Regulatory procedures,investment opportunities and stock valuation

Electric utilities differ in their accounting procedures. By regulatory commission directive some use normalization and some use flow through to arrive at their earnings figures. Because regulation is on an allowed return on investment standard these reported earnings are relevant for stock valuation. Any variation in price/earnings ratios between flow through and normalizing companies therefore must be explained by differences in risk to equity investors, differences in investment opportunities, or market inefficiency involving erroneous restatement of earnings. Empirical work demonstrates that there is a difference in price/earnings ratios. Firms that normalize enjoy a premium. The evidence also indicates that the premium is not explained by risk difference. Because the perverse form of market inefficiency required as an explanation seems unlikely, the most reasonable conclusion is that the premium relates to investment opportunities associated with regulatory climate. If so it promises no excess return to stock buyers because it is already impounded in stock price.     

Speculative behavior of foreign exchange rates during the current float

The current regime of floating exchange rates has been characterized by a number of informed observers as economically unsatisfactory. Use of terms such as “overshooting”, “bandwagon effects”, “destabilizing”, and “insufficient speculation” reflects serious misgivings on the part of many toward the long-run viability of a floating, rather than a fixed or semi-fixed, rate regime. Using fairly standard procedures, the authors have attempted to determine the extent to which the foreign exchange market exhibits the adverse features noted above. The authors conclude that by and large foreign exchange markets have not performed particularly poorly. The foreign exchange markets seem to be efficient at least in the weak form sense. Past exchange rate changes are not useful in predicting future exchange rate changes. This empirical finding contrasts sharply with the view that the markets “overshoot”, or that there are “bandwagon effects”, or that the amount of price stabilizing speculation is inadequate.     

Property and liability stockholder yields and accounting profits

The market rate of return and related risk of a group of 23 property-liability insurers are explored. The focus is on the return earned by the stockholders of these firms. Previous studies have only examined the accounting rate of return. This study compares the accounting rate of returns to stockholder yields. Several factors that effect the return earned by shareholders are reviewed.The average return on the property-liability stocks studies was 4.0 percentage points greater than the accounting rate of return (0.14 vs 0.10). This evidence suggests that studies based only on accounting rates of return under-estimate returns earned by property-liability shareholders. On a risk-return basis property-liability profits were found not to be significantly different from the general stock market. However, several individual firms had superior stockholder yields. The beta for the group of firms was 1.09.     

Repetition and attitudinal discrepancy effects on the affective response to television advertising

Significant, favorable attitudinal response toward both the brand and ad were observed at the first exposure in a laboratory experiment on the effects of repeated exposure to television advertisements. At higher levels of repetition, lower, although still positive, ratings were obtained. Response was significantly mediated by prior brand attitude. Mean differences in attitude toward the brand and ad were only partially accounted for by changes in brand perception.     

Demographics,job satisfaction,and propensity to leave of industrial salesmen

An extremely important and expensive promotional tool used by industrial marketers is personal selling. One of the major costs of personal selling is the cost associated with sales personnel turnover. Past studies in the sales management area have focused on the effect of organizational and psychological factors on the satisfaction of salespeople and their propensity to leave their organizations. However, no study has examined the interrelationships among salespeople's demographic variables, job satisfaction, and propensity to leave, even though such relationships have been studied for nonselling occupations. An empirical study done to at least partly fill this research void is described. The results provide new insights for researchers and practitioners with an interest in the sales management area.     

Self-monitoring,norms, and attitudes as influences on consumer complaining

Reactions of consumers to marketplace problems vary widely despite the frequent similarity of sources of dissatisfaction. The results of two studies designed to investigate the determinants of consumer inclinations to complain are presented. Two alternative social-psychological explanations of behavior employing self-monitoring, moral and social norms,and attitudes as predictor variables are examined.     

Comparison processes in task perceptions,evaluations, and reactions

The primary objective of this article is to present a social comparison model of how employees perceive, evaluate, and react to tasks. The model represents a synthesis of recent findings in the task design area and three social comparison theories. A three-stage process is described which suggests that employees first understand their tasks at an informational level, then understand their tasks at an evaluative level, and finally react to their tasks both affectively and behaviorally. Managerial implications and future research directions are discussed.     

Testing the addition hypothesis in Vroom's force model

Although Vroom's force model hypothesized that the products of multiplying expectancy E_ij and valence V_j combine additively, no methodologically adequate test of the addition hypothesis has existed. This research reports initial graphic and statistical tests of the validity of the addition hypothesis. Eleven of 22 subjects met both a statistical and graphic criterion for rejection of the addition hypothesis. An alternative hypotheses should be considered by expectancy theorists.     

