The impact of skewness in the hedging decision

The impact of skewness in the hedger's objective function is tested using a model of hedging derived from a third‐order Taylor Series approximation of expected utility. To determine the effect of price skewness upon hedging and speculation, analytical results are derived using an example of cotton storage. Findings suggest that when forward risk premiums and price skewness in the spot asset have opposite signs, speculation increases relative to the mean‐variance model. When the signs are identical, speculation will decrease, contradicting findings of mean‐variance models. © 2006 Wiley Periodicals, Inc. Jrl Fut Mark 26:503–520, 2006     

Tactical Opportunities,Risk Attitude and Choice of Farming Strategy: an Application of the Distribution Method

When assessing farming strategies, it is important to account for the opportunities provided for tactically adjusting to outcomes of risk. The hypothesis that accounting for tactical adjustment is more important than accounting for risk attitude was supported in this study with regard to identifying the optimal drainage recirculation strategy for an irrigated dairy farm. Failing to account for tactical adjustment would lead to a sub-optimal choice, costing the farmer about A$3 100 in present value terms. In contrast, failing to account for risk aversion would not affect the strategy chosen. The distribution method was found to be well suited to modelling tactical adjustment.     

Some differences between licensed and internalized transfers of machine tool technology: An empirical note

This note uses survey evidence drawn from the machine tool industry in three countries to identify some of the differences in form between technology transfers which are internalized and those governed by licensing contracts between independent firms. The results show that, consistent with transactions cost theory, the internalized mode of governance leads to the transfer of a much broader range of information and skills than licensed transactions.     

Strategic groups as reference groups: Theory,modeling and empirical examination of industry and competitive strategy

Previous studies on strategic groups have mainly focused on their static characteristics in order to test the theory of strategic groups and intraindustry performance differences (Porter, 1979; Cool and Schendel, 1988; Fiegenbaum and Thomas, 1990). In contrast, this study takes a longitudinal, dynamic perspective and describes the forces driving strategic group membership and structural evolution. It proposes that a strategic group acts as a reference point for group members in formulating competitive strategy. A partial adjustment model of strategic mobility is then developed which incorporates the idea of a strategic group as a reference group. It models strategic change in an industry both within and across strategic groups. The model is tested in the context of an in-depth industry analysis of the more significant firms in the insurance industry over the 1970-84 time period. The results suggest that strategic groups act as reference points for firm strategies and that predictions of future firm strategies and industry/group structures may also be successfully derived.     

Legalization of drugs: Effects on the workplace

In the last few years bipartisan support for legalizing drugs has grown to a surprising level. Because of the lack of involvement of the business community in this debate, we surveyed the human resource managers of 127 firms about their perceptions of the effects of legalization. Their responses were uniformly negative, with expectations that drug use, absenteeism, worksite crime, and liability costs would increase, while the quality and quantity of work would decline. They also forecast increases in drug testing, performance monitoring, and education and rehabilitation programs as a result.     

Streets, Malls, and Supermarkets

We develop a model of competition between shopping centers, comparing competitive outcomes in three alternative modes of retail organization, namely: streets (in which neither developers or retailers internalize agglomeration effects between products); malls (in which developers internalize); and supermarkets (in which both developers and retailers internalize). For a fixed number of centers: (i) converting streets to malls intensifies developer (but not retailer) competition, which increases product range (i.e., the number of shops built by the developers) and consumer surplus, reduces profits, and has ambiguous effects on welfare; (ii) converting streets to supermarkets intensifies retailer and developer competition, has ambiguous effects on product range (number of shops), reduces profits, and increases social welfare. With free entry both conversions reduce the number of centers and, if there is excess entry, conversion to supermarkets (but not malls) unambiguously increases welfare.     

An analysis of some aspects of regulatory risk and the required rate of return for public utilities

This paper uses a modification of the continuous time asset pricing model of Cox, Ingersoll, and Ross to analyze the effect of regulatory risk on the cost of capital. Analysis shows that random errors in setting the allowed rate of return can either increase or decrease the cost of capital depending on other regulatory parameters. However, the analysis suggests that regulatory risk is not material.     

The Impact of Organizational Culture and Reshaping Capabilities on Change Implementation Success: The Mediating Role of Readiness for Change

abstract    It was hypothesized that employees' perceptions of an organizational culture strong in human relations values and open systems values would be associated with heightened levels of readiness for change which, in turn, would be predictive of change implementation success. Similarly, it was predicted that reshaping capabilities would lead to change implementation success, via its effects on employees' perceptions of readiness for change. Using a temporal research design, these propositions were tested for 67 employees working in a state government department who were about to undergo the implementation of a new end-user computing system in their workplace. Change implementation success was operationalized as user satisfaction and system usage. There was evidence to suggest that employees who perceived strong human relations values in their division at Time 1 reported higher levels of readiness for change at pre-implementation which, in turn, predicted system usage at Time 2. In addition, readiness for change mediated the relationship between reshaping capabilities and system usage. Analyses also revealed that pre-implementation levels of readiness for change exerted a positive main effect on employees' satisfaction with the system's accuracy, user friendliness, and formatting functions at post-implementation. These findings are discussed in terms of their theoretical contribution to the readiness for change literature, and in relation to the practical importance of developing positive change attitudes among employees if change initiatives are to be successful.