International Business Faculty Papers
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Item Analysis of attitudes of Turkish citizens towards the effect of European Union membership on the economic, political, and cultural environment(Routledge, 2007-09) Aybar, C. Bulent; Mergen, A. Erhan; Perotti, Victor; Reid, David McHardyPrevious studies on Turkey’s possible accession to the European Union have mostly focused on the level of support for membership as expressed by Turkish citizens. The purpose of this paper is to shed some light on the specific expectations and perceptions of the Turks about the EU membership process, focusing on economic development, democratic progress, economic and political stability, and cultural influence. In both the focus group studies and the final survey, the authors targeted people who have some knowledge about the EU accession process and EU membership, namely, academics and business people.Item CAFTA-DR effects on FDI inflows, growth and distribution of the workforce : a system dynamics approach(Southern New Hampshire University, 2010-06-29) Teekasap, Pard; Frutos, Dinorah; Samii, MassoodAs regional trading arrangements have spread over the last decades, the study of the relation between trade agreements and foreign direct investment still presents difficulties due to the multi-dimensional character of such relationship. This paper presents a system dynamics model that attempts to shed new light on how some of the Central American Free Trade Agreement (CAFTA-DR). Specifically we look at how the growth and distribution of the workforce in the non-agricultural (or industrial) and agricultural sector in six CAFTADR country members. The model results indicate that the provisions we considered tend to industrialize member countries as well as expand the agricultural sector in some countries in the long run. In addition, the model indicates that the treaty provisions drive up the GDP per capita for all member countries.Item CAFTA-DR effects on FDI inflows, growth and distribution of the workforce in Costa Rica : a system dynamics approach(Routledge, 2010-10) Frutos, Dinorah; Teekasap, Pard; Samii, MassoodAs regional trading arrangements have spread, enlarged and deepened over the last decades, the study of the relation between trade agreements and foreign direct investment still presents difficulties due to the multi-dimensional character of such relationship. This paper attempts to shed new light on how some of the Central American Free Trade (CAFTA) policies will impact FDI inflows on the manufacturing and agricultural sectors in Costa Rica. Specifically we look at how the growth and distribution of the workforce is affected by the treaty. The results show that the agreement provisions will have a positive effect on foreign direct investment. From these results it is possible to estimate that in the long run, the implementation of CAFTA has a higher probability of generating the intended benefits. System dynamics modelling is used in this paper.Item Can country continuously compete on cheap labor cost? A system dynamics approach to FDI policy analysis(Southern New Hampshire University, 2010-06-28) Samii, Massood; Teekasap, PardThis paper studies the interaction of FDI, wages and employment of workers under different policies in countries that use cheap labor cost strategies such as Thailand. The interactions are analyzed by using system dynamics modeling. The model simulation shows that FDI drives salaries up when the demand for workers reaches the limit of the working population. A higher salary, in turn, causes low labor cost seeking FDI to withdraw their investment. Government policies aimed to sustain cheap labor cost seeking FDI are examined. Policies to subsidize foreign operation such as providing tax breaks and reducing the time to set up a new firm can stimulate FDI in the short term but in the long term the foreign firms still withdraw their investments due to high salaries. An increase in the working population or a reduction in firm hiring process time, on the other hand, does not affect the volume of FDI. Thus, the country cannot rely on a low labor cost strategy on the long term.Item Comparative analysis of the Mexican and Turkish currency crises(Routledge, 2000) Aybar, C. Bulent; Ajami, Riad A.; Bear, Marca M.The study aims to explore characteristics of currency crises in emerging markets. Two recent experiences in Mexico and Turkey respectively analyzed carefully to identify common elements in the development and eruption of the crises. Results of the study suggest that there are several background factors and triggers that were consistent in both cases. Finally a discussion of the policy implications of the findings concludes the study.Item Comparative performance of IPO in Japan and United States(Southern New Hampshire University, 2001) Takei, Hideki; Samii, MassoodThe increase in the initial public offerings (IPOs) in recent years has created a considerable interest in the study of their behavior. The price performance of post IPO has been studied extensively. However, these studies have focused on the US market and there is very little systematic analysis on the comparative performance of IPOs in various international markets. In this paper we evaluate post IPO performance of stocks in the US and in Japan. The major conclusion is that while the over all pattern of price performance is the same in both markets, there are differences that distinguish the two markets.Item A cultural analysis of management styles : the United States with a new generation of managers in India and China(Journal of Current Research in Global Business, 2008) Samii, Massood; Schragle-Law, Susan; Yan, ChangIn this study, the outcome of our research represented an interesting difference with both Hofstede’s and GLOBE’s results. Our focus is on well educated, highly trained managers from the US, India and China. The participants were upwardly mobile, some MBA educated, many trained in the Western style of management - essentially a new generation of managers. Questionnaires were given to managers working in multinationals in each of these countries and/or individuals with advanced education. This study extends the findings of Hofstede, the GLOBE and Level 5 Leadership by focusing on the management styles of the modern sector of emerging economies. The research suggests that there are significant and rapid changes on how to manage and how to compete in the new global economy.Item Emerging market multinationals : an analysis of performance and risk characteristics(The