Cross-section of option returns and volatility

We study the cross-section of stock option returns by sorting stocks on the difference between historical realized volatility and at-the-money implied volatility. We find that a zero-cost trading strategy that is long (short) in the portfolio with a large positive (negative) difference between these two volatility measures produces an economically and statistically significant average monthly return. The results are robust to different market conditions, to stock risks-characteristics, to various industry groupings, to option liquidity characteristics, and are not explained by usual risk factor models.     

R&D and Technological Learning in Indian Industry: Econometric Estimation of the Research Production Function

Estimation of research production functions has produced rich and useful results for developed countries in the past. This paper makes a pioneering attempt to estimate the same in the context of a less-developed country (LDC) (India). The objective is to examine the process of technology generation and learning in Indian industry. The existing literature recognizes two principal characteristics of technological activities in LDCs. First, their R&D effort is geared towards "minor" as opposed to "major" innovations. Second, technological learning constitutes an integral part of their research thrust. This paper attempts to capture these characteristics in a rigorous econometric framework by estimating a comprehensive research production function incorporating the role of learning. We use Indian firm-level in-house R&D data for two sectors: pharmaceuticals and electronics. Our study not only captures the role of learning in determining research effort and research output, but also re-examines some of the existing hypotheses relating to the effects of firm size, technology import and ownership. We find that the two sectors display two distinct learning trajectories, but in both cases learning proves to be crucially important in technology generation.     

Cause‐Related Marketing from the Nonprofit's Perspective: Classifying Goals and Experienced Outcomes

This research examines the cause‐related marketing (CRM) experience from a nonprofit (NPO) perspective, using qualitative and quantitative methods. U.S. NPO managers with direct CRM experience (n = 154) participated. Results demonstrate that NPOs have both first order (immediate financial support) and second order (less tangible, longer term) goals when undertaking CRM, and that they generally realize these outcomes, though not always. NPOs primarily seek event support, networking opportunities and public awareness, followed by funding opportunities, with less emphasis on gaining business expertise. This research extends the framework of Gourville and Rangan (2004 Gourville, J. T. and Rangan, V. K. 2004. Valuing the cause marketing relationship.. California Management Review, 47: 38–57. [Crossref], [Web of Science ®] , [Google Scholar]) by offering a more precise, differentiated model.     

Cross-border production sharing and exchange-rate sensitivity of Mexico's trade balance

Increasing patterns of international trade occur in the form of cross-border production sharing – the dispersion of separate blocks of an integrated production process across different nations. In the case of ‘standard’ or ‘ordinary’ trade, imports are destined for use in the importing country, and exports are largely produced within the country. However, with production sharing, imported parts and components are destined for inclusion in the country's exports. A depreciation of a nation's currency raises its exports. At the same time, imported components become more expensive, which partly offsets the expansionary effect of the depreciation on exports. Using a simple theoretical framework, this paper shows that production networks lower the sensitivity of a country's trade balance to changes in exchange rates. The empirical examination finds Mexico's Maquiladora trade balance to be unresponsive to changes in both, its real effective as well as its real peso-dollar rates, while that for non-Maquiladora category is significantly responsive, in confirmation with the theorized hypothesis.     

What Do We Know about Trade Promotions? Contributions,Limitations, and Further Research

The trade promotion area remains seriously under-researched compared with its share of the overall marketing mix budget. This review attempts to provide an up-to-date account of what we know about trade promotions. For eight major topics we elaborate on what that topic means in the context of trade promotions, why it has been deemed important, what empirical findings have emerged in that area, and proposeareas for future research.     

Promoting Vegetarianism through Moralization and Knowledge Calibration

This research extends the theories of moralization and knowledge calibration to vegetarianism. In two studies involving interviews with vegetarians, and meat-eaters; we investigated consumer attitudes toward vegetarianism. Our text analysis results revealed that emotionally calibrated consumers are ‘moral vegetarians’ who find meat repulsive, and make ethical food choices. In contrast, cognitively calibrated consumers are ‘health vegetarians’ who scan the nutrition information, avoid meat due to health restrictions, and embrace vegetarianism for healthy life. Finally, we provided insights into how faux meat companies can promote their products and transform consumer behavior toward vegetarianism by advertising ethical and environmentally friendly foods, and healthy and anti-obesity foods to moral and health vegetarians, respectively.     

A Decision Model for E-commerce-enabled Partial Market Exit

Struggling retail chains often try to recover profitability by closing some of their stores. The challenge in this strategy lies in determining how many stores to close, as store exit has implications for both the customers and the supply chain. After a store closes, its customers are lost forever to the competition, unless there is a surviving open store nearby or an electronic alternative such as an e-store. From the supply chain perspective, after a store closes, its supporting regional distribution center is left with less business, and thus reduced viability. This paper develops a decision support model to study the profitability of alternative retail network structures by varying the proportion of stores that are closed, the average price sensitivity of demand, the price difference between the online store and the traditional retailers, and customer retention rates.