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Asynchronous current account trends between North and South of the Euro Area were accompanied by significant appreciations of real exchange rate originating in the strong shifts in consumer prices and unit labor costs in the periphery economies relative to the core countries of the Euro Area. The issue is whether the real exchange rate is a significant driver of persisting current account imbalances in the Euro Area considering that, according to some authors, differences in domestic demand are more important than is often realized. In the paper we examine relative importance of real exchange rate and demand shocks according to the current account adjustments in the Euro Area member countries. Our results indicate that while the prices and costs related determinants of external competitiveness affected current account adjustments primarily during the pre-crisis period, demand drivers shaped current account balances mainly during the crisis period.

Purpose: Following the theoretical literature on growth model with externalities, the chapter aims at finding empirical evidence of the main sources of economic interdependencies in Europe.

Methodology/approach: A two-step econometric procedure is adopted. In the first step, in order to evaluate growth spillovers in Europe, cointegration relationships between indexes of industrial production per capita are estimated for 15 European countries. The estimated coefficients, interpreted as long-run elasticities between European countries, appear to be different between countries and unstable over time. In the second step, these coefficients are explained by trade, specialization, research and development (R&D), and macroeconomic variables.

Findings: Panel estimations show strong evidence in favor of a positive relationship between openness, country size, knowledge accumulation, and the long-run sensitivity to European income. European income spillovers are not explained by the specialization of trade and production. We conclude that countries that benefit the most from economic integration are the largest and those that invest the most in R&D.

Originality/value of chapter: The two-step approach adopted in this chapter is original and allows for measuring the impact of various determinants of externalities at the same time.

This research was funded in part by the Center for International Business Research, University of South Carolina.

This research aims to investigate whether and to what extent the co-movements of cross-country business cycles, cross-country stock market cycles and cross-country real estate market cycles are linked across G7 from February 1990 to June 2014.

The empirical approaches include correlation analysis on Hodrick–Prescott (HP) cycles, HP cycle return spillovers effects using Diebold and Yilmaz’s (2012) spillover index methodology, as well as Croux et al.’s (2001) dynamic correlation and cohesion methodology.

There are fairly strong cycle-return spillover effects between the cross-country business cycles, cross-country stock market cycles and cross-country real estate market cycles. The interactions among the cross-country business cycles, cross-country stock market cycles and cross-country real estate market cycles in G7 are less positively pronounced or exhibit counter-cyclical behavior at the traditional business cycle (medium-term) frequency band when “pure” stock market cycles are considered.

The research is subject to the usual limitations concerning empirical research.

This study finds that real estate is an important factor in influencing the degree and behavior of the relationship between cross-country business cycles and cross-country stock market cycles in G7. It provides important empirical insights for portfolio investors to understand and forecast the differential benefits and pitfalls of portfolio diversification in the long-, medium- and short-cycle horizons, as well as for research studying the linkages between the real economy and financial sectors.

In adding to the existing body of knowledge concerning economic globalization and financial market interdependence, this study evaluates the linkages between business cycles, stock market cycles and public real estate market cycles cross G7 and adds to the academic real estate literature. Because public real estate market is a subset of stock market, our approach is to use an original stock market index, as well as a “pure” stock market index (with the influence of real estate market removed) to offer additional empirical insights from two key complementary perspectives.

Using a meta-regression analysis, we quantitatively review the empirical literature on the relation between effective tax rate (ETR) and firm size. Accounting literature offers two competing theories on this relation: The political cost theory, suggesting a positive size-ETR relation, and the political power theory, suggesting a negative size-ETR relation. Using a unique data set of 56 studies that do not show a clear tendency towards either of the two theories, we contribute to the discussion on the size-ETR relation in three ways: First, applying meta-regression analysis on a US meta-data set, we provide evidence supporting the political cost theory. Second, our analysis reveals factors that are possible sources of variation and bias in previous empirical studies; these findings can improve future empirical and analytical models. Third, we extend our analysis to a cross-country meta-data set; this extension enables us to investigate explanations for the two competing theories in more detail. We find that Hofstede’s cultural dimensions theory, a transparency index and a corruption index explain variation in the size-ETR relation. Independent of the two theories, we also find that tax planning aspects potentially affect the size-ETR relation. To our knowledge, these explanations have not yet been investigated in our research context.

Purpose – This chapter aims at investigating the impact of cross-border knowledge spillovers on technological innovation in the renewable energy sector.

Methodology/approach – The analysis presented in the chapter assumes that technological knowledge exhibits several tacit elements and requires established connections to flow between countries. A new measure for knowledge spillovers is obtained by weighting international R&D stocks through bilateral trade flows. The country-level patenting activity is modelled through a knowledge production function. The sample includes 18 OECD countries over the 1990–2006 period. Estimates are obtained through panel data techniques.

Findings – Our econometric results show that international knowledge developed by other countries has positive effects on the focal country's innovation in renewable energy technologies. Cross-country linkages, rather than mere geographic proximity, are found to favour cross-country knowledge spillovers.

Impact – The research contributes to the design of energy innovation policies. Public R&D is confirmed to be a relevant input to energy innovation. Coordination between countries in energy R&D activities can be required, particularly when countries maintain mutual linkages.

