scholarly journals Sovereign risk management: A rationalist explanation of Putin’s and Trump’s risk taking behavior and its consequences

2017 ◽  
Vol 1 (2) ◽  
pp. 6-16 ◽  
Author(s):  
Frank Lehrbass
Keyword(s):  
Risk Taking ◽  
Corporate Leaders ◽  
Negotiated Settlement ◽  
Climate Action ◽  
War Finance ◽  
The Usa ◽  
Expected Utility Maximization ◽  
Trade War ◽  
Russian Politics ◽  
Open Position

It goes without saying that nowadays corporate leaders should perform their activity within the concept of sustainable development. The United Nations detail on their homepage (sustainabledevelopment.un.org) what this means. But corporate leaders sometimes face headwind from their governments. Therefore it is important to understand the reasons for such governmental decision making. Two prominent cases are the presidents of the USA and Russia. Firstly, two seemingly unrelated topics of Russian politics are investigated. It is shown that under expected utility maximization the assumptions of an unbiased oil forward market and a risk-acceptant attitude (strictly convex utility function) of president Putin are sufficient to explain Russia’s open position in oil and the bailout of Rosneft. Secondly, actions of president Trump are considered. Again, a risk-acceptant attitude is able to explain his campaign and to conform with his statements. Thirdly, international negotiations over Ukraine between two risk-acceptant presidents are considered. It is proven that the chances for a negotiated settlement have shrunken with the election of Trump and might now even be nil. Fourthly, a tentative outlook on international economics (trade war), finance (regulation) and politics (climate action) is performed.

scholarly journals A rationalist explanation of Russian risk-taking

2016 ◽  
Vol 11 (1) ◽  
Author(s):  
Frank Lehrbass ◽  
Valentin Weinhold
Keyword(s):  
Utility Function ◽  
Expected Utility ◽  
Risk Taking ◽  
Utility Maximization ◽  
Strictly Convex ◽  
Forward Market ◽  
Expected Utility Maximization ◽  
Russian Politics ◽  
Open Position

Three seemingly unrelated topics of Russian politics are investigated. It is shown that under expected utility maximization the assumptions of an unbiased oil forward market and a risk-acceptant attitude (strictly convex utility function) are sufficient to explain Russia’s open position in oil and the bailout of Rosneft. The risk-acceptant attitude of the Russian leader also causes a shrunken bargaining range for the conflict in Ukraine, which can be enlarged by sanctions but not necessarily by the proliferation of weapons. This gives sanctions a clear edge over the proliferation of weapons.

The Thucydides Trap as an Alternative Explanation for the US–China Trade War

2020 ◽  
Vol 12 (1) ◽  
pp. 42-55 ◽  
Author(s):  
Imad A. Moosa
Keyword(s):  
Alternative Explanation ◽  
Bilateral Trade ◽  
National Income ◽  
Trade Deficit ◽  
Basic Principles ◽  
China Trade ◽  
The Us ◽  
The Usa ◽  
Thucydides Trap ◽  
Trade War

The current trade war between the USA and China is perceived to be motivated by the US desire to curtail the bilateral trade deficit, on the assumption that reducing the deficit boosts economic growth. This flawed proposition indicates gross misunderstanding of the national income identity and the basic principles of macroeconomics. The imposition of tariffs will not reduce the trade deficit as the assumptions and conditions required for a smooth working of the process are unrealistic and counterfactual. The notion of an economic Thucydides trap is put forward to explain why the trade war is motivated by US apprehension about China’s rising economic power.

scholarly journals Do mistakes acceptance foster innovation? Polish and US cross-country study of tacit knowledge sharing in IT

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Wioleta Kucharska
Keyword(s):  
Critical Thinking ◽  
Tacit Knowledge ◽  
Risk Taking ◽  
Structural Equation ◽  
Equation Modeling ◽  
Learning Climate ◽  
It Industry ◽  
Content Type ◽  
The Usa ◽  
High Level

Purpose This study aims to understand and compare how the mechanism of innovative processes in the information technology (IT) industry – the most innovative industry worldwide – is shaped in Poland and the USA in terms of tacit knowledge awareness and sharing driven by a culture of knowledge and learning, composed of a learning climate and mistake acceptance. Design/methodology/approach Study samples were drawn from the IT industry in Poland (n = 350) and the USA (n = 370) and analyzed using the structural equation modeling method. Findings True learning derives from mistake acceptance. As a result of a risk-taking attitude and critical thinking, the IT industry in the USA is consistently innovation-oriented. Specifically, external innovations are highly correlated with internal innovations. Moreover, a knowledge culture supports a learning culture via a learning climate. A learning climate is an important facilitator for learning from mistakes. Originality/value This study revealed that a high level of mistake acceptance stimulates a risk-taking attitude that offers a high level of tacit knowledge awareness as a result of critical thinking, but critical thinking without readiness to take a risk is useless for tacit knowledge capturing.

