Local Sourcing in China: The Case of Braun Electric (Shanghai) Co. Ltd

Increasingly, multinational enterprises manufacture locally in China, for reasons of cheap labour or as a means of more efficiently penetrating the vast Chinese market. However, the literature suggests a range of problems associated with local manufacturing, such as the sourcing of locally produced components and materials. This study looks into the case of Braun Electric (Shanghai) Co Ltd., a wholly owned subsidiary of Braun AG of Germany, which produces electric foil shavers in China, examining its reasons for local sourcing, associated problems and resulting strategies. The case study is based on a two-week research visit to the company in January 1996.     

Efficient Hedge Fund Strategy Allocations – Systematic Framework for Investors that Incorporates Higher Moments

In this paper, we provide a realistic framework that investors can use to optimize hedge fund portfolio strategy allocations. Our approach includes important aspects that investors need to address in the real world, such as how limited resources can restrict the ability to conduct multiple due diligences. Additionally, our approach is not based on a utility function, but on an easily quantifiable preference parameter, lambda. We need to account for higher moments of the return distribution within our optimization and approximate a best‐fit distribution. Thus we replace the empirical return distributions, which are often skewed or exhibit excess kurtosis, with two normal distributions. We then use the estimated return distributions in the strategy optimization. Our dataset comes from the Lipper TASS Hedge Fund Database and covers the June 1996‐December 2008 time period. Our results show in‐ and out‐of‐sample that our framework yields superior results to the Markowitz framework. It is also better able to manage regime switches, which tend to occur frequently during crises. Lastly, to test our results for stability, we use robustness tests, which allow for the time‐varying correlation structures of the strategies.     

Economic Evaluation and Optimization of the Degree of Automation in Insurance Processes

In the context of value and customer orientation there are various requirements concerning the process – especially in insurance companies: processes are meant to be standardized, automated, and flexible. It is in question whether a fast and cheap automated processing is preferred to manual handling. For which claims and which process steps is it of economic value to have the flexibility and the competence and ability to solve problems of human operators at your disposal? Various combinations, representing different degrees of automation, are possible. The different degrees of automation for the processing of an insurance claims are compared and resulting cash flows are determined. It is essential to include all consequences that can be attributed to a single process and to consider customer reactions and restrictions to the capacity of processing. Instead of using heuristic rules to decide on automation in practice, here the decision is flexible and depends on the given situation. Viewing an aggregated number of insurance claims it is possible to deduce information about the performance of the process. The model is exemplarily illustrated with help of a part of the process for handling own damage glass claims.     

Quantifying Decommissioning Risk in the Deepwater Gulf of Mexico

Deepwater oil and gas structures are expensive to install and will be expensive to dismantle when the asset no longer serves a useful purpose. Deepwater structures present special risk because decommissioning expenditures are expected to cost tens to hundreds of millions of dollars to perform, and occur when the asset no longer generates revenue. An analytic framework is presented to quantify the decommissioning risk of offshore structures by comparing the value of an asset's reserves to its undiscounted asset retirement obligations. The procedure is applied to the deepwater fixed platform and compliant tower inventory in the Gulf of Mexico circa January 2013.     

Optimal Institutional Mechanisms for Funding Generic Advertising: An Experimental Analysis

Given the uncertain legal status of generic advertising programs for agricultural commodities, alternative voluntary funding institutions are investigated that could provide a high level of benefits to producers. This experimental study simulates key economic and psychological factors that affect voluntary producer contributions to generic advertising. The results suggest that producer referenda play a critical role in increasing contributions and that producer surplus is maximized by a provision point mechanism instituted by producer referendum with thresholds ranging from 68% to 90%, and expected funding from 47% to 77% of the time, depending on the level of advertising effectiveness.     

Internationalisation and innovation in the knowledge-intensive business services

This paper aims to analyse the link between the distinct degree of internationalisation and the innovation activities of Knowledge-Intensive Business Services (KIBSs). The empirical results suggest that there are differences between the groups of KIBS analysed, particularly with regards to their characteristics, innovation activities, use of source of knowledge, use of advanced technologies and value-added practices, and innovation outputs. However, these differences are not always systematic. There is a noticeable tendency for domestic establishments to perform more weakly with regards to innovation-related activities and innovation outputs than international establishments, but also between KIBS that have different degrees of international activities.     

