Foreign
Capital, Spillovers and Export Performance in Emerging Economies:
Evidence from Indian IT firms
Abstract:
The role of foreign capital inflow, foreign direct investment (FDI)
and foreign portfolio investment (FPI), on export behavior of both
recipients and non-recipient competing firms in the same sector
often guides economic development policy.
By using panel data of Indian IT firms over 2000-2006, we
show that FDI reduces the
sunk costs of entering foreign markets and therefore
positively effects
both the decision to export and the export propensity of
recipient firms. Foreign portfolio investment has no effect on the
decision to export, but it does marginally increase the volume of
exports. Further, these
positive FDI and FPI recipient effects do not spill-over to
non-recipients.
Cultural Traits and Stock Market Development: An Empirical Analysis Forthcoming at Journal of Entreprenuership and Public Policy
Abstract:
During recent times, stock market has emerged as a major
financial institution of an economy. Yet, cross country
differences, in size and role of stock market, persist. This
article investigates the correlation between cultural traits
and the development of the stock market in a country.
Considering multiple dimensions of culture, identified in
the literature by Hofstede (1980, 2001) and World value
Survey (WVS), we construct our hypotheses: (i) Trust, a key
cultural
trait, should positively influence stock market development,
(ii) Uncertainty avoidance, Hofstede’s cultural dimension
should negatively influence the development of the stock
market, and (iii) Individualism, an alternate cultural
dimension of Hofstede’s measures, should be positively
correlated with stock market development. Our cross country
empirical analysis supports our hypotheses. The results hold
for multiple measures of stock market development.
Do Political Institutions and Culture Jointly Matter for Financial Development? A Cross-Country Panel Investigation Published in Global Economy Journal
Abstract: This article investigates the role of political
institutions and culture in creating an efficient financial
infrastructure for a country. It further delves into this
relationship and addresses the question: do both types of
institutions mentioned above affect
financial development of a country, jointly? Our findings
support the established notion in the literature that
institutions matter for financial development. We show both
these types of institutions – political institutions
and culture – jointly promote financial development.
Further, our result stresses that these two types of
institutions behave as complements – the presence of
efficient political institutions augment the effectiveness
of culture and, thus, financial development is enhanced. Our
results are robust to various proxies of institutions and
alternate estimation models.
Development of
interorganizational trust in virtual organizations An integrative
framework
Published in European Business Review
Purpose – A virtual organization (VO) is a set of geographically
dispersed and functionally diverse organizational entities
interconnected by electronic forms of communication that cooperate
with one another for a common valued outcome. The objective of this
article is to propose a research framework that illustrates the
development of trust between VOs.
Design/methodology/approach – This paper provides an overview of
literature on VOs, identifies antecedents of trustworthiness in
virtual environment, explores the role of boundary spanners’
interpersonal trust, and relates them to inter-VO trust formation. A
research analysis is developed that depicts the proposed
relationships.
Findings – The propositions shed light on the overall
interorganizational trust building process in VOs. In doing so, the
framework also acknowledges the role of individual boundary spanners
of a trustor organization in the trust development process.
Originality/value – Systematic scholarly research relating to VOs
has been somewhat limited. With the emergence of VOs as important
organizational forms, there is an increasing need to comprehend how
interorganizational trust is developed and maintained in VOs. This
study attempts to fill this gap in the extant literature by
exploring how social exchange factors in a virtual context relate to
factors of organizational trustworthiness of the trustee
organization. In addition, this paper also investigates the key role
played by the boundary spanners of both organizations in the trust
formation process.
Keywords: Virtual organizations, Interorganizational trust,
Interpersonal trust, Social exchange theory, Trustworthiness, Trust,
Boundary spanner
Leading virtual teams: How do
social, cognitive, and behavioral capabilities matter?
Published in Management Decision
Purpose – The purpose of this article is to propose a research
framework that identifies crucial leadership capabilities pertaining
to the different lifecycle stages of a virtual team (VT). More
specifically, this analysis identifies social, cognitive, and
behavioral capabilities as important determinant of effective VT
management and success.
