When natural resources run out,market knowledge steps in: Lessons on natural resource deployment from a longitudinal study in a resource-scarce region of Ethiopia

With the increasing scarcity of natural resources, the ability to maintain quality standards during resource-scarce times becomes more critical for business performance. Theories on managing resource scarcity cannot be easily tested in contexts where resources are still abundant. This study therefore turns to an emerging market context in which natural resource availability naturally varies strongly between seasons, namely, that of Ethiopian pastoralists who for many generations learned to adapt to natural resource scarcity. Central to our theory is the natural resource deployment capability, which is the ability of a business to make efficient and effective use of available resources to maintain business performance during resource-scarce times. Using three-wave longitudinal data from 120 pastoral family-based livestock businesses, the study shows that when resources are scarce or extremely scarce, market knowledge helps to better deploy the scarce natural resources, leading to higher product quality. The findings imply that businesses with a better understanding of markets have stronger natural resource deployment capability. The lesson for businesses that are confronted with approaching resource scarcity is therefore to strengthen their ability to deploy resources efficiently and effectively by strengthening their market knowledge in which such capability is rooted.     

Consumer awareness and willingness to pay for safety of street foods in developing countries: a review

Street food vending is still popular in developing countries despite the giant stride recorded in the areas of food processing and global food supply in the last century. Its contribution to the socio‐economic development of the countries is evidenced by the volume of trade involved and provision of employment for significant portion of rural and urban populace. However, there has been persistent global concern on the risks of street food to the health of consumers because of the attitudes of practitioners throughout the chain. This review summarizes the findings of studies on awareness and perceptions of street food consumers to the hazards involved in street food, and their willingness to pay (WTP) premium for safety intervention. The major limitation to WTP is the extra cost that could result from the implementation of reports of WTP studies which could disenfranchise those consumers that may not be able to afford the premium. This review, therefore, recommends the formulation and enforcement of appropriate public policies that would cover the entire chain of street food vending for the safety of everybody along the chain and the protection of the health of the consumers.     

Formal institutions and foreign direct investment

This study examines the impact of formal institutions on foreign direct investment. First, the quality (strength or weakness) of formal institutions in host countries is analyzed. Second, the absolute differences in the quality of formal institutions between the host and home countries are examined. The results show that (1) strong formal institutions in host countries positively influence FDI flows and (2) the larger the institutional distance between the home and host country, the lesser the FDI inflows. © 2009 Wiley Periodicals, Inc.     

Impact of cooperatives on smallholders' commercialization behavior: evidence from Ethiopia

This article examines the impact of marketing cooperatives on smallholder commercialization of cereals using detailed household data in rural Ethiopia. We use the strong government role in promoting the establishment of cooperatives to justify the use of propensity score matching to compare households that are cooperative members to similar households in comparable areas without cooperatives. The analysis reveals that although cooperatives obtain higher prices for their members, they are not associated with a significant increase in the overall share of cereal production sold commercially by their members. However, these average results hide considerable heterogeneity across households. In particular, we find that smaller farmers tend to reduce their marketed output as a result of higher prices, whereas the opposite is true for larger farmers.     

Export Controls and International Business: A Study with Special Emphasis on Dual-Use Export Controls and Their Impact on Firms in the US

The production of hazardous materials that can be used for civilian and military purposes (dual-use items) has led the U.S. government to impose export controls in order to prevent the proliferation of risky materials falling into the wrong hands — a concern in this age of international terrorism. Export controls are prudent government responses to the emergence of a new and widely perceived threat to national security. However, existing controls have failed to keep up with rapid global economic and technological changes, and are likely to have adverse effects on firms’ economic performance. This article suggests regulatory and policy reforms, as well as corporate strategies for dealing with U.S. export controls in order to make such controls effective and relevant to changing technological developments. Among the problems the article identifies are the negative effects of these export controls on firm innovation, market competitiveness, investment, and trade flows. These issues point to a pressing agenda for regulatory reform. Reforms can focus on limiting control lists, enhancing the bilateral or multilateral cooperation in export controls, improving the efficiency and transparency of the licensing system, improving resources and the outreach to small and medium-size exporters, and compensation for the loss of market share.     

Trade Liberalization in Textiles and Clothing and Developing Countries: An Analysis with Special Emphasis on the US Import Market

This article examines the role and importance of the textiles and clothing sector in the economies of the United States and developing countries as well as the qualitative changes in the dynamics of the industry. After briefly looking at the history of protectionism in the industry, the article addresses the impact of quota elimination on developing countries' exports to the United States. It also discusses the role of China as the dominant supplier. It suggests that with the elimination of quotas, most of the benefits will probably accrue to a handful of efficient suppliers, notably China and India. The article concludes by providing some recommendations to enable many developing countries to cushion the sudden effects of trade liberalization.     

Patent protection and foreign direct investment

The importance of development and use of products embodying intellectual property rights has increased dramatically. The growing share of knowledge‐intensive products in worldwide trade, together with the increase in international technological competition, has magnified the importance of patents and other forms of intellectual property. The objective of this study is to examine the effect of patent protection on inward foreign direct investment (FDI). It also examines the relative importance of other variables such as market size, trade orientation, unemployment rates, and so on. The findings are supportive of the fact that the level of patent protection is a strong determinant of investment flows. A proper understanding of this relationship will help firms and governments devise appropriate intellectual property policy to encourage the growth and expansion of FDI. © 2006 Wiley Periodicals, Inc.     

Tenants’ land access in the rental market: evidence from northern Ethiopia

The purpose of this study is to investigate the allocation efficiency in the tenancy market, and thereby the potential of the market to facilitate operational farm size adjustment that can help land‐poor tenant households to transform into smallholder commercial farms. We analyzed three rounds of balanced panel data for the production seasons 2005–2006, 2009–2010, and 2014–2015 collected from 320 smallholder farms in Tigrai region in northern Ethiopia. Random effects dynamic probit and tobit models are used to assess how land‐poor tenants’ access and extent of access to land are affected by state dependency (earlier participation in the market), kinship ties, climate shocks, and legal restrictions. The results indicate that state dependency and kinship ties with the landholder had strong positive effects on participation and intensity of participation. Climate shocks significantly affected the intensity of participation of tenants already in the rental market. Tenants’ overall access to rented land had not improved from 2005–2006 to 2014–2015. The amount of land accessed by those already in the market was insufficient for them to become commercial farmers. The important policy implication is that orchestrated interventions at community level are needed to reduce transaction costs and thereby improve land access of entrepreneurial tenants.     

Market performance implications of modularization: Evidence from global auto firms operating in China

Auto firms play an increasingly important role in national economies. However, their internationalization strategies, especially the trend towards modularization has been underexplored in the international business literature. Drawing on the resource based theory, we develop hypotheses on the link between modularization and market performance. Analyzing a sample of 262 auto parts suppliers in China, the study shows the positive influence of modularization on firm performance and the moderating role of knowledge sharing tools and physical proximity in this relationship. In addition, these relationships are channeled by firms’ strategic actions to maintain superior business performance against competitors (firm positional advantage).