Spatial concentration and plant-level productivity in France

This paper analyzes empirically the effect of spatial agglomeration of activities on plant-level productivity, using French firm and plant-level data from 1996 to 2004. We exploit short-run variations of variables by making use of GMM estimation. This allows us to control for endogeneity biases that the estimation of agglomeration economies typically encounters. This means that our paper focuses on a subset of agglomeration economies, the short-run ones. Our results show that French plants benefit from localization economies, but we find very little - if any - evidence of urbanization economies. We also show that those localization benefits are relatively well internalized by firms in their location choice: we find very little difference between the geography that would maximize productivity gains in the short-run and the geography actually observed.     

Pipeline management for the acquisition of industrial projects

The management and controlling of the industrial project acquisition process, with its staged, funnel-like structure, has been neglected in empirical research so far—even though an effective acquisition process is crucial for economic success. In addition to profitability, the main goal of industrial companies is to implement a pipeline process that ensures that the pipeline is always filled with acquisition projects and results in a constant stream of orders over time. The projects considered are characterized by complexity, uniqueness, and discontinuity. Based on a large-scale survey among German industrial companies, we describe the industrial project acquisition process, where the projects mentioned above are sold on a non-continuous basis to industrial customers. We assess how the industrial project acquisition process is really structured, whether a sales funnel management is applicable and utilized by sales management to monitor and control this process, and whether a sophisticated sales funnel management contributes to enhanced economic success.     

Measuring the effect of watch-preceded and direct rating changes: a note on credit markets

This paper analyzes the importance of distinguishing between watch-preceded and direct rating changes for the credit default swap (CDS) market by examining a total of 2991 rating change announcements, 1526 watchlist placement announcements, and 430 rating affirmations following watchlist placements. The results show that watch-preceded downgrades do not lead to significant CDS market reactions, while direct downgrades are associated with a significant increase in CDS spread levels. Likewise, we document that watchlist placements for downgrade lead to increases in firms’ CDS spreads. CDS markets do not react to rating upgrades but watchlist placements for upgrade result in an immediate decrease in CDS spreads. Rating affirmations following watchlist placements for downgrade lead to slight reductions in CDS spreads, while affirmations following watchlist placements for upgrade have no effect on CDS spreads. These findings demonstrate the importance for empirical research on the interaction between credit markets and rating announcements to differentiate between watch-preceded and direct rating changes, particularly for rating downgrades.     

New borders: Evidence from the former Soviet Union

New Borders: Evidence from the Former Soviet Union. — We study the effects of trade barriers and the persistence of past linkages on trade flows in the former Soviet Union (FSU). Estimating a gravity equation on 1987–1996 trade between nine Russian regions and fourteen FSU republics, we find that Russian regions traded nearly twice as much with each other as with republics in the reform period (1994–1996). In contrast, they did not trade significantly more with each other than with republics in the prereform period (1987–1990). Our results suggest that the bias towards domestic trade in the reform period is primarily a result of tariffs. We also find that past linkages, such as infrastructure, production and consumption chains, and business networks, have limited the reorientation of trade.     

Buchbesprechungen

Ohne Zusammenfassung     

How Can We Better Understand Current and Future Workforce Values in the Global Business Environment?

Our study tested the predictive power of socioeconomic development theory and age differences theory to explain work values across cultures and across age groups. We compared the values orientations of future managers, business students under the age of 25, with those of current managers and professionals, who we split into three decade groups (30 to 39, 40 to 49, and 50 to 59). Our respondents (n = 1,518) come from six diverse societies: Brazil, Germany, Indonesia, Russia, the United States, and Vietnam. Our findings indicate that both theories contribute to our understanding of work values and behaviors. One implication is that while socioeconomic development theory makes an important contribution, it is clearly not sufficient by itself to explain work values/behavior differences in the global context. The study findings and the discussion of them will hopefully provide multinational managers with a clearer assessment of current and future workforce values/behavior. © 2012 Wiley Periodicals, Inc.     

Perils of Managing the Service Profit Chain: The Role of Time Lags and Feedback Loops

The tendency of managers to focus on short-term results rather than on sustained company success is of particular importance to retail marketing managers, because marketing activities involve expenditures which may only pay off in the longer term. To address the issue of myopic management, our study shows how the complexity of the service profit chain (SPC) can cause managers to make suboptimal decisions. Hence, our paper departs from past research by recognizing that understanding the temporal interplay between operational investments, employee satisfaction, customer satisfaction, and operating profit is essential to achieving sustained success. In particular, we intend to improve understanding of the functioning of the SPC with respect to time lags and feedback loops. Results of our large-scale longitudinal study set in a multi-outlet retail chain reveal time-lag effects between operational investments and employee satisfaction, as well as between customer satisfaction and performance. These findings, along with evidence of a negative interaction effect of employee satisfaction on the relationship between current performance and future investments, show the substantial risk of mismanaging the SPC. We identify specific situations in which the dynamic approach leads to superior marketing investment decisions, when compared to the conventional static view of the SCP. These insights provide valuable managerial guidance for effectively managing the SPC over time.     

Konjunktur- und Strukturkomponenten der Länderhaushalte

Deutschland hat im August 2009 eine Schuldenregel im Grundgesetz verankert. Die Bundesl?nder müssen bis 2020 ihre Ausgaben grunds?tzlich ohne Kredite fi nanzieren. Konjunkturbedingte Defi zite sind weiterhin m?glich, die in konjunkturell guten Zeiten ausgeglichen werden müssen. Das RWI hat ein Verfahren entwickelt, wie die Konjunktur- und Strukturkomponenten der Landeshaushalte berechnet werden sollten.     

Empirical bias in intraday volatility measures

Intraday volatility measures have recently become the norm in risk measurement and forecasting. This article empirically investigates the unbiasedness of three of these measures over four different datasets. We find that the three measures are significantly biased and that the bias can have either sign.