Price volatility and the political economy of resource-rich nations

This paper attempts to understand how price volatility affects the political transition of a resource-rich nation. Two states reflect price volatility: ‘high prices’ and ‘low prices’. We argue that whether or not political transition (i.e., a switch from one regime to another) will take place in a particular state depends critically on the kind of goods a country produces. If the main economic activity in a country is the extraction of “point-source” resources such as oil that demands capital-intensive production, the opportunity cost of switching the existing regime does not alter if the price of the resource changes but the benefit becomes more lucrative. Therefore, the incumbent group is most vulnerable during ‘high prices’. If the main economic activity of the nations is the production of “diffused resources” such as coffee that requires labor, prices do affect the opportunity cost. Nations concentrating in these commodities face acute political crisis during downturns.     

Hypothesis of Price Formation in Input–Output Tables

The goal of this paper is to check if different theoretical approaches to price formation can be verified in the structure of empirical input–output tables. From a propositive point of view, the hypothesis is made of two different markets (the ‘industrial’ market of intermediate and investment goods; and the ‘commercial’ market of final consumption goods), with two different mechanisms of price formation. The consequences of this hypothesis are outlined as regards deflation procedures. An empirical test of the theories about price formation and of the method of deflation suggested by the two-market hypothesis is made using 1985 Italian input–output tables at 1980 prices.     

Cross-border restaurant price and exchange rate interactions

Purchasing power parity suggests that international price ratios for identical goods should approximate nominal exchange rates for the currencies in which the prices are denominated. Deviations of the price ratios from exchange rates can occur for a number of reasons and mixed evidence has been recorded for how long those deviations last. Empirical evidence for international restaurant prices in El Paso, Texas and Ciudad Juarez, Mexico confirms that menu item price ratios are strongly correlated with the peso/dollar exchange rate. An earlier exploratory study of eight individual products also indicated that half-life deviations in this market are very short. This study utilizes additional data from a larger and more extensive sample to examine if the prior results are confirmed.     

Sind positiv eingestellte Kunden generell bereit, mehr zu zahlen?

At first sight it appears plausible that customers who display more positive evaluative reactions to a company, which previously had sold goods to them (=?supplier-related attitudes [SRA] such as customer satisfaction or loyalty), generally should be willing to pay higher prices for additional offerings of this supplier than their counterparts with less positive SRA. However, sizes of the respective correlations reported in past empirical research diverge considerably. Therefore, two empirical studies were conducted to explore the extent to which eight socio-demographic and psychographic customer characteristics influence relationships between SRA and willingness to pay intentions in the sense that the characteristics systematically increase or decrease (moderate) the considered relationships. In a first study of 238 customers of power companies, four characteristics (age, female gender, household size, electricity bill) were found to significantly negatively moderate the relationship between customers’ attitude toward their electricity supplier and their price tolerance for “green electricity” and one characteristic (involvement) was detected to have a significant negative moderating influence. A second study of 319 mobile communication customers suggested that customers’ involvement and relationship length with their current mobile services supplier positively moderated the association between the customers’ attitude toward their supplier and willingness to pay for a packet offer of their mobile service provider, whereas female gender exerted a negative moderating influence. The results imply that companies should conduct analyses aiming at the identification of socio-demo- and psychographic moderators or customer segments with heterogeneous impacts of SRA on behavioral price intentions respectively as part of their marketing planning process.     

Intermediaries in Entrepôt Trade: Hong Kong Re-Exports of Chinese Goods

In this paper, we examine Hong Kong's role in intermediating trade between China and the rest of the world. Hong Kong traders distribute a large fraction of China's exports. Net of customs, insurance, and freight charges, re-exports of Chinese goods are much more expensive when they leave Hong Kong than when they enter. Hong Kong markups on re-exports of Chinese goods are higher for differentiated products, products with higher variance in export prices, and products sent to China for further processing. These results are consistent with the view that traders resolve informational problems in exchange. Additional results suggest that traders price discriminate across destination markets and use transfer pricing to shift income from high-tax countries to Hong Kong.     

