Showing papers in "Journal of International Business Studies in 1978"
TL;DR: Forty-three studies on the export behavior of firms involving eleven countries were assembled in this article and integrated into a more-or-less meaningful whole that both yields interesting implications and provides a useful background guide for future research on the subject.
Abstract: Forty-three studies on the export behavior of firms involving eleven countries were assembled. (The author believes that they constitute nearly all of the available literature on the subject.) An attempt was made to integrate them into a more-or-less meaningful whole that both yields interesting implications and provides a useful background guide for future research on the subject.
952 citations
TL;DR: In this article, the authors developed a model that stresses the importance of a firm's activities and "pre-export" behavior for the export start, which is based both on more traditional research in international business and recent developments in location theory.
Abstract: In this article we develop a model that stresses the importance of a firm's activities and “pre-export” behavior for the export start. Of special importance in the model are factors such as information, characteristics of the decision-maker, the enterprise environment, and the extraregional expansion of the firm. The model is based both on more “traditional” research in international business and recent developments in location theory.
593 citations
577 citations
TL;DR: In this article, economic, social, political and policy variables are tested for their significance in discriminating among three groups of developing countries designated "unattractive, moderately attractive, and highly attractive" with respect to foreign investment in manufacturing.
Abstract: Forty-four economic, social, political and policy variables are tested for their significance in discriminating among three groups of developing countries designated “unattractive,” “moderately attractive,” and “highly attractive” with respect to foreign investment in manufacturing. Among the six essential discriminators, the only policy variable to emerge is the corporate tax level.
235 citations
TL;DR: In this paper, an extensive investigation of the research and development investments made abroad by seven U.S.-based seven multinational organizations is presented, including Exxon Chemical Company, International Business Machines (IBM), the chemicals and Plastics Group of Union Carbide Corporation; CPC International; Otis Elevator Company; and the Corning Glass Works.
Abstract: This article summarizes the author's extensive investigation of the research and development investments made abroad by seven U.S.-based seven multinational organizations. The article describes the factors that affected the initial Investment in 55 RD the Exxon Chemical Company; International Business Machines (IBM); the chemicals and Plastics Group of Union Carbide Corporation; CPC International; Otis Elevator Company; and the Corning Glass Works. The article also discusses the evolution of the same 55 R&D units established abroad by these seven multinationals.
219 citations
TL;DR: In this paper, the authors identified a typical form of the exporting adoption process regarding two dimensions: the initiating force and the rationality of the export adoption process, and measured the organizational structural characteristics of 35 Nebraska exporting manufacturers.
Abstract: This research identifies a typical form of the exporting adoption process regarding two dimensions—the initiating force and the rationality of the export adoption process. It was hypothesized, first, for this study that, in the export innovation adoption situation, the adoption process would be initiated more often by internally perceived problems or needs rather than by the passively received information about the innovation: exporting. A second major hypothesis took the view that the export adoption process was more rational than nonrational. Third, using various instruments—including Hage and Aiken's index—we measured the organizational structural characteristics of 35 Nebraska exporting manufacturers. The innovation-oriented and nonrational export adoption processes proved to be the more common in this group.
179 citations
TL;DR: This paper investigated the behavior of foreign exchange rates and found that the distribution of the underlying stochastic process for foreign exchange rate changes was stable paretion during fixed rate periods while a Student model provided a relatively better description of floating rates.
Abstract: This paper investigates the behavior of foreign exchange rates. Empirical tests indicate that the distribution of the underlying stochastic process for foreign exchange rate changes was stable paretion during fixed rate periods while a Student model provides a relatively better description of floating rates. These findings point to an important direction for further work on the appropriate distribution for foreign exchange rates and estimates of parameters.
104 citations
TL;DR: In this article, an inquiry into the determinants of U.S. private manufacturing investments in Africa shows that corporate decisions to undertake manufacturing investments abroad are essentially determined by the expected rate of return on investment, the size of the domestic market, the presence of needed raw materials, a sufficiently developed infrastructure, political stability and a favorable investment climate, and good prospects for the growth of private enterprise in the host country.
Abstract: An inquiry into the determinants of U.S. private manufacturing investments in Africa shows that corporate decisions to undertake manufacturing investments abroad are essentially determined by the expected rate of return on investment, the size of the domestic market, the presence of needed raw materials, a sufficiently developed infrastructure, political stability and a favorable investment climate, and good prospects for the growth of private enterprise in the host country. On the other hand, the rate of growth of the domestic market, relatively low overseas wages, and tax concessions and tariff protection offered by host governments have nonsignificant influence on the foreign investment decision.