Haworth Press, Inc., 2005) Aybar, C. Bulent; Thirunavukkarasu, ArulThis study explores the risk and performance characteristics of emerging market multinationals (EMNCs). We use a sample composed of 79 EMNCs from 15 countries located in Africa, Asia, Eastern Europe-Russia, and Latin America. Our risk and performance analyses are based on monthly share price returns collected over 1996-2003 period and annual accounting data. We find that EMNCs on average perform better than their respective country market indices, a widely used EM benchmark, S&P500 and, global market index (MSCI-World) during the period of analysis. Our sample firms on average earn 13.21% return on assets, 8.97% return on equity, and 11.96% return on invested capital. We also find that EMNC returns are highly volatile, and despite some level of diversification achieved by EMNCs, their returns remain highly sensitive to local market shocks. The cross-sectional analysis of the determinants of the performance of the EMNCs reveals that leverage and systematic risk are the most important factors, followed by size. Our analysis indicates that performance is not affected by the degree of internationalization and EMNC investments in developed markets have a positive impact on the value. Finally, our results indicate that EMNCs in less risky emerging markets enjoy higher firm value.Item The emerging securities market in Russia(Routledge, 1998) Khambata, Dara; Aybar, C. BulentThis paper examines the Russian equity market from speculative infancy to its modern-day status as an asset in the global economy.Item Energy policy and oil prices : system dynamics approach to modeling oil market(Global Commerce Forum, 2010) Samii, Massood; Teekasap, PardThe pattern of global oil demand, real oil price, and world economy in the future is studied through system dynamics modeling. Based on the simulation, the oil demand will drop and then gradually recover while the real oil price will be stable and then drop mimicking a sigmoid curve. The economy will continuously increase. If an economic stimulus policy is implemented, the oil demand is expected to have a shallower drop. Thus, the real oil price is likely to be an S-shaped curve with a higher value, and the economy is expected to grow faster as compared to the case when there is no stimulus policy.Item Enterprise social networks : application to oil industry(Journal of Global Commerce Research, 2009) Samii, Massood; Manus, Alexandru; Frutos, DinorahWe believe that Enterprise Social Networks (ESNs) will help improve communication among stakeholders within the created "virtual" communities and improve overall operational efficiency of the industry. Such a model requires the creation of "network externalities" through a large number of participants in the network. It is postulated, that the larger the membership in the community the greater the advantages of membership. The paper demonstrates how ESN would work for the oil industry and explains how various members could benefit from their participation in the network. The value chain of the oil industry and its various participants as well as the interaction and business value creation for each enterprise group are discussed.Item Euro pricing of crude oil : an OPEC's perspective(Middle East Economic Association and Loyola University, 2004-09) Samii, Massood; Thirunavukkarasu, Arul; Rajamanickam, MohanaIn the late 1970s and the early part of the 1980s, a debate emerged within the Long Term Strategy Committee of the Organization of Petroleum Exporting Countries (OPEC) whether to continue the pricing of crude oil in United States dollars or to shift to an alternative currency. This debate was rooted in the persistent decline in the value of the United States dollar relative to other global currencies. The choice of currencies available to price crude oil was limited for OPEC because of the inadequate liquidity of most other currencies. With the recent emergence of the euro, the issue of choice of currency for pricing crude oil has emerged once again for policy discussion. The current paper is focused on the implications of a shift in the pricing of crude oil from United States dollar to euro on OPEC members. Winners and losers are identified based on economic gains and losses. It is concluded that while such a policy would incrementally benefit OPEC en bloc, it would result in a disadvantage for the countries whose major trading partner is the United States and, therefore, would not be a Pareto optimal solution.Item Financial crisis and firm performance : empirical evidence from Turkey(Blackwell Publishing Ltd., 2006-07) Gonenc, Halit; Aybar, C. BulentThe objective of this study is to examine the impact of concentrated ownership and business group affiliation on the performance of Turkish firms during the financial crisis by controlling balance sheet currency exposure, international involvement and firm size. Our analysis focuses on a 12-month window encapsulating the February 2001 financial crisis. Our findings show that balance sheet exposure is the key determinant of the firm performance during the crisis periods. While we find evidence that firms with higher concentrated ownership experience lower stock market performance prior and during the financial crisis, business group affiliation does not have any impact on the performance. However, there is weak evidence that stock market performance increases with the level of business group diversification.Item Financial liberalization, financial deepening and efficiency implications in the emerging markets : preliminary evidence from Turkey(Elsevier, 1998) Aybar, C. BulentThe chapter investigates the implications of financial liberalization and financial deepening on the intertemporal behavior of stock returns in the Turkish equity markets. The objective of the study is to test return predictability and the changes in this behavior in two qualitatively different time periods. The empirical findings indicate that return behavior does not change as the financial markets deepen in Turkey. Return characteristics qualitatively remain unchanged and return predictability continues. The adverse implications of this finding are rather severe and they are addressed in the conclusions.Item Foreign direct investment under uncertainty : an options pricing strategy(Southern New Hampshire University, 1999-10-19) Broaden, CharlotteItem Foundations of foreign direct investment(Southern New Hampshire University, 1999-09-29) Broaden, CharlotteTo adequately understand foreign direct investment, one must trace the