Corporate foreign currency borrowing and investment: The case of Hungary

The paper investigates the impact of foreign currency lending on investment. Using Hungarian firm level data, we test whether foreign currency lending contributed to larger investment before the crisis and whether the depreciation during the Great Recession resulted in lower investment rate for firms with foreign currency loans. Results of OLS and matching estimations show that before the crisis FX lending increased investment rates and during the crisis the investment rate of firms with FX loans declined more because of the balance sheet effects triggered by the depreciation. These effects were found to be more pronounced for liquidity constrained firms.     

Estimation and hedging effectiveness of time‐varying hedge ratio: Flexible bivariate garch approaches

Bollerslev's ( 1990 , Review of Economics and Statistics, 52, 5–59) constant conditional correlation and Engle's (2002, Journal of Business & Economic Statistics, 20, 339–350) dynamic conditional correlation (DCC) bivariate generalized autoregressive conditional heteroskedasticity (BGARCH) models are usually used to estimate time‐varying hedge ratios. In this study, we extend the above model to more flexible ones to analyze the behavior of the optimal conditional hedge ratio based on two (BGARCH) models: (i) adopting more flexible bivariate density functions such as a bivariate skewed‐t density function; (ii) considering asymmetric individual conditional variance equations; and (iii) incorporating asymmetry in the conditional correlation equation for the DCC‐based model. Hedging performance in terms of variance reduction and also value at risk and expected shortfall of the hedged portfolio are also conducted. Using daily data of the spot and futures returns of corn and soybeans we find asymmetric and flexible density specifications help increase the goodness‐of‐fit of the estimated models, but do not guarantee higher hedging performance. We also find that there is an inverse relationship between the variance of hedge ratios and hedging effectiveness. © 2009 Wiley Periodicals, Inc. Jrl Fut Mark 30:71–99, 2010     

Evolution of an international joint venture: The case of a French‐Brazilian joint venture

Considering the situation of low performance of joint ventures, a certain number of studies have concluded that there is a close relationship between the initial conditions of creation of joint ventures and their success or failure. Nevertheless, other explanatory factors can be identified through dynamic analysis of the joint venture. For this purpose, on the basis of the case of the Franco‐Brazilian Algar‐Bull joint venture in the information technology sector, from its creation in 1983 to its dissolution in 1998, the aim of our research is to study the influence of external evolution processes ( partners' adaptive strategies and changes in environmental constraints) on the success or failure of a joint venture. © 2006 Wiley Periodicals, Inc.     

Cross-reward effects in a coalition loyalty program: The impact of a point currency devaluation

While single-brand reward programs encourage customers to remain loyal to that one brand, coalition programs encourage customers to be “promiscuous” by offering points redeemable across partner stores. Despite the benefits of this “open relationship” with customers, store managers face uncertainty as to how rewards offered by partners influence transactions at their own stores. We use a model of multi-store purchase incidence and spend to show how the value of points shared among partner stores can explain patterns in customer-level purchases across them. We also allow reward spillovers to be moderated by three measures of store affinity that characterize a coalition’s portfolio: the relative popularity, geographic distance, and overlap in product categories between each pair of stores.For the coalition studied, popularity affinity was the main determinant of the valence of cross-reward effects, both before and after the devaluation. In contrast, category and geographic affinity had a smaller and more heterogenous impact. Through the use of an event where the loyalty program uniformly devalued the entire coalition’s value of reward points, we show that cross-reward effects changed (lessened), leading to larger financial losses for the most popular stores. While we do not observe changes to the composition of the coalition’s portfolio, our results also suggest that the value of a shared reward currency may be driven by the inclusion of smaller partners.     

Customer co-creation projects and social media: The case of Barilla of Italy

This article investigates a social media-enabled, customer co-creation project that employs front-end innovation (FEI) at a well-known, large-scale food manufacturer. It sheds light on the role of social media technology in transforming the characteristics of FEI in terms of boundaries and knowledge distance. What type of exploratory or exploitative innovation ideas does a project of this sort enable? How did the project evolve? What lessons can be learned from this project? A longitudinal case study of Barilla was carried out through two rounds of interviews with marketing, business development and innovation, and digital communication managers. The evidence gathered highlights the emergent evolution of this customer co-creation project from an initial stage of idea exploitation to a more complex and fruitful stage in which both exploitation and exploration were simultaneously accomplished.     

An econometric test of the self-employment model: The case of Italy

In this paper the authors put forward their attempt to test a self-employment model using an Italian data set which collects information about 78 Italian provinces (out of 95) over the period of 1985–1988. The self-employment model is introduced as a useful way to explain the formation of new small firms and subsequently previous econometric studies based on this model are discussed and compared.Once the empirical definitions of the variables are clarified, the econometric specification is introduced in Section 4 and results are discussed in Section 5 and 6.The general outcome of the estimates backs to a certain extent the self-employment approach which has already been tested with good results both in the U.K. and in the U.S. As far as the income choice is concerned, it turns out to be important in explaining the birth of new small firms. With regard to the role of job-losses, they also turn out to be significantly correlated with the high rates of firm formation.On the other hand, the discussion reported in Section 5 underlines the importance of other environmental factors which were not included in the original specification of Section 4. In particular, if the numerosity of the existing small firms is taken into account, self-employment relationships lose some of their significance. p]The laborer asks what he thinks the entrepreneur will be able to pay, and in any case will not accept less than he can get from some other entrepreneur, or by turning entrepreneur himself. In the same way the entrepreneur offers to any laborer what he thinks he must in order to secure his services, and in any case not more than he thinks the laborer will actually be worth to him, keeping in mind what he can get by turning laborer himself.Knight, 1921, p. 273     

Expectations,network effects and timing of technology adoption: some empirical evidence from a sample of SMEs in Italy

We provide evidence on the influence of expectations and network effects on the timing of technological adoption. By considering a sample of SMEs operating in Italy, we focus on the determinants of their decision to adopt Fast Ethernet, a communication standard for Local Area Networks (LANs). We find that both expectations and network effects significantly affect the timing of adoption. In particular, price expectations generally tend to delay adoption and (indirect) network effects in the form of backward compatibility as well as informational spillovers tend to foster adoption. Firm size also matters.

