The structure of Islamic economics: A comparative perspective on markets,ethics and economics

A comparative examination of mainstream economic doctrines and their recent developments is undertaken with a view to find out how ethics has been treated in these. The principal focus here is to identify the new paradigm that can treat ethics endogenously in preference formation, the market and the economic order. The quest for this paradigm leads us to an examination of Islamic economics. Islamic economics is presented in terms of its epistemological roots. Thereby, a general systems view of interactions, integration and creative evolution among economic and social possibilities is shown to lead to the paradigm of Islamic political economy. Some Islamic financial and economic instruments are examined to bring out the pervasive causality of the principle of universal complementarity across diversity in a general systems perspective of Islamic political economy as premised on its epistemological roots.     

Digital distribution and the prohibition of resale markets for information goods

An existing theoretical literature finds that frictionless resale markets cannot reduce profits of monopolist producers of perfectly durable goods. This paper starts by presenting logical arguments suggesting this finding does not hold for goods consumers tire of with use, implying the impact of resale is an empirical question. The empirical impact is then estimated in the market for video games, one of many markets in which producers may soon legally prevent resale by distributing their products digitally as downloads or streamed rentals. Estimation proceeds in two steps. First, demand parameters are estimated using a dynamic discrete choice model in a market with allowed resale, using data on new sales and used trade-ins. Then, using these parameter estimates, prices, profits, and consumer welfare are simulated under counterfactual environments. When resale is allowed, firms are unable to prevent their goods from selling for low prices in later periods. The ability to do so by restricting resale outright yields significant profit increases. Renting, however, does not raise profits as much due to a revenue extraction problem.     

Performance of professional service firms from emerging markets: Role of innovative services and firm capabilities

Professional service firms (PSF) from emerging markets face a financial dilemma: PSFs tend to utilize high-wage labor, yet their emerging market status makes foreign clients cautious regarding quality and less willing to pay high prices. To allay these concerns, PSFs may be able to develop attractive, highly innovative services, but as the resource-based view (RBV) notes, this requires emerging market firms to possess critical capabilities to support such a competitive advantage. Relying on services theory, we propose that entrepreneurial orientation (EO) of management and expert human capital (HC) are critical capabilities, enabling a PSF to develop and market innovative services profitably. In testing our model on 201 Indian PSFs, we find a mediating role for innovativeness whereby EO and HC drive service innovation which, in turn, accounts for financial performance. Further, we find EO positively moderates the innovative service–performance relationship as proactive, risk-tolerant managers improve foreign marketing. Insights for theory and practice are provided that enable PSFs to overcome the constraints and challenges of their emerging market origin.     

The impact of information sharing and bullwhip effects on improving consumer services in dual-channel retailing

Data sharing among the supply chain players can be an exceptionally significant factor for the retailing industry. In this consideration, an improved retailing methodology for a dual-channel supply chain with a single retailer and manufacturer is built under the bullwhip effect and asymmetric data sharing. Retailer provides asymmetric information to the manufacturer regarding demand to increase their profit. In this scenario, measuring the bullwhip effect is essential in retailing strategy. By adopting an online-to-offline retailing strategy, industries can earn more profit and increase the satisfaction level of customers. The present study focuses on dual-channel retailing, where the demand for the product in both channels varies with the selling price. Keeping in mind the goal of sustainable development, an advanced transportation strategy is utilized in this study, along with some carbon emission costs. Autonomated inspection is utilized to identify defective products. Finally, centralized and decentralized profit functions are formulated for this study. Several cases and numerical examples are provided to validate this study. It is clear from the numerical findings that information sharing within the players provides 1.26% more profit compared to a decentralized case. Due to asymmetric information, which leads to the bullwhip effect, the retailing system faces loss. Thus, information sharing is 0.19% beneficial for dual-channel retailing. Sensitivity analysis for key parameters ensures the findings' applicability in the real world.     

Professional services in emerging asian markets: The Indonesian case

In 1946, at the age of 25, the author founded a oneman accounting firm in Manila, serving small companies that were opening their doors in the wake of World War II. Having achieved a leadership position in the Philippines by the early 1960s, the author's growing firm, SGV, expanded its operations in East Asia by establishing joint ventures with other leading Asian professional services firms. The SGV Group, the resulting multinational organization, provided professional services for various projects and enterprises in the developing countries of Asia, Africa, and the Middle East. After becoming the largest professional firm in Asia, in 1985 the SGV Group joined Arthur Andersen & Co. Societé Cooperative, the worldwide leader in business information and computer technology. The partners of the SGV Group were aware that world class computer technology had to come from the developed countries, while Arthur Andersen could see the advantages of a relationship with the largest Asian professional services group. In this article, the author offers the perspective of a firm based in a developing country expanding into one of the most important emerging markets, Indonesia.     

