Asia Pacific

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Cultural Disharmony Undermines Workplace Creativity

Managing cultural friction not only creates a more harmonious workplace, says professor Roy Y.J. Chua, but ensures that you reap the creative benefits of multiculturalism at its best. Closed for comment; 13 Comments posted.

Will the Japan Disaster Remake the Landscape for Green Energy in Asia?

Entrepreneurs at the recent Asia Business Conference at Harvard Business School said the disaster in Japan could accelerate the move toward "green" energy sources in Asia, opening opportunities. Read More

China’s 60-Year Road from Revolution to World Power

In a new book, The People's Republic of China at 60: An International Assessment, HBS professor William C. Kirby discusses common assumptions about pre-revolutionary China and its development into an economic power. Read More

It Pays to Hire Women in Countries That Won’t

South Korean companies don't hire many women, no matter how qualified. So multinationals are moving in to take advantage of this rich hiring opportunity, according to new research by professor Jordan Siegel. Read More

The Consumer Appeal of Underdog Branding

Research by HBS professor Anat Keinan and colleagues explains how and why a "brand biography" about hard luck and fierce determination can boost the power of products in industries as diverse as food and beverages, technology, airlines, and automobiles. Closed for comment; 21 Comments posted.

Mindful Leadership: When East Meets West

Harvard Business School professor William George is fusing Western understanding about leadership with Eastern wisdom about the mind to develop leaders who are self-aware and self-compassionate. An interview about his recent Mindful Leadership conference taught with a Buddhist meditation master. Closed for comment; 33 Comments posted.

A Reexamination of Tunneling and Business Groups: New Data and New Methods

"Tunneling" refers to efforts by firms' controlling owner-managers to take money for themselves at the expense of minority shareholders. Looking at emerging economies in general and at India in particular, HBS professor Jordan I. Siegel and doctoral student Prithwiraj Choudhury argue for a simultaneous analysis of corporate governance and strategic activity differences in order to reveal the quality of firm-level corporate governance. The development of rigorous methodology in corporate governance is not merely an academic issue but has enormous real-world consequences. It is critical that scholars gain deeper empirical and theoretical insights into the question of whether these business groups serve primarily as theft devices for the controlling owners, or whether they serve primarily as a positive force that enables the creation of scale and scope efficiencies. Read More

Looking Behind Google’s Stand in China

Google's threat to pull out of China is either a blow for Internet freedom or cover for a failed business strategy, depending on with whom you talk. Professor John A. Quelch looks behind the headlines in a new case. Read More

The End of Chimerica

For the better part of the past decade, the world economy has been dominated by a unique geoeconomic constellation that the authors call "Chimerica": a world economic order that combined Chinese export-led development with U.S. overconsumption on the basis of a financial marriage between the world's sole superpower and its most likely future rival. For China, the key attraction of the relationship was its potential to propel the Chinese economy forward by means of export-led growth. For the United States, Chimerica meant being able to consume more, save less, and still maintain low interest rates and a stable rate of investment. Yet, like many another marriage between a saver and a spender, Chimerica was not destined to last. In this paper, economic historians Niall Ferguson of HBS and Moritz Schularick of Freie Universitšt Berlin consider the problem of global imbalances and try to set events in a longer-term perspective. Read More

Business Summit: China in the Global Economy

While the global economic downturn will affect China's exports, the domestic economy is expected to remain strong, agreed panelists at the HBS Business Summit. Read More

Business Summit: The Evolution of Agribusiness

Agribusiness has come to be seen not just as economically important, but as a critical part of society. The future for this massive industry will be both exciting and complex. Read More

Do Friends Influence Purchases in a Social Network?

In spite of the cultural and social revolution in the rise of social networking sites such as Facebook and MySpace (and in South Korea, Cyworld), the business viability of these sites remains in question. While many sites are attempting to follow Google and generate revenues from advertising, will advertising be effective? If friends influence the purchases of a user in a social network, it could potentially be a significant source of revenue for the sites and their corporate sponsors. Using a unique data set from Cyworld, this study empirically assesses if friends indeed influence purchases. The answer: It depends. Findings are relevant for social networking sites and large advertisers. Read More

The Unseen Link Between Savings and National Growth

Professor Diego Comin and fellow researchers find a little observed link between private savings and country growth. The work may offer a simple interpretation for the East Asia "miracle" and for failures in Latin America. Q&A. Read More

Money or Knowledge? What Drives Demand for Financial Services in Emerging Markets?

