The Transfer Problem and Real Exchange Rate Overshooting in Financial Crises: The Role of the Debt Servicing Multiplier*

We develop a real model of exchange rate overshooting due to a debt servicing multiplier. Borrowers of foreign capital are bound by noncontingent contracts to pay the world rate of return following an adverse shock. This is onerous, since the marginal product of capital is less than the world rate of return and the shock causes some capital to become extra‐marginal. If the resultant debt servicing shortfall is met by taxes on workers, this reduces their demand for nontradable goods, which feeds back onto their wage, reducing their demand for nontradable goods, etc. In the short run, when extra‐marginal projects are “stuck” in the economy, the real exchange rate can overshoot. This mechanism may help to explain overshooting of exchange rates in the 1997 Asian financial crisis.     

Monetary policy and inferential expectations of exchange rates

We present a macroeconomic market experiment to isolate the impact of monetary shocks on the exchange rate, as an alternative to SVAR identification. In a non-stochastic treatment, covered interest rate parity holds and predicted exchange rates are tracked well. In a stochastic treatment, we model expectations using a Neyman–Pearson hypothesis test (inferential expectations) and find evidence of belief conservatism and uncovered interest rate parity failure. The market environment magnifies belief conservatism, which is opposite to the standard claim that markets tend to eliminate individual choice anomalies.     

The Services Internationalization Process: An Exploratory Investigation of Australian Service Company Internationalization to China

Service companies possess different characteristics from non-service-based companies, affecting their process of internationalization. This article examines the internationalization of service organizations using case studies of 23 Australian service organizations internationalizing to China. It finds that the internationalization process is influenced by the type of service the organization produces. The Uppsala internationalization model partially explains internationalization for companies producing exportable services but did not explain internationalization for companies, which produce nonexportable services (services that must be located within the market). International experience, government regulations and capital intensity were influential for internationalization. The findings develop a model for service organization internationalization.     

A longitudinal study of the characteristics, business creation process and outcome differences of Canadian female vs. male nascent entrepreneurs

This paper concerns a longitudinal study, of a random sample of nascent entrepreneurs in Canada (based on an initial screening sample of 49,763 households). We study gender differences, including number and type of gestational activities, the characteristics of the business created, and the status of the start-up effort after the 4th year of data collection. Logistic regression is used to predict the creation of an operating business from gender and other variables. Four of nine gender difference hypotheses were supported. Findings show that women who are members of a start-up team are six times more likely to achieve an operating business.

Transnational networking and business performance: Ethnic entrepreneurs in Canada

It is generally acknowledged that transnational networking plays an important role in promoting the performance of ethnic entrepreneurial firms. Yet distinctions between the different types of transnational networking and their effects on business performance have received scant attention in the literature, probably because ethnicity has been considered to be the main actor in the networking–performance relationship. This paper argues that one of the reasons why business performance differs across ethnic entrepreneurial firms is that ethnic entrepreneurs engage in dissimilar types of transnational networking. Analyses of the data generated by 720 ethnic entrepreneurs in Canada revealed that ethnicity, along with human capital and push/pull factors, both of which are part of our conceptual framework, plays a central role in the engagement of different types of transnational networking and that the different types of transnational networking affect business turnover (sales) and business survival (age). Push/pull factors were found to play a marginal role in business performance. These results highlight the competitive market that immigrants and members of ethnic minority groups encounter in the hosting economy and stress the value of transnational networking.     

Explaining the Timing of Australia's Manufactured Export Boom

Abstract
This article seeks to explain some of the recent growth in Australia's manufactured exports using a sunk cost model. It is shown that a shock to the economy can cause a sudden and permanent increase in exports. Results from a sample survey suggest that the increased export orientation of Australia's manufacturing sector may persist, even if the recent economic shocks faced by exporters are reversed .     

