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This paper attempts to examine which theory is best at explaining the geographic concentration in Java, an island in which most of the Indonesia’s large and medium manufacturing industries have located overwhelmingly. Our previous studies on Java have found that there was a stable – albeit increasing trend – and persistent geographic concentration in Java over the period 1976‐1995. Yet some critical questions exist: Why geographic concentration in Java persisted during this period? To what extent relevant theories and empirical literature can be used as an explicit test of competing theories on agglomeration forces? In answering those questions, we compare the three major grand theories of geographic concentration: Neo‐Classical Theory (NCT), New Trade Theory (NTT) and New Economic Geography (NEG). Using the regional specialization index as a measure of geographic concentration of manufacturing industry and pooling data over the period 1991‐002, our econometric analysis integrates the perspectives of industry, region (space) and time. We further explore the nature and dynamics of agglomeration forces underpinning the industrial agglomeration in Java by testing some key variables. Our econometric results rejected the NCT hypotheses and showed that the NTT and NEG can better explain the phenomena. It’s apparent that manufacturing firms in Java seek to locate in more populous and densely populated areas in order to enjoy both localization economies and urbanization economies, as shown by the significance of scale economies and income per capita. The former is associated with the size of a particular industry, while the latter reflects the size of a market in a particular urban area. More importantly, the results suggest that there is a synergy between thickness of market and agglomeration forces. The interplay of agglomeration economies is intensified by the imperfect competition of Java’s market structure. We find that Java’s market structure may restrict competition so that firms tend to concentrate geographically. Instead of providing some important recommendations for local and central governments and practical implications for investors and manufacturing firms, this paper gives empirical evidence with respect to path dependency hypothesis. The finding supports the NEG’s belief that history matters: older firms tend to enhance regional specialization.

Much corporate and government strategy is a reaction to the widely accepted wisdom that a new economy, grounded in an ever‐quickening pace of change, is emerging world‐wide. But what evidence is there? In these extracts from a recent interview the US economist Paul Krugman challenges whether there are any measures to show we live in such exceptional times.

Countries have differences in competition policies, which are cause for friction in international trade and investment. This paper discusses those issues and develops a model to try to explain the willingness of countries to participate in a cooperative competition policy. The model suggests that countries which are economically advanced, active in trade, and already involved in trade regimes are most likely to cooperate in competition policy.

The present paper is a phenomenological study of capital inflow, economic growth and financial crisis in the Southeast Asian countries in general and Malaysia in particular. The paper seeks to explain how unregulated capital inflow in an open economy leads to unsustainable growth It comes to the broad conclusion that although capital inflow is conducive to economic growth, it may also generate the problem of macroeconomic vulnerability and unsustainability, and in such a situation, the occurrence of financial crisis may not be an uncommon possibility.

This paper investigates whether a J-curve can be detected in the time series data on China’s bilateral trade with the G-7 countries. It utilizes cointegration and causality tests to ascertain both the long-run relatedness, and the short-run dynamics, between the real exchange rate, national income, and the trade balance. There is some evidence that a real depreciation eventually improves the trade balance with some countries. But there is no indication of a negative short-run response which characterizes the J-curve.

The purpose of this paper is to explore the link between redistribution, convergence and local cultural capital (as defined by culture-based development concept).

The paper infers the basic mechanism of the cultural dependence of convergence and inequality – through an empirical test for the case of the “German job miracle” during the current crisis. Two empirical questions are asked: first, is local income inequality associated with local cultural capital and second, is the negative convergence between East and West Germany during the crisis related to culturally sensitive employers’ preference for job preservation vs job loss. An OLS enquiry and two deeper estimation methods (a logit model and a 3SLS simultaneous equations model) are alternatively applied in order to triangulate the empirical results.

The findings support the existence of cultural effect on local income inequality and cultural path dependence of employers’ preferences for job preservation vs job loss in a condition of economic shock.

The paper provides both theoretical reasoning and empirical illustration of the significance of the cultural effect on human preferences which may or may not allow for redistribution and convergence between localities.

The apparent onset of an era of anti-globalization creates significant challenges for international business (IB) practice, research and education. This paper aims to discuss the implication of these challenges for IB scholarship.

This essay assesses the needs for research in IB in view of the challenges posed by the anti-globalization movement.

The author identifies and analyzes two sets of concerns of the anti-globalization movement: the unequal distribution of the benefits of globalization and emergent constraints on national sovereignty. On that basis, he offers suggestions on how international business scholars may contribute to addressing these challenges through research, teaching and public engagement.

Businesses need to understand the economic and institutional arguments motivating the anti-globalization movement and to address them within their scope of activity.

Globalization benefits societies, in general, but some groups do not benefit unless specific remedial action is taken. If these groups are not supported, they can cause political disruption to IB and, hence, economic prosperity.

This paper offers a pathway for IB scholars to contribute to discourses on globalization and anti-globalization.

There have been times in recent years when it has seemed that the US economy, in particular, has defied economic gravity. This was certainly the case in the late nineties of the twentieth century. Many heaved a sigh of relief when the Nasdaq and the Dow responded to the pull of economic gravity and fell to earth in the early part of the twenty first century. The Earth at the time, in 2002, appeared to be indices of around 8,000 for the Dow and 1,250 for the Nasdaq. These measures still indicated huge wealth in terms of saleable bits of paper as well, indicating the underlying huge capacity of the real economy for creating surpluses. Both indices climbed back, though the Nasdaq was a long way from its astronomic former heights before the next (2007) crisis hit. True to the cyclical record of modern capitalism, however, by 2006 the US and the world stock markets were booming again. The nominal value of shares traded worldwide in 2006 by some estimates was nearly $70 trillion (Bogle, 2005). In 2007, another crisis appeared, ushered in supposedly by the collapse of the sub-prime mortgage market in the United States; subsequent events took their toll in economic and financial terms not only in the United States but worldwide in most of the major economies. The terms “credit crunch” and “sub-prime” had become so pervasive within a few weeks of the onset of the latest economic crisis that by July 2008, the Concise Oxford Dictionary provided definitions for them. While these terms are now embedded in the language of economics and everyday speech, inevitably the affected economies will recover from the crises and continue to grow. While there is no shortage of reasons posited for the latest crisis and those preceding it, far fewer explanations have been forwarded to tell us why economies survive economic shocks and, despite dire predictions and expressions of gloom, recent crises have not been as disastrous as was once the case, notably as in the Depression years of the 1930s. During the Depression of the Thirties, production fell by a third between 1929 and 1933, unemployment reached 13 million and even by 1938 one person in five were unemployed. No economist has predicted these dire consequences even for the crisis of 2007–2009. In 1999, Paul Krugman published his short book: The Return of Depression Economics in which he not only reminded us of the 1930s Depression but suggested that the then economic crises bore an “eerie resemblance to the Great Depression.”¹ He retreats within a few pages and describes the events as the Great Recession because the global damage has been “well short of Depression levels” (Krugman, 1999). A decade later, Krugman, by then a Nobel laureate for economics in 2008, began his 2009 revised edition of Return of Depression Economics thus: “The world economy is not in depression: it probably won't fall into depression (though I wish I could be completely sure about that)” (Krugman, 2009). By early January 2009, he surprised other economic commentators by using the term “depression” in his New York Times column.