Analyzing Modes of Foreign Entry

This paper studies the entry decision of a multinational enterprise into a foreign market. Two alternative entry modes for a foreign direct investment are considered: Greenfield investment versus acquisition. In contrast to existing approaches, the acquisition price and the profits under both entry modes are endogenously determined. Interestingly, we find that the optimal entry mode decision is a ected by the competition intensity in the market in a non-monotonic way. When markets are very much or very little competitive, greenfield investment is the optimal entry mode, while for intermediate values it is acquisition.Foreign direct investment ; multinational enterprise ; greenfield investment ; acquisition ; transition economies

Modes of Foreign Entry under Asymmetric Information about Potential Technology Spillovers

This paper studies the effect of technology spillovers on the entry decision of a multinational enterprise into a foreign market. Two alternative entry modes for a foreign direct investment are considered: Greenfield investment versus acquisition. We find that with quantity competition a spillover makes acquisitions less attractive, while with price competition acquisitions become more attractive. Asymmetric information about potential spillovers always reduces the number of acquisitions independently of whether the host country or the entrant has private information. Interestingly, we find that asymmetric information always hurts the entrant, while it sometimes is in favor of the host country.Foreign direct investment ; multinational enterprise ; enty mode ; technology spillovers ; asymmetric information ; transition economies

Technology Transfer and Spillovers in International Joint Ventures

This paper analyzes the effects of a potential spillover on technology transfer of a multinational enterprise and on the host country policy. In particular, we examine how both parties' incentives can be controlled through the ownership structure in an international joint venture. In contrast to existing arguments we show that spillovers must not always have negative effects on technology transfer and they may be efficiency improving. Moreover, there are circumstances where a joint venture is mutually beneficial. Surprisingly, however, we find that despite the prospect of spillovers a joint venture is sometimes not in the interest of a host country.Foreign Direct Investment; Joint Venutres; Ownership Structure; Multinational Enterprise; Spillovers; Transition Economics

Overconfidence in the Market for Lemons

We extend Akerlof ’s (1970) “Market for Lemons†by assuming that some buyers are overconfident. Buyers in our model receive a noisy signal about the quality of the good that is at display for sale. Overconfident buyers do not update according to Bayes’ rule but take the noisy signal at face value. The main finding is that the presence of overconfident buyers can stabilize the market outcome by preventing total adverse selection. This stabilization, however, comes at a cost: rational buyers are crowded out of the market.Adverse Selection; Market for Lemons; Overconfidence

Price Discrimination in Input Markets: Quantity Discounts and Private Information

We consider a monopolistic supplier’s optimal choice of wholesale tariffs when downstream firms are privately informed about their retail costs. Under discriminatory pricing, downstream firms that differ in their ex ante distribution of retail costs are offered different tariffs. Under uniform pricing, the same wholesale tariff is offered to all downstream firms. In contrast to the extant literature on thirddegree price discrimination with nonlinear wholesale tariffs, we find that banning discriminatory wholesale contracts—the usual legal practice in the EU and US— often is beneficial for social welfare. This result is shown to be robust even when the upstream supplier faces competition in the form of fringe supply.Asymmetric Information; InputMarkets; Quantity Discounts; Price Discrimination; Screening; Vertical Contracting

Coping with old age in a changing Africa by Nana Araba Apt

Students of ageing in Africa will welcome Coping with old age in a changing Africa. It meets the need for a book written by a gerontologist committed to portraying an insider view of Africas social problems and finding home-grown solutions. The title, however, is misleading. Apts book is about growing old in Ghana, as indicated in the minute subtitle which appears on the title page but not on the cover of the book. Nevertheless, readers will learn much about Africa from the Ghanaian case study

Old age in global perspective: cross-cultural and cross-national views by Steven M. Albert and Maria G. Cattell

In this article we contest the widespread view that the social or political consciousness that developed among South African youth, as a result of their role in the uprisings of the 1980s, led them to reject the authority of the older generation, in their families and generally. Using the results of a national probability-sample survey among youth of the four main race groups in South Africa, we argue that an assumed political consciousness is not a helpful variable to use in understanding South African youth and their attitudes towards the values of their parents. We go on to disaggregate youth according to parental presence and roles during childhood; to find various and changing patterns of parenting, including the importance of grandmothers; and to argue that intergenerational attitudes among young people differ importantly according to these differing formative experience

Living with adult children: a benefit assessment of co-resident living arrangements among black and white older South Africans

South Africa serves as an instructive case for the study of living arrangements. Co-residence with a child is the rule for the black elderly and the exception for the white elderly. The article analyses the living arrangements of black and while elderly drawing on a national database (Ferreira et al.. 1992). The focus of attention is the co-resident living arrangement. The article explores the determinants of co-residence and discusses the specific benefits accruing to the older person and the adult child. The findings suggest that traditional social security arrangements for the black elderly are adapting to the rapid social change taking place in South Africa. Notably, daughters as well as sons are involved in carrying out filial piety duties, especially in the urban areas. There are signs in the data that poor housing conditions and a lack of choice in housing place family relations under severe strain in the urban areas. Overall, co-residence is generally perceived as a positive experience by the elderly. It is recommended that the extended family living arrangement deserves consideration as both an acceptable and a viable option for the care of the elderly in South Africa in the foreseeable future

Voter education and older African first-time voters in South Africa's 1994 elections

In the run-up to the first non-racial democratic elections held in April 1994 voter education targeted all South Africans to promote free and fair elections. A particular challenge for the campaign launched by the Independent Electoral Commission (IEC) was to reach illiterate and rural citizens. A nationwide representative sample survey conducted shortly after the elections sought to evaluate the effectiveness of voter education. The dataset pertaining to African first-time voters (n = I 208) was re-analysed for this paper to compare the subjective experience of voter education and voting behaviour among older (50+ years) and younger citizens. A risk analysis was applied to identify categories of older persons who were less likely than others to receive voter education messages and to go to the polls. The results indicated that the voter education campaign was successful in engaging older voters and that voting behaviour of older and younger voters was similar. Where differences occurred, they were mainly associated with rural location and also education factors but rarely with age. The finding that post-election euphoria among older first-time voters equaled or surpassed that of younger voters led to the conclusion that voting was experienced as a particularly fulfilling moment in the lives of older black South Africans