Capabilities,technologies, and firm exit during industry shakeout: Evidence from the global solar photovoltaic industry

Research Summary: Explanations of entrants’ survival in an emerging industry are premised on pre‐entry capabilities or technology entry choices prior to the emergence of the dominant design. We consider how these drivers interact to strengthen or nullify firms’ pre‐entry advantage, and facilitate adaptation as the industry evolves. We also expand the treatment of exit by separating dissolution from acquisition, in which firms’ capabilities continue to be utilized in the industry. Studying a recent shakeout in the global solar photovoltaic industry, we find that pre‐entry capabilities and technology choices act in a complementary manner for some firms, thereby enhancing survival, and as buffers against exit for others. Nearly half of exits were via acquisitions, and technology choice at entry played an important role in determining how firms exited. Managerial Summary: New industries are often characterized by intense technology competition that culminates in a dominant technology followed by industry shakeout. Although prior research underscores the central role of technology choice and firm capabilities to survival, we do not actually know how firms with different capabilities and who have made competing technology choices survive an industry shakeout. In this article, we show how entrants’ capabilities and technology choices can act in a complementary manner for some firms, enhancing their chance of survival, and as buffers against failure for others. Moreover, we explain why some firms that do exit are acquired, when others are dissolved.     

Self-consciousness and emotions driving femvertising: A path analysis of women’s attitude towards femvertising,forwarding intention and purchase intention

Femvertising is making huge waves as large numbers of brands are launching campaigns marketing feminism. While promoting products brands are selling empowerment to women through marketing campaigns. As women purchasing power is increasing they provide bigger opportunity to marketers, this is the reason femvertising is the hottest trend used by advertisers to attract women customers. This study investigates the influence of self-consciousness and Need for Emotion on Attitude towards femvertising. It further sheds light on the effect of Attitude towards femvertising on forwarding intention of ad and purchase intention of the advertised brand. ANOVA was conducted to analyze the relationship between demographic profile of women respondents with their attitude towards femvertising, forwarding intention and purchase intention. Results show that individuals Private & Public self-consciousness and need for emotion influence their attitude towards femvertising. Positive attitude towards femvertising influence their forwarding intention of ad but does to lead to purchase intent. The findings revealed that intention to forward and purchase intention varies across different age groups.     

Earnings Retention as a Specification Mechanism in Logistic Bankruptcy Models: A Test of the Free Cash Flow Theory

This paper explores the applicability of as a specification mechanism to improve forecasting methods in corporate bankruptcy. The study combines lessons from Jensen's Free Cash Flow Theory with a logisitic model of bankruptcy to improve forecasting accuracy. The model uses data from the Indian textile industry to show that data classification based on investment opportunities is yet another way of improving precision. The study also re-examines the Free Cash Flow Theory and concludes that in applying it to a bankruptcy scenario, its initial findings regarding retention policy hold true; that is, low growth firms should retain less of their earnings than their high growth counterparts.     

Local costs of distribution,international trade costs and micro evidence on the law of one price

This paper connects trade flows to deviations from the law of one price (LOOP) in a structural model of trade and retailing. It accounts for the observed cross-country dispersion in prices of goods, based on retail price survey data, by focusing on two sources of goods market segmentation — (i) international trade costs, and (ii) non-traded input costs of distribution. I find that a multi-sector Ricardian trade model, ala Eaton–Kortum, augmented with a distribution sector, can account for the average price dispersion for a basket of goods fully and generates 70% of the variation in price dispersion across goods within the basket. While tradability of goods is important in explaining the average price dispersion for the basket of goods, distribution costs are important in explaining why, within the basket, some goods show more price dispersion than others.     

Trade Policies in Southeast Asia in the Wider Asian Perspective

This paper takes stock of trade policies in Southeast Asia after the Asian crisis and in the wake of the current global economic crisis. It compares trade policies in individual Southeast Asian countries; places them in the context of regional and global economic integration; and particularly draws implications for the region from the rise of China and India. The first section looks at recent trade and FDI patterns in Southeast Asia. Then follows an overview of key trade‐policy trends, in the region overall and in individual countries. The next sections examine ASEAN countries in international trade negotiations and agreements: first in the WTO, especially in the Doha Round; then within ASEAN; and finally on cross‐regional FTAs. The paper concludes that ASEAN countries cannot rely on external tracks ‘from above’ for meaningful trade policy reform. Since the Asian crisis there has been a slowdown of reform momentum, and too much reliance on trade negotiations – especially FTAs. Rather, countries in the region have to rely on themselves –‘from below’ as it were. The engine of liberalisation and regulatory reform has to be home‐driven – as it was before the Asian crisis – with governments taking unilateral measures in response to internal and external conditions.     

Investigating the consequences of word of mouth from a WOM sender’s perspective in the services context

Abstract

Employing scenario-based experiments, this paper examines the effect of word of mouth (WOM) on the sender’s intention to give future WOM about the focal service provider and the self-enhancement derived from articulating WOM. Extant WOM literature considers self-enhancement as a key driver of positive WOM. This paper provides empirical evidence that a reverse effect exists and that self-enhancement is also an outcome of WOM behaviour. Results indicate that the impact of WOM on self-enhancement has substantive significance and holds for both positive and negative WOM. The effect of WOM on intentions is only partially supported. Finally, tie strength between the WOM participants partially moderates the relationship between the variables. Importantly, the impact of negative WOM is stronger than that of positive WOM.     

Arbitrage in stationary markets

We analyse questions of arbitrage in financial markets in which asset prices change in time as stationary stochastic processes. The main focus of the paper is on a model where the price vectors are independent and identically distributed. In the framework of this model, we find conditions that are necessary and sufficient for the absence of arbitrage opportunities. We discuss the relations between the results obtained and the phenomenon of “volatility-induced growth” in stationary markets. Financial support by the Swiss National Center of Competence in Research “Financial Valuation and Risk Management” (NCCR FINRISK) is gratefully acknowledged.