First of all, let me say I'm pleased to be invited and I'm honored to be asked to do this. I enjoy speaking to doctoral students and young people. I have had a long career in this profession and it's fun to talk to people starting out on this journey. Maybe I have some useful insights to share. So, I'm pleased to have the opportunity to talk with you. Thank you!

How did I start working in international business? OK, I have to tell you a little bit about myself. From the time I was about 11, my family lived in a small little town of 3000 called St. Stephen, New Brunswick, which is on the Canadian border across the St. Croix River from another little town on the U.S. side of the border called Calais, Maine. The St. Stephen - Calais border, was one of the top three border crossings between Canada and the United States; it was the main one for anyone traveling from the United States to the Atlantic Provinces.

So I grew up on the border. My house was close to the main street going through town, and we always had American tourists passing through. My first job in international business was working in small retail shops that catered to tourists, working at the counter selling things to American tourists that were coming over and needed currency exchange done. I spent my time exchanging Canadian dollars for American dollars from the time I was probably about 16. The stores I worked in sold everything from your traditional “knick knack” pencils to fur coats. So everything from five cents to $1,000. We'd be making exchange rate transactions, and different stores would give you a discount if you used different money. So I think my interest in foreign exchange and cross-border transactions came very much from those years. That was my first international business job. They, of course were summer jobs. I don't know what you did in in the summer [Fynn], when you were working but maybe you had something similar working with tourists from another country. You see the differences right away. Obviously, there are some differences. Everybody spoke English, but we had different pronunciations, came from different countries, and different cultures.

Let me give you an example. My best friend’s house was on the main street into and out of town. When we were teenagers we used to sit over in her front doorstep and watch the American tourists drive by in July and August. And every once in a while, we'd see a car go by with snow skis on the roof -- in the summer! Now you understand what that was. These were American tourists who thought Canada was a place of snow and igloos, even in July, and that you could come across the border from Maine into New Brunswick and bring your skis with you and have an opportunity to ski. Now, we can't do that today. Today we have the Internet and the Internet shows you what the weather is going to be like in the other location so that kind of misconception, I think, is gone. But the cultural differences are still there.

Let me give you another example of differences that still do exist today. I graduated from high school during the Vietnam War. On the Canadian side of the border, young men were not going to war but the boys in the high school across the border in Calais, Maine were all being called up. There was a mandatory draft on the American side of the border. So you have policies where on one side -- just across the river -- I could almost throw something across the river -- young men were going off to fight a war where many didn't come home, and on my side the young men were getting jobs and getting married and going off to university.

My first full time job started before I got my PhD. [Fynn], you're in the Master in IB program right now. I did a one-year master's program in Economics at McGill University and I got a teaching job before my thesis was written. I was 21 when I started teaching full time at Mount Saint Vincent University in Halifax, Nova Scotia, in an Economics department. I didn't teach International Business. I taught International Economics (Trade and Finance), Public Finance, and a course in Canadian Economic Problems and Policies.

I didn't actually teach International Business (IB) until I remarried, we moved to Texas A&M, and I joined the Management department in the Mays Business School. IB is almost always taught in business schools and I didn't join a business school until 1995. So I guess my first full-time IB teaching was 26 years ago. But I started teaching International Economics when I was 21.

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Okay, my short answer is for love! That will make you laugh, I know. My husband Chuck Hermann and I met at Harvard University. He was at Ohio State University, a chaired full professor. I was a full professor at Carleton University in Ottawa teaching in a Graduate School of International Affairs called the Paterson School. We commuted, as lots of couples do, and eventually decided to go on the market together. Texas A&M hired my husband because President George Herbert Walker Bush, the 41st president, put his Presidential Library at Texas A&M. He was opening a school here, the Bush School of Government and Public Service, and they hired my husband to be the first director.

