Global Business

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    Now Indonesia has a sovereign wealth fund – and it won’t be the last

Now Indonesia has a sovereign wealth fund – and it won’t be the last

Key players in international finance

Sovereign wealth funds (SWFs) are large state owned investment funds. With assets under management of about US $7 trillion globally, SWFs have become key players in international finance – even surpassing the combined size of global hedge funds and private equity firms.

In the vast majority of cases SWFs were funded by the proceeds of oil and […]

The commodity price rout and Africa’s unusual electoral cycle

The ongoing electoral cycle in Sub-Saharan Africa is turning out to be somewhat unusual. In the Nigeria March 2015 poll, the People’s Democratic Party suffered its first loss since the end of military rule in 1999, whilst in South Africa’s August 2016 municipal election the ruling Africa National Congress (ANC) registered its worst performance since the end of apartheid […]

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    Most multinationals use unaffiliated suppliers in their supply chains

Most multinationals use unaffiliated suppliers in their supply chains

The global nature of supply chains has rapidly come to dominate international trade. This column presents new evidence on production fragmentation and intra-firm trade. For US corporations, cross-country shipments of goods between units of the corporation are rare, despite the fact that most US manufacturing parents own foreign affiliates in upstream or downstream industries.

In 1997, the chipmaker Intel invested […]

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    Well-managed Pakistani firms are more capital- intensive and more likely to export

Well-managed Pakistani firms are more capital- intensive and more likely to export

The causes and consequences of the vast differences in productivity within and across countries have been the subject of research for decades. Recently, economists have woken up to the important role of management practices in firms to explain these differences. Working with the State Bank of Pakistan and the Pakistan Bureau of Statistics, we have conducted what is to […]

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    Africa’s Nile basin countries should invest in rain, not big infrastructure projects

Africa’s Nile basin countries should invest in rain, not big infrastructure projects

Last month the The African Ministers’ Council on Water (AMCOW) and over 1000 experts gathered in Dar es Salaam during the Africa Water Week to discuss new pathways for development and increased investment in water infrastructure. The challenges are huge; the El Nino of last year showed the exposure of African economies to the vagaries of weather. Climate change […]

The art, and the deal, go global

Isabella Stewart Gardner was, in her day, the very model of a modern Medici. Beginning in 1891, she used her ample inheritance to buy up paintings by Old Masters and new artists alike during her frequent visits to Paris and Venice. She brought them back to her home town of Boston and displayed them in a museum built to […]

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    Network science shows London is at the heart of the world’s corporate elite

Network science shows London is at the heart of the world’s corporate elite

In this blog article, we investigate the position of the UK within the global corporate elite network. Firms are not individual market actors, but are typically embedded in dense networks of power and control, for example based on ownership or interlocking directorates. The CORPNET research group at the University of Amsterdam studies these networks as part of a five-year research programme funded […]

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    The quiet revolution in India’s private sector and international trade

The quiet revolution in India’s private sector and international trade

In early June of 2016 Narendra Modi, India’s Prime Minister, visited the US and addressed the US Congress. His speech was recognised for its ability to craft a global ambitious agenda and to speak like a global power. Nor was this speech an isolated incident. For many years Indian leaders and policy makers have shown growing activism at the global level, […]

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    Is Donald Trump right when he claims that China hurts US workers?

Is Donald Trump right when he claims that China hurts US workers?

China recently surpassed the United States as the country with the largest share of world trade in goods – see Figure 1. This boom in trade with China has led to much concern about the losers from rising import competition in manufacturing. In Donald Trump’s US presidential campaign, for example, he has continuously complained about the Chinese: ‘They’re stealing […]

Post Brexit vote, a fresh look at globalisation

There were a lot of dramatic headlines over the weekend suggesting that Brexit signals the beginning of the end of globalization. Surely, it is too soon to understand all the ramifications of the British referendum. But at the same time, today is surely a good day to make the case for multilateralism. While there are plenty of reasons to […]

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    Egypt as No. 2: What’s next for Africa’s (new) second largest economy?

