Cooperation vs. competition in R&D: The role of stability of equilibrium

We consider a model in which firms first choose process R&D expenditures and then compete in an output market. We show the symmetric equilibrium under R&D competition is sometimes unstable, in which case two asymmetric equilibria must also exist. For the latter, we find, in contrast to the literature that total profits are sometimes higher with R&D competition than with research joint venture cartelization (due to the cost asymmetry of the resulting duopoly in the noncooperative case). Furthermore, these equilibria provide another instance of R&D-induced firm heterogeneity.     

Dynamic lot sizing problem with continuous-time Markovian production cost

This paper develops a polynomial algorithm for obtaining dynamic economic lot sizes in a single product multiperiod production system with the objective of minimizing total production and inventory costs over T periods. It is assumed that production costs are linear, inventory costs are concave, setup costs are zero and backlogging is not permitted in all periods. Moreover, the unit production cost is a stochastic variable, which is evolved according to a continuous-time Markov process over the planning horizon. The model is formulated as a stochastic dynamic programming (DP) optimization with the state variable being unit production cost. Then, it is solved using the backward dynamic programming approach. To justify the application of the proposed model, two practical cases are presented.     

Testing the impact of a promotional video on destination image change: application of China as a tourism destination

This study empirically examines the potential effects of a promotional video on the image change of China as a travel destination. The analysis is based on an experimental study conducted among young, international short‐term employees in the USA. Despite positive changes in almost all the destination attributes as a result of watching the promotional video, the structure of the image constructs remains fairly stable, providing critical insights on the potential role of publicity campaigns in affecting destination images. Results of the study reveal that China's image consists of mixed and often contrasting representations, especially the polarity of modernisation and progress versus nature and history. It was found that the dominant factor affecting the respondents' behavioural intentions was the cultural and nature tourism dimension. Although other image dimensions exhibit influence as well, findings of this study suggest that perceived value should be a strategic focus in promoting China as a desirable travel destination, in addition to culture and nature tourism. This paper ends with conclusions and implications for both research on destination image and destination marketing in China. Copyright © 2009 John Wiley & Sons, Ltd.     

On Environmental Regulation of Oligopoly Markets: Emission versus Performance Standards

By specializing Montero’s (J Environ Econ Manag 44:23–44, 2002) model of environmental regulation under Cournot competition to an oligopoly with linear demand and quadratic abatement costs, we extend his comparison of firms incentives to invest in R&D under emission and performance standards by solving for a closed form solution of the underlying two-stage game. This allows for a full comparison of the two instruments in terms of their resulting propensity for R&D and equilibrium industry output. In addition, we incorporate an equilibrium welfare analysis. Finally, we investigate a three-stage game wherein a welfare-maximizing regulator sets a socially optimal emission cap under each policy instrument. For the latter game, while closed-form solutions for the subgame-perfect equilibrium are not possible, we establish numerically that the resulting welfare is always larger under a performance standard.     

Overnight Covered Interest Parity:Theory and Practice

This study shows, both theoretically and empirically, that in a world where capital as well as exchange markets are imperfect it is incorrect to employ mid-market rates to estimate CIP relationships. Developing and using the correct specification, we estimated covered interest parity relationships between the overnight U.S. Euro-dollar and Canadian interbank markets, for the 1986-1992 period. It was found that covered interest parity holds for both directions. However, the speed and pattern of adjustments with which potential arbitrage profits are eliminated are not symmetric between U.S. Euro-dollar and Canadian interbank markets. [GI51     

Investigating the Interrelationships among Success Measures of Open Source Software Projects

Open source software (OSS) has attracted extensive attention from researchers and scholars. This increasing attention is a result of the remarkable growth in the number of OSS applications in recent years. Despite an increased number of studies on OSS project success, the interrelationships among different success indicators of OSS projects are not well understood in literature. The present study reports on the interrelationships between the success measures of OSS projects, as defined by the ability of the project to attract user and developer interest, release management, project activity, and development sustainability. To test the relationships hypothesized, we gathered data from 1409 OSS projects over time (in two snapshots over a period of eight months). The results show the following: (a) project activity until any time period positively impacts the subsequent period’s developer interest and development sustainability; (b) development sustainability positively drives user and developer interest; (c) release frequency positively influences the next period’s developer interest, as well as development sustainability; (d) developer interest positively drives user interest. These findings have implications for both the OSS research community and OSS practitioners.     

