Price Commitment versus Flexibility: the Role of Exchange Rate Uncertainty and its Implications for Exchange Rate Passthrough

The paper investigates the incentives to commit price or retain price flexibility in a model in which exporting firms face different degrees of exchange rate uncertainty. The result shows that introducing exchange rate uncertainty can lead to the endogenous emergence of a unique leader–follower equilibrium; which firm emerges as price leader depends on the substitutability of products, the magnitude of exchange rate uncertainty, and the cost structure. This study may provide one explanation as to why some exporters set price before the realization of the nominal exchange rates (“sticky price”). The results imply exchange rate variability affects exchange rate passthrough.     

Service Competitiveness – An Anglo-US Study

This article reports on the latest in a series of international comparisons of management practices and performance outcomes of industries in various countries. Here, it is the service industries in the UK and the US which come under the microscope. Among the companies surveyed, there were more world-class performers in the US than the UK, but also more low performers. The concluding part of the article is diagnostic – the authors also suggest measures which could improve performance.     

VAR,ERROR CORRECTION AND PRETEST FORECASTS AT LONG HORIZONS

This paper focuses on the construction of forecasts over long horizons where a typical long-horizon forecast might span four years using 20 to 40 years’ data. It is argued that the presence of persistence in the form of unit or near-unit autoregressive roots poses substantial difficulties for long-horizon interval and point forecasting. These difficulties may not be overcome even by efficient pre-testing or model-selection procedures and might, in general, lead to point forecasts with large asymptotic root mean squared errors and undesirably wide prediction intervals.     

Employee involvement in American corporations

At the direction of the U.S. Senate subcommittee on Governmental Affairs, the general Accounting Office (GAO) conducted a survey of employee involvement practices within American companies. The population consisted of top management within Fortune's 500 largest manufacturing and 500 largest service companies. An analysis of the data examined three broad areas relating to employee involvement: (1) the existing organizational programs and processes such as personnel practices, information sharing, and training; (2) the degree of corporate participation in specific employee involvement programs including the reasons for undertaking employee involvement programs, and the perceived barriers to the implementation of employee involvement programs; and (3) the perceived effect of employee involvement on organizational operation as measured by changes in indicators of performance and activities within the internal business environment.     

THE LOCATION OF NONMETROPOLITAN HIGH-TECH INDUSTRIES: A Comparison of Regional Determinants

A study of the location of three classifications of high-tech industries in rural areas was undertaken using ordinary least squares, Tobit, and a two-step estimation procedure suggested by Heckman (1976). The results indicate that the location decision for high tech firms is influenced primarily by the county population, adjacency to an SMSA, and the expenditures on public infrastructure (exclusive of education expenditures). However, location near interstate highways was generally not a significant factor. Results were similar between branch and unit (single ownership) plants. Some differences in signs of orders of magnitude occurred among the estimation procedures. Making a choice between Tobit and Heckman approaches depends upon the goal of the research.