Cultural Differentials Modify Change

2014 ◽  
Vol 3 (2) ◽  
pp. 50-79 ◽  
Author(s):  
Mambo G. Mupepi ◽  
Patience Taruwinga
Keyword(s):  
Regression Analysis ◽  
Cultural Differences ◽  
Risk Taking ◽  
Perceived Risk ◽  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Organizational Vision ◽  
Performance Orientation ◽  
Perceived Success ◽  
The Usa

A mixed research methodology was deployed to show that cultural differences and perceived risk-taking must be considered in charting competences in advancing household enterprises in the Southern African Development Communities and the USA. The consequences were that triumphant households were those that took cognizance of multiculturalism in assessing and measuring performance. Multiple Linear Regression analysis demonstrated that capacity must be customized to suit organizational vision and that the vital predictor of perceived success in the USA was performance orientation while uncertainty avoidance topped the list in the SADC. Results indicate that diversity was understood in all successful enterprises.

scholarly journals The risk of carbon leakage in global climate agreements

2020 ◽  
Author(s):  
Tobias Nielsen ◽  
Nicolai Baumert ◽  
Astrid Kander ◽  
Magnus Jiborn ◽  
Viktoras Kulionis
Keyword(s):  
Climate Change ◽  
Kyoto Protocol ◽  
Global Climate ◽  
Developed Countries ◽  
Carbon Leakage ◽  
Policy Makers ◽  
Climate Agreements ◽  
Climate Action ◽  
The Usa ◽  
Nationally Determined Contributions

Abstract Although climate change and international trade are interdependent, policy-makers often address the two topics separately. This may inhibit progress at the intersection of climate change and trade and could present a serious constraint for global climate action. One key risk is carbon leakage through emission outsourcing, i.e. reductions in emissions in countries with rigorous climate policies being offset by increased emissions in countries with less stringent policies. We first analyze the Paris Agreement’s nationally determined contributions (NDC) and investigate how carbon leakage is addressed. We find that the risk of carbon leakage is insufficiently accounted for in these documents. Then, we apply a novel quantitative approach (Jiborn et al., 2018; Baumert et al., 2019) to analyze trends in carbon outsourcing related to a previous international climate regime—the Kyoto Protocol—in order to assess whether reported emission reductions were offset by carbon outsourcing in the past. Our results for 2000–2014 show a more nuanced picture of carbon leakage during the Kyoto Protocol than previous studies have reported. Carbon outsourcing from developed to developing countries was dominated by the USA outsourcing to China, while the evidence for other developed countries was mixed. Against conventional wisdom, we find that, in general, countries that stayed committed to their Kyoto Protocol emission targets were either only minor carbon outsourcers or actually even insourcers—although the trend was slightly negative—indicating that binding emissions targets do not necessarily lead to carbon outsourcing. We argue that multiple carbon monitoring approaches are needed to reduce the risk of carbon leakage.

scholarly journals Economical Feasibility of Rare Earth Mining outside China

Minerals ◽  
2019 ◽  
Vol 9 (10) ◽  
pp. 576 ◽  
Author(s):  
Marie Sophie Jaroni ◽  
Bernd Friedrich ◽  
Peter Letmathe
Keyword(s):  
Rare Earth ◽  
Net Present Value ◽  
Western World ◽  
Discounted Cash Flow ◽  
Dominant Position ◽  
Development Scenarios ◽  
The Usa ◽  
Trade War ◽  
Economical Feasibility ◽  
The U.S

Although rare earth deposits are found on all continents, China produces more than 90% of all globally used rare earth metals. Besides its economic dominance, China has also gained a monopolistic know how position in Rare Earth Elements process technologies. Based on China’s dominant position in rare earth markets, other countries such as the USA, Australia, Europe and Japan are increasingly concerned about a stable rare earth supply and their increasing dependence on China. In 2019 the new trade conflict blazed up between China and the U.S., and the threat of China to decrease or even stop rare earth supply to the U.S. is a new chapter in the trade war which shows that new means of supply must be found. The main focus of this paper is to evaluate and compare advanced rare earth projects outside China with a new holistic and objective method to get a detailed picture of possible rare earth mining outside China. In addition to the exclusively economic investigation, specific countries’ risk und price development scenarios are considered. This leads to an objective picture of rare earth mining outside of China, which is needed as a basis for discussions of secure rare earth supply for the western world. Building on this objective economic analysis, we can also add new supply risk due to new political situations. To this end, data is compiled on 14 selected focus projects with regard to the required investments, operating costs, and the potential revenues for each case. These data are used to develop a discounted cash flow model (with analogous assumptions and methods) for each project. This model enables the achievable net present value (NPV), the internal interest rate, and the static amortization period for each project to be determined.

scholarly journals On Development of American-Chinese Trading Relations

2020 ◽  
Vol 14 (3) ◽  
pp. 26-38
Author(s):  
S. N. Pogodin ◽  
T. S. Yagya
Keyword(s):  
Statistical Data ◽  
Bilateral Trade ◽  
Present Stage ◽  
Economic Strategies ◽  
New Period ◽  
The Usa ◽  
Trade War ◽  
The New Period ◽  
Chinese Trade ◽  
Trade And Investment