Knowledge of Inter-customer Relations as a Source of Value Creation and Commitment in Financial Service Firm's Intermediation

This paper develops a knowledge perspective on value creation in organisations that employ mediating technology to facilitate inter-customer relations. Mediators, individually and collectively, build networks of customers between whom linking can take place, and they provide services that facilitate inter-customer exchanges. Earlier research has shown the importance of size and standardisation in mediation. A different stream of research has shown that contextual knowledge is important for problem solving and innovation in organisations. Combining theories of mediating technology and situated problem solving, the paper posits that inter-customer relations constitute the fundamental context for value creation of firms using the mediating technology. LISREL is used to test relationship-level, cross-sectional hypotheses that link knowledge of inter-customer relationships, added value, and customer commitment to bank services for small firms. This work extends Thompson's work on mediating technology with implications for organisation action by demonstrating that mediators' knowledge of inter-customer relationships is an important resource in intermediation. Three contributions are made to strategic management and organisation theory. First, the paper provides a deeper understanding of the relationship between knowledge and committed customers. Second, fundamental resources are developed for firms using mediating technology. Finally, the use of the situated knowledge concept is extended to inter-customer relations, thus explaining performance beyond the contexts to which the concept has previously been applied. The findings have implications for segmentation practices, organisation domain decisions and the corresponding organisational structures, and practices that can provide effective service to inter-customer relations rather than to atomistic independent customers.     

The effect of market orientation and its components on innovation consequences: a meta-analysis

While there is a rich body of research on market orientation’s effect on business performance, much little attention has been given to its effect on innovation consequences. This is the first meta-analytic effort to study the independent effects of market orientation components (customer orientation, competitor orientation, interfunctional coordination) on innovation consequences. Also, it is the first meta-analysis to study the impact of contextual characteristics on the way market orientation affects innovation consequences. The study finds that market orientation components positively affect innovation consequences but that competitor orientation’s effect depends on a minimum level of customer orientation. The study also suggests that the relationship between market orientation and innovation consequences is stronger in highly competitive environments but weaker in technology turbulent ones. Finally, findings suggest that the relationship is stronger in large firms, service companies, and in countries characterized by high individualism and high power distance national cultures.

What determines the efficiency of Australian mining companies?

We examine the firm‐specific determinants of technical efficiency in Australian mining companies using data envelopment analysis (DEA). To do so, we employ panel data sourced from individual mining companies listed on the Australian Securities Exchange (ASX) over the period 2010–2014. To ensure valid statistical inference in the presence of serial correlation between DEA efficiency scores, we apply Simar and Wilson's two‐stage bootstrap method. We find that ownership concentration, firm size, firm age, product portfolio, product diversification and growth status significantly contribute to efficiency gains. However, other firm‐specific factors, such as capacity utilisation, financial risk and overseas operations appear to have limited impact on the technical efficiency of mining firms.     

The Deterrent Effect of Whistleblowing on Tax Collections

Abstract

Many countries use tax-related whistleblowing programs, but the evidence on these programs suggests information provided by whistleblowers yields modest tax collections. However, when every citizen could become a whistleblower, deterrence from tax evasion can by itself increase tax collections. We find that tax collections significantly increased after the introduction of the whistleblowing mechanism in Israel in February 2013, although this mechanism directly yielded little or no tax collections. In support of the hypothesis that deterrence led to the increase in tax collections, we find that collections increased in industries with high tax-evasion risk, but not in industries with low tax-evasion risk. Furthermore, the increase in tax collections occurred in corporations, where the timing and magnitude of tax payments are more discretionary, but not from employees, for whom employers directly deduct taxes. Eventually, following reports that the whistleblowing mechanism is ineffective, deterrence diminished and tax collections decreased, suggesting the deterrence effect was temporary.