Time-Based Management of the New Product Development Process

This study explored the problem of compressing new product development by focusing on the specific phases of the innovation process. These phases manifest significant qualitative differences that require attention for understanding the complexities of accelerating new product development. Based on data from 35 high-technology companies, Necmi Karagozoglu and Warren Brown identified several different acceleration methods. Results revealed unexpected and at times inconsistent insights than those reflected in the case study and anecdotally based literature, and implied also that some of the well documented approaches to successful new product development need to be replaced with their time-based versions.     

Knowledge of campaign finance regulation reduces perceptions of corruption

We use an experimental survey design to measure how campaign finance regulation influences perceptions of political corruption and trust in politicians when citizens are exposed to information about regulation. Unlike most observational studies, results of this experimental study suggest that knowledge of campaign finance regulation substantially reduces citizens’ perceptions of corruption but has only limited effect on trust in politicians. Findings have crucial implications for public policy. At a time when public cynicism about politics is high, a significant reduction in perceptions of political corruption through successful dissemination of campaign finance regulation would be a boost to the legitimacy of democracies.     

Measuring the impact of restructuring and country-specific factors on the efficiency of post-crisis East Asian banking systems: Integrating DEA with SFA

This paper investigates the relationship between post-crisis bank restructuring, country-specific conditions and bank efficiency in Asian countries from 1997 to 2001 using an approach that integrates data envelopment analysis and stochastic frontier analysis. We focus on restructuring measures related to bank ownership. The results indicate that although domestic mergers produce more efficient banks, overall, restructuring does not lead to more efficient banking systems. Banking system inefficiencies are mostly attributed to country-specific conditions, particularly, high interest rates, concentrated markets and economic development.     

Pricing Eurodollar futures options using the BDT term structure model: The effect of yield curve smoothing

This article focuses on pricing Eurodollar futures options using the single‐factor Black, Derman, and Toy (1990) term structure model with particular emphasis on yield curve smoothing. Of the various approaches, the maximum smoothness forward rate approach developed by Adams and van Deventer (1994), cubic yield spline, and linear interpolation are used to produce finely spaced binomial trees. We compare the pricing accuracy associated with the use of yield curve smoothing techniques within the BDT framework. The findings provide the first supporting evidence that using a forward rate curve with maximum smoothness together with a time‐varying volatility structure improves best the performance of the BDT model. The empirical results are found to be robust across factors affecting the option price such as time‐to‐expiration, moneyness, and trading volume. © 2000 John Wiley & Sons, Inc. Jrl Fut Mark 20:293–306, 2000     

Pushing the DEA research envelope

This brief article first investigates key dimensions underlying the progress realized by data envelopment analysis (DEA) methodologies. The resulting perspective is then used to encourage reflection on future paths for the field. Borrowing from the social sciences literature, we distinguish between problematization and gap identification in suggesting strategies to push the DEA research envelope. Emerging evidence of a declining number of influential methodological (theory)-based publications, and a flattening diffusion of applications imply an unfolding maturity of the field. Such findings suggest that focusing on known limitations of DEA, and/or of its applications, while searching for synergistic partnerships with other methodologies, can create new and fertile grounds for research. Possible future directions might thus include ‘DEA in practice’, ‘opening the black-box of production,’ ‘rationalizing inefficiency,’ and ‘the productivity dilemma.’ What we are therefore proposing is a strengthening of the methodology's contribution to fields of endeavor both including, and beyond, those considered in the past.     

Developing foreign bank efficiency models for DEA grounded in finance theory

We develop foreign bank technical, cost and profit efficiency models for particular application with data envelopment analysis (DEA). Key motivations for the paper are (a) the often-observed practice of choosing inputs and outputs where the selection process is poorly explained and linkages to theory are unclear, and (b) foreign bank productivity analysis, which has been neglected in DEA banking literature. The main aim is to demonstrate a process grounded in finance and banking theories for developing bank efficiency models, which can bring comparability and direction to empirical productivity studies. We expect this paper to foster empirical bank productivity studies.     

Stability and integrity tests in data envelopment analysis

Studies that apply data envelopment analysis often neglect testing the stability of the efficient frontier to data perturbations, and, to a lesser extent, the ability of efficiency scores to correctly discriminate between units on performance (integrity). Our primary motivation is to demonstrate methods that can help reduce the number of managerial decisions based on results that may be unreliable. To this end, we illustrate multiple tests of stability and integrity in an environment of fully units-invariant efficiency measurement. This application of tests of stability and integrity using a slacks-based measure of efficiency is the first in a peer-reviewed journal.     

The Split of the S&P 500 Futures Contract: Effects on Liquidity and Market Dynamics

The Chicago Mercantile Exchange reduced the size of its S&P 500 futures contract when it reduced the multiplier from 500 to 250 and increased the minimum tick from 0.05 to 0.10 on November 3, 1997. This is a rare major change in a very successful contract's specifications. We analyze effects of this change on liquidity and market dynamics in both a univariate and a multivariate context. The main contribution of this study is the use of multiple intervention analysis with various dynamic response functions to examine the effects of the split while taking into account several other major market events surrounding it. A multivariate analysis is also used to test the impact of the split using a structural model of liquidity and market dynamics. Empirical findings offer limited support for the hypotheses that smaller contract size resulted in smoother trading, and that more public customers trade the S&P 500 futures contract following its split. We observe a reduction in the average transaction size as well as a temporary narrowing of the bid-ask spreads, but no significant change in volatility that can be attributed to the split. We do not find any significant and lasting impact on other liquidity and market variables.     

Can foreign banks compete in China?

Foreign banks in China have faced strict regulatory requirements that were not imposed on domestic banks and as such they have performed poorly in profitability rankings. Recent changes in the Chinese regulatory requirements prompt us to consider whether foreign banks are now on an equal footing with the Chinese domestic banks. Using Cobb–Douglas stochastic frontier analysis with total income as the dependent variable, we find no significant performance difference between foreign and domestic banks. However, robustness testing using the individual components of total income as dependent variables reveals that foreign banks need to improve efficiency of their income generation.     

Purging data before productivity analysis

Studies of productivity often ignore measurement error and fail to distinguish between exogenous and endogenous factors in adjusting for the environment. This failure may misguide managerial decisions on benchmarking, ranking, and remuneration. For example, common relative efficiency techniques such as data envelopment analysis (DEA) assume away the measurement error. This article combines DEA with stochastic frontier analysis in a synergistic multiple-stage analysis to purge the estimate of managerial performance of measurement error and exogenous factors. Removing the impact of measurement error indicates the largest rise in productivity. Removing the impact of exogenous factors raises discriminatory power. The method offers a number of innovations over other studies in the literature. The article is also the first to investigate the profit efficiency of the commercial banks in the United Arab Emirates.