Clientele Effects and Condo Conversions

During an asset boom a property can develop a new usage. Appreciation investors emerge to change a property's occupant mix or letter grade. Rental investors not intending to change the mix or grade are outbid. Sellers receive a capitalized premium from the new type of bidder. For apartments in Miami-Fort Lauderdale during 2004–2006, there is an asset pricing premium from condo converters. The price of real estate depends on clienteles in addition to characteristics.     

Decomposing the sales promotion bump accounting for cross-category effects

Extant research on the decomposition of unit sales bumps due to price promotions considers these effects only within a single product category. This article introduces a framework that accommodates specific cross-category effects. Empirical results based on daily data measured at the item/SKU level show that the effects of promotions on sales in other categories are modest. Between-category complementary effects (20%) are, on average, substantially larger than between-category substitution effects (11%). Hence, a promotion of an item has an average net spin-off effect of (20 − 11 =) 9% of its own effect. The number of significant cross-category effects is low, which means that we expect that, most of the time, it is sufficient to look at within-category effects only. We also find within-category complementary effects, which implies that competitive items within the category may benefit from a promotion. We find small stockpiling effects (6%), modest cross-item effects (22%), and substantial category-expansion effects (72%). The cross-item effects are the result of cross-item substitution effects within the category (26%) and within-category complementary effects (4%). Approximately 15% (= 11% / 72%) of the category-expansion effect is due to between-category substitution effects of dependent categories.     

International advertising campaigns in fast-moving consumer goods companies originating from a SMOPEC country

A particularly interesting area of research concerns how international fast-moving consumer goods (FMCG) companies from small and open economies that operate in turbulent markets plan successful advertising campaigns for international markets. The objective of this research was to determine how they are planned and what factors affect this planning. The theoretical part of the study reviews literature related to the internationalization of firms, international advertising campaigns, and standardization versus adaptation of international advertising. Based on the literature, a theoretical framework and propositions regarding the international campaign planning process for FMCG companies were developed. The empirical part uses the multiple-case study method to examine four FMCG companies that were founded in Finland. The empirical results show that five stages are especially important in the international campaign planning of FMCG companies. Moreover, the companies need to consider a number of factors when deciding on international adverting campaigns. The study presents a number of theoretical contributions and managerial implications. A novel finding relates to the importance of understanding the impact of the internationalization/globalization phase of the company. During internationalization often within the home continent, companies increasingly adapt advertising campaigns to different countries, whereas globalization to other continents calls for increased standardization across countries. Another interesting finding was that FMCG companies from small and open-economy (SMOPEC) countries often use innovative non-traditional campaigns to overcome the resource limitations.     

Challenges and opportunities in high-dimensional choice data analyses

Modern businesses routinely capture data on millions of observations across subjects, brand SKUs, time periods, predictor variables, and store locations, thereby generating massive high-dimensional datasets. For example, Netflix has choice data on billions of movies selected, user ratings, and geodemographic characteristics. Similar datasets emerge in retailing with potential use of RFIDs, online auctions (e.g., eBay), social networking sites (e.g., mySpace), product reviews (e.g., ePinion), customer relationship marketing, internet commerce, and mobile marketing. We envision massive databases as four-way VAST matrix arrays of Variables?×?Alternatives?×?Subjects?×?Time where at least one dimension is very large. Predictive choice modeling of such massive databases poses novel computational and modeling issues, and the negligence of academic research to address them will result in a disconnect from the marketing practice and an impoverishment of marketing theory. To address these issues, we discuss and identify the challenges and opportunities for both practicing and academic marketers. Thus, we offer an impetus for advancing research in this nascent area and fostering collaboration across scientific disciplines to improve the practice of marketing in information-rich environment.     

Alternative Firm Strategies for Signaling Quality in the Food System

Dynamics in the global food system, coupled with rapid advance in agricultural biotechnology, have resulted in additional demands for capturing information and sharing information vertically within the supply chain. Food safety and quality characteristics are a cornerstone of this information demand. Events such as foot-and-mouth disease (FMD) and bovine spongiform encephalopathy (BSE), genetic engineering and animal welfare concerns have laid the foundation for additional information need.
Managers of private firms within the food supply chain must decide how to respond to the situation. A crucial component of the problem is what and how to provide information to downstream customers as well as stipulate what and how information is received from upstream suppliers. Alternative signaling mechanisms abound. The choice among these alternative signals, or combination of alternatives, has both short- and long-run implications for the reputation of the firm, its products or services, and the efficiency with which it conducts its business. The signaling problem in the supply chain is bidirectional and has three critical dimensions: information asymmetry, incentive asymmetry, and arduous measurability. From a broad perspective, the choice set for signaling includes: strategies that rely on third-party protocols and procedures; differentiation through branding and reputation; indemnification strategies such as insurance, warranties, and bonding; and coordination strategies such as strategic alliances and vertical integration (intemalization). Each mechanism for signaling differentially influences the three dimensions of the signaling problem. No globally optimal strategy solution exists. Differentiation through branding and reputation mitigate the signaling problem relatively well compared with the other alternatives.     

Stock Market Liberalization, Economic Reform, and Emerging Market Equity Prices

A stock market liberalization is a decision by a country's government to allow foreigners to purchase shares in that country's stock market. On average, a country's aggregate equity price index experiences abnormal returns of 3.3 percent per month in real dollar terms during an eight-month window leading up to the implementation of its initial stock market liberalization. This result is consistent with the prediction of standard international asset pricing models that stock market liberalization may reduce the liberalizing country's cost of equity capital by allowing for risk sharing between domestic and foreign agents.     

Financial Turmoil, Failed Bank Acquisitions, and Bank Business Lending Behavior

This paper utilizes bank Call Report and FDIC receivership data from 1987 to 1991 to examine the impact of a failed bank acquisition on the growth rate of commercial and industrial (C&I) lending at the acquiring institutions. Using a two-stage least squares model with fixed effects, we find that banks acquiring a failed bank's assets experience a significant decline in both the growth rate of C&I lending and their capital asset ratios in the period of the acquisition. The results support anecdotal evidence that failed-bank borrowers may experience difficulties in accessing credit once their bank fails and underscores the importance of bank-borrower relationships in C&I lending. Finally, the paper provides an alternative explanation for banks' stagnant or declining business lending activity during this period of financial turmoil.     

Smooth and Sticky Adjustment: A Comparative Analysis of the US and UK

This paper adopts the methodology of the microeconometric labor literature to analyze a common assertion from trade economists that reallocation within sectors is less costly than between sectors. Findings are compared across two countries (the UK and US) which have experienced very different recent aggregate unemployment experiences. Workers previously employed in "declining" sectors are more mobile than those employed in 'expanding' sectors in both countries, and individuals are more likely to switch sector the longer they are unemployed. A plausible explanation for this is that individuals initially attempt to find jobs that complement their general and specific skills in order to accrue the associated rewards, and move sector only as this prospect diminishes. This would seem to accord with the 'smooth adjustment hypothesis' which proposes that intraindustry adjustments are less costly than interindustry ones.