Why is there apparently limited demand for financial services in emerging markets? On the one hand, low-income individuals may not want formal services when informal savings, credit, and insurance markets function reasonably well, and the benefits of formal financial market participation may not exceed the costs. On the other hand, limited financial literacy could be the barrier: If people are not familiar or comfortable with products, they will not demand them. These two views carry significantly different implications for the development of financial markets around the world, and would suggest quite different policy decisions by governments and international organizations seeking to promote "financial deepening." HBS professor Shawn Cole and coauthors found that financial literacy education has no effect on the probability of opening a bank savings account for the full population, although it does significantly increase the probability among those with low initial levels of financial literacy and low levels of education. In contrast, modest financial subsidies significantly increase the share of households that open a bank savings account within the subsequent two months. Read More

Capitalizing On Innovation: The Case of Japan

How can Japan create a better business environment for innovation? Japan presents a unique case of industrial structures that have produced remarkable developments in certain sectors but seem increasingly inadequate to do the same in modern technology industries, which rely on ecosystems of firms producing complementary products. Robert Dujarric and HBS professor Andrei Hagiu present three case studies of software, animation, and mobile telephony to illustrate potential sources of inefficiencies. Like all advanced economies, Japan faces two interconnected challenges. The first challenge is rising competition from lower-cost countries with the capacity to manufacture midrange and in some cases advanced industrial products. At the same time, Japan confronts changes in the relative weights of manufacturing and services, including soft goods, which go against the country's long-standing competitive advantage and emphasis on manufacturing. If Japan is to continue to prosper in a world where its ability to rely principally on manufacturing will diminish, its policymakers will need to capitalize on its untapped innovative power. Read More

Female Empowerment: Impact of a Commitment Savings Product in the Philippines

Does access to personal savings increase female decision-making power in the household? The answer could be important for policymakers looking to increase female empowerment. HBS professor Nava Ashraf and colleagues developed a commitment savings product called a SEED (Save, Earn, Enjoy Deposits) account with a small, rural bank in the Philippines. The SEED account requires that clients commit not to withdraw funds that are in the account until they reach a goal date or amount, but it does not explicitly commit the client to continue depositing funds after opening the account. This working paper examines the impact of the commitment savings product on both self-reported decision-making processes within the household and the subsequent household allocation of resources. Read More

Professional Networks in China and America

While American managers prefer to separate work and personal relationships, Chinese counterparts are much more likely to intermingle the two. One result: Doing business in China takes lots of time, says HBS professor Roy Y.J. Chua. Read More

An Exploration of the Japanese Slowdown during the 1990s

Why was the 1990s a lost decade for Japan? HBS professor Diego Comin argues that it was the combination of some shocks that lasted for about three years and the response of companies that drastically reduced their expenses in adopting new technologies and developing new ones. Though the severe shocks that hit the Japanese economy did not persist, the investments that Japanese companies and entrepreneurs did not undertake to improve technology and production methods during the 1990s propagated those shocks and made their effects very long-lasting. Read More

The Cost of Property Rights: Establishing Institutions on the Philippine Frontier Under American Rule, 1898-1918

Economists generally agree that a system of transparent and secure property rights is beneficial for growth and development. A large literature emphasizes the role of property rights in spurring long-term investments, improving productivity, changing labor allocations, and increasing access to formal sources of credit. This paper describes U.S. attempts to implement property rights reforms in the Philippines in the early twentieth century. Iyer and Maurer document that, two decades after the arrival of the Americans, property rights in the Philippines had become unambiguously less secure, and that political and budgetary constraints played a large role in inhibiting the progress of reforms. Read More

Traveling Agents: Political Change and Bureaucratic Turnover in India

Politicians and bureaucrats are two important pillars of governance, but while politicians are motivated by short-term electoral pressures, bureaucrats are driven by long-term career concerns. This difference in the nature of their incentives is, in most cases, deliberate and constitutionally provided for. Iyer and Mani address two key questions in this paper: How do politicians facing short-term electoral pressures control bureaucrats with low-powered incentives? In turn, how do bureaucrats respond to these incentives? The authors develop a simple framework and provide empirical evidence on both the politicians' and the bureaucrats' strategies, using a detailed data set on the entire career histories of officers in the Indian Administrative Service, the top layer of government bureaucracy in India. Read More

Are the Olympics a Catalyst for China Reforms?

