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Cross-country panel data are used to assess the effect of free-trade agreements on flows of Foreign Direct Investment (FDI). Free-trade agreements are found to have a significant positive effect on FDI flows, and free-trade agreements are found to matter more for the smaller members of the agreement. For example, the North American Free-Trade Agreement's (NAFTA) effect on FDI flows into Mexico is much larger than its effect on flows into the United States. These cross country results are used to assess NAFTA's effect on FDI flows into Mexico. After controlling for a set of other factors such as an increase in worldwide FDI flows the trade agreement is found to generate FDI flows nearly 60 percent higher than they would have been without the agreement.

We examine the components of displayed (quoted) liquidity and the amount of non-displayed liquidity on the NYSE for a sample of non-US stocks. Consistently with prior work, non-US stocks have less displayed liquidity than similar US stocks. Extending prior research, we find that this is true both in the limit order book and on the floor. As Domowitz et al. [Domowitz, I., Glen, J., Madhavan, A., 1998. International cross-listing and order flow migration: Evidence from and emerging market. Journal of Finance 53, 2001–2027] posit, non-US stocks from transparent/linked home markets have more displayed NYSE liquidity when the home market is open but non-US stocks from opaque/non-linked home markets have more NYSE displayed liquidity when the home market is closed. Non-US and US stocks have similar supplies of non-displayed liquidity, consistent with the idea that the conditional nature of non-displayed liquidity allows NYSE traders to mitigate adverse selection problems inherent in trading non-US stocks. Our results imply that non-US stocks have less total (displayed plus non-displayed) liquidity than US stocks.

This paper analyses the growth trends in the Indian Computer Industry for the period 1991-2002. We focus on the significance of size and age on growth of firms and whether or not the law of diminishing returns to learning holds for a high tech industry like computers. An important difference between the computer software and hardware industry is also taken into account: The software industry is more service oriented, mainly targeting exports whereas hardware is a goods oriented industry, targeting the home market. Hence we analyse the hardware and software industry separately. It is found that the law of diminishing returns to learning does not hold for the software industry, but does hold for the hardware industry. Current size also negatively affects firm growth and more diversified hardware firms are more successful in the Indian context. JEL Codes: L11, L86, C33

Firms with export operations have internal environments that are often geared toward serving the home market. As a result, export marketing and other business functions compete for resources, which thus increases the likelihood of conflict between them. Using survey responses from more than 700 exporting firms, the authors test a model of the antecedents and consequences of two important interaction variables: exporting’s interfunctional connectedness and conflict. The model explains 52 percent and 49 percent of variance in exporting connectedness and conflict, respectively. The authors identify the key drivers of successful interactions as follows: management commitment, organizational training and reward systems, relative functional identification, centralization, and export employee job satisfaction and commitment. The authors also demonstrate that connectedness is most critical for export success when export markets are in a state of turbulence, whereas conflict is most detrimental when the firm’s export environment is stable.

This study develops a model of trade that highlights the effects of the interconnection of country-specific communications networks as a driving force behind trade in high-tech products with positive transport costs. By constructing a two-country model of monopolistic competition with two production factors, it is shown that the locational decisions of firms may magnify the influence of interconnected networks. In a reversal of the standard home market effects, the abundance of unskilled labour in the developing countries can attract high-tech firms from the developed countries. JEL classification: D43, F12, L13

We provide a firm level analysis of the impact of capital market liberalization in 18 emerging markets. Consistent with models of international asset pricing, we find that firms’ stock returns increase during liberalization and that a majority of firms have lower mean returns and lower dividend yields after liberalization. We also find that emerging market firms have increased exposure to the world market and decreased exposure to the home market following liberalization. These changes in returns and exposures support the predictions of theoretical international asset pricing models. We also test and find support for the importance of size, local risk, foreign exchange risk, and cross-listing status in explaining the cross-section of changes in returns.