Nash equilibria in a model of multiproduct price competition: an assignment problem

We study the market interaction of a finite number of single-product firms and a representative buyer, where the buyer consumes bundles of these goods. The buyers’ value function determines their willingness to pay for subsets of goods. We show that Nash-equilibrium outcomes are solutions of the linear relaxation of an integer programming assignment problem and that they always exist. The Nash-equilibrium price set is characterized by the Pareto frontier of the associated dual problem’s projection on the firms’ price vectors. We identify the Nash-equilibrium prices for monotonic buyers’ value functions and, more importantly, we show that some central solution concepts in cooperative game theory are (subgame perfect) equilibrium prices of our strategic game.     

Ecological tax reform—a value chain level approach

This study assesses the effects of an ecological tax reform on three value chains. These case studies lead to an analysis of the business strategy options when companies face a shift in the relative prices of their production factors. The results support earlier research findings that the direct effects of an ecological tax reform on the price competitiveness of companies is on average rather small. However, the effects of the reform are shown to vary significantly between the different parts of the value chain. Copyright © 2002 John Wiley & Sons, Ltd. and ERP Environment     

Stage models of corporate ‘greening’: a critical evaluation

Corporate ‘greening’, i.e. the process by which companies can become more environmentally responsible in their operations, has attracted considerable interest lately. Largely born out of hands-on consultancy experience, various models have been proposed which describe a series of ‘stages’ by which companies become progressively more environmentally conscious and reduce their impact on the natural environment. The present article critically analyses some of these ‘stage’ models of corporate ‘greening’ from both an empirical and a management theoretical point of view. The empirical analysis is based on four case studies of the ‘greening’ efforts of companies in the UK water and electricity industries. Environmental strategy and management in these companies is found to fit poorly into the stage models of corporate ‘greening’. The article concludes that more comprehensive and interpretative explanations of organizational ‘greening’ are needed, including contextual and process oriented analysis. © 1998 John Wiley & Sons, Ltd and ERP Environment.     

Risk premia in multi-national enterprises

The CAPM implies that investors require equity risk premia when choosing risky investments and therefore demand higher returns to equity invested if higher risk is present. This should apply to investments in independent enterprises and multi-national enterprises alike. This hypothesis is investigated by analyzing a panel of 407,000 European firms for the years 1985 to 2010. When income is set in relation to invested capital, risk measured by earnings volatility emerges as the most important stable determinant of income. Results indicate that both MNEs and independent firms regularly account for risk as a major determinant of income when pricing international goods and services. Hence international taxation rules for multi-national enterprises should account for risk premia in transfer prices and resulting profits.     

The measurement of the gains or losses to an enterprise through relative price changes: The terms-of-trade effect and real income

This paper provides a framework for measuring the terms-of-trade effect for an enterprise. This effect is the impact on the organization of changes in input to output prices as well as in the prices of goods and service upon which the income is utilized. The measurement of the effect is outlined with illustrative data and applied to the German Telecom sector, which has suffered particularly badly through adverse relative price changes. The case study of the German Telecom sector is also used to introduce the concept of real income. The framework advocated is argued to be particularly useful, since it allows not only the effects ex post of relative price movements to be evaluated, but also the effects ex ante of particular spending scenarios to be simulated (for example, investment). As such, it should be a useful addition to the ‘toolbag’ of managerial economists.     

China and international market integration: Evidence from the law of one price in the Middle East and Africa

We model market integration in the Middle East and Africa by analyzing price dispersion and testing the law of one price (LOP) on highly-comparable actual local retail prices of 135 goods and services across 23 countries in the region over the period of 1990–2016. Second-generation panel estimators are applied to four price benchmarks: Regional average, South Africa, China, and US prices. Cross-regional price dispersion diminishes considerably over time up to 2008, particularly for non-tradeables around China price. The test of LOP indicates the percentage of convergent prices is highest in China price benchmark, followed by US, South Africa, and regional average benchmarks. Direct estimation of the convergence speed confirms this order. Overall, the results show evidence of increasing market integration in Middle East and Africa but it appears to be driven by global forces and, especially, the rise of China as a new economic power. The results show that some emerging market economies, such as China, can step up and promote integration while traditional economic powerhouses, such as the USA and UK, disengage from international economic relations.     

