What makes export manufacturers pursue functional upgrading in an emerging market? A study of Chinese technology new ventures

This study examines unique factors causing emerging market firms to pursue functional upgrading. Our analysis draws on the resource-based view and learning theory, and our study sample consisted of Chinese new technology ventures. We test the effect of governance mechanisms and internal resources on the functional upgrading of firms. The results indicate that trade shows and quality advantage facilitated the functional upgrading of firms. However, contrary to our expectations, electronic markets and technological advancement do not emerge as significant variables. The implications of the results are discussed in consideration of the existing literature, and future research opportunities are described.     

External balances,trade flows and financial conditions

This paper studies how changing expectations concerning future trade and financial conditions are reflected in international external positions. In the absence of Ponzi schemes and arbitrage opportunities, the net foreign asset position of any country must, as a matter of theory, equal the expected present discounted value of future trade deficits, discounted at the cumulated world stochastic discount factor (SDF) that prices all freely traded financial assets. I study the forecasting implications of this theoretical link in 12 countries (Australia, Canada, China, France, Germany, India, Italy, Japan, South Korea, Thailand, The United States and The United Kingdom) between 1970 and 2011. I find that variations in the external positions of most countries reflect changing expectations about trade conditions far into the future. I also find the changing forecasts for the future path of the world SDF are reflected in the dynamics of the U.S. external position.     

Dynamic capability in a small global factory

In order to balance their local and global operations optimally, SMEs are moving toward a ‘global factory’ type of organizational form, meaning a differentiated network of activities held together through the control of key assets and flows of knowledge, and coordinated by a focal firm. Managing such a network requires a specific dynamic capability comprising, according to our study, cognitive, managerial, and organizational capabilities. Cognitive capabilities – cultural awareness, entrepreneurial orientation, and a global mindset – are the basis for a global factory because they are the source for opportunity recognition and exploitation, and are therefore crucial. The focal firm's organizational flexibility and absorptive capacity, as well as managerial capabilities in the areas of interface competence and analytical capability, are needed in the steering of a small global factory, the success of which depends on the nurturing of these assets.     

Solving the income fluctuation problem with unbounded rewards

This paper studies the income fluctuation problem without imposing bounds on utility, assets, income or consumption. We prove that the Coleman operator is a contraction mapping over the natural class of candidate consumption policies when endowed with a metric that evaluates consumption differences in terms of marginal utility. We show that this metric is complete, and that the fixed point of the operator coincides with the unique optimal policy. As a consequence, even in this unbounded setting, policy function iteration always converges to the optimal policy at a geometric rate.     

The politics of anticipation: On knowing and governing environmental futures

In this article we describe how the historical emergence and rise of future studies, since the founding issue of Futures in 1968, has been intricately connected to the emergence and development of environmental anticipation as discourse and practice. We trace a dialectical and inter-twined relationship between technologies of environmental anticipation and forecasting, and technologies of anti-environmentalist anticipation and counter-intervention, one which we argue shapes not only the contemporary politics of anticipation, but in a very material sense, the future conditions of biological and social life on Earth. In so doing we want to address the possible contributions that the field of futures studies can make to reimagining collective agency and ways of being on Earth, whilst reflecting critically upon its genealogical relations to the political reason and strategic horizons of powerful fossil fuel interests, from the crisis of the 1970s to the present. The article also offers a more in-depth contextualization to the other articles in this special issue of Futures on “The Politics of Environmental Anticipation”. The aim is to bring to the fore the role that social scientists play in environmental anticipation − i.e. drawing attention to the fact that the future could always have been otherwise.     

Extreme risk spillovers between crude palm oil prices and exchange rates

This study is the first attempt to examine the extreme risk spillovers between Malaysian crude palm oil (CPO) and foreign exchange currencies of the three largest CPO importers: India, the European Union and China throughout the global financial crisis. Using daily data of three currencies, CPO spot and futures from 2000 to 2018, our results show: First, before the crisis, the unexpected change in foreign exchange rates is the primary driver of risk spillover to the CPO market. Second, during the crisis, the extreme movement of CPO spot returns is dominant in the Malaysian exchange rates relative to the euro. Third, after the crisis, the spillover flows from the CPO market to the foreign exchange market. Overall, our findings show the importance of CPO pricing dynamics in mitigating foreign exchange risk over the crisis period. This paper contributes to the extant literature by recognizing the effect of risk spillover on the targeted foreign exchange rate for portfolio allocation.     

On emerging stock market contagion: The Baltic region

This study provides new evidence on emerging stock market contagion during the Global Financial crisis (GFC) and the Euro zone Sovereign Debt Crisis (ESDC). Focusing on the three emerging Baltic markets and developed European markets, proxied by the EUROSTOXX50 stock index, we explore asymmetric dynamic conditional correlation dynamics across stable and crisis periods. Empirical evidence indicates a diverse contagion pattern for the Baltic region across the two crises. Latvia and Lithuania were contagious during the GFC, while they were insulated from the adverse effects of the ESDC. On the other hand, Estonia decoupled from the negative consequences during the global turmoil period, but recoupled during the ESDC. The results could be attributed to financial and macroeconomic characteristics of the Baltic countries before and after the turmoil periods and the introduction time of the Euro as a national currency.     

Overall and time-varying effects of global and domestic uncertainty on the Korean economy

This study analyzes the overall and time-varying effects of global and domestic uncertainty on the Korean economy by estimating constant parameter and time-varying parameter vector autoregressive models. Global and Korea-specific uncertainty are measured using the method proposed by Mumtaz and Theodoridis (2017). A rise in both the uncertainty measures has an adverse impact on the Korean economy by lowering stock market returns and output growth, and by creating inflation caused by currency depreciation. Quantitatively, the domestic uncertainty shock exercises a larger effect on the Korean economy than the global uncertainty shock, as the former uncertainty shock accounts for about one-fifth of output variation and the latter accounts for about one-tenth. Regarding time-varying effects, substantial increases in domestic uncertainty during the Asian Financial Crisis and global uncertainty during the Global Financial Crisis explain a significant part of macroeconomic fluctuations in Korea during those periods. This is because of the increased volatility of uncertainty shocks during these periods, rather than a structural change in the way these shocks affect the economy.     

Policy coordination among the ASEAN-5: A global VAR analysis

This paper aims to analyse the feasibility of policy coordination among the ASEAN-5 economies. This is done by determining whether they experience symmetric responses to common shocks. Given that the problem of dimensionality plagues large-scale macroeconomic modelling, a Global VAR model by Pesaran, Schuermann, and Weiner (2004) and Dees, Mauro, Pesaran, and Smith (2007) is used. The results in this paper provide some weak evidence of symmetric responses to the common (global) shocks of interest: a US monetary policy shock, a US output shock, a Chinese output shock; an oil price shock. Shocks from the US produced the most symmetric responses. The lack of symmetry in some cases has implications for further policy coordination. Since migrant remittances could provide an adjustment mechanism, further labour market integration is needed as it currently lags behind trade and financial integration in the region.     

Too small to be independent? On the influence of ECB monetary policy on interest rates of the EEA countries

Monetary policy independence is regarded as the central argument in favour of floating exchange rates and monetary integration. We evaluate the actual independence of non-euro members of the European Economic Area by using heterogeneous panel cointegration methods that allow cross-dependency. We show that domestic interest rates follow the euro interest rates. These spillovers imply a low monetary independence despite the insulation given by floating exchange rate regimes and inflation-targeting frameworks. We therefore find significant spillover effects of the European Central Bank policy and argue that the costs of monetary integration in Europe may be lower than expected.