This paper empirically investigates cross-listing's implications for companies in the newly-established capital markets in Central and Eastern Europe. Central and Eastern European companies face small capitalisation of local markets, limited liquidity and poor effectiveness of legal systems, all of which can have detrimental effects on stock pricing. We find that companies which issue Depositary Receipts and enter foreign markets experience a permanent value enhancement of about 26% around the event. We also observe that foreign listing significantly improves home market liquidity, which suggests that cross-listing helps to draw the interest of new investors and encourages them to start trading in both foreign and local markets. Moreover, we find that the pricing efficiency increases after foreign listing, which is reflected in reduced stock return autocorrelation.

Does home market size matter for the pattern of trade? Krugman started the literature, showing it does matter. Davis overturned his result, arguing that an assumption of convenience—transport costs only for the differentiated goods—conveniently obtained the result. Here we relax another persistent assumption of convenience—two industry types differentiated only by the degree of scale economies—and find that market size reemerges as a relevant force in determining industrial structure.

We develop a model that explores the link between services and fragmentation. In our model components used in the manufacturing process are made with services and labor. Low foreign wages create an incentive to outsource component production (fragmentation). However, the need for services in the manufacturing process can play a role in limiting fragmentation. Although advanced economies have higher costs of supplying simple services, the size of their home market offers a greater variety of services. As a result, the price of aggregate services tends to be lower than in less developed economies. When services are not tradable, advanced economies will tend to produce components that are service-intensive, and outsource components that are less service-intensive and more labor-intensive to developing countries. Complete free trade in services, however, eliminates the home-market effect, and, in the absence of the Dornbush–Fischer–Samuelson type of comparative advantage, will lead to complete outsourcing of components.

The aim of this study is to investigate whether the impact of the SEC's Form 20-F reconciliation requirements on non-US firms' choices of foreign stock exchanges was different for firms from common law and code law countries, that is, for firms with different accounting, legal and financial systems. We examined attributes of 253 cross-listed firms from the UK, Australia, France, Germany and Japan in the 1999 financial year. We found the ability to raise further capital in the home market was relevant for firms from both groups. In addition, firms from code law countries listing on the NYSE or NASDAQ were more likely to have greater foreign revenue and lower leverage. We expected differences in accounting requirements to be a greater barrier to listing on the NYSE or NASDAQ for code law firms. However, we found firms from code law countries were more likely to select a Form 20-F exchange than firms from common law countries, providing support for suggestions that a NYSE/NASDAQ cross-listing has a ...

This article reports on a content analysis of newspaper coverage of a wildfire on the Hanford nuclear site in the summer of 2000. The risk and mass communication literatures suggest that newspaper coverage of such fires would frame the event in dread terms, with some variation in the framing depending on the community diversity of the home market. We found that newspapers did vary in their framing of the fire, and that vigilance and confidence were more common framings of the fire. Our tentative explanation is that key risk communicators and reporters adhered to their professional ethics and relied on one another to develop a frame for Hanford hazards and risks.

This study formulates Prusa's (1992) theory that anti-dumping regulations facilitate the formation of cartels between an exporter and import-competing firms. It demonstrates that interest rates and product differentiation are two key factors that may determine the robustness of the cartels. It builds a Bertrand duopoly model with differentiated products that explains how anti-dumping regulations might encourage the creation of cartels. To highlight the circumstances under which an import-competing firm is seriously hurt by dumped exports, this study adopts the following setting. First, both the exporter and the import-competing firms sell only in the home market. Second, if the exporter's product is sold at a cheaper price than the product of an import-competing firm in the home market, this is a sufficient condition to initiate an anti-dumping petition. Although the setting might also provide the circumstances under which the anti-dumping authority could be over-protecting the import-competing firm, it makes it possible to view the exporter as a predator. Since the setting enables the exporter to be free from the need to make profits in its own market, it sets a lower price for its product only if it decides to undertake predatory activities against an import-competing firm.