A Microeconometric note on product innovation and product innovation advertising

This paper seeks to explain why more than half of the German service sector firms that introduce a product innovations do not advertise their new or markedly improved product. One part of the explanation is that they do not need to advertise because they are closely related to their customers anyway, and another part of the explanation is that product innovation and product innovation advertising are strategic substitutes.     

A brief instrument to measure health-related quality-of-life in patients with bone metastasis: validation of the German version of Bone Metastases Quality-of-Life-10 (BOMET-QoL-10)

Aims: This prospective, epidemiologic study was designed to translate the original Spanish Bone Metastases Quality-of-Life-10 (BOMET-QoL-10) questionnaire and undertake a validation of the translated German version of BOMET-QoL-10 in Germany to assess health-related quality-of-life (HRQoL) in patients with bone metastases (BM).

Methods: The translation process included forward and backward translations, and a linguistic validation. Patients aged ≥18 years with histological confirmation of cancer, diagnosed with BM, life expectancy ≥6 months, and fluency in German were eligible for this study (enrolled consecutively in 33 outpatient centers in Germany). Patients were given the German version of BOMET-QoL-10, together with the European Organization for Research and Treatment of Cancer (EORTC) Quality of Life Questionnaire QLQ-C30 and EORTC QLQ-BM22 questionnaires at inclusion, 6 weeks, 3 months, and 6 months after inclusion. A debriefing questionnaire was administered at inclusion to determine patient acceptability and understanding.

Results: Data include 364 patients with BM (median age?=?68 years; females?=?71.7%). The BOMET-QoL-10 is brief and clear (median completion time?=?5?minutes; >90% of patients completed the questionnaire without assistance). The BOMET-QoL-10 forms only one overall scale. All 10 items showed a substantial correlation with the first factor (factor loading, range?=?0.58–0.86). BOMET-QoL-10 exhibits high internal consistency and reproducibility (Cronbach’s alpha?=?0.91; intra-class correlation coefficient?=?0.76). BOMET-QoL-10 showed significant correlations (range?=?0.69–0.79) both with EORTC QLQ-C30 and EORTC QLQ-BM22 within the functioning (physical, social, interference) and symptom (fatigue, pain) scales, displayed significant sensitivity to change in EORTC QLQ-BM22 scores, and proved the potential ability to detect change in HRQoL in patients with different disease status.

Limitations: There was a high proportion of females in this study, which might represent a limitation.

Conclusions: The German version of BOMET-QoL-10 is a valid, reliable, brief, and clear instrument able to measure HRQoL in patients with BM.     

Socially responsible products: what motivates consumers to pay a premium?

The motivation to pay a premium for socially responsible products is partly an expression of consumer concern for the well-being of those involved in the production process. Buying a product with a socially responsible label, and donating to a charity are similarly motivated actions. While there is an extensive literature on the economics of charitable giving that examines motivations to donate as well as on the impacts of labelling on consumer demand, there is little overlap between the two literatures. We bridge these two literatures by investigating whether consumers have heterogeneous motivations for paying a premium. Through a laboratory experiment that auctions coffee with hypothetical socially responsible labels that put different weights on in-kind versus cash transfers, we find that those consumers who prefer an in-kind transfer (paternalistic altruists) are willing to pay a 52.5% price premium over standard coffee. Those who prefer that most of the premium is paid as cash (strong altruists) are willing to pay a 42.5% premium. Finally, those who are indifferent to how the premium is spent by the recipient (warm-glow givers) are willing to pay only a 19.2% premium. We discuss the implications of our results and future research directions.     

Quantity and quality effects of advertising: a demand system approach

Quantity and quality effects of advertising are investigated in this article. A censored demand system is estimated for fish, beef, pork, and other meats using Norwegian household data. In the demand model, generic fish advertising and meat advertising is introduced as demand shifters, and at the same time unit values are treated as endogenous. The unit values capture the quality of the commodities. Empirical findings show that advertising can have both quantity and quality effects on household demand.