Advanced International Economics & Business:

10 ECTS, semester 1 2009-2010

Lecturers:
Dr. Florian Becker-Ritterspach
Prof Dr. Hans van Ees (coordinator)
Prof Dr. Harry Garretsen

This course is composed by three elective streams. Students choose their streams at the very
beginning of the course. They then will only work in this particular steam during the entire
course. Each of the three streams is given by a lecturer with expertise in that particular stream,
e.g. in terms of research projects, publications and/or previous lecturing experience. All streams
have a similar structure, grading and evaluation format. All themes have comprehensive
assignments and all themes have similar rules of the game, similar workload etc.

For the academic year 2009-2010, the Advanced IE&B course has the following streams:

1. Transfer of Organizational Forms and Practices across contextual diversity (Dr. Florian
Becker-Ritterspach).
2. Corporate Governance in Crisis, Crisis in Corporate Governance (Prof Dr Hans van Ees).
3. Banking, Financial Development and Financial Crises (Prof .dr Harry Garretsen).

The first lecture for this course will be Thursday, September 3, from 16.00-18.00 hours (Blauwe
Zaal). It is very important to come to this lecture. In the lecture the course structure and content
will be explained. In addition, we will ask each student to submit his or her preference for one of
the course streams. Subsequently, students will be allocated to these three streams and
assignments will be distributed. Note that we will do our best to honor your preferences, but we
do not guarantee that you will be allocated the theme of your first choice.

Upon completion of this course students are able to:

1. explain, identify, summarize and express the essential (multidisciplinary) characteristics
and components of the major theories, issues, and contributions to the field of the selected
topic of international economics and or international business
2. evaluate and critically review journal articles in the field of the selected topic of
international economics and/or international business
3. do applied research in the field of the selected topic, i.e. develop an interesting research
question, choose and/or develop a relevant theoretical framework helping them to answer
the research question, apply a methodological approach helping them to answer the
question, find and work with relevant data related to aspects of the selected topic, and
analyse and report through presentations and in writing on the findings in a clear way.
4. communicate their knowledge about ideas, critical evaluations, and contributions to the
field of the selected topic of international Economics and or international business to an
audience of peers.
Grading

Your course grade composition:

- Literature presentation 30%
- Discussant for a literature presentation 10%
- Team paper writing and presentation 50%
- Discussant for a team paper 10%
100%

Presentation Grading Criteria

An exemplary presentation would

1. Provide a background of the article that is well-integrated with other similar scholarly work/
2. Critically analyse (rather than describe) the core arguments in the article, consider implications
(e.g. for other nations and/or industries, and/or provide an update of the circumstances
described).
3. Expose the reader to other works that relevant for the article.
4. Justify all arguments put forward in the assessment of the article.
 5.

grades 1-4 grade 5 grade 6 grade 7 grades 8-9-10

Only the article Some attempt to A sufficient Good understanding Excellent mastery of
text is repeated, address the topic, understanding of the of the relevant the set topic
either in part or but poor level of set topic in respect material providing a evidenced by a
in an incorrect understanding and of key qualities with sound background critical analysis of
manner. interpretation. The some justification of of the article, which the core arguments in
ideas in the article arguments and is integrated with the article, the
are correctly critical reflections. other relevant consideration of
presented, but are Sufficient examples. scholarly work. implications for other
not related to other Sufficient updating nations/industries,
works, and bear no and examples and/or the provision
relevant examples. of an update on the
circumstances
described in the
article;
Justification of all
arguments;
Integration of the
article background
with other relevant
works. Excellent
examples,
applications (or even
well-motivated
examples that
contradict the paper).
 Guidelines for Tutorial Presentation

There are two paper presentations at each of the six tutorial sessions in weeks 38-43. Normally,
each student takes one paper.

1. Written interpretative summary and evaluation

Each presenting student publishes TWO documents to your GROUP Nestor site, at least one day
before your presentations at 9.00 a.m.

