Measuring advertising intensity and intangible capital in the Greek food industry

The objective of the present paper is to examine market conduct and its determinants in the Greek food industry and to measure how and to what degree the industry and the firm's structural characteristics affect advertising intensity. An advertising intensity model giving emphasis to intangible capital is formulated. Data from ICAP have been used on a four-digit classification for the food industry during the 1990–1997 period. The empirical results indicate that intangible capital positively affects the advertising intensity of the firm and plays an important role in strategies that affect total cost, demand and structure of the market.     

The persistence of profits in the Greek manufacturing industry, 1963–88

The objective of this article is to evaluate empirically the profit rate persistence in the case of the Greek manufacturing industry (1963–88). More specifically, we address ourselves to two questions: first, do industrial profit rates eventually converge on a common rate? and secondly, what are the factors that affect the speed of adjustment of industrial profit rates? Our results suggest: a high persistence of profit rates for most industrial sectors; a generally high permanent component of the profit rates with substantial variations among sectors; and a similarity with other studies of industrialized countries with regards to the factors (concentration ratio, advertising intensity, export intensity, capital intensity etc.) affecting the speed of adjustment.     

Monetary policy and inventory investment in Greek manufacturing industry

The paper reports an attempt to estimate the role of Greek monetary policy in inventory investment in manufacturing. Interest and inflation rate expectations exercise a significant influence. Expected fluctations in the exchange rate, for the first time examined, are of major importance especially for stocks of raw materials which are mostly imported. Being strongly affected by monetary variables, inventory investment can play a major role as a transmission channel of monetary policy changes to the Greek economy.     

The disaggregated demand for labour in Greek industry

This paper employs the Granger test to examine the causal relationship between growth in the money supply and inflation for the US over the period 1959 to 1986. Alternative procedures, including both statistical search and non–statistical ad hoc methods, are utilized to determine the order of the bivariate distributed lag models used in implementing the test. In general, the results show feedback between movements in the money supply and price level changes. Unlike the results of Thornton and Batten (1985), one of the ad hoc methods for lag–length determination is found to perform somewhat better than the statistical search methods in correctly assessing the causal relationships involving money growth and inflation.     

Measuring the degree of market power in the Greek manufacturing industry

This paper investigates the competitive conditions in the Greek manufacturing industry, estimates the net and the total welfare losses due to the possible existence of market power and investigates factors affecting the market power at sectoral level and over time. The bootstrap method is applied to assign measures of accuracy to the statistical estimates. The empirical results imply the presence of imperfect competition in the Greek manufacturing industry and the existence of welfare losses. Furthermore, the findings indicate that labor intensity, the sector size and the openness influence the market power at the sectoral level and labor intensity, while the number of firms and the openness affect the market power over time.     

A model of advertising with application to the German automobile industry

This paper develops a dynamic duopolistic model of advertising and price competition. Advertising accumulates a stock of goodwill which enters directly into the demand functions and both the cooperative and predatory effects of advertising are considered. It is shown that firms invest more in advertising the higher the degree of cooperativeness of advertising and some comparative static results are provided. In the second, empirical part of the article, estimations of the demand equations are presented using data from the German automobile industry. The main conclusion drawn is that advertising plays an important role in this market and has a predatory nature.     

Financial structure and the effectiveness of pollution control in an oligopolistic industry

This paper explores the link between pollution taxes and the financial and output decisions of firms in an oligopolistic industry facing demand uncertainty. It is shown that environmental regulations such as pollution taxes may induce firms to alter their financial structure, which in turn influences both output levels and the effectiveness of the tax in controlling pollution emissions. It is demonstrated that there exist circumstances in which highly leveraged firms may respond to pollution taxes by expanding output and emission levels. This possibility arises in a leveraged oligopoly since the tax acts as a credible commitment device which leads to more aggressive competition in output markets.     

