DSGE pileups

The sampling distribution of estimators for DSGE structural parameters tends to be non-normal and/or pile up on the boundary of the theoretically admissible parameter space. This calls into question both the reliability of asymptotic approximations and the presumption of correct specification. This paper seeks to develop a conceptual framework for understanding how these phenomena arise, and to provide pragmatic methods for dealing with them in practice. The results are presented in three examples and a medium scale DSGE model.     

Domestic or global imbalances? Rising income risk and the fall in the US current account

When default leads to exclusion from financial markets, the implied loss of consumption smoothing opportunities is more costly when income volatility is high. A rise in income risk thus makes default less attractive, allowing creditors to relax borrowing limits. I show how, in an open economy, this endogenous financial deepening may reduce aggregate foreign assets in response to a rise in individual income risk, against the precautionary savings intuition. Conditions for this depend on whether default constrains complete or uncontingent contracts. The post-1980 rise in US household income risk strongly reduces foreign assets when domestic markets are complete or world interest rates low.     

Managing a Global Retail Brand in Different Markets: Meta-Analyses of Customer Responses to Service Encounters

This study investigates how retailers can leverage their brand to shape customers’ satisfaction with service encounters. It develops and tests hypotheses about how brand, store, and consumer factors moderate customer responses to experience clues during retail service encounters. Six meta-regression analyses synthesize and compare results from 842 satisfaction equations describing customers’ encounters with a global retailer operating 400 stores in 32 countries. The results show how customers weigh their perceptions of service encounters differently depending on brand, store, and consumer factors. In markets where customers believe the retailer has high holistic brand quality, they place less weight on experience clues within the store. In markets where customers believe the retailer’s service brand promise, they place more weight on in-store experience clues. In markets where the retailer promises utilitarian value, customers weigh functional experience clues more heavily. In markets with an online purchasing channel, the effect of experience clues common to offline and online store environments is magnified, and unique clues are diminished. In addition, customers heavily weigh experience clues that fit their goals. In general, retail success factors include high brand quality (which makes customers more forgiving), a service brand promise that is mirrored in the store image (which makes customers attend to the experience clues aligned with them), and the careful monitoring and managing of retail touchpoints (to customize experience clues to each market). In this way, retailers can use customer-based strategies to effectively design and manage their global retail brand in different markets.     

Global engineering services: Shedding light on network capabilities

This paper addresses the operations challenges of effectively managing professional services on a global scale. The specific context for the study is professional engineering services and particularly those that are delivered globally – global engineering services (GES). Estimates suggest that the market for GES was around US$930 billion in 2012, rising to US$1.4 trillion by 2020 (ISG, 2013). Yet this influential sector receives scant attention in the operations management literature. The paper draws on six case studies to explore the operations management challenges of delivering GES. In doing so the paper introduces the concept of network capabilities for GES, highlighting the centrality that: (i) network resources – accessing and deploying dispersed resources, (ii) network coordination – coordinating and integrating network activities, and (iii) network learning – collective learning and knowledge management, all play in enabling the successful operational management of GES.     

Corporate social responsibility in cruising: Using materiality analysis to create shared value

Creating Shared Value hinges on the interdependence between a company's success and social welfare, and also the identification and expansion of connections between that company and society. Because critics say the concept is counterproductive, in that it focuses too narrowly on the company's economic value creation, we take a materiality analysis approach of corporate social responsibility (CSR). This approach provides evidence of what is important to stakeholders and promotes meaningful corporate disclosure, central to the Global Reporting Initiative. This study reports on a materiality analysis of the cruise industry, comparing stakeholder concerns/demands with both the relevant literature and existing CSR reports to determine to what extent the current industry definition of its social responsibility matches the expectations of its stakeholders, and subsequently, to theorise reasons for the patterns found. Results evidence that cruise companies tend to both over-report immaterial issues and under-report material issues, without responding to stakeholders' requests.     

Coordination,timing and common knowledge

There is tight link between coordination and common knowledge. The role of higher order beliefs in static incomplete information games has been widely studied. In particular, information frictions break down common knowledge. A large body of literature in economics examine dynamic coordination problems when there are timing frictions, in the sense that players do not all move at once. Timing frictions in dynamic coordination games play a role that is closely analogous to information frictions in static coordination games.This paper makes explicit the role of higher order beliefs about timing in dynamic coordination games with timing frictions. An event is said to be effectively known if a player knew the event when he last had an option to change his behavior. The lack of effective common knowledge of the time drives results of dynamic coordination games.     

Capability accumulation,innovation, and technology diffusion: Lessons from a Base of the Pyramid cluster

Although research on industry clusters has made many valuable contributions, a dearth of empirical evidence and theoretical reflection about the characteristics of Base of the Pyramid (BOP) clusters has persisted. Consequently, the literature still lacks a framework that incorporates the context, challenges, and dynamics encountered in such clusters. Drawing from clusters, capability accumulation, and innovation literatures, we develop a theoretical framework that provides a more fine-grained understanding of the dynamics encountered in BOP clusters, the role of support organizations, the importance of capabilities accumulation in firms, and the challenges associated with technology development and diffusion within such settings. We use case study research method conducted in a traditional granite-mining cluster in Brazil, based on 154 interviews with key informants between 1999 and 2011. Our findings suggest that BOP clusters present different dynamics when compared to clusters elsewhere, because of the existence of idiosyncrasies such as additional barriers to technology diffusion, especially when coupled with a lack of coordination and misaligned policy approaches. We contribute to the literature by arguing that the process of technology diffusion in BOP clusters is hindered by these barriers, and that technology development without wide diffusion within BOP clusters can become a source of social exclusion and wealth concentration. Moreover, in large emerging economies, global pipelines are not necessarily the only path for BOP clusters to achieve competitive advantage and sustainable growth, as suggested in the clusters literature.     

全球价值链与国内价值链——基于投入产出表的新方法

价值链作为组织和协调经济活动的微观机制,已使经济全球化和增长模式发生了深刻的变化。本文利用来自投入产出表的新方法,测度了广东省和江苏省全球价值链和国内价值链的水平。结果表明,粤苏两省切入全球价值链的倾向高于切入国内价值链的倾向,而对其它省份关联效应较大的行业基本上是中间品行业,且具有自然资源密集的特征。全球价值链与国内价值链之间的互动关系,则关系到我国产业升级的前景和区域经济协调发展的基础。     

Which Way is “Up” in Upgrading? Trajectories of Change in the Value Chain for South African Wine

Global Value Chain (GVC) analysis uses the concept of upgrading to highlight paths for developing country firms to “move up the value chain,” usually through the lenses of four categories—product, process, functional, and inter-sectoral upgrading. The implicit normative expectation is that these firms move toward producing higher value-added products and/or take on more sophisticated functions along a value chain. In this article, upgrading is approached more broadly as “reaching a better deal,” including a balance between rewards and risk. The case study of South African wine shows that better product quality, improved processes, and some functional upgrading have co-existed with processes of “downgrading,” higher risks, and limited rewards, especially in traditional export markets. A reflection on further conceptual development and directions for empirical research is also provided.     

全球经济危机给中国高校国际化带来的新挑战及其思考

本文从国际合作与交流的角度出发,分析了当前全球经济危机给中国高校国际化带来的新机遇和新挑战,进而从课程建设、师资队伍建设、管理队伍建设三个方面,对如何应对新挑战、抓住新机遇进行了初步的探讨。