The paper examines the impact of the income distribution in a less-developed country (LDC) on its patterns of trade, through its influence on home market demand patterns. In a learning-by-doing model with nonhomothetic preferences, the authors show that import substitution under low inequality generates more focused learning and enhances trade potential more effectively. In addition, relative wages under trade are higher in a low-inequality LDC. The model predicts that high-inequality LDCs are more likely to remain exporters of unskilled/low-skilled goods, whereas low-inequality LDCs are more likely to mature into simple manufactures and beyond—a prediction that is consistent with world trade patterns of LDCs. The authors present descriptive and empirical evidence in support of this link between income inequality, domestic demand patterns, and dynamic comparative advantage.

This study links the highly distinctive national contexts of the pharmaceutical industry to the evolution of innovative capabilities for Japanese drug firms from 1975 to 1995. During these two decades, the Japanese domestic environment for pharmaceuticals changed radically, encouraging a ‘bubble’ of trivial innovations. Experience by Japanese firms in their domestic market predominantly determined their innovative capabilities, pushing these firms towards trivial innovation. Corporate experience in the socially ‘proximate’ markets of Southern Europe served as a strategic complement for significant innovation by Japanese drug firms, and thus as a partial counterweight to the home market. Unfortunately, corporate diversification was a strategic substitute for significant innovation, and many Japanese drug firms are significantly diversified. The resulting degradation of innovative capability for Japanese drug firms has locked most of them into an increasingly unattractive home market. Copyright © 2004 John Wiley & Sons, Ltd.

Until recently, restructuring activity in the EU retail industry has primarily been domestically oriented and focused upon growth opportunities in the retailers' home market. Alongside the on-going harmonization and integration of European markets, grocery retailers have become increasingly interested in cross-border integration activity. Although a salient feature of Scandinavian grocery retailing, this (r)evolution of the industry has attracted only minor attention in academic literature. This paper examines the motives and strategies underlying the intensified integration activity of Scandinavian grocery retailers in general and their integration across national as well as industry boundaries, in particular. The analysis of recent integration events displays a fairly balanced distribution between proactive and reactive motives, albeit the former motive tends to dominate in the case of grocery retailers' integration activity across industry borderlines. Above all, the proactive motive has been apparent ...

The increasing integration of the economies of EU Member States results in an increased integration of groups of companies within the EU and the perception of the EU as the "home market" of bigger companies rather than of individual Member States. Against this background, in recent years the European Commission has devoted considerable resources to the implications of these developments for EU corporate taxation and taken several concrete initiatives aiming at a common consolidated tax base for the EU-wide activities of companies. Much work still needs to be done and technical issues need to be resolved. Moreover, political support for these plans currently remains insufficient for any rapid implementation. As a result of the ongoing Commission work, considerable progress has nevertheless been made and the overall development is moving in the right direction.

The contracting practices of franchisors outside their domestic market have received little attention in the empirical literature on franchising to date, largely because of lack of data. We exploit a novel data set that allows us to describe the contracts offered by a number of US and Canadian franchisors operating in Mexico and also compare them to contracts employed at home. Our analyses reveal a series of stylized facts that we hope will prove useful in guiding future empirical and theoretical research on contracting and especially on cross-border contracting practices. These are as follows: (1) The overwhelming majority of franchisors seeking franchisees in Mexico offer exactly the same contract to potential Mexican franchisees as that employed in the home market; (2) Among those franchisors that already have established outlets in Mexico, nearly half use the exact same fees in Mexico and at home; (3) The majority of those franchisors that make changes only alter the fixed fee component of the contract; (4) There is no evidence that franchisors use franchising more or less in Mexico compared to home as an alternative to royalty rate customization—in fact, the extent of franchising (versus company-owned units) of these firms in Mexico is not different systematically from that observed in their domestic market or worldwide; and (5) There is no evidence of increased customization over time—if anything, the evidence suggests increased similarities in contracting practices over time.

