The distribution of personal income: Revisited

In a recent paper, Majumder and Chakravarty (1990) propose a four-parameter model which they find provides a better fit to some income data than the lognormal, gamma, Singh-Maddala, Dagum, and generalized beta of the second kind (GB2) distributions. This note (1) demonstrates that the model proposed by Majumder and Chakravarty is a reparameterization of the GB2 and (2) reconciles the corresponding contradictory empirical findings reported by Majumder and Chakravarty.     

Non‐additivity in portfolios of exploration activities: a real options‐based analysis of equity alliances in biotechnology

Firms invest in exploration‐oriented activities to seek competitive advantage and in response to changing environments. Real options formulations represent an emerging strand of thinking on such investments. In this paper we begin with the observation that firms often simultaneously invest in multiple exploration projects. We identify two sources of potential interactions among these real options investments. First, we investigate the effects of correlations between the outcomes in different options. Second, we analyze the effects of investments that are fungible across project options. We show that under different conditions multiple options can be sub‐additive (due to redundancies in outcomes) or super‐additive (due to fungible inputs). We test the implications of our model with data from the biotech industry and find supporting evidence. Our model and results have some interesting implications for the exploration literature and real options lens. Copyright © 2004 John Wiley & Sons, Ltd.     

Can order exposure be mandated?

In this paper, we examine whether the hidden portion of limit orders represents depth that would be revealed if traders were not allowed to hide it, and the associated market quality implications. Specifically, we examine the decisions by the Toronto Stock Exchange to first abolish the use of hidden limit orders in 1996, and then reintroduce them in 2002. We find that quoted depth does not change following either decision, suggesting that the hidden portion of orders represents depth that would otherwise not be exposed. Using confidential order data for the period following the reintroduction of hidden limit orders, we find that total inside depth increases. For both events, volume does not change and the usage of the limit order book increases if hidden limit orders are allowed. This suggests that if traders are required to expose their orders they will not exit the market, but instead will switch to using market orders. We also find evidence to suggest that informed traders use hidden limit orders to minimize price impact if the probability of non-execution is small.     

Exploring the relationship between freedom from corruption and business governance in the Oceania region

This paper empirically investigates the relationship between Freedom from Corruption Index and business governance in the Oceania region by using the Pearson’s correlation coefficients, ordinary least square regression model and ordinary least square regression based decomposition analysis. This paper found that all eleven business governance indicators are positively correlated to Freedom from Corruption Index. Eight business governance indicators; namely, (1) trading across borders, (2) enforcing contracts, (3) resolving contracts, (4) ease of doing business, (5) registering property, (6) getting credit, (7) paying taxes and (8) starting a business significantly influences Freedom from Corruption Index. One standard deviation increase in eleven business governance indicators is associated with about 3.47 % point increase in Freedom from Corruption Index. All eleven business governance indicators contribute between 20 and 40 % differences in freedom from corruption in the Oceania region. All eleven business governance indicators contribute between 5.17 and 10.88 % to freedom from corruption in the Oceania region.     

The interrelationships between brand and channel choice

We propose a framework for the joint study of the consumer’s decision of where to buy and what to buy. The framework is rooted in utility theory where the utility is for a particular channel/brand combination. The framework contains firm actions, the consumer search process, the choice process, and consumer learning. We develop research questions within each of these areas. We then discuss methodological issues pertaining to the use of experimentation and econometrics. Our framework suggests that brand and channel choices are closely intertwined, and therefore studying them jointly will reveal a deeper understanding of consumer decision making in the modern marketing environment.     

A policy of credit disruption: the Punjab Land Alienation Act of 1900

If land is titled and transferable, it can be used as collateral against which money can be borrowed. The resulting increase in access to credit is usually expected to foster economic growth. This article focuses on a policy in colonial India that made land less available as collateral for debt. Using a panel dataset for Punjab districts from 1890 to 1910, the findings show that this reduced the availability of mortgage-backed credit, but did not hurt proxies for economic development, such as acreage and cattle, at least in the short run.     

Recreating and extending Japanese automobile buyer'supplier links in north America

We compare buyer'supplier links established by pairs of Japanese-owned automobile assemblers and component manufacturers operating in Japan and in North America during 1989-90. Eight assemblers and more than 170 Japanese component manufacturers had established North American manufacturing facilities. In total, Japanese automobile assembly organizations operating in North America had recreated about a quarter of their Japanese supply links. The suppliers that set up North American facilities had recreated almost 60 percent of their links with traditional buyers and formed more than 16 percent of the possible extension links with new assembler partners. We identify several economic and organizational factors that influence whether an existing buyer'supplier link will be recreated in a new location and whether firms that do not have a buyer'supplier relationship at home will form an extension link in the new location. We find that the presence of a long-term buyer'supplier relationship, buyer and supplier entry timing to the new location, the joint venture status of the buyer, supplier size, and the breadth of a supplier's sales base in the home market influence the likelihood that links will be recreated and extension links will be formed.     

Entry timing,exploration, and firm survival in the early U.S. bicycle industry

We explore the relationship between a firm's entry timing and its probability of surviving the early, uncertain period of its industry, and consider the trade‐off between entering early and potentially establishing a strong position in the industry vs. waiting until technological uncertainty is reduced. We hypothesize that, owing to inertial forces, firms that enter the industry at the earliest point in its history are least likely to make the conversion to the product generation that becomes the dominant design in the industry. Exploration through the introduction of new products appears to reflect a local search process and retards the transition to the dominant design. We also hypothesize that, though firms entering early may exhibit longer life spans, their advantages are limited to the period before the emergence of the dominant design. We test our hypotheses in the early U.S. bicycle industry, and find evidence consistent with the idea that inertia limits firms' abilities to make the transition between generations of product configurations. Copyright © 2006 John Wiley & Sons, Ltd.     

The Effect of Rebate and Loan Incentives on Residential Heat Pump Adoption: Evidence from North Carolina

Environmental and Resource Economics - Electrification can promote deep decarbonization to tackle climate change with a cleaner power grid. Electric heat pumps provide a feasible and...