Are Unbundled and Self‐supplied Telecommunications Switching Substitutes? An Empirical Study

The Telecommunications Act of 1996 requires incumbent monopoly phone companies to lease elements of their networks to rivals. An important policy question is whether these unbundled elements are substitutes for entry modes that are more facilities‐based. In this article, we estimate demand curves for unbundled elements with the goal of assessing cross‐price effects between two of the more popular entry modes that differ in the mix of unbundled and self‐supplied inputs. As expected, we find downward sloping demand curves for unbundled elements. We also find own‐price elasticities in the elastic region of demand. What we do not find is evidence of substitution; we are able to reject the hypothesis of effective substitution between the two entry modes.     

Open interest,cross listing,and information shocks

This study examines the characteristics and behavior of the demand for hedging, proxied by open interest, for the cross‐listed Euribor futures contract traded at Euronext‐LIFFE and Eurex. The study is unique in its investigation of the simultaneous determinants of open interest in a cross‐listed setting. It also assesses the impact of shocks on traders' demand for hedging and shows how the 9/11 terrorist attacks and the credit crunch influence the level of dependency between Euronext‐LIFFE and Eurex. Differences of opinion, ECB Governing Council meetings, days of the week, contract maturity, illiquidity, and volatility are investigated as potential determinants of open interest. © 2010 Wiley Periodicals, Inc. Jrl Fut Mark 31:755–778, 2011     

External shocks and efficiency changes in the US airline industry

The US airline industry has experienced severe turbulence during the recent decade. The September 11 terrorist attack (9/11) was the greatest shock at the beginning of the 2000s. Recently, the dramatic increase in fuel costs emerged as another shock to the industry. To understand the effects of these two major events, this study investigated the cross-sectional efficiency of the US airline industry and its changes using the data envelopment analysis technique. The primary findings suggest that 9/11 affected the network carriers (NCs) more severely than the low-cost carriers (LCCs), while fuel costs more seriously influenced the LCCs than the NCs.     

Global economy in the doldrums

The USA and Japan have been in recession since last spring, and the events of September 11 have further intensified the global downturn. How quickly can the USA s keenly expansive economic policy succeed in overcoming the paralysing effects of the terrorist attacks? Is the euro area sliding into recession or will we soon see a return to economic expansion here?     

Impact of terrorist attacks on stock market volatility in emerging markets

We use an event study methodology alongside an improved bootstrapping test to evaluate the impact of terrorist attacks on the volatility of stock markets in 12 MENA countries, and test for regional financial integration. Results show that the impact of terrorist attacks on financial markets' volatility lasts about 20 trading days, which is considered to be long compared to the term effect of similar events in developed markets. Moreover, we find evidence of regional financial integration. Our robustness check shows that the bootstrapping approach is more robust, and that theoretical p-values might be misleading if underlying assumptions are violated.     

Options on federal funds futures and interest rate volatility

This study examines the response of the spot and futures interest rates on the fed funds, Eurodollar, and Libor to the listing of CME fed funds options. With the exception of the Libor futures, the introduction of options is associated with a decrease in the conditional volatility of the interest rates in the sample. There is also evidence that the volume of options trading has a negative effect on the fed funds and the Eurodollar spot rates. In contrast, the fed funds and the Eurodollar futures rates respond positively to the volume of options trading. Overall, strong generalization of the effects of options listing and options trading across the markets is not possible. These results remain robust even after controlling for several exogenous variables including changes in the Fed's target for the fed funds rate, the TED spread, the 9/11 terrorist attacks, and day‐of‐the‐week effects.     

The effects of business- and non-business-targeting terrorism on FDI to the MENA region: The moderating role of political regime

This study investigates the effects of terrorist attacks on foreign investment by stressing the importance of both business- and non-business-targeting terrorism in the host country. Building on North’s strand of institutional theory, we argue that both forms of terrorism represent exogenous risks likely to generate high levels of non-ergodic uncertainty for MNEs and subsequently deter foreign investors. Further, we hypothesize that these effects may be moderated by host-country political regime type, which serves as a gauge for a favorable investment environment for MNEs operating in institutionally fragile markets. Using panel data on fifteen MENA countries over the period 2001–2018, we find empirical support for our hypotheses whereby hybrid political regimes, namely anocracies, strengthen the negative effects of both business- and non-business-targeting terrorism on FDI. Our work contributes to the research on FDI and exogenous risks by offering a more fine-grained conceptualization of terrorism, as well as by highlighting the moderating role of host-country hybrid regimes.     

