Liability of country foreignness and liability of regional foreignness: their effects on geographic diversification and firm performance

The costs of inter- and intra-regional diversification have been widely discussed in the existing international business literature, but the findings are mixed. Explanations for the mixed findings have important managerial implications, because business managers have to estimate accurately the costs of doing business within and across regions before they make their internationalization decisions. To explain the existing mixed findings, this study differentiates between liabilities of foreignness at the country and regional levels, and explores the joint effects of liability of country foreignness (LCF) and liability of regional foreignness (LRF) on the performance of internationalizing firms. Using data from 167 Canadian firms, we find that LCF may not necessarily be negatively correlated with intra-regional diversification, but LRF is positively correlated with inter-regional diversification. LCF moderates the relationship between LRF and inter-regional diversification, and also mediates the relationship between intra-regional diversification and firm performance. LRF mediates the relationship between inter-regional diversification and firm performance. Missing one or more of these variables may result in different cost estimates. Identification of the relationships between these variables helps to improve the accuracy of estimating the costs of doing business aboard.

Proactive R&D management and firm growth: a punctuated equilibrium model

The external environment is characterized by periods of relative stability interspersed with periods of extreme change, implying that high performing firms must practice exploration and exploitation in order to survive and thrive. In this paper, we posit that R&D expenditure volatility indicates the presence of proactive R&D management, and is evidence of a firm moving from exploitation to exploration over time. This is consistent with a punctuated equilibrium model of R&D investment where shocks are induced by reactions to external turbulence. Using an unbalanced panel of almost 11,000 firm-years from 1997 to 2006, we show that greater fluctuations in the firm's R&D expenditure over time are associated with higher firm growth. Developing a contextual view of the relationship between R&D expenditure volatility and firm growth, we find that this relationship is weaker among firms with higher levels of corporate diversification and negative among smaller firms and those in slow clockspeed industries.

Multi-site evaluation of an urban land-surface model: intra-urban heterogeneity, seasonality and parameter complexity requirements

An extensive off-line evaluation of the Noah/Single Layer Urban Canopy Model (Noah/SLUCM) urban land-surface model is presented using data from 15 sites to assess (1) the ability of the scheme to reproduce the surface energy balance observed in a range of urban environments, including seasonal changes, and (2) the impact of increasing complexity of input parameter information. Model performance is found to be most dependent on representation of vegetated surface area cover; refinement of other parameter values leads to smaller improvements. Model biases in net all-wave radiation and trade-offs between turbulent heat fluxes are highlighted using an optimization algorithm. Here we use the Urban Zones to characterize Energy partitioning (UZE) as the basis to assign default SLUCM parameter values. A methodology (FRAISE) to assign sites (or areas) to one of these categories based on surface characteristics is evaluated. Using three urban sites from the Basel Urban Boundary Layer Experiment (BUBBLE) dataset, an independent evaluation of the model performance with the parameter values representative of each class is performed. The scheme copes well with both seasonal changes in the surface characteristics and intra-urban heterogeneities in energy flux partitioning, with RMSE performance comparable to similar state-of-the-art models for all fluxes, sites and seasons. The potential of the methodology for high-resolution atmospheric modelling application using the Weather Research and Forecasting (WRF) model is highlighted. This analysis supports the recommendations that (1) three classes are appropriate to characterize the urban environment, and (2) that the parameter values identified should be adopted as default values in WRF.

Meta-analysis of the INSIG2 association with obesity including 74,345 individuals: does heterogeneity of estimates relate to study design?

