Dependent Development: the Subcontracting Networks In the Tiger Economies

The ‘dependency development’ approach attributes the phenomenal economic growth of Hong Kong and Taiwan to their structural linkage with the advanced industrialised countries through trade. Foreign buyers and sourcing agents of the multinationals subcontract to the Hong Kong and Taiwanese manufacturers for low-cost and flexible production of labour-intensive consumer products. Such a dependency relationship is, however, successfully managed by the manufacturers in the two economies of the operation of a very similar subcontracting system in major industries. This paper examines the nature of the subcontracting system, the reasons for subcontracting, the operating dynamics, the sustaining mechanisms and the inherent structural problems of the subcontracting network. With the industrial restructuring process taking place in Hong Kong and Taiwan, there are changes to the subcontracting system which have significant implications for the welfare of the workers.     

Initiating U.S. Free Trade Agreements: How Do Potential Partners Stack Up?

This paper addresses the possible endogeneity of income in the gravity model by providing instrumental variables for income. Using these instruments (physical capital, human capital, and labor accumulation rates) in regression equations of the gravity model, it is shown that the effect of income on bilateral trade is highly significant and, in some cases, is not appreciably different from ordinary least squares estimates. The impact on trade of other gravity variables, including dummy variables for membership in various trading blocs, is also examined.     

Value at Risk and Economic Growth

The improvement of data statistics as well as the econometrician methods have facilitated the introduction the new variables and factors I the economic growth analysis. In this sense, real variables have mainly been considered in the economic growth studies, but not financial or risk management aspects. In this sense, it is interesting to analyze the relationship between economic growth and value at risk and the feed-back process. The goal of the paper is to analyze the relationship between economic growth and risk management and the feed-back process. We will consider economic variables, including economic growth, rule of law, human capital, fiscal policy and monetary policy, among others, in our analysis. We will analyze the theoretical relationships between these variables and risk and the effects of risk on economic growth. We will also develop an empirical analysis considering the case of 15 European Union countries.

Farms’ technical inefficiencies in the presence of government programs*

We focus on determining the impacts of government programs on farms’ technical inefficiency levels. We use Kumbhakar's stochastic frontier model that accounts for both production risks and risk preferences. Our theoretical framework shows that decoupled government transfers are likely to increase (decrease) DARA (IARA) farmers’ production inefficiencies if variable inputs are risk decreasing. However, the impacts of decoupled payments cannot be anticipated if variable inputs are risk increasing. We use farm‐level data collected in Kansas to illustrate the model.     

Analysis of Domestic Factors Affecting Outward Foreign Direct Investment in Brazil

Developing markets have increasingly gained prominence in the world economy, but the domestic factors behind this success are not well established. This uncertainty may interfere with multinational expansion plans. In this article, we examine several macroeconomic and institutional factors affecting Brazilian outward foreign direct investment in 17 destination countries. We applied a pooled ordinary least squares regression over the 2001–2014 period. The findings suggest that macroeconomic factors are still statistically significant to explain investment abroad, but several institutional factors such as corruption have emerged, having a negative effect and political violence having a positive effect on Brazilian outward foreign direct investment.     

Poverty and unemployment: A cultural approach

For years, policymakers, business leaders, human resources professionals, and economists have attempted to explain the existence of unemployment. Unemployment inhibits the economic growth of a nation and contributes to the problem of ongoing poverty, which cannot be lessened without that growth. Understanding the causes of unemployment and developing policies and programs to decrease it are vitally important for nations around the world, but one key variable in the study of unemployment has been overlooked. That variable is culture. This article will show that culture can significantly explain cross‐national differences in unemployment rates and offers a link to understanding the global problem of poverty that plagues nations today. © 2012 Wiley Periodicals, Inc.     