The tension of information sharing: Effects on subsidiary embeddedness

This paper investigates the relationship between foreign subsidiary competition and embeddedness in a peripheral area of an advanced country. The study argues that pressure to innovate and unintended private knowledge spillovers compete in explaining the relationship between competition and embeddedness as a result of the tension of information sharing. Such a tension can be relaxed when accounting for subsidiaries’ competence-creating entry motives. Statistical analysis supports this argument. This study contributes to the broad IB field as well as to business network theory and to research on the creation of local linkages by MNEs. Implications for managers and policy-makers are also discussed.     

Consumer durables,economics of information and public policy

The economic concept of the value of the last dollar spent is used to analyse market failure associated with the energy requirements of appliances. A model is developed which focuses on the information problem concerning the energy used to derive service flows from durables. Economic perspectives based upon the model are offered as to (1) why the private sector did not correct the problem, (2) why events in the 1970s prompted public intervention, and (3) how Energy Guide labels enhance the exchange process. But can consumers use the information contained on Energy Guide labels? The results of a study of high school students in the United States suggest that many consumers with problem solving skills comparable to these students would be unable to use the labels effectively. The study also indicated that effective education materials have been developed to help consumers use the labels.     

The impact of advertising on consumer price sensitivity in experience goods markets

In this paper we use Nielsen scanner panel data on four categories of consumer goods to examine how TV advertising and other marketing activities affect the demand curve facing a brand. Advertising can affect consumer demand in many different ways. Becker and Murphy (Quarterly Journal of Economics 108:941–964, 1993) have argued that the “presumptive case” should be that advertising works by raising marginal consumers’ willingness to pay for a brand. This has the effect of flattening the demand curve, thus increasing the equilibrium price elasticity of demand and the lowering the equilibrium price. Thus, “advertising is profitable not because it lowers the elasticity of demand for the advertised good, but because it raises the level of demand.” Our empirical results support this conjecture on how advertising shifts the demand curve for 17 of the 18 brands we examine. There have been many prior studies of how advertising affects two equilibrium quantities: the price elasticity of demand and/or the price level. Our work is differentiated from previous work primarily by our focus on how advertising shifts demand curves as a whole. As Becker and Murphy pointed out, a focus on equilibrium prices or elasticities alone can be quite misleading. Indeed, in many instances, the observation that advertising causes prices to fall and/or demand elasticities to increase, has misled authors into concluding that consumer “price sensitivity” must have increased, meaning the number of consumers’ willing to pay any particular price for a brand was reduced—perhaps because advertising makes consumers more aware of substitutes. But, in fact, a decrease in the equilibrium price is perfectly consistent with a scenario where advertising actually raises each individual consumer’s willingness to pay for a brand. Thus, we argue that to understand how advertising affects consumer price sensitivity one needs to estimate how it shifts the whole distribution of willingness to pay in the population. This means estimating how it shifts the shape of the demand curve as a whole, which in turn means estimating a complete demand system for all brands in a category—as we do here. We estimate demand systems for toothpaste, toothbrushes, detergent and ketchup. Across these categories, we find one important exception to conjecture that advertising should primarily increase the willingness to pay of marginal consumers. The exception is the case of Heinz ketchup. Heinz advertising has a greater positive effect on the WTP of infra-marginal consumers. This is not surprising, because Heinz advertising focuses on differentiating the brand on the “thickness” dimension. This is a horizontal dimension that may be highly valued by some consumers and not others. The consumers who most value this dimension have the highest WTP for Heinz, and, by focusing on this dimension; Heinz advertising raises the WTP of these infra-marginal consumers further. In such a case, advertising is profitable because it reduces the market share loss that the brand would suffer from any given price increase. In contrast, in the other categories we examine, advertising tends to focus more on vertical attributes.

Beyond formal retailing and consumer services: an examination of how households acquire goods and services

The aim of this paper is to show that the acquisition of goods and services through formal firms is less widespread than might be expected. Drawing upon empirical evidence from a deprived neighbourhood, this paper finds that a large proportion of goods and services are informally acquired. In the realm of goods acquisition, informalisation is normally a result of economic necessity and is the first option but second choice of households. In the sphere of consumer services, however, informal modes of provision are often preferred by households and actively chosen over formal consumer services. The implications of these findings for how households acquire goods and services in the wider society are then considered so as to start to open up a debate on the consequences of informality in retailing and consumer services.     

