Product Quality as a Formative Index: Evaluating an Alternative Measurement Approach*

Product quality is a critical competitive issue when launching new products. However, the product quality construct has been measured inconsistently in prior research, with researchers often not considering multiple components of quality. Thus, results may not be comparable across studies, and when dimensions of quality are excluded, relationships found between quality and other constructs may be spurious. As a response, we develop a formative measurement approach to product quality. The components of product quality are not interchangeable in measurement as typical reflective approaches assume. These dimensions make up the quality construct, necessitating a formative measurement approach. Here, this approach is developed and tested, compared with the traditional reflective approach, and its relationships with other constructs evaluated in a model of new product performance. Overall, this formative approach is shown both to be theoretically appropriate and to possess strong measurement properties. This approach has clear implications for research concerning product quality and improving its measurement in the future.     

Speed to Market for Innovative Products: Blessing or Curse?

The relationships among speed to market, quality, and costs are important to managers as they attempt to best establish incentives and set goals for new product development teams, allocate resources for new product development, or create positional advantage in the market. The existing literature suggests that the economic consequences of being late to the market are significant, including higher development and manufacturing costs, lower profit margins, and lessening of the firm's market value. Therefore, traditional logic has held that new product development managers need to manage the trade‐offs among speed to market, quality, and costs. While both scholars and managers have often acquiesced to performance trade‐offs among “faster, better, and cheaper,” this research attempts to improve understanding of the interrelationships between these objectives, and ultimately profit. Based on a survey of 197 managers, faster speed to market is shown to be related to better quality and lower costs; it is not necessary to sacrifice one of these outcomes. Further, the moderating roles of two dimensions of innovativeness (innovativeness to the firm and to the market) are examined on the relationships between speed and quality, as well as speed and profit. Both dimensions of innovativeness positively moderate the relationship between speed to market and quality. For more innovative products (both to the firm and the market), there is a stronger positive relationship between speed and quality than for less innovative products. Further, innovativeness to the firm negatively moderates the relationship between speed and profit. Thus, speed has a less positive impact on profit for highly innovative‐to‐the‐firm products compared with less innovative‐to‐the‐firm products. By being conscious of the projects’ levels of innovativeness (along with prioritizing various performance measures), managers can more rationally decide when to emphasize speed to market based on this study's findings.     

Underground economy and aggregate fluctuations

This paper explores the role of underground economic activities as an explanation of differences in registered aggregate fluctuations. In order to do so, we introduce an underground economy sector in an otherwise standard Real Business Cycle model and calibrate it to the USA economy. We find that, at low frequencies, Europe fluctuates more than the USA, while its participation rate is smaller. The existence of underground activities rationalizes the negative relationship between participation rates and fluctuations of registered output. Our model accounts for 44.3% of the differences in aggregate fluctuations between the USA and European economies. Finally, the model generates implied sizes of the underground economy of 3.2% and 7% of the American and European output, respectively, which are in the range of those found in the empirical literature.     

When Satisfied Consumers Do Not Return: Variety Seeking's Effect on Short‐ and Long‐Term Intentions

Even satisfied consumers frequently do not come back, which challenges loyalty theory and marketing practice. It is reasoned that variety‐seeking tendencies will significantly affect short‐term revisit intentions, whereas satisfaction and regret will mostly determine long‐term revisit intentions. Thus, the influence of satisfaction on loyalty is hypothesized to be critically dependent on the time perspective of the intentions, now or later, and variety seeking. A representative survey (N = 400) in eight Spanish cities supported these predictions. Multivariate moderated‐mediation analyses revealed that indeed the influence of satisfaction, regret, and variety seeking critically depends on the time perspective of the behavioral intentions.     

Motivations of educational tourists in non-English-speaking countries: the role of languages

ABSTRACT

Learning a language or improving one’s foreign language skills may be a key motivator for students to decide to participate in an exchange program as well as choose the destination for their studies. Nevertheless, studies on educational tourism are limited, and there is no research on the motivations of students visiting non-English-speaking countries. To fill this gap, this paper aims to examine the motivations of university students in non-English-speaking destinations by using the push-and-pull framework. Primary data were collected through an online survey from 190 and 205 students who participated in mobility programs in a Spanish university and in a German university respectively. Empirical findings reveal that languages are a key motivating factor for either growing personally through cultural enrichment, or growing professionally. Furthermore, these data allow generic recommendations so that the destinations can attract a larger number of international students.     

