The intersubsidiary competition in an MNE: evidence from the Greater China region

We examine subsidiary survival from an intersubsidiary competition perspective. Drawing from 87 Taiwanese subsidiaries of MNEs we examine the influences of strategic importance of a subsidiary, resource asymmetry, and characteristics of value activities on the survival rate of a subsidiary. Results show that these factors have differential effects on the survival rates of a firm's foreign subsidiaries. Specifically, strategic importance and gains in intangible resources enhance a subsidiary's survival rate, whereas local responsiveness, gains in physical resources, and similarity and mobility of value‐added activities decrease its survival rate. Copyright © 2007 ASAC. Published by John Wiley & Sons, Ltd.     

Exchange rates and fundamentals: evidence on the economic value of predictability

A major puzzle in international finance is the well-documented inability of models based on monetary fundamentals to produce better out-of-sample forecasts of the nominal exchange rate than a naive random walk. While this literature has generally employed statistical measures of forecast accuracy, we investigate whether there is any economic value to the predictive power of monetary fundamentals for the exchange rate. We find that, in the context of a simple asset allocation problem, the economic value of exchange rate forecasts from a fundamentals model can be greater than the economic value of random walk forecasts across a range of horizons.     

Understanding diversity managersõ role in organizational change: Towards a conceptual framework

The paper presents a conceptual framework charting the agency of diversity managers in organizational change. Evaluating and critiquing the contemporary models of organizational change management, we identify three concepts, which are situatedness, relationality, and praxis, for understanding the diversity managers' agency in the organizational change process. Each orienting concept is explored in the context of current diversity management literature and their combined explanatory power is discussed. Copyright © 2009 ASAC. Published by John Wiley & Sons, Ltd.     

HIDDEN DISCIPLINES IN MALAYSIA: THE ROLE OF BUSINESS HISTORY IN A MULTI-DISCIPLINARY FRAMEWORK

Business history plays a crucial role in the understanding of the history and socioeconomic development of Malaysia. This paper analyses that role through an assessment of the most relevant colonial, post-colonial, and contemporary literature. Malaysian business history adopts a multidisciplinary approach, which has the potential to propel the discipline to address potentially sensitive political issues in Malaysia, though in the past business history's assimilation into other disciplines has discouraged, with notable exceptions, its potential to explore sensitive topics. In conclusion, the paper outlines the challenges faced by Malaysian business history academics and argues for extending the discipline's boundaries.     

Business Cycles and the Role of Confidence: Evidence for Europe*

This paper examines whether indicators of consumer and business confidence can predict movements in GDP over the business cycle for four European economies. The empirical methodology used to investigate the properties of the data comprises cross‐correlation statistics, implementing an approach developed by den Haan [Journal of Monetary Economics (2000) , Vol. 46, pp. 3–30]. The predictive power of confidence indicators is also examined, investigating whether they can predict discrete events, namely economic downturns, and whether they can quantitatively forecast point estimates of economic activity. The results indicate that both consumer and business confidence indicators are procyclical and generally play a significant role in predicting downturns.     

US Credit Crisis and Spillovers to Asia

We review key highlights of the global credit crisis. We then consider how financial turmoil in the largest advanced economies might be transmitted to East Asia. The focus is on foreign trade links, international capital flows, currency market pressures and mismatches, financial sector fragilities, and countercyclical monetary and fiscal policy actions. We introduce a set of vulnerability indicators and explore whether an ordinal ranking of East Asian economies according to these vulnerability indicators seems to be related to the cross-country differences in estimated slowdowns of economic growth during the crisis. Finally, we discuss how Asian economies might encourage the adoption of a stronger regulatory and supervisory framework in the USA and whether some Asian economies and the USA might pursue a more “balanced” growth strategy after the crisis.     

A SMALL-SCALE DSGE MODEL FOR FORECASTING THE SOUTH AFRICAN ECONOMY

This paper uses a version of Hansen's (1985) Dynamic Stochastic General Equilibrium (DSGE) model to forecast the South African economy. The calibrated model, based on annual data over the period of 1970‐2000, is used to generate one‐ to eight‐quarters‐ahead out‐of‐sample forecast errors for the period of 2001:1 to 2005:4. The forecast errors are then compared with the unrestricted versions of the Classical and Bayesian VARs. A Bayesian VAR with relatively loose priors outperforms both the classical VAR and the DSGE model.     

FORECASTING RECESSION IN SOUTH AFRICA: A COMPARISON OF THE YIELD CURVE AND OTHER ECONOMIC INDICATORS

The paper uses the standard probit model proposed by Estrella and Mishkin (1996) , as well as the modified probit model suggested by Dueker (1997) , to examine the ability of the yield curve to predict recessions in South Africa, and compares its predictive power with other commonly used variables such as the growth rate of real money supply, changes in stock prices and the index of leading economic indicators. Compared with other indicators, real M3 growth does not provide much information about future recessions, whilst movements in the All‐Share index provide information for up to 12 months but do not do better than the yield curve. The index of leading economic indicators outperforms the yield spread in the short run up to 4 months but the yield spread performs better at longer horizons.     

Conformity and diversity of accounting and financial reporting practices in Portuguese local government

Portuguese governmental accounting has evolved from essentially a cash‐based budgetary accounting system to an accrual‐based financial and cost accounting system. Evidence from financial reports shows a great level of diversity amongst municipalities' voluntary compliance with the new accounting rules. Using a sample of Portuguese municipalities in the year 2003 we calculate and analyse the levels of compliance with the practices required by law and document the diversity in compliance across municipalities. The differences across municipalities are explained by some fundamental factors: size, financial conditions, urban characteristics, and diffusion across neighbouring municipalities. We show an unexpected effect of size. Larger municipalities comply less with accounting standards. Organizational complexity, conservative practices, and aversion to change may explain this result. Copyright © 2007 ASAC. Published by John Wiley & Sons, Ltd.