Showing papers in "The International Trade Journal in 1993"
TL;DR: In this article, the authors discuss the validity of this model against the backdrop of assumptions in two key dimensions, namely, firms' experience of international business and the industry's degree of internationalization.
Abstract: The process, or evolution, through which multinational firms have reached their present international position is often referred to as “the internationalization process of the firm.” The most widely accepted theory of this phenomenon explains this slow, and sequential process in terms of organizations’ growth and learning. It is every now and then argued that this approach has lost some of its explanatory value. The purpose of this article is to discuss the validity of this model against the backdrop of assumptions in two key dimensions, namely, firms’ experience of international business and the industry's degree of internationalization.
105 citations
TL;DR: In this article, a cross-sectional time series model was estimated to explain the influence of the openness of an economy and political instability on gross inflow of foreign direct investments into developing countries.
Abstract: A cross-sectional time series model was estimated to explain the influence of the openness of an economy and political instability on gross inflow of foreign direct investments into developing countries. Results indicate positive relation between the openness of developing economies and the inflow of foreign direct investments and negative relation between political instability and the inflow of foreign direct investments. Research findings and policy implications are presented.
18 citations
TL;DR: In this paper, the authors argue that the validity of many popular explanations for counter-trade is suspect and argue that countertrade exemplifies bundled market transactions, a phenomenon generally observed when transaction difficulties are encountered The bundling is a contractual arrangement that alleviates the market-for-lemons problem, the principal-agency problems, difficulties in the protection of property rights, and time-inconsistency problems Bundled transactions will remain as long as the transaction difficulties exist.
Abstract: Countertrade is a peculiar form of transaction allegedly popular in less developed countries and in centrally planned economies It attracted much interest in the past decade As the landscape of economic systems drastically changed recently, one wonders what the fate of countertrade will become In this article we review various motivations for countertrade We argue that the validity of many popular explanations is suspect We contend that countertrade exemplifies bundled market transactions, a phenomenon generally observed when transaction difficulties are encountered The bundling is a contractual arrangement that alleviates the market-for-lemons problem, the principal-agency problems, difficulties in the protection of property rights, and time-inconsistency problems Bundled transactions will remain as long as the transaction difficulties exist Terminology may change, but the economic do not
13 citations
TL;DR: The motivation to countertrade can be attributed to many factors including circumventing credit and foreign exchange problems, surmounting barriers to otherwise closed markets, hiding price cuts, or simply the need by exporters to remain competitive as mentioned in this paper.
Abstract: The motivation to countertrade (CT) can be attributed to many factors including circumventing credit and foreign exchange problems, surmounting barriers to otherwise closed markets, hiding price cuts, or simply the need by exporters to remain competitive. However, CT arrangements essentially constitute packages of buying, selling, and financing contracts. Hence, to explain CT requires explanation of why package deals are preferred to a set of component contracts. Examination of domestic CT with “international ramifications” stripped out suggests the inherent rationales are wishes to hide price cuts and to overcome cash shortages, motivations that are consistent with data collected from U.K. and Canadian firms, which also stress problems of contracting complexity and of finding uses for the countertraded goods.
11 citations
TL;DR: The J-curve theory predicts that the balance of trade will initially deteriorate before improving after a currency depreciation as mentioned in this paper, and empirical evidence that some of the 1985-1987 tra...
Abstract: The J-curve theory predicts that the balance of trade will initially deteriorate before improving after a currency depreciation. This article finds empirical evidence that some of the 1985-1987 tra...
10 citations
TL;DR: In this article, the export activities of excellent exporters are studied and a broad range of self-identified business activities indicate that high-performing exporters were more willing to accept risks in dealing with customers in South America than were lower performing exporters.
Abstract: This paper studies the export activities of excellent exporters. “E”-award-winning exporters are divided into tercile extremes based on performance, and then the highest performing group, excellent exporters, is contrasted with the lowest performing group through the use of discriminant analysis. Results from a broad range of self-identified business activities indicate that high-performing exporters were more willing to accept risks in dealing with customers in South America than were lower performing exporters.
7 citations
TL;DR: In this paper, a regional Ricardo-Viner model is used, in which markets for residential land create increasing endogenous relocation costs, so that under neutral assumptions an improvement in the terms of trade leads to an absolute fall in welfare for labor in a declining region, while labor is mobile.
Abstract: Some stylized facts of protection can be addressed by a regional trade model in which the existence of extra markets constitutes a barrier to labor relocation and motivates demands for protection A regional Ricardo-Viner model is used, in which markets for residential land create increasing endogenous relocation costs, so that under neutral assumptions an improvement in the terms of trade leads to an absolute fall in welfare for labor in a declining region, while labor is mobile, giving a new resolution of the “neoclassical ambiguity”
6 citations
TL;DR: Recently available data on intra-firm trade by Japanese multinationals suggest that the tendency to trade heavily with (Japanese) supplier firms with established relationships is not a conspiracy to promote a trade surplus, but rather an outcome of standard Japanese practices that closely resemble hierarchical vertical integration.
