Emotions in International Politics. Beyond Mainstream International Relations

In recent years, social scientists have increasingly recognized the interconnectedness of thought on emotions. Nowhere is the role of passions more evident than international politics, where pride, anger, guilt, fear, empathy, and other feelings are routinely on display. But in the absence of an overarching theory of emotions, how can we understand their role at the international level? Emotions in International Politics fills the need for theoretical tools in the new and rapidly growing subfield of international relations. Eminent scholars from a range of disciplines consider how emotions can be investigated from an international perspective involving collective players, drawing evidence from such emotionally fraught events as the Rwandan genocide, World War II, the 9/11 attacks, and the Iranian nuclear standoff. The path-breaking research collected in Emotions in International Politics will be a valuable theoretical guide to understanding conflict and cooperation in international relations.

Scientific mindfulness: A foundation for future themes in international business.

We conceptualize new ways to qualify what themes should dominate the future international business and management (IB/IM) research agenda by examining three questions: Whom should we ask? What should we ask, and which selection criteria should we apply? What are the contextual forces? Our main findings are the following: (1) wider perspectives from academia and practice would benefit both rigor and relevance; (2) four key forces are climate change, globalization, inequality, and sustainability; and (3) we propose scientific mindfulness as the way forward for generating themes in IB/IM research. Scientific mindfulness is a holistic, cross-disciplinary, and contextual approach, whereby researchers need to make sense of multiple perspectives with the betterment of society as the ultimate criterion.

