Avoiding aggregation bias in demand estimation: A multivariate promotional disaggregation approach

Demand models produce biased results when applied to data aggregated across stores with heterogeneous promotional activity. We show how to modify extant aggregate demand frameworks to avoid this problem. First a consumer-level model is developed, which is then integrated over the heterogeneous stores to arrive at aggregate demand. Our approach is highly practical since it requires only standard scanner data of the type produced by the major vendors. Using data for super-premium ice cream, we apply the proposed methodology to the random coefficients logit demand framework.

Convergence in the high-technology consumer markets: Not all brands gain equally from adding new functionalities to products

Convergence in the electronics sector has allowed the addition of new functionalities to products (e.g., mobile television to a cell phone). It is proposed that the goal congruence of the added functionality (i.e., whether it has similar or different goals as the base product) would affect the relative gain to high versus lower quality brands. While lower quality brands would gain when a congruent functionality is added, high quality brands would gain from an incongruent addition. The former hypothesis was confirmed significantly and the latter marginally in two experimental studies.

Global Software Piracy: Searching for Further Explanations

This paper identifies that Information and Communication Technology (ICT) has a negative effect on software piracy rates in addition to consolidating prior research that economic development and the cultural dimension of individualism also negatively affect piracy rates. Using data for 59 countries from 2000 to 2005, the findings show that economic well-being, individualism and technology development as measured by ICT expenditures explain between 70% and 82% of the variation in software piracy rates during this period. The research results provide important implications for policy makers and business practitioners to help reduce software piracy.

The Appropriateness of the Key Account Management Organization

Key account management programs often lack efficiency and effectiveness, as most key account management organizations are inadequately designed for specific customer-supplier relationships. In this paper, a decision model based on transaction cost economics is developed that allows for individualized decision-making on the most appropriate key account management organization: By defining the transaction cost economics determinants uncertainty and frequency more in-depth companies will become able to refine their decision on the key account management organization alternatives with respect to the characteristics of their individual customer-supplier relationship.

The impact of public guarantees on credit to SMEs

This article provides an in-depth evaluation of the impact of public credit guarantees to SMEs in increasing credit availability and reducing borrowing costs, without compromising their financial sustainability. Extensive econometric tests have been carried out by comparing the performance of the SMEs that benefited from such guarantees in Italy with a sample of comparable firms. The findings confirm the presence of a causal relationship between the public guarantee and the higher debt leverage of guaranteed firms, as well as their lower debt cost. Italy’s guarantee instrument has proved to be an effective instrument in these respects.

Cost of small business banking: a New Zealand study

The research reported in this article develops a model for assessing the cost of banking services faced by small businesses. The lack of price competition in the provision of small business banking services combined with limited transparency concerning actual fee levels prevents small businesses from readily estimating likely fee levels. Prior research and government reports note the difficulties faced by small business in relation to banking services and this research contributes to an understanding of the potential dead weight losses incurred resulting from poor signalling and information asymmetry and potentially a deficient public policy framework.

Business Ethics Training: Insights from Learning Theory

This paper explores research in educational psychology and learning theory in a search for insights to enhance business ethics training Useful educational principles uncovered are then applied to the development of an ethics training initiative for sales professionals. The paper concludes with suggestions for future research to help enrich business ethics training.

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.

Cross-cultural entrepreneurship research: Current status and framework for future studies

Although cross-cultural research in the field of entrepreneurship is still in its infancy as a research stream, it offers important inferences for both theory and practice. Some have criticized the relative immaturity of previous survey-based studies’ methodology. In order to address this flaw, we analyze existing survey-based studies in the field of cross-cultural entrepreneurship to identify research gaps in content and methodology and then derive the most appropriate analytical approach to fill the gaps for this type of research. Finally, we present a practical framework in which to conduct sound and prudent future studies, integrating the most appropriate analytical approach, general methodological insights, and the particularities of entrepreneurship research in a cross-cultural setting.