Abstract: The Kreinin hypothesis argues that the viability of an open, GATT-oriented global trading system could be threatened by the failure of Japan, a major player, to open its domestic markets and to source intermediate goods from foreign firms on a nondiscriminatory basis. Newly available data on intrafirm trade by Japanese multinationals suggest that the tendency to trade heavily with (Japanese) supplier firms with established relationships is not a conspiracy to promote a trade surplus, but rather an outcome of standard Japanese practices that closely resemble hierarchical vertical integration. But a breakdown of the GATT system is still a very real possibility because the Japanese chronic current-account surplus contributes to even further gains in the international competitiveness of major Japanese industries, and this may prove intolerable to the other major players.
4 citations
TL;DR: In this article, the authors examined the effect of marketing cost differentials on the ability of small countries to compete with large-country producers in goods manufactured under economies of scale and showed that the mere presence of scale economies does not necessarily retard the performance of small country producers unless export marketing costs exceed domestic marketing costs.
Abstract: The paper examines the effect of marketing cost differentials on the ability of small countries to compete with large-country producers in goods manufactured under economies of scale. It is shown that the mere presence of scale economies does not necessarily retard the performance of small-country producers unless export marketing costs exceed domestic marketing costs. When economies of scale and positive differences between export and domestic marketing costs are simultaneously present, small countries with potentially more efficient producers may be unable to export to large countries served by less efficient local producers. Furthermore, the latter may end up exporting to the former. The policy implications is that subsidization of exports in conjunction with restrictions on domestic prices enhances national welfare.
3 citations
TL;DR: In this article, the authors analyze the present regulatory regime on trade secrets in developing countries and conclude that the present system fails to balance the property rights of the innovator with that of the interest of the public.
Abstract: Most of the studies on international technology transfer deal mainly with the traditional issues of patents and trademarks. There is very little analysis of the important policy issues pertaining to trade secrets—an area that is becoming increasingly important as more and more companies maintain their technologies in the form of trade secrets rather than patents. This article analyzes the present regulatory regime on trade secrets in developing countries and concludes that the present system fails to balance the property rights of the innovator with that of the interest of the public. It addresses some major policy issues and makes certain recommendations to resolve the problem.
3 citations
TL;DR: In this paper, the authors determine the range of investment opportunities, the ecopolitical environment, expected rates of return, and risk factors in selected East Asian countries as perceived by leading U.S. multinational corporations.
Abstract: The focus of this article is to determine the range of investment opportunities, the ecopolitical environment, expected rates of return, and risk factors in selected East Asian countries as perceived by leading U.S. multinational corporations (MNCs). The study is conducted primarily by means of a mailed questionnaire sent to chief financial officers (CFOs) and officers in charge of international operations. Respondents represent a broad range of manufacturing and service-type MNCs. Data gathered by questionnaires and 10K statements are subjected to various statistical tests utilizing cross-tabulations and analysis of variance.
TL;DR: The European entrant into the world aircraft market is Airbus Industrie, a consortium of four European nations as mentioned in this paper, which has increased its share of the world's jumbo jet aircraft market and has become the second largest manufacturer; only Boeing is larger.
Abstract: The production of commercial jet aircraft has been a hallmark of US. technology. Historically, U.S. firms such as Boeing, McDonnell-Douglas, and Lockheed have dominated the world aircraft market. This has led to the attempt on the part of European governments to foster aircraft companies that could compete with the U.S. firms. One such European entrant into the world aircraft market is Airbus Industrie, a consortium of four European nations. Aided by governmental subsidies, Airbus has increased its share of the world's jumbo jet aircraft market and has become the second largest manufacturer; only Boeing is larger. The upsurge of Airbus, coupled with other market forces, has driven the U.S. firm, Lockhead, out of the commercial aircraft market. The two remaining U.S. firms, Boeing and McDonnell-Douglas, have felt considerable competitive pressure. Of major concern is the extent to which governmental subsidies have assisted Airbus in developing and manufacturing commercial jet aircraft. U.S. manufacturers h...
TL;DR: In this paper, the authors show that international trade is far more complex than price/quantity analysis and two-nation/two-product analysis and show that tariffs and other impediments to trade cause a loss of economic efficiency.
Abstract: Standard international trade models universally consider maximizing the availability of inexpensive goods as the objective of international trade. They then go on to show that tariffs and other impediments to trade cause a loss of economic efficiency. Fewer goods are available in the trading nations because of the impediments. The common method of analysis is to use price / quantity curves and two-nation / two-product curves. Here we show that international trade is far more complex. It is a vast network beyond our present ability to accurately model. It can, however, be structured as a linear program. As a linear program it has many of the characteristics of a network. The chief difference is that linear programs provide static analysis. The world trade network is dynamic. However, by structuring it as a linear program, many of the components of international trade omitted by price/ quantity and two-nation / two-product analysis can be incorporated. An important part of any programming analysis is determ...
TL;DR: In this paper, it was shown that a voluntary export restraint (VER) has no effect on equilibrium prices, real incomes, and welfare using a multidimensional general equilibrium model that supports multiple world supply configurations at one equilibrium price vector.
Abstract: In this paper a voluntary export restraint (VER) is demonstrated to have no effect on equilibrium prices, real incomes, and welfare using a multidimensional general equilibrium model that supports multiple world supply configurations at one equilibrium price vector. This set of configurations is called replicate equilibria. It is shown that a VER that precludes one equilibrium may not preclude a replicate. It is also shown that VERs and quotas may not be equivalent to a tariff even with perfect competition in all markets.