Financial Markets and Real Ecinomy: Four Essays in International Trade

Financial markets play an important role in an economy performing various functions like mobilizing and pooling savings, producing information about investment opportunities, screening and monitoring investments, implementation of corporate governance, diversification and management of risk. These functions influence saving rates, investment decisions, technological innovation and, therefore, have important implications for welfare. In my PhD dissertation I examine the interplay of financial and product markets by looking at different channels through which financial markets may influence an economy.My dissertation consists of four chapters. The first chapter is a co-authored work with Martin Strieborny, a PhD student from the University of Lausanne. The second chapter is a co-authored work with Melise Jaud, a PhD student from the Paris School of Economics. The third chapter is co-authored with both Melise Jaud and Martin Strieborny. The last chapter of my PhD dissertation is a single author paper.Chapter 1 of my PhD thesis analyzes the effect of financial development on growth of contract intensive industries. These industries intensively use intermediate inputs that neither can be sold on organized exchange, nor are reference-priced (Levchenko, 2007; Nunn, 2007). A typical example of a contract intensive industry would be an industry where an upstream supplier has to make investments in order to customize a product for needs of a downstream buyer. After the investment is made and the product is adjusted, the buyer may refuse to meet a commitment and trigger ex post renegotiation. Since the product is customized to the buyer's needs, the supplier cannot sell the product to a different buyer at the original price. This is referred in the literature as the holdup problem. As a consequence, the individually rational suppliers will underinvest into relationship-specific assets, hurting the downstream firms with negative consequences for aggregate growth. The standard way to mitigate the hold up problem is to write a binding contract and to rely on the legal enforcement by the state. However, even the most effective contract enforcement might fail to protect the supplier in tough times when the buyer lacks a reliable source of external financing. This suggests the potential role of financial intermediaries, banks in particular, in mitigating the incomplete contract problem. First, financial products like letters of credit and letters of guarantee can substantially decrease a risk and transaction costs of parties. Second, a bank loan can serve as a signal about a buyer's true financial situation, an upstream firm will be more willing undertake relationship-specific investment knowing that the business partner is creditworthy and will abstain from myopic behavior (Fama, 1985; von Thadden, 1995). Therefore, a well-developed financial (especially banking) system should disproportionately benefit contract intensive industries.The empirical test confirms this hypothesis. Indeed, contract intensive industries seem to grow faster in countries with a well developed financial system. Furthermore, this effect comes from a more developed banking sector rather than from a deeper stock market. These results are reaffirmed examining the effect of US bank deregulation on the growth of contract intensive industries in different states. Beyond an overall pro-growth effect, the bank deregulation seems to disproportionately benefit the industries requiring relationship-specific investments from their suppliers.Chapter 2 of my PhD focuses on the role of the financial sector in promoting exports of developing countries. In particular, it investigates how credit constraints affect the ability of firms operating in agri-food sectors of developing countries to keep exporting to foreign markets.Trade in high-value agri-food products from developing countries has expanded enormously over the last two decades offering opportunities for development. However, trade in agri-food is governed by a growing array of standards. Sanitary and Phytosanitary standards (SPS) and technical regulations impose additional sunk, fixed and operating costs along the firms' export life. Such costs may be detrimental to firms' survival, "pricing out" producers that cannot comply. The existence of these costs suggests a potential role of credit constraints in shaping the duration of trade relationships on foreign markets. A well-developed financial system provides the funds to exporters necessary to adjust production processes in order to meet quality and quantity requirements in foreign markets and to maintain long-standing trade relationships. The products with higher needs for financing should benefit the most from a well functioning financial system. This differential effect calls for a difference-in-difference approach initially proposed by Rajan and Zingales (1998). As a proxy for demand for financing of agri-food products, the sanitary risk index developed by Jaud et al. (2009) is used. The empirical literature on standards and norms show high costs of compliance, both variable and fixed, for high-value food products (Garcia-Martinez and Poole, 2004; Maskus et al., 2005). The sanitary risk index reflects the propensity of products to fail health and safety controls on the European Union (EU) market. Given the high costs of compliance, the sanitary risk index captures the demand for external financing to comply with such regulations.The prediction is empirically tested examining the export survival of different agri-food products from firms operating in Ghana, Mali, Malawi, Senegal and Tanzania. The results suggest that agri-food products that require more financing to keep up with food safety regulation of the destination market, indeed sustain longer in foreign market, when they are exported from countries with better developed financial markets.Chapter 3 analyzes the link between financial markets and efficiency of resource allocation in an economy. Producing and exporting products inconsistent with a country's factor endowments constitutes a serious misallocation of funds, which undermines competitiveness of the economy and inhibits its long term growth. In this chapter, inefficient exporting patterns are analyzed through the lens of the agency theories from the corporate finance literature. Managers may pursue projects with negative net present values because their perquisites or even their job might depend on them. Exporting activities are particularly prone to this problem. Business related to foreign markets involves both high levels of additional spending and strong incentives for managers to overinvest. Rational managers might have incentives to push for exports that use country's scarce factors which is suboptimal from a social point of view. Export subsidies might further skew the incentives towards inefficient exporting. Management can divert the export subsidies into investments promoting inefficient exporting.Corporate finance literature stresses the disciplining role of outside debt in counteracting the internal pressures to divert such "free cash flow" into unprofitable investments. Managers can lose both their reputation and the control of "their" firm if the unpaid external debt triggers a bankruptcy procedure. The threat of possible failure to satisfy debt service payments pushes the managers toward an efficient use of available resources (Jensen, 1986; Stulz, 1990; Hart and Moore, 1995). The main sources of debt financing in the most countries are banks. The disciplining role of banks might be especially important in the countries suffering from insufficient judicial quality. Banks, in pursuing their rights, rely on comparatively simple legal interventions that can be implemented even by mediocre courts. In addition to their disciplining role, banks can promote efficient exporting patterns in a more direct way by relaxing credit constraints of producers, through screening, identifying and investing in the most profitable investment projects. Therefore, a well-developed domestic financial system, and particular banking system, would help to push a country's exports towards products congruent with its comparative advantage.This prediction is tested looking at the survival of different product categories exported to US market. Products are identified according to the Euclidian distance between their revealed factor intensity and the country's factor endowments. The results suggest that products suffering from a comparative disadvantage (labour-intensive products from capital-abundant countries) survive less on the competitive US market. This pattern is stronger if the exporting country has a well-developed banking system. Thus, a strong banking sector promotes exports consistent with a country comparative advantage.Chapter 4 of my PhD thesis further examines the role of financial markets in fostering efficient resource allocation in an economy. In particular, the allocative efficiency hypothesis is investigated in the context of equity market liberalization.Many empirical studies document a positive and significant effect of financial liberalization on growth (Levchenko et al. 2009; Quinn and Toyoda 2009; Bekaert et al., 2005). However, the decrease in the cost of capital and the associated growth in investment appears rather modest in comparison to the large GDP growth effect (Bekaert and Harvey, 2005; Henry, 2000, 2003). Therefore, financial liberalization may have a positive impact on growth through its effect on the allocation of funds across firms and sectors.Free access to international capital markets allows the largest and most profitable domestic firms to borrow funds in foreign markets (Rajan and Zingales, 2003). As domestic banks loose some of their best clients, they reoptimize their lending practices seeking new clients among small and younger industrial firms. These firms are likely to be more risky than large and established companies. Screening of customers becomes prevalent as the return to screening rises. Banks, ceteris paribus, tend to focus on firms operating in comparative-advantage sectors because they are better risks. Firms in comparative-disadvantage sectors finding it harder to finance their entry into or survival in export markets either exit or refrain from entering export markets. On aggregate, one should therefore expect to see less entry, more exit, and shorter survival on export markets in those sectors after financial liberalization.The paper investigates the effect of financial liberalization on a country's export pattern by comparing the dynamics of entry and exit of different products in a country export portfolio before and after financial liberalization.The results suggest that products that lie far from the country's comparative advantage set tend to disappear relatively faster from the country's export portfolio following the liberalization of financial markets. In other words, financial liberalization tends to rebalance the composition of a country's export portfolio towards the products that intensively use the economy's abundant factors.

