Development Resource Planning: Complexity of Product Development and the Capacity to Launch New Products

Overcommitment of development capacity or development resource deficiencies are important problems in new product development (NPD). Existing approaches to development resource planning have largely neglected the issue of resource magnitude required for NPD. This research aims to fill the void by developing a simple higher‐level aggregate model based on an intuitive idea: The number of new product families that a firm can effectively undertake is bound by the complexity of its products or systems and the total amount of resources allocated to NPD. This study examines three manufacturing companies to verify the proposed model. The empirical results confirm the study's initial hypothesis: The more complex the product family, the smaller the number of product families that are launched per unit of revenue. Several suggestions and implications for managing NPD resources are discussed, such as how this study's model can establish an upper limit for the capacity to develop and launch new product families.     

A Credit Risk Model for Consumer Loan Portfolios

ABSTRACT

We propose a credit risk model for consumer loan portfolios in Brazil. Consumer profiles and the risk classification of credit operations are used to segment the portfolios. Credit loss distributions for each segment are selected and used in a Monte Carlo simulation process to generate the loss distribution of the portfolios. The dependence among the credit losses in the different segments of the portfolios is modeled through an elliptical copula function. Statistical tests are done and show that the proposed model is adequate to represent credit loss distributions in consumer credit in Brazil.

RESUMEN.Proponemos un modelo para los créditos de riesgo de la cartera de préstamos al consumidor en Brasil. Los perfiles del consumidor y la clasificación del riesgo de las operaciones crediticias se utilizan para segmentar la cartera. La distribución de las pérdidas de los créditos de cada segmento se seleccionan e utilizan en un proceso de simulación Monte Carlo, para generar la distribución de las pérdidas de la cartera. La dependencia entre la pérdida del crédito en los diferentes segmentos de la cartera se modela utilizando una función de cópula elíptica. Las pruebas estadísticas se realizan y muestran que el modelo propuesto es apropiado para representar la distribución de la pérdida de crédito en el ramo de los créditos a los consumidores en Brasil.

RESUMO.Propomos um modelo de crédito de risco para portfólios de empréstimos ao consumidor, no Brasil. O perfil dos comsumidores e a classificação de risco das operações de crédito são usados para segmentar o portfólio. As distribuições de perda de crédito para cada segmento são selecionadas e usadas num processo de simulação Monte Carlo, para gerar a distribuição da perda do portfólio. A dependência entre a perda do crédito nos diferentes segmentos do portfólio é determinada por uma função de cópula elítica. Testes estatísticos foram realizados e demonstram que o modelo proposto é adequado, para representar as distribuições de perda de crédito no crédito ao consumidor, no Brasil.     

Disclosure versus recognition: Evidence from lobbying behavior in response to SFAS No. 158

This study examines the lobbying behavior of firms following the release of the SFAS No. 158 exposure draft. SFAS No. 158 requires the recognition of previously disclosed net pension and postretirement benefit obligations on the balance sheet. The study documents that firms that lobbied against the pronouncement had large, underfunded plans and the decision to lobby was related to the magnitude of the SFAS No. 158 balance sheet adjustment. The findings have important implications for the recognition versus disclosure debate because they document management’s reaction to the relocation of information disclosed in the financial statement footnotes to its recognition on the balance sheet.     

The Wage–Health Insurance Trade‐off and Worker Selection: Evidence From the Medical Expenditure Panel Survey 1997 to 2006

Key provisions within healthcare reform will likely further increase the cost of employer‐sponsored insurance. Theory suggests that workers pay for their health insurance through a wage offset. We investigate this issue using data from the Medical Expenditure Panel Survey. GMM estimates aimed at correcting for endogenous worker mobility reveal evidence of a trade‐off for workers who are offered health insurance as the only fringe benefit. On the other hand, employees in establishments with a more comprehensive set of benefits enjoy higher wages relative to employees in establishments that offer no benefits. Health also affects the wage–health insurance trade‐off.     

When Do Vertical Mergers Create Value?

This paper studies the market reaction to vertical mergers and explores the many rationales for vertical integration proposed in the industrial organization literature. Abnormal returns for vertical merger announcements are positive until the late 1990s, and turn negative afterward. Acquirers suffer most of the losses. We find support for the most fundamental insight in the industrial organization literature, namely, that vertical mergers generate the greatest value when undertaken in imperfectly competitive markets. We find some evidence to support ideas of asset and site specificity, that is, creating value when market exchange is difficult. We do not find support for information‐based or price uncertainty theories.