Do Technological Conditions of Production Explain Industrial Growth? The Indian Manufacturing, 1998–1999 to 2007–2008

The paper tries to assess whether the technological conditions of production can explain the sluggishness in growth in Indian manufacturing industries reflected in a stagnant share in aggregate GDP. For this purpose, the returns to scale and elasticity of factor substitution are estimated for various two-digit manufacturing industries of India for the years 1998–1999 to 2007–2008 using the translog production function specification. Most of the previous research of this kind was undertaken by using either aggregate level time-series or state-wise aggregate cross-section data. The recent availability of factory (plant) level panel data has motivated us to re-estimate the parameters of the production function for the Indian manufacturing using factory-level data. Our results clearly indicate presence of significant scale economies. We observe that the capital-labour elasticity of substitution varies across industries, being a little above one or less than one in nearly half of the cases. A multiple regression analysis has been undertaken with the help of industry-level panel data for the years 1998–1999 to 2007–2008 to find out if the manufacturing growth rate is conditioned by the parameters of the production function. Our results indicate that production function parameters do exert an important influence on the rate of growth.

     

Stealth marketing as a strategy

Stealth marketing has gained increasing attention as a strategy during the past few years. We begin by providing a brief historical review to provide some perspective on how this strategy has been practiced in a myriad of ways in various parts of the world, and how it has consequently evolved in the emerging new marketplace. A more inclusive definition of stealth marketing is then proposed to conceptually understand its use in various contexts. Specifically, we propose a new typology of stealth marketing strategies based on whether businesses or competitors are aware of them, and whether they are visible to the targeted customers. We further provide suggestions of how firms can counter the stealth marketing strategies used by their competitors. Contrary to conventional wisdom, evidence is also provided about how such strategies can be used for “doing good” for society. Finally, the assessment of efficiency and effectiveness of stealth marketing strategies, and their related ethical implications, are discussed.     

The role of moral intensity and moral philosophy in ethical decision making: a cross‐cultural comparison of China and the European Union

The present study uses cross‐cultural samples of marketing practitioners from two European Union (EU) nations (the United Kingdom and Spain) and China to examine the relationships between moral intensity, personal moral philosophies and ethical decision making. Additionally, cross‐cultural comparisons were made regarding intentions, personal moral philosophies and moral intensity. Results indicate that both samples tend to use the perceived harm construct (e.g. magnitude of consequences, probability of effect, temporal immediacy and concentration of effect) to determine intentions in situations involving ethical issues. However, social consensus tends to be situation‐specific for both groups and proximity seems not to be used at all when making decisions in situations involving ethics. As for personal moral philosophies, idealism is only used by the EU sample; however, for both samples, the use of relativism depends upon the specific situation.     

Low price guarantees as signals of lowest price: The moderating role of perceived price dispersion

This article presents two experimental studies examining the effects of a low price guarantee on consumers’ pre-purchase evaluations and behavioral intentions. The authors first examine how the effects of a low price guarantee are moderated by consumer perception of market price dispersion. The results show that low price guarantee effects are likely to be attenuated when consumers perceive market price dispersion for a product to be high. The second study shows that higher levels of penalty can help restore a low price guarantee's effectiveness. Specifically, a low price guarantee with progressively higher levels of penalty leads to incrementally more favorable effects on key consumer outcomes when perceived price dispersion is high. Interestingly, penalty level has no such incremental benefit in case of low perceived price dispersion. Theoretical and managerial implications of the authors’ findings, the limitations of the studies, and future research opportunities are discussed.     

