The economic advantages of chain organization

This article considers the rapid spread of chain firms in many industries. The conventional explanation is that chains generate economies of scale in costs. Alternatively, the structure of chains may enhance demand by helping firms develop reputations, among other reasons. I quantify the value of these explanations empirically with a large, detailed data set on the hotel industry, combining a reduced‐form analysis of revenues with a structural estimation of firm costs. Revenue analysis shows substantial evidence of a large chain premium. Cost estimation shows that after accounting for unobserved heterogeneity, chain‐affiliated firms receive no cost advantage relative to independent firms.     

Fiscal Policy,Monetary Policy and the Mechanics of Modern Clearing and Settlement Systems

Thomas Palley, Eric Tymoigne and Randall Wray recently debated neo-Chartalism in this journal. This article argues that the mechanics of modern clearing and settlement systems is important to understanding this debate. In the neo-Chartalist framework taxes and bond issuance function as part of monetary policy; it is an alternative method for draining reserves to obtain the overnight target rate. Abba Lerner’s Chartalist framework is much clearer on public finance, noting that the federal government can use alternative financing methods to pay for expenditures. Palley’s concerns with central bank ‘money financing’ and inflation are unpersuasive. The Old Keynesian ‘budget restraint– high-powered money relation’ offers limited insight into modern clearing and settlement systems. The article concludes that policymakers should embrace Lerner’s advice and view ‘money printing’ as a normal policy instrument to support functional finance.     

A note on assessing the relation between CEO characteristics and stock performance: Alpha Above Replacement

Many studies examine the relation between stock performance and CEO characteristics. We approach the topic in a different way, using the alphas generated by the Fama‐French three‐factor model as the dependent variable in a CEO characteristic model. We find several traits are significantly related to alpha. CEOs who are younger, own a larger fraction of firm equity and hold a graduate degree provide greater alphas. CEOs who are also the founder of the firm deliver larger alphas. Our results provide useful information for boards assessing the performance of CEOs and considering CEO succession.     

参加巴菲特年会有感

作为一名价值投资者,我从这次年会中得到的启示包括： 人性弱点：人们总是做蠢事,这就是我们能赚钱的原因。巴菲特讲述他1952年到拉斯维加斯度蜜月时看到从纽约等地来的人衣冠楚楚,却做着愚蠢的事情,明知是期望值为负数的事情还是要做,原因是这是个“充满机会的世界”。我们做我们的,他们做他们的。     

RAIFFEISEN AS SOCIAL INNOVATOR

In recent years the term social innovation has become widely used by policy makers, yet important ambiguities remain. One of these concerns what has been called the paradox of embedded agency – how social innovators conceive of something new when working with existing social institutions. So far few writers have considered whether historical examples can, with benefit of hindsight, shed light on the relationships between social innovators and social institutions. This paper considers the example of Friedrich Wilhelm Raiffeisen, creator of rural credit unions and agricultural co‐operatives in 19th‐century Germany. Raiffeisen was a social conservative who worked in many ways within existing social institutions. At the same time, his desire to meet social needs drove him to create new forms of action and organization that resulted in social innovation. Raiffeisen's process of invention shows that social innovation, particularly in transitional eras like his, need not be a matter of using logical‐deductive processes to address a social need, but may depend critically on values, will, a readiness to experiment, and an ability to find allies. These qualities enabled Raiffeisen to break through existing institutions to do something fundamentally new, and they may be qualities that provide new focus for social‐innovation research and policy.     

Marketing’s roles in innovation in business-to-business firms: Status, issues, and research agenda

A project funded by the Institute for the Study of Business Markets to develop an understanding of the current state of business-to-business marketing and a research agenda for the field identified a lack of understanding of how the marketing function can or should best contribute to firms’ innovation efforts as the top priority. A workshop of senior academics and research-oriented practitioners explored this topic further, identifying four specific themes: (1) improving customer needs understanding and customer involvement in developing new products, (2) innovating beyond the lab, (3) disseminating and implementing research findings in firms, and (4) marketing’s overall role in innovation. This article defines these themes, sketches the current status of knowledge about each theme, frames practitioners’ issues with them, and proposes research agendas for each theme to move the field forward. The goal is to encourage rigorously executed academic research that can also help firms innovate more successfully.     

The Impact of Customer Characteristics and Moral Philosophies on EthicalJudgments of Salespeople

This study considers customer characteristics as situational influences on a salesperson'sethical judgment formation. Specifically, customer gender, income, and propensity to buy were considered as factors which may bias these judgments. Additionally, the gender of the salesperson and their moral value structure were examined as moderating effects. An experiment using real estate agents reading hypothetical sales scenarios revealed differences across (1) customer gender, (2) customer income, and (3) level of the respondent'sidealism. Significant interactive effects with these factors were also found involving respondent gender and level of idealism. These and previous findings which consider situational effects on ethical decision-making, indicate that a more contingent approach to ethics studies is warranted.     

Is there an association between Vice‐Chancellors’ compensation and external performance measures?

We provide evidence on the pay for performance relation between Australian university Vice Chancellors’ compensation and independent measures of university teaching, research and other performance indicators provided by external ranking bodies. Our results show limited association between university rankings and Vice Chancellors’ compensation, but confirm that Vice Chancellors’ compensation is predominantly driven by size measures based on the different components of revenue. Further, we find that few universities offer performance‐based bonus payments. Our results are robust with respect to a number of sensitivity tests.