By hosting the Summer Games, China is putting itself at the center of the world's stage, a position some reformers would like to leverage to spark human rights improvements in the country. Can outsiders influence Chinese policy? Not without help, says HBS professor Tarun Khanna. Read More

Fixing Market Failures or Fixing Elections? Agricultural Credit in India

There are strong theoretical reasons to believe that politicians manipulate resources under their control to achieve electoral success. Yet, compelling examples of this manipulation are heretofore rarely documented in scholarly literature. Cole's paper presents evidence that government-owned banks in India serve the electoral interests of politicians. It also analyzes how resources are strategically distributed. Read More

Financial Development, Bank Ownership, and Growth. Or, Does Quantity Imply Quality?

Government ownership of banks, a common phenomenon, is among the most important policy tools used to influence financial development. But what is the actual effect of such ownership on the financial development of a country? This paper uses a policy experiment in India to evaluate the effect of government ownership of banks on development. Read More

Accountability and Inequality in Single-Party Regimes: A Comparative Analysis of Vietnam and China

While both China and Vietnam have experienced rapid annual growth over the past two decades, income inequality has risen more rapidly in China than in Vietnam during the same period. Structural and socio-cultural determinants fail to account for these divergent paths, as nearly every variable predicts higher inequality in Vietnam. This paper by Regina Abrami and colleagues focuses on differences in political institutions to explain these divergent paths. In so doing, it contributes to a growing body of literature describing variation in authoritarian regimes, but focuses on variation within one authoritarian regime type. Read More

What is the Future of State Capitalism?

In state capitalism, is the operative word "capitalism"? State capitalism is neither to be applauded nor feared, judging from the tone of responses to May's column. Jim Heskett sums up. Online forum now closed. Closed for comment; 43 Comments posted.

The Marketing Challenges of the China Olympics

The Olympic Games are normally a marketer's dream. Not so much this year, given widespread protests against the Chinese government. Professor John Quelch outlines the branding challenges posed by this year's Games in Beijing. Read More

The Lessons of Business History: A Handbook

Compiling a handbook on the current thinking in any area of study seems daunting enough, but the just-published Oxford Handbook of Business History carries an even larger mission: bring the lessons of business history to current research in other disciplines and to the practice of business management itself. A Q&A with coeditor Geoffrey Jones. Read More

Colonial Land Tenure, Electoral Competition and Public Goods in India

How is the impact of historical institutions felt today? This comparative analysis by Banerjee and Iyer highlights the impact of a specific historical institution on long-term development, specifically the land tenure systems instituted during British colonial rule. The paper compares the long-term development outcomes between areas where controls rights in land were historically given to a few landlords and areas where such rights were more broadly distributed. The paper also documents the impact of these differing historical institutions on political participation and electoral competition in the post-colonial period. Read More

Podcast: The Potential Partnership of India and China

Even without cooperation between them, China and India appear headed toward economic superpower status in the coming decades. But what if they worked together? In this podcast, Harvard Business School professor Tarun Khanna discusses the possibility of Sino-Indian cooperation and its impact on global business. Read More

Billions of Entrepreneurs in China and India

Entrepreneurship in both China and India is rising dramatically and thriving under quite different conditions. HBS professor Tarun Khanna explains what it all means in this Q&A about his new book, Billions of Entrepreneurs: How China and India Are Reshaping Their Futures and Yours. Plus: book excerpt. Read More

The Changing Face of American Innovation

Chinese and Indian scientists and engineers have made an unexpectedly large contribution to U.S. technology formation over the last 30 years, according to new research by HBS professor William R. Kerr. But that trend may be ebbing, with potentially harmful effects on future growth in American innovation. Read More

Why Global Brands Work

Japanese automakers create single products and brands for worldwide consumption, while Ford customizes products for local markets. You know who won. Why do global brands work? What makes them work? Professor John Quelch provides some answers. Read More