Originality – This study adds empirical evidence on the effect of cross-country knowledge spillovers and on the channels through which technological knowledge diffuses globally. It contributes to the emerging empirical research on energy innovation.

Previous studies have found significant differences in consumer attitudes toward marketing between countries and attributed such variations to differences in the stage of consumerism development and cultural values. This study aims to test these competing hypotheses using econometric decomposition to identify the source of such cross‐country variations.

Using survey data of consumer attitudes toward marketing from China and Canada, this study adopts econometric decomposition to examine the cross‐country difference in consumer attitudes toward marketing.

The results show that Chinese consumers have more positive attitudes toward marketing than Canadians and the two countries differ significantly across all predictor variables. However, the results of decomposition suggest that consumerism, individualism and relativism do not have any significant effect on the country gap in consumer attitudes toward marketing, while idealism has a significant coefficient effect.

The study finds different effects of cultural values on consumer attitudes across countries and has meaningful implications for international marketing strategies.

The study investigates the sources of cross‐national differences in consumer attitudes toward marketing using rigorous analyses to improve the accuracy of cultural attribution for international marketing and cross‐cultural consumer research.

To deepen our understanding about the development of turnover intention, the purpose of this paper is to develop a conceptual model based on the stress theory to explain cross-country differences in the formation of turnover intention, complementing previous literature that mainly emphasizes the effect of monetary compensation on turnover intention without taking into account anxiety and pressure.

Empirical testing of this model by investigating personnel across Taiwan’s and Indonesia’s banks confirms the applicability of stress theory in cross-cultural business management. Of the 161 Chinese-language questionnaires distributed to the employees from the three large banks in Taiwan, 137 usable questionnaires were returned for a response rate of 85 percent. At the same time, of the 234 Indonesian-language questionnaires distributed to the employees from the two large banks in Indonesia, 219 usable questionnaires were returned for a response rate of 93.6 percent.

This research reveals that mental disengagement fully mediates the indirect relationship between performance-related anxiety and turnover intention, while positive reinterpretation fully mediates the indirect relationship between work pressure and turnover intention. Furthermore, the effects of performance-related anxiety and work pressure on turnover intention are moderated by cross-country differences.

First, the finding concerning the full mediating role of mental disengagement complements prior justifications of the conservation of resources theory. Second, the finding of this study regarding the full mediating role of positive reinterpretation complements the previous findings of Taylor’s (1983) theory of cognitive adaptation, which conceptualizes employees as active agents in restoring the psychological equilibrium in the aftermath of a competitive pressurized event.

The search for more effective policies, choice of optimal implementation strategies for achieving defined policy targets (e.g., cost-containment, improved access, and quality healthcare outcomes), and selection among the metrics relevant for assessing health system policy change performance simultaneously pose continuing healthcare sector challenges for many countries of the world. Meanwhile, research on the core drivers of healthcare costs across the health systems of the many countries continues to gain increased momentum as these countries learn among themselves. Consequently, cross-country comparison studies largely focus their interests on the relationship among health expenditures (HCE), GDP, aging demographics, and technology. Using more recent 1980–2014 annual data panel on 34 OECD countries and the panel ARDL (Autoregressive Distributed Lag) framework, this study investigates the long- and short-run relationships among aggregate healthcare expenditure, income (GDP per capita or per capita GDP^_HCE), age dependency ratio, and “international co-operation patents” (for capturing the technology effects). Results from the panel ARDL approach and Granger causality tests suggest a long-run relationship among healthcare expenditure and the three major determinants. Findings from the Westerlund test with bootstrapping further corroborate the existence of a long-run relationship among healthcare expenditure and the three core determinants. Interestingly, GDP less health expenditure (GDP^_HCE) is the only short-run driver of HCE. The income elasticity estimates, falling in the 1.16–1.46 range, suggest that the behavior of aggregate healthcare in the 34 OECD countries tends toward those for luxury goods. Finally, through cross-country technology spillover effects, these OECD countries benefit significantly from international investments through technology cooperations resulting in jointly owned patents.

The use of economic sanctions has grown dramatically in recent decades. Nevertheless, many arguments are presented in the public policy space regarding their effects on target populations. The author presents the first systematic analysis of the effects of sanctions on living conditions in target countries.

This paper provides a comprehensive survey and assessment of the literature on the effects of economic sanctions on living standards in target countries. The author identifies 31 studies that apply quantitative econometric or calibration methods to cross-country and national data to assess the impact of economic sanctions on indicators of human and economic development. The author provides in-depth discussions of three sanctions episodes—Iran, Afghanistan and Venezuela—that illustrate the channels through which sanctions affect living conditions in target countries.

Of the 31 studies, 30 find that sanctions have negative effects on outcomes ranging from per capita income to poverty, inequality, mortality and human rights. The author provides new results showing that 54 countries—27% of all countries and 29% of the world economy— are sanctioned today, up from only 4% of countries in the 1960s. In the three cases discussed, sanctions that restricted the access of governments to foreign exchange limited the ability of states to provide essential public goods and services and generated substantial negative spillovers on private sector and nongovernmental actors.

This is the first literature survey that systematically assesses the quantitative evidence on the effect of sanctions on living conditions in target countries.