Subarna K. Samanta

Correlates of bribe giving in international business

Using indices of bribe for 19 countries, this study examines the determinants of bribe paying in international business. There is a strong positive correlation between countries where bribe taking is highly prevalent and those countries that are most likely to offer bribes. The propensity to give bribes is determined by economic factors such as per capita income and degree of economic freedom in the country, cultural factors such as power distance and masculinity; and legal regulatory factors such as accounting and tax treatment of bribes. It appears that, to eliminate international bribery, the supply side needs to be addressed in addition to the demand for bribes.

Application of Stein Rules to Combination Forecasting

We propose some Stein-rule combination forecasting methods that are designed to ameliorate the estimation risk inherent in making operational the variance–covariance method for constructing combination weights. By Monte Carlo simulation, it is shown that this amelioration can be substantial in many cases. Moreover, generalized Stein-rule combinations are proposed that offer the user the opportunity to enhance combination forecasting performance when shrinking the feasible variance–covariance weights toward a fortuitous shrinkage point. In an empirical exercise, the proposed Stein-rule combinations performed well relative to competing combination methods.

Effect of perception of corruption on outward US Foreign Direct Investment

US Foreign Direct Investment (FDI) outflows are examined with respect to the level of corruption – in the form of bribery – in 42 recipient countries over a five-year period. Analysis indicates that US firms are less likely to invest in countries where bribery, as measured by the Corruption Perceptions Index (CPI), is widespread. However, the size of the foreign market is found to be a more robust factor determining US outward investment, with larger economies attracting more investment. The level of bribery, while significant by itself, loses its importance when included with other economic and cultural variables. The findings are discussed in the context of the Foreign Corrupt Practices Act (FCPA), which makes it illegal for US firms to bribe foreign officials to obtain business advantages.

Investment Flows, Economic Growth, and Corruption in African Countries: An Analysis

ABSTRACT The analysis of corruption in international business is a relatively new phenomenon, and for the past two decades, many studies have attempted to capture the economic impact of the corruption in a country. However, most of these studies have concentrated their analysis to the experiences of the developed countries. None or very few of the current works have addressed the corruption issue in the context of foreign direct investment and economic growth in the developing countries. This work examines theoretically, as well as empirically, the incidence of corruption in the context of foreign direct investment in the developing countries, especially several African countries that signed a treaty to reduce the incidence of corruption in their respective countries.

Trends in international bribe‐giving: do anti‐bribery laws matter?

Purpose – This paper aims to examine whether the vigorous enforcement of anti‐bribery laws has had an impact on the propensity of firms to engage in bribe‐giving in international business.Design/methodology/approach – A set of statistical analyses was performed on data – Bribe Payers Index, a measure of bribe‐giving – from four years spanning a nine‐year period to ascertain trends in bribe‐giving.Findings – The results indicate that the perceived level of bribe‐giving by firms from the major exporting countries has been declining. This decline has occurred at a time when the enforcement of national anti‐bribery laws has been stepped up greatly and international treaties against bribe‐giving have been adopted and increasingly enforced.Research limitations/implications – A robust legal approach to curb bribe‐giving appears to have a general deterrent effect on the propensity of firms based in the countries studied to engage in bribe‐giving. Data availability is limited to about 20 countries.Practical implic...

Unanticipated monetary policy: Another look for a developing country

Abstract This paper examines the problem of testing the RESN hypothesis from the perspective of a developing economy where deviation of the level of output from its natural rate is assumed to be affected by the unexpected monetary change only. In this context, we have developed three different methods to estimate the anticipated and unanticipated money change. The empirical findings are in conflict with the RESN hypothesis that only unanticipated money growth matters for real economic activity and, hence, the paper provides opposing evidence for the usefulness of this approach for the macroeconomic policies in developing economies.

Factor Market Distortions and Backward Incidence of Pollution Control

This paper analyzes the backward incidence of stronger pollution control into factors of production using a two-sector general equilibrium model in which the economy experiences perfect capital mobility but norigid factor price differential. In this context we conclude that higher levels of wage and capital rental differentials may act as an effective control over the pollution emission in the economy when factor price differentials directly depend on the pollution level.

The Effects of Different Teaching Approaches in Introductory Financial Accounting

Abstract The purpose of the research is to examine the effect of the two different teaching approaches in the first accounting course on student performance in a subsequent finance course. The study compares 128 accounting and finance students who took introductory financial accounting by either a user approach or a traditional preparer approach to examine their academic performance on a subsequent finance course. The results indicate that there is no significant difference in the finance course grade between students who took the traditional introductory accounting course and students who were taught under the user approach. These findings support the argument that the user approach has no impact on subsequent finance course grade and either method can be used to teach introductory financial accounting. Three factors were found to affect subsequent performance in an introductory finance course: GPA prior to taking the finance course, grades in macroeconomics, and statistics.

CROSS COUNTRY SPILLOVER EFFECTS IN FOREIGN EXCHANGE MARKET: An Empirical Analysis of Six OECD Countries

This article examines the extent of cross-country spillover effects with regard to the foreign exchange rates in an increasingly integrated world economy. Vector Autoregression methodologies are used to identify the spillover effects of one exchange rate changes on other exchange rates. Analysis of monthly data over 1973–1999 period for six OECD countries (Canada, France, Germany, Great Britain, Italy, and Japan) does indicate the existence of strong spillover effects or interdependence among the exchange rates for most of the countries considered in this study.

Effects of Exchange Rate Uncertainty on Mexican Foreign Trade

The behavior of current account balance and the value of the domestic currency has been a focal point of much policy discussion for a long time. Most of the OECD countries have experienced volatile exchange rates as well as current account deficits for most of the last two decades. Conventional wisdom holds that appreciation of domestic currency leads to increased trade deficit and vice versa. This paper examines the long run equilibrium relation between exchange rate risk and the volume of foreign trade in Mexico. Mexico is one of the countries in Latin America that has been moving towards a free market economy, featuring free trade as the main driving force behind its endeavor for economic development. So, it is of keen interest to examine how the exchange rate fluctuations and its uncertainty has influenced the economy during such institutional changes.