Businesses Beware: The World Is Not Flat

With apologies to Thomas Friedman, managers who believe the hype of a flat world do so at their own risk, says HBS professor Pankaj Ghemawat. National borders still matter a lot for business strategists. While identifying similarities from one place to the next is essential, effective cross-border strategies will take careful stock of differences as well. A Q&A and book excerpt follow. Read More

How Brand China Can Succeed

A series of recent setbacks including the Mattel toy recalls threaten China's new and improving image, says Professor John Quelch. There is just not enough preexisting brand equity among the world's consumers to inoculate Brand China against the current tide of negative publicity. What should the country do to polish its image? Read More

Diversification of Chinese Companies: An International Comparison

Many observers have argued that Chinese managers are particularly quick to diversify their enterprises. Fueled by robust economic growth and the scant enforcement of intellectual property rights that could serve as barriers to entry, Chinese companies appear to be aggressively expanding into new industries whenever economic opportunities appear to beckon. There is much anecdotal evidence to support this view. But because the Chinese economy is extraordinarily large and dynamic, it is difficult to know whether anecdotes reflect an underlying trend toward greater diversification. This paper provides systematic evidence about the scope of Chinese companies, and compares the data with the evolution of firm scope in 8 other large economies. Read More

Mattel: Getting a Toy Recall Right

Mattel has been criticized heavily for having to recall not once but twice in as many weeks 20 million toys manufactured in China. But Mattel also deserves praise for stepping up to its responsibilities as the leading brand in the toy industry. Harvard Business School professor John Quelch examines what Mattel did right. Read More

The Business of Global Poverty

Nearly half of the planet's population subsists on $2 a day or less. What role should business play as the world confronts what may be the most explosive socioeconomic challenge of the new century? Read More

What’s Behind China’s Wild Stock Ride?

Podcast: The recent one-day plunge of 9 percent in China's stock markets has continued to weigh heavily on other markets around the world. What caused the fall? Are more ups and downs to come? Professor Li Jin discusses the unique characteristics that drive Chinese stocks. Read More

Handicapping the Best Countries for Business

India? South Africa? Russia? Which are the best countries for a firm to invest in? In a new book, Professor Richard Vietor looks at the economic, political, and structural strengths and weaknesses of ten countries and tells readers how to analyze the development of these areas in the future. Read our Q&A and book excerpt. Read More

Risky Business? Protecting Foreign Investments

After a string of forced nationalizations of private enterprises in the 1960s and 1970s, the pendulum swung back and companies were again encouraged by host countries to build and run major infrastructure projects such as power and water. But a set of new property protections has done little to manage the risk in many of these politically unstable environments. Professor Louis T. Wells, coauthor of a new book on making foreign investment safe, discusses the current landscape. Read More

Tata-Corus: India’s New Steel Giant

By acquiring Anglo-Dutch steel firm Corus, India's Tata Steel is now one of the world's top five steel makers. Professor Tarun Khanna says the fact that the deal is the largest out of India and generated by the private sector makes this a notable event. But now comes the hard part—making the merger work. Can Tata avoid mistakes made by Chinese companies? From The Economic Times/India Times. Read More

“Don’ts" and "Do’s”: Insights from Experience in Mitigating Risks of Western Investors in Post-Communist Countries

Cultural and other misunderstandings between westerners and locals in post-communist countries are very costly, and western investors grossly underestimate how damaging ineffective interaction really is. This article shows that such interaction constitutes a major stumbling block to effective risk management and stands in the way of the enterprise fully taking advantage of opportunities for profit in these product-hungry, fast-expanding, and dynamic economies. Ultimately, effective communication between westerners and locals is the necessary condition for the success of western investments in transition countries. Read More

The Immigrant Technologist: Studying Technology Transfer with China

Immigrants account for almost half of Ph.D.-level scientists and engineers in the U.S., and are prime drivers of technology development. Increasingly, however, Chinese technologists and entrepreneurs are returning home rather than staying in the U.S. to pursue opportunities. Professor William Kerr discusses the phenomena of technology transfer and implications for U.S.-based businesses and policymakers. From New Business. Read More

