Supply Chain Management Competency and Firm Financial Success

Supply chain management (SCM) plays a major role in creating (or destroying) shareholder value by influencing the three major drivers of firm financial performance: revenue, operating costs, and working capital. Yet, the relationship between SCM competency and firm financial performance is not well‐established. Drawing on the resource‐based view of the firm, this study assesses this relationship using Delphi‐style opinion data from AMR Research’s Supply Chain Top 25 rankings to assess SCM competency and Altman’s (1968) Z‐score statistic as the measure of financial success. The study findings show that firms recognized by industry experts for SCM competency have significantly higher Z‐scores than their close competitors and industry averages.     

Pricing multi-class network services using the Shapley Value

This paper investigates pricing issues in class-based networks. Classes of packets having lower impatience and longer average delay receive monetary compensations. The inter-class price differential is determined by the inter-class compensations. The paper also presents rules for allocating network resource to each class. The corresponding payoff (disutility share) for each class is driven by the Shapley Value of the associated cooperative game.     

Pricing Policy and Partial Collusion

We study the pricing policy equilibria emerging in a partial collusion duopolistic framework where firms in the first stage of the game choose non-cooperatively the pricing strategy (perfect price discrimination or uniform pricing), and from the second stage onward collude on prices. We show that for intermediate discount factors and high firms’ asymmetry, the unique equilibrium is characterized by only the smaller firm choosing price discrimination. In the case of intermediate discount factors and low firms’ asymmetry, there are two possible equilibria: both firms price discriminate or no firm price discriminates. When the discount factor is particularly high or particularly low both firms price discriminate in equilibrium.     

The role of foreign direct investment in the host-country firm selection process: firm-level evidence from Slovenian manufacturing

This paper examines the role of inward foreign direct investment (FDI) in firm selection processes in the Slovenian manufacturing sector in the 1994–2003 period. It adopts the firm dynamics framework that allows testing of selection effects directly by assessing the impact of foreign firms’ activity on the probability of exiting of local firms (crowding out). The results show that intra-industry productivity spillover effects offset only a minor part of the competition pressure which results from foreign firm entry, hence incumbent firms experience a drop in their survival probability upon a foreign firm’s entry within a particular industry. This result is driven by foreign firm entry of the greenfield type, as entry through the acquisition of existing firms has no significant effect. The strength of the crowding-out effect decreases with the incumbent firm’s export propensity. There is no significant evidence that inward FDI would stimulate the selection process through backward linkages in the upstream supplying industries, whereas foreign firms’ activity reduces the exit probability of downstream local customers (through forward linkages).     

The spatial effects of trade openness: a survey

This paper surveys the literature on the implications of trade liberalisation for intra-national economic geographies. Three results stand out. First, neither urban systems models nor new economic geography models imply a robust prediction for the impact of trade openness on spatial concentration. Whether trade promotes concentration or dispersion depends on subtle modelling choices among which it is impossible to adjudicate a priori. Second, empirical evidence mirrors the theoretical indeterminacy: a majority of cross-country studies find no significant effect of openness on urban concentration or regional inequality. Third, the available models predict that, other things equal, regions with inherently less costly access to foreign markets, such as border or port regions, stand to reap the largest gains from trade liberalisation. This prediction is confirmed by the available evidence. Whether trade liberalisation raises or lowers regional inequality therefore depends on each country’s specific geography.     

Not all trade restrictions are created equally

There has been great focus in the recent trade theory literature on the introduction of firm heterogeneity into trade models. This introduction has highlighted the importance of the entry/exit decision of firms in response to changes in trade barriers. However, it is typical in many of these models to use iceberg transport costs as a general form of trade barriers that can be interchangeable with ad valorem tariffs. I show that this is not always an appropriate conclusion. Specifically, I illustrate that profit for an exporter is more elastic in response to tariffs than iceberg transport costs, which affects the entry/exit decision of firms. This has implications for welfare analysis and empirical specifications.     

Should multivariate early warning systems for banking crises pool across regions?

Most extant work on prediction of banking crises has utilised global samples, which are in turn dominated by observations from middle-income countries, and rely on a single estimator. However, economic and financial structures as well as the pattern of shocks may differ substantially across regions, while a range of specifications is desirable to check robustness. Accordingly, in this paper we test the implicit pooling assumption in earlier multivariate work on Early Warning Systems using both logit and binary recursive tree specifications separately for crises in Asia and Latin America, as well as the pooled sample. Results suggest markedly different crisis determinants across regions, implying global samples are inappropriate.     

SOA Adoption Phases

The paper argues that attitudes to SOA follow a typical hype cycle from Technological Trigger, Peak of Inflated Expectations, and a Trough of Disillusionment to the more recent realization that SOA is a concept that may offer certain benefits but has several limitations. The main research question studies how the attitude to SOA changes in various phases of the hype cycle, how the SOA implementation cycle and an increase in business process maturity (BPMa) are interconnected and which factors influence the transition between the hype cycle phases. The paper shows that an organization’s success with implementing SOA depends on its ability to match the SOA implementation with an increase in BPMa. The dual purpose of implementing SOA is shown in the first framework: to assure the coherence of IT assets and to assure business/IT alignment. In the second framework, the interconnection of SOA and BPMa and its role in transiting through the hype cycle phases is outlined. The findings are analyzed using a longitudinal case study of a large Slovenian company.