Firm Growth and Failure in Increasingly Competitive Markets Theory and Application to Hospital Markets

Recent models of firm failure and growth have ignored demand factors. In this paper, we generalize these theoretical analyses to include demand factors in explaining failure and growth for heterogeneous firms in local markets facing imperfect but increasing competition. The model is then applied empirically to the hospital industry in California over the 1980s, during which time competition did intensify. We model the closure decision based on expectations of future growth, explicitly accounting for self selection and simultaneity. We find that both size and demand factors are important determinants of survival and growth     

Impact of national traumatic events on consumer purchasing

The purpose of this research is to evaluate differences in consumer perception before and after national traumatic events such as the terrorist attacks that took place on 11 September 2001. The authors found a significant difference in consumer ethnocentrism, patriotism, time management, attitude towards regulation of business and product quality following the terrorist attacks. These differences impact consumer purchase decision processes and become important to businesses that are targeting these consumers with their product offerings. In addition, marketing managers' understanding of change in consumer perceptions and attitude should impact how consumer products are marketed.     

Reflections on the Evolving Terrorist Threat to Luxury Hotels: A Case Study on Marriott International

The advent of global terrorist networks represents a challenge to international business (IB) theory. Traditionally conceptualized as a type of political risk experienced by multinational enterprises (MNEs) operating in conflictive areas, terrorism has evolved in recent years. The global terrorist networks that dominate the international scene today have different motivations, strategies, tactics, and organizational structures than their secular and ethnic‐separatist predecessors and these differences matter for IB theory and practice. Moreover, these groups have shown themselves adaptive, resilient, and capable of striking targets of strategic and symbolic importance in global business and financial centers. This paper examines the changing nature of the terrorist threat to MNEs and the implications for a sector that has been a target of recent attacks: the luxury hotel industry. Structured as a case study of Marriott International, a leading global hospitality provider, the paper analyzes ways the firm is adapting to the evolving threat and the measures it has introduced to safeguard guests, staff, property, and brand. Implications for IB theory and practice are drawn. © 2012 Wiley Periodicals, Inc.     

TO CHANGE OR NOT TO CHANGE: HOW MOTOR CARRIERS RESPONDED FOLLOWING 9/11

What happens when firms are confronted by a strategic surprise—defined as “sudden, urgent, unfamiliar change” (Ansoff 1975, p. 22)—such as the terrorist attacks that occurred on September 11, 2001? Numerous studies have examined how strategic change, in the aftermath of a significant environmental event, contributes to organizational survival and success. But, is strategic change the appropriate response to unexpected and disruptive environmental change? And is there a preferred trajectory for change, such that certain strategies are better suited than others to the post‐surprise environment? This exploratory research examines whether or not strategic change is an appropriate response to strategic surprise affecting the firms in the trucking industry by considering the actions of motor carriers in the aftermath of 9/11. The data evidences significant disruption to the trucking industry following the event: among the sample, mean operating ratios declined by more than 50%. While nearly 40% of the carriers studied changed strategies in the post‐9/11 environment, this did not guarantee better performance. All carriers fared worse following the attacks, but those carriers that changed strategies actually performed significantly worse than those that persisted with pre‐9/11 strategies.     

The Use of the Logit Model in Applied Industrial Organization

Qualitative choice models, such as the logit model, can capture important firm and product asymmetries. This paper surveys use of the logit model in industrial organization, with special focus on its application to merger analysis. The basic model and its motivation are reviewed, as is its estimation. Discussed in some detail is the use of the logit model to predict the price and welfare effects of horizontal mergers in differentiated products industries. Simulation using a qualitative choice model is argued to be far superior to traditional structural analysis. Logit merger simulations have the particular virtues of low informational and computational burdens and the use of the logit model can be motivated as reflecting a diffuse prior on the structure of demand.     

Public–Private Partnerships and Supply Chain Security: C‐TPAT as an Indicator of Relational Security

Following the attacks of September 11th, public and private entities recognized a need to protect the global supply chain from terrorist disruption. In response to this need, the U.S. Government partnered with industry to create the Customs‐Trade Partnership Against Terrorism (C‐TPAT) program. This research investigates the public–private partnership (PPP) relational aspects of C‐TPAT. C‐TPAT encourages firms to voluntarily improve their security competence and that of their supply chain partners. We introduce the concept of relational security in the context of PPPs. We define relational security as all activities that establish, cultivate, and maintain successful security exchanges between parties. We establish C‐TPAT as one indicator of relational security by demonstrating its ability to establish, cultivate, and maintain successful security exchanges between parties. Results indicate certified firms outperform noncertified firms in security performance, firm performance, and resilience.     

An empirical assessment of the welfare effects of reciprocal dumping

Can two-way trade in similar products lead to lower welfare than if such trade was banned? Theory answers yes. To empirically investigate this proposition we examine Swedish imports of bottled water. Assuming one-shot (Bertrand and Cournot) competition, we can use the estimates from a structural model of demand to uncover marginal costs. We simulate the effect on consumer and producer surplus of banning imports. We do not find convincing evidence that banning imports would increase overall welfare. Given our choice of market this suggests we should not be overly concerned with the welfare effects of two-way trade in consumer goods that are close to homogenous.     

