Foreign direct investment subsidy in a dynamic stochastic general equilibrium model with heterogeneous firms

This study analyzes the macroeconomic impacts of subsidies to attract multinational corporations when firms are determining whether to enter or how to serve foreign markets. We show that a small FDI subsidy scheme induces consumption gains and delivers short‐term welfare improvement for the FDI host country if firms differ in productivity. However, the subsidy generates a new problem and results in the wealth reallocation effect, leading to welfare deterioration for the host country in the long run. Moreover, we find that a subsidy program induces a welfare improvement for the host country if it is offered to all domestic producers instead of foreign producers only in the host country.     

Approximate tâtonnement processes

Summary We introduce a probabilistic model for price adjustment in an exchange economy which approximates the classical Walras tâtonnement process while avoiding many of its unrealistic features. The model is decentralized in that the trades permitted to an agent and the resulting price changes depend only on the commodity vector currently held by that agent, and not on the commodity vectors held by the other agents in the economy. Our results will show that the Walras tâtonnement process can be decentralized without changing its behavior on the macroeconomic scale. Our model has a finite set of commodities, a market maker who adjusts prices, and a large finite set of agents who trade only with the market maker. Each agent has a demand function depending on his commodity vector and the price vector. At each discrete time, one agent is chosen at random and exchanges his current commodity vector for his demand vector. Then the market maker adjusts the price vector by an amount which depends on the selected agent's commodity vector and the current price. Prices are adjusted rapidly enough to avoid prolonged trading at the wrong price, but slowly enough so that a substantial price change will depend on a significant simple of agents. The main result shows that with probability arbitrarily close to one the price will rapidly approach and then remain close to an equilibrium value, following a path which is close to the price path of the corresponding tâtonnement process.     

Microeconometric models of infrequently purchased goods: An application to household pork consumption

The double-hurdle and infrequency-of-purchase models are generalized with the inverse hyperbolic sine transformation in the dependent variable. The resulting specifications feature more flexible parameterization and error distributions than the untransformed models. Using the 1987–88 Nationwide Food Consumption Survey data on household pork consumption, a nonnested test suggests that the IHS double-hurdle model provides better characterization of the data-generating process than the IHS infrequency-of-purchase model but the elasticities derived from these models are similar. Own-price effects on the probability and level of consumption are negative and significant, but the elasticities are small. Income and cross-price effects are not significant. Household age composition, education, gender of meal planner, and race are among the demographic variables that affect consumption.     

Diffusion of mobile telephony: An empirical study in Taiwan

Mobile telephony penetration is a major indicator of mobile telephony diffusion. Taiwan had a mobile telephony penetration of 108% in 2002, ranking first in the world. This study analyzes this accelerated diffusion in terms of growth model and determinants of the diffusion rate. To eliminate the inherent uncertainty associated with choosing the optimal growth model, this study compares the performance of three conventional models, namely Gompertz, Logistic and Bass, to identify the most appropriate model, and to distinguish the forces driving the diffusion rate. Empirical results indicate that the most appropriate model is the Logistic model. Network externalities, which this study shows to be the same as the imitation effect in the Bass model, explain the superiority of the Logistic model. Moreover, market competition, which markedly reduces service prices, is identified as a primary driver of the diffusion rate of mobile telephony in Taiwan. Economic conditions, technological innovation and number of operators are insignificant factors. Finally, mobile telephony is a substitute for fixed-line telephony in Taiwan.     

Materialism through the eyes of Polish and American consumers

The research applies the Material Values Scale (MVS; Richins and Dawson, 1992) cross-culturally by comparing materialism among Polish and American business students. Cultural differences (e.g., greater humanistic/collectivistic/Christian values in Poland) suggest lower MVS scores for Poles than for Americans. This prediction is consistent with the Local Culture hypothesis (i.e., that a strong local culture results in maintenance of traditional values in defense against global forces). Contrary to predictions, data suggest no Polish-American materialism differences, a finding consistent with the globalization hypothesis (i.e., increasing globalization leads to relatively uniform worldwide materialism). As a precursor to hypotheses testing, confirmatory factor analysis (CFA) tests the construct validity and cross-cultural validity of the MVS. The findings suggest substantial difficulties with the scale that limit the confidence in conclusions based on the scale. Based on these findings, future research discussion aims at developing a measure of materialism with potentially greater construct validity for cross-cultural applications.     

The role of family decision makers in festival tourism

This study assessed the role of family decision makers in participating in a festival according to five stages of festival participation. A survey process was conducted using two sampling groups: the sample for families with children and the sample for families without children. According to the results of the study, a number of marketing implications were generated. For example, the husband was revealed to more actively join transportation-related activities including driving, deciding travel routes, automobile safety checks, and filling up with gasoline. The wife was a strong decision maker in selecting restaurants or menus in the festival tourism management process. Likewise, the role of the wife is very significant, from suggesting the festival participation at the first stage to determining a revisit to the festival at the last stage. However, the children or joint decision-making patterns were not distinctive as they are said to be in other tourism literature. Findings of the study are expected to offer valuable insights for all festival stakeholders including festival vendors, local government, local residents, and festival organizers.     

Black–white differences in beliefs about the U.S. restaurant tipping norm: Moderated by socio-economic status?

A re-analysis of two national telephone surveys found that black–white differences in awareness that it is customary to tip a percentage of the bill declined as socio-economic status increased. However, black–white differences in awareness that is customary to tip 15–20 percent in restaurants was unrelated to socio-economic status. The practical as well as theoretical implications of these findings are discussed along with directions for future research.     

Are multinationals exporting jobs? The case of Taiwan

Does offshore production always result in job exportation? Using firm‐level data for Taiwanese multinationals that allow us to avoid reverse causality issues, this paper finds that while increasing offshore production has a negative impact on the demand for domestic manufacturing workers, this is not the case for domestic research and development workers who are often more skilled. The results also suggest that for Taiwan, there is geographical fragmentation of production activities in such a way that more skilled jobs are maintained domestically and less‐skilled jobs are exported to other developing countries. These findings confirm the prediction of the knowledge‐capital model.