The impact of the WARN Act on firm value

The Worker Adjustment and Retraining Notification (WARN) Act of 1989 mandated that at least 60 days advance notice be given to employees. Critics argued that its passage would decrease managerial flexibility in closing plants, subsequently reducing firm values. This study addresses this issue by examining the stock market's reaction to announcements leading to the eventual enactment of the WARN legislation. We find evidence indicating negative effects of the legislation on stock returns of small firms.     

Anchor stores

Planned shopping malls usually have one or more department (anchor) stores and multiple specialized retailers selling substitutable commodities in each commodity category. If consumers know their taste for the anchor's commodity and its price, but learn about a retailer's commodity only by costly search, collocation may benefit both store types. Intra-mall competition reduces markups, but anchors guarantee a minimum surplus from search. A mall with many retailers makes finding a suitable specialized commodity highly probable. For some parameters, additional consumer search dominates the loss in retail markups, so a profit-maximizing land developer would rent mall space to both store types.     

Binary effectivity rules

A social choice rule (SCR) is a collection of social choice correspondences, one for each agenda. An effectivity rule is a collection of effectivity functions, one for each agenda. We prove that every monotonic and superadditive effectivity rule is the effectivity rule of some SCR. A SCR is binary if it is rationalized by an acyclic binary relation. The foregoing result motivates our definition of a binary effectivity rule as the effectivity rule of some binary SCR. A binary SCR is regular if it satisfies unanimity, monotonicity, and independence of infeasible alternatives. A binary effectivity rule is regular if it is the effectivity rule of some regular binary SCR. We characterize completely the family of regular binary effectivity rules. Quite surprisingly, intrinsically defined von Neumann–Morgenstern solutions play an important role in this characterization.     

Does subsidised temporary employment get the unemployed back to work? Aneconometric analysis of two different schemes

Subsidised employment is an important tool of active labour market policies to improve the reemployment chances of the unemployed. Using unusually informative individual data from administrative records, we investigate the effects of two different schemes of subsidised temporary employment implemented in Switzerland: non-profit employment programmes (EP) and a subsidy for temporary jobs (TEMP) in private and public firms. Econometric matching methods show that TEMP is more successful than EP in getting the unemployed back to work. Compared to not participating in any programme, EP and TEMP are ineffective for unemployed who find jobs easily anyway or have a short unemployment spell. For potential and actual long-term unemployed, both programmes may have positive effects, but the effect of TEMP is larger.     

BEYOND THE HYPE: INTELLECTUAL PROPERTY AND THE KNOWLEDGE SOCIETY/KNOWLEDGE ECONOMY

Abstract.  This paper explores the debates surrounding whether or not we have now moved into a new knowledge economy and/or knowledge society and if so whether this shift is as significant and as far reaching as the industrial revolution. In this possible transformation the place of information communications technologies has been crucial. Debate has occurred across both economics and sociology with differing emphases as is shown in the ranges of definitions that we review in the paper. One consistent factor is the lack of clarity and consistency between them both within and across the disciplines. In order to explore the issues that the debates raises in a more grounded way, the paper explores them in relation to intellectual property (IP) and the intellectual commons in the process of innovation, growth and economic development. The paper is developed through an analysis first of the industrial revolution and the role within this of uncertainty, technologies, complementarities and elective affinities and the way IP was protected and controlled through patents, secrecy, being first to the market and copyright. The second part of the paper examines definitions of the knowledge economy and society and the role within these of information communication technologies in order to explore whether the ways that IP is protected and controlled have changed. In the debate about the 'knowledge economy and society' the role of innovation via human capital with a greater reliance on intellectual capabilities has been emphasized. The role of IP thus remains central but is now challenged by the rise of new forms of communication, which make its protection harder and move much of the concern with respect to regulation to a global rather than national and local level.     

Econometric analysis of copyrights

This paper explores the impact of copyrights on firm value and on the demand for firm output. Using panel data on franchise value and ticket sales from the National Football League over the 1991–2000 period, we analyze the effect of copyrights (in this case, team logos) using several parametric estimators, the Arellano and Bond [1991. Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Review of Economic Studies 58, 277–297] dynamic panel data estimator, and a semi-non-parametric method based on difference-in-differences propensity score matching. We find a negative effect of logo changes on franchise value that is robust across multiple specifications. In addition, logo changes also appear to have a moderate positive, albeit not particularly robust, impact on ticket sales.     

Normative contexts and moral decision

This paper attempts to explain the significance of the ‘ideologies’ — or ‘middle-level’ normative discourse — described by Kenneth Goodpaster in his paper ‘Business Ethics, Ideology, and the Naturalistic Fallacy’. It is argued that the propositions constitutive of this discourse are not invokable moral principles (i.e. principles which generate solutions to actual moral problems). Rather, they are characterizations of the normative contexts in which moral decisions are made. As such, they place limits on the ways in which the abstract moral principles of traditional moral theory may be applied or interpreted in making real-life moral decisions.     