origins of international trade beginning with comparative advantage theory, which views trade from the standpoint of perfect competition, to the new classical theories that focus on imperfect markets. The debates that are raised in these theories touch on many issues, however, central to the underlying theme in all of these theories are the issues of efficiency and equity as they impact both the home and host countries. Understanding the theories in and of themselves is not enough to explain the concept of foreign direct investment. We need an instrument to tie the two together and that instrument or more preferably, institution, is the multinational corporation (MNC). The literature is inconclusive in providing a precise definition of the MNC. A generally accepted theorem is that MNC’s are composed of a corporate structure where operations are in two or more countries on such a scale that growth and success depend on more than one nation, and where decisions are made on the basis of global alternatives (Parry 1973). For the basis of this paper, we shall also accept this premise. This paper will examine how international trade theory impacts foreign direct investment decisions. We will investigate the idea of a MNC moving from the notion of perfect competition to the concept of dealing with market imperfections as well as follow the evolution to the "new paradigm" of international trade.Item Global shock transmission to emerging markets(Southern New Hampshire University, 2003-07) Dasari, Usha; Dhakar, Tej S.; Samii, MassoodThe process of global integration has intensified the competition in world markets during the 1990s. In the new environment, many developing countries are increasingly relying upon greater trade integration for upgrading their international competitiveness and promoting their dynamic comparative advantage. In view of growing global integration, this paper attempts to analyze whether Indian, Hungarian and Polish economies have become more internationalized as a result of economic reforms embraced by each of these countries in early 1990s and hence vulnerable to global economic cycles: the integration hypothesis. The paper applies variance decompositions derived from vector auto regression to assess the degree of economic integration of the three economies with U.S. economy. The study concludes that, in the pre-liberalization period U.S. economy did not influence the Indian, Hungarian and Polish economies. Shocks from U.S. had no impact on their aggregates. In the post liberalization period, however, the results are mixed. Hungarian aggregates show very low degree of integration with US followed by Poland, and India. Although, all the three countries have shown varying degrees of integration in the post-liberalization period, none of the economies are found to be overly vulnerable to international shocks. It can be argued that despite opening of economy and transition towards integration with the global economy, the degree of integration across countries still remains significantly low.Item Globalization, emerging market economies and currency crisis in Asia : implications on economic reform and development(St. Louis University, 1999) Aybar, C. Bulent; Milman, Claudio D.Recent experiences in Latin America and Asia provide ample evidence that countries in the process of integration are increasingly exposed to internal and external economic shocks. More importantly, this growing vulnerability of particularly developing economies has the potential of undermining decades of development efforts. The Asian crisis clearly demonstrates that we are increasingly unable to predict the triggers of such crises, and certainly lack the institutional arrangements to contain them. This translates into the fact that our ability to manage the interaction between domestic and international economic forces is limited or undermined by certain factors. This practical outcome has the potential to delay the process of globalization and integration of developing economies into the world economy.Item Internalization strategies and value implications of Latin American emerging market multinationals(Internext, 2009) Ficici, Aysun; Aybar, C. BulentThis study investigates the Internationalization strategies and their value implications of Latin American Emerging Market Multinationals (LAEMMs). We examine 66 mergers and acquisitions (M&A) announcements, 20 joint venture (JV) announcements and 9 Strategic Alliance (SA) announcements associated with LAEMMs during the sample period of 1991-2005. First, the paper explores the effects of cross-border expansion patterns on firm value creation. Second, it examines market reaction to the announcements of cross-border expansion patterns. Third, it evaluates firm performance in relation to the cross-border expansion activities. This study finds that most LAEMMs do not earn significantly positive abnormal returns during the event windows defined in this study. However, it is generally evident that there is value creation in international expansion activities. According to the event-study results, value creation is mostly associated with SAs. This finding is consistent with previous research. It is also indicated that most SA announcements are received by the market positively. JVs also experience value creation during the event windows utilized in this study. However, value creation of JVs is not to the extent that of SAs. Market reaction to JV announcements is also positive, but not to the degree of SAs.Item The long run performance of privatization related ADR issues(Southern New Hampshire University, 2000-11) Aybar, C. BulentAmerican Depository Receipts (ADRs) have been increasingly used in the Share Issue Privatization process (SIP) by privatizing governments both in developed and developing countries. In this study long-term performance of 143 privatization related ADR programs were analyzed. The ADR programs covered in the study were initiated between 1984 and 1999, and included a diverse mix of companies from 29 different industries across 31 developed an emerging markets. The analysis of the long run performance of these programs revealed interesting patterns. In all cases, average cumulative returns and average cumulative abnormal returns of developed country privatization related ADRs exceeded emerging market privatization returns. Same conclusion was reached by using an alternative return calculation methodology. While sample companies generally outperformed their respective country indices and FT World index, they under performed the S&P500 Index.