Rethinking the effectiveness of asset and cost retrenchment: The contingency effects of a firm's rent creation mechanism

This paper posits that the efficacy of different retrenchment strategies depends upon the firm's core rent creation mechanism. We focus on two distinct mechanisms of rent creation: Ricardian rent creation based on the exploitation of resources and Schumpeterian rent creation based on explorative capabilities. We argue that cost retrenchment may have detrimental effects on firms with a relatively high Schumpeterian rent focus. On the other hand, asset retrenchment may erode the basis for future rent creation for firms with a higher Ricardian rent focus. Our findings based on a sample of large nondiversified Japanese firms highlight the differing degrees of fragility and recoverability of the two rent creation mechanisms in the context of different retrenchment strategies. Copyright © 2012 John Wiley & Sons, Ltd.     

Price transmission and volatility spillovers in Asian rice markets: Evidence from MGARCH and panel GARCH models

ABSTRACT

This article examines world rice price transmission and volatility spillovers across six major Asian rice markets over the period 2005-13. In addition to the conventional GARCH models, we use a panel GARCH framework to estimate the spillover effects along with the consideration of heterogeneity and interdependence among countries. Empirical results suggest that changes in the world rice price affected not only the price levels of domestic rice markets but also their conditional variances. Moreover, interdependence across rice markets contributed to a strong spillover of a price shock in one country to another within the region.     

Learning from the world? Horizontal knowledge flows and geopolitics in international consulting firms

This paper examines the nature of the contemporary multinational corporation (MNC) through a study of the use of knowledge management systems (KMS) in four major international consulting firms. In particular, we explore whether and how such systems facilitate horizontal (inter-subsidiary) flows of knowledge, as described in the network view of the MNC. Our analysis reveals the presence of horizontal flows within the four firms, but flows that are contextually constrained and partly shaped by geopolitical power relations. Thus, our study gives some support to the image of the MNC as a network whilst highlighting the contextual limits of horizontal knowledge transfer and, importantly, the geopolitical conditions under which such knowledge transfer takes place. At the same time, it challenges the claim that consulting firms are model organizations in the area of knowledge management as well as the more negative view that questions the ability of KMS to facilitate knowledge transfer.     

Market growth through mergers and acquisitions: The role of the relationship marketing manager in sustaining performance

This research suggests that firms considering a merger and acquisition strategy need to pay attention to the relationship marketing managers of the target firm and the implicit agreements that have kept them with the target firm. The results of this study convey that the joint activity of maintaining the implicit contracts and retaining the relationship marketing managers have a stabilizing and positive impact on the productivity of subordinate marketing employees. These employees are a key success factor that enables the target firm to function effectively after the acquisition.     

Should all Choices Count? Using the Cut-Offs Approach to Edit Responses in a Choice Experiment

Should we give equal weight to all responses in a choice experiment? Previous Choice Modelling papers have considered the issue of the internal consistency of choices—such as the extent to which strictly-dominated options are chosen. In this paper, a different focus is employed, namely the extent to which people choose options which violate their stated upper or lower limits for the acceptable levels for individual attributes. Since hypothetical over-statement of WTP has been a focus in stated preference studies, we concentrate on violations of stated upper limits of WTP, and explore the effects of “editing” such choices using a variable censoring rule and alternative approaches to re-classifying choices. The empirical case study is a choice experiment on eco-tourists in Rwanda. Our main conclusion is that the suggested approach offers a useful way of imposing consistency on choices, and that editing choices in this manner has an appreciable impact on estimated willingness to pay. However, issues remain with regard to explaining why people apparently violate their stated maximum willingness to pay.     

Eliciting Willingness to Pay without Bias using Follow-up Certainty Statements: Comparisons between Probably/Definitely and a 10-point Certainty Scale

Correction for hypothetical bias using follow up certainty questions often takes one of two forms: (1) two options, “definitely sure” and “probably sure”, or (2) a 10-point scale with 10 very certain. While both have been successful in eliminating hypothetical bias from estimates of WTP by calibrating based on the certainty of yes responses, little is known about the relationship between the two. The purpose of this paper is to compare the two using data from three field experiments in a private good, dichotomous choice format. We compare four types of yes responses that differ in the criterion used to determine if there is sufficient certainty for a hypothetical yes response to be considered a true yes response. We make several comparisons, but focus on determining which values on the 10-point scale give the same estimates of WTP as “definitely sure” hypothetical yeses and real yeses (actual purchases). Values that produce equivalence are near 10 on the certainty scale.     

Exploring knowledge management to organizational performance outcomes in a transitional economy

The Eastern European Economies offer many major business opportunities but due to the transitional nature of their economies, these are highly complex and fraught with the socialist cultural disposition. There is a dearth of research into the nature of these opportunities/complexities, especially in regard to knowledge management and subsequent organizational outcomes. Our study of firms in Croatia suggests that knowledge management positively affects organizational outcomes of firm innovation, product improvement and employee improvement. Moreover, our empirical research illustrates the importance of the management of knowledge and not just the presence of knowledge as our model results indicate insignificant results between employee knowledge-based capability and the organizational outcomes.     

Accounting practices of the St. Joseph Lead Company: 1864-1900

This paper presents the results of an inquiry into the accounting practices of the St. Joseph Lead Company during the nineteenth century. For several decades following its incorporation in 1864 the St. Joseph Lead Company maintained a very crude double-entry bookkeeping system that lacked detailed cost accounting records. In fact, there is little evidence of any type of industrial accounting prior to 1890 when a direct cost responsibility accounting system was established. Thus, the industrial accounting procedures of the St. Joseph Lead Company appear to have lagged far behind the practices of the contemporary British and American mining firms which have been the objects of recent studies. The investigation thereby reveals considerable diversity in the industrial accounting practices of the American mining industry during the second half of the nineteenth century.     

Economic Benefits Resulting From Irrigation Water Use: Theory and an Application to Groundwater Use

Traditional economic analysis using a crop production function approachhas assumed that all variable factors, including irrigation water, arefully employed in the crop production process. However, this paper firstdemonstrates that economic benefits of irrigation water areoverestimated when the crop production function, and therefore theirrigation water demand function, is expressed in terms of irrigationwater supplied, rather than consumptive irrigation water use. Second,the paper demonstrates that the magnitude of the estimation bias isproportional to the rate of irrigation water losses through leaching,runoff and evaporation. Consequently, the model misspecification problemwould lead to increased irrigation water use and reduce incentives forfarmers to adopt improved irrigation technologies.     

The role of On‐line communities on the internet for Sustainable Development

For the world to move towards a more sustainable future greater understanding is required about the links between society, reality, business activity, the environment, technology and sustainable development (Welford, 199816). Technological development of the Internet offers the potential, if appropriately utilized, to be an enabler of a more sustainable future. On‐line communications, via the Internet, is driving the evolution of cyber based communities in both domestic and commercial environments. Such changes in international communications are clearly at a relatively early stage of development, which raises many issues of fundamental interest but also concern. Security and control are issues of prime importance to all existing and future participants in cyberspace, due to the direct implications on both freedom and order. The Internet has evolved from a small specialist controlled environment, including both scientists and academic members, to on‐line activity that is currently viewed by many as anarchic in nature. The more recent rise of the World Wide Web (WWW), driven by corporate acceptance and adoption, appears to be pushing towards formalization of both the Internet infrastructure and also applications. In exploring the role of on‐line communities for sustainable development the paper addresses fundamental issues of importance. Copyright © 1999 John Wiley & Sons, Ltd and ERP Environment.