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Upcoming Challenges for Federal Reserve PolicyOpen in a New Window

Central banks are responsible for determining the monetary policy by setting the interest rates to balance investments and savings, which helps to keep economies fully employed and inflation stable. The natural rate is the interest rate that helps to achieve the balance, and federal reserve policy makers believe that the rate is at 3%, down from 4.5% prior to the recession. The 1.5 percentage point decline in the natural interest rate provides less ability to counteract future economic...

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Indonesia Considering Lower, But Stricter, TaxesOpen in a New Window

Over a week ago, Indonesian president Joko Widodo announced that he would like to lower the country's corporate tax rate. In addition, he is considering a more drastic change of converting one of the nation's islands into a tax haven. The proposed decrease of 8% would reduce the corporate tax rate to 17%. The decision remaining is whether to cut the rate all at once or gradually. However, the proposal still requires the approval of the country's parliament, which may be...

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Once Strong Mongolian Economy in TurmoilOpen in a New Window

Just four years ago, the Mongolian economy grew by 17% and attracted billions of dollars in foreign investment, according to World Bank data. Today, there is a mounting debt crisis and the risk of a possible default from the Mongolian government, with GDP only growing about 1.3% for the first half of the year. Currency has also plummeted nearly 10% against the dollar in the past month alone, and concern continues to grow as more investors pull their funding from the country. The Mongolian...

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Incentivizing Participation in Voluntary Green ProgramsOpen in a New Window

[This blog is based on the Article Snapshot for my article with Michael Giebelhausen, HaeEun Helen Chun, and J. Joseph Cronin Jr. in the Journal of Marketing, July 2016. A six-minute radio dialogue between Michael Giebelhausen and Tomas Hult about the article is on the globalEDGE Business Beat] Consumers experience a "warm glow" and heightened service satisfaction when they participate in a provider's voluntary green program (and vice versa), an effect that can be dampened or...

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Assessing Performance Outcomes in MarketingOpen in a New Window

[This blog is based on the Article Snapshot for my article with Constantine S. Katsikeas, Neil A. Morgan, and Leonidas C. Leonidou in the Journal of Marketing, March 2016. A six-minute radio dialogue between Neil Morgan and Tomas Hult about the article is on the globalEDGE Business Beat] An assessment of performance outcome measures in marketing reveals significant problems with how such outcomes are conceptualized and operationalized and performance areas in which empirical knowledge of...

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Will Transferring Manufacturing Jobs Back to the U.S. Actually Help?Open in a New Window

For years Americans have seen manufacturing jobs relocated overseas in an effort to lower production costs. The loss of these jobs has put millions out of work, and has done nothing to help the economy. There is a push to relocate these lost jobs back to American soil, to help recreate the jobs that have been lost. However, the question is, will the returning of these factories actually create more jobs? Companies are slowly making their way back to the United States, but they are not...

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Slow Growth Numbers in JapanOpen in a New Window

The latest economic numbers for the second quarter of 2016 were published Monday, and they do not paint a bright picture of the Japanese economy. Data shows the economy in Japan barely grew, expanding only 0.2%, lower than the already diminished target rate of 0.7%. The stalling growth was somewhat expected, considering April earthquakes and the impact of Brexit, but was still worrisome considering the large drop from 2% growth in the first quarter. Japanese officials have long looked for...

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globalEDGE Business Beat: Latest SegmentsOpen in a New Window

In the latest globalEDGE Business Beat, MSU's International Business Center Director Tomas Hult talks with 5 guests on a wide range of interesting topics. Included are discussions on voluntary green programs and their implications, customer satisfaction and its impact on stock returns, innovation inside companies, and the current state of international trade agreements. Check out the new Business Beat segments to gain insights into the international business world!

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Kenya Announces Entrance Into Oil IndustryOpen in a New Window

In 2012, the UK-based oil exploration company, Tullow Oil, discovered oil in Kenya's northwestern Turkana region. Over four years later, the country is now announcing its plans to go forward with the production of crude oil. Part of the reason for the delay is the difficulties the company encountered soon after discovering the oil. Sheep and cattle farmers in the region were upset with the company's exploration efforts, citing damaged pastures that could destroy their...

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Afghan Start-Up Adds Spice to Many LivesOpen in a New Window

Afghanistan may not seem like the ideal location for business opportunities. The country faces frequent blackouts, bombings, equipment shortages, and a consumer market that is untested. Despite these challenges, three Army veterans and a civilian who served in Afghanistan have decided to take on these challenges through their company, Rumi Spice. Rumi Spice buys saffron, a local crop, from Afghan farmers and then sells it around the globe in order to develop Afghanistan’s economy and...