(1) The first document is a short paper summary + evaluation that consists of two parts:
(i) The summary part (max. 2 pages!) has the following format:
- Complete title and literature source
- The student’s name
- Fundamental objective, and how it fits in a broader stream of research
- Theoretical arguments (basic assumptions, its major propositions, conclusions)
- Methods, Results and conclusions
(ii) The evaluation part (max. 1 page) critically evaluates the article. The aspects of
evaluation can include: new insights, adequacy of research methods, soundness of
conclusions, theoretically informed opinion.

(2) The second document contains the PowerPoint slides of your presentation.

2. Paper presentation at tutorials (45 min. for each paper)

Presentation (20 min) Note that the other students have already studied the papers(s).
(i) You briefly summarize and interpret the literature;
(ii) You relate it to the other literature item of the session;
(iii) You are also expected to look for additional materials that complement the presented
literature (e.g., articles, book chapters, newspapers, web documents, from own experiences,
etc.). This additional material should further elaborate the picture, either theoretically (e.g., by
comparing the literature with other pertaining theoretical views), or empirically, by giving
examples, applications to the topic, or both. The quality of this literature updating with extra
material will have a substantial impact on the presentation grade.

Discussant’s comments (5 min) At the beginning of each session, the teacher assigns a student
to be the discussant of the paper (see the file “Guidelines for Discussants”).

Open discussion (15 min)

Tutor’s comments (5 min)

Presentation checklist
make clear essential points
use real world examples
- stimulate questions
 - no reading aloud
- rely on your PowerPoint sheets
- mind your non-verbal communication, keep eye contact with the audience.

Discussants

A discussant student will be appointed to each paper presentation.

The role. The discussant has 5 minutes to reflect on the paper and its presentation. Her/his role
includes a SHORT evaluation of the presentation itself. However, most important is a discussion
of the content of the presentation. The discussant suggests for the group theoretically informed
questions to discuss. S/he can ask question from the presenting student as well. But take care:
then, the teacher will ask the discussant’s own answer to the question s/he posed!
By pointing out interesting aspects or by making good (but not offensive!) critical remarks,
a good discussant can make the open discussion of the presentation more meaningful and
interesting. (That’s why it is popular to appoint a discussant to scientific conference presentations
as well; though, unlike you, these discussants do not receive a grade).

Discussant grading. As you can see in the file “Grading” in this section, you get maximally 20%
of your final course grade for your activity as discussant (10% at the literature presentation
sessions and 10% at the team paper presentation at the end of the course).1
Discussants are appointed randomly to each presentation, just before the presentation! Please note
that there is no exam to this course; so the random choice of discussants is a mean to test if the
student has studied the course reading materials carefully.

Please note that the 5 minutes time assigned to a discussant is long. You certainly cannot fill it up
simply with improvisation. So you have to come to each presentation session prepared to be
chosen as a discussant. This effort pays off good. Past teaching experience shows that good
discussants often received even 9 for their short, but smart, contributions. However, unprepared
discussants received really very bad grades.
.

Publishing your presentation for your group in Nestor

1. Go to the Nestor site of the course.
2. Choose “Communication” from the main menu.
3. Choose “Group pages”.
4. Choose your group from the list

1
Randomness also means that some may be discussant twice during a part of the course, while
others may not be discussants at all. If you are not chosen as a discussant, then the weight of your
pertaining presentation grade component is increased by 10%. (So it becomes 40% at literature
presentation and 60% at team paper presentation, see the file “Grading criteria”). If you are
discussant twice in the same part of the course, then the average of your two discussant
presentation grade gives the 10%.
If you are discussant once at literature presentation and once at team presentation, then your 10%
weights add up to 20% in your grade.
5. Choose “File Exchange”
6. Choose “Add file”
6. Specify a subject: give the sort title of the paper you discuss.
7. Attach your file as indicated. The file name should identify the topic (your name will appear
automatically anyhow).
 Advanced IE&B - 2008

Feedback Form - Theory Tutorials

Group:

Term paper:

Grade:

++ / + / ± / - /--

Clear introduction outlining topic, objective, approach and structure

of the paper
The paper is well structured and divided into sections and
paragraphs
There is a clear research question

