Market efficiency across securities exchanges

Considerable empirical evidence has been presented in the literature of finance in recent years addressed to the question of the informational efficiency of the American capital market. The present paper adds to that evidence. In particular, securities traded off the NYSE—on the American Stock Exchange, on regional exchanges, and over the counter—are found to exhibit return characteristics that imply rather more frequent price departures from equilibrium than for their NYSE-listed counterparts. The data consist of the actual investment experiences of a large sample of individual investors with securities traded in the various locales.     

Capital cost and adjusted present value: Reconciliation and amplification

In recent years the adjusted present value method has been propounded for capital budgeting analysis. A comparison of the standard cost of capital approach to the adjusted present value method indicates that the two analyses produce exactly equivalent present value appraisals, as long as the enterprise contemplating the asset has a policy of keeping the degree of leverage constant. The conclusions reached are independent of the firm's target leverage position matching its present posture.     

The role of incubator organizations in the founding of growth-oriented firms

The role of incubator organizations, those organizations where entrepreneur work before starting their own firms, is examined. Using a sample of 161 new, growth-oriented firms, the relationships of the new companies to their incubator organizations are considered, as well as the characteristics of the incubator organizations. 5The findings have implications for prospective entrepreneurs. Entrepreneurs in most industry categories do not change geographic location and, in most technical industries, usually start businesses related to what they did before. An individual's decision to join a particular organization results in a particular geographic location and in knowledge about a particular industry. The would-be founder located in an unpromising geographic area and getting experience in an industry offering few opportunities for company start-ups is unlikely to be able to start a growth-oriented technical firm, regardless of personal motivation. However, the prospective founder of a nontechnical firm appears to be less tied to the experience gained in an incubator organization.There are also implications for regional economic development. Because technically oriented start-ups are tied closely to the business of their incubator organizations and because most entrepreneurs don't move when starting, the possibilities for high-technology start-ups may be very limited in many geographic regions. There have been no studies, to date, on why some founders move when starting. Programs to attract entrepreneurs at the time of start-up may have promise, but, at least to date, there is not much evidence of entrepreneurs being mobile at this stage of their careers.Local and regional programs to attract branch facilities of larger corportions have a long history. The emphasis is usually upon attracting facilities that will offer the maximum number of blue-collar jobs. In contrast to this traditional approach, it might be beneficial to shift the emphasis to those facilities most likely to function as incubators. The greatest benefits might come from laboratories or divisions that would “seed” a region with people learning about promising technologies or industries.The role of universities in this process appears to be less direct than is often assumed. Based upon our sample, it appears that software and biotechnology/medical firms often have spun-off from universities or hospitals. However, in other industry categories, it is business firms that have primarily served as incubators. There are currently many experiments underway to create university-affiliated innovation centers or incubator centers intended to help aspiring entrepreneurs. Whether these will enable universities to function more effectively as incubators, spinning off students and faculty who start growth-oriented firms, remains to be seen.     

Monetary policy and the daily behavior of interest rates

It is possible that previous research has failed to detect significant variation in the ex-ante real interest rate because the Federal Reserve follows a policy designed to stabilize the real rate. If the Fed is successful, there will be little month-to-month variation in the real rate. Nonetheless, research to date has relied on monthly or quarterly data. This paper presents the results of new tests that use daily data in an attempt to detect short-term variation in the ex-ante real rate. Though the tests reveal that the real rate is not constant, most of the detected variation is related to reserve settlement on Wednesday.     

Union steward locus of control,job, union involvement,and grievance behavior

Discretionary behaviors of union stewards are described. The use (or otherwise) of these behaviors may be a critical index of the number of grievances filed in an organization. Utilization of proactive grievance filing behaviors is systematically associated with steward job involvement, union involvement, and locus of control orientations. This hypothesis received empirical support in this research. Implications for organizational theorists and practitioners alike are discussed.     

Market similarity and market selection: Implications for international marketing strategy

International market selection patterns for a sample of 954 new products suggest that firms exhibit a significant preference for markets similar to the home market. Preferences for similar markets decline as firms gain experience in a variety of markets, however. This pattern suggests the importance of uncertainty and information in global market selection and marketing mix management. Alternative means of gathering information about foreign markets permit and support very different approaches to global marketing activity. More fundamentally, a global perspective on the relationship between market conditions, marketing policies and programs, and consumer response can be developed systematically to improve global marketing performance.     

Three conjoint segmentation approaches to the evaluation of advertising theme creation

Advertising professionals have been challenged for decades by the problem of choosing the most appropriate advertising theme or product claims. Although many studies have been conducted in the areas of message recall and viewer response rates, very little guidance has been provided in this elusive area. Some methodological insights are provided here describing three segmentation procedures, using conjoint analysis in advertising theme creation.     

Information processing analysis of a stochastic model of brand choice

A formal and detailed comparison between Morrison's brand loyal model and its information processing counterpart reveals serious internal inconsistencies and other shortcomings of this stochastic model.     

Perceived importance of selected product information sources in two time periods by United States and West German consumers

Perceived use of different types of information sources in the purchase of a major durable good is investigated in two countries (West Germany and the U.S.), two age groups (under 35, 35 and over), and two time periods (1970 and 1976). A logit model is constructed to allow probabilistic conclusions about the relationships among time, country, and age as explanatory variables and information source types as response variables. Product testing is found to increase in importance between time periods in both countries and to have the highest probability of use in combination with peer group as a source. Advertising has twice the probability of perceived use in the U.S. as in West Germany, and probability of use has not changed between years. Age is found not to be significant in perceived importance of sources.     

Inflation forecasts,the expected real rate and information efficiency

This paper examines the inflation forecast accuracy and rationality of a time series predictor, an expected inflation series constructed from surveys undertaken by the University of Michigan's Institute for Social Research, and the yield on U.S. Treasury bills. A quadratic loss function is assumed, and Theil's inequality ratios are used to decompose the mean squared foreast error (MSE). Although it is the only unbiased forecast, the time series predictor does not appear to be optimal during the recent period of turbulent inflation. As for bias in the other series, the surveys are inconsistent with weak-form rational expectations and the Treasury bill is reflecting variations in more than one factor. In an examination of the latter under the assumption of no liquidity premium, the results suggest that the forecast error is in part attribute to moderate variation in the expected real rate. Given the minimal cost of observing the Treasury bill yield, the findings of this study suggest that the market, although imperfect, has performed reasonably well in forecasting inflation.     

Importance,elicitation order,and expectancy × value

Considerable confusion surrounds the role of importance in multiattribute attitude models. The present study tests a theoretical proposition as to how attribute importance is manifested in the expectancy-value formulation. Though not unequivocal, the results suggest that order of elicitation may be more valid than structured ratings as an indicant of attribute importance.     

Comparisons of factor structures in separate consumer behavior studies

Three methods of comparing factor structures among separate factor analytic studies are examined. Examples are developed for each of the three methods, illustrating typical uses in different research settings. Major characteristics of the methods are compared and summarized. The article is essentially a non-technical and nonexhaustive overview of comparison methods directed to researchers not fully acquainted with the function and utility of these comparatively new techniques. The examples used are developed from a large-scale consumer study, but applications obviously extend to a much broader group of business research situations.