Consumer perception,information provision,and regulation of insurance markets

Available evidence shows that consumers overinsure against modest risks. For instance, a majority of consumers tend to choose too low a level of deductible for homeowners insurance and automobile insurance, and purchase excessive warranties for electronics and other durable products such as automobiles and furniture. The analysis demonstrates that overinsurance decreases consumer welfare and increases insurers’ profits. This tendency of overinsurance stems from lack of information about the probability and magnitude of loss, and it calls for policies that require insurers or third-party organizations to provide more, albeit not perfect, information and data for consumers before they make insurance-purchase decisions. The implications of the analysis for other financial products such as stocks and deposits are discussed.     

Foreign entry,quality, and cultural distance: product-level evidence from US movie exports

This paper investigates the effect of quality on foreign entry using data on international movie exports and direct and revealed measures of movie quality. Strict quality sorting is predicted by a model of firm heterogeneity. An alternative model is random entry, in which entry decisions are independent of the movie’s quality. I develop a discrete choice model that allows for both of these extremes as special cases, and use graphical techniques and simulations to compare their predictions to the data. I then use regression analysis to estimate the effect of quality on the propensity to enter foreign markets. A one-standard-deviation increase in quality increases the probability of entry by 25–50 %. Systematic differences in taste for different genre types are used to estimate a measure of cultural distance between countries. Movies in “culturally dependent” genres are less likely to enter foreign markets and their probability of entry is less sensitive to quality. The cultural distance measure enters a gravity equation of US bilateral trade significantly.     

Managerial Commitment to Sustainable Supply Chain Management Projects

Most companies are under pressure to improve the environmental sustainability of their supply chains. However, there is considerable variance in companies' ability to successfully deploy environmental management projects. One important factor, according to articles in the academic and business press, is the ability of champions of sustainable supply chain management (SCM) projects within organizations to gain the commitment of colleagues (e.g., other managers from a variety of functions) to help these projects succeed. Therefore, this paper examines variables that affect a project champion's ability to gain this commitment from colleagues. In particular, building on existing research, this research employs a video‐based experimental design to examine the effect of the influence approach that the project champion employs, the values of the person the champion is trying to influence, and the organizational climate. The results suggest that organizational climate and certain individual values directly affect commitment. There are also interactions between values and influence tactics. The research adds to the field's growing knowledge on the antecedents of sustainable SCM within companies while providing valuable guidance for environmental champions and for top managers.     

Networks of Value‐added Trade

Global value chains (GVCs) require new methods for evaluating interconnections among countries, which can no longer be accurately appraised by standard bilateral gross trade flows. This paper uses tools of network analysis to examine the evolution of value‐added trade from 1995 to 2011. GVCs are very centralised and asymmetric networks, with a few large economies acting as hubs, which exposes them to the propagation of idiosyncratic shocks. As GVCs expanded, the networks of foreign value added in exports became denser, more complex and intensively connected. The regional dimension of GVCs is still dominant but is progressively giving place to a more global network. Networks of foreign value added in goods exports outpace those of services exports. However, foreign inputs of services are important for exports of both goods and services. There is a striking rise of China as a supplier of value added, while Germany and the United States maintain a central role in GVCs over the whole period.     

Business economics in a post-truth era

Business economists face increasing challenges at this political and policymaking juncture. “Experts” and economists are out of favor with the public and with certain policymakers. In response, business economists should be frank about our failures and the limits of our models. We can then be ready to defend truth against falsehood. In our defense of fact-based decision making, we must first assert that data matter, and the unbiased integrity of that data matters. We must support and defend the work of the Bureau of Economic Analysis, the Bureau of Labor Statistics, and the Census Bureau. Business economists must be story tellers, transmitting historical memory of past crises, of past attacks on our profession and data sources (such President Nixon’s targeting of the Bureau of Labor Statistics).     

Intensity of R&D competition and the generation of innovations in heterogeneous setting

This paper discusses the role of technological spillovers and technological races in dynamic strategic interactions setup. Two firms invest simultaneously into new products creation and into further development of the quality of these products. Each firm may benefit from the costless technological spillover in case of technological leadership of the other firm. At the same time they cooperate in the joint creation of new products. Three different scenarios emerge: constant technological leadership, the technological leapfrogging and symmetric outcome with or without potential spillovers. R&D is maximal for the first scenario and minimal for the symmetric play under the threat of spillover with endogenous specialization of firms’ activities in cases of constant leadership and leapfrogging. Definition of technological competition intensity as inverse to the technology gap allows to recover inverted-U relationship between those two in a multidimensional context.     

An algorithm for panel ANOVA with grouped data

In this paper, we present an algorithm suitable for analysing the variance of panel data when some observations are either given in grouped form or are missed. The analysis is carried out from the perspective of ANOVA panel data models with general errors. The classification intervals of the grouped observations may vary from one to another, thus the missing observations are in fact a particular case of grouping. The proposed Algorithm (1) estimates the parameters of the panel data models; (2) evaluates the covariance matrices of the asymptotic distribution of the time-dependent parameters assuming that the number of time periods, T, is fixed and the number of individuals, N, tends to infinity and similarly, of the individual parameters when T → ∞ and N is fixed; and, finally, (3) uses these asymptotic covariance matrix estimations to analyse the variance of the panel data.     

Inflation and the Exchange Rate: The Role of Aggregate Demand Elasticity

This paper examines the effect of aggregate demand elasticity on the exchange rate when inflation occurs. We discover that both the source of the inflation, whether demand-pull or cost-push, and the elasticity of aggregate demand with respect to the price level, are of consequence for the exchange rate. We obtain two primary conclusions. First, the effect on the exchange rate of cost push inflation is ambiguous and is partially determined by the price level elasticity of aggregate demand. In particular, and assuming that the two examined countries have equivalent aggregate supply elasticities, we conclude that the nation with the less elastic aggregate demand function will see its currency appreciate relative to the other. Second, demand-pull inflation results in an unambiguous increase in the exchange rate but the size of that increase is partially a function of aggregate demand elasticity. Assuming again that two countries have equivalent aggregate supply elasticities, that country with the more elastic aggregate demand will experience currency appreciation.