Literature review, framework and proposition are clearly linked to the

research question
Argumentation is clear, convincing and shows your own ideas,
rather than a mere reproduction of someone else’s opinions
Conclusions are related to the objective set out in the introduction

Conclusions are based on the analysis / discussion in the main body

of the paper.
References to literature are complete, consistent and correct

Lay out / presentation of the appropriate and consistent

The paper has a clear added value

Discussant grading sheet
Group:

Short & concise presentation

Critical review

Reference to reading material

Raising of interesting questions

Grade:
 Topic I. Transfer of organizational forms and practices across contextual diversity

Dr. Florian Becker-Ritterspach

Listed below are the papers for the presentations for this stream for weeks 38-43. Each group
meeting will contain 2 presentations.
Note that some presentations will cover 2 papers.

Please see also the course documents page on NESTOR for a document with some additional
information on the themes and the papers for this stream

Pdf versions of the papers below are posted on NESTOR

Tutorial topics and literature (for weeks 38-43)

1. Week 38: The lean production and labour process approach

Florida, R., Kenney, M., 1991. Organisation vs. culture: Japanese automotive
transplants in the US. Industrial Relations Journal 22, 181-196.
Elger, T., Smith, C., 1994. Exit, Voice and 'Mandate': Management Strategies and
Labour Practices of Japanese Firms in Britain. British Journal of Industrial
Relations 26, 185-207.

2. Week 39: Prominent perspectives in the international business literature

Szulanski, G., 1996. Exploring internal stickiness: Impediments to the transfer of
best practice within the firm. Strategic Management Journal 17, 27-43.
Gupta, A.K., Govindarajan, V., 2000. Knowledge Flows within Multinational
Corporations. Strategic Management Journal 21, 473-496.

3. Week 40: European and American institutionalism and the transfer of

practices
Kostova, T., Roth, K., 2002. Adoption of an Organizational Practice By
Subsidiaries Of Multinational Corporations: Institutional and Relational Effects.
Academy of Management Journal 45, 215-233.
Ferner A., Quintanilla J., Varul M. Z., 2001. Country-of-Origin Effects, Host-
Country Effects, and the Management of HR in Multinationals: German
Companies in Britain and Spain. Journal of World Business 36, 107-127.
4. Week 41: The culturalist perspective
Bhagat, R.S., Kedia, B.L., Harveston, P.D., Triandis, H.C., 2002. Cultural
variations in the cross-border transfer of organizational knowledge: An integrative
framework. Academy of Management Review 27, 204-221.
Javidan,M. Stahl G.K., Biodbeck, F., Wilderom, C.P.M., 2005. Cross-border
transfer of knowledge: Cultural lessons from Project GLOBE. Academy of
Management Executive 19, 59-76.

5. Week 42: Translation perspectives and semantics perspective

Holden, N.J., Von Kortzfleisch, H.F.O, 2004. Why Cross-Cultural Knowledge
Transfer is a Form of Translation in More Ways than You Think. Knowledge and
Process Management 11, 127–136.
Brannen, M.Y., 2004. When Micky loses face: recontextualization, semantic fit,
and the semiotics of foreignness. Academy of Management Review 4, 593–616.

6. Week 43: Politics, power and postcolonial perspectives

Sharpe, D., 2006. Shop floor practices under changing forms of managerial
control: A comparative ethnographic study of micro-politics, control and
resistance within a Japanese multinational. Journal of International
Management 12, 318-339.
Frenkel, M., 2008. The Multinational Corporation as a third space: Rethinking
international management discourse on knowledge transfer through Homi Bhabha.
Academy of Management Review 33/4, 924-942.
Assignment for the stream: Transfer of organizational forms and practices across contextual
diversity

Background
This track is concerned with processes of transfer of organizational forms and practices in
Multinational enterprises (MNEs). Transfers (of whatever kind) across organizational units and
across regional/national borders trigger a couple of fundamental questions.

These involve above all:

- What is transferred?
- What kind of context enables and constrains the transfer?
- What happens to the transfer and the receiving context as a result of a transfer?

