Liberalization and the growth of business‐led R&D: the case of India

Firms and organizations in India have responded to market reforms, liberalization and globalization by improving efficiency, importing technology and by increasing in‐house R&D. This paper highlights some of the evolutionary changes that have occurred since India undertook sweeping reforms in July 1991 to open its economy to foreign participation and competition. Although some authors, such as Forbes (1999), have looked at the impact of the liberalization on India's R&D and innovation, they missed a number of dimensions that have far‐reaching implications for the process of technological capability development in India. Using the concept of technological capability, this paper makes a contribution to the discourse on the changing R&D and innovation scenario in the face of on‐going liberalization in India. It concludes with three case studies, which illustrate some of the recent changes made by industrial organisations.     

Perceived conduct and professional ethics among marketing faculty

This paper describes the results of a mail survey to the educator membership of the American Marketing Association. Data were collected regarding beliefs about both the frequency of occurrence and severity of 59 ethical issues facing marketing faculty. The research questions examined include: What unethical practices are believed to most commonly occur? What practices are most severe? How do these beliefs vary by faculty rank and size and type of school? Implications for both the improvement of marketing education and for future research are provided.     

Towards more effective consumer market-place interventions — A model for the improvement of O.F.T. codes of practice

In the U.K., the Office of Fair Trading (O.F.T.) is required to encourage trade associations to prepare and disseminate codes of practice for the enhancement of trading practices. In this paper the authors put forward a model of prerequisites for O.F.T. Code effectiveness. The model is then used to investigate and develop insight into the effectiveness of codes already in existence and to explain the successes and failures of these market-place interventions. Finally, the potential impact of the proposed general duty to trade fairly is considered in the context of the model.

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Effektivere Interventionen auf Konsumgütermärkten — ein Modellansatz für die Verbesserung der Verhaltensrichtlinien der englischen Wettbewerbsbehörde

Zusammenfassung Die englische Wettbewerbsbehörde, das Office of Fair Trading, ist verpflichtet, bei den einzelnen Wirtschaftsverbänden auf die Erarbeitung und Verbreitung von Verhaltensrichtlinien zu drängen, die der Verbesserung von Handelspraktiken dienen.Die Authoren stellen ein Modell der Voraussetzungen für die Effektivität solcher Verhaltensrichtlinien vor, das in Figur 1 zusammengefaßt ist. Mit Hilfe dieses Modells werden die bereits bestehenden Verhaltensrichtlinien analysiert. Vor allem werden die Erfolge und Mißerfolge solcher Markteingriffe erklärt. Schließlich wird die potentielle Wirkung der vorgeschlagenen allgemeinen Pflicht zu lauterem Wettbewerb im Lichte dieses Modells diskutiert.

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William Richardson is acting subject leader and a member of the Business Policy team at Sheffield City Polytechnic. He was formerly Consumer Affairs Officer for South Yorkshire County Council. His address: The Gables, Royston Road, Cudworth, Barnsley S72 8TU, S. Yorks, U.K. David Morris is Dean of the Faculty of Business at Coventry Lanchester Polytechnic, Priory Street, Coventry CV1 5FB, U.K.     

Over-investment of free cash flow

This paper examines the extent of firm level over-investment of free cash flow. Using an accounting-based framework to measure over-investment and free cash flow, I find evidence that, consistent with agency cost explanations, over-investment is concentrated in firms with the highest levels of free cash flow. Further tests examine whether firms’ governance structures are associated with over-investment of free cash flow. The evidence suggests that certain governance structures, such as the presence of activist shareholders, appear to mitigate over-investment.     

Value creation and destruction in cross‐border acquisitions: an empirical analysis of foreign acquisitions of U.S. firms

We conduct an investigation of the sources of gains and losses in cross‐border acquisitions in light of different motives for undertaking these transactions: synergy‐seeking, managerialism and hubris. We find that the data are consistent with the expectation that multiple sources of value creation exist in synergistic cross‐border acquisitions: asset sharing, reverse internalization of valuable intangible assets, and financial diversification. Gains accrue to bidder firm shareholders only for the least fungible of these sources of gains, i.e., reverse internalization. For value‐destroying acquisitions that are expected to be driven by managerialism, we find that the data are consistent with only one of the sources of value destruction that we examine, i.e., risk reduction. In these acquisitions, the evidence also suggests that the relative size of the target to the bidder mitigates the negative effects of risk reduction. Our results underscore the importance of considering the implications of alternative behavioral assumptions in empirical strategy content research. Copyright © 2002 John Wiley & Sons, Ltd.     

THE STATISTICS OF LONG-HORIZON REGRESSIONS REVISITED1

This paper compares commonly used approaches for estimating the relation between long-horizon returns and a predetermined variable X₁, such as dividend yields. Specifically, we look at regression of (i) nonoverlapping multiperiod returns on X_t (ii) overlapping multiperiod returns on X_t, (iii) single-period returns on multiperiod X_t, and (iv) single-period returns on X_t and its implied long-horizon regression coefficient. We provide analytical formulae which quantify the efficiency of the estimators used in the various approaches. Using the formulae, as well as Monte Carlo simulations, we demonstrate that the relative efficiency of the estimators used in the various approaches differs remarkably, depending on the dynamic structure of the regressor. of special interest for financial economists, when the regressors are highly autocorrelated, we find that the regressions (ii) (iii), and (iv) provide only marginal efficiency gains above and beyond the nonoverlapping long-horizon regression.     

The zero-sum management disease and the von Thünen prescription

As early as the mid-nineteenth century, the German farmer and economic theorist, Johann von Thünen, knew that the economic pie could be made larger by the common man's ability to work more creatively and productively. Von Thünen's contributions to management thought may well be what we need today.