Egypt as No. 2: What’s next for Africa’s (new) second largest economy?

Perhaps the best thing about Egypt’s emergence as Africa’s second largest economy, overtaking South Africa, is that it had nothing to do with a Gross Domestic Product (GDP) rebasing exercise ─ the periodic revision of GDP estimates, as done by Nigeria and Kenya in 2014, with a view to obtaining an up-to-date reflection of the economy and changing dynamics […]

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    American companies kick the tires of Cuba’s new-old economy

American companies kick the tires of Cuba’s new-old economy

The car was a Detroit classic on a Havana street, a pink and white 1956 Chevy Bel Air with a nickname out of a rock ‘n roll song: Lola. And parked behind the wheel was a distinguished American guest, New York Governor Andrew Cuomo, come to Cuba in April 2015 on an official trip. But Lola carried a surprise under […]

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    How do ‘Economists for Brexit’ manage to defy the laws of gravity?

How do ‘Economists for Brexit’ manage to defy the laws of gravity?

The possibility of the UK leaving the European Union (EU) has generated an unusual degree of consensus among economists. Acrimony and rancour surrounded debates around austerity and joining the euro, but analysis from the Bank of England to the OECD to academia has all concluded that Brexit would make us economically worse off. The disagreement is mainly over the […]

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    Ghana races to the ballot with increased concern over the economy

Ghana races to the ballot with increased concern over the economy

On 21 January 2016, the International Monetary Fund approved disbursement of a USD 114 Million loan to Ghana. It was the third such effort in the recent past to align the economy’s sails towards greater stability. Even though this played a pivotal role in defusing a pervasive sense of crisis, investors have grown wary of the woes bedevilling what was, […]

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    Chinese managers used to state control have a hard time acting as capitalists

Chinese managers used to state control have a hard time acting as capitalists

China has undergone a series of reforms to make the economy more market oriented, with a major step being the 1999 Securities Law that established rules for stock markets and listed firms. Along with the market reforms, the state also engaged in firm reform, where key element were allowing easier founding and growth of firms with no state ownership, […]

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    India needs to sophisticate and diversify its manufacturing exports

India needs to sophisticate and diversify its manufacturing exports

The expansion of India’s exports of services between 1990 and 2013 has been nothing short of spectacular, putting India on a par with the world’s high-income economies in terms of service-product sophistication and as a share of total exports. This has created unique opportunities for continued growth. By contrast, when it comes to exports of manufactured goods, India has […]

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    In some countries, state firms pursue politics more than profits

In some countries, state firms pursue politics more than profits

The global sources of foreign direct investment are changing, and state-owned enterprises (SOEs) are an increasingly large proportion of the pool of available global capital. In 2013, SOEs invested $US160 billion internationally, representing 11 per cent of global foreign direct investment flows, despite making up one per cent of total multinational corporations. SOEs also dominate cross-border mergers and acquisitions: […]

How can companies read early signals of change and adapt?

The world’s economies apparently change at random, reacting unforeseeably. However, certain large-scale processes can be understood and predicted as inter-related, evolving mechanisms driving business, government, and societal behaviour and decision-making. The DRIVE framework shows how the future could unfold through five such processes.

First are the demographic and social changes resulting from current models of population growth. All countries are […]

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    Mergers that aim at increasing revenue only work with the customers’ blessing

Mergers that aim at increasing revenue only work with the customers’ blessing

When one company acquires or merges with another one in search of revenue synergies, they both face greater risks than if they were aiming at cost synergies: while cost synergies can be forced top-down, revenue synergies depend on customers’ reactions.

Business leaders often equate “risk” to “things can go wrong”. This notion is reinforced by stories of catastrophes (like the merger of AOL […]

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    The value of intermediaries in the global market for cloud workers

The value of intermediaries in the global market for cloud workers

A variety of online markets have developed in recent years to facilitate trade in labour services. Upwork – previously known as oDesk-eLance (oDesk was founded in 2005 and merged with eLance in 2014) – is the largest global online market for outsourced work, with revenues of around $1 billion a year, making it the ‘behemoth of the human cloud’ […]