Assessing Consequences of Component Sharing across Brands in the Vertical Product Line in the Automotive Market

Component sharing may look great in the boardroom but not in the showroom. Indeed, savings on research and development and production costs could be offset by a plunge in customer brand attractiveness. The central objective of this paper is to investigate consumer and market responses toward component sharing between brands. More specifically, by combining experimental with econometric studies, this paper investigates the impact of component sharing on customer evaluation of luxury, volume, and economy brands offered in a car manufacturer's vertical product line. An experimental study in which component sharing between automotive brands was made explicit aimed to understand the impact of brand combinations and type of sourcing on the evaluations of the two brands sharing components. This experimental study shows that the evaluation of luxury brands sharing with a volume brand suffers more than when a volume brand shares components with an economy brand. This experimental study was executed for two different brand combinations including one luxury, one volume, and one economy brand: (1) Audi, Volkswagen, and Skoda; and (2) Lexus, Toyota, and Suzuki. The evaluation of an economy brand benefits more from sharing with a volume brand than a volume brand suffers from sharing with an economy brand. The magnitude of these effects depends on several factors, such as component type, the source of the component sharing, and the salience of component sharing to the consumers. One important limitation of the experiment is that component sharing is made rather salient, and no behavioral effects of component sharing are studied. Therefore, a second was executed in which market share data on brands of the Volkwagen company (i.e., Audi, Volkswagen, Seat, and Skoda) were collected, while also data on the component‐sharing practices between these brands were gathered. A market share model was estimated in which market shares of the four studied brands were explained by component‐sharing practices and some control variables (i.e., price, model changes) in an exploratory fashion. The explorative examination of market share effects confirms that luxury brands may suffer, while economy brands may benefit from component sharing. In sum, this research suggests that component sharing between brands has negative effects for the higher‐end, and positive effects for the lower‐end brand. However, it also shows that sourcing matters. This study is considered as the first study investigating the phenomenon of component sharing, and it points to multiple future research issues, such as studying this phenomenon in other markets.     

Multinational firms, market integration, and trade structure: What remains of the standard-goods hypothesis?

Multinational Firms, Market Integration, and Trade Structure: What Remains of the Standard-Goods Hypothesis? — In extending traditional empirical trade models to multinational firms, this paper shows the effect of the transfer of firm-specific technology and intangible assets by these firms on the structure of host countries. For Belgium, a small open economy with a large presence of foreign multinationals, this effect is of crucial importance and previous studies appeared to have produced biased results by neglecting it. The econometric results show how the large multinational presence induced by the European integration has shifted Belgium’s trade structure towards differentiated products, thereby challenging the standard-goods hypothesis which states that small countries tend to specialize in nondifferentiated products. Spain and Ireland have witnessed an increase in foreign direct investment and a shift in trade structure similar to Belgium after joining the EC.     

Sport participation and the social and physical environment: explaining differences between urban and rural areas in the Netherlands

In this study, we investigated the intensity of sport participation in the Netherlands comparing urban and rural areas. Using a socio-ecological theoretical model, we focussed on the extent to which the rural–urban divide in sport participation is explained by micro-level (socio-demographics), meso-level (safety and socio-economic status of neighbourhoods) and exo-level (variety and proximity of sport facilities) characteristics. We tested our theoretical expectations using representative data on 17,910 Dutch inhabitants between 6 and 79 years of age. Our study reconfirmed the importance of individual socio-demographics (micro-level), such as age, education and household income for sports participation. Furthermore, our results showed that weekly sport participation was more common in rural than in urban areas. This rural–urban divide in sport participation especially was attributed to social environmental factors (meso-level); physical conditions of the environment provided no explanation. Our findings should, however, not be taken as a denial of the importance of the physical environment (exo-level). This study was conducted in the Netherlands, a country with a high density, abundant sport facilities and a supportive sport climate. Moreover, variety of sport facilities nearby proved significant in explaining an individual’s monthly sport participation. To conclude, this study enhances our understanding of the rural–urban divide in sport participation and highlights the importance of especially meso-level features in addition to the socio-demographics. It thus may inform policymakers to critically assess sport promotion policies.     