On exports and economic growth: the case of Italy

The export-led growth hypothesis for the Italian economy (1960-98) is tested through a VAR model with four macroeconomic variables: an index of the GDP of the rest of the world; the Italian real exchange rate; Italian real exports; and the Italian real GDP. Our results provide clear empirical support for the hypothesis. They also suggest that the Kaldorian approach is very useful in analysing short-run as well as long-run growth and fluctuations of an open economy such as Italy.     

The joint impact of humor and argument strength in a print advertising context: A case for weaker arguments

Humor is used extensively in advertising, but with mixed results. Drawing on the heuristic systematic model of persuasion, the authors explore a contingency underlying the impact of humorous executions on ad and brand attitudes for a convenience good. Results of a laboratory experiment with print ads show that the presence (vs. absence) of incidental humor can interact with message characteristics such that humorous ads engender more positive attitudes when they employ weaker arguments, and less positive attitudes when they use stronger arguments. © 1999 John Wiley & Sons, Inc.     

Paths of evolution for the Chinese migrant entrepreneurship: a multiple case analysis in Italy

Chinese diaspora is one of the most important areas in the field of immigrant entrepreneurship and the Chinese case is, for absolute numbers, entrepreneurship rates and scientific attention, one of the most significant phenomena in the world and in Italy. While much of the literature on the topic focuses on ethnic networks and social ties, there is a lack of studies that acknowledge the role of business networks in the later growth of migrant entrepreneurship, when the importance of social ties within the ethnic community diminishes. This paper tries to answer the following research question: Which is the role of ethnic networks and business networks in the path of evolution of Chinese migrant entrepreneurship? Thus, the paper analyses the structure and characteristics of ethnic networks and business networks and the role of each in the growth and evolution of Chinese migrant entrepreneurship. Our research considers business networks as the main focus of analysis that may replace social ties in consolidating insidership in new business settings and in finding new opportunities. A qualitative methodology is adopted, namely a multiple case study. Five cases of individual Chinese companies settled in a specific area are presented, for which the networks in which they are involved are traced and analysed. The case analysis shows that in the evolution of Chinese migrant entrepreneurship, ethnic networks are very important in the early phases of the business, but the role of cross-cultural business networks becomes relevant for further development. Implications—managerial and for policy makers—are highlighted and discussed.     

Likeability as a measure of advertising effectiveness: the case of financial services

Television advertising for financial services accounts for over one-third of total financial services advertising expenditure, yet there is evidence to suggest it is not very well done. Given the difficulties advertisers have to overcome in terms of promoting an intangible product in accordance with tight restrictions on advertising content and format to a largely uninvolved audience, it becomes all the more imperative to study how viewers judge financial services commercials. This paper presents the findings of a study which seeks to establish which elements, if any, of a financial services commercial first make it likeable to its target audience, second motivate the viewer to seek more information about the service being advertised and, third, have an effect on the image the viewer has of the advertiser. Some interesting findings from the research point to the similarities between the emerging factors for viewers' affective reactions to fast-moving consumer goods (FMCG) and financial services commercials and the extent to which likeability mediates the influence which advertisement execution features have on subsequent behavioural intentions.     

Knowledge complementarity,knowledge absorption effectiveness,and new product performance: The exploration of international joint ventures in China

Firms use international joint ventures (IJVs) to access and learn from partners’ knowledge and thus enhance their new product performance, especially when the partners have complementary knowledge bases. Most of the existing literature assumes that knowledge complementarity can directly lead to enhanced new product performance, while ignoring the mediating role of knowledge absorption effectiveness and moderating effects of organizational structure and organizational culture to integrate and manage knowledge complementarity. Using dyadic data from 119 IJVs in China, this article suggests that knowledge complementarity influences IJV new product performance through the full mediation of knowledge absorption effectiveness. Also, the results suggest that an IJV's departmentalization of organizational structure significantly hurts the effect of knowledge complementarity on knowledge absorption effectiveness, while a strong learning culture of the IJV can significantly enhance such effects.     

Investment and control in international joint ventures: the case of China

In this study, we explore several factors affecting the amount of control that foreign companies have over their joint ventures in China. Managers working in sixty-seven international joint ventures were asked to report the share of equity held by the Chinese and foreign partners; the extent to which each partner had contributed important non-capital resources; the ratio of IJV board members appointed by each partner; the nationality of managers holding key executive positions in the IJVs; and the amount of strategic and operational control that each partner enjoyed. Results showed that equity share is the major lever for the exercise of strategic control and also influences operational control through its effects on the appointment of board members and appointments to key executive positions. Results also showed that providing non-capital resources has a direct effect on operational control in addition to its indirect effect through appointments to key executive positions.