Distribution Channel Relationships: The Conditions and Strategic Outcomes of Cooperation between Manufacturer and Distributor

The purpose of this paper is to carry out an empirical examination of the antecedents of cooperation between manufacturer and distributor. A further objective is to study the levels of satisfaction with the strategic outcomes of such cooperation. We analyze the extent to which cooperation requires not only complementary resources and capabilities of the partners but also goal congruence, trust and relational norms. Cooperation between manufacturer and distributor also involves reciprocal commitment and joint investment in specific assets. Finally, manufacturers and distributors should not only gain satisfaction from the economic, psychological or social benefits of cooperation, but should also gain competitive advantage, profits and strategic outcomes that help to compete in the market more efficiently.     

A mediation model between dimensions of social capital

Our paper contributes to the growing research by examining the interrelations between the dimensions of capital and their effects on the international market share of multinational companies in the global contractors industry. Previous works on social capital have failed to study the interrelationships between its dimensions or have proposed models with direct relationships. The current study proposes a multiple mediating model and tests the mediation. In particular, we posit that the relational and resource dimensions play a mediating role in the structural dimension-international market share relationship. A variance-based structural equation modeling (Partial Least Squares) has been applied to a sample made up of 225 global contractors. Our analysis lends support to the importance of the central positions of a firm and their influence on international market share. Moreover, mediation hypotheses posit how the relational and resource dimensions play a critical mediating role in the structural dimension – international market share relationship. Analysis of the data suggest that the dimensions of social capital are interrelated in such a way that the relational and resource dimensions: (a) fully mediate the effect of centrality (structural dimension) on the international share market and (b) exert significant influence on the international market share of each company.     

How to create information management capabilities through web 2.0

Over the last two decades investment in information technologies (IT) has been sufficiently high to be considered economically relevant. However, it has not been easy to prove that there are positive effects of these investments on organisational performance. This study questions the validity of directly relating web 2.0 initiatives to firm performance without taking into consideration other complementary assets such as managerial skills in IT, organisational restructuring and a culture of change. If these factors are not present, IT may not in fact produce any benefits whatsoever. The authors approach this problem using the resource-based view and propose the construct information management capability as a measure to gather the integration of the various co-specialised and complementary capabilities, whether technological or human and organisational, necessary in order to obtain competitive advantages in information use. A scale is created to measure this construct, the reliability and validity of which are demonstrated.     

NEW LIGHTS ON THE ROBBINSIAN THEORY OF WORK SUPPLY

We assess the actual relevance of Robbins' paper ‘On the elasticity of Demand for Income in terms of Effort’ to the theory of work supply. First, we show that the paper is the first application of income and substitution effects to this branch of economic research. Next, we analyse Robbins' economic terminology, especially his definition of work. We find that the concept of work he uses could seem vague as he may be considering both the length and intensity dimensions of this activity. To verify this possibility, we formally reassess Robbins' original proposal by introducing this wider definition of work into the mathematical framework he proposes. The resulting model shows that this reading (i) is compatible with his diagrammatic analysis; (ii) clarifies the meaning of the other vague economic concepts the author uses; and (iii) illuminates his verbal explanations. Additionally, we derive all the relevant results of both the income‐leisure and the more recent effort‐extraction models from this Robbinsian model of work supply. This last outcome allows us to state that Robbins' model comprises current theories of work supply.     

Resampling and bootstrap algorithms to assess the relevance of variables: applications to cross section entrepreneurship data

Empirical Economics - In this paper, we propose an algorithmic approach based on resampling and bootstrap techniques to measure the importance of a variable, or a set of variables, in econometric...     

Sources of strategic fit in high-tech firms

This study analyses the concept of strategic fit as a factor explaining organisational performance. We propose that strategic fit should include aspects of environment perception as well as the gap between planning processes and strategic implementation. Studying the firm's capacity to reduce this gap, we identify various organisational capabilities and analyse their relationships. Through managers’ responses from a sample of firms in European high-technology sectors, we find sufficient empirical evidence to affirm that strategic fit facilitates improvement in organisational performance. We also observe that strategic flexibility, real options and organisational learning are sources of strategic fit. So-called learning organisations facilitate generation of options that give the organisation the strategic flexibility needed to achieve fit with the environment. Strategic flexibility is defined in both the adaptive and anticipative sense. Our article thus offers a new perspective to contribute to better understanding of strategic fit and its antecedents.     

Applicability of the Classic WACC Concept in Practice

ABSTRACT

A large percentage of companies use the discounted cash flow (DCF) approach as the primary technique for investment/project evaluation and the capital budgeting process. This approach requires forecasting the detailed cash flow of the project under evaluation and then discounting the resulting cash flow to the present value (Net Present Value–NPV) using an appropriate discount rate.

The discount rate commonly used represents the Weighted Average Cost of Capital (WACC) of the firm. There is no scarcity of literature on this subject as the concept has been around for the last 50 years or so. Although most analysts believe the concept is simple and very well known, the irony is that its misinterpretation and misuse prevails. There are many versions of the WACC equation and each is specific to a certain cash flow. Therefore, using the classic WACC relationship in all cases may result in the calculation of an overly optimistic NPV. Depending on the cash flow pattern, the investment may show a positive NPV at the classic WACC but it will actually be losing equity.

