SPRING 2013
VOLUME14, NUMBER1

FOREIGN DIRECT INVESTMENT AND ECONOMIC DEVELOPMENT: AN EXPLORATORY STUDY OF THE INTERNALISATION STRATEGY OF A TECHNOLOGY-INTENSIVE MULTINATIONAL

Stephanie Cadeddu, Jerome Donovan, and Eryadi K Masli

Foreign direct investment is considered an important driver of economic development, particularly through its potential transfer of knowledge, know-how and technology to host countries which may enable industrial or economic upgrading. This study explores the internationalisation process of a technological-intensive Multinational Enterprise (MNE) and, through internalisation theory, explores how it transferred its knowledge, know-how and technology to the host country it entered. Through this exploratory study, findings confirm theoretical expectations developed from the extensive literature review, with data showing that the MNE adopted strict governance structures over the activities of its subsidiary, restricting the transfer of its firm specific advantages to the host market, while leveraging from the central coordination and management of product development and value chain activities.


https://doi.org/10.51240/jibe.2013.1.1          PDF

HIGHLY ATTRACTIVE MODELS IN ADVERTISING: WHAT CAUSES NEGATIVE AFFECT?

Nguyen Hoang Sinh

Highly attractive models (HAMs) have been popularly used in advertising to impact psychologically on the message receiver in the hopes of increasing the advertisement’s effectiveness. The marketing literature is replete with evidence of the positive effects of using HAMs. However, support for their effectiveness is somewhat conflicted. The research attempts to add to the body of knowledge, specifically through exploring individual difference variables (model characteristics, product types, comparison motives, and culture) impact on negative affect. This study also investigates whether advertising skepticism determined by culture has an impact on negative affect as a result of a HAM comparison. The methodology uses a 3 (beauty types) x 2 (product types) x 2 (comparison motives) between-subjects experimental design. Respondents for the main study are female students across cultures from international programs and universities in Vietnam. The results supported all hypotheses; except product types shown having no impact on negative affect. The research also confirmed there are interrelationships between culture and skepticism. These findings have implications regarding the potentially negative influence of advertising including HAMs for practitioners, academics and public policy makers.


https://doi.org/10.51240/jibe.2013.1.2          PDF

TRADE FACILITATION AND PERFORMANCE OF MANUFACTURING EXPORTS FROM CAMEROON

Arnaud F Djemmo

Cameroon’s “Vision 2035” considers the increase of manufacturing exports as the key factor of its “emergence” in 2035. In this context, measures to reduce manufacturing production and export costs should be taken with primary attention to reforms in trade facilitation. We use an augmented gravity model to evaluate the impact of five trade facilitation measures - port efficiency, customs efficiency, regulatory environment, use of ICT and quality of roads - on the performance of the manufacturing exports from Cameroon. Our results confirm the positive role of physical infrastructures on African exports. Using the Poisson Pseudo Maximum Likelihood to deal with the presence of “zero” in our bilateral trade matrix, we find that port efficiency and quality of roads are the main drivers of trade facilitation in Cameroon.


https://doi.org/10.51240/jibe.2013.1.3          PDF

UNCERTAINTY, ABSORPTIVE CAPACITY, AND REAL OPTION VALUE OF INTERNATIONAL INVESTMENT: AN EXAMINATION OF PRIOR EXPERIENCE

Sangcheol Song

Considering that experience develops a firm’s absorptive capacity, this paper examines the moderating effects of firms’ prior experience with high uncertainty and international investments on the real options value of subsequent and similar investments under uncertainty. In addition to the firm’s real option investments, we propose that consideration for a firm’s capability to perceive and respond to exogenous uncertainty and future opportunities would lead to a better understanding of the value of real options under uncertainty. Differential absorptive capacity based on prior experience with similar type of uncertainty and investment leads to heterogeneous value of subsequent uncertainty and investment.


https://doi.org/10.51240/jibe.2013.1.4          PDF

BANKING SYSTEM RESILIENCE AND FINANCIAL STABILITY - AN EVIDENCE FROM INDIAN BANKING

Vighneswara Swamy

This paper while emphasising the importance of the concept of financial stability in wake of recent global financial crisis in particular and other (banking and financial) crises in general attempts to highlight the significance of the soundness of banking sector in emerging economies where banking sector constitutes a lion’s share in the financial system. This study examines banking sector stability by constructing a micro vector auto regressive (VAR) model and establishes the significance of the interrelatedness of the bank-specific variables such as; Liquidity, Asset Quality, Capital Adequacy and Profitability. Further, the paper offers a substantive review of literature on the concept of financial stability in backdrop of the ongoing definition debate for financial stability. A significant contribution of this study is that, by employing the most appropriate key determinants of banking sector soundness, the paper constructs a recursive micro VAR model to explain the interdependence and comovement of the banking stability covariates in a bank-dominated financial system that aids in understanding the dynamics of financial stability of emerging economies


https://doi.org/10.51240/jibe.2013.1.5          PDF