Observation assistants: sitter effectiveness and industry measures

Patient safety remains a strategic goal and of societal importance for better health care. Direct observation remains an ineffective and expensive means of providing for patient safety. The nursing quality team found that using assessment tools helped to objectively categorize which patients are at risk. Defining patient volume, actual productive sitter usage, and assessing demand for patients in psychiatric crisis and patients at high risk to fall in the form of average daily census provided an easy-to-translate, familiar unit of measure to compare patient volume to demand and utilization. The sitter utilization case was unable to provide correlation of sitter use to decreased fall rates, elopement, or assault behaviors. Currently, there is no research to suggest the use of constant observation reduces the risk of patient harm related to their risk for falling or harming themselves.     

Entry and exit from Greek manufacturing industry: a test of the symmetry hypothesis

The paper examines the role of trade patterns in the entry and exit decisions of firms and tests the existence of symmetry between entry and exit factors. Trade patterns were found, through their entry and exit impact, to affect the structure of Greek industry rather unfavourably. Prospects seem to be bleaker within the integrated European market of the 1990s. The lack of symmetry leads to increasing concentration. The gloomy outlook is improved by the strong stand of existing, competitive firms.     

Measuring the effects of advertising on green industry sales: a generalized propensity score approach

This article estimates the effects of advertising expenditures on annual gross sales of green industry firms using a quasi-experimental framework. In order to account for potential selection bias, a generalized propensity score and a dose-response function are used to estimate advertising treatment effects. The method used allows us to investigate the relationship between the dose (advertising expenditures) and the response (firm sales). We use data from the National Green Industry Surveys of 2009 and 2014 to conduct the analysis. To further investigate potential heterogeneous advertising effects of the size of the firms, we separate the sample into small firms and large firms, according to their annual gross sales. The results indicate that the magnitude and shape of the response function depend on the size of the firm. For small firms, increasing advertising spending yields to higher sales within a range of advertising spending. Beyond this range, advertising spending increases do not impact sales any more. Thus, small firms’ management should carefully monitor advertising input. For large firms, on the other hand, the current evidence does not support a positive relationship between advertising spending and sales since the marginal treatment effect is insignificant almost over the entire range of adverting spending.     

R&D contribution in TFP growth of Greek industry: A limited information likelihood approach

We provide a novel panel model to decompose total factor productivity (TFP) growth in the Greek industry at the firm level while we tackle the contribution of R&D. We, therefore, opt for parametric methodology that provides statistical inference and would validate the results. Our modeling departs from prior strong assumptions such as error terms across firms being independent. In fact, we provide a novel limited information maximum likelihood (LIML) estimation method that adequately deals with the issue of endogeneity and model misspecification. We demonstrate that our model detects variability in terms of TFP growth components across industries and firms. Our results show that R&D would enhance TFP of Greek firms, albeit the crisis has had a detrimental impact. Financial ratios such as liquidity and solvency ratios also affect TFP as we demonstrate that both would enhance TFP. The solvency ratio is important as it provides an estimate of whether the firm can cope with debt. We also note variability across small versus medium and large firms and report that small firms are more productive and spend more of their revenues on R&D. In terms of policy, our evidence warrants higher R&D spending to enhance TFP growth, though R&D funding is a concern.     

Coase on broadcasting, advertising and policy

The initial argument developed in this paper is that a wants-basedconception of the objectives of policy, clearly operative inhis broadcasting studies, together with the acceptance of certainassumed properties of the competitive process, tightly constrainCoase's work. At times, for example, when considering the impactof advertising, Coase accepts that the assessment of policymust be carried out on a broader basis. Coase does not, however,go on to develop a criterion beyond wants. Elsewhere, he highlightsthe importance of the distinction between wants and needs. Thispaper further argues that, by elaborating upon this distinction,it becomes possible to give an indication of how a broader frameworkfor the assessment of policy might be developed.     