I became what is colloquially known as “the trailing spouse.” I was hired as an associate professor with tenure in the Management department at Texas A&M, which is one of the best Management departments in the world. I think they were not quite sure what to do with me. First of all, because I was a trailing spouse coming in, never taught in a business school, had an economics degree, was doing very different things. I'm not sure they thought that I was going to last, either! I can tell you a funny story about that…

I had to come back down and interview by myself in the Management department and there was one major hotel here in College Station, which was full. So Texas A&M put me up to stay during my visit in a motel that basically was a group of little rooms with keys that were under the mat and you got your key and you went  inside. All right, so I'm in this little room and I've arrived late at night and I'm settled in. Now I wake up in the morning and there is the single biggest cockroach I have ever seen in my life on the floor! I mean, Texas has everything big, including bugs, and I looked at that bug. I'm from Canada. I had never seen anything like that. I packed up my suitcase and Ricky Griffin picked me up. Now Ricky has been the president of the Academy of Management and we've become good friends. Ricky picked me up in his car and I took my suitcase out to the car and I said, “Ricky, I don't care whether you hire me; I'm not staying there tonight. That room has a huge bug as big as it can be.” I was moved to the hotel and things were fine -- but there was culture shock. I am now much more sanguine about Texas bugs and snakes and fire ants and the variety of local critters that one has down here [in Texas].

Chuck and I found a home here, we made friends, and we've stayed. My husband truly enjoyed setting up the Bush School. It has been probably the most important achievement of his long career in academia. We also grew to know and love President and Mrs. Bush. A little girl from a town of 3000 on the Canadian border, having the opportunity to interact with former and current presidents and heads of states has been a true privilege. We both retired in August 2019, just before Covid-19, and we are still here.

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That's a really good question and I'm not sure I know the answer. I know what I'm known for and maybe
that's what I should talk about.

I wrote my PhD dissertation in a very little known area at the time called transfer pricing. I kind of fell into it, so maybe I should take a minute and explain how I fell into it. Remember I told you I started teaching at 21, at your age with a master's degree. My first husband has been accepted into an MBA program in Halifax, Nova Scotia so I was looking for a job in Halifax and one came up at Mount Saint Vincent University. I started teaching at MSVU as a lecturer with an incomplete masters from McGill and after a year or two I was told “Lorraine, you can't stay unless you have a PhD.” There was one doctoral program in Economics in Halifax at Dalhousie University. I telephoned a professor and asked if could take his doctoral course in Public Finance. I was teaching the course at the undergraduate level and I thought a smart thing to do would be to take the doctoral course. And he said yes; his name was John Head. So I took John’s course that year as a part-time doctoral student.

John Head invited his dissertation chair Carl Shoup, who was retiring from Columbia University in New York, to come to Dalhousie for a year and Carl said yes. By then, I was registering full time for the PhD program and starting to think about doing a dissertation. I asked John if he would chair my dissertation and he said, “Why don't you ask Carl Shoup to do it? Carl's coming for a year as a Senior Killam Fellow. Maybe he would take you on?” Remember, this is pre-email. We're talking 1970s. So John wrote a letter to Carl and Carl wrote a letter to John back saying, “I've been appointed to the Committee of Eminent Persons at the United Nations. We have to write a report on taxing multinationals, and I've been assigned to write the section on transfer pricing. I will supervise Lorraine’s dissertation if she writes on transfer pricing.” So I'm invited into John's office and John hands me the letter from Carl, and I read the letter (I still have a copy of the letter) and he says, “I think you should do this.” So what would you have done, [Fynn]? You start your PhD program and you really don't know what you're going to write on. You go to the professor you know and he says, “Look there's this world famous professor coming for one year. He was my supervisor. I think you should say yes.” Well, I said yes. Would you have said yes? I mean, you had never met the person - what if you didn't get along? I knew nothing about transfer pricing. This was a “carpe diem” - seize the day – moment and I did.

It turned out, by fluke, that within about a 10 year range four of us wrote PhD dissertations on transfer pricing, and I think we four would be considered to be the “founding fathers” of the field of the economics of transfer pricing. The other three were Jeff Arpan at South Carolina, who also became president of the Academy of International Business, and is now deceased. Tom Horst, who started in academia but left and founded Horst Frisch, a consulting firm in transfer pricing. The fourth was Takao Itagaki, who taught at a Japanese University. I've unfortunately lost touch with him.

