discussed and directions for future research furnished.     

Theory-Driven Choice Models

We explore issues in theory-driven choice modeling by focusing on partial-equilibrium models of dynamic structural demand with forward-looking decision-makers, full equilibrium models that integrate the supply side, integration of bounded rationality in dynamic structural models of choice and public policy implications of these models.     

Economic Stagnation and Crisis in Korea during the Eighteenth and Nineteenth Centuries

In contrast to rapid economic growth in the twentieth century, Korea suffered a long economic decline in the eighteenth and nineteenth centuries, with the failure accelerating from 1850 to 1890. According to 36 different harvest records, rice productivity continuously declined from the early eighteenth to the late nineteenth centuries due to deforestation and increase in natural disasters. Contraction of rural markets after the interruption of trade with Japan also contributed to the decrease in rice production. The third reason for the nineteenth‐century crisis was the dissolution of the government‐led grain storage and redistribution system. Finally, the ultimate culprit for the crisis could be found in Confucianism with which the Joseon Dynasty was unable to properly understand and respond to the crisis.     

An analysis of factors improving technology roadmap credibility: A communications theory assessment of roadmapping processes

In recent years, many industrial firms have been able to use roadmapping as an effective process methodology for projecting future technology and for coordinating technology planning and strategy. Firms potentially realize a number of benefits in deploying technology roadmapping (TRM) processes. Roadmaps provide information identifying which new technologies will meet firms' future product demands, allowing companies to leverage R&D investments through choosing appropriately out of a range of alternative technologies. Moreover, the roadmapping process serves an important communication tool helping to bring about consensus among roadmap developers, as well as between participants brought in during the development process, who may communicate their understanding of shared corporate goals through the roadmap. However, there are few conceptual accounts or case studies have made the argument that roadmapping processes may be used effectively as communication tools. This paper, therefore, seeks to elaborate a theoretical foundation for identifying the factors that must be considered in setting up a roadmap and for analyzing the effect of these factors on technology roadmap credibility as perceived by its users. Based on the survey results of 120 different R&D units, this empirical study found that firms need to explore further how they can enable frequent interactions between the TRM development team and TRM participants. A high level of interaction will improve the credibility of a TRM, with communication channels selected by the organization also positively affecting TRM credibility.     

A learning-based model of repeated games with incomplete information

This paper tests a learning-based model of strategic teaching in repeated games with incomplete information. The repeated game has a long-run player whose type is unknown to a group of short-run players. The proposed model assumes a fraction of ‘short-run’ players follow a one-parameter learning model (self-tuning EWA). In addition, some ‘long-run’ players are myopic while others are sophisticated and rationally anticipate how short-run players adjust their actions over time and “teach” the short-run players to maximize their long-run payoffs. All players optimize noisily. The proposed model nests an agent-based quantal-response equilibrium (AQRE) and the standard equilibrium models as special cases. Using data from 28 experimental sessions of trust and entry repeated games, including 8 previously unpublished sessions, the model fits substantially better than chance and much better than standard equilibrium models. Estimates show that most of the long-run players are sophisticated, and short-run players become more sophisticated with experience.