Dave Elliott has been working for SportzCorp, a sport consulting firm located in Winnipeg, Manitoba, Canada, for nearly two years, and has worked on a number of projects, but he has never been given such a lofty assignment as this one. His company has been contacted by a Canadian woman who is interested in purchasing a Canadian Hockey League (CHL) ice hockey franchise, a quasi-professional association comprised of players aged 16–21, operating across Canada and parts of the northern United States. The CHL had grown significantly in recent years and is an increasingly attractive business opportunity for investors. Elliott has arrived at his office one morning to find a three-page memo outlining his task.

This paper studies the behaviour of returns for a sample of cross-listed stocks, listed on both the Paris Bourse and SEAQ-International in London. The aim of the paper is to discover which market adjusts to fundamental news more quickly, the home market of Paris or SEAQ-International. We find that prices in London adjust to changes in their fundamental value more slowly than Paris prices, despite the ability to quickly arbitrage between the two markets. We suggest that this finding may reflect the type of trading, which takes place in the two markets and differences associated with the reporting of large trades. We also estimate the amount of noise present in the two markets and show that the Paris market is more noisy than London. © 2003 Published by Elsevier B.V.

This article proposes an empirical investigation of regional trade flows following a cross-section method. For this purpose, the author refers to a regional context looking at a chosen sample of European regions. She mainly intends to assess the role of the home market effect and the level of transport costs in driving regional export flows. In particular, she is interested in testing the importance of spatial components in regional trade analysis. By simply adapting the gravity model approach to her framework, she is able to prove that physical distance smooths the intensity of trading flows while local transport facilities as well as local demand foster them.

This paper measures the size and composition of non-tariff trade costs such as transport, wholesale, and network costs incurred in Canada's merchandise trade using Statistics Canada's latest ‘trade margins’ statistics. It examines how changes in these trade costs have influenced Canada's merchandise trade pattern and the course of economic integration. Our results show that as tariffs have been substantially reduced and largely abolished, costs associated with transport and distribution services now appear much larger than remaining customs duties; therefore, liberalisation in services might be the next key step in promoting greater merchandise trade. Further, reducing transport and other trade-related costs has helped ‘reverse’ the ‘home market effect’, expanding Canada's domestic demand and production for exports of differentiated products.

The present paper develops a two-stage game of quality and quantity competition for an international duopoly in the home market with linear demand and cost functions. While a quota increases domestic output, domestic quality falls to the monopoly level. Import quality may rise or fall with the quota, and the upgrading noted in the empirical literature may occur only relative to home quality.

We explore the effects of local content schemes in perfect competition as means to protect the domestic intermediate-good production which requires internationally immobile sector-specific factors. We show that local content schemes have no effect for a small country but that they have significant effects for a large country. For a large country, the effects of local content protection depend on (i) whether content protection is imposed on the production undertaken in the home country (production content protection) or on the sales made in the home market (sales content protection) and (ii) whether the home country’s intermediate-good input coefficient is larger than the foreign counterpart or not. The effect on welfare is simple. If local content protection can lower the price of the foreign intermediate good, the home country can improve welfare.

Kenya’s textile and apparel sector has the potential to play a key role in anchoring the country’s deeper movement into middle income status and in serving as a source of gainful employment for its fast growing, young population. As a manufactured good, it offers opportunities for increased value capture and streamlined trade logistics and for the building of skills and experience from the factory floor to management level. Based on these foundations, it therefore serves as a potential gateway to other manufactured goods, offering opportunities for Kenya to capture an increasing share of global trade and to advance economic diversification. The report is structured as follows: chapter two describes global and regional market trends in textile and apparel. Chapter three reviews the evolution, growth, and performance of the apparel sector in Kenya and then analyzes the sector in terms of markets, products, and stakeholders. Chapter four focuses on Kenya’s performance in terms of relevant macro indicators and highlights the critical constraints faced by apparel manufacturers and exporters in Kenya. Chapter five concludes with recommendations. Where possible, chapters end with a summary of key points and conclusions.

