Real interest rate linkages in the Pacific-Basin region

This paper examines the linkage of real interest rates of a group of Pacific-Basin countries with a focus on East Asia. We consider monthly real interest rates of US, Japan, Korea, Singapore, and Thailand from 1980 to 2006. The impulse response analysis and half-life estimation are conducted in a multivariate setting, adopting the bias-corrected bootstrap as a means of statistical inference. It is found that the degree of capital market integration has increased after the Asian financial crisis in 1997. The overall evidence suggests that the crisis has substantially changed the nature of the short run interactions among the real interest rates. Before the crisis, both the US and Japanese capital markets dominated the region. After the crisis, the dominance of the Japanese market has completely disappeared, while the US market remains as a sole dominant player and the Korean market has become more influential.     

Do Institutionalized Traditions Matter During Crisis? Employee Downsizing in Korean Manufacturing Organizations

This study examines the downfall of the permanent employment tradition in South Korean manufacturing organizations in the aftermath of the 1997 East Asian economic crisis. We explore whether organizations abandon their traditional institutionalized practices under discontinuous environmental change or despite the change continue these time‐honoured practices. We examine both the organizational factors that inhibit lay‐offs and performance indicators that trigger organizations to re‐evaluate their lifetime employment practices under drastic environmental upheaval. We test our hypotheses on 574 Korean manufacturing organizations and find that under discontinuous change: (1) economic and institutional factors simultaneously apply opposite forces on organizational actions; (2) organizational factors such as poor performance on productivity and export create a need for headcount reductions while factors such as size, domestic ownership, government support, and unionization create social and institutional pressures that inhibit downsizing; and (3) prior experience with downsizing moderates the relationship between institutional factors and further downsizing.     

The welfare costs of monopoly are larger than you think

We show that monopoly is the parent of monopsony when an industry employs specialized resources. This means that the welfare loss from monopoly and monopolization is larger than commonly portrayed. Copyright © 2010 John Wiley & Sons, Ltd.     

Design and development of inventory knowledge discovery system

Inventory management (IM) performance is affected by the forecasting accuracy of both demand and supply. In this paper, an inventory knowledge discovery system (IKDS) is designed and developed to forecast and acquire knowledge among variables for demand forecasting. In IKDS, the TREes PArroting Networks (TREPAN) algorithm is used to extract knowledge from trained networks in the form of decision trees which can be used to understand previously unknown relationships between the input variables so as to improve the forecasting performance for IM. The experimental results show that the forecasting accuracy using TREPAN is superior to traditional methods like moving average and autoregressive integrated moving average. In addition, the knowledge extracted from IKDS is represented in a comprehensible way and can be used to facilitate human decision-making.     

Preparing for organizational death: Proactive HR engagement in an organizational transition

This article describes an HR team's call to action in managing an organization's transition from healthy, vibrant, and financially successful workplace to its death after being acquired. The HR team countered conventional practice in two key ways. First, despite being from the seller's side, it acted unusually early in the company's acquisition and operated proactively throughout the integration process. This constructive approach stemmed from the self‐confidence developed in the HR function over years of process improvement and culture change. Second, the HR professionals were motivated (rather than threatened) by the high stakes involved in this organizational transition. Their company—with its industry‐leading business results and a loyal, long‐tenured workforce—was slated to be closed, dismantled, and auctioned off in pieces to other firms. The HR team's mission was to help people deal with the death of their current employer and prepare for life afterward while maintaining a focus on business results. This article shows how HR helped senior leadership handle the challenge of retaining the talent needed to meet customer commitments and keep the business running while also readying people for an uncertain future with many eventual layoffs. © 2008 Wiley Periodicals, Inc.     

How and when do prior international experiences lead to global work? A career motivation perspective

While research suggests a link between individuals' prior international experiences and their future participation in global work, we know little about how and the conditions under which this relationship occurs. Drawing on career motivation theory, we conceptualize global identity as a mediator between individuals' density of prior international experiences—defined as the extent to which time spent in culturally novel countries has provided individuals with developmental opportunities—and their global work aspirations, which in turn leads to their global work involvement. Further, this multi-stage mediation model holds mainly when individuals receive positive feedback regarding their intercultural competencies (i.e., cultural intelligence) from their peers. We test our model using a multi-wave multi-source dataset spanning 6 years. We discuss implications for the literatures on prior international experiences and global careers.     

Misallocation and financial market frictions: Some direct evidence from the dispersion in borrowing costs

Financial frictions distort the allocation of resources among productive units—all else equal, firms whose financing choices are affected by such frictions face higher borrowing costs than firms with ready access to capital markets. As a result, input choices may differ systematically across firms in ways that are unrelated to their productive efficiency. We propose an accounting framework that allows us to assess empirically the magnitude of the loss in aggregate resources due to such misallocation. To a second-order approximation, the framework requires only information on the dispersion in borrowing costs across firms, which we measure—for a subset of U.S. manufacturing firms—directly from the interest rate spreads on their outstanding publicly-traded debt. Given the observed dispersion in borrowing costs, our approximation method implies a relatively modest loss in efficiency due to resource misallocation—on the order of 1 to 2 percent of measured total factor productivity (TFP). In our framework, the correlation between firm size and borrowing costs has no bearing on TFP losses under the assumption that financial distortions and firm-level efficiency are jointly log-normally distributed. To take into account the effect of covariation between firm size and borrowing costs, we consider a more general framework, which dispenses with the assumption of log-normality and which implies somewhat higher estimates of the resource losses—about 3.5 percent of measured TFP. Counterfactual experiments indicate that dispersion in borrowing costs must be an order of magnitude higher than that observed in the U.S. financial data, in order for misallocation—arising from financial distortions—to account for a significant fraction of measured TFP differentials across countries.