The theories covered in this course give different answers to these questions and show a spectrum
as to how the issue of transfer in MNEs can be captured and theorized.

Your task
Your task is to find an empirical case involving issues of transfer. While I leave the actual
example of transfer to you, I urge you to apply the theories discussed as much as possible. Ideally
your project explores how and why certain transfer contents (knowledge, practice, product, a
business model) change or adapt in the process of transfer across border within an MNE.

Methodologically, I urge you to conduct a qualitative case study. This can be based on interviews
but also observation (e.g. visit websites, branches of shops or etc.).

The paper should include a clear research question, literature review, analytical
framework/propositions and empirical section which tests and analyses your
framework/propositions. The paper ideally closes with a discussion of the findings, its limitations
and future avenues for research.
 Topic II Corporate Governance in Crisis, Crisis in Corporate Governance

Prof. Dr. Hans van Ees

Listed below are the papers for the presentations for this stream for weeks 38-43. Each group
meeting will contain 2 presentations.
Note that some presentations will cover 2 papers.

Please see also the course documents page on NESTOR for a document with some additional
information on the themes and the papers for this stream

In week 37 there are no group meetings yet, but see the document with additional paper
information for suggested background reading.

Pdf versions of the papers below are posted on NESTOR

Tutorial topics and literature (for weeks 38-43)

1. Week 38: Corporate Governance. An overview of the field

a. Shleifer, A. and R.W. Vishny (1997). “A Survey of Corporate
Governance”, Journal of Finance. 52 (2): 737-783.
b. Larcker, D., S. Richardson and I. Tuna (2005). How Important is
Corporate Governance?, Working Paper. Wharton Business School

2. Week 39: Corporate Governance. Executive compensation

a. Bebchuk, L.A. and J.M.Fried 2003. Executive Compensation as an
Agency Problem, Journal of Economic Perspectives. 17: 71-92
b. Ferrarini, G. and N. Moloney 2005. Executive remuneration in the EU:
The context for reform. Working paper. ECGI 32/2005.

3. Week 40: Financial systems, banks and corporate governance

a. Allen, F.and Carlletti, E,. 2008, The Roles of Banks in Financial
Systems, Prepared for Berger, A., Molyneux, P.and Wilson, J.
(eds.) ,The Oxford Handbook of Banking. Oxford Universtiy Press.
1-29.
b. Allen, F, Chui, M.K.F. and Maddaloni, A. 2008, Financial Structure
and Corporate Governance in EU, USA and Asia, in Freixas, X.,
 Hartmann, P. and in Mayer, C., Handbook of European Financial
Markets and Institutions. Oxford University Press. 31-67.

4. Week 41: Corporate Governance of Banks

a. Mülbert, P.O, 2009 Corporate Governance of Banks, Working Paper.
ECGI 130/2009.
b. (1). Heremans, D. Corporate Governance Issues for Banks: A
Financial Stability Perspective, Working paper. Leuven. (2)
Wymeersch, Y, 2008, Corporate Governance and Financial Stability,
Working paper 2008-11, Leuven.
5. Week 43: Corporate Governance and the financial crisis
a. Bebchuk, L.A..and Spamann, H., 2009 Regulating Bankers Pay,
Discussion Paper . 641, Harvard Law School, Cambridge.
b. Laeven, L., and R. Levine. 2009. Corporate Governance, Regulation,
and Bank Risk Taking. Journal of Financial Economics, 93/2. 259-
275 (forthcoming)

6. Week 42: Corporate Governance lessons from the financial crisis

a. Erkens, D., Mingyi H., and Matos, P, 2009, Corporate Governance in
the Recent Financial Crisis:Evidence from Financial Institutions
Worldwide, Working paper. UCLA.

b. Grant Kirkpatrick, 2009, The Corporate Governance Lessons from the

Financial Crisis, Financial Market Trends. OECD.
Assignment for the stream: Corporate Governance in Crisis, Crisis in Corporate Governance

Background. Based a.o. upon Moody’s Gobal corporate governance

The financial and economics crisis has focused a great deal of scrutiny — by investors, the media, governments and
others — on failures in corporate governance, in particular lax board oversight of risk management and executive
compensation practices that encouraged excessive risk-taking. While the primary focus has been on governance
deficiencies at banks and other financial institutions, Moody’s believes the financial crisis will re-emphasize the
importance of good corporate governance for both financial institutions and corporates worldwide. The key
corporate governance areas that we consider to be most readily observable and measurable for investors going
forward are:

� board oversight of risk management;

� executive compensation;

� board composition (skill set and independence);

� board practices; and

� succession planning.