This paper assesses for the first time the effect of regional trade openness on agglomeration within regions, using regional data on the trade of Colombia. The results of the panel model show that the effect of trade is sufficiently strong to shape the spatial configuration, a structure that rarely changes. The effect varies across regions. On the one hand, trade enhances spatial agglomeration within regions with large home market and location advantages. On the other hand, trade induces dispersion within regions that lack access to international trade or historical advantage. These results hold when controlling for the natural course of agglomeration (region-specific time trends), congestion effects in main cities and road infrastructure within regions.

This paper studies the interaction of a minimum quality standard and exports in a vertical product differentiation model when firms sell global products. If ex ante quality of foreign firms is lower (higher) than the quality of exporting firms, a mild minimum quality standard in the home market hinders (supports) exports. The minimum quality standard increases quality in both markets. A welfare maximizing minimum quality standard is always lower under trade than under autarky. A Minimum quality standard reduces profits for the exporting firm. It increases domestic welfare, but reduces welfare in the export market.

This chapter deals with colonial goods which, for most people, come immediately to mind when discussing international trade in the eighteenth century; particularly as such goods play the leading role in international literature on the subject. It has regularly been argued that colonial trade was the main branch of commerce in the eighteenth century, even for the Austrian Netherlands. Colonial goods may have functioned as substitutes for traditional foods and raw materials and thereby helped to mitigate ecological constraints posed by traditional agriculture. The exotic commodities examined in the chapter (principally coffee, tea, sugar, dyestuffs and cocoa) each had their own particularities, yet all were largely intended for direct human consumption. Colonial imports clearly constituted a major share of overall imports and were generally increasing, albeit not always as steeply as expected. The chapter reinforces arguments for the intrinsic strength of the home market and its emerging industries.Keywords: Austrian Netherlands; colonial commodities; international trade; market capacity; traditional agriculture

One of the main objectives of the project behind this book was to understand how small start-ups from the transition economies of Central and Eastern Europe were able to overcome the challenges of a difficult context and grow into international players, competing at the top of their industries.

Our objective is to examine empirically the behavior of foreign banks regarding real loan growth during a financial crisis for a set of countries in which these banks dominate the banking sectors due primarily to having taken over large existing former state-owned banks. The eight countries are among the most developed in Emerging Europe, their banking sectors having been modernized by the beginning of the time period. We consider a data period that includes an initial credit boom (2004-2007) followed by the global financial crisis (2008 & 2009) and the onset of the Eurozone crisis (2010). Our main innovations with respect to the existing literature on banking during the financial crisis are to include explicit consideration of exchange rate dynamics and to separate foreign banks into two categories, namely, subsidiaries of the Big 6 European MNBs and all other foreign-controlled banks. Our results show that bank lending was impacted adversely by the crisis but that the two types of foreign banks behaved differently. The Big 6 banks remained committed to the region in that their lending behavior was not different from that of domestic banks corroborating the notion that these countries are a “second home market” for these banks. Contrariwise, the other foreign banks were primarily responsible for fueling the credit boom prior to the crisis but then “cut and ran” by decreasing their lending appreciably during the crisis. Our results also indicate different bank behavior in countries with flexible exchange rate regimes from those in the Eurozone. Hence, we conclude that both innovations matter in empirical work on bank behavior during a crisis in the region and may, by extension, be relevant to other small countries in which banking sectors are dominated by foreign financial institutions.

Early attempts to describe the internationalization process of retailers indicate that market entry is determined by the nature of domestic operations and the strategic development experience of a retailer in the home market. For example, firms that grow organically in the home market expand into other markets with the same mode. Yet, increasingly retailers move beyond their initial foreign market entry mode when there are differences in the characteristics of the host and home markets. For example, a retailer is more likely to use an organic start-up in markets with a low psychic distance and favor joint ventures and licensing in markets with high psychic distance from the home market.