India Needs to Encourage Trade with China

Although India and China have increased bilateral trade over the last five years, the amount is far less than what would be expected. Harvard Business School professor Tarun Khanna says India has primarily itself to blame. From The Economic Times. Read More

Governing Sumida Corporation

In a new Harvard Business School case, Professor Lynn Paine and her colleagues explore the nature of corporate governance systems by studying Japanese electronics components maker Sumida Corp. CEO Shigeyuki Yawata looks to create a governance structure that would be transparent to investors and stakeholders worldwide. Read More

Report from China: The New Entrepreneurs

When a delegation of Harvard Business School faculty visited Chinese entrepreneurs, they came away with something unexpected: the start of what could be a fundamental rethinking of how entrepreneurship works. Read More

Meeting China’s Need for Management Education

On a recent trip to China, Steven C. Wheelwright noted an increasing interest in entrepreneurship, globalization, and competitiveness. Most of all, the Chinese have an increasing thirst for management education. Read More

The China Dilemma for U.S. Firms: Comply, Resist, or Leave?

If you were an advisor to the senior managements of these companies doing business in China, what would you propose that they do? Closed for comment; 34 Comments posted.

The Trouble Behind Livedoor

When Livedoor CEO Takafumi Horie was arrested last month, it shook the economic underpinnings of Japan. Professor Robin Greenwood discusses what went wrong with one of that country's most-watched Internet companies. Read More

Restoring a Global Economy, 1950–1980

In his recent book Multinationals and Global Capitalism, professor Geoffrey Jones dissects the influence of multinationals on the world economy. This excerpt recalls the rebuilding of the global economy following World War II. Read More

Asian and American Leadership Styles: How Are They Unique?

Business leadership is at the core of Asian economic development, says HBS professor D. Quinn Mills. As he explained recently in Kuala Lumpur, the American and Asian leadership styles, while very different, also share important similarities. Read More

Is a “Level Playing Field” a Good Thing?

There is a lot of talk these days about a level playing field, sparked in part by Thomas L. Friedman's bestseller, The World is Flat. But what is a level playing field in the world today, and does everyone play by the same rules? Closed for comment; 16 Comments posted.

Float Manipulation and Stock Prices

When a firm reduces the number of shares available to trade, so-called float manipulation, the price of the stock is often driven up. The author uses a series of 2,000 stock split events in Japan as an experiment to understand the consequences of float manipulation for stock prices. The conclusion: Stock prices are raised significantly when there are differing opinions about the value of shares, investors are unable to sell short, and the number of outstanding shares is reduced. Read More

A Cross-Sectional Analysis of the Excess Comovement of Stock Returns

This paper develops cross-sectional predictions from a model in which the excess comovement of stock returns comes from correlated demand shocks. The model is tested on 298 Nikkei index stocks and 1,458 non-index stocks for the years 1993 through 2003. The study finds that controlling for index membership, index overweighting is a significant determinant of the comovement of returns with index returns. Read More

The Rise of Innovation in Asia

Asian countries are no longer just a place to get cheap labor or programming skills. Innovation is on the rise. A report from the Harvard Business School Asia Business Conference. Read More

Entrepreneurial Hospital Pioneers New Model

A "Robin Hood" cardiac hospital in India—which charges wealthy patients, yet equally welcomes the destitute—is an exciting example of entrepreneurship in the subcontinent, says HBS professor Tarun Khanna. Read More

Ground-Floor Opportunities for Retail in India

India is overcoming tradition and poverty to create opportunities for retailers ready to take a chance on a new playing field. Read More

How Corporate Responsibility is Changing in Asia

Expectations are changing on the role multinational corporations play in improving the Asian communities in which they serve. Read More

What Developing-World Companies Teach Us About Innovation

A mini case study by professor Donald N. Sull and coauthors on how three businesses in developing countries overcome a lack of resources to succeed. From Strategy & Innovation. Read More

Gaps in the Historical Record: Development of the Electronics Industry

There is plenty of history to be written about the birth of consumer electronics and the computer, says HBS professor emeritus Alfred D. Chandler Jr. Read More

Studying Japan from the Inside

What comes next for Japan’s economy? Masako Egawa, executive director of Harvard Business School’s Japan Research Office, sees a period of fundamental change ahead. Read More

It’s India Above China in New World Order

Can India overtake China? That's the title of an influential new article in Foreign Policy magazine. A Q&A with authors Yasheng Huang of MIT and Tarun Khanna of HBS. Read More

Business Plan Winner Targets India Dropouts

Gyaana means "knowledge" in Sanskrit—a fitting name for a business that aims to fight the 50 percent dropout rate in India by offering microfinance loans to families. Read More

Will American Brands Be a Casualty of War?