Transfer prices and incentive contracts in vertically-integrated divisionalized companies

This paper studies a divisionalized firm with sequential transfers in which central management wants to motivate two division managers who receive predecision information. Central management can only contract on the observables price, cost and quantity. Starting with the optimal compensation schemes as a benchmark, the paper considers the question whether using transfer prices to substitute for price and cost, respectively, can replicate the optimal solution or not. This is to say, whether using an aggregate measure comes at a loss. The results are dependent on the design constraints (i) single or ‘dual’ transfer prices and (ii) simultaneous design of the reward functions or exogenously given reward functions. Basically, only in the case that central management is restricted to given reward functions, and wants to use the same single transfer price for both divisions, there is a loss relative to the benchmark solution. In the other cases, generally, there is enough latitude to design the available functions to mimic the benchmark. The paper goes on to discuss special cases. First, it finds conditions when purely cost-based transfer prices are optimal, and second, it derives explicit solutions for given linear compensation schemes over divisional book profits.     

ON THE SECOND STAGE OF THE CAMBRIDGE CAPITAL CONTROVERSY

The second stage of the Cambridge capital controversy concerns the neo‐Walrasian theory of value and distribution. Since production is not understood in this theory as employing factors of production but rather commodities, that is goods and services with date and place of delivery, some scholars maintained that it is not affected by the problems that emerged, during the first stage of the controversy, as regards the conception of capital as a factor of production and the rate of interest as the price for its use. The reply of the ‘neo‐Ricardians’ was based on two arguments. The first regarded the relevance of the new notions of equilibrium adopted in the neo‐Walrasian approach, with particular reference to temporary and Arrow–Debreu equilibria, and the second the possibility that the phenomena of re‐switching and reverse capital deepening, by affecting the working of the saving‐investment market, could cause equilibrium multiplicity and instability also in a neo‐Walrasian framework.     

“店选网购”的竞争效应及其反垄断政策涵义

随着互联网和电子商务的发展，消费者在店商试选后以较低价格从网商购买商品的“店选网购”现象非常普遍，厂商或店商经常以其存在搭便车问题为由采取维持转售价格予以限制。本文通过构建具有横向差异化的霍特林模型，考察“店选网购”的竞争效应。研究表明，尽管“店选网购”存在搭便车问题，却能促进店商与网商间的竞争，降低店商和网商的价格和利润，使消费者从中获益，但对社会福利的影响结果是不明确的；其反垄断政策涵义是，“店选网购”具有促进竞争和存在搭便车问题的双重特性，不能简单地作为豁免维持转售价格的正当理由，而应根据实际情况具体分析。     

浅谈如何提高学生对象征性交货方式的理解

象征性交货是针对实际交货而言的一种交货方式,卖方凭单交货,买方凭单付款,是国际贸易中经常使用的交货方式。学生在初学时不容易理解,主要是由缺乏感性认识、对风险转移界限理解不透彻、缺乏相关知识和没有从总体上把握外贸合同等原因造成。因此教师要针对原因找对策,提高学生的理解力,真正达到学以致用的目的。     

Preferred supplier programs for consulting services: An exploratory study of German client companies

Research has recently provided evidence that at least some companies have involved purchasing departments in buying professional services such as management consulting services. Some departments have established preferred supplier programs (PSPs) for consulting services, i.e., programs for consultancies with whom a company seeks to build up long-term relationships. While there are several studies that analyze such programs for suppliers of goods, research on business services is limited. Our aim is to present an exploratory analysis of PSPs for consulting services. Based on a survey of German client companies, we found that the most important reason for establishing PSPs is to reduce costs and transaction costs. Furthermore, our findings revealed that companies with and without PSPs for consulting services apply high significance to relational selection criteria. Moreover, in companies with PSPs, purchasing departments are more frequently involved in selecting consultancies compared to companies without PSPs. Finally, we found that companies with and without PSPs do not differ in their assessment of problems associated with the purchasing of consulting services. The study contributes to research on the purchasing of consulting services by indicating that the consultant–manager relationship should be extended to a service triad, involving purchasing professionals, managers, and consultants. Moreover, we contribute to research on PSPs by extending the focus to PSPs for knowledge-intensive service providers.     