So there were four of us who started that field in the 1970s, and I worked in that field writing journal articles until the late 1980s, and got bored and stopped. I had started teaching a course on multinational enterprises, thinking that since I was researching transfer pricing I should know something about MNEs. You know what transfer pricing is? Maybe I should stop here - although I think most people do know now. It's how firms set prices for transactions that happen inside the multinational group. So, name any multinational; it's going to be moving goods or services or intangibles or now digital transactions or financial transactions that are happening inside the group, and transfer pricing is how you price the transactions. I was focused on how you price them for economic purposes but you can also price them so as to avoid taxes or avoid playing customs duties or because there's foreign exchange controls.

There's lots of reasons to set transfer prices and I spent my whole academic life basically studying how and why firm set prices inside the group. That's what my dissertation was written on and what I published on. I started teaching transfer pricing as individual lectures back in the 1980s. I started executive training in transfer pricing with [the Canadian] tax authorities in 1989. I consult on transfer pricing now and I'm doing a lot of writing now since I've retired. I'm going back to, not full time, but most of what I'm writing right now -- such as the article I have coming out tomorrow -- is on transfer pricing. The book I'm writing is also on transfer pricing.

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International business is about cross-border activities and if you look at the definition of the scope of international business studies on the Journal of International Business Studies (JIBS) website, it's basically one that I wrote when I was the JIBS editor-in-chief. I think about it as involving anything that's cross-border, anything that's comparative across countries or things that are truly international (I think of transfer pricing as an international activity, for example).

I think what fascinates me about IB today is some of the changes that are going on. Maybe the way to think about how IB is changing - I'll give you transfer pricing as an example. When I first started out working in transfer pricing, we were very focused on the pricing of goods because what moved across borders were goods. We really didn't move services very much because it was difficult to move services. Then services started to move. And then intangible assets. Think about global brands and all the work that's done on global brands as intangibles, as marketing assets.

And now we have digital transactions and digital transactions are moving. I started talking to you before we started recording this about setting up a Listserv for [the Pew] Fellows in 1991 so that we could keep in touch, which was I think one of the very earliest Listservs. And of having an early Gmail account. I mean they were early but they are now ubiquitous, right? You are growing up in a world that's very different than the world that I grew up in. “Trade” for me was bilateral trade in goods. I now have two Amazon accounts: I have a US amazon (amazon.com) account but I also have an amazon.ca account. I bounce back and forth between them on a regular basis when I want to send something to my mother or to my daughter in Canada and I buy it on the CA website instead.

So I think one of the big changes is digitalization and I'm very interested in Industry 4.0 and have written on it. I'm interested in how value chains are going to change with digital production. I've done a little bit of work on 3D-printing and I'm interested in 3D printing. So that kind of technological change is going to make a world that's very different for you than it is to me.

A related one is, I mentioned to you, that a lot of the trade was bilateral, you have a single seller and a single buyer. What we have seen happening now is the creation of platforms and hubs. Think of Facebook for example and the question is, how do you measure the value on Facebook for tax purposes, and how should it be priced, and where should it be allocated? I now see firms using a lot of these kinds of hub structures. So for example, I'm interested in marketing hubs, IP hubs, and IT (information technology) hubs. I'm interested in the cloud. We're recording what we're doing today to a cloud recording. It is not being recorded on my computer; it's in the cloud. So who owns that? Who has intellectual property rights to it? Where should it be taxed, right? These kinds of issues, I think are just fascinating as conundrums. And one of the really cool things about IB, I think, is the puzzles that we face.

I'll give you one other suggestion about why I think today is particularly interesting in IB. It is because we live in a world of what I call “shocks and responses” or crises. The pandemic is a very good example; the 2009 financial crisis is another one. You know about the butterfly effect, right? The butterfly effect is a butterfly flaps its wings, and it's heard all over the world. Now we have one little virus, comes out of one location, and it spread around the world and affected us in ways that we had no idea was going to happen.

So, I think we don't know really very much about where we're headed and, what is the phrase? We “look through a glass darkly”, as Shakespeare said. At best we can talk about what we think will be in the next five years. Look at yourself. I may be around -- I hope to be around -- to pass 100. You're going to live past, say, 110 or 120. The world is going to change enormously in your lifetime - isn't that exciting?