NLRP3 inflammasome plays a key role in the regulation of intestinal homeostasis.

BACKGROUND:: Attenuated innate immune responses to the intestinal microbiota have been linked to the pathogenesis of Crohn's disease (CD). Recent genetic studies have revealed that hypofunctional mutations of NLRP3, a member of the NOD-like receptor (NLR) superfamily, are associated with an increased risk of developing CD. NLRP3 is a key component of the inflammasome, an intracellular danger sensor of the innate immune system. When activated, the inflammasome triggers caspase-1-dependent processing of inflammatory mediators, such as IL-1β and IL-18. METHODS:: In the current study we sought to assess the role of the NLRP3 inflammasome in the maintenance of intestinal homeostasis through its regulation of innate protective processes. To investigate this role, Nlrp3(-/-) and wildtype mice were assessed in the dextran sulfate sodium and 2,4,6-trinitrobenzenesulfonic acid models of experimental colitis. RESULTS:: Nlrp3(-/-) mice were found to be more susceptible to experimental colitis, an observation that was associated with reduced IL-1β, reduced antiinflammatory cytokine IL-10, and reduced protective growth factor TGF-β. Macrophages isolated from Nlrp3(-/-) mice failed to respond to bacterial muramyl dipeptide. Furthermore, Nlrp3-deficient neutrophils exhibited reduced chemotaxis and enhanced spontaneous apoptosis, but no change in oxidative burst. Lastly, Nlrp3(-/-) mice displayed altered colonic β-defensin expression, reduced colonic antimicrobial secretions, and a unique intestinal microbiota. CONCLUSIONS:: Our data confirm an essential role for the NLRP3 inflammasome in the regulation of intestinal homeostasis and provide biological insight into disease mechanisms associated with increased risk of CD in individuals with NLRP3 mutations. (Inflamm Bowel Dis 2010).

c-Jun N-terminal kinase has a key role in Alzheimer disease synaptic dysfunction in vivo.

Altered synaptic function is considered one of the first features of Alzheimer disease (AD). Currently, no treatment is available to prevent the dysfunction of excitatory synapses in AD. Identification of the key modulators of synaptopathy is of particular significance in the treatment of AD. We here characterized the pathways leading to synaptopathy in TgCRND8 mice and showed that c-Jun N-terminal kinase (JNK) is activated at the spine prior to the onset of cognitive impairment. The specific inhibition of JNK, with its specific inhibiting peptide D-JNKI1, prevented synaptic dysfunction in TgCRND8 mice. D-JNKI1 avoided both the loss of postsynaptic proteins and glutamate receptors from the postsynaptic density and the reduction in size of excitatory synapses, reverting their dysfunction. This set of data reveals that JNK is a key signaling pathway in AD synaptic injury and that its specific inhibition offers an innovative therapeutic strategy to prevent spine degeneration in AD.

