Banks and bubbles: How good are bankers at spotting winners?

This paper examines the bank lending relations of a large sample of technology and nontechnology firms that went public during the 1996–2000 period. We use a unique hand-collected data set to examine the characteristics of firms that establish pre- Initial Public Offering (IPO) bank lending relations and whether post-IPO performance is related to the existence and size of pre-IPO banking relations. We find that the majority of IPO firms have banking relations before they go public. Firms with banking relations are older, more profitable or, in the case of tech firms, have lower losses, and are more likely to have funding from venture capitalists than firms without banking relations. We also find that banks lent aggressively to technology firms in the sense that current earnings and cash flows were significantly less important in determining banking relations for technology firms than for nontechnology firms. Consistent with the importance of so-called soft information in lending decisions, we find that, controlling for ex ante observable risk measures, there is a positive and significant relation between improvements in post-IPO operating performance and the existence and size of pre-IPO banking relations. Overall, our results indicate that firms with the best current and future prospects establish banking relations. Our findings provide an explanation as to why investors could interpret lending relations as a positive signal of firm quality.     

Customer segments as moving targets: Integrating customer value dynamism into segment instability logic

Segmentation is a mature concept in marketing strategy that continues to receive significant attention from managers and scholars alike. The key goal in segmentation is identifying and reaching profitable segments with products and services that meet the common needs of these customers. However, a fundamental issue needing rigorous attention is that customers' needs are dynamic and can induce segment instability. The purpose of this paper is to draw focus to segment instability in business-to-business markets by conceptually exploring its theoretical underpinnings and integrating related theory on customer value change to propose an agenda for future research.     

Banks as Interest Rate Managers

Most banks have a two-tier pricing system, offering accounts at market-related interest rates and at posted rates that are changed at discrete intervals. In this paper, I develop a model of bank interest rate management. I consider a bank with two classes of loans and deposits in its balance sheet: One pays a market rate of interest, the other a posted rate. Market rates are exogenous and evolve stochastically over time. Posted rates are altered intermittently by the bank itself. The bank faces imperfect arbitrage by its customers between posted and market rate funds. Under simple assumptions about the stochastic process governing the market rate, I derive optimal decision rules for the adjustment of the posted rate and determine conditions under which these rules are asymmetric. A key prediction of the model is a negative correlation between market loan rates and the gap; this is more consistent with the behavior of British banks than is the contrary prediction of more standard models.     

University – industry collaboration in R&D: the role of labor market rigidity

We investigate how R&D university – industry collaboration (R&D UIC) is influenced by labor market rigidity. While it is well-established that an educated and skilled workforce will facilitate R&D UIC, another aspect of these alliances has been under-researched: the role of labor market rigidity, in particular the difficulties employers face in hiring and firing workers. We hypothesize that the size of the R&D labor pool in a country will encourage R&D UIC, and that the ease with which employers are legally allowed to hire and fire will directly and indirectly influence R&D UIC. Integrating data from various sources, we test our model on a sample of 73 countries for which information on the size of the R&D labor pool and labor market regulations are available. We also conduct a robustness test using a different proxy for R&D labor pool on a larger sample of 109 countries. Results confirm the strong link between a country's R&D labor pool and R&D UIC, as well as direct negative impacts of hiring and firing rigidity and an indirect negative impact of hiring rigidity. The findings have implications for managers, policy makers, and researchers of R&D collaboration between universities and industry.     

A new statutory director’s duty for Australia — a ‘duty’ to be concerned about employee entitlements in the insolvent corporation

Australia has introduced legislation that is aimed at preventing a person from entering into agreements or conducting transactions with the intention of defeating the recovery of employee entitlements. It is essentially aimed at directors and their behaviour in the pre‐appointment period. This paper discusses the history leading up to such a legislative move and the likely benign impact now that the Corporations Act in Australia prohibits such behaviour. Further, the paper argues that mooted changes to the legislation giving employees a ‘maximum priority’ ahead of secured creditors is unnecessary. Copyright © 2003 John Wiley & Sons, Ltd.     

The service sector of Cuba: An analysis and critique

The Cuban economy has experienced a significant increase in foreign direct investment over the past decade due to the end of the Soviet Union and the establishment of more liberal trade policies. Although the U.S. embargo of trade with Cuba still exists, there has been movement lately that suggests the end of the four‐decades‐old policy. The purpose of this article is to analyze the current Cuban business environment and to identify potential entrepreneurial opportunities in the service sector. Major trade partners are also reviewed and managerial implications discussed. © 2006 Wiley Periodicals, Inc.     

Does It Get Better? Recent Estimates of Sexual Orientation and Earnings in the United States

Using 2013–2015 National Health Interview Survey data, we reproduce a well‐documented finding that self‐identified lesbians earn significantly more than comparable heterosexual women. These data also show — for the first time in the literature — that self‐identified gay men also earn significantly more than comparable heterosexual men, a difference on the order of 10% of annual earnings. We discuss several possible explanations for the new finding of a gay male earnings premium and suggest that reduced discrimination and changing patterns of household specialization are unlikely to be the primary mechanisms.     

Distinguishing between Equilibrium and Integration in Spatial Price Analysis

This article introduces a new spatial price analysis methodology based on maximum likelihood estimation of a mixture distribution model incorporating price, transfer cost, and trade flow data. This method permits differentiation between market integration and competitive market equilibrium and derivation of intuitive measures of intermarket tradability, competitive market equilibrium, perfect integration, segmented equilibrium, and segmented disequilibrium. One can also use these estimates to derive semiparametric measures of time-varying regime probabilities to track changing market conditions. An application to trade in soybean meal among Pacific Rim economies demonstrates the usefulness of the method.