Identification management and its bases: Bridging management and marketing perspectives through a focus on affiliation dimensions

There has been growing interest in both management and marketing regarding how individuals become identified with organizations and how organizations attempt to manage these identifications. The authors present a framework built on explicit and implicit points of convergence in research conducted in both these disciplines. In their review of the management and marketing literatures, the authors suggest three fundamental mechanisms, or “bases”, for managing organizational identification: relational, behavioral, and symbolic. Furthermore, the authors argue that how an individual is affiliated with an organization will impact the relative influence of these identification management bases. The authors conclude by suggesting how management and marketing scholars can create a theoretical space for future interdisciplinary work Such a change would involve moving away from “employees” versus “customers” as a prime division between the fields and moving toward a more fine-grained approach that emphasizes the unique characteristics of individual-organizational relationships. M. Teresa Cardador (cardador@uiuc.edu) is a doctoral student in management at the University of Illinois at Urbana-Champaign. Her research explores issues related to workplace attachment and identification, work orientation, and the experience of employees who find work highly meaningful and engaging. Michael G. Pratt (mpratt@uiuc.edu) is a James F. Towey Fellow and an associate professor of management at the University of Illinois at Urbana-Champaign. He earned his Ph.D. at the University of Michigan. His articles have appeared in leading management outlets, includingAdministrative Science Quarterly, theAcademy of Management Journal, theAcademy of Management Review, andResearch in Organizational Behavior. He recently coedited (with Anat Rafaeli) a book titledArtifacts and Organizations: Beyond Mere Symbolism (Lawrence Erlbaum, 2005). His current research examines issues of organizational attachment (e.g., identification and commitment), multiple identities and meaning, and intuition. Dr. Pratt’s work focuses largely on professionals in both traditional and dispersed work contexts.     

Does integrity matter for CSR practice in organizations? The mediating role of transformational leadership

Scholars have long debated whether leader's integrity affects managerial decision making with respect to social responsibility. In this paper, we propose a model in which transformational leadership mediates integrity and corporate social responsibility (CSR) and examine the relationship between these concepts. A survey of 170 senior managers from 50 organizations was conducted. Results indicate that integrity is a predictor of transformational leadership behavior and that transformational leaders’ behaviors are linked to CSR practices. It was also found that leaders rated with higher integrity are engaged in CSR because they exhibit more transformational leadership behaviors. These findings add to the extant literature by demonstrating that integrity is important as transformational leaders engage more actively on ‘responsible’ behaviors. Practical implications call for an understanding among corporate leaders of the benefits of integrity and how it relates to transformational leadership. Organizations can improve their selection and leadership development processes by focusing on these two dimensions.     

Relinking Cross‐functional Collaboration,Knowledge Integration Mechanisms,and Product Innovation Performance: a Moderated Mediation Model

Previous research shows that knowledge integration mechanisms (KIMs) mediate the cross‐functional collaboration‐product innovation performance relationship; however, this mediating effect seems to be rather weak. This study, in contrast, develops a moderated mediation (MOME) model to argue that such a mediating effect is moderated by product innovativeness. A sample comprised of 106 manufacturing firms is utilized in the analyses. A moderated‐mediation approach shows that the mediating effect of KIMs in the linkage between cross‐functional collaboration and product innovation performance varies by different perspectives of product innovativeness. From an industry (macro‐level) perspective, product innovativeness positively moderates the mediating effect of KIMs on product innovation performance; in contrast, such a moderating effect is not significant under a firm (micro‐level) perspective. Copyright © 2011 ASAC. Published by John Wiley & Sons, Ltd.     

Convergence within the EU: Evidence from Interest Rates

The economic and political changes which are taking place in Europe affect interest rates. This paper develops a two-factor model for the term structure of interest rates specially designed to apply to EMU countries. In addition to the participant country's short-term interest rate, we include as a second factor a 'European' short-term interest rate. We assume that the 'European' rate follows a mean reverting process. The domestic interest rate also follows a mean reverting process, but its convergence is to a stochastic mean which is identified with the 'European' rate. Closed-form solutions for prices of zero coupon discount bonds and options on these bonds are provided. A special feature of the model is that both the domestic and the European interest rate risks are priced. We also discuss an empirical estimation focusing on the Spanish bond market. The 'European' rate is proxied by the ecu's interest rate. Through a comparison of the performance of our convergence model with a Vasicek model for the Spanish bond market, we show that our model provides a better fit both in-sample and out-of sample and that the difference in performance between the models is greater the longer the maturity of the bonds.
(J.E.L.: E43, C510).