86 citations
44 citations
TL;DR: In this paper, the stock price behavior of most developed countries has been known to follow the random walk process, eg, in Fama's (3) study on US stocks, Soinik (7), Theil and Leenders (8), and Dryden's (2) work on European stocks An interesting result emerges from the comparison of these studies: that although the random-walk hypothesis would adequately depict the behavior of European stock markets, the deviation from a random walk is more apparent in European exchanges than in the US stock markets.
Abstract: * The stock price behavior of most developed countries has been known to follow the random walk process, eg, in Fama's (3) study on US stocks, Soinik (7), Theil and Leenders (8), and Dryden's (2) work on European stocks An interesting result emerges from the comparison of these studies: that although the random walk hypothesis would adequately depict the behavior of European stock markets, the deviation from a random walk is more apparent in European exchanges than in the US An accepted explanation takes into account the differences in the institutional characteristics of the two markets; such as, stringencies of disclosure requirements, control on inside trades, thinness of markets, and discontinuities of trading, etc (7) If the degree of "structure" or "organization" affects the degree of conformity to the random walk process, then we should expect countries, whose stock exchanges are not as "organized" as the European or US exchanges-eg, lesser degree of regulations or disclosure requirements-to exhibit greater deviation from a random price behavior Consequently, it would be interesting to see the results if similar tests were performed on stock prices from nonUS or European exchanges In the following, we will discuss results of serial correlation for five Far Eastern countries: Australia, Hong Kong, Japan, Philippines, and Singapore These results are then compared to those of the previous studies on US and European stocks
38 citations
TL;DR: In this paper, the authors define the services and nature of export management companies in the United States and discuss the organizational characteristics of these firms, including country expertise, product expertise, the factors involved in taking on a new line, and the costs that may be expected by manufacturers in using an EMC.
Abstract: This article helps to define the services and nature of export management companies in the United States. Specifically, attention is given to the organizational characteristics of these firms. Also discussed are: the breadth of country expertise, the breadth of product expertise, the factors involved in taking on a new line, and the costs that may be expected by manufacturers in using an EMC. Implications for management and for government policy are considered at the end of the article.
TL;DR: In this article, a cross-cultural, repeated measures study of advertising attitudes among subscribers toward product test magazines is presented, showing that older subscribers have less favorable attitudes to all aspects of advertising than younger subscribers.
Abstract: Results of a cross-cultural, repeated measures study of advertising attitudes among subscribers toward product test magazines are presented. The subscribers, seen as an important group of purchasers and trend setters, are found to have less favorable attitudes to all aspects of advertising studied in 1976 than in 1970, both in the U.S and West Germany. Differences in attitudes among age groups are much more clearly structured in 1976, with younger subscribers showing consistently lower attitudes. Differences are found between countries, particularly in varied views of economic and social dimensions. Implications are discussed and future research suggested.
TL;DR: In this paper, the authors tried to explain the variation in the bid-ask spread over time and across currencies by examining the costs and risks banks face when dealing in foreign exchange and defined the proper risk measure for open forward position.
Abstract: The bid-ask spread on forward contracts determines, in part, the effectiveness of the foreign exchange market as a vehicle for hedging exchange risk. The purpose of this paper is to try to explain the variation in the spread over time and across currencies by examining the costs and risks banks face when dealing in foreign exchange. The paper also attempts to define the proper risk measure for open forward position in foreign exchange.
TL;DR: In this paper, the authors show how mathematical programming can be used to design a netting system capable of minimizing the total costs involved in settling interaffiliate accounts, where the netting is done by paper and pencil.
Abstract: Global production rationalization typically leads to a heavy volume of intercompany fund flows. By transferring only a netted amount of these payments, significant savings can be realized in the form of reduced foreign exchange spreads, float, and other transaction costs. However, if this netting is done by paper and pencil, opportunities to reduce transfer costs may be missed, especially where there is a complex pattern of cross-border transactions. The purpose of this paper is to show how mathematical programming can be used to design a netting system capable of minimizing the total costs involved in settling interaffiliate accounts.
TL;DR: The authors survey the reactions of financial executives (accountors) and professional accountants to the Financial Accounting Standards Board's recent pronouncement on foreign currency translation and find that CPAs were generally supportive of the FASB and the provisions of its controversial standard.
Abstract: This article surveys the reactions of financial executives (accountors) and professional accountants to the Financial Accounting Standards Board's recent pronouncement on foreign currency translation. CPAs were found to be generally supportive of the FASB and the provisions of its controversial standard. Financial executives, in stark contrast, were generally opposed to the major provisions of FASB 8.
TL;DR: In this article, it was shown that the profit maximizing price is a function of the level of ownership in the subsidiary, the dividend payout ratio of the subsidiary and the effective marginal tax rates in both parent and subsidiary countries, and the tariff on the goods transferred.
