Across the threshold: Role of performance and compatibility in innovative new products' market penetration

Both academicians and practitioners agree that there exists a critical threshold to cross for an innovative new product to be able to achieve ultimate market penetration. In this article, the authors characterize the threshold as depending upon innovation characteristics: performance and compatibility, in particular. Based on the insights from evolutionary games, several numerical simulations are conducted to investigate how the critical threshold changes as each parameter representing the innovation characteristics undergoes a change. The analysis results confirm that relative advantage and compatibility are of critical influence in impacting the threshold and thus the successful market entry. Moreover, the effect size was different depending on the size of the firm's proprietary customer base. Based on the findings, discussion on new product design strategies for companies having different market positions (i.e., new start-up firms, established firms, and incumbent market leaders) is provided.     

Observed Inflation Forecasts and the New Keynesian Phillips Curve*

This paper investigates the empirical success of the New Keynesian Phillips Curve (NKPC) in explaining US inflation when observed measures of inflation expectations are used in conjunction with the output gap. The paper contributes to the literature by addressing the important problem of serial correlation in the stylized NKPC and developing an extended model to account for this serial correlation. Contrary to recent results indicating no role for the output gap, we find it to be a statistically significant driving variable for inflation, with this finding robust to whether the inflation expectations series used relates to individual consumers, professional forecasters or the US Fed.     

Loan guarantees and credit supply

The efficiency of federal lending guarantees depends on whether guarantees increase lending supply or simply act as a subsidy to lenders. We use notches in the guarantee rate schedule for Small Business Administration (SBA) loans to estimate the elasticity of bank lending volume to loan guarantees. We show significant bunching in the loan distribution on the side of the size threshold that carries a more generous loan guarantee. The excess mass implies that increasing guarantee generosity by one percentage point of loan principal would increase per-loan lending volume by $19,000. Excess mass increases in periods with guarantee generosity, and placebo results indicate that the effect disappears when the guarantee notch is eliminated.     

Career success schemas and their contextual embeddedness: A comparative configurational perspective

We introduce career success schemas as critical for understanding how people in different contexts perceive and understand career success. Using a comparative configurational approach, we show, in a study of 13 countries, that two structural characteristics of career success schemas—complexity and convergence—differ across country contexts and are embedded in specific configurations of institutional factors. Adopting complexity and convergence as primary dimensions, we propose a taxonomy of career success schemas at the country level. Based on this taxonomy, we contribute to the understanding of subjective career success across countries, discuss the importance of schemas for organisational career systems in multinational enterprises, and propose specific guidelines for future comparative careers research.     

Negative work–family/family–work spillover and demand for flexible work arrangements: the moderating roles of parenthood and gender

In recent years, companies have increasingly adopted flexible work arrangements (FWAs) to help company managers address negative work–family/family–work spillover (inter-role conflicts between work and family roles). Accordingly, we investigate the effects of parenthood and gender on the relationship between negative work–family/family–work spillover and demand for FWAs. Based on a sample of 1577 managers (967 females and 610 males) of South Korean companies, the results show that parenthood has a significant moderating effect on the relationship between negative work–family/family–work spillover and the demand for FWAs, regardless of gender. The present study highlights the importance of parenthood not only in addressing negative work–family/family–work spillover but also in expressing a demand for FWAs.     

The Wage Penalty for Married Women of Career Interruptions: Evidence from the 1970s and the 1990s

The goal of this paper is to assess how the wage penalty for career interruptions by married women changed between the 1970s and the 1990s. We estimate the wage penalty for career interruptions using the work-history model and PSID data. We use several approaches to control for various forms of endogeneity and selection bias. Our empirical results suggest that (i) the wage penalty for married women's career interruptions increased from 40.4% to 73.7% over the period, (ii) the ratio of the wage penalty for married women to that of married men also increased, from 1.33 to 2.43, (iii) Blinder–Oaxaca decompositions show that changes in education- or occupation-specific wage penalties account for most of the wage penalty increase.     

IFRS and the regulatory environment: The case of U.S. investor allocation choice

This paper investigates whether a country’s use of international financial reporting standards (IFRS) is associated with increased US investment in foreign equities. The recent global trend towards the use of IFRS may signal attempts by policy makers to reduce information asymmetries for international investors. However, a concern is that these standards must be accompanied by a stronger regulatory environment in order for them to gain legitimacy. Investor allocation choice is based on US holdings of foreign equities and the regulatory environment is interpreted using two distinct factors: the legal standards system and the enforcement regime. We document that US investment is associated with IFRS only when it is combined with a strong regulatory environment, specifically a strong enforcement regime. We also find that mandating IFRS is attractive to US investors only when combined with a strong regulatory environment.     

NEW EXPORTER DYNAMICS

We document that new exporters initially export small amounts, grow gradually, and are most likely to exit the export market in their first few years. We find that the standard sunk‐cost model cannot replicate these new exporter dynamics: New exporters grow too large too quickly and live too long. In a modified sunk‐cost model that can account for these facts, the entry costs needed to match the data are three times smaller than in the sunk‐cost model. Dynamic models with richer plant‐level heterogeneity are needed.     

Price Discrimination in Public Healthcare

Could a public healthcare system use price discrimination—paying medical service providers different fees, depending on the service provider's quality—lead to improvements in social welfare? We show that differentiating medical fees by quality increases social welfare relative to uniform pricing (i.e. quality‐invariant fee schedules) whenever hospitals and doctors have private information about their own ability. We also show that by moving from uniform to differentiated medical fees, the public healthcare system can effectively incentivise good doctors and hospitals (i.e. low‐cost‐types) to provide even higher levels of quality than they would under complete information. In the socially optimal quality‐differentiated medical fee system, low‐cost‐type medical‐service providers enjoy a rent due to their informational advantage. Informational rent is socially beneficial because it gives service providers a strong incentive to invest in the extra training required to deliver high‐quality services at low cost, providing yet another efficiency gain from quality‐differentiated medical fees.     

Not everybody prefers organic food: unobserved heterogeneity in U.S. consumers’ preference for organic apple and milk

Despite organic food’s growing market share and the often-found premiums for organic foods in willingness-to-pay studies, the ultimate size of the organic food market remains unclear. Due to perceived taste, safety or appearance, some people may, in fact, not prefer organic. This study uses data from choice experiments to determine preference for organic versus conventional milk and apples. Using latent class and random parameter models, nontrivial shares (at least 33%) of consumers in both markets are not willing to pay a premium for organic. These results have implications for food marketers but also for economists modelling the organic food sector, which typically assume vertical differentiation.