Jobs and the Future of the US Economy: Possibilities and Limits

This paper reviews the presentations and discussions had at the conference on ??Jobs And The Future of the US Economy: Possibilities and Limits?? held at Howard University shortly after the late 2000??s financial crisis. The paper begins with the historical context in which the conference was placed and reviews the various points made by topic. The paper concludes with an outline of potential alternative eventualities facing the economy were the US not to adopt the policies presented.     

Is infrastructure capital productive? A dynamic heterogeneous approach

This paper offers an evaluation of the output contribution of infrastructure. Using a panel time series approach and a large cross‐country dataset, the paper estimates a long‐run aggregate production function relating gross domestic product to human capital, physical capital, and a synthetic measure of infrastructure comprising transport, power and telecommunications. Tests of the cointegration rank allowing it to vary across countries reveal a common rank with a single cointegrating vector, which we interpret as the long‐run production function. Estimation of its parameters is performed using the pooled mean group (PMG) estimator, which allows for unrestricted short‐run parameter heterogeneity across countries while imposing the (testable) restriction of long‐run parameter homogeneity. The long‐run elasticity of output with respect to the synthetic infrastructure index ranges between 0.07 and 0.10. The estimates are highly significant, both statistically and economically, and robust to alternative dynamic specifications and infrastructure measures. Tests of parameter homogeneity fail to yield evidence that the long‐run parameters differ across countries. Copyright © 2014 John Wiley & Sons, Ltd.     

Information Spillovers and the Choice of Export Destination: A Multinomial Logit Analysis of Spanish Young SMEs

Does having more firms around exporting to a particular destination improve the chances of exporting to that destination (e.g. through information spillovers)? We answer this question implementing a multinomial logit model of whether a firm exports to a particular country. To identify the source of information spillovers, we construct indicators of geographical concentration of exporters selling to a specific destination: within industry, multinationals and across industries. In our application with data for Spanish new small sized firms, only within-industry agglomeration of exporting domestic firms significantly affects the probability of small sized firms exporting to the same destination. The significance of localisation economies is robust to a barrage of controls including destination specific characteristics, gravitational factors (distance and level of development), firm heterogeneity (size) and regional differences.     

It Won't Fit! For Innovative Products,Sometimes That's for the Best

The degree of overlap (i.e., fit) between product development organizations' resources and the product development projects pursued has powerful performance implications. Drawing on organizational learning theory and the resource‐based view, this research conceptualizes and empirically tests the interrelationships between the levels of fit, innovativeness, speed to market, and financial new product performance. After reviewing the research literature relevant to resource fit and new product performance, the level of innovativeness is posited to be an important moderating and mediating factor, which is validated by analysis of data gathered from 279 product developing firms. Technological fit has a negative direct effect on both technological and market innovativeness, while the use of existing marketing resources (i.e., a high degree of marketing fit) positively impacts technological innovativeness. This suggests, consistent with findings from market orientation research, that a deep, long‐held customer understanding can promote technological innovativeness. The moderating hypotheses proposed are also well supported: First, a high degree of marketing fit has a more positive impact on performance for market innovative products (e.g., products which address a new target market or use a nontraditional channel for the firm). Drawing on a deep customer understanding is more critical to performance for market innovative products. Conversely, the benefits of marketing fit are limited where market innovativeness is lacking. Interestingly, the counterpart moderating role of technological innovativeness on technological fit's performance effect is not significant; the level of technological innovativeness does not significantly impact the performance impact of technological fit. There are also significant moderating effects across dimensions. Our results show that the financial benefit of using existing marketing resources is lessened for technologically innovative products. Technological innovations necessitate drastic adaptation of marketing resources (i.e., channel and brand); firms drawing only on existing marketing resources for a technologically innovative new product will incur reduced profit. Similarly, the positive implications of using existing technological resources are limited for products which are highly market innovative. Generally, resource fit is seen to have an (oft‐overlooked) dark side in product development, though several of our findings suggest that marketing resources are more flexible than are technological resources.