Variations in the Effect of Uncertainty on Different Types of Investment: An Empirical Investigation

Several recent studies, including those by Pindyck (1991), Pindyck and Solimano (1993), Dixit and Pindyck (1994), Episcopos (1995), and Abel et al . (1996), suggest an important linkage between the effect of uncertainty on investment and the irreversibility of the latter. This paper broadly follows the foregoing tradition, but makes the point that it should be possible to distinguish between investments with different degrees of irreversibility and to relate the effect of uncertainty with the degree of investment irreversibility. A simple empirical illustration is provided by using pooled annual data for 12 OECD countries and estimating fixed-effects models for different types of investments. Although caution is appropriate in interpreting the estimates, the evidence suggests that the adverse effect of uncertainty is more severe on investments that have a greater degree of irreversibility.     

Anomalies in the Foundations of Ridge Regression: Some Clarifications

Several anomalies in the foundations of ridge regression from the perspective of constrained least-square (LS) problems were pointed out in Jensen & Ramirez. Some of these so-called anomalies, attributed to the non-monotonic behaviour of the norm of unconstrained ridge estimators and the consequent lack of sufficiency of Lagrange's principle, are shown to be incorrect. It is noted in this paper that, for a fixed Y , norms of unconstrained ridge estimators corresponding to the given basis are indeed strictly monotone. Furthermore, the conditions for sufficiency of Lagrange's principle are valid for a suitable range of the constraint parameter. The discrepancy arose in the context of one data set due to confusion between estimates of the parameter vector, β , corresponding to different parametrization (choice of bases) and/or constraint norms. In order to avoid such confusion, it is suggested that the parameter β corresponding to each basis be labelled appropriately.     

Supply Chain Management in a Private Farming Vis-à-Vis Cooperative Processing and Distribution Environment of Dairy Sector in India

Organized segment of dairy sector was hitherto dominated by the cooperative sector that established a structured and three-tiered organizational hierarchy, procured milk from small-scale farms, processed and distributed milk and milk products. With the liberalization of India's economy and market entry by the private sector, new dynamics have emerged. These include increased supplies of a greater variety of value-added products and increased inter-firm competition with companies and supporting their sales development with integrated marketing initiatives. This fostered greater attention to branding, product positioning and product differentiation with intense price discounting for some products. In response to these challenges, the State cooperatives have started to integrate their operations in areas such as procurement of supplies, logistics, manufacturing, distribution and inventory management. However, these face a major constraint regarding the sufficient availability of milk supplies over space and time while due to political interferences, excess staff adds to the administrative costs therby inefficiencies in its operations and losses results.     

Industrial interactions and academic patenting: evidence from German scientists

Using a unique survey of scientists at a large public research organization, this paper examines the effects of industry interactions on academic patenting. Two types of collaborations, industrial cooperation and consulting, are considered. Results show that both cooperation and consultancy increase the likelihood of patenting. However, only the positive influence of industrial cooperation stands up to robustness checks. Effects of personal, professional and institutional factors are in line with the literature, yet with some differences across cooperation and consultancy. Implications for research policy concerning academic patenting and challenges that industry may experience are discussed.     

Cigarette demand and effectiveness of U.S. smoking control policies: state-level evidence for more than half a century

Using state-level U.S. data over 1956–2008 this paper examines the demand for cigarettes. The long data span enables us to compare and evaluate the effectiveness of various policies and to examine cigarette demand across individual states. Our results show cigarette demand to be price inelastic, smoking-habit effects to be strong, income effects to be small, and border price effects can be significant. These findings are quite robust across alternate model specifications. None of the three smoking control policies considered (Fairness Doctrine, Broadcast Ban, and Master Settlement Agreement) were shown to be effective in curbing overall smoking, although most were effective in a few states. Policy implications are discussed.     

Cooperative and noncooperative R&D with spillovers: The case of labor-managed firms

This research focuses on the behavior of not-for-profit enterprises. In particular, using a familiar model of cost-reducing R&D with spillovers, we examine strategic interactions between labor-managed firms in a duopoly. Research spillovers have not been previously considered in the context of labor-managed firms. Among four market scenarios involving (i) competition in research and production; (ii) cooperation in research and production; (iii and iv) competition or cooperation in research and the reverse in production, our results show that research is greatest under full cooperation, while output is greatest under full competition. Output and R&D are the lowest in the case when firms compete in research, but form a production cartel. The degree of research spillovers has a crucial bearing upon these rankings. Some of these results differ from those for profit-maximizing firms. The effects of changes in research spillovers on employment (output) are shown to depend upon the nature of the underlying production technology. Policy implications are discussed.     

Advertising media and cigarette demand

Using state-level panel data for the USA spanning three decades, this research estimates the demand for cigarettes. The main contribution lies in studying the effects of cigarette advertising disaggregated across five qualitatively different groups. Results show cigarette demand to be near unit elastic, the income effects to be generally insignificant and border price effects and habit effects to be significant. Regarding advertising effects, aggregate cigarette advertising has a negative effect on smoking. Important differences across advertising media emerge when cigarette advertising is disaggregated. The effects of public entertainment and Internet cigarette advertising are stronger than those of other media. Anti-smoking messages accompanying print cigarette advertising seem relatively more effective. Implications for smoking control policy are discussed.     

Interplay between reputation and growth: the source,role and audience of reputation of rapid growth technology-based SMEs

Abstract

Drawing on resource-based view and signalling theory, this paper presents a comparative case of four (young vs. old; small vs. medium-sized) business-to-business firms to examine how (i.e. through which sources), why (i.e. for which managerial purposes) and for whom (i.e. for which audiences) do technology-based small and medium-sized enterprises build their reputation along the process of rapid growth? The results indicate that in the pre-growth stage product awards as well as technological and financial partners are important sources of reputation for demonstrating technological capabilities and firm sustainability to potential customers especially for young firms. Older firms, in turn, rely on technology partners and acquisitions in the rapid growth stage to convince existing customers that the firms’ can keep up with their customer’s changing needs. Moreover, the reputation gained from the first well-known customer and a focused clientele appear to be two critical antecedents of rapid growth whereas patents do not seem to have a significant reputational role in rapid growth. Our study informs the theory of reputation development of growing technology-based firms by abstracting a more nuanced understanding of stakeholder- and stage-contingent reputation that fosters rapid growth, and provides new insight into the literature on small firm growth.     

Linkage between perceived external prestige and emotional labor: Mediation effect of organizational identification among pharmaceutical representatives in India

With the increasing importance of customer service in sustaining competitive advantage, one of the challenges before the organizations is how to motivate their employees to perform desired emotional labor during customer interactions. The present study examines the linkage between perceived external prestige and emotional labor strategies among the pharmaceutical representatives in India. Drawing from the social comparison theory and social identity theory, the study shows that perceived external prestige influences employees’ emotional labor strategies directly as well as through organizational identification. Contributions of the study to theory and to human resource management practices are discussed.     

Medical professionals and health care fraud: Do they aid or check abuse?

This paper examines the role of health care professionals in combating health care fraud. It is not overall clear whether the share of the health professionals help control abuse. Using data across U.S. states, our econometric results show that greater employment of nurses consistently reduced health fraud, whereas more physicians did not have a significant impact. Further, more urbanized states and states with a greater proportion of the elderly experienced greater health scams. Identity thefts facilitated health care fraud, whereas different dimensions of health insurance (including the share of the population with Medicare, managed care, and no insurance) and hospital occupancy rates did not matter.