The growing international insertion of multinational companies originating from emerging economies (EMNCs) can be described as a major trend in the current world economic scenario. During the last two decades, outward foreign direct investment from such economies grew at a higher year average rate than those from developed economies. Their participation in the world outward FDI grew from 11 per cent in 2000 to 28 per cent in 2010, and their outward stock reached more than 15 per cent of the world FDI outward stock, compared with a performance of less than 10 per cent in the 1990s (UNCTAD, 2013).

Shoham, Rose and Albaum (1995) discussed the Etnocentric, Polycentric, Regiocentric, and Geocentric Framework (EPRG) in the context of a nomological network that also included export motives and psychological distance. Notably, the impact of EPRG orientations on firm performance was not discussed in their study. This article addresses this relationship. We argue that EPRG orientation, in and by itself, should not affect performance. We document empirically that subjective assessments of export performance do not differ on the basis of firms’ EPRG orientations.

Nowadays, with the rapid development of the society and economy, the living standards of people increase rapidly. People are gradually pursuing green and environmental living concepts rather than the extensive type living modes. Due to the increase of people's cognition of scientific development concept as well as the gradually increasing demands on residential interior design, the concept of green residence comes into people's mind. As the development tendency of future interior design, green residence can be environmental-friendly and increase the greenery and comfort to the house, thus being more and more welcomed in the home market. This paper analyzes and explores some questions concerned during the green residential interior design by starting from the concept of green residential interior design.

In the past few decades, MNCs from emerging markets have appeared as important players in the international competitive environment. Catching up through fast growth rates, these emerging country multinationals are predicted to influence the international business environment tremendously. This Chapter presents the primary characteristics of emerging country multinationals and models of their international expansion.

In this initial investigation, the author compares Guanxi’s potential benefits in the business contexts in China, Hong Kong and in Singapore. The results indicate that Guanxi plays a key role in the business context of all three markets. Guanxi’s role in the business context is more important in China than in Hong Kong and Singapore. Also, it is more important for Hong Kong and Singapore business managers to have strong Guanxi when doing business in China than in their home market.

In numbers alone the IP Rookie is the most common type of IP active firm. The IP Rookie is identified by a low degree of integrated IP management and a low degree of IP exchange orientation. These firms are commonly small or medium sized and they seldom consider IP as part of their business. Many IP Rookies are aware of the challenges and opportunities that lie in IP, but consider IP registration and enforcement as a complex and expensive process outside their scope. IP Rookies commonly operate as a manufacturing firm in an industry with little or no IP registration by competitors and are often market followers. Geographically, the IP Rookie tends to operate locally, producing and selling primarily in their home market. Operating as an IP Rookie may be appropriate for some firms, however they could derive a long-term benefit in developing their integrated IP management. Should the IF Rookie decide that IP ought to be part of their future business, the first step is to ensure that any IP activity is related to the firm’s overall strategy by formulating an IP strategy. Further steps include: the development of internal capabilities within IP; formalization of processes; and setting aside dedicated resources to IP related issues. Another approach to develop the work with IP for the IP Rookie is to start considering exchange of IP as a potential leverage. Seeking licensing opportunities might open new ways the firm can benefit from its W.

We empirically examine changes in information asymmetry and informational efficiency of cross-listed stocks in their home market around a cross-listing in the United States. We estimate intraday market microstructure measures of information asymmetry and price efficiency, and find that a U.S. cross-listing significantly improves the quality of a firm's information environment and stock price efficiency in the home market. This improvement is stronger for cross-listings that take place after the adoption of Sarbanes-Oxley Act. Our results demonstrate that stricter disclosure from a U.S. cross-listing is beneficial, in line with the legal and reputational bonding hypotheses.