Abstract: Multinational enterprises are able to affect the profits reported by their subdivisions by altering transfer prices of goods shipped between affiliates. This paper shows that the profit maximizing price is a function of the level of ownership in the subsidiary, the dividend payout ratio of the subsidiary, the effective marginal tax rates in both parent and subsidiary countries, and the tariff on the goods transferred. In general, it is found that Multinational Enterprises appear to set transfer prices to Canadian subsidiaries so as to maximize the overall profits of the enterprise.
TL;DR: In this article, the authors present an analysis of the benefits of portfolio diversification in a two-parameter equilibrium capital market with homogenous expectations and show that there is no correspondence between the risky Errunza portfolio and the portfolio generated by a different expectations generator.
Abstract: The thesis that there are gains from international diversification has been made several times in the professional literature as a reading of several of Errunza's citations clearly illustrates. The diversification argument that is presented consists essentially of indicating that (1) both the derived efficient frontier and optimal portfolio depend upon, among other things, the covariances of returns between securities and (2) intracountry covariances are indeed higher than intercountry convariances.1 Ergo, the presumption that international diversification results in a more desirable mean-variance efficiency locus-optimal portfolio. This argument has considerable intuitive appeal. However, a more general as well as more rigorous delineation would have been to structure the argument in terms of optimal portfolio choice in a two-parameter equilibrium capital market with homogenous expectations. This in turn would imply that (1) the mean-variance portfolio decision rule would exhibit the separation property-i.e., the decision with regard to the composition of the risky assets in the portfolio would be independent of the decision with regard to the proportion of the risky assets in the portfolio; (2) the investment opportunity set consists of two assets-i.e., the market portfolio consisting of all risky assets and the riskless asset; and (3) any portfolio which includes only a subset of the market portfolio would be characterized by having some diversifiable or residual risk, and hence, by definition, would be inefficient. If the argument for international diversification were presented in this manner, an important limitation of Errunza's empirical procedure would have been transparent. The procedure employed by Errunza to generate the efficiency locus was via a quadratic programming algorithm of Boles, et al. The utilized data inputs were historical (19571971; 1959-1972) means, variances, and co-variances of quarterly and annual returns of various countries' national stock price indices adjusted for U.S. exchange rate fluctuations.2'3 This procedure incorporates a crucial assumption about the set of investor expectations which concommittantly may lead to implications that conflict with our prior portfolio choice discussion. Specifically, as indicated, the set of investor beliefs about a country's returns, variances, and covariances is identical to the historical magnitudes of these variables.4 Thus, the estimated gains from portfolio diversification A la Errunza's procedure hold precisely only for individuals having this specific expectations generator. Hence, depending upon the particular sequence of history, there may be little, if any, correspondence between the risky Errunza portfolio and the portfolio of all risky marketable assets, or for that matter, with the risky portfolio generated by a different expectations generator under ceteris paribus Errunza conditions.5 Indeed, Tables 1 and 2 of Errunza aptly illustrate the first point above. Further, there is no presumption, particularly given capital market equilibrium, of any correspondence between historical mean-variance portfolio dominance of period 1 and ex ante mean-variance portfolio efficiency of period 2.6,7 Accordingly, two useful and interesting exercises would have been to assess the stationarity of the intercountry pairwise covariances and the serial correspondence la portfolio composition between
TL;DR: The authors empirically investigated currency futures traded on the International Monetary Market (IMM) of the Chicago Mercantile Exchange (CME) and found that currency future prices were consonant with the interest rate parity theorem.
Abstract: This paper empirically investigates three questions concerning currency futures traded on the International Monetary Market (IMM) of the Chicago Mercantile Exchange: 1) Are currency future prices consonant with the interest rate parity theorem? 2) Does a characteristic bias exist in the currency futures prices? 3) What has been the holding period return experience of currency futures since their inception on the IMM?
TL;DR: Using trade and industry data disaggregated to the four-digit S.I.C. level, the authors analyzes various hypotheses related to directions of U.S. international trade and concludes that capital intensity, skill intensity, and, to a lesser degree, economies of scale and industry structure are important determinants of trade patterns.
Abstract: Using trade and industry data disaggregated to the four-digit S.I.C. level, the paper analyzes various hypotheses related to directions of U.S. international trade. The study concludes that capital intensity, skill intensity, and, to a lesser degree, economies of scale and industry structure are important determinants of trade patterns. Tariffs appear usually to be established against foreign industries that threaten domestic ones, but there exists limited evidence that tariffs can reverse expected directions of trade.
