Leadership & Organizational Behavior

There is perhaps no topic that is more important for the functioning of a market economy than competition policy. The theorems and analyses stating that market economies deliver benefits in the form of higher living standards and lower prices are all based on the assumption that there is effective competition in the market. At the same time when Adam Smith emphasised that competitive markets deliver enormous benefits, he also emphasised the tendency of firms to suppress competition.

Over the last three decades, there has been a substantial shift in financial market policy towards the promotion of financial liberalization. Policy makers around the globe have been preoccupied with deregulating interest rates, lifting restrictions on bank portfolios and enticing competition in financial services. Financial deregulation is typically accompanied with a change in the system of prudential regulation.

Much has been learned about emerging markets finance over the past 20 years. These markets have attracted a unique interdisciplinary interest that bridges both investment and corporate finance with international economics, development economics, law, demographics, and political science. Our paper focuses on the research areas that are ripe for exploration.

Regulatory changes that appear comprehensive will have little impact on the functioning of a developing market if they fail to lead to foreign portfolio inflows. We specify a reduced-form model for a number of financial time series and search for a common, endogenous break in the data generating process. We also estimate a confidence interval for the break. Our endogenous break dates are accurately estimated but do not always correspond closely to dates of official capital market reforms.

We study the interrelationship between capital flows, returns, dividend yields and world interest rates in 20 emerging markets. We estimate a vector autoregression with these variables to measure the degree to which lower interest rates contribute to increased capital flows and shocks in flows affect the cost of capital among other dynamic relations. We precede the VAR analysis by a detailed examination of endogenous break points in capital flows and the other variables. These structural breaks are traced to the liberalization of emerging equity markets.

The Great Divide in economic and financial development and the convergence in financial architecture among the successful countries raise fundamental questions about how financial development interacts with economic growth. Is it possible to engineer a development takeoff by creating a modern financial architecture from scratch? Or are financial institutions and markets a reflection of underlying conditions in the real sector? Or are both financial development and economic growth driven by some other underlying variables?

Supply chain management is a complex process that requires a high-level dedicated governing body or steering committee to meet the various needs of the supply chain's multiple customers. Because a supply chain system is complex and nonlinear, there may be multiple reasons for poor performance. Supply chains can fall victim to feedback loops that reinforce negative actions and behaviors. Improving a supply chain requires understanding functional deficiencies and, also, how such deficiencies interact with one another to degrade overall performance.

Three experiments explored the role of negotiator focus in disconnecting negotiated outcomes and evaluations. Negotiators who focused on their target prices, the ideal outcome they could obtain, achieved objectively superior outcomes compared with negotiators who focused on their lower bound (e.g., reservation price). Those negotiators who focused on their targets, however, were less satisfied with their objectively superior outcomes.

In this article, the authors explore the role of individuals' counterfactual thoughts in determining their satisfaction with negotiated outcomes. When negotiators' first offers are immediately accepted, negotiators are more likely to generate counterfactual thoughts about how they could have done better and therefore are less likely to be satisfied with the agreement than are negotiators whose offers are not accepted immediately.