Three essays in international finance

Executive Summary The first essay of this dissertation investigates whether greater exchange rate uncertainty (i.e., variation over time in the exchange rate) fosters or depresses the foreign investment of multinational firms. In addition to the direct capital financing it supplies, foreign investment can be a source of valuable technology and know-how, which can have substantial positive effects on a host country's economic growth. Thus, it is critically important for policy makers and central bankers, among others, to understand how multinationals base their investment decisions on the characteristics of foreign exchange markets. In this essay, I first develop a theoretical framework to improve our knowledge regarding how the aggregate level of foreign investment responds to exchange rate uncertainty when an economy consists of many firms, each of which is making decisions. The analysis predicts a U-shaped effect of exchange rate uncertainty on the total level of foreign investment of the economy. That is, the effect is negative for low levels of uncertainty and positive for higher levels of uncertainty. This pattern emerges because the relationship between exchange rate volatility and 'the probability of investment is negative for firms with low productivity at home (i.e., firms that find it profitable to invest abroad) and the relationship is positive for firms with high productivity at home (i.e., firms that prefer exporting their product). This finding stands in sharp contrast to predictions in the existing literature that consider a single firm's decision to invest in a unique project. The main contribution of this research is to show that the aggregation over many firms produces a U-shaped pattern between exchange rate uncertainty and the probability of investment. Using data from industrialized countries for the period of 1982-2002, this essay offers a comprehensive empirical analysis that provides evidence in support of the theoretical prediction. In the second essay, I aim to explain the time variation in sovereign credit risk, which captures the risk that a government may be unable to repay its debt. The importance of correctly evaluating such a risk is illustrated by the central role of sovereign debt in previous international lending crises. In addition, sovereign debt is the largest asset class in emerging markets. In this essay, I provide a pricing formula for the evaluation of sovereign credit risk in which the decision to default on sovereign debt is made by the government. The pricing formula explains the variation across time in daily credit spreads - a widely used measure of credit risk - to a degree not offered by existing theoretical and empirical models. I use information on a country's stock market to compute the prevailing sovereign credit spread in that country. The pricing formula explains a substantial fraction of the time variation in daily credit spread changes for Brazil, Mexico, Peru, and Russia for the 1998-2008 period, particularly during the recent subprime crisis. I also show that when a government incentive to default is allowed to depend on current economic conditions, one can best explain the level of credit spreads, especially during the recent period of financial distress. In the third essay, I show that the risk of sovereign default abroad can produce adverse consequences for the U.S. equity market through a decrease in returns and an increase in volatility. The risk of sovereign default, which is no longer limited to emerging economies, has recently become a major concern for financial markets. While sovereign debt plays an increasing role in today's financial environment, the effects of sovereign credit risk on the U.S. financial markets have been largely ignored in the literature. In this essay, I develop a theoretical framework that explores how the risk of sovereign default abroad helps explain the level and the volatility of U.S. equity returns. The intuition for this effect is that negative economic shocks deteriorate the fiscal situation of foreign governments, thereby increasing the risk of a sovereign default that would trigger a local contraction in economic growth. The increased risk of an economic slowdown abroad amplifies the direct effect of these shocks on the level and the volatility of equity returns in the U.S. through two channels. The first channel involves a decrease in the future earnings of U.S. exporters resulting from unfavorable adjustments to the exchange rate. The second channel involves investors' incentives to rebalance their portfolios toward safer assets, which depresses U.S. equity prices. An empirical estimation of the model with monthly data for the 1994-2008 period provides evidence that the risk of sovereign default abroad generates a strong leverage effect during economic downturns, which helps to substantially explain the level and the volatility of U.S. equity returns.

Global regulation of the knowledge-based economy: The rise of standards in educational services

This article examines the extent and limits of non-state forms of authority in international relations. It analyses how the information and communication technology (ICT) infrastructure for the tradability of services in a global knowledge-based economy relies on informal regulatory practices for adjustment of ICT-related skills. Companies and associations provide training and certification programmes as part of a growing market for educational services setting their own standards. The existing literature on non-conventional forms of authority in the global political economy has emphasised that the consent of actors subject to informal rules and explicit or implicit state recognition remains crucial for the effectiveness of those new forms of power. However, analyses based on a limited sample of actors tend toward a narrow understanding of the issues and fail to fully explore the differentiated space in which non-state authority is emerging. This paper examines the form of authority underpinning the global knowledge-based economy within the broader perspective of the issues likely to be standardised by technical ICT specification, the wide range of actors involved, and the highly differentiated space where standards become authoritative. The empirical findings highlight the role of different private actors in establishing international educational norms in this field. They also pinpoint the limits of profit-oriented standard-settings, notably with regard to generic norms.

The transcription factor PHR1 plays a key role in the regulation of sulfate shoot-to-root flux upon phosphate starvation in Arabidopsis.

Background: Sulfate and phosphate are both vital macronutrients required for plant growth and development. Despite evidence for interaction between sulfate and phosphate homeostasis, no transcriptional factor has yet been identified in higher plants that affects, at the gene expression and physiological levels, the response to both elements. This work was aimed at examining whether PHR1, a transcription factor previously shown to participate in the regulation of genes involved in phosphate homeostasis, also contributed to the regulation and activity of genes involved in sulfate inter-organ transport. Results: Among the genes implicated in sulfate transport in Arabidopsis thaliana, SULTR1;3 and SULTR3;4 showed up-regulation of transcripts in plants grown under phosphate-deficient conditions. The promoter of SULTR1;3 contains a motif that is potentially recognizable by PHR1. Using the phr1 mutant, we showed that SULTR1;3 up regulation following phosphate deficiency was dependent on PHR1. Furthermore, transcript up regulation was found in phosphate-deficient shoots of the phr1 mutant for SULTR2;1 and SULTR3;4, indicating that PHR1 played both a positive and negative role on the expression of genes encoding sulfate transporters. Importantly, both phr1 and sultr1;3 mutants displayed a reduction in their sulfate shoot-to-root transfer capacity compared to wild-type plants under phosphate-deficient conditions. Conclusions: This study reveals that PHR1 plays an important role in sulfate inter-organ transport, in particular on the regulation of the SULTR1;3 gene and its impact on shoot-to-root sulfate transport in phosphate-deficient plants. PHR1 thus contributes to the homeostasis of both sulfate and phosphate in plants under phosphate deficiency. Such a function is also conserved in Chlamydomonas reinhardtii via the PHR1 ortholog PSR1.