Design/methodology/approach – This paper provides an overview of
literature on leadership in VTs, categorizes leadership
capabilities, and relates the capabilities to various stages of VT
life cycle. A research analysis is developed that depicts the
proposed relationships.
Findings – The propositions demonstrate that, for effective
leadership of VT to take place, it is important to understand the
specific set of capabilities that contributes to successful
management of a particular VT stage.
Research limitations/implications – The propositions of this study
set the agenda for future studies to more closely examine the
dynamic of leadership capabilities and VT life cycle stages.
Practical implications –VTs are an important element of the current
competitive landscape and business organizations are increasingly
using them as an important competitive tool. The findings provide
implications for VT leaders or manager hiring
decisions. Organizations embarking on the creation of a workforce
that comprises of VTs and virtual workers should consider deploying
leaders who possess considerable social, cognitive, and behavioral
capabilities to effectively manage VTs.
Originality/value –Research relating to VT leadership has been
somewhat limited. With the usage of VTs is predicted to gain more
importance in the future, there is a greater need to understand how
specific leadership capabilities contribute to the successful
management and development of VTs. This study attempts to fill the
void in the extant literature by exploring the specific leadership
capabilities and by investigating their relative influence and
relationships with VT lifecycle stages.
Is culture a determinant of
financial development?
Published in Applied Economics Letters
This article investigates the missing link in the literature –
whether informal institutions, or what is known as culture, can
affect the level of financial development for a country? Our
hypothesis stresses that the cultural dimensions of a country can
have an impact on its financial set-up. We consider multiple
dimensions of culture, identified in the literature by Tabellini
(2008), to test our hypothesis. As culture evolves in the form of
greater trust, control and other traits, individuals’ attitudes
towards financial
market change, and they engage in greater financial transactions.
This, in turn, leads to better financial development. Using quantile
estimation technique for a cross section of 90 countries, we find
that culture significantly influences the level of financial
development. To ensure the robustness of our findings we use
Hofstede’s cultural dimension – ‘Uncertainty Avoidance Index’ (UAI)
– as an alternative measure for culture. Our results hold for
multiple measures of financial development.
The PTA Factor: Role of
Preferential Trade Agreements in the Trade-Institution Relation
The impact of trade on corruption has been well documented in the
literature. Using a country level panel data we test two hypotheses.
First, we investigate if trade openness influences corruption level
of a country. While many studies have shown that greater trade
openness mitigates corruption among trading partners, there are
studies that has raised doubts against this claim. In this paper we
re-explore this claim for a large sample of developed and developing
countries. We find that the effect of trade openness on the level of
corruption is largely insignificant. Second, we test if a country
entering into preferential trading agreements alters its level of
corruption. Our finding suggests that entering into a PTA agreement
boosts corruption level for the member countries.
Foreign Direct Investment and
Export Performance in Emerging Economies: Evidence from Indian IT
firms
The effects of FDI on export behavior of both recipients and
non-recipient competing firms in the same sector often guides
economic development policy. We estimate a Logit model of the
probability of export and Pooled Tobit and Fixed and Random Effects
Tobit models of the volume of exports using a large sample of Indian
Information Technology firms in 2000-2006 that focus on the role of
FDI. For FDI recipients the probability of exporting and the volume
of exports is greater. In addition, there is clear evidence of a
spillover of the effects of FDI to non-recipient firms as their
probability of exporting also increase. In a random effects Tobit
model spillover also exists for the volume of exports.
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Labor Mobility, Knowledge
Transfer and Productivity Spillover: Evidence from Indian Firms
Productivity spillover from foreign direct investment (FDI) provides
a rationale for recruitment of multinational enterprises (MNEs). Our
model suggests spillovers depend on industry-specific
characteristics like high skilled mobile labor that may transfer
knowledge, skills and techniques of the MNE to other firms. With a
panel of Indian firms in the information technology (IT) and the
textiles sectors for 2000-2006 we find direct recipients of FDI
experience an increase in productivity. However, spillover effects
exist in IT, with high skilled mobile labor, but not in textiles,
without such labor. This suggests policies should be industry
specific, not economy wide.
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