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I think there were big changes in the last two decades. One was the rapid growth of emerging markets. I was co-author of a special issue of Academy of Management Journal in 2000 on emerging markets. That's the single largest article that is most cited on my CV, the introductory paper that we wrote for that special issue in emerging markets. The rise of emerging markets is, by far, I think one of the most important things that's happened, I would say since the early 1990s. The second is obviously the Internet. Amazon was founded in 1994. I had one of the first Amazon accounts. GMAIL was founded in 2004 and I had one of the first Gmail accounts too. So the creation of the internet and digitalization of activities -- the rise of digital multinationals -- is another one.

Are there other things that I think are major issues? I think the rise of the middle class in much of the rest of the world is a huge change. A recent one is the rise of protectionism. The negative impacts on globalization due to the pandemic point to the fragility of the global economy. The greater diffusion and interdependence of the global economy leave it open to shocks like the 2008-2009 financial crisis and the 2020 pandemic. Think about Arab Spring and how that was transmitted from country to country all over because of the Internet and Facebook. We're connected in ways that we never were before.

And of course, on the horizon facing all of us is global warming. Call it climate change, call it global warming, call it what you want. If we can't get the ozone layer under control, we’re in huge trouble! I spoke some years ago when the IB meetings were in Copenhagen and OIKOS was having -- you're an OIKOS member? - OIKOS was having its annual meeting there. OIKOS is a group of students and faculty mostly in economics and business schools, who are interested in the environment. Their focus is on trying to introduce sustainability into courses at the undergraduate level, all over the world in economics and business schools. I think it's a powerful movement and a really truly worthwhile one and one that PhD students can get involved in too. I want to leave a better planet to my children and my grandchildren and your children and your grandchildren. I'd like them to be able to see trees and get outdoors and enjoy the nature and there still be butterflies and bees and hummingbirds around us.

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Do you mean IB as a field or IB research? Do you mean International Business transactions, the real IB, or those of us who are studying the field of IB?

In terms of what's going to happen in international business over the next couple of years, let me just mention that we did a panel on this at the AIB meetings last year. All the papers were subsequently published in a special issue of AIB Insights. The basic theme we talked about was how international business is changing right around us. We talked about the fact that with globalization two things are moving in opposite direction: Digitalization enables cross border movement much more easily; transaction costs have gone down. You've got scale without mass so you can start to relocate things more easily on a worldwide basis.

On the other hand, government regulations are becoming more protectionist and COVID-19 created disruptions in global supply chains. This morning, I read a Wall Street Journal article about problems with lean production. Do you know what I mean when I say lean production? I spent a long time in the late 1980s studying the shift from mass production to lean production. That's the move from focusing on minimum efficient scale and long production lines to moving everything close by where you do it just in time and you don't keep any inventories. The article explores what happens when we have a pandemic and we no longer have any inventories and now we can't get semiconductors, or we can't get parts so there's no steel or tin. As a result, they're talking about building a semiconductor plant in the United States for the first time in generations and bringing this stuff home because just-in-time production doesn't work well in pandemics. When you have volatility and uncertainty, they slow down international business and that's clearly going to happen over the next few years. Firms are setting up at home because they think more shocks and responses are going to happen. Are there going to be more shocks and responses? Yes, I actually believe we're likely to have more pandemics. I do think it's quite possible we will have another global financial crisis. There are some symptoms that suggests we might have that also.

Also another big change I probably should mention this to you, for someone who works in transfer pricing now, a huge issue is the general public perception that multinationals don't pay taxes anywhere in the world, that they are stateless corporations. They can be much bigger than countries; the sales of multinationals, let’s say the top 100 multinationals, are bigger than the GDP of many of the countries in the world. I think the view that multinationals are good corporate citizens is very much under attack today and the CEOs of many multinationals are running scared for that reason. Apple, for example, and Google are starting to pay more tax. And so a re-think about MNE-state relations, the political economy of MNE-state relations, is definitely coming. Interestingly, this was foretold by Ray Vernon who published a book in 1998 called In the Hurricane’s Eye. You know what the hurricane’s eye is? It’s the very center of the hurricane, where everything is peaceful and quiet, very still, but the hurricane is all around you. Vernon argued that the good times that multinationals were having in the 1990s were going to be soon over. We were going to move out of the hurricane’s eye and things were going to get much worse for MNEs. And he was right. He was a little early as he often was but we're no longer in the hurricane’s eye for multinationals and MNE-state relations are in a confrontational time period now all around the world.

