The magnitude and reliability of equity capital cost estimates: A statistical approach

The purpose of this paper is to illustrate a simple technique of estimating the cost of equity capital as well as a statistical measure of its reliability. The approach specifies a probability structure that is readily estimated from company dividend data, and front that structure both the estimated cost of capital and its standard error are calculated.     

THE CHOICE AMONG DEBT,EQUITY, AND CONVERTIBLE BONDS

The hybrid nature of convertible bonds continues to interest corporate financial managers, investors, and economists. While much theoretical and empirical research examines an issuer's choice between using straight debt and equity, little research evaluates how an issuer chooses among debt, equity, and convertible bonds. This study extends Marsh's [ 13 ] research on the differences between debt and equity issuers in the United Kingdom by examining U.S. industrial firms that issue debt, equity, or convertible bonds. It also illustrates how various distinguishing features influence the probability that each security will be issued.     

Innovation and change in organizational relationships: interdisciplinary contexts

From July 13–15 of 1988 individuals from nine countries gathered at the Manchester Business School for the fifth international conference of INTERSTUDY (the International Association for the Study of Interdisciplinary Research). Entitled Interdisciplinary Research and the World Marketplace, the conference was co-sponsored by the Manchester Business School and the journal R&D MANAGEMENT. Founded in 1980, Inter-study has endeavoured to advance the art and science of IDR (interdisciplinary problem-focussed research) by organizing international meetings for representatives of the academy, industry, and government. Its major accomplishment has been publication of the results of those meetings in four books. These books, along with other publications in the growing field of IDR, provide a valuable collection of resources for scholars, managers, researchers, and practitioners.     

Consumer substitution decisions: an integrative framework

Substitution decisions have been examined from a variety of perspectives. The economics literature measures cross-price elasticity, operations research models optimal assortments, the psychology literature studies goals in conflict, and marketing research has examined substitution-in-use, brand switching, stockouts, and self-control. We integrate these perspectives into a common framework for understanding consumer substitution decisions; their specific drivers (availability of new alternatives, internal vs. external restrictions on choice); the moderating role of a consumer’s commitment to an initially desired alternative; and the affective, motivational, cognitive, and behavioral outcomes of substitution. We use this framework to recommend new avenues for research.     

Hospital Retailing

The United Kingdom 1988 Health and Medicine Act offered local Health Authorities the opportunity to generate income from commercial activities unrelated to health care. Retailing offers large income potential, and some Authorities are taking full advantage, employing commercial advisers or entering into agreements with retail developers and retailers to exploit this potential. The authors set out to discover whether there was much potential in hospital retailing, assess the views of the main interest groups involved (Health Authorities, retailers and customers) and see whether any guidelines could be suggested to aid Authorities and retailers considering taking this route. Their conclusion is that there is much potential since there are advantages for all three groups providing that customers requirements were met and that developers avoid an over-commercial environment in hospitals.     

How to Measure and Draw Causal Inferences with Patent Scope

Abstract

This paper presents an easy-to-use measure of patent scope that is grounded both in patent law and in the practices of patent attorneys. We validate our measure by showing both that patent attorneys’ subjective assessments of scope agree with our estimates, and that the behavior of patenters is consistent with it. Using our validation exercise, we find that previous measures of patent scope (i.e., the number of patent classes, the number of citations made by future patents, and the number of claims in a patent) are uninformative or misleading. To facilitate drawing causal inferences with our measure, we show how it can be used to create an instrumental variable, patent examiner scope toughness, which we also validate. We then demonstrate the power of this instrument by examining standard-essential patents. We show that an (exogenous) diminishment of patent scope leads to patents being much less likely to be declared standard essential.     

Symmetric and Asymmetric Stationarity Tests of Productivity

Studies of productivity in the operations and engineering management literature have typically focused on identifying the drivers of productivity and how best to manage resources. To date, the issues of the time-series behavior and the stochastic structure of productivity have largely been overlooked. This article examines the times-series properties of productivity utilizing several unit root and stationarity tests including one that allows for asymmetric adjustments to equilibrium. The findings suggest that productivity is a nonstationary process and first-differencing is necessary to render a stationary series. Moreover, we find some evidence of an asymmetric adjustment process in the productivity growth rates of manufacturing.     

An Evaluation of a Developmental Economic Education Project Given Limited Data

The Joint Council on Economic Education's Developmental Economic Education Program (DEEP) has been subjected to evaluations, both on a nationwide basis and in terms of the effects of a given project in a local area. Usually, the results have been positive, but too few of the evaluations have employed rigorous statistical analysis. Furthermore, the lasting effects of the program have not been sufficiently considered. The authors of this article recognize important limitations in their study, but present interesting evidence of the possible impact of the DEEP project in one city (Minneapolis) and suggest the policy implications of their findings.     

Modeling the Response of Gasoline-Crude Oil Price Crack Spread Macroeconomic Shocks

To date, considerable attention has been given to evaluating movements in crude oil and gasoline prices and in determining the significance of fundamental state variables that may influence these prices. This paper differs from the existing literature by identifying the response of the single-product gasoline-crude oil crack spread to unexpected changes in real output growth, inflation, the corporate default risk premium, and the stance of monetary policy utilizing the econometric techniques of vector autoregression and generalized impulse response analysis. The generalized impulse response method does not impose a priori restrictions as to the relative importance each of the state variables may play in the process of transmitting unexpected information from the macroeconomic variables to the crack spread. The results show the extent and the magnitude of the relationship between the crack spread being investigated and macroeconomic factors.