The dilemma of exchange rate arrangements in East Asia

This paper analyzes exchange rate flexibility in East Asia and explores what has changed since the Asian financial crisis. Our focus is not on the choice of an appropriate exchange rate regime in East Asia, but rather on exchange rate flexibility and management in the region. We find that exchange rate management in East Asia differs based on the country and the time period. We identify major concerns about current exchange rate arrangements in East Asia, including asymmetric responses to external shocks, competitive devaluation, and the dilemma of choosing between asset dollarization and liability dollarization. The paper concludes with some policy implications for an exchange rate arrangement in East Asia.     

Peers Versus National Culture: An Analysis of Antecedents to Ethical Decision-making

Given the recent ethics scandals in the United States, there has been a renewed focus on understanding the antecedents to ethical decision-making in the research literature. Since ethical norms and standards of behavior are not universally consistent, an individual’s choice of referent may exert a large influence on his/her ethical decision-making. This study used a social identity theory lens to empirically examine the relative influence of the macro- and micro-level variables of national culture and peers on an individual’s intention to behave ethically. Our sample consisted of respondents from Germany, Italy, and Japan. The results indicated that both national culture and peers were found to act as significant referents in ethical decision-making dilemmas. Although peers exerted a much stronger influence on an individual’s ethical decision-making, the impact of peers varied depending on the national culture levels of individualism and power distance. James W. Westerman is an Associate Professor of Management at Appalachian State University. He received his Ph.D in Management from the University of Colorado at Boulder and an MBA from Florida State University. His research interests include person-organization fit, compensation, and employee ethics, and has been published in the Journal of Organizational Behaviour, Journal of Business Ethics, Academy of Management Learning and Education, Group and Organization Management and the Journal of Business and Psychology, among others. Rafik I. Beekun (Ph.D., the University of Texas at Austin) is Professor of Management and Strategy in the Managerial Sciences Department at the University of Nevada. Reno, and Co-director, Center for Corporate Governance and Business Ethics. His current research focuses on business ethics, national cultures and the link between management and spirituality. He has published in such journals as the Journal of Applied Psychology, Human Relations, Journal of Management, Journal of Business Ethics and Decision Sciences. Yvonne Stedham is a Professor of Management in College of Business at the University of Nevada, Reno. She received a Ph.D. in Business and an MBA from the University of Kansas, Lawrence, Kansas and undergraduate degrees in Economics and Business from the University of Bonn, Germany. She joined the University of Nevada, Reno in 1988 and served as Chair of the Managerial Sciences Department from 1999-2002. Dr. Stedham's research covers a broad spectrum of management issues with a special focus on international, business ethics and gender aspects, and has been published in the Journal of Management. Women in Management Review, the Journal of Management Studies, the Journal of Business Ethics,the Journal of European Industrial Training, and the Journal of Knowledge Management Practice, Asia Pacific Journal of Human Resource, and others. Jeanne H. Yamamura, CPA, MIM, PHD, is Associate Professor at the University of Nevada Reno. Her research is focused in the area of the international management of accounting professionals and in ethical decision making. She has published in journals such as the International Journal of Accounting, the International Journal of Accounting, Auditing and Performance Evaluation and the International Journal of Human Resource Management.     

Chinese Yuan after Chinese Exchange Rate System Reform

I. Introduction The Chinese government announced its change in exchange rate system from the dollar peg system into a managed floating exchange rate system “with reference to” a currencybasket on 21 July 2005 1. The exchange rate system reform has been regarded as a historical?2006 The Authors regime switching in China. This Chinese government decision has preferable effects on neighboring countries in choosing exchange rate system or exchange rate policy because the monetary authorities …     

Cross‐country Relative Price Volatility: Effects of Market Structure*

Using annual data on nine manufacturing sectors of 18 OECD countries, the article studies the implications of market structure for cross‐country relative price variability. It is found that, in accordance with predictions from a standard markup pricing model, reductions in market competition, along with increased nominal exchange rate volatility, are associated with greater variability of cross‐country relative prices. The market structure also has similar effects on components of cross‐country relative price variability. The empirical findings are robust to the inclusion of various control variables and alternative sample specifications.     