For financial institutins such as banks and in particulalr Financial institutions participating in government rescue
programs the challenges relating to corporate governance, and to executive pay in particular, will be of utmost
importance.

All this begs a number of questions to be asked in the course related to the nature of financial corporations as
opposed to non-financial corporations, the role of banks in financial systems, the corporate governance of banks and
the lessons banks draw from the current financial and economic crisis.

Your task
Your task is to find one or empirical cases (banks and possible non-financial firms) to address the typical questions
that are relevant in times of crisis. For instance,
1. Are (these) banks special in the organization of it is corporate governance, when compared to a non-
financial firms. To what extent can we make sense of the differences and similarities and are we albe to
suggest improvements.
2. Have (these) banks draw lessons from the current financial crisis and with reference to the literature you’ve
studied in class and by yourself do this lessons makes sense to you, can you suggest theoreritcally motivated
improvements etc.

While I leave the actual examples to you, applying theory discussed and collected by yourself is of utmost
importance. Methodologically, you will conduct a qualitative multicase study. Data collection will be based on
observation (e.g. secondary sources, websites, annual reports, consultnacy reports etc.).

Deliverable
Your exploratory should include a clear literature review, clear description of the banks’ cg structure in an empirical
section and a theory-informen discussion of findings, with implications relevant for research and practice.

Nb. Example reports and related sources of inspiration are to be found at e.g. Nestor Advisors
 Topic III Banking, Financial Development & Financial Crises
Prof. dr. Harry Garretsen

Listed below are the papers for the presentations for this stream for weeks 38-43. Each group
meeting will contain 2 presentations.
Note that some presentations will cover 2 papers.

Please see also the course documents page on NESTOR for a document with some additional
information on the themes and the papers for this stream

In week 37 there are no group meetings yet, but see the document with additional paper
information for suggested background reading.

Pdf versions of the papers below are posted on NESTOR

Theme 1 (week 38) Do Banks Have a Positive Impact on Growth and Stability?
-R. Levine, 2001, “Bank-Based or Market-Based Financial Systems; Which is Better? 35 pp.,
see for this version http://www.econ.brown.edu/fac/Ross_Levine/Publications.htm
[paper published in the Journal of Financial Intermediation. 2002, 11, pp. 1-30]

-R. de Haas and I. van Lelyveld, 2006, “Foreign Bank and Credit Stability in Central and Eastern
Europe, A panel data analysis”, Journal of Banking and Finance. 30, pp. 1927-1952.

Theme 2 (week 39) Is Financial Liberalization Good for Economic Growth?

-E. Prasad and R. Rajan, 2008, “A Pragmatic Approach to Capital Account Liberalization”, 35
pp., http://faculty.chicagobooth.edu/raghuram.rajan/research/
[paper published in Journal of Economic Perspectives, 22(3), pp. 149-172]

-D. Rodrik and A. Subramanian, 2008, “Why Did Financial Liberalization Disappoint?”, March
2008, 30 pp., http://ksghome.harvard.edu/~drodrik/papers.html

Theme 3 (week 40) The Causes of Financial Crises: Basic Theories and Data
1st presentation:
-F. Mishkin, 1996, “Understanding Financial Crises; A Developing Country Perspective”, NBER
Working Paper. 5600, May 1996, 49 pp.
-H. Minsky, 1992, “The Financial Instability Hypothesis”, Working paper 74, Jerome Levy
Economics Institute of Bard College, 10 pp.