The INSIG2 rs7566605 polymorphism was identified for obesity (BMI> or =30 kg/m(2)) in one of the first genome-wide association studies, but replications were inconsistent. We collected statistics from 34 studies (n = 74,345), including general population (GP) studies, population-based studies with subjects selected for conditions related to a better health status ('healthy population', HP), and obesity studies (OB). We tested five hypotheses to explore potential sources of heterogeneity. The meta-analysis of 27 studies on Caucasian adults (n = 66,213) combining the different study designs did not support overall association of the CC-genotype with obesity, yielding an odds ratio (OR) of 1.05 (p-value = 0.27). The I(2) measure of 41% (p-value = 0.015) indicated between-study heterogeneity. Restricting to GP studies resulted in a declined I(2) measure of 11% (p-value = 0.33) and an OR of 1.10 (p-value = 0.015). Regarding the five hypotheses, our data showed (a) some difference between GP and HP studies (p-value = 0.012) and (b) an association in extreme comparisons (BMI> or =32.5, 35.0, 37.5, 40.0 kg/m(2) versus BMI<25 kg/m(2)) yielding ORs of 1.16, 1.18, 1.22, or 1.27 (p-values 0.001 to 0.003), which was also underscored by significantly increased CC-genotype frequencies across BMI categories (10.4% to 12.5%, p-value for trend = 0.0002). We did not find evidence for differential ORs (c) among studies with higher than average obesity prevalence compared to lower, (d) among studies with BMI assessment after the year 2000 compared to those before, or (e) among studies from older populations compared to younger. Analysis of non-Caucasian adults (n = 4889) or children (n = 3243) yielded ORs of 1.01 (p-value = 0.94) or 1.15 (p-value = 0.22), respectively. There was no evidence for overall association of the rs7566605 polymorphism with obesity. Our data suggested an association with extreme degrees of obesity, and consequently heterogeneous effects from different study designs may mask an underlying association when unaccounted for. The importance of study design might be under-recognized in gene discovery and association replication so far.

Role of genetic polymorphism peroxisome proliferator-activated receptor-gamma2 Pro12Ala on ethnic susceptibility to diabetes in South-Asian and Caucasian subjects: Evidence for heterogeneity

OBJECTIVE: To determine whether the peroxisome proliferator-activated receptor (PPAR)-gamma Pro12ala polymorphism modulates susceptibility to diabetes in South Asians. RESEARCH DESIGN AND METHODS: South Asians (n = 697) and Caucasians (n = 457) living in Dallas/Forth Worth, Texas, and South Asians living in Chennai, India (n = 1,619), were enrolled for this study. PPAR-gamma Pro12Ala was determined using restriction fragment-length polymorphism. Insulin responsiveness to an oral glucose tolerance test (OGTT) was measured in nondiabetic subjects. RESULTS: The Caucasian diabetic subjects had significantly lower prevalence of PPAR-gamma 12Ala when compared with the Caucasian nondiabetic subjects (20 vs. 9%, P = 0.006). However, there were no significant differences between diabetic and nondiabetic subjects with reference to the Pro12Ala polymorphism among the South Asians living in Dallas (20 vs. 23%) and in India (19 vs. 19.3%). Although Caucasians carrying PPAR-gamma Pro12Ala had lower plasma insulin levels at 2 h of OGTT than the wild-type (Pro/Pro) carriers (76 +/- 68 and 54 +/- 33 microU/ml, respectively, P = 0.01), no differences in either fasting or 2-h plasma insulin concentrations were found between South Asians carrying the PPAR-gamma Pro12Ala polymorphism and those with the wild-type genotype at either Chennai or Dallas. CONCLUSIONS: Although further replication studies are necessary to test the validity of the described genotype-phenotype relationship, our study supports the hypothesis that the PPAR-gamma Pro12Ala polymorphism is protective against diabetes in Caucasians but not in South Asians.

Good and bad increases in ecological awareness: environmental differentiation revisited

We analyze a vertically differentiated market, assuming that conventional and green firms' products have different impacts on the environment. Heterogeneous consumers choose to be supplied by a conventional or a green firm, depending on their extra willingness to pay for a green product and the relative prices of the products in the market. We show that environmental awareness campaigns may have a negative impact on total welfare. This possibility is shown to exist without consumer misperceptions about the quality of green products and ruling out changes in the coverage and the structure of the market. Surprisingly, both conventional and green firms may benefit from heterogeneity-enhancing awareness campaigns, while social welfare is more likely to be enhanced by heterogeneity-reducing ones.

Greasing the wheels? The impact of regulations and corruption on firm entry

This paper investigates the question of whether corruption might ‘grease the wheels’ of an economy. We investigate whether and to what extent the impact of regulations on entrepreneurship is dependent on corruption. We first test whether regulations robustly deter firm entry into markets. Our results show that the existence of a larger number of procedures required to start a business, as well as larger minimum capital requirements are detrimental to entrepreneurship. Second, we test whether corruption reduces the negative impact of regulations on entrepreneurship in highly regulated economies. Our empirical analysis, covering a maximum of 43 countries over the 2003–2005 period, shows that corruption facilitates firm entry in highly regulated economies. For example, the ‘greasing’ effect of corruption kicks in at around 50 days required to start a new business. Our results thus provide support for the ‘grease the wheels’ hypothesis.