TL;DR: In the past, governments in advanced countries have generally considered that direct foreign investment (DFI) in less developed countries (LDCs) had beneficial, or at least neutral, effects on their own developed national economies as mentioned in this paper.
Abstract: In the past, governments in advanced countries have generally considered that direct foreign investment (DFI) in less developed countries (LDCs) had beneficial, or at least neutral, effects on their own developed national economies. This view has recently come under attack from advanced-country unions concerned with “job loss,” businessmen concerned with competition from LDCs, and government officials concerned with relative declines in technological strengths.
TL;DR: In this article, questionnaires were sent out to both alumni and potential employers of business graduates at the University of Notre Dame to determine the importance of international business in the college curriculum and determining what aspects of International business education are most important.
Abstract: As a preliminary step in increasing the international dimensions of the College of Business Administration at the University of Notre Dame, questionnaires were sent out to both alumni and potential employers of business graduates. These surveys were aimed at determining the importance of international business in the college curriculum and determining what aspects of international business education are most important. This paper emphasizes the similarity of responses obtained from these two diverse groups.
TL;DR: In this article, an exploratory field study on manufacturing technology transfers within MNCs was conducted. And the authors developed a research design that differentiates among MNC companies according to their maturity with respect to International involvement.
Abstract: This article reports on an exploratory field study on manufacturing technology transfers within MNCs. A research design was developed that differentiates among MNCs according to their maturity with respect to International involvement. Trends in technology transfers were analyzed using number of countries with manufacturing subsidiaries and years of involvement in international business as predictor variables. We analyzed total technology exports and imports, new technologies transferred, and the level at which these transfers took place.
TL;DR: In this paper, an empirical study of the Colombian foreign investment board and its real decision-making process is presented, based on more than 200 interviews of government officials and company executives and on a study of 25 foreign investment proposals.
Abstract: This article presents an empirical study of foreign investment board and of its real decision-making process. The analysis, based on more than 200 interviews of government officials and company executives and on a study of 25 foreign investment proposals reveals the existence of a large gap between screening regulations and administrative facilities; a series of propositions are offered to explain this gap. The article concludes by giving an assessment of the Colombian foreign investment screening process and by suggesting implications for the MNC negotiation strategy.
TL;DR: In this article, the authors compare several traditional forecasting methods with a number of time-series techniques and conclude that U.S. exports can be forecasted with the use of several alternative models.
Abstract: Traditionally, models of U.S. exports tend to emphasize relationships involving independent variables that measure demand in the importing countries, domestic (U.S.) demand or the level of business activity, direct foreign investment, U.S. grants and loans, etc. This paper compares several of these traditional forecasting methods with a number of time-series techniques. The results indicate that U.S. exports can be forecasted with the use of several alternative models.
TL;DR: This article reported the response of 103 financial managers of United States multinational corporations to the Financial Accounting Standards Board Statement #8 with regard to foreign currency translation and found that a sizable majority of financial managers felt that FAS #8 was inferior to their prior translation method and should be modified or eliminated.
Abstract: This study reports the response of 103 financial managers of United States multinational corporations to the Financial Accounting Standards Board Statement #8 with regard to foreign currency translation. A sizable majority of financial managers felt that FAS #8 was inferior to their prior translation method and should be modified or eliminated. The article examines reported reasons for these responses.
TL;DR: In this paper, the authors examined management information techniques deemed useful in planning and implementing a pricing strategy for export activity of manufactured products from developing nations, arguing that the use of direct-costing methods combined with the differential-cost approach will help establish a floor price which will lead to profit maximization.
Abstract: This article examines management information techniques deemed useful in planning and implementing a pricing strategy for export activity of manufactured products from developing nations. The existence of alternative accounting principles governing the identification, measurement, and communication of product cost elements requires that a careful examination be made of the different costing methods and their impact on the net inflow of foreign currency and the realization of an adequate rate of return. This study rejects the use of the full-costing method for export pricing in developing nations. Instead, it argues that the use of direct-costing methods combined with the differential-cost approach will help establish a floor price which will lead to profit maximization. The author suggests three areas that require attention for such maximization to occur.
TL;DR: In this article, the authors present a technique for optimal hedging decisions for a general set of international financial problems, specifically within the context of a floating exchange rate regime, which requires neither exchange rate projections nor the specification of a utility function for the decision-maker.
Abstract: This article presents a technique for optimal hedging decisions for a general set of international financial problems, specifically within the context of a floating exchange rate regime. The techniques discussed are designed specifically to require neither exchange rate projections nor the specification of a utility function for the decision-maker. Rather, the decision-maker is encouraged to analyze the implications of a given financial strategy over a reasonable range of future exchange rates, choosing the strategy that best meets corporate financial goals in light of possible (and uncertain) exchange rate fluctuations.