Response strategies of local firms to import competition in emerging markets

Using a sample of 3808 firms from 1996 to 2007, the impact of three strategic options that can be implemented by local Asian (i.e., Indian) firms facing increased import competition in their domestic market is analyzed. On average, firms with greater investments in intangible resources and tighter product focus do better, while firms with greater international sales perform poorly compared to their peers. However, in industries characterized by high import competition, firms with international operations and product focus tend to have higher performance, while firms with intangible resources perform poorly.     

Strategic currency hedging and global portfolio investments upside down

The literature on the convenience of currency hedging of international portfolio investments has not reached a final verdict. There are arguments for (Perold and Schulman [Perold, A.F. and Schulman, E.C. (1988). The free lunch in currency hedging: implications for investment policy and performance standards, Financial Analysts Journal, May/June Vol. 44, No. 3: 45-52]) and against (Froot [Froot, K. (1993). Currency hedging over long horizons. NBER Working Paper 4355.] and Campbell et al. [Campbell, J.Y., Viceira, L.M. and White, J.S. (2003). Foreign currency for long-term investors. The Economic Journal, Volume 113, Number 486, (March), pp. C1-C25(1)]). This paper analyzes the perspective of global investors based in emerging markets, for which hedging should imply increasing expected returns. The question thus is whether currency hedging is a “free lunch” in this case. No free lunch exists, as it turns out. Hard currencies act as natural hedges against global (and local) portfolio losses, since they tend to appreciate with respect to emerging market currencies when the world portfolio return is negative. Therefore, in this case currency hedging increases volatility—although also increasing expected returns. This result is likely to hold generally for relatively open economies with flexible exchange rate regimes.     

Decision Factors Considered Important by MNCs in Their Reevaluation and/or Modification of Foreign Entry Modes During the Argentine Financial Crisis

ABSTRACT

Eighty-two multinational companies (MNCs) were surveyed during the recent (2001–2002) Argentine financial crisis to identify decision factors they considered important in reevaluating and/or altering their foreign entry modes during the crisis. The firms rated size of local demand, changes in trade barriers, changes in trade and tax policies, potential industrial growth, and customer attitudes as the most important issues to consider in their entry mode reevaluations. The least important factors were interactions between the host government and the IMF/WTO, physical infrastructure, neighboring economies, trading bloc associations, and availability of bargain assets. Differences were also found in factor importance ratings as to MNCs' willingness to reevaluate their foreign entry modes, their current modes of operations, and their willingness to change their foreign entry modes during the Argentine crisis. The research, managerial, and policy-making implications of the findings are discussed.

RESUMEN. Durante la reciente crisis financiera argentina (2001–2002), se examinaron ochenta y dos compañías multinacionales para identificar los factores inherentes a la toma de decisión, considerados importantes para reevaluar y/o alterar la modalidad de entrada de capital extranjero durante este período. Se tomaron en consideración los siguientes elementos, considerados importantes para realizar dicha reevaluación: tamaño de la demanda local de las empresas, cambio ocurrido en las barreras comerciales, cambios en el comercio, políticas impositivas, crecimiento industrial en potencia y reacción de los consumidores. Los factores menos importantes fueron las interacciones entre el gobierno anfitrión y el FMI/OMC, la infraestructura física, las economías vecinas, las asociaciones de bloques comerciales, y la disponibilidad de activos de negociación. También se encontraron discrepancias en la clasificación asignada a la buena voluntad que las CNM demostraban en reevaluar sus modalidades de entrada extranjera, así como sus modalidades corrientes de operación y su buena voluntad para cambiarlas durante la crisis argentina. Se discutieron además los resultados obtenidos cuanto a las implicancias investigatorias, gerenciales, y las relativas a la elaboración de políticas.

RESUMO. Analisaram-se 82 empresas multinacionais durante a recente crise financeira argentina (2001–2002), a fim de identificar os fatores decisórios considerados importantes para a reavaliação e/ou modificação do modo de entrada no mercado estrangeiro durante a crise. As empresas classificaram o tamanho da demanda local, as mudanças nas barreiras comerciais, mudanças nas políticas comerciais e fiscais, crescimento potencial do setor e atitudes dos clientes como os fatores mais importantes a serem considerados em sua reavaliação do modo de entrada. Os fatores menos importantes foram as interaç[otilde]es entre o governo local e o FMI/OIT, infra-estrutura física, economias vizinhas, associaç[otilde]es de comércio e disponibilidade de ativos para acordos comerciais. Foram encontradas também diferenças nas classificaç[otilde]es da importância de fatores como a disposição das multinacionais em reavaliar os modos de entrada no mercado estrangeiro, seus atuais modos de operação e sua disposição de alterar o modo de entrada no mercado estrangeiro durante a crise Argentina. O estudo discute também as implicaç[otilde]es dos achados para a gerência, as pesquisas e a elaboração de políticas.     

Understanding postorganic fresh fruit and vegetable consumers at participatory farmers’ markets in Ireland: reflexivity,trust and social movements

This paper examines how trusting relations between consumers and vendors of organic fresh fruits and vegetables (FFVs) in a particular type of farmers’ market (FM) in Ireland are established and maintained, and what the implications of this are. First, the food system is outlined, and then its attendant problems. These problems have led to various solutions, two of which are organic food and FMs. Then, the growth in these two areas is outlined, as is the accompanying growth in the academic literature on these two areas, some of which overlaps. Various pressures, including in particular the increasing distance food travels and disconnected stallholders and products at the FM, are suggested. In light of this, a need to apply an understanding of the reflexive consumer, trust and social movements is suggested. It is found that the consumers interviewed act reflexively by choosing to go to these FMs. They prioritize the trusting relationships built up through repeated personal contact at these FMs over and above organic certification. Along with and as part of this, they prioritize local, fresh, seasonal ‘chemical‐free’ FFVs over and above imported certified organic produce. Various aspects of collective identity formation, including modes of behaviour, objects and stories, and language, are involved in this process. These elements, to some extent, act as a buffer against the pressures of distance and disconnection. Along with this, the essential meaning of the word organic is, in this particular context, reconstructed to include various socio‐environmental values missing from some certified organic produce. The word postorganic is suggested. The main methodologies used are semistructured in‐depth interviews and participant observation.     

‘A knavish people…’: London Jewry and the stock market during the South Sea Bubble

In an era when financial markets were only beginning the move from personal to impersonal relations, this paper examines the role of Jewish brokers in the market for Bank of England stock at a time when their status as recent immigrants, subject to constraints due to religion and ethnicity, made them unlikely intermediaries beyond their own communities. Using formal network analysis, an examination of their activity during the first half of 1720 suggests a marginal role. However, as the Bubble began to burst a few Jewish financiers became disproportionately involved as purchasers of a stock clearly on the decline.