And in the academic field -- from an IB research perspective -- my view is that academics are often late to the table. I mean, seriously, we tend to study things that have been done in the past and for a simple reason, we don't have the data. If you're going to do empirical work you need data sets, and data sets typically historically were slow to come by. So, if I wanted to use Standard & Poor's data I probably need Standard & Poor's data from a couple of years ago. I've been writing for the last few months about the OECD proposals on taxing the digital economy and I'm using 2018 data so it's three years old and that's preliminary data for 2018.

So we tend to study stuff that's happened in the past and look back and then abstract, thinking the future is going to be the same, which it often isn't. If you want to get people who are more forward looking, they're typically not doing empirical work and that's often very hard to get published in in our journals. There is still a lot of work going on in emerging markets. Lots and lots of publications on emerging markets. And there's lots of work still being done on mode of entry decisions; people are still interested in the choice between exports and licensing, and foreign direct investment and joint ventures, and how firms split between their choices over those.

But there is some new work happening, I think. There's Calls for Papers on the digital economy. Now there's a lot of Calls for Papers on crises. There's Calls for Papers on digital globalization - and they may end up more in book chapters because of problems of accessing data.

The other big change of course is the rise of Big Data. And the question is, can you use Big Data sets? We're just starting now to see the very beginnings of that; in other words, using Google data and Gmail data and Facebook data as predictors for behavior. I think it's going to be less accepted to use Big Data in journal articles for a while and you probably will see them more in consumer marketing than in IB journals.

I have been working with a group of scholars arguing that the event study method is a method that should be more used in IB. Let me explain to you what I mean. Do you know what the event study method is? Event studies started out in finance and accounting and they've been around for a long time. They use stock market data, which are reported daily, often minute by minute. And so what happened in finance is they realized is that if there was an announcement made about a firm - the firm was going to announce a new merger or the CEO was accused of some crime - that the stock price would change. And they understood that you could actually look at and measure the stock market price change over a three day window and estimate the impact, the dollar impact, on the firm's market value. Basically by doing that, estimating what the likely impact on the value of the firm would be, how much it went up and how much it went down. So finance professors started publishing studies in the 1980s about stock market price changes as a result of self-announcements and external announcements that affected the firm.

However, to my knowledge, there's only been about a dozen papers published in JIBS using the event study method, and most of them have analyzed stock market announcements and I think three of them are mine. So a group of us who were involved in using the event study method have been arguing that IB scholars could do more studies in real time if they had access to daily data. For example, you could look at the pandemic. You could look at the announcement date when Covid-19 was listed by the WHO as a pandemic, which I think was March 12, 2020. You could ask yourself, did any stock price, say of firms that we now know have really benefited, like Zoom (the stock price of Zoom skyrocketed), could we have predicted that Zoom was going to be a winner from the pandemic? And how early could we have predicted it? Was it around the WHO announcement? Was it somewhat later that it happened?

So in other words, if we have real time data, we could now start understanding IB phenomena and how that changed in real time. For example, suppose I have an exchange rate shock that happens in one country; let's say it happens in Brazil. And we know when the exchange rate goes crazy in Brazil. Can we look at the impact on Venezuelan firms next door and argue about transmission of exchange rate shocks and see that reflected in the stock market prices of multinationals that do business between Brazil and Venezuela, for example?

Now let me go back to Big Data. What if we have real time Big Data tweets and a CEO tweets regularly and he or she does some kind of a stupid tweet that they shouldn't have done and that affects the stock price. Could we pick that up and do an IB paper about a multinational and show how one tweet, like the butterfly effect, has ripples around the world in terms of stock prices? And I think the answer is yes.

How could Big Data affect your research choices as a PhD student? When I had PhD students, they would come to me with dissertation ideas. They wanted to study what was going on today. They weren't interested in studying what happened five years ago. I bet the same is true of you. You want to study what's going on now; you don't care so much about stuff that happened 10 years or 20 years ago. And I used to say to my PhD students, “I'm sorry, but the problem is you're not going to get data for that. You need to write a dissertation where you have data.”