Airline website loyalty formation and the moderating effects of gender and education

The objective of this study is to analyse the moderating effects of gender and education on users’ loyalty to the website of an airline. We provide a tested model for greater understanding the effects of gender and education on the loyalty of experienced users in utilitarian purchasers of airline’s website. The results reveal that website quality, e-satisfaction, e-trust and affective e-loyalty are antecedents of conative e-loyalty in loyalty relationships between passengers and airline websites, as well as the importance of university education in the configuration of loyalty to the website. Consumers with university education are found to be more likely to purchase through the websites of airline companies than those without. Also, according to the most recent literature, the moderating effect of gender has been found non-significant in most of the causal relationships presented in the model studied.     

Digital hostages: Leveraging ransomware attacks in cyberspace

Global institutions face costly infrastructure disruption from cyberthreats such as ransomware attacks. The global threat of ransomware attacks has continued to increase over time. Although it is important to conduct a cost-benefit evaluation and to weigh the risks prior to engaging, a new emerging option of dealing with ransomware attacks should be considered. I outline an interdisciplinary approach to cybernegotiation combining features of online dispute resolution and terrorist hostage theory. In this novel cyber-based dispute system design, the Wade and seek method is the application of traditional hostage negotiation theory used to help businesses mitigate the costs of ransomware attacks.     

Competition,agency and productivity

This article tests a set of hypotheses relating to agency and Schumpeterian views on how competition affects performance. A survey data set of Australian workplaces is used, with the change in labour productivity as the dependent variable. The results show strong support for the idea that intense competition raises productivity growth in managerial workplaces, but not in non‐managerial workplaces (i.e. where the principal owner also works). Testing the agency theories in more detail, we find no evidence that the number of competitors, the price elasticity of demand or a proxy for bankruptcy (pre‐tax losses) are the mechanisms behind the process. For non‐managerial workplaces the results indicate support for the idea that greater demand uncertainty reduces productivity growth. In contrast, for managerial workplaces, greater demand uncertainty tends to raise productivity growth.     

Airline Codeshare Alliances

The paper juxtaposes the challenges that airline codeshare alliances create for analytical information systems on the one hand and their motivation from a marketing perspective on the other. The authors review the state-of-the-art literature on potential marketing benefits and analyze the impact on airline planning systems. In this regard, revenue management systems are of particular interest. Based on a simulation study, the authors infer a severe impact of decentralized codeshare controls as currently widely implemented in the industry on revenue management performance. In the scenarios examined, complementary codesharing reduces alliance-wide revenues by up to 1 %. Losses increase when a carrier experiences high local demand or a high degree of codeshare demand, and disseminate over the whole network. Virtual codeshares also cause losses of 0.3 % to 1.5 % depending on the discount level offered by the marketing carrier and on the demand structure. Finally, the authors formulate a set of managerial implications based on these findings.     

Social Responsiveness,Profitability and Catastrophic Events: Evidence on the Corporate Philanthropic Response to 9/11

In this study we seek to determine whether catastrophic events lead to corporate charitable giving unrelated to levels of firm profitability. We examine the issue relative to the corporate philanthropic response to the 9/11 terrorist attacks of 2001. Based on a sample of 489 Fortune 500 companies, we find that differences in the extent of corporate contributions following 9/11 are positively and significantly associated with differences in firms' profitability. Further, while the degree of connection to the catastrophic event led to higher levels of giving in comparison to the contributions of less connected firms, differences in the extent of philanthropy are still␣related to short-term profitability for the more connected firms. The study thus provides evidence suggesting that even in the wake of catastrophic events, corporate philanthropic giving is constrained by economic concerns.     

Super‐Connectors: A New Model of Internationalization from the MENA Region

The main purpose of this case‐based research is to investigate and analyze three fast‐growing airlines (Emirates/Dubai, Qatar Airways/Qatar, and Etihad Airways/Abu Dhabi) and their internationalization from the Middle East and North Africa (MENA) region. The three carriers that are commonly known as “super‐connectors” in the airline industry continue to excel in their business models and internationalization. Based on secondary data, surveys, and company‐specific information, the article uses a longitudinal case‐based research approach to discuss the three airlines. Findings of the work reveal that the three super‐connectors have aggressively expanded in the MENA region and beyond by seeking multiple alliances, joint ventures, long‐term collaborative agreements (code sharing), and foreign direct investment (FDI). These activities represent innovative business models and operational efficiencies in the global airline industry. We believe that non‐MENA airlines may not have the same dynamism, strategic clout, corporate‐related efficiencies, and financial prowess that we witness among the three super‐connectors. In international business (IB) and multinational corporation (MNC)‐related areas, researchers, industry analysts, and policymakers need to pay attention to the MENA region's super‐connectors and their emerging internationalization models. The article also provides useful trends and implications that can be benchmarked by practitioners, researchers, and airlines regarding the issues of internationalization, growth, and new business models. © 2015 Wiley Periodicals, Inc.