Consumer reporting: A conceptual framework for the organizational level

In this paper, a conceptual framework for consumer reporting at the organizational level is developed. Consumer reporting is defined as the provision of information by an organization to its consumers with respect to the effects of its activities judged relevant by those consumers. In this context, the term organization covers business firms but also governmental agencies, hospitals, charities, and other non-profit organizations with relations to their consumers/clients.The concept of consumer satisfaction is regarded as the core element of consumer reporting. Several issues with respect to consumer satisfaction and dissatisfaction as well as their measurement are discussed. It is concluded that perceptual indicators of consumer satisfaction should constitute the core of consumer reporting in establishing the consumer profile of the organization. However, additional information could be provided too, for instance situational indicators of consumer satisfaction or information about consumer dissatisfaction. All of this information should be geared towards the goal of accounting for the resulting organizational strategy and policies towards the consumers. Several practical examples are given to illustrate the items about which information can be provided and the fact that consumer reporting can be realized in practice.

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Berichterstattung von Organisationen für Verbraucher: ein konzeptioneller Rahmen

Zusammenfassung Eine solche Berichterstattung wird im vorliegenden Beitrag definiert als Informationen einer Organisation für ihre Konsumenten über diejenigen Wirkungen ihrer Aktivitäten, die von diesen Konsumenten für wichtig gehalten werden. Der Begriff Organisation steht hier nicht nur für kommerzielle Firmen, sondern auch für Behörden, Krankenhäuser, Stiftungen und andere nicht gewinnorientierte Organisationen mit ihren jeweiligen Beziehungen zu ihren Verbrauchern bzw. Klienten.Das Konzept der Verbraucherzufriedenheit steht dabei im Mittelpunkt. Deshalb werden zunächst dieses Konzept und die Methoden zur Messung von Verbraucherzufriedenheit diskutiert. Ergebnis ist dabei, daß das Konsumentenprofil einer Organisation durch perzipierte Indikatoren ermöglicht wird. Figur 1 gibt hierfür ein Beispiel. Das Konsumentenprofiel kann durch situative Indikatoren und durch Informationen über Verbraucherzufriedenheit ergänzt werden (Figur 2). Alle diese Informationen sollten zum Ziel haben, die Unternehmenspolitik gegenüber den Konsumenten zu verantworten.Zum Schluß werden einige praktische Beispiele behandelt, die einerseits zeigen, welche Informationen solche Berichterstattungen enthalten können, und andererseits, daß es in der Praxis bereits Ansätze in dieser Richtung gibt.

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Hans Kasper is Associate Professor of Marketing and Hein Schreuder Professor of Business Economics at the Faculty of Economics, University of Limburg, P.O. Box 616, NL-6200 MD Masstricht, The Netherlands.     

Conflict management and innovation performance: An integrated contingency perspective

In recent years, many of the basic assumptions underlying organizational conflict research have changed, drawing into question the validity of some previous research findings. Operating from the perspective that conflict is complex, multidimensional, and context specific, this research takes a fresh look at key conflict antecedents, mediators, and consequences in the context of the innovation process. The study investigates the relationships among five behavioral conflict-handling strategies, destructive and constructive conflict, and innovation performance as perceived by 290 R & D and marketing department managers. Empirical results both support and question some of the previous findings in conflict research. The results indicate that integrating, accommodating, compromising, forcing, and avoiding conflict-handling strategies can have different impacts on constructive and destructive conflict in an innovation context. Kelly Hewett (kelly_hewett@moore.sc.edu) is in the Department of Marketing at the Moore School of Business, University of South Carolina. Her research focuses on the management of relationships between buyers and sellers, as well as between headquarters and foreign subsidiaries in managing the marketing function globally. Her research has been published in theJournal of Marketing, the Journal of the Academy of Marketing Science, and theJournal of International Business Studies, among others. R. Bruce Money (moneyb@byu.edu) is the Donald Staheli Fellow and an associate professor of marketing and international business in the Marriott School of Management, Brigham Young University. His articles have been published in journals such as theJournal of Marketing, theJournal of the Academy of Marketing Science, theJournal of International Business Studies, andSloan Management Review. His research interests include the international aspects of national culture’s measurement and effects, business-to-business marketing, word-of-mouth promo-tion, services marketing, and negotiation. Subhash Sharma (sharma@moore.sc.edu) is the James F. Kane Professor of Business in the Moore School of Business, University of South Carolina. Professor Sharma’s research interests include marketing strategy, structural equation modeling, data mining, customer relationship management, e-commerce, the marketing-operations interface, and global marketing strategies. He has published numerous articles in these areas in leading academic journals such as theJournal of Marketing Research, theJournal of Marketing, Marketing Science, theJournal of Retailing, theJournal of Operations Management, theInternational Journal of Research in Marketing, andManagement Science. Professor Sharma has also authored two textbooks:Applied Multivariate Techniques (John Wiley, 1996) andScaling Procedures: Issues and Applications (with Richard G. Netemeyer and William O. Bearden, Sage, 2003). Professor Sharma was a member of the editorial boards of theJournal of Marketing Research and theJournal of Marketing and currently serves on the editorial review board of theJournal of Retailing.     

Perspectives on demarketing during the energy crisis

This article has attempted to outline the antecedent conditions which produced a gasoline shortage in the United States and describe the demarketing strategies employed by Shell and Exxon. The effectiveness of their respective strategies and the oil industry, in general, in stimulating de-consumption was also examined.