Labor Income and Predictable Stock Returns

We propose a novel economic mechanism that generates stock returnpredictability in both the time series and the cross-section.Investors’ income has two sources, wages and dividendsthat grow stochastically over time. As a consequence the fractionof total income produced by wages fluctuates depending on economicconditions. We show that the risk premium that investors requireto hold stocks varies with these fluctuations. A regressionof stock returns on lagged values of the labor income to consumptionratio produces statistically significant coefficients and largeadjusted R²s. Tests of the model’s cross-sectional predictionson the set of 25 Fama–French portfolios sorted on sizeand book-to-market are also met with considerable support.     

Model building and estimation strategies for implementing the Balanced Scorecard in Health sector

Over last two decades, the concept of the Balanced Scorecard has had broad application by the health sector internationally, including Hospitals systems and national healthcare systems or organizations. However, the lack of literature on causal-effect relationships between different types of dimensions and