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Book part
Publication date: 18 August 2006

Quan Li

The international business literature presents an interesting intellectual puzzle regarding the effect of political instability and political risk on foreign direct investment…

Abstract

The international business literature presents an interesting intellectual puzzle regarding the effect of political instability and political risk on foreign direct investment (FDI). Survey evidence shows that multinational executives take into account political instability in making investment decisions, while econometric studies produce conflicting findings. In this paper, I offer a new theory that explains how political violence, an extreme form of political instability, affects FDI. The new theory differs from previous arguments on three points. First, the theory considers how rational expectations and uncertainty on the part of foreign investors affect the ways in which political violence influences investment behaviors. Second, the new theoretical argument argues for the need to investigate separately the effects of different types of political violence (civil war, interstate war, and transnational terrorism). Third, I consider FDI inflows as resulting from two distinct but related decisions, including the investment location choice and the decision on investment amount, and sort out statistically the separate effects of political violence on these two processes. The empirical analysis of FDI inflows covers about 129 countries from 1976 to 1996. The statistical findings largely support my theoretical expectations. My theory helps reconcile the inconsistent econometric findings on the effect of political instability on FDI flows.

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Regional Economic Integration
Type: Book
ISBN: 978-0-76231-296-2

Book part
Publication date: 1 July 2015

Mohamed Kadria and Mohamed Safouane Ben Aissa

This chapter attempts to analyze mainly the interactions between the implementation of inflation targeting (IT) policy and performance in the conduct of economic policies (fiscal…

Abstract

This chapter attempts to analyze mainly the interactions between the implementation of inflation targeting (IT) policy and performance in the conduct of economic policies (fiscal and exchange rate) in emerging countries. More precisely, empirical studies conducted in this chapter aim to apprehend the feedback effect of this strategy of monetary policy on the budget deficit and volatility of exchange rate performance. This said, we consider the institutional framework as endogenous to IT and analyze the response of authorities to the adoption of this monetary regime. To do this, the retained methodological path in this chapter is an empirical way, based on the econometrics of panel data. First, our contribution to the existing literature is to evaluate the time-varying treatment effect of IT’s adoption on the budget deficit of emerging inflation targeters, using the propensity score matching approach. Our empirical analysis, conducted on a sample of 34 economies (13 IT and 21 non-IT economies) for the period from 1990 to 2010, show a significant impact of IT on the reduction of budget deficit in emerging countries having adopted this monetary policy framework. Therefore, we can say that the emerging government can benefit ex post and gradually from a decline in their public deficits. Retaining the same econometric approach and sample, we tried secondly to empirically examine whether the adoption of IT in emerging inflation targeters has been effectively translated by an increase in the nominal effective exchange rate volatility compared to non-IT countries. Our results show that this effect is decreasing and that this volatility is becoming less important after the shift to this monetary regime. We might suggest that this indirect and occasional intervention in the foreign exchange market can be made by fear of inflation rather than by fear of floating hence in most emerging countries that have adopted the IT strategy. Finally, we can say that our conclusions corroborate the literature of disciplining effects of IT regime on fiscal policy performance as well as the two controversial effects of IT on the nominal effective exchange rate volatility.

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Monetary Policy in the Context of the Financial Crisis: New Challenges and Lessons
Type: Book
ISBN: 978-1-78441-779-6

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Explaining Growth in the Middle East
Type: Book
ISBN: 978-0-44452-240-5

Abstract

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Nonlinear Time Series Analysis of Business Cycles
Type: Book
ISBN: 978-0-44451-838-5

Book part
Publication date: 1 January 2004

Roger D. Congleton

A crisis typically has three characteristics. First, a crisis is unexpected, a complete surprise. Second, a crisis is normally unpleasant in that current plans are found to work…

Abstract

A crisis typically has three characteristics. First, a crisis is unexpected, a complete surprise. Second, a crisis is normally unpleasant in that current plans are found to work less well than had been anticipated. Third, a crisis requires an urgent response of some kind. That is to say, an immediate change of plans is expected to reduce or avoid the worst consequences associated with the unpleasant surprise. These characteristics imply that not every public policy problem is a crisis, because many public policy problems are anticipated or long-standing. The present social security problem faced by most Organization of Economic Cooperation and Development (OECD) nations is not a crisis, although it is a serious problem. Other policy problems are clearly worsened rather than improved when current policies are abandoned. This may be said of constitutional law, in cases in which minor unexpected problems arise from longstanding political procedures. Other policy problems lack immediacy, even when they are unanticipated. This might be argued, for example, of global warming, which was unanticipated prior to 1990 yet is anticipated to take decades to emerge. Not every serious problem is a crisis.1

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The Dynamics of Intervention: Regulation and Redistribution in the Mixed Economy
Type: Book
ISBN: 978-0-76231-053-1

Book part
Publication date: 25 April 2011

Michael Wallace and Travis Scott Lowe

Purpose – In this chapter, we examine individual- and country-level differences in 4 work attitudes (work centrality, work commitment, job satisfaction, and autonomy) among 31…

Abstract

Purpose – In this chapter, we examine individual- and country-level differences in 4 work attitudes (work centrality, work commitment, job satisfaction, and autonomy) among 31 European countries in 1999 using a multilevel framework.

Design/methodology/approach – We utilize the 1999/2000 European Values Study to investigate individual- and country-level determinants of work values and job rewards. Our analysis contains 17 traditionally capitalist and 14 post-socialist countries. At the country level, we consider 11 institutional processes as possible explanations for variations in work values and job rewards: post-socialist status, continuous democracy, contentious politics, state capacity, socialist ideology, union density, economic integration, service employment, income inequality, linguistic heterogeneity, and population density.