Empirically Effective Bond Pricing Model and Analysis on Term Structures of Implied Interest Rates in Financial Crisis

In his book (1993) Kariya proposed a government bond (GB) pricing model that simultaneously values individual fixed-coupon (non-defaultable) bonds of different coupon rates and maturities via a discount function approach, and Kariya and Tsuda (Financ Eng Japanese Mark 1:1–20, 1994) verified its empirical effectiveness of the model as a pricing model for Japanese Government bonds (JGBs) though the empirical setting was limited to a simple case. In this paper we first clarify the theoretical relation between our stochastic discount function approach and the spot rate or forward rate approach in mathematical finance. Then we make a comprehensive empirical study on the capacity of the model in view of its pricing capability for individual GBs with different attributes and in view of its capacity of describing the movements of term structures of interest rates that JGBs imply as yield curves. Based on various tests of validity in a GLS (Generalized Least Squares) framework we propose a specific formulation with a polynomial of order 6 for the mean discount function that depends on maturity and coupon as attributes and a specific covariance structure. It is shown that even in the middle of the Financial Crisis, the cross-sectional model we propose is shown to be very effective for simultaneously pricing all the existing JGBs and deriving and describing zero yields.     

How Do Female Spouses’ Political Interests Affect Male Spouses’ Views About a Women’s Issue?

This paper explores how the degree of female spouses’ political interest affects male spouses’ views about women’s empowerment using individual level data in Japan. Controlling for unobserved area-specific fixed effects, results show that males are likely to consider women’s empowerment important if their spouses are interested in politics. This spouse effect is observed for conservative males but not for progressive-neutral males. Results were unchanged when the endogeneity bias caused by spouses’ political interests were controlled for. These findings suggest that female family members’ political interests and views play an important role in determining male views regarding women’s issues.     

Relative Income Position and Happiness: Are Cabinet Supporters Different from Others in Japan?

During the period of 2001–2006, the Liberal Democratic Party (LDP) adopted a market‐oriented policy under the Koizumi cabinet. Using data covering the Koizumi and first Abe cabinets, the present paper attempts to examine whether the effects of relative income differ between supporters and non‐supporters of the Koizumi cabinet. Key findings are as follows: within the Koizumi cabinet period, a relatively low‐income position is negatively related to happiness for non‐LDP supporters but not for LDP supporters. However, under the period of the first Abe cabinet, the difference in the effect of relative income for LDP supporters and others disappears. These results imply that an expectation of market outcomes leads to a difference in the effect of relative income position on happiness levels.     

Identity,nostalgia and happiness among migrants: The case of the Kōshien High School Baseball Tournament in Japan

Public broadcasting of all games of high school baseball tournaments attests to their popularity in Japan. The present study uses individual‐level data to test the hypothesis that nostalgia influences the level of happiness of Japanese people. Its key findings were: (i) the number of wins by a prefecture team increased the happiness level of its residents; (ii) this effect applied only to residents of large cities; and (iii) for urban migrants, originally from rural areas, the effect of their home team wins exceeded that of the wins of their host area team. This effect was significant in cases where the host area cultural climate differed from that of the migrant home area. These findings suggest that a scarcity of ‘identity’ goods related to the residential community increases high school baseball influence on happiness. Furthermore, the influence of nostalgia for home on migrants’ happiness is greater than their attachment to their current residential community.     

Confidence Sets for the Break Date in Cointegrating Regressions

In this paper, we propose constructing confidence sets for a break date in cointegrating regressions by inverting a test for the break location, which is obtained by maximizing the weighted average of power. It is found that the limiting distribution of the test depends on the number of I(1) regressors whose coefficients sustain structural change and the number of I(1) regressors whose coefficients are fixed throughout the sample. By Monte Carlo simulations, we then show that compared with a confidence interval developed by using the existing method based on the limiting distribution of the break point estimator under the assumption of the shrinking shift, the confidence set proposed in the present paper has a more accurate coverage rate, while the length of the confidence set is comparable. By using the method developed in this paper, we then investigate the cointegrating regressions of Russian macroeconomic variables with oil prices with a break.     

Effects of justice and utilitarianism on ethical decision making: a cross‐cultural examination of gender similarities and differences

This study investigates the relationship between intention to behave ethically and gender within the context of national culture. Using Reidenbach and Robin's measures of the ethical dimensions of justice and utilitarianism in a sample of business students from three different countries, we found that gender is significantly related to the respondents' intention to behave ethically. Women relied on both justice as well as utilitarianism when making moral decisions. By contrast, men relied only on justice, and did not rely on utilitarianism when faced with the same ethical issues. Further, women's intention to behave was contextual, significantly affected by two national culture dimensions (uncertainty avoidance and individualism), whereas men's decisions were more universal, and not related to national culture dimensions.