Measuring Ethnic Community Involvement: Development and Initial Testing of an Index*

This paper builds on the work of Chaganti and Greene, who distinguish between ethnic minority entrepreneurs/small business owners who are very involved with their ethnic community and those who are not. We extend their work by developing an Index of Ethnic Community Involvement based not only on personal but also business characteristics. We utilize a large sample size (698 interviews with entrepreneurs), drawn from five ethnic groups, and develop a valid and reliable (0.69) Index of Ethnic Involvement (IEI) with a strong emphasis on social capital theory. Our initial analysis shows the IEI predicts some personal and business characteristics. Future development will include building regression models to predict business outcomes. The IEI, when fully developed, promises to be useful for targeting assistance, education and training programs, and policy initiatives for entrepreneurs and small business owners according to the level of ethnic community involvement.     

PHILOSOPHICAL DIMENSIONS OF RURAL POVERTY IN CANADA*

Recently, new dimensions of social awareness and economic enlightenment have begun to influence policy in a search for “the means of attenuating those inevitable evils which are already apparent”. There is now a general concensus about the massive extent of rural poverty. There is general agreement that the causes of rural poverty can be found in a lack of aggregate demand in periods of slow economic growth, in a lagging response to structural change required by technological change within commercial agriculture, and in the lack of alternative opportunities for resources no longer needed in agriculture. In finding answers the whole range of economic and social policy is involved, including general fiscal and monetary policy, policies designed to reduce regional disparties and improve educational training and employment opportunities, specific policies to facilitate the efficient adjustment of commercial agriculture, and entirely new policies designed to provide a level of income maintenance viewed, not only as essential to human dignity and welfare but, equally, as essential to the attainment of economic efficiency which the persistence of under-utilized resources can effectively block. PAUVRETÉ RURALE AU CANADA II nous faut trouver un moyen de survie qui fonctionne bien. Pour ce faire, nous devons sélectionner les priorités, el développer des méthodes pratiques de solution. Ce ne sera pas facile. A tous les stages il nous faudra faire le poids entre l'efficacité et le bien-être social, entre les profits corporatifs et la liberté individuelle, entre les opportunités et les tensions de la vie urbaine et les attractions et les opportunités limités de la vie rurale. Nous avons les moyens de régler ces problèmes de pauvreté avant que n'adviennent chez nous les ébranlements extrêmes que nous constatons ailleur dans le monde. Regardons de près ce qu'ont fait nos programmes universels de bien-être social pour régler le problème de pauvreté. Ces programmes sont simplement passés du gouvernement fédéral aux gouvernements provinciaux et jusqu'aux gouvernements municipaux qui utilisent nratiouement les méthodes de l'inquisition avant de répartir leurs fonds de bien-être trap limités. L'homme doit mettre à son service la technologie et non pas se laisser controller par elle. Si l'homme est destinéà rnaintenir son humanité, on doit lui laisser quand même ses valeurs de base. Ceci voudrait dire un maximum de liberté individuelle. C'est ce qui lui permettra une certains solicitude et une vue d'ensemble plus claire de la destiné humaine.     

How location and ethnicity affect ethnic entrepreneurs in three Canadian cities

Few studies on the entrepreneurial contributions of immigrant and/or ethnic entrepreneurs have been carried out in Canada. This article presents results from a cross‐Canadian project. Data were collected from 718 entrepreneurs in three cities. Analysis of the socio‐demographic profile suggests that ethnic entrepreneurs pursue different paths of integration. Firm characteristics suggest that similar support programs are needed for ethnic firms as for all small firms. Also, our analysis suggests that there is no need for new support programs for ethnic firms, except to help them better integrate. Lastly, the use that these entrepreneurs make of social capital only partially confirms the literature. © 2010 Wiley Periodicals, Inc.     

Belief adjustment: a double hurdle model and experimental evidence

Experimental Economics - We present an experiment where subjects sequentially receive signals about the true state of the world and need to form beliefs about which one is true, with payoffs...