Defending against rival innovation

We analyze how an incumbent defends its competitive advantage with a focus on the under-examined methods of actively defending against the threats posed by rival innovation. We describe, delineate and analyze the set of such defenses and their likely effects. The set of such defenses differs substantially from many standard defenses, such as those aimed at defeating the threat of imitation. The further study of these pre-emptive innovation defenses is important because these defenses are different and because they can substantially affect the sustainability of firm profits and the pace of different of types of innovation.

Outsourcing of Information Systems Functions in Small and Medium Sized Enterprises: A Test of a Multi-Theoretical Model

In this paper determinants of information systems (IS) outsourcing are deduced from transaction cost economic theory, resource-based theory and power theory. They are summarized in a theoretical framework which is tested using a sample of small and medium sized enterprises (SMEs) in Germany. The results show that internal performance and know-how deficits vis-à-vis external service providers are key determinants that explain why different IS functions are outsourced to varying degrees in SMEs. Moreover, the determinants of IS functions were found to partially differ between IS functions. Revised reprint of an article from WIRTSCHAFTSINFORMATIK 43(4)2001:339–350.

A model of the effect of affect on economic decision making

The standard economic model of decision making assumes a decision maker’s current emotional state has no impact on his or her decisions. Yet there is a large psychological literature that shows that current emotional state, in particular mild positive affect, has a significant effect on decision making, problem solving, and behavior. This paper offers a way to incorporate this insight from psychology into economic modelling. Moreover, this paper shows that this simple insight can parsimoniously explain a wide variety of behaviors.

Market Concentration, Economic Welfare, and Antitrust Policy

The authors review the foundation for incorporating market concentration directly into consumer utility functions, and develop a general equilibrium model to derive welfare-maximizing principles for optimal enforcement of antitrust policies toward concentrated market structures, including merger policy. An intriguing result is that increased market concentration can fail to maximize economic welfare even if a proposed merger might generate positive net efficiencies.

The relationship between FSI advertising style and coupon redemption

We investigate the relationship between free-standing insert advertising style and coupon redemption. Results from two experiments indicate that the propensity to clip a coupon can be enhanced by matching ad tone (emotional vs rational) to the nature of a consumer’s primary motivation with respect to coupon usage. Moreover, this result appears to hold for consumers with both procoupon and anticoupon inclinations.

R&;D in SMEs: a paradox?

This paper has three objectives: (1) to survey the relevant literature addressing the (apparent) paradox of Research & Development investments carried out within Small and Medium Enterprises; (2) to provide focused summaries of the articles in this special issue; (3) to draw some general conclusions in terms of policy implications.

Entrepreneurship and competitiveness dynamics in Latin America

This study analyses the relationship between entrepreneurial dynamics and the level of competitiveness in Latin American countries. Based on a stage of economic development model, we demonstrate that Latin American countries under the model followed different paths related to competitiveness. These different paths can explain the effect of specific competitiveness conditions on entrepreneurial dynamics in Latin America.

Effort or timing: The effect of lump-sum bonuses

This article addresses the question of whether lump-sum bonuses motivate salespeople to work harder to attain incremental orders or whether they induce salespeople to play timing games (behaviors that increase incentive payments without providing incremental benefits to the firm) with their order submissions. We find that lump-sum bonuses primarily motivate salespeople to work harder—a result that is consistent with the widespread use of bonuses in practice, but that contradicts earlier empirical work in academics.

Internationalisation of technology-oriented firms in Germany and the UK

Based on longitudinal data, this article examines empirically the long-term export behaviour of German and British technology-oriented firms founded between 1987 and 1996. Applying logit models, the results show that firms can overcome high entry costs by acquiring firm-specific assets. Similarly, firm-specific resources prevent high-tech companies from exiting the international market. The strategic role of investment in R&D is stressed in particular by the data.

The knowledge spillover theory of entrepreneurship

Contemporary theories of entrepreneurship generally focus on the recognition of opportunities and the decision to exploit them. Although the entrepreneurship literature treats opportunities as exogenous, the prevailing theory of economic growth suggests they are endogenous. This paper advances the microeconomic foundations of endogenous growth theory by developing a knowledge spillover theory of entrepreneurship. Knowledge created endogenously results in knowledge spillovers, which allow entrepreneurs to identify and exploit opportunities.