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The Alternative Finance Industry in the United KingdomOpen in a New Window

A study conducted by the University of Cambridge and Nesta, in partnership with KPMG, recently covered the development of the alternative finance industry in the United Kingdom. In the U.K., the industry expanded by 84% in 2015 £3.2 billion, and equity based crowdfunding was 15.6% of the total amount of seed and venture stage equity investment in the United Kingdom. The fastest growing models of alternative finance investment are donation-based and equity-based...

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Austria May Block Turkey's Bid at EU MembershipOpen in a New Window

Austria's foreign minister, Sebastian Kurz, has threatened to oppose any attempts by Turkey to join the European Union. Kurz claimed he will use his position in the EU foreign ministers' council to vote against further negotiation chapters with Turkey. His announcement was made Sunday, following a recommendation by Chancellor Christian Kern to completely terminate said negotiations. Several other Austrian government members have echoed their sentiments, citing the recent...

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Avocado Shortage Sparks a Crime Wave in New ZealandOpen in a New Window

Avocados are experiencing a sudden shortage in the market, as New Zealand bandits have been reportedly stealing the delicious creamy fruit. In the past five months, 40 large-scale thefts from New Zealand’s orchards have been reported, with 350 avocados being stolen at a time. Crime is surging through New Zealand and the international demand for avocados continues to rise. Due to the shortage, avocados are selling for $4 to $7 each. As a result of the thefts, the orchards have lost...

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Communicating in the International WorldOpen in a New Window

For anyone conducting their business internationally, being aware of and understanding cultural differences is often essential for success. Issues such as directness, cultural values, and punctuality vary across countries, and expressions can have very different meanings in foreign cultures. By researching a country’s culture and customs first, you can impress and gain the respect of your international colleagues, helping to build relationships which will be crucial to the growth of your...

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Historic Interest Rate Cut by the RBAOpen in a New Window

Australia's central bank recently cut interest rates from 1.75% to 1.5%, a direct consequence of the country's faltering job market and record-low inflation. The Reserve Bank of Australia hopes to boost the labor market as well as induce economic growth via this interest rate cut. After a decade-long mining boom, the Australian economy gradually shifted towards less commodity-dependant growth, helping the nation avoid a recession. Unfortunately, there are many indicators that...

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The World's Exponential Increase in Dependence on Global Supply Chains; Let's Strategize!Open in a New Window

[This blog post is based on a presentation I gave in a business-academic panel “jam session” at the American Marketing Association Summer Educators’ Conference, August 6, 2016. The slides with charts and data can be downloaded here]. The strategic importance placed on leveraging global supply chains has seen an exponential increase in the last decade. The world is now connected in a cogwheel fashion, where all 195 countries leverage inbound and outbound elements of...

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Why U.S. Tech Companies Struggle to Succeed in ChinaOpen in a New Window

Whether it's a ride-share app, a search engine, or a social media platform, tech companies have struggled to expand their businesses overseas. Many successful U.S. tech companies expect to thrive in the world's second largest economy, but the results have been less than satisfactory. According to a statistic posted by the Harvard Business School, "48% of foreign corporations fail and withdraw from China within two years of starting operations." Why is this economy so...

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Is Japan's newest stimulus enough?Open in a New Window

The Bank of Japan announced a new stimulus plan last Friday. This new plan involves the annual purchasing of the equivalent of $58 billion USD worth of ETFs. This is an increase of approximately $26 billion from last year. The bank notably yields negative interest rates. However, those will not be affected in this new round of easing. Also not included in the plan is an increase in its pledge to buy Japanese government bonds. Japan's central bank owns a significant...

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“Girl Power” – Angela Merkel, Theresa May, and Hillary ClintonOpen in a New Window

“Girl power” was made popular by the pop group Spice Girls in the mid-to-late 1990s. The phrase is typically used as a reference to female empowerment and independence, and has also been linked to modern-day feminism. The “girl power” phrase came in vogue in 1987 in a song by London-based all-girl group Mint Juleps and their “Girl to the Power of 6.” The pop-punk due Shampoo also had a single titled Girl Power in 1995. But, Spice Girls, without a doubt, set...

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Despite Criticism, the TPP Provides Many BenefitsOpen in a New Window

The Trans-Pacific Partnership (TPP) has been a largely controversial topic from the day discussions began. As the largest regional trade agreement in history, the agreement would set new terms for trade and business between the U.S., Canada, Mexico, Australia, and numerous other Pacific Rim countries. As a whole, this group of member countries is responsible for nearly one-third of world trade. Needing the approval of Congress, the TPP has become a topic of discussion in the 2016 U.S....

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