2nd presentation
-L. Laeven and F Valencia, 2008, “Systemic Banking Crises. A New Data Base”, IMF Working
Paper WP/08/224, IMF Washington, 78 pp.
Theme 4 (week 41) The Consequences of Financial Crises: Empirics and Policies
-Claessens, S, M.A. Kose and M.E. Terrones, 2008, “What Happens During Recessions,
Crunches and Busts?”, IMF Working Paper WP/08/274, IMF Washington, 75 pp.

- Demirgüç-Kunt, A. and L. Servén, 2009, “Are All the Sacred Cows Dead? Implications of the
Financial Crisis for Macro and Financial Policies”, World Bank Policy Research Working
Paper 4807, The World Bank Washington, 52 pp.

Theme 5 (week 42) The history of crises and contagion

-Reinhart, C. and K. Rogoff, 2008, “Banking Crises, An Equal Opportunity Menace”, December
2008, also available as NBER WP 14587, 65 pp.

-Kaminsky, G., C Reinhart, and C Vegh, 2003, “The Unholy Trinity of Financial Contagion”,
NBER WP 10061, 38 pp [published in Journal of Economic Perspectives, Vol. 17 No. 4. Fall
2003, 51-74.]

Theme 6 (week 43) The current crisis: 2007/8-?

1st presentation:
-Borio, C. 2008, “The Financial Turmoil of 2007-?: A Preliminary Assessment and Some Policy
Considerations”, BIS Working Paper 251, BIS Basle, 28 pp.
-Rajan, R and D. Diamond, 2009, “The Credit Crisis, Conjectures about Causes and Remedies”,
published in papers and proceedings American Economic Review, May 2009, 12 pp.

2nd presentation
-Blanchard O.J, 2009, “The Crisis: Basic Mechanisms and Appropriate Policies”, CESifo Forum,
1/2009, 14 pp (Oliver Blanchard is chief economist of the IMF)
-IMF, World Economic Outlook, October 2008 (chapter 4), 30 pp.

OPTIONAL: assuming there is sufficient time left, we will also discuss the implications of the
current financial crisis for academic economics in week 43 (this topic will then be introduced by
the lecturer, see the course document on NESTOR with additional information for this stream for
references to papers)
Assignment

This stream basically deals with the role that the financial sector, and the banking sector in
particular, plays in financial crises like the one the world economy is experiencing right now. The
paper and the additional material that were the subject of the presentations during the 1st part of
the course focus on the causes and consequences of financial crisis. As opposed the “banks and
governance” stream for the same AIEB course, the inner-workings or the governance of the
financial sector and banks is more or less taken as given, here we are concerned with impact of
the (mal)functioning of the banking sector on the rest of the economy.

The papers from the 1st part of the course not only serve as background knowledge for the
assignment but in doing their assignment, students are explicitly asked to make as much use as
possible of these papers. The assignment itself is rather straightforward: analyze a specific
financial crisis from the list below. In doing so, in your paper you should:
-briefly present and discuss the basic facts of the crisis at hand
-give your interpretation of the causes and consequences of this particular crisis from a
theoretical point of view
- give your interpretation of the causes and consequences of this particular crisis from an
empirical point of view
-discuss the policy reaction to the crisis
-try to give your own assessment of the crisis in the concluding section of the paper

Apart from the literature used in the 1st part of the course, the paper also has to include or to be
build on additional literature that is specific to the topic of your paper. There is a vast amount of
data and literature available for each of the historical and current crises mentioned below and of
the tasks of this assignment is to collect the additional information yourself. In case you get stuck
you can contact the lecturer.

The list of topics for papers contains a mix of (well-documented) historical (country specific)
examples of financial crises as well as of current (and thus on-going) crisis examples:
Historical crises (20th century)
-The Great Depression of the 1930s in the USA
-The financial crisis in South-East Asia from 1997-1998
-The Mexican financial crisis of 1994-1995
-The financial crisis in Japan after 1991
-The crisis in Argentina at the turn of the century (2001-2002)

The 1st global financial crisis of the 21st century

Country examples of the ongoing crisis in western industrial countries
-USA; UK; Canada; Germany; Iceland; Netherlands
(optional, depending on group size: the current financial crisis and the case of China or a
developing country)