Genetic heterogeneity in erythropoietic protoporphyria: a study of the enzymatic defect in nine affected families

Erythropoietic protoporphyria (EPP) is associated with a deficiency of protohaem ferrolyase. We have used a novel assay for this enzyme based on its ability to utilize zinc as a substrate to investigate the inheritance of EPP in nine affected families. Zinc chelatase activity was markedly reduced in peripheral blood mononuclear cells from 14 EPP patients (mean, 3.3 nmol Zn protohaem/h/mg protein; range, 0.3-8.0) when compared with 41 controls (16.8 +/- 3.6) p less than 0.01. In three families with parent-to-child transmission of disease, the asymptomatic parent had an enzymatic activity within the normal range. In three pedigrees where the parents were asymptomatic, enzymatic activities were below the 95% confidence limits in both. Zinc chelatase activity was below the mean control value in 17 of the 18 parents in nine affected pedigrees, and six of seven asymptomatic offspring of patients with protoporphyria. The findings suggest that EPP is not transmitted as a simple dominant trait and that inheritance of more than one gene may be required for disease expression.

Energy exchange in a dense urban environment Part II: impact of spatial heterogeneity of the surface

The centre of cities, characterised by spatial and temporal complexity, are challenging environments for micrometeorological research. This paper considers the impact of sensor location and heterogeneity of the urban surface on flux observations in the dense city centre of London, UK. Data gathered at two sites in close vicinity, but with different measurement heights, were analysed to investigate the influence of source area characteristics on long-term radiation and turbulent heat fluxes. Combining consideration of diffuse radiation and effects of specular reflections, the non-Lambertian urban surface is found to impact the measurements of surface albedo. Comparisons of observations from the two sites reveal that turbulent heat fluxes are similar under some flow conditions. However, they mostly observe processes at different scales due to their differing measurement heights, highlighting the critical impact of siting sensors in urban areas. A detailed source area analysis is presented to investigate the surface controls influencing the energy exchanges at the different scales

Monopolistic product line competition with ex post consumer heterogeneity

We model monopolistic competition in product lines, assuming that consumer heterogeneity is the result rather than the cause of product variety. Our results contradict some well-known policy implications yielded by the standard monopolistic competition framework.

Two-way communication costs and the boundaries of the firm

Casson and Wadeson (International Journal of the Economics of Business, 1998, 5, pp. 5-27) have modelled the dialogue, or conversation, which customers have with their suppliers in order to convey their requirements, while taking production implications into account. They showed that this has important implications for the positioning of the boundaries of the firm. Unfortunately, their model has the restriction that communication is only costly in the direction of customer to supplier. This paper extends their model by introducing two-way communication costs. It shows that the level of communication cost in the direction of supplier to customer is a key additional factor in determining the nature of the dialogue that takes place. It also shows that this has important additional implications for the positioning of the boundaries of the firm. Custom computer software development is used as an example of an application of the theory.

Communication costs and the boundaries of the firm

Much has been written about where the boundaries of the firm are drawn, but little about what occurs at the boundaries themselves. When a firm subcontracts, does it inform its suppliers fully of what it requires, or is it willing to accept what they have available? In practice firms often engage in a dialogue, or conversation, with their suppliers, in which at first they set out their general requirements, and only when the supplier reports back on how these can be met are their more specific requirements set out. This paper models such conversations as a rational response to communication costs. The model is used to examine the impact of new information technology, such as CAD/CAM, on the conduct of subcontracting. It can also be used to examine its impact on the marketing activities of firms. The technique of analysis, which is based on the economic theory of teams, has more general applications too. It can be used to model all the forms of dialogue involved in the processes of coordination both within and between firms.

Information strategies and the theory of the Firm

Information costs play a key role in determining the relative efficiency of alternative organisational structures. The choice of locations at which information is stored in a firm is an important determinant of its information costs. A specific example of information use is modelled in order to explore what factors determine whether information should be stored centrally or locally and if it should be replicated at different sites. This provides insights into why firms are structured hierarchically, with some decisions and tasks being performed centrally and others at different levels of decentralisation. The effects of new information technologies are also discussed. These can radically alter the patterns and levels of information costs within a firm and so can cause substantial changes in organisational structure.