Cross-listings of equities internationally are becoming more common. Using data for Europe and North America, previous studies reject the order flow diversion hypothesis, which states that international cross-listings reduce home-country trading volume. We test this hypothesis using data for equities cross-listed in Singapore and Malaysia. We find that trading volume in Malaysia fell 42.9% when Singapore markets were closed for holidays. Furthermore, we show that trading volume in Malaysia did not increase following the implementation of regulations that ended the trading of Malaysian equities in Singapore in 1998. Hence, we reject the order flow diversion hypothesis.

In a vertically differentiated industry a domestic and a foreign firm first choose the quality of their goods and then compete in quantities, or prices, in the home market. We investigate the cases in which a tariff is chosen before, or after, the firms’ quality decision. These cases are referred to as the ex-ante and the ex-post game, respectively. Optimal ex-post tariffs are positive and ensure that the domestic firm always produces the high quality good. The optimal ex-ante tariff is prohibitive and welfare under domestic monopoly is lower than under ex-post tariffs, unless firms compete in prices and the domestic firm is high quality. The authors would like to thank Jim Markusen and the participants at the meetings in Aix-en-Provence, The International Conference in Industrial Organization (Carlos III), Bellatera (Barcelona), ASSET (Alicante), ETSG (Erasmus) and seminars at Bologna and Vigo universities. The paper was written when Herguera and Petrakis were at Carlos III. The authors would like to thank an anonymous referee, Berthold Herrendorf, and especially the Editor, Jonathan Eaton, for detailed comments that led to a complete rewrite of the paper. Kujal acknowledges support from grants DGESIC [PB98/0024 and CAM 06/0058/2001. Herguera acknowledges support from grant [PB93-236. All remaining errors are our own Publicado

This article analyzes the relationship between export competitiveness and investment in machinery, allowing for imperfect substitution between domestically produced and imported machinery. A trans log export price function is estimated for developed, export oriented developing, and import substituting developing economies in a panel data setting. Between 1967 and 1990 imported machinery helped lower export prices for export oriented developing economies. Moreover, throughout the period imported machinery was not a substitute for domestic machinery. Import substituting developing economies was unable to harness imported machinery to reduce costs early in the period, but from about the early 1980s, with the opening of their trade regimes, they were able to benefit from the cost reducing effect. The results imply that innovative effort based on imported technologies can be a precursor to the development of domestic innovation capabilities.

Using a home market economic model, this article explains the changing competitive balance between the U.S. and Japanese film industries. I test the hypothesis that the domestic movies' market share in Japan has decreased because consumer movie spending has increased more rapidly in the United States than in Japan. The results of using information from a database (1955-2000) of media industry development in the United States and Japan generally support the economic hypothesis.

Executive Overview The economic landscape of the world is changing rapidly and becoming increasingly global. For virtually every medium-sized to large company in developed as well as developing economies, market opportunities, critical resources, cutting-edge ideas, and competitors lurk not just around the corner in the home market but increasingly in distant and often little-understood regions of the world as well. How successful a company is at exploiting emerging opportunities and tackling their accompanying challenges depends crucially on how intelligent it is at observing and interpreting the dynamic world in which it operates. Creating a global mindset is one of the central ingredients required for building such intelligence. In this article, we address the following issues: why mindset matters, what a global mindset is, the value of a global mindset, and finally, what companies can do to cultivate a global mindset.

Does national market size matter for industrial structure? Round One (Krugman) answered in the affirmative: Home market effects matter. Round Two (Davis) refuted this, arguing that an assumption of convenience--transport costs only for the differentiated goods--conveniently obtained the result. In Round Three we relax another persistent assumption of convenience--industry types differentiated only by the degree of scale economies--and find that market size reemerges as a relevant force in determining industrial structure.

