A General Method of Deriving the Inefficiencies of Banks from a Profit Function

This article develops a new method of estimating inefficiencies in joint production and shows that unlike the approaches utilized in the previous studies of inefficiency, this method maintains a consistent relationship between the error term of a profit function and the error terms of its price derivatives. A useful by-product of the method is a proof of a Hotelling-like lemma that relates stochastic input demand and output supply functions to stochastic profit functions. While the previous studies fit a single frontier to data on all firms, this paper estimates a frontier unique to every observed firm to allow each one to have a different potential of achieving maximal levels of profit. The new method is applied in the analysis of annual data, 1984–1989, for U.S. commercial banks. Both the analytical and numerical results of the paper show that the residual that the previous studies attribute to inefficiency includes the effects of excluded variables and of inaccuracies in the specified functional forms. Once accurate estimates of these effects are subtracted from the residual, the distortions in the measured inefficiencies should be considerably reduced. Consequently, this article considers how such estimates might be obtained.     

Dating Business-Cycle turning points

This paper presents a logit model for dating business-cycle turning points. The regressors are monthly series from the Business Cycle Indicators database of the Conference Board. Dividing the sample period into a subset for model initialization (1959∶9–1970∶12) and a subset for testing (1971∶1–2003∶12) yields a chronology that is nearly identical to that established by the National Bureau of Economic Research (NBER). However, the recognition lag is less than four months, in contrast to an average of more than eleven months for the official chronology. (JEL E320) The author is grateful for comments by an anonymous referee.     

Dynamics of fertility and labour force participation of Canadian women in 1971 and 1981: a cohort approach

The authors analyze the relationship between labor force participation and fertility in Canada using data from the Public Use Sample Tapes from the 1971 and 1981 censuses. Factors considered include age, religion, educational status, and marital status. The authors conclude that "labour force participation of women seems to have less influence on fertility compared to [the] fertility effect on labour force participation."     

Using a customer-Level marketing strategy to enhance firm performance: A review of theoretical and empirical evidence

It is becoming increasingly apparent from the literature that marketers need to consider customer-level information when they generate a marketing strategy for the firm. In this article, the authors develop a customer-focused framework that uses a marketing strategy with an overall objective of maximized financial performance. This strategy is driven by seven customer-level marketing tactics and shows how actual customer data can be used to generate an actionable marketing strategy leading to optimal levels of profitability, customer equity, and shareholder value. In addition, the authors discuss a successful implementation of this strategy for several business-to-business and business-to-consumer firms and offer insights as to how to customize an implementation strategy for any firm, along with presenting potential challenges a firm may encounter during the implementation process. Several suggestions for future research are offered to explore and harness this newly available evidence. V. Kumar (VK) (vk@business.uconn.edu) is the ING Chair Professor of Marketing and the executive director of the ING Center for Financial Services at the University of Connecticut. He spends his time by transferring his knowledge (however little it may be) to his two daughters about customer lifetime value, diffusion models, forecasting sales and market share, retailing, and marketing strategy. J. Andrew Petersen (apetersen@business.uconn.edu) is a doctoral candidate in marketing at the University of Connecticut. His research interests include customer lifetime value, word-of-mouth effects, and customer-level marketing strategy. His research has been published inMarketing Research Magazine and theJournal of the Academy of Marketing Science.     

Drivers and implications of entrepreneurial orientation for academic spin-offs

International Entrepreneurship and Management Journal - This paper has been designed with a dual goal. On the one hand, the paper aims to examine the role of management teams, industry agents, and...     

Characteristics of agricultural input package users in communal clubs serviced by Acat in KwaZulu: A note

Characteristics of communal club members who use input packages are studied using a survey of communal clubs serviced by Africa Co‐operative Action Trust (Acat) in KwaZulu during 1989. Discriminant analysis shows that full input package adopters tend to belong to older clubs, have less formal savings and receive more visits each year from KwaZulu Department of Agriculture (KDA) extension officers. They also have a greater proportion of land under sugar‐cane, larger farm sizes and a higher rand monetary value of livestock.

Members of older clubs benefit from greater club experience in ordering inputs and liquidity for securing discounts on bulk orders. Clubs also enable scarce KDA extension manpower resources to be used more effectively by focusing extension efforts on groups rather than individual farmers. Sugar‐cane production probably indicates member willingness to innovate and the availability of funds to buy complete input packages for other crops. Increased access to land promotes input package adoption which can raise agricultural productivity. Development of institutional arrangements for a land rental market in KwaZulu should be considered. Higher monetary values of livestock reflect Increased ability to bear risk associated with technology adoption and that adopters have the means to purchase input packages     

There is relevance in the classroom: Analysis of present methods of teaching business ethics

In 1988 the Journal of Business Ethics published a paper by David Mathison entitled Business Ethics Cases and Decision Models: A Call for Relevancy in the Classroom. Mathison argued that the present methods of teaching business ethics may be inappropriate for MBA students. He believes that faculty are teaching at one decision-making level and that students are and will be functioning on another (lower) level. The purpose of this paper is to respond to Mathison's arguments and offer support for the present methods and materials used to teach Master level ethics classes. The support includes suggested class discussion ideas and assignments.Victoria K. Strong is a graduate student at Bentley College. She returned to school to pursue a Master of Science in Accountancy after working in the engineering profession for 12 years. She received her B.S. in Mechanical Engineering in 1984. Her business experience includes positions as Mechanical Design Engineer and Unit Supervisor of an engineering development laboratory. Alan N. Hoffman is an Associate Professor of Management at Bentley College. He received his DBA from Indiana University. Dr. Hoffman's writing has been published in the Academy of Management Journal and Human Relations.The authors would like to thank Carolyn Colt and the entire spring 1988 MG520-class for their valuable contributions.