Social Media Metrics — A Framework and Guidelines for Managing Social Media

Social media are becoming ubiquitous and need to be managed like all other forms of media that organizations employ to meet their goals. However, social media are fundamentally different from any traditional or other online media because of their social network structure and egalitarian nature. These differences require a distinct measurement approach as a prerequisite for proper analysis and subsequent management. To develop the right social media metrics and subsequently construct appropriate dashboards, we provide a tool kit consisting of three novel components. First, we theoretically derive and propose a holistic framework that covers the major elements of social media, drawing on theories from marketing, psychology, and sociology. We continue to support and detail these elements — namely ‘motives,’ ‘content,’ ‘network structure,’ and ‘social roles & interactions’ — with recent research studies. Second, based on our theoretical framework, the literature review, and practical experience, we suggest nine guidelines that may prove valuable for designing appropriate social media metrics and constructing a sensible social media dashboard. Third, based on the framework and the guidelines we derive managerial implications and suggest an agenda for future research.     

IMF‐Supported Programmes: Stimulating Capital to Non‐defaulting Countries

International Monetary Fund (IMF)‐supported programmes catalyse private capital to non‐defaulting countries. We find the IMF to be effective in stimulating private capital flows to middle‐income countries that participate in a Fund programme, but do not restructure their debt. IMF‐supported programmes help non‐defaulting countries to signal their willingness to reform and repay debts, thereby catalysing private capital. This signalling role appears to be more important for Fund catalysis, than the size of IMF lending.     

Boorstin's consumption community concept: A tale of two countries

The concept of consumption community, first proposed by historian Daniel Boorstin, claims that in the modern era of high mobility, people look not only to neighborhood as a basis for feelings of community but also to communality of consumption behavior (e.g., drinking the same brand of beer). The idea was tested cross-nationally by administering a newly devised psychological sense of community (PSC) scale to more than 100 adult respondents in Belgium and a like number in the U.S. The findings support Boorstin in that for both national samples, PSC values for consumption items were generally positive and consistent with social science theoretical expectations. Implications of the study findings are discussed for theory and social policy.

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Zusammenfassung Das Konzept der Konsumgemeinschaft von Boorstin: Eine Geschichte von zwei Ländern. Das Konzept der Konsumgemeinschaft, erstmals durch den Historiker Daniel Boorstin vorgestellt, behauptet, da\ im heutigen Zeitalter hoher Mobilität der Einzelne sein Gemeinschaftsgefühl nicht nur durch seine Beziehung aus der direkten Nachbarschaft bezieht, sondern auch aus der Gemeinsamkeit bestimmter Konsumverhaltensweisen (z. B. das Trinken derselben Biermarke). Diese Idee wurde empirisch geprüft durch eine ländervergleichende Untersuchung, in der eine neu entwickelte psychologische Skala für den Gemeinschaftssinn bei jeweils einer Stichprobe von mehr als 100 erwachsenen Personen in Belgien und in den USA angewendet wurde. Die Ergebnisse stützen Boorstin insofern, als beide Länderstichproben zu Skalenwerten führen, die mit den theoretischen sozialwirtschaftlichen Erwartungen übereinstimmen.

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Koen De Vos is a Research Assistant at the same institution.     

Testing random assignment to peer groups

Identification of peer effects is complicated by the fact that the individuals under study may select their peers. Random assignment to peer groups has proven useful to sidestep such a concern. In the absence of a formal randomization mechanism, it needs to be argued that assignment is “as good as” random. This paper introduces a simple yet powerful test to do so. We provide theoretical results for this test. As a by-product, we equally obtain such results for an approach popularized by Guryan et al. (2009). These results help to explain why this approach suffers from low power, as has been observed elsewhere.     

Sectoral co-movements of employment growth at regional level

This paper presents a comprehensive study of sectoral co-movements of employment growth in the entire Dutch economy. We construct different macro typologies according to manufacturing versus services, innovativeness, labour skills and position in the value chain, thus expanding the list of potential logics of sectoral interrelations. Using a vector autoregression model, we assess whether and how growth in a macro-sector, and in a given region, can predict growth in the same or other macro-sectors, in the same or in other regions. Our findings bring to light the inter-regional nature of intersectoral linkages, as well as the existence of complementarities between sectors. Supporting the growth of innovative firms could have positive externality effects, especially in the Knowledge-Intensive Business Services sector which is associated with the growth of the entire economy.     

The challenge of using standard contracts in public–private partnerships

A call for an increased use of standard contracts in public–private partnerships (PPPs) for infrastructure development is noticeable in practice. These contracts are expected to simplify and improve procurement by creating opportunities for learning, lower transaction costs, and better competition. This paper delineates standard contracts in PPP as a new venue for research and unfolds their potential impact. Here lies an important challenge since the benefits of standardization are not as straightforward as they look at first sight, particularly when taking into account the tension between the powerful, control-oriented role of contracting authorities and the need for contingent, informal contracting.