The article is devoted to the analysis of the of American-Chinese trading relations’ development at the present stage. The economic strategies of the USA and China towards each other in the period up to 2016 are investigated and the changes that have occurred in the positions and activities of the administration of these two states since 2017 are tracked. The statistical data reflecting the state of bilateral trade of the USA and China, their investment activities for the period up to 2016 and in the new period from 2017 are analyzed. The emphasis is on identifying new features of American-Chinese trade and investment cooperation during the D. Trump’s administration. Attention is paid to the motives of the trade conflict named the trade war between the USA and China, and its results.

scholarly journals Trade War between the USA and China: Impact on an Austrian Company in the Steel Sector

2020 ◽  
Vol 66 (1) ◽  
pp. 39-51
Author(s):  
Thomas Scheipl ◽  
Vito Bobek ◽  
Tatjana Horvat
Keyword(s):  
Steel Industry ◽  
Quantitative Research ◽  
Optimal Strategies ◽  
Negative Effects ◽  
Trade Dispute ◽  
The Usa ◽  
Steel Sector ◽  
Trade War ◽  
Full Swing ◽  
The Impact

AbstractThe paper is intended to provide information on the trade war between China and the USA. It analyses the consequences of the trade dispute, discusses the impact on an Austrian company in the steel sector, gives an overview of possible strategies with which companies can reduce the negative effects of tariffs and discusses strategies that are good options for companies in the steel industry. The methodology applied included theoretical and empirical research based on quantitative analysis as well as quantitative research in the form of expert interviews. The results show that the trade war between China and the USA was in full swing until January 2020. The impacts do not only affect the parties involved, but also other parties such as the EU. Companies can use a variety of strategies to mitigate the negative effects of trade wars. The best strategy for a company depends on the structure of the company, its products and its competitors. The paper adds new insights to the existing literature on the trade war between China and the US and its effects, strategies to mitigate the negative effects of tariffs and discussions on optimal strategies for companies in the steel industry.

Looking Before Leaping: Can We Afford an Unlimited Trade War Between the World’s Two Largest Economies

2020 ◽  
Vol 12 (1) ◽  
pp. 24-41
Author(s):  
Xihui Sun
Keyword(s):  
Extreme Pressure ◽  
The Us ◽  
The World ◽  
The Usa ◽  
Trade War ◽  
Trump Administration

The Trump administration launched the world’s biggest trade war with China, which is suggestive of its distinctive governing philosophy. Consequently, the trade war with China is not only part of the US policies on China, but also part of the Indo-Pacific strategy of the administration, with aims of both money and containment. In response, China has adopted both hardline and moderate approaches, resolutely fighting back the pressure from the USA and exhibiting restraint in retaliation. However, China and the USA have their own advantages, and the end of the trade war depends on the resolution, willpower, and judgment of the situation. Presently, China is the only country that has the ability and resolution to stand up to the USA to stay the course in the trade war; China’s perseverance and retaliation to the US’ extreme pressure in the trade war temporarily eased the pressure on other countries from the USA. The trade war is damaging to the world and will cause more harm if it goes unchecked. The USA dominates the direction of Sino-US relations, but China’s response also shapes Sino-US relations to a certain extent.

scholarly journals A real driver of US–China trade conflict

2019 ◽  
Vol 3 (1) ◽  
pp. 30-40 ◽  
Author(s):  
Min-hyung Kim
Keyword(s):  
Transition Theory ◽  
Power Transition Theory ◽  
Content Type ◽  
China Trade ◽  
The Us ◽  
The Usa ◽  
Us Hegemony ◽  
Trade War ◽  
Zero Sum ◽  
Hegemonic Stability

Purpose According to the conventional wisdom, trade is not a zero-sum game, but a positive-sum game. By allowing countries to focus on producing the goods that they can produce relatively efficiently, free trade is largely beneficial for everyone involved. Then, why are the world’s two largest economies (i.e. the USA and China) currently engaged in a trade war, which is likely to hurt their own economies? What is the driving force for the trade war between the two economic giants? The purpose of this paper is to offer an explanation of the underlying cause of the US–China trade war. Design/methodology/approach In an effort to make sense of the trade war between the USA and China, the paper draws the insights from the two international relations theories – i.e. hegemonic stability theory and power transition theory. Findings As China continues to threaten US hegemony in the world in general and East Asia in particular, the Sino–US competition for hegemony will intensify over time. As a result, the trade war between the two countries may persist longer than many anticipate. Further, even if the trade war between the two superpowers ends soon, a similar type of conflict is likely to occur later as long as the Sino–US hegemonic rivalry continues. Originality/value The central thesis of this paper is that “US fear” about its declining hegemony and China’s rapid rise as a challenger of US hegemony is driving a US-launched trade war with China. Since the underlying cause of the trade war between the world’s two largest economies is political (i.e. the Sino–US hegemonic rivalry) rather than economic (e.g. US attempts to improve the trade balance with China by imposing tariffs on Chinese goods), the paper contends that the full understanding of the trade war requires close attention to the importance of power competition between the two superpowers.

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