Findings – We find that traditionally capitalist countries tend to score lower on work values and higher on job rewards than post-socialist countries. Our analyses show that each of the 11 institutional processes, especially continuous democracy and economic integration, has statistically significant effects on the four dependent variables.

Research limitations/implications – Of the 44 hypotheses we made, 23 were supported by statistically significant effects in the predicted direction, 16 were not significant, and 5 were statistically significant in a direction unanticipated by our theory. We discuss possible reasons for the results that did not conform to our expectations.

Originality/value – The study is one of the most comprehensive multination studies of work values and job rewards in that it examines the impact of 11 institutional processes on four different work attitudes among 31 European countries. It is the only study of this scope to rigorously examine the differences between traditionally capitalist and post-socialist countries.

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Comparing European Workers Part A
Type: Book
ISBN: 978-1-84950-947-3

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Book part
Publication date: 7 July 2006

Douglas D. Davis, Laura Razzolini, Robert J. Reilly and Bart J. Wilson

We report an experiment conducted to gain insight into factors that may affect revenues in English auctions and lotteries, two commonly used charity fund-raising formats. In…

Abstract

We report an experiment conducted to gain insight into factors that may affect revenues in English auctions and lotteries, two commonly used charity fund-raising formats. In particular, we examine how changes in the marginal per capita return (MPCR) from the public component of bidding, and how changes in the distribution of values affect the revenue properties of each format. Although we observe some predicted comparative static effects, the dominant result is that lottery revenues uniformly exceed English auction revenues. The similarity of lottery and English auction bids across sales formats appears to drive the excess lottery revenues.

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Experiments Investigating Fundraising and Charitable Contributors
Type: Book
ISBN: 978-0-76231-301-3

Book part
Publication date: 18 April 2018

Dominique Lord and Simon Washington

Purpose – This chapter first provides the motivation for writing this book. It then describes the challenges involved with assessing societal safety through the analysis of…

Abstract

Purpose – This chapter first provides the motivation for writing this book. It then describes the challenges involved with assessing societal safety through the analysis of transport system crashes. It concludes with a summary of the contents of the remainder of the book, identifying how various dimensions of the transport system challenges are addressed.

Methodology/Approach – This chapter discusses important real-world and methodological challenges that practitioners, academics and researchers face in making a more sustainable highway system through a reduction in the number and severity of transport network crashes resulting in fatalities, injuries and property damage.

Findings – The chapter first describes important challenges, such as complexity of the driving task, the challenges of engineering transport systems for humans, unanticipated effects that arise from differences between driver safety and security, the co-mingling of mobility modes of travel, and challenges in evaluating road safety. The chapters are separated into five general themes: driver behaviour, the transportation network, vulnerable road users, methods for understanding and predicting safety performance, and methods for evaluating safety impacts of countermeasures.

Practical Implications – Comprehending the challenges associated with road crashes is a first step in making the roadway system more sustainable. This book provides a broad and understandable description of these challenges and how they can be overcome by academics and practitioners working in transport network safety management.

Originality – This book presents a clear understanding and offers insights about the challenges and potential solutions that can be brought to bear to make a more sustainable and safe transport system, whether it is located in an urban or rural area, and for a wide variety of functional classifications and designs. The topics covered in this book are intended to be useful and applied to tackle transport system management anywhere in the world.

Book part
Publication date: 27 October 2016

Brian K. Laird and Charles D. Bailey

Traditional agency theory assumes monitoring is good for the principal, but we investigate an unintended effect: diminishment of the agent’s preference for honesty. We hypothesize…

Abstract

Traditional agency theory assumes monitoring is good for the principal, but we investigate an unintended effect: diminishment of the agent’s preference for honesty. We hypothesize greater dishonest behavior in a monitored environment than in a non-monitored environment, when the agent has the opportunity to cheat outside the scope of monitoring. Relevant theories to explain such behavior are behavioral agency theory, where trust and reciprocity are thought to alter contractual outcomes, and the fraud-triangle theory, where the ability to rationalize deviant acts affects behavior. We utilize participants who have been acclimated to either a monitored or an unmonitored condition in an immediately preceding experiment and seamlessly continue that treatment. Within each of these conditions, participants perform a simple task with a performance-based monetary reward. Half self-report and can safely cheat, while the other half are verified; the difference between verified and self-reported scores is a proxy for dishonest reporting. As hypothesized, unmonitored individuals reciprocate with honest behavior, while monitored individuals tend toward dishonest behavior when the opportunity arises. Implications for fraud prevention are discussed.

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Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-78560-973-2

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Book part
Publication date: 1 October 2014

Pilar Abad and Helena Chuliá

In this chapter we investigate the response of bond markets to macroeconomic news announcements in the euro area. Specifically, we analyze the impact of (un)expected changes in…

Abstract

In this chapter we investigate the response of bond markets to macroeconomic news announcements in the euro area. Specifically, we analyze the impact of (un)expected changes in the interest rate, unemployment rate, consumer confidence index and industrial production index on the returns, volatility and correlations of European government bond markets. Overall, our results suggest that, bond return volatility strongly reacts to news announcements and that the response is asymmetric. However, the influence of macroeconomic news announcements appears insignificant for bond returns. Finally, our results paint a complex picture of the effect of macroeconomic news releases on correlations.

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Risk Management Post Financial Crisis: A Period of Monetary Easing
Type: Book
ISBN: 978-1-78441-027-8

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