We analyze brand stretching—the extension of a successful brand label from an initial home market to a different product line—using a model that assumes that brand identity is a complementary feature that enhances consumer willingness to pay. Our analysis implies a pattern of brand‐stretching entry in which (1) firms with strong brand identities may prefer to extend their brands to markets that are “far” from their original product line, and (2) fragmented or unconcentrated markets with no strong incumbent brands are attractive entry targets for brand extension.

There is fierce competition among firms to target larger markets. Effective competition and achieving advantage over competitors are closely associated with the concept of competitive advantage. Various sources of competitive advantage are found in the literature. However, Information and Communication Technologies (ICTs) are increasingly becoming the center of attention for creating competitive advantage both at firm and country level. A large group of firms in every country are Small and Medium Enterprises (SMEs). SMEs are widely known as enablers of business and economic growth; nevertheless, they constantly face challenges in competition. In this study, ICTs are introduced as a strategy for SMEs to improve their competitiveness. It is suggested that promoting competition among SMEs could lead to a higher performance in competitiveness at country level. The present research concludes by the strong potentiality of ICTs to improve Iran’s national competitiveness through making the home market more competitive for its SMEs.

Research in institutional logics tends to neglect to emphasize how logics relate to one another when enacted by interacting actors. We explore how variants of a market logic enacted by private firms relate to an array of public sector logics when the firms aim to commercialize innovative welfare solutions in healthcare. Two findings are obtained: First, conflicting or convergent logics relationships are continuously built between a market logic and different public sector logics. Second, the logics relationships influence the firms’ space for actions: Where some firms focus on commercializing in their home market other firms shift focus to international markets depending on whether their market logic has a convergent or conflicting relationship with public sector logics in their home market. The findings contribute to institutional logics theory by refining our understanding of how different relationships between logics develop continuously and enable actors to take different forms of actions.

This article describes the Initial Public Offering (IPO) of a German ship-owning outfit (HCI Hammonia Shipping AG) in the German market and outlines its development over the first couple of years on the market, until August 2012. Directed mainly at institutional investors, the stock-listed company hit the market in an environment overwhelmingly dominated by the “KG-system” as most popular equity gathering method. However, the HCI Hammonia AG’s business model is rooted in its home market as it owns container ships that are chartered out to container shipping lines. Against all odds, the company thrived even through the first years of the downturn.

The emergence of the microcomputer has brought high tech marketing concepts to the fore. This entire industry is new and provides an opportunity to study marketing behavior without a lot of historical baggage. This paper will illustrate techniques used in the marketing of microcomputers. Product life cycles, the influence of technology, price, promotion, physical distribution and the selection of target markets all affect the marketing effort. Each of these influences will be examined.

Although the Multilateral Trade Negotiations, concluded on April 12, 1979, eliminated the overall tariff disparity on dutiable trade with Japan from 4.3 points in favor of Japan to 0.6 points in favor of the U.S. (MTN, 1979) it is doubtful that this will significantly alter their favorable balance of trade with the U.S. due to their unique national psychology. The purpose of this paper is to examine the salient psychological characteristics of the Japanese businessman in order to demonstrate how they protect their home market.

Wood S., Coe N. M. and Wrigley N. Multi-scalar localization and capability transference: exploring embeddedness in the Asian retail expansion of Tesco, Regional Studies. This paper revisits the ‘firm in the region’ and the ‘region in the firm’ dichotomy through the case of Tesco's retail expansion in Asia. It focuses on the tension between the transference of proven key capabilities to the host economies Tesco has entered, and strategic localization, primarily for customer-facing, corporate culture, regulatory and institutional reasons. It is demonstrated how the retailer has pursued a multi-scalar adaptive approach that goes beyond any standardized/localized dichotomy to respond to differences between and within national markets. In the process, this paper provides evidence of genuine two-way knowledge flow between the home market and subsidiaries, between subsidiaries themselves, and of subsidiaries granted autonomy and the ability to flex their strategies.