The effect of border barriers to services trade on goods trade

This paper has two objectives (a) to introduce border policy-induced barriers (PIBs) to services trade and (b) analyse the impact of border PIBs in services sectors on goods trade. The World Input-Output Database covering 43 countries is used over the period 2000–14. A three-stage analysis is employed. The measures of bilateral services trade barriers calculated in each services sector in the first stage are decomposed into its cultural/geographic and policy-induced parts in the second stage. Border PIBs to services trade are used in the structural gravity estimations of bilateral goods trade in the final stage. The results demonstrate significant and robust adverse effects of barriers to services trade on goods trade. When the level of development is taken into consideration, there are marked differences in the impact of these barriers on goods trade.     

The economics of the super‐multiplier: A comprehensive treatment with labor markets

This paper links the super‐multiplier to Keynesian macroeconomics, showing it to be the most Keynesian of growth perspectives. Next, the paper shows that the super‐multiplier is a micro‐economically coherent theory of investment and capital accumulation. Firms’ decisions regarding capital accumulation coordinate demand and supply growth in goods markets. The paper then explores the implications of incorporating the super‐multiplier in the neo‐Kaleckian and Cambridge growth models. Lastly, it shows how labor markets and unemployment can be added into super‐multiplier models to provide a comprehensive growth model that addresses Solow's (1956, Journal of Economics, 70, 65–94) labor market knife‐edge problem. Incorporating labor markets does not change the fundamental super‐multiplier result that growth is determined by the growth of autonomous demand.     

Volatility,global information,and market conditions: a study in futures markets

This study examined the behavior of return volatility in relation to the timing of information flow under different market conditions influenced by trading volume and market depth. We emphasized information flow during trading and nontrading periods that may represent domestic and offshore information in the global trading of currencies. Test results show that volatility was negatively related to market depth; that is, deeper markets had relatively less return volatility. Additionally, the effect that market depth had on volatility was superseded by information within trading volume. Test results focusing on the timing of information flow reveal that in low‐volume markets, the volatility of nontrading‐period returns exceeded the volatility of trading‐period returns. However, when trading volume was high, this pattern was reversed and conformed to the observations of earlier articles. Our findings proved to be robust across time, different currency markets, and different measures of return volatility. We also observed a trend toward greater integration between foreign and U.S. financial markets; the U.S. market increasingly emphasized information from nontrading periods to supplement information arriving during trading periods. © 2001 John Wiley & Sons, Inc. Jrl Fut Mark 21:173–196, 2001     

Blurring B2C and B2B boundaries: corporate brand value co-creation in B2B2C markets

ABSTRACT

This paper aims to explore how corporate brands co-create value with their multiple stakeholders in a B2B2C marketplace. Main data sources stem from in-depth interviews with top managers of a technology corporation in the financial sector. Findings depict a model that conceptualises the successful value co-creation process as the careful management of six specific drivers, namely: interdependency, direct approach, trust, strategic alignment, adaptive modus operandi, and knowledge sharing. Hence, the study offers new food for thought for scholars and practitioners who wish to improve their knowledge and understanding on brand value co-creation and corporate marketing.     

The existence and persistence of the pay-per-use bias in car sharing services

A key benefit of using car sharing services (relative to car ownership) is that they are more cost effective. Car sharing firms offer a menu of pricing plans to make this happen. The two most common plans are flat-rate and pay-per-use pricing. However, little is known about how consumers choose among these pricing plans. In this study, we analyze consumers' choices between pay-per-use and flat-rate pricing using data from a car sharing provider in a large European city. In contrast to previous research, we find a prevalent and time-persistent pay-per-use bias. Specifically, depending on the definition of the bias, 21% to 32% of customers exhibit this bias. This bias also persists over time within customer. We propose three potential explanations for the existence and persistence of this bias. First, we suggest that customers underestimate their usage. Second, we propose that customers have a preference for flexibility, leading them to pay more. Finally, we show that the physical context, such as weather, increases the likelihood of a pay-per-use bias. Our findings suggest that more research into consumer response to pricing in the Sharing Economy is needed.     

A unifying view of goods and services supply chain management

Ambiguities in the constructs that are the building blocks of research may have hindered advancement of service operations knowledge/research. To alleviate this situation, the authors identify similarities and differences between goods and services to inform a view of constructs (e.g. inventory, capacity, and Bullwhip effect) that are equivalent and are of relevance to both sectors. A unifying paradigm that allows transference of ideas across the two broad sectors is proposed and illustrated with case studies.     

Customer satisfaction,corporate image,and service quality in professional services

This study explores the impact of corporate image and service quality on customer satisfaction in the professional service industries. Data were collected on audit firms, sending a questionnaire to financial executives of leading Italian companies. The results show that the most important variable explaining customer satisfaction was the apparent effectiveness of the audit firm. In relation to service quality, managers' satisfaction was primarily driven by their perception of audit firm's work as a useful value-adding service. The length of audit firm–auditee relation, the location of the auditor's office, and the financial executive's personal characteristics were also significant drivers of customer satisfaction.