Expert and entrepreneur: the unique research domain of professional service entrepreneurs

Professionals are knowledge experts who create customized solutions for clients. Many professionals practice in the context of strong professional institutions that prescribe intense socialization and codes and norms. While some professionals work as employees, many start their own firms in order to practice. Firm start-up for professionals is more prevalent than for most other occupations. While professional institutions often constraint their activities, firm start-up for professional service entrepreneurs (PSEs) involves similar entrepreneurial activities as other entrepreneurs, creating an interesting paradox worth investigating. This paper explores the uniqueness of PSEs and the firms they start, and the distinctiveness and value of research in the context of PSEs and professional service firms.     

Science and Corporate Strategy: A Bibliometric Update of Hounshell and Smith

Hounshell and Smith's Science and Corporate Strategy: DuPont R&D, 1902- 1980 is one of the most comprehensive business history books ever written. In addition, it highlights the important relationship between corporate strategy and R&D activities. The purpose of this current paper is to update the information on DuPont's R&D activities using secondary data and bibliometrics. Our findings are that DuPont underwent a series of dramatic shifts in their R&D efforts during the 1980s and into the 1990s. For example, there was a focus on life sciences, a concerted attempt to reduce R&D, and an endeavour to align R&D more with core businesses. Beyond the bibliometrics, we found that corporate performance and changes in the top management team may have precipitated these changes in R&D. The implications of such relationships are also discussed.     

The power of asymmetric unit root tests under threshold and consistent-threshold estimation

The asymmetric unit root tests of Enders and Granger (Journal of Business and Economic Statistics, 16, 304–11, 1998) are examined using consistent threshold estimation and the original two-step procedure. In contrast to earlier studies, the ability of the tests to jointly reject the unit root and symmetry hypotheses is examined, thus permitting a fuller analysis of the tests' properties. Whilst the threshold autoregressive test is found to have little power in either its consistent or original forms, the consistent momentum-threshold autoregressive test is found to exhibit high power against a range of plausible alternatives when using newly derived critical values.     

Efficiency in the NFL betting market: modifying and consolidating research methods

Modifying and consolidating previous research methods to generate more reliable estimates, some fairly weak evidence is found of inefficiency in the NFL betting market resulting from a bias favouring home underdog (against away favourite) teams. In contrast to previous research, no evidence is found that ‘momentum strategies’ generate significant returns in this market.     

Matching using semiparametric propensity scores

This paper considers the application of semiparametric methods to estimate propensity scores or probabilities of program participation, which are central to certain program evaluation methods. To evaluate the practical benefits, we first conduct a Monte Carlo study. Second, we use data from the NSW experiment, CPS, and PSID. We compare treatment effect and evaluation bias estimates using propensity scores estimated from parametric logit, semiparametric single index, and semiparametric binary quantile regression models. Our results suggest that it is important to account for very general forms of heterogeneity in (semiparametric) estimation of the propensity score, particularly when the treatment effects vary in an unsystematic manner with the true propensity score.     

The robustness of the independent private value model in Bayesian mechanism design

Summary. In a Bayesian model of group decision-making, dependence among the agents' types has been shown to have a beneficial effect on the design of incentive compatible mechanisms that achieve the efficient choice associated with complete information. This effect is shown here to depend as much upon the use of large monetary transfers among the agents as it does upon dependence: if the transfers are bounded in magnitude, then nonexistence in the case of independence of an efficient, incentive compatible, ex ante budget-balanced and interim individually rational mechanism is robust to the introduction of a small amount of dependence among types. This robustness result supports the use of the simplifying assumption of independence in mechanism design. Received: October 28, 1996; revised version: May 28, 1997     

Microeconometric models of infrequently purchased goods: An application to household pork consumption

The double-hurdle and infrequency-of-purchase models are generalized with the inverse hyperbolic sine transformation in the dependent variable. The resulting specifications feature more flexible parameterization and error distributions than the untransformed models. Using the 1987–88 Nationwide Food Consumption Survey data on household pork consumption, a nonnested test suggests that the IHS double-hurdle model provides better characterization of the data-generating process than the IHS infrequency-of-purchase model but the elasticities derived from these models are similar. Own-price effects on the probability and level of consumption are negative and significant, but the elasticities are small. Income and cross-price effects are not significant. Household age composition, education, gender of meal planner, and race are among the demographic variables that affect consumption.     

The success of divestitures in merger enforcement: Evidence from the J&J-Pfizer transaction

Despite being a widely used tool in merger enforcement, there have been few studies of whether antitrust divestitures are successful. We help fill this void by conducting a study of the divestitures relating to Johnson & Johnson's $16.6 billion acquisition of Pfizer's consumer health division in 2006. Six brands were divested in this matter to alleviate antitrust concern. For three of the brands, their pre- and post-divestiture performances are similar, while the remainder underwent changes that do not appear to be divestiture related. Overall, the results are consistent with the view that the divestitures maintained the pre-transaction level of competition.