Nowadays, what I would tell my PhD students is, “Learn the event study method. Learn how to use it in a multi-country setting, which we did not have, but we now do have. We now have the ability to take the event study method and do it on multiple stock markets at the same time, or do it with multiple Amazon data sites, or multiple Facebook sites in real time data and investigate IB phenomena, using Big Data. To me, that opens up IB scholarship in a way that we really haven't done because we were so hidebound saying we had to use Standard & Poor's or we had to use Bureau Van Dijk data. We had to use the data that was there. Or the other alternative is, of course, to go collect your own data but that's very time intensive. However, even surveys are even easier now. I can run a SurveyMonkey survey at the “drop of a hat”, if I wish to do so. I couldn't do that five years ago.

So what I'm saying is, the journals are online and digital to you. Big Data is available to you. New software techniques are available to you that, for the first time, enable you to do real time studies of cross border phenomena. My generation couldn't do that and the generation that is coming after me couldn't do either, but your generation can. So, I hope you “step up to the plate” and take advantage of the new tools and opportunities. Even old phenomena like mode of entry decisions or international trade. Studying international trade and digital products, studying digital multinationals, really think about 3D printing, think about the shift from mass production to lean production to digital production.

I believe I'm the one who coined the terms, which I used it first at a conference three or four years ago, “Going Digitals” and “Born Digitals.” Born Digitals are firms that were born digital from birth, like Amazon, like Facebook. They didn't start out as real brick and mortar businesses; they were born digital. But the rest of the world; there's a whole bunch of Going Digitals. Everybody else is going digital whether they want to or not. They don't have a choice, right? The old brick and mortar firms, I don't think are really going to survive.

Let me give you an example. With 3D printing now you can send me the designs and I can use the design, so we have cross border trade. I think a real core source of value going forward is not going to be in the production stage but in the design stage. I have a printer sitting right beside me; it's not a 3D printer. Do you have a 3D printer? No, but that's partly because 3D printers are still expensive. When I started out, I started with a typewriter. You're going to have a 3D printer sitting next to you soon. If something doesn't work, you’re going to be able to just print another one. You're going to search online and buy designs and then you're going to print the replacement using your 3D printer.

Here is another example. I always wanted a Dick Tracy watch. When I was a kid, Dick Tracy was a cartoon strip, and I wanted a Dick Tracy watch. (I told you I was a computer geek.) I now have a Dick Tracy watch; that was a dream come true, getting my first Apple Watch. We are going to eventually, maybe in four or five years, have a nano computer chip embedded under the skin, who knows. Think about how you're going to get information. I don't have a pair of Google glasses, but we're going to have something that enables us to do that soon. Designing these new internet-enabled products – the Internet of Things – is going to be a huge source of value going forward.

Now that's assuming global warming doesn't hit us and that we don’t all have to retreat and live underground. But assuming we don't have a third world war, and that we don't destroy the planet around us, I think the future is really bright.

I'll say one more thing about why I think the future is really bright. Most of the intellectual gains that were made over the last, I don't know, let me say generations, multiple generations, have been made by two groups. They've been made in the United States/ Canada/ Europe - and they’ve been made by men. I grew up looking at walls [of photos] of department heads where they were all men. And they were all Americans (with an occasional Canadian).

One of the wonderful things, more than one of the wonderful things that's happening around us now, is the rise of women and the rise of emerging markets and the opportunity to harness that global brain power that has been suppressed for all these years because of poverty and because of discrimination. It's unbelievable to me that there are parts of the world where women can't drive, can't vote, and their husbands can cast them off to live in poverty the rest of their lives. It's unbelievable to me that there are still places in the world where people, young children, are made to work or treated as sex slaves. I hope we are emerging out of that terrible history and can harness the brain power of people regardless of their race, color, gender, ethnicity so that their full potential can be realized.

I sit on a lot of women AIB Fellows panels; we're about 28 women now. All of us went through discrimination when we were young, where we were the “only woman in the room” and had a variety of not so great things happen in our lives. And we are all very much involved in trying to make the world a better place for the young women and young people coming behind us. We come from many countries, many different backgrounds, many different ethnicities, but I think we all want diversity and inclusion and we want equity; we want equal pay for equal work regardless of who's doing it. And I don't think we should put up with country practices that don't meet universal values. I was on the committee for AIB that wrote the Mission, Vision and Values statement for the Academy of International Business, and we based it on United Nations Declaration of Human Rights.