This paper highlights (a) pitfalls and misuses of the WACC, (b) interdependence between types of cash flow and WACC, (c) assumptions behind the WACC and whether these assumptions are realistic, and (d) alternative approaches to arrive at the correct net present value (NPV). Company CEOs, management, analysts, and other investors using the WACC for investment decisions need to be fully aware of its pitfalls and misuses.

RESUMEN. Un gran porcentaje de empresas usan el enfoque del flujo de caja descontado (DCF–discounted cash flow), como la técnica principal para evaluar las inversiones/proyectos y el proceso de elaboración del presupuesto de capital. Este enfoque exige la proyección detallada del flujo de caja del proyecto bajo análisis y, a continuación, el redescuento del flujo de caja resultante al valor actual-Valor Actual Neto (Net Present Value–NPV) utilizando una tasa de redescuento apropiada.

La tasa de descuento comúnmente utilizada representa el Costo de Capital Medio Ponderado (Weighted Average Cost of Capital (WACC) de la empresa. No falta literatura a este respecto, ya que el concepto ha existido ya alrededor de 50 años. Aunque la mayoría de los analistas creen que el mismo es simple y muy conocido, irónicamente, lo que prevalece es su mala interpretación y uso equivocado. Existen muchas versiones sobre la ecuación WACC, y cada una se identifica con un flujo de caja específico. Consecuentemente, el uso de la relación WACC clásica puede resultar, en todos los casos, en un cálculo de NPV exageradamente optimista. Dependiendo del tipo de flujo de caja, la inversión puede mostrar un NPV positivo con un WACC clásico, cuando en realidad estará perdiendo patrimonio.

Este documento coloca en destaque (a) escollos y mal uso del WACC, (b) interdependencia entre el tipo de flujo de caja y el WACC, (c) presunciones por detrás del WACC, y si ellas son realistas, y (d) mostrar enfoques alternativos para llegar al valor actual neto correcto (NPV). El CEO de la empresa, su gerencia, analistas y otros inversores usarán el WACC para tomar decisiones inherentes a la inversión.

RESUMO. Uma grande porcentagem das empresas usa a abordagem do fluxo de caixa descontado (DCF) como técnica básica de avaliação de investimentos/projetos e do processo de orçamentação de capital. Essa abordagem requer que se preveja o fluxo de caixa detalhado do projeto sob avaliação e, depois, desconte o fluxo de caixa resultante para obter o valor presente líquido (NPV) usando uma taxa de desconto apropriada.

A taxa de desconto geralmente usada representa o Custo de Capital Médio Ponderado (WACC–Weighted Average Cost of Capital) da empresa. A literatura sobre este tema é abundante, já que o conceito existe há uns 50 anos. Embora a maioria dos analistas considere o conceito simples e bem conhecido, o fato é que erros de interpretação e utilização predominam. Existem muitas vers$oTes da equação do WACC, cada uma específica a certo fluxo de caixa. Portanto, aplicar a relação WACC clássica a todos os casos pode resultar em cálculos de NPVs otimistas demais. Dependendo do padrão de fluxo de caixa, o investimento pode exibir um NPV positivo no WACC clássico, quando na verdade estará perdendo patrimônio.

Este artigo realça (a) as armadilhas e usos equivocados do WACC, (b) as interdependências entre tipo de fluxo de caixa e WACC, (c) pressupostos por trás do WACC e se esses pressupostos são realistas, e (d) mostra abordagens alternativas para se chegar ao valor presente líquido (NPV) correto. Visa os CEOs das empresas, a gerência, os analistas e utros investidores que usam o WACC nas decisões de investimentos.     

Measuring Corporate Social Responsibility in tourism: Development and validation of an efficient measurement scale in the hospitality industry

This article aims at developing an efficient measurement scale for corporate social responsibility in the tourism industry, given the contextual character that is recognized in the practice of this construct. Indicators were generated on the basis of a literature review and qualitative research. To assess the reliability and validity, first- and second-order confirmatory factor analysis were carried out. Results show a multidimensional structure of this construct—including economic, social, and environmental issues. This study contributes to the advancement of knowledge in the field of social responsibility through its practical application regarding concepts of sustainable development which have mainly been theoretical. The authors would like to thank the two anonymous reviewers for many helpful comments and suggestions. E-mail: shumookh333alghamdi@hotmail.comView all notes     

Testing Heterogeneous Image in Cultural/Non‐cultural Tourism Markets: a Latent Model Approach

We identify the latent variable ‘destination image’ to segment tourism demand based on the different types of behaviour generated by those images. We used simultaneous latent structure analysis, which also permits a comparison of the degree of homogeneity or heterogeneity of two or more tourist markets. After presenting the most significant methodological aspects of this technique, we describe its application to the data of a study of the behaviour of tourism demand of Andalusia to determine whether those tourists with a marked inclination for cultural tourism have a similar (homogeneous) image of this destination as do other tourists. Copyright © 2011 John Wiley & Sons, Ltd.     

Distributional Implications of Tax Relief on Voluntary Private Pensions in Spain*

Using taxation statistics, this paper explores the distributional implications of tax relief on private pensions in Spain in 2002. For this purpose, the author suggests a decomposition of the Kakwani index and its generalisations that allows us to distinguish between the regressivity caused by targeting and that due to benefits allocation among recipients. This paper finds that these tax incentives are regressive ‐ mainly for the latter reason ‐ and have negative although small distributional effects. Finally, this work presents several proposals for reform of the current system and simulates their implications for equity.