Capital structure,asset utilization,profitability and growth in the Greek manufacturing sector

Greece's accession to the European Union (EU) has affected its economy and its manufacturing sector. Large-size enterprises (LSEs) form a small but vital part of Greek manufacturing and constitute a major component of the country's stock market. According to finance theory, the capital structure of a firm affects its capital cost and market value. This paper, by using dynamic panel data techniques, investigates the determinants of capital structure of LSEs in the Greek manufacturing sector. The findings suggest that asset utilization, gross and net profitability and total assets growth have a significant effect on the capital structure of LSEs. This has straightforward policy implications. Following recent economic developments, Greek firms are exposed to a stronger competition in the EU and global markets, but also to new opportunities. In order to improve their capital structure, Greek manufacturing LSEs need to achieve higher asset utilization and profit margins through economies of scale attained mainly by higher exports. Moreover, governmental measures aiming to support LSEs' efforts should focus their impact on alleviating taxation, reducing bureaucratic burdens, minimizing market imperfections and subsidizing applications of new technology.     

Unproductive labour,capital accumulation and profitability crisis in the Greek economy

The focus of this paper is on the evolution of the major macroeconomic variables of classical political economy and the contrast with their orthodox counterparts in the quest to identify the causes of the current crisis in the Greek economy. Our analysis shows that declining profitability past a certain point leads to a stagnant mass of real net profits that discourage investment and increase unemployment. More specifically, for the period 1970–2007 for which we have detailed data, we identify the so-called silent depression of the 1970s and early 1980s, the new golden age of accumulation during which the capitalization of the production process led to a rapidly growing productivity and with stagnant or slowly rising real wages increased the rate of surplus value to new heights. As a consequence, the rate of profit from the mid-1980s onwards displayed a mildly rising trend and remained at a much lower level than that of the early 1970s. The rate of profit starts to fall after 2007, the year of the onset of the (world) economic crisis, and this continues up to 2014. Our econometric analysis based on an ARDL model further shows that the incremental rate of return, a variable derived from, and therefore strictly related to the average rate of profit, constitutes a by far more concrete measure of profitability and, in combination with the real interest rate, shapes the process of capital accumulation.     

Product quality,advertising intensity and market size

We develop a model of product differentiation in which firms strategically compete in product quality and advertising intensity. Products exhibit a combination of vertical and horizontal differentiation. A consumer’s utility has a stochastic relationship with quality, but they are more likely to prefer a higher quality good. Consumers face a trade-off between higher quality goods and price. Increased competition leads to less advertising, but may result in higher or lower quality products offered in the market.     

Employment,output and political business cycle effects in the Greek non-tradable sector

Starting from a theoretical model with traded and non-traded goods, a long-run labour demand equation is identifed, with employment being proportional to relative output and prices. Using Greek data, the model supports weak exogeneity of relative prices and fiscal expansion with respect to the long-run parameters in the cointegrating space. It also highlights structural rigidities in the functioning of the Greek labour market. Political business cycle and partisan effects are shown to affect the short-run employment decisions.     

Perfect versus imperfect direct advertising,and market performance

We present a model of economic growth driven by horizontal innovation in which, unlike the existing literature, the final output sector employs a non-specified, non-CES, additive production function. Our motivation in conducting such analysis is based on the recognition that the use of a CES aggregate production function in the final output sector leads to the unrealistic conclusion that the gross markup of price over marginal costs set in the monopolistically-competitive intermediate sector is constant. We derive necessary and sufficient conditions for an equilibrium with perfect competition in the final output market to exist even in the presence of a non-CES technology. These conditions generalize the usual properties of the CES case. We also analyze the long-run relation between economic growth and variable markups.     

Profitability and accumulation in Greek manufacturing

This paper examines long-term trends in profitability and capital accumulation for the Greek manufacturing industry from 1955 to 1989, using the growth accounting framework introduced by Weisskopf (1979) and further developed by Glyn et al. (1990). The results show that the overall 7% annual decline in profit rate in Greek manufacturing is attributed primarily to falling profit share and secondarily to falling productivity of capital. The effect of capacity utilization was negligible. The analysis is carried out for different subperiods and the relative importance of each of the constituent components of profitability is evaluated.