First Look

Abstract—This book is the Spanish edition of our award winning paper "These Are the Good Old Days: Foreign Entry and the Mexican Banking System." NBER Working Paper Series, No. 18713, January 2013. The book examines the effects of foreign bank entry into Mexico. Foreign banks now own over 80% of banking assets in Mexico, and we show how, using a political economy model and a series of econometric tests, this has helped to stabilize the system and reduced non-performance loans, but it has also increased the risk aversion of banks operating in Mexico. Therefore, we conclude, after one century of banking crisis this is the best of times for Mexican banking.

Publisher's link: http://www.library.hbs.edu/forms/purchaseform/

Abstract—I examine Google's pattern and practice of tying to leverage its dominance into new sectors. In particular, I show how Google used these tactics to enter numerous markets, to compel usage of its services, and often to dominate competing offerings. I explore the technical and commercial implementations of these practices and then identify their effects on competition. I conclude that Google's tying tactics are suspect under antitrust law.

Publisher's link: http://www.benedelman.org/publications/google-tying-2014-10-26.pdf

Abstract—This paper examines how making deliberate efforts to regulate aversive affective responses influences people's decisions in moral dilemmas. We hypothesize that emotion regulation-mainly suppression and reappraisal-will encourage utilitarian choices in emotionally charged contexts and that this effect will be mediated by the decision maker's decreased deontological inclinations. In Study 1, we find that individuals who endorsed the utilitarian option (vs. the deontological option) were more likely to suppress their emotional expressions. In Studies 2a, 2b, and 3, we instruct participants to either regulate their emotions, using one of two different strategies (reappraisal vs. suppression), or not to regulate, and we collect data through the concurrent monitoring of psycho-physiological measures. We find that participants are more likely to make utilitarian decisions when asked to suppress their emotions rather than when they do not regulate their affect. In Study 4, we show that one's reduced deontological inclinations mediate the relationship between emotion regulation and utilitarian decision making.

Abstract—Price is a key factor in most purchases, but it can be presented at different stages of decision making prior to a purchase. We examine the sequence-dependent effects of price and product information on the decision-making process at both neural and behavioral levels. During functional magnetic resonance imaging, the price of a product was shown to participants either before or after the product itself was presented. Early exposure to price, or price primacy, altered the process of valuation, as seen via altered patterns of activity in medial prefrontal cortex immediately prior to purchase decisions. Specifically, whereas viewing products first resulted in evaluations strongly related to products' attractiveness or desirability, viewing prices first appeared to promote overall evaluations related to products' monetary worth. Consistent with this framework, we show that price primacy can increase purchase of bargain priced products when their worth is easily recognized. Together, these results suggest that price primacy highlights considerations of product worth and can thereby influence purchasing.

Publisher's link: http://dx.doi.org.ezp-prod1.hul.harvard.edu/10.1016/j.worlddev.2014.08.016

Abstract—Defenders of state-owned development banks emphasize their role in reducing capital constraints and fostering productive investment; detractors point out that they may benefit politically connected capitalists or bail out inefficient firms. We study the effect of loans and equity investments of the Brazilian National Development Bank (BNDES) and find that they do not have any consistent effect on firm-level performance and investment, except for a reduction in financial expenditures due to the subsidies accompanying loans. However, BNDES does not systematically lend to underperforming firms. Our results indicate that BNDES subsidizes firms that could fund their projects with other sources of capital.

Publisher's link: http://www.sciencedirect.com.ezp-prod1.hul.harvard.edu/science/article/pii/S0305750X1400254X

Abstract—The globalization of state-owned multinational companies (SOMNCs) has become an important phenomenon in international business (IB), yet it has received scant attention in the literature. We explain how the analysis of SOMNCs can help advance the literature by extending our understanding of state-owned firms (SOEs) and multinational companies (MNCs) in at least two ways. First, we cross-fertilize the IB and SOEs literatures in their analyses of foreign investment behavior and introduce two arguments: the extraterritoriality argument, which helps explain how the MNC dimension of SOMNCs extends the SOE literature, and the non-business internationalization argument, which helps explain how the SOE dimension of SOMNCs extends the MNC literature. Second, we analyze how the study of SOMNCs can help develop new insights of theories of firm behavior. In this respect, we introduce five arguments: the triple agency conflict argument in agency theory; the owner risk argument in transaction costs economics; the advantage and disadvantage of ownership argument in the resource-based view (RBV); the power escape argument in resource dependence theory; and the illegitimate ownership argument in neoinstitutional theory. After our analysis, we introduce the papers in the special issue that, collectively, reflect diverse and sophisticated research interest in the topic of SOMNCs.

Publisher's link: http://www.palgrave-journals.com.ezp-prod1.hul.harvard.edu/jibs/journal/v45/n8/pdf/jibs201443a.pdf