Economics Insights @ CBS

This paper studies the joint impact of corruption on the entry mode and volume of inward foreign direct investment (FDI) using a unique firm-level data set. We find that corruption not only reduces inward FDI, but also shifts the ownership structure towards joint ventures. The latter finding supports the view that corruption increases the value of using a local partner to cut through the bureaucratic maze. However, R&D intensive firms are found to favor sole ownership.

Reflecting on the past is often a critical ingredient for successful learning. The current research investigated how counterfactual thinking, reflecting on how prior experiences might have been different, motivates effective learning from these previous experiences. Specifically, we explored how the structure of counterfactual reflection — their additive ("If only I had") versus subtractive ("If only I had not") nature — influences performance in dyadic-level strategic interactions.

The universality of design perception and response is tested using data collected from 10 countries: Argentina, Australia, China, Germany, Great Britain, India, The Netherlands, Russia, Singapore, and the United States. A Bayesian, finite-mixture, structural equation model is developed that identifies latent logo clusters while accounting for heterogeneity in evaluations. The concomitant variable approach allows cluster probabilities to be country specific.

Despite abundant anecdotal evidence that creativity is associated with living in foreign countries, there is currently little empirical evidence for this relationship. Five studies employing a multimethod approach systematically explored the link between living abroad and creativity. Using both individual and dyadic creativity tasks, Studies 1 and 2 provided initial demonstrations that time spent living abroad (but not time spent traveling abroad) showed a positive relationship with creativity.

The authors propose that culture affects people through their perceptions of what is consensually believed. Whereas past research has examined whether cultural differences in social judgment are mediated by differences in individuals’ personal values and beliefs, this article investigates whether they are mediated by differences in individuals’ perceptions of the views of people around them.