Board size variation and rates of succession in the corporate presidency

Within the setting of 54 industrial corporations, the higher the variation in the membership size of the board of directors, the more rapid the rate of replacement of the president. Variations in board size are developed from a coefficient of volatility identifying yearly changes from 1947 to 1977. Further analysis of the data suggests that for relatively successful companies a significantly negative relationship exists between board size variation and rates of succession, whereas a significantly positive relationship exists for relatively unsuccessful companies. These results have implications for succession planning in the corporate presidency.     

Prices of deep discount bonds and the Revenue Act of 1978: An evaluation of market response

This article explores the market response of deep discount corporate bonds to the reduction in the capital gains tax rate incorporated into the Revenue Act of 1978. Such tax change should have increased the desirability of assets acquired for capital gains potential, such as deep discount bonds. Examining a time series of prices and returns for a sample of deep discount corporate bonds and a control group of comparable duration and credit risk corporate bonds selling at or near par did indeed provide evidence of a market price reaction. Moreover, the price changes for the deep discount bonds occurred well in advance of the implementation of the tax change.     

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.     

Product familiarity and information processing strategies: An exploratory investigation

A theoretical and empirical examination of the relationship between product class familiarity and usage of information processing strategies is presented. Four major dimensions of information processing strategies are identified and used to conceptualize the linkage between product class familiarity and usage of particular strategies. Research hypotheses are tested in an exploratory study using a laboratory choice situation. Implications of the study with respect to usage of specific strategies and for future research are discussed.     

Intrafamily decision making in family planning

58 expectant couples were counseled about family planning postpartum and husbands and wives were asked to rank preference of methods. Husbands preferred IUDs (12%), the pill (7.6%), or diaphragms (8.2%). Wives preferred diaphragm (10%), foam (8%), jelly (8%), and IUDs (6%). The process of discussion was then charted. It was found that wives were more influential than husbands in the joint ranking process, which put IUDs 1st, followed by diaphragms and jelly. As discussion progressed, side effects became more important and the condom was selected as a compromise more often than any other method. It is suggested that marketing attempts for condoms emphasize the lack of side effects as well as promote the advantages to men.     

Reliability and cross-validity of trade-off analysis in an industrial setting

More than 200 applications of trade-off analysis now have been completed. A review of the literature uncovers only four sources that evaluate the reliability or validity, or both, of trade-off analysis using the concept evaluation approach. Detailed evaluations of trade-off analysis based on trade-off grid data are unavailable. This paper reports reliability and cross-validity experience using this approach.     

Retailing strategy for customer growth and new customer attraction

The image that current and potential customers have of a retail store affects the magnitude of patronage at that store. In attempting to increase store patronage, management of a retail store must look to people who already are customers, as well as to people who are not current customers. The appropriate strategy depends upon the dimensions used by people in their evaluation of the store. The hypothesis is tested that the strategy used for gaining increased patronage from customers may have to differ from that used to gain patronage from noncustomers.Field survey techniques were used to collect data from 225 adult females. Respondents evaluated three large retail department stores, which were believed to have distinct images in the minds of female shoppers, on the basis of a set of 12 semantic scales that represented various store attributes. Each respondent indicated frequency of shopping at each store. The data were analyzed by two different multiple discriminant analyses. For the customer growth strategy, the semantic scale measures were used to develop a discriminant model for each store to determine which attributes would be the best predictors of shopping frequency. The analysis relevant to the strategy of new customer attraction differed. First, shoppers were classified as loyal to one store on the basis of their rates of shopping at each store. Second, the 36 attribute measurements (12 scales for 3 stores) were factor analyzed, and three factors were extracted. Those attributes which loaded highest on each of the factors for each store were used as predictor variables in the discriminant analysis.The results of this study indicate that different marketing strategies may be required for increasing sales to existing customers and attracting new customers. In addition, consumers do not necessarily differentiate similar type retail stores on the same dimension.     

Uncertainty and communication strategy formation

Managers may affect the consumer information search and acquisition process and, thus, consumer preference by designing communications and selecting information channels that are responsive to consumers' uncertainty-associated information needs. However, measures of uncertainty that would be appropriate for general use in measuring product-attribute associated uncertainty have not been developed and assessed. In this paper, two methodologies that may be appropriate are presented and evaluated. Comparison of the methods shows both approaches to be about equal when evaluated with respect to convergent and face validity, test-retest reliability, and the ability of each measure to predict preference. Possible uses of product-attribute uncertainty measures in assisting managers to formulate communications strategy are discussed.     

Issues in fitting theoretical and measurement models in marketing

This article reviews the applications of linear structural equation modeling in business. It further examines the extent to which measurement models are constructed to fit theory models. The consensus appears to be that modelers intuitively use congeneric models without considering the appropriateness of such use. The other measurement models, such as tau equivalent or parallel form models are used very little in the literature. In addition, there is no use of common factor measurement models. The article also examines the extent to which various indices of fit are used in modeling marketing phenomena. Although chi square tests of model fit are used most frequently, the study documents increasing use of yet other indices, which perhaps more accurately reflect the extent to which the model fits.