Empirical studies of entry and exit: A survey of the evidence

Over 70 empirical studies of entry and exit patterns covering eleven different countries generally support the expectation that entry is more frequent in more profitable, rapidly growing industries, and slower where the absolute costs of capital required to build a minimum efficient scale plant are imposing. Scale economies, excess capacity, and limit pricing receive little empirical support as entry impediments. The evidence concerning the effects of advertising and R&D intensity is confusing.Exit is faster where profits are lower, and slower where durable specific (sunk) capital costs are more important. Exit and entry are strongly correlated, probably due to displacement (of incumbents by more efficient entrants) and vacuum effects (in which entrants are enticed by the prospects of selling to uncommitted customers abandoned by a recent exit).     

The 1989–92 Credit Crunch for Real Estate: A Retrospective

This study surveys a broad range of information to establish the degree to which real estate lending and construction activity decreased in the 1989–92 period owing to a "credit crunch." It reviews the conditions that led up to the contraction in mortgage lending and construction and then documents the extent to which the evidence is consistent with a credit crunch in lending for residential and nonresidential construction, permanent financing of income properties, and residential mortgage lending. Also, this study weighs the relative importance of the credit crunch and other factors that contributed to the falloff in real estate lending and contrasts the recent period with earlier credit crunch episodes.     

FOCUS: Can Accountants Distinguish their Assets from their Morals?

Can the use of focus groups be helpful to get to the roots of ethical issues in the accounting profession? The activities of one such group at Cranfield throws considerable light on the pressures to which individual accountants can be subjected. Professor Vyakarnam has recently been appointed to the Chair of Enterprise at Nottingham Trent University. Sri Srikanthan is Senior Lecturer in the Finance and Accounting Department at Cranfield University School of Management, where Sharon Fitzsimons is Research Officer in the Economics Group.     

Permanent income,hedonic prices,and demand for housing: New evidence

Housing demand is examined by looking quite specifically at the income and price variables based on individual household data. Permanent and transitory incomes are computed through instrumental variables related to human and nonhuman wealth. A price is constructed by spatially varying hedonic techniques. Separation of measured income into permanent and transitory components substantially improves the predictive power of the housing demand estimation and leads to demand elasticities of +1 and ?1 with respect to permanent income and price. The permanent income elasticity is roughly twice the measured income elasticity.     

A ‘PARTNERSHIP’ ROUTE TO HUMAN RESOURCE MANAGEMENT?*

Collaborative relationships between firms have been growing in importance, including ‘partnerships’ between customers and suppliers. Institutional economists and sociologists have different views on the origins, character and consequences of partnership, and the nature of this debate is outlined, as well as the implications for the reality of ‘partnership’ and its role in the diffusion of business practice. Against this background we use case study and survey evidence to explore the transition within the supply chain relationship, from a customer ‘demands’ model and hence to ‘supplier development’. Supplier development can be seen as an aid to risk reduction, particularly where it involves management control system development in the supply organization. The partnership implications for the human resource management (HRM) function are explored. Supply-side partners are likely to be involved increasingly with activities that will underpin the alliance (for example, training, cultural change and removal of industrial relations obstacles to change). These indirect effects may be supplemented by direct involvement by the HRM specialists in the customer organization, especially where partnership development places strong reliance on the human resource dimensions of the two organizations. Examples of this form of development are discussed. This evidence is assessed in terms of the different disciplinary approaches discussed at the outset. What emerges most strongly is that although ‘partnership’ is used to describe many inter-firm relationships, many of these are very unequal and are recognized to be so, but in other cases evolutionary steps can be taken to reduce the risks involved and lead to apparently equitable alliances. Within this risk reduction process, the role of human resources appears to be of varying importance.     

Organizational values,work norms,and relational role behaviours: an empirical retail assessment

We apply the relationship-marketing concept to a retail setting in order to determine if customer-contact employees' relational role behaviours (RRBs) (consisting of both trust-building and attachment behaviours) have organizationally influenced antecedents. Using organizational culture and value–norm–behaviour linkage, we posit that organizational values (consisting of customer orientation, employee orientation, and financial orientation) influence work norms for customer retention (solidarity and role integrity) and, ultimately, RRBs. Hypotheses and a model which illustrates the relationships between the constructs are presented. A study is conducted in a US regional drugstore chain (n=246). LISREL is used to analyse the results. Six out of eight hypotheses are supported. The findings are discussed as well as managerial implications, limitations, and future research directions.     

AN INVESTIGATION OF INDUSTRY AND FIRM STRUCTURAL CHARACTERISTICS IN CORPORATE TURNAROUNDS*

This article uses the structure/conduct/performance framework as an underpinning to investigate the attributes of turnaround firms. Turnaround is defined as a substantial improvement of the firms's return on assets relative to the average return of its industry. Industry and firm structural characteristics including concentration, industry growth, R&D, advertising, market share, size, diversification, capital intensity and margins are identified. The results of a series of univariate and multivariate tests run on a sample of turnaround and non-turnaround firms indicate that size, R&D, and an interaction between operating margin and advertising can be helpful in explaining some turnaround situations.     

Strategies and Performance in the Thrift Industry: 1979–1987

From the late seventies until 1989, the regulatory environment of the thrift industry was changed from one that permitted little managerial discretion to one in which managers were allowed to choose from a wide variety of lending and borrowing activities. In this article, cluster analysis is used to separate thrifts into strategic groups based on the extent to which they utilized their new powers. Differences among the groups and the relationship between group membership and performance is tested over the period 1979–1987 using analysis of variance.