Does your U.S. brand play well overseas? If so, heed the words of Harvard Business School professor John Quelch: A swelling anti-American tide could wash away the international popularity of U.S. brands. Read More

The Basics of Consumer Marketing in Asia

Confronting a per-capita income in China that varies from as low as $380 to as high as $5,000, brands face a special challenge gaining headway. At this panel, experts discussed the secrets of price competition and market research. Said one, "Our best tools are our two legs." Read More

China: The Next Big Market Opportunity or the Next Big Bubble?

Is China post WTO a land of great entrepreneurial opportunity, or a house of cards threatening to collapse on foreign investors? Closed for comment; 20 Comments posted.

Using Big Business to Fight Poverty

Can an international alliance of global corporations win a war on poverty? Yes, if such an alliance is well planned and formed soon, according to HBS professor emeritus George C. Lodge. Read More

Entrepreneurship in Asia and Foreign Direct Investment

A look at local entrepreneurship in four economies in Asia offers a fascinating lens on Foreign Direct Investment, says HBS professor Yasheng Huang. Discussing his new research proposal at an HBS International Seminar recently, Huang also offered insights on what it might mean as China rises. Read More

MNCs in Asia: Investing in the Future

To be a major global player, you have to participate in Asia. But challenges facing multinationals as they take part in this market range from currency devaluation to ever-changing government regulations. Read More

The Country Effect: Does Location Matter?

How much is the success of your company pegged to the cultural and economic traditions of the country you do business in? Not much—at least that is what is suggested by Rohit Deshpandé's research on high-performing companies. Read More

Governance in India and Around the Globe

India is not known for rigid corporate governance standards. Is software giant Infosys changing all that? A working paper by HBS professors Tarun Khanna and Krishna Palepu looks at how globalization may—or may not—foster convergence of corporate governance. Read More

Alfred Chandler on the Electronic Century

Pulitzer Prize-winning historian Alfred D. Chandler Jr. examines the development of two pivotal industries in post-World War II America—the consumer electronics and computer industries. Read More

Why dot.coms Will Rise Again

Think dot.coms are down for the count? Think again. Dot.coms will exert an ever-greater impact on business, according to HBS professors F. Warren McFarlan and Dorothy A. Leonard. Read More

New Paths to Success in Asia

The HBS Asia-Pacific Research Center in Hong Kong is helping HBS faculty identify opportunities for researching Asian businesses. This local base of operations opens doors to faculty that would have otherwise remained closed or undiscovered. Read More

What’s Next for Japan

Japan, it’s clear, is in the midst of a classic challenge facing nations in a rapidly globalizing world economy: struggling to maintain beneficial social traditions, yet also yearning to be competitive. But can it do both? In a debate led by Harvard University professor Michael E. Porter, experts contemplated the future for Japan. Read More

Can Japan Compete? [Part Two]

In this, the second part of a two-part interview, HBS professor Michael Porter expands upon the message of his new book, Can Japan Compete?, and on the value of clearly defined strategies and open competition. Read More

Can Japan Compete? [Part One]

Not long ago, Japan was considered a competitive powerhouse with exemplary business practices that were admired and often copied, particularly in the West. What went wrong? In a new book, HBS professor Michael Porter and two coauthors take a closer look. [ Part 1 ] Read More

Companies, Cultures and the Transformation to the Transnational

Often overlooked in the move into the international arena, a comapny's heritage can have a major impact on how it adapts to the new environment. In this excerpt from the second edition of their pioneering book Managing Across Borders: The Transnational Solution, HBS Professor Christopher A. Bartlett and Sumantra Ghoshal examine one aspect of that heritage: the influence on a company of its nation's history, infrastructure and culture. Read More