Book reviews

Technological Risk H. W. Lewis ,Yew York and London, W. W. Norton ,and Company, 1991, xiii+353pp., £15.95.

Towards Global Localisation: the computing and telecommunications industries in Britain and France Philip Cooke, Frank Moulaert, Erik Swyngedouw, Olivier Weinstein & Peter Wells with Martine Lamattre & Patrice Grevet London, UCL Press, 1992, 227pp., £30.00 hardback.

A Strategy of Change: concepts and controversies in the management of change David C. Wilson London, Routledge, 1992, 147pp., ISBN 0-4 15-053269, £10.00 pbk.     

Rethinking the effect of perceived fit on customers’ evaluations of new products

Prior research has demonstrated that customer evaluations of a new product are directly related to the degree to which a company’s skills are perceived to “fit” with those required to provide the new product. This finding has led to recommendations that firms focus on perceptually close new product areas. However, many firms have successfully entered perceptually distant markets. We reconcile this apparent contradiction by proposing that the effect of perceived fit on new product evaluation is not direct, but is mediated by the certainty a customer has that a company can deliver the proposed new product. Our findings indicate that, by itself, perceived fit has a positive impact on industrial product evaluations. However, the relationship between fit and new product evaluations, previously held to be direct, is instead mediated by customer certainty. That is, when the effect of customer certainty is considered, the direct effect of fit disappears. Implications for theory and practice are discussed. His research interests include management of brand equity, and competitive analysis. His research has been published inJournal of Marketing Research, Journal of Marketing, Journal of Consumer Research, Strategic Management Journal, Journal of Advertising Research, Industrial Marketing Management, Journal of Services Marketing andPlanning Review. He received his Ph.D. from the University of Pittsburgh. Her research interests are in “marketing creativity,” and the management of mature products. Her research has been published in theJournal of Services Marketing and in the proceedings of the American Marketing Association. She received her Ph.D. from the University of Wisconsin-Madison.     

Lancaster's characteristics approach revisited: product selection using non‐parametric methods

In consumer theory, the principles of Lancaster's characteristics approach and hedonic pricing appear to offer the most promising insight into choice when qualitative aspects are important. The paper reconciles these principles with the family of non‐parametric frontier estimation methods known as data envelopment analysis. It is shown that, with some straightforward adjustments, DEA is entirely consistent with the characteristics view of consumer choice found in the economics literature. In making Lancaster's ideas operational, the paper also addresses the theoretical concern voiced by Lancaster about combining indivisible products. The principles are illustrated with a case study involving the comparison of diesel cars. The paper concludes that the user will ultimately have to apply some judgement in choosing between competing efficient products. However, the analysis should help to restrict the number of products to be assessed to manageable proportions. Copyright © 2002 John Wiley & Sons, Ltd.     

The Roles of Independent Research and Technology Organizations in the United Kingdom's Technology Transfer Mechanism to SMEs

Independent Research and Technology Organizations (RTOs) provide an increasing proportion of the UK's technology services requirements. RTOs, often former state research establishments spun out into the private sector, provide technology consulting and networking services to specific sectors or for generic technologies; some are membership-based organizations while others work for contract clients. In this paper we explore the roles and services provided by RTOs, together with the measures being taken to assist small firms that, for many RTOs, form a new and challenging market. The diversity of services and approaches to SMEs are related, in part, to the different origins of RTOs. The research indicates three forms of technology services market failure that suggest a need for ongoing external support for the market's mechanism.     

THE ROLE OF CAPITAL ADEQUACY REGULATION IN THE HEDGING DECISIONS OF FINANCIAL INTERMEDIARIES

This paper identifies the effect of capital adequacy requirements, which have been ignored to date in the hedging literature, on the forward hedging decisions of financial intermediaries. Using a more general framework than has been used in the literature on intermediary behavior in forward markets, cases are developed where capital and forward contracting are substitutes as well as where increasing the capital requirement increases the volume of desired forward contracting. The model shows that the most important factors in determining the equilibrium rate and the equilibrium position of intermediaries are the statistical association between the level of the forward rate and the spread between interest rates, the level of the capital-to-assets ratio, and the degree of risk aversion of intermediaries and other participants in the forward market. To characterize whether the intermediary's optimal forward position is long or short, one must have knowledge of at least the sign of the association between the level and spread for the particular intermediary, the intermediary's capital position, and whether the forward market equilibrium corresponds to a positive or negative premium. The model also demonstrates that a full hedge of assets is always sub-optimal, and a universally applicable expression for the optimal hedge ratio when hedging is costless is derived.     

A technical note on Buchanan's application of the Herfindahl index

Buchanan used the Herfindahl index to measure trade union membership concentration in a recent article for this journal. This note argues that the Herfindahl index is an appropriate measure of trade union membership concentration. However, the manner in which Buchanan applied it is questioned and data are presented to demonstrate the limitations of his approach.     

Directional bias in vacation travel

Vacation travel between regions is usually asymmetrical. This causes a problem when one tries to use a gravity model to forecast inter-regional travel. Although researchers have adopted strategies for coping with this problem, none of these strategies adequately resolve the complication of asymmetrical flows. This paper presents a measure of directional bias that accounts for unequal flows between two regions, and applies it to inter-provincial flows in Canada for the years 1968 to 1978. The directional bias appears to be stable over the period considered, and the index can be easily incorporated into forecasting models. Its use will allow researchers to add greater precision and power to their predictive models.     

A process model of residential resettlement

Quality & Quantity -     

Cross arbitrage and specification in exchange rate models

Triangular arbitrage between currencies imposes strong restrictions on the specification of exchange rate equations, which do not seem to have been noted in the literature. The form of these restrictions and the ways in which they can be allowed for are examined.