Leveraging affiliations by marketing to and through associations

Associations offer a wide range of benefits to their members and thus offer a rich source for understanding relationship marketing practices. Yet, the marketing academic literature is devoid of any frameworks that help us understand the process of marketing to and through associations at the firm level. What are the appropriate dimension(s) of characterizing associations, and how might they be best classified? What are organizational factors that foster or hinder such characterizations, and, what are their consequences and implications?Based on literature review and field interviews with association executives and related exploratory research, we uncover “affinity strength,” or members' attachment to the association, as the key dimension distinguishing associations. We then test to determine antecedent factors (association systems characteristics) that foster or hinder affinity strength as well as its consequences and implications. The major study involved a survey of executives of a wide range of associations, selected from the Encyclopedia of Associations.Certain association systems characteristics do predict affinity strength. Also, affinity strength's relationship with some of the antecedents as well as consequential variables was shown to be stronger or weaker, contingent upon the type of association (i.e., Professional, Cause-based, Common Interest, or Demographic) being considered. Overall, however, attributes of associations (e.g., association systems and outcomes), rather than association types, were more critical in explaining several phenomena pertaining to marketing to and through associations.     

How Efficiently is Capital Allocated? Evidence from the Knitted Garment Industry in Tirupur

This paper studies the effect of community identity on investment behaviour in the knitted garment industry in the South Indian town of Tirupur. We document very large and systematic differences in both levels of capital stock and the capital intensity of production in firms owned by people from two different community groups. We argue that the differences in investment cannot be explained by productivity differences alone. We suggest that the most likely explanation is that the two communities differ in their access to capital.     

Sustainable financing practices through green bonds: What affects the funding size?

Financing through the supply‐driven green bonds market has significantly surged in recent years. In this paper, we examine the factors influencing the size of financing though green bond supply, using cross‐section OLS regressions on a global dataset for 8 years (2010–2017) sourced from Bloomberg. We consider a set of tridimensional factors: bond characteristics, issuer characteristics, and market characteristics and examine their effects on issue size. Alongside whole sample estimation, we produce year‐wise estimations to realize the evolution and persistence of the effects over time. We then produce estimates across rating grades of the bonds. Finally, we carry Blinder–Oaxaca decomposition to see if average issue size has significantly changed over time and whether the factors considered can explain the difference. We find a large number of factors affecting issue size asymmetrically; however, many of the effects do not persist over time and are heterogeneous across rating grades. In contrast to the aggregate market trend, we find no evidence of increases in average issue size in the recent year. Furthermore, the average financing size is found significantly lower for high‐grade bonds. The paper provides a basis for encouraging green bond supply, particularly considering the rating of the bonds and the issuers.     

Alternate instruments to manage the capital flow conundrum: A study of selected Asian economies

Capital inflows to and outflows from emerging market economies (EME) have increased significantly since 2000. This rapid increase, accompanied by a sharp rise in volatility, has amplified the complexity of macroeconomic management in EME. While foreign capital provides additional financing for productive investment and offers avenues for risk diversification, unbridled flows exacerbate financial and macroeconomic instability. In this paper, we focus on the experience of six emerging Asian economies (EAE) in dealing with capital flows. Using quarterly data, we identify the waves of capital flows experienced by these EAE and the efficacy of the various policy measures taken. The policy choices include negotiating the trilemma (i.e. balancing the need for monetary policy autonomy, exchange rate flexibility and capital account openness), as per the demands of the macroeconomic situation. The paper also analyses the extent to which intervention in the foreign exchange market and imposition of short‐term capital flow management measures have aided countries to negotiate the trilemma. The efficacy of these responses have been varied across countries, implying that a judicious mix of these measures, along with improvement in financial and institutional development, is required to effectively counter the vagaries of capital flows.     

Financial development and the instability of open economies

This paper introduces a framework for analyzing the role of financial factors as a source of instability in small open economies. Our basic model is a dynamic open economy model with a tradeable good produced with capital and a country-specific factor. We also assume that firms face credit constraints, with the constraint being tighter at a lower level of financial development. A basic implication of this model is that economies at an intermediate level of financial development are more unstable than either very developed or very underdeveloped economies. This is true both in the sense that temporary shocks have large and persistent effects and also in the sense that these economies can exhibit cycles. Thus, countries that are going through a phase of financial development may become more unstable in the short run. Similarly, full capital account liberalization may destabilize the economy in economies at an intermediate level of financial development: phases of growth with capital inflows are followed by collapse with capital outflows. On the other hand, foreign direct investment does not destabilize.