Consumer Search Ability,Price Dispersion and the Digital Divide

The ‘digital divide’ in online activities is believed to arise from differences in Internet access, but this paper advances an alternative explanation that is related to consumer search ability. It argues that this leads to greater price dispersion, causing some consumers to be discriminated against. It analyses price data for the UK Internet motor insurance market, collecting data on 32,255 prices for 110 sub‐markets, where differences in price dispersion across these by age, occupation and sex of the driver are argued to reflect differences in search ability. Allowing for price dispersion to also depend on the insurance risk, it finds greater price dispersion for consumers with weaker search abilities, i.e. older, unemployed, retired or female consumers. As this is not explained by alternative hypotheses, the paper concludes that improved Internet access alone will not close the ‘digital divide’. The implication is that policymakers should address the online search abilities of individuals as well as Internet access.     

From ‘start-up’ to ‘re-boot’: Product lifecycle strategies and competitive advantage in the computer industry

The PC sector, following the packaging and car manufacturing industries, will increasingly be forced to acknowledge and account for its product base throughout the commodity's life, and beyond. The environmental problems being posed by electronic waste have been recognized and both the EU and the individual Member States are discussing solutions which may or may not include legislative action. In anticipation, product take-back programmes are beginning to emerge within the industry and the economics and logistics of re-use and recycling are at the forefront of this debate. The issues in store for this sector are examined and specific initiatives by organizations considered. It is asked whether a ‘closing of the product loop’ will generate a competitive advantage for these companies and what impact an industry-led ‘consortia’ initiative may have.     

Autoverkopen en autopark in Nederland, 1950–1970

Summary This is a study of the demand for the ownership of new or firsthand cars, i.e. the demand of ‘first owners’ who habitually buy new cars which are then traded in long before they are obsolescent. Upon combining the evidence of various surveys with time-series for 1950-64 it is found that this ownership has an income elasticity of 2 and a price elasticity of – 1.25 in respect of the constant-quality index of new car prices earlier provided. On the average new cars are traded in after three years so that roughly one third of the existing stock is replaced every year. These values together determine an equation for purchases of new cars which accurately predicts new registrations in 1965 and 1966. Projections for the years 1967-70 are provided. In the model employed the total number of cars (including used cars) is determined by the active demand exerted by ‘first owners’ on one hand and by the hitherto fairly constant scrappage rates on the other. Projections of the overall ownership rate can therefore be derived from the forecasts of new registrations. The ownership rate will approach 80% around 1970, and it is likely that at that stage the current scrappage rates will cease to apply in view of the greater predilection for comparatively younger cars.     

Business strategies and the transition to low‐carbon cities

Cities are key drivers of global climate change, with the majority of greenhouse gas (GHG) emissions being tied to urban life. Local actions to mitigate and adapt to climate change are essential for stabilization of the global climate and can also help to address other urban ecological problems such as pollution, decreasing biodiversity, etc. Companies are important urban actors in the development of low‐carbon cities because they provide a multitude of goods and services to city populations and directly influence urban carbon dioxide (CO₂) emissions. This is a new area of research. While studies on corporate sustainability are numerous, there is little, if any, existing research that examines the role of companies in climate change adaptation and mitigation within specific urban areas. Urban ecologists also have not examined how corporate activity affects urban systems. Taking a multi‐disciplinary systems approach, we present a conceptual model of the role of companies in managing urban interactions with the climate system. We also present empirical findings illustrating how one company ‘partners’ with the city of Rotterdam to test electric vehicles as a pilot project for urban climate adaptation and mitigation. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.