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This paper examines the relationships that social and economic exchanges, two elements of the employee‐organization relationship (EOR), had with affective commitment, turnover intentions, employer trust, and altruism. The paper also aims to determine whether reciprocation wariness, reflecting fear of exploitation in reciprocation, moderated relationships that exchange elements had with outcomes.

A total of 453 employees of a large Korean electronics organization completed a survey on their work attitudes, behaviors, and demographic characteristics.

Results showed that reciprocation wariness moderated relations that social exchange had with commitment, turnover intentions, and trust, and that economic exchange had with turnover intentions.

The significance of examining social and economic exchange and of developing conceptualizations of the EOR that incorporate individual differences is discussed.

Organizational leaders need to consider how individuals may differ in responses to exchange elements of the EOR. Common assumptions about the EOR that social exchange is universally beneficial and that the necessity of economic exchange is accepted by all employees may not be accurate.

New theorizing and testing of the role of reciprocation wariness in the EOR contributes to an emerging literature on social and economic exchanges and how individuals may respond to these elements of the EOR.

Although social exchange theory has long been used to explain employees’ positive work attitudes in response to perceived investment in employee development (PIED), few studies have examined this theoretical mechanism by introducing a direct measure of social exchange between employees and their personified organization. Furthermore, most studies have focused solely on one type of exchange (i.e. social exchange) and have ignored another type of exchange characterized as economic exchange. The purpose of this paper is therefore to uncover the process by which PIED affects employees’ attitudes, including affective organizational commitment and job satisfaction, by examining the mediating roles of both social and economic exchanges.

To test the hypothesized mediating model, this study conducted a three-phase, time-lagged questionnaire survey and collected data from 545 full-time employees. The model was tested based on structural equation modeling with a bootstrap test of indirect effects.

In line with social exchange theory, the findings showed that social exchange perceptions positively mediated the relationships between PIED and affective commitment/job satisfaction, whereas economic exchange perceptions negatively mediated them. Additionally, social and economic exchange perceptions were found to partially mediate the relationship between PIED and affective commitment but fully mediate the relationship between PIED and job satisfaction.

These results suggest that employers would benefit from investing in employee development, provided workers see the training investment as the employer’s side of social exchange, which in turn leads to increased affective commitment and job satisfaction. When employers do not achieve the expected returns from the training investment, they should check not only hard data (e.g. training attendance rate, hours of training, etc.) but also soft data (e.g. employees’ perceptions of training investment, social exchange, etc.) by conducting employee surveys and communicating with line managers.

The main contribution of this study is that it provides important empirical support for social exchange theory in the context of organizational training investment and employees’ attitudinal outcomes, by directly testing the positive mediating role of social exchange and the negative role of economic exchange.

This paper explains why some firms manage to capture disproportionate value from their network of relationships, leading to superior performance. The paper examines how a firm's dependencies affect its value appropriation potential (VAP) in economic networks.

The paper follows the axiomatic method and the embeddedness perspective of firms to develop an index called nodal power, which captures the power that accrues to a firm in exchange-based economic networks. Thereafter, using the formal method and simulation, it shows nodal power reflects a firm's VAP in economic networks.

The study analysis and findings prove that a firm's dyadic level exchange relations and the embedded network structure determine its VAP by affecting the nodal power. A firm with lesser nodal power is likely to appropriate less value from its relations even if it equally contributes to the value creation. This finding explains how the structural and relational characteristics of a firm's network enable disproportionate value appropriation.

Nodal power furthers the scope of analyzing firms' economic relationships and changing power equations in dynamic networks. It can help firms build optimal strategic networks and manage the portfolio of relationships by predicting the impact of changing relations on firms' VAP.

The paper's original contribution is to explain, through formal analysis, why and how the structure and nature of relations of firms affect their VAP. The paper also formalizes the power-dependence principle through a dependency-based index called nodal power and uses it to show how interfirm dependencies are key to value appropriation.

This paper proposes a systems framework for the analysis of economic exchange and development. Exchange is examined in the context of a social system in which actors have differential control over resources and different action opportunities and positions in a structure of social relationships. Exchange activities in a social system have ramifications in different spheres (economic and non‐economic) of social life. We focus on those ramifications which relate to social differentiation in terms of power‐unequal or differentiated action capabilities and different structural positions of actors in the social system of interaction. This perspective on exchange leads to the consideration of factors important to the emergence and maintenance of systemic, uneven development of action capabilities and to unequal dependency relationships among actors in a social system. In sum, what we wish to do in this paper is to develop a more systematic model that indicates the mechanisms whereby initial imbalances of the sort mentioned above generate social processes‐non‐economic as well as economic‐which tend to institutionalize the imbalances and perpetuate them in a self‐reinforcing manner.

The purpose of this paper is to examine the underlying exchange mechanisms between ethical leadership behavior and affective commitment. The authors hypothesized that ethical leadership behavior enhances perceived organizational support (POS), which then raises employee affective commitment. The authors further predicted that economic exchange weakens such indirect effect of ethical leadership on affective commitment via POS.

Using a two-phase survey, the authors tested the hypotheses with a sample of 176 bank employees in Macau using hierarchical regression analysis and bootstrapping.

POS was found to mediate the relationship between ethical leadership behavior and affective commitment, whereas economic exchange was found to moderate the ethical leadership behavior – POS relationship as well as its indirect effect on affective commitment via POS.

By identifying POS as the mediator and economic exchange as the moderator, this study enhances our knowledge of the dynamics of multiple exchange mechanisms linking ethical leadership behavior to affective commitment.

The purpose of this paper is to investigate the extent to which leader behaviors (authentic, directive, and transactional) predict subordinates' conceptualization of exchanges with their organization (i.e. social and economic exchanges).

Data were collected from 165 employees in various organizations within the USA using questionnaires.

Results showed that authentic leadership was positively related to social exchanges. Further, directive leadership was positively related to economic exchanges. Contrary to the authors' prediction that transactional leadership would be a positive predictor of economic exchanges, transactional leader behaviors predicted both social exchanges (positive relationship) and economic exchanges (negative relationship). Several of the relationships between leader behaviors and follower exchange relationships were mediated by employee attitudes (i.e. job satisfaction) and beliefs (i.e. exchange ideology).

Further research is necessary to elucidate the reasons why leader transactional behaviors drive social exchanges, and through what mechanisms.

Organizations and practitioners can use these finding to select leaders who foster desired employee behaviors. Coaching or training efforts to develop authentic leaders may also be beneficial. Organizations and practitioners may benefit by implementing leadership training initiatives that develop managers' authentic leadership.

The paper's results position authentic and directive leader behaviors as positive and negative predictors of social and economic exchanges, respectively. It also identifies mechanisms through which leader behaviors influence employees' perceptions of exchanges.

For the past decades, issues concerning the impact of economic integration on financial integration, especially exchange rate integration, has been criticized among several regions such as ASEAN. This chapter intends to: (i) test for the exchange rate integration among the ASEAN-5, including Indonesia, Philippines, Malaysia, Singapore, and Thailand, using panel data techniques; and (ii) determine the impact of economic integration on the level of exchange rate integration among the ASEAN-5 countries. The purchasing power parity (PPP) is tested using panel unit root tests on monthly data. The results confirm the PPP among the ASEAN-5 countries due to lower transaction costs from ASEAN agreements. The chapter applies Multivariate GARCH (M-GARCH) models using daily data to determine the level of exchange rate integration among the ASEAN-3, including Malaysia, Singapore, and Thailand. The results of panel cointegration tests using quarterly data of economic integration and exchange rate integration confirm the impact of international trade openness on exchange rate integration. With free trade agreements leading to lower trade barriers, lower transaction costs, and low transportation costs, the economic integration among ASEAN countries practically leads to a higher degree of exchange rate integration. The findings imply that trade liberalization has the strongest effect on the real exchange rate. As such, regulators of ASEAN countries should pay more attention to the exchange rate policies of each other because of the interdependence of their exchange rates.

The purpose of this study is to examine real exchange rate misalignment and economic growth in Malaysia.

The result of the autoregressive distributed lag (ARDL) approach and the generalized forecast error variance decomposition.

The result of the ARDL approach shows an increase in the real interest rate differential, productivity differential, the real oil price or reserve differential will lead to an appreciation of the real exchange rate in the long run. The result of the generalized forecast error variance decomposition shows that the real interest rate differential, productivity differential, the real oil price, and reserve differential are generally important to the real exchange rate determination. Moreover, the result of the ARDL approach shows that an increase in real exchange rate misalignment will lead to a decrease in economic growth. More specifically, devaluation will promote economic growth and appreciation will hurt economic growth. Exchange rate can be a policy variable to influence economic growth. Real exchange rate misalignment should be avoided to enable the allocation of resources in the economy according to fundamentals.

A managed floating exchange rate regime could be a choice of exchange rate regime in other developing countries to achieve rapid economic growth.

This study examines the sensitivity of sales, profit margins and input costs to exchange rate movements for non‐financial, UK firms. The sample is a representative cross‐section of larger, publicly‐listed firms and is not limited to those directly involved in international trade. Surveyed firms provided data on both the direct and indirect components of economic exposure. As with other studies, we find a statistically significant relationship between a firm’s exchange rate sensitivity and the degree to which it sells, sources, or funds itself internationally. Contrary to the theory on economic exposure, only one indirect determinant, that for foreign‐based competition, is unambiguously significant. The other indirect effects, the degree of product differentiation, the demand elasticity for a firm’s output, and common input currencies for competitors, are not significant in our models. Our examination of the interactive effects suggested by the theory of economic exposure shows no statistical relationship to a firm’s exchange rate sensitivity. We attribute the weak evidence for competitive effects to the complexities of the indirect determinants of economic exposure at the firm‐specific level.

Neoclassic economics is a thing of considerable beauty. It yet finds an increasing tendency on the part of those trained in its discipline to rebel from its neatly fitted abstractions and intriguing diagrams. The rebellion stems from two sources. Veblen's sweeping attacks upon its postulates¹⁶ shock its theoretical foundations. The rapid changes in the industrial and business world discredited it on another front by bringing into increasingly sharp relief the divergence between the institutional assumptions of the orthodox theory and the conditions actually obtaining. The giant corporation, overhead costs, and the necessity for maintenance of volume, industrial concentration, the trade association, a widening spread among income classes, advertising, the growing inability of the consumer to gauge quality, the resort to reorganization instead of the “going out of business” of the long-run analyses – what place could the orthodox theory give to these important characteristics of the existing business economy?