The impact of customer satisfaction and relationship quality on customer retention: A critical reassessment and model development

Customer satisfaction with a company's products or services is often seen as the key to a company's success and long-term competitiveness. In the context of relationship marketing, customer satisfaction is often viewed as a central determinant of customer retention. However, the few empirical investigations in this area indicate that a direct relationship between these constructs is weak or even nonexistent. The overall purpose of this article is to develop a conceptual foundation for investigating the customer retention process, with the use of the concepts of customer satisfaction and relationship quality. The article involves a critical examination of the satisfaction–retention relationship, and the development of a more comprehensive view of the customer's quality perception. © 1997 John Wiley & Sons, Inc.     

Is Private Saving in Latin America and the Caribbean Different?

Private saving and economic growth are intimately linked, and low saving rates in Latin America and the Caribbean (LAC) have often been held responsible for disappointing growth in the region. Thus, identifying factors that spur saving is critical. This paper surveys previous empirical studies on LAC, highlighting contradictions, omissions and in some cases inconclusiveness of findings. Relying on a large dataset and a nested econometric framework, it analyzes private saving patterns and explores the role of its determinants in LAC, across LAC sub‐regions and compared with other regions. While the results highlight great heterogeneity in private saving rates within LAC and compared with the rest of the world, saving determinants are broadly the same notwithstanding some differences in sensitivity and contributions' sizes, and include its lag, income, demographics and public saving.     

What Drives Fraud in a Credence Goods Market? – Evidence from a Field Study

This paper investigates the impact of competition on an expert firm's incentive to defraud its customers in a credence goods market. Controlling for the competence of car repair shops, their financial situation, and reputational concerns, we use and complement the data set from a nationwide field study conducted by the German Automobile Association that regularly checks the reliability of garages in Germany. We find that more intense competition lowers a firm's incentive to defraud its customers.     

Brain drain or brain bank? The impact of skilled emigration on poor-country innovation

The development prospects of a poor country or region depend in part on its capacity for innovation. In turn, the productivity of its innovators, whom are often concentrated around urban centers, depends on their access to technological knowledge. The emigration of highly skilled individuals weakens local knowledge networks (brain drain) but may also help remaining innovators access valuable knowledge accumulated abroad (brain bank). We develop a model in which the size of the optimal innovator Diaspora depends on the competing strengths of co-location and Diaspora effects for accessing knowledge. Then, using patent citation data associated with inventions from India, we estimate the key co-location and Diaspora parameters. The net effect of innovator emigration is to harm domestic knowledge access, on average. However, knowledge access conferred by the Diaspora is particularly valuable in the production of India’s most important inventions as measured by citations received. Thus, our findings imply that the optimal emigration level may depend, at least partly, on the relative value resulting from the most cited compared to average inventions.     

A GOODWINIAN MODEL WITH DIRECT AND ROUNDABOUT RETURNS TO SCALE (AN APPLICATION TO ITALY)

This paper re‐formulates and tests statistically a hypothetical law (HL) of capital accumulation that manifests itself in three scenarios for Italian economy. HL refines Verdoorn law and ‘Ricardian’ relationship between employment and returns; it generalizes neoclassical and Goodwinian models. Big cycles are not sustainable in inertia Scenario I. Lowering direct diseconomy of scale does not alter a non‐trivial stationary state in stabilization Scenario II. Weakening an inverse relation between employment ratio and growth rate of capital intensity raises stationary relative labour compensation without deteriorating profitability in stabilization Scenario III. Stationary states with zero relative labour compensation are not economically relevant.     

Start-ups by the unemployed: characteristics,survival and direct employment effects

Fostering and supporting start-up businesses by unemployed persons has become an increasingly important issue in many European countries. These new ventures are being subsidized by various governmental programs. Empirical evidence on skill-composition, direct job creation and other key variables is rather scarce, largely because of inadequate data availability. We base our analysis on unique survey data containing a representative sample of over 3,100 start-ups founded by unemployed persons in Germany and subsidized under two different schemes: the bridging allowance (BA) and the start-up-subsidy (SUS). We are able to draw on extensive pre- and post-founding information concerning the characteristics of the business (start-up capital, industry, etc.) and of the business founders (education, motivation, preparation, etc.). Our main results are: (1) The two programs attracted very different business founders (higher skilled for the BA, more female persons for the SUS), and different businesses were created (less capital intensive for the SUS). (2) We find that formerly unemployed founders are motivated by push and pull factors. (3) Survival rates 2.5 years after business founding are quite high (around 70%) and similar for both programs and across gender. (4) However, the newly developed businesses differ significantly in terms of direct employment effects. While around 30% of the founders with the BA already have at least one employee, this is true for roughly 12% of the founders with the SUS.     

Decision parameters in global R&D management

This paper addresses the question of which variables have what kind of impact on the decision to locate new R&D facilities in countries different from the home country of a corporation. In the first section of the paper we demonstrate the complexity of this question by referring to empirical research, managerial statements and literature. We then develop a conceptual model for the location decision of international R&D activities. This is based on Porter's (1990) framework of the factors constituting the competitive advantage of nations. In the final section of this paper we show how such a model helps us to understand and also to explain a number of management issues related to global R&D activities.     

Market Power,Efficiency and the Dispersion of Systematic Risk

A number of studies have used the Capital Asset Pricing Model (CAPM) to integrate product market and financial theories of the firm. We reexamine the relationship between product market structure and systematic risk at the firm and industry level. We show that theory yields no testable implications at the firm level. We show, however, that there is a relationship between the intraindustry dispersion of systematic risk and industry concentration which depends on the causes and consequences of concentration. Estimates of the relationship between the intraindustry variance of and concentration for a 1987 cross-section of U.S. industries suggest that concentration allows larger firms to exercise market power.