JOINING EUROPEAN MONETARY UNION: A REAL OPTIONS PERSPECTIVE

We examine the real option implicit in countries' decisions on whether to join a monetary union when future benefits of this move are uncertain. Our theoretical model is calibrated for the current Euro‐12 area and EU‐15 outs, proxying policymakers' inflation preferences with unemployment rates, debt‐to‐GDP and potential‐to‐actual‐GDP ratios. The Euro‐12 area is generally ready or close to wanting to expand, whereas the EU‐15 outs are unready to make that move at present and have widely varying probabilities of wanting to do so in the future, depending on the measure used.     

Organizational Learning at the Marketing/Entrepreneurship Interface

The intent of this special issue is to examine the interface of marketing and entrepreneurship. In the franchise contracts paper by Cochet and Garg and in the Chinese small firm paper by Li, Tan, Zhao and Liu, we assess whether these studies achieved that interface and, if so, what the papers respectively and mutually contribute to the body of knowledge at the interface.     

Optimal flow-line conditions with worker variability

When classical scheduling theory is applied to task sequencing problems, human characteristics are often not the primary consideration and their impact is often assumed away. In this paper, we examine the workforce scheduling problem in sequential flow line systems. We investigate the impact of within-worker and between-worker variability and discuss the selection of scheduling policies between fixed and work-sharing systems. The methodology includes human performance modeling with the objective to maximize throughput with general results with respect to productivity model. We are interested in determining and characterizing the optimal switching time between workers in work-sharing systems. A closed form solution is established in the case of two and three tasks with two workers. For a general number of workers and tasks we establish the maximum number of changes between assignments. We also establish a bound on throughput. Results allow one to solve workforce scheduling problems reduced complexity given the current set of bounds and conditions.     

CREDIT SPREADS AND THE ZERO‐COUPON TREASURY SPOT CURVE

We examine the relation between credit spreads on industrial bonds and the underlying Treasury term structure. We use zero‐coupon spot rates to eliminate the coupon bias and to allow for a consistent study both within and across the different credit ratings. Our results indicate that the level and slope of the Treasury term structure are negatively correlated with changes in the credit spread on investment‐grade corporate bonds. We also find that the relation between credit spreads and the Treasury term structure is relatively stable through time. This is good news for value‐at‐risk calculations, as this suggests that the correlations among assets of different credit classes are stable; therefore use of historic correlations to model spread relations can be valid.     

Can Companies Influence Investor Behaviour through Advertising? Super Bowl Commercials and Stock Returns

Recent research shows that mood and attention may affect investors’ choices. In this paper we examine whether companies can create such mood and attention effects through advertising. We choose a natural experiment by investigating price reactions and trading activity for firms employing TV commercials in 19 Super Bowl broadcasts over the 1969–2001 period. We find significant positive abnormal returns for firms which are readily identifiable from the ad contents, which is consistent with the presence of mood and attention effects. For recognisable companies with the number of ads greater than the sample mean, the event is followed by an average abnormal one day return of 45 basis points. The effect appears to persist in the short term with the 20‐day post‐event cumulative abnormal returns for such firms averaging 2%. We find significant abnormal net buying activity for small trades in shares of recognised Super Bowl advertisers indicating that small investors tend to be the ones most attracted by the increased publicity.     

The relationship among systems engineers' capacity for engineering systems thinking,project types,and project success

In recent years, systems engineering and Project Management Bodies of Knowledge have been rapidly growing. However, despite the vast amount of literature available on systems engineering and project management, about two‐thirds of all projects still fail. A review of both project management and systems engineering publications reveals that most of these works focus on processes. We suggest focusing on people—project managers and systems engineers. One of our previous studies dealt with project managers; this article focuses on systems engineers. This article presents findings of a study aimed at exploring the relationship among systems engineers' capacity for engineering systems thinking (CEST), project types, and project success. The instrument used in this study was a self‐report questionnaire, composed of three parts. The first part assessed the participants' CEST, the second part assessed several measures of project success, and the third part assessed four dimensions of project type. The simple random sampling method was used, and the sample included 114 senior systems engineers who were randomly selected from the sampling frame. The study findings show that there is a statistically significant correlation between CEST and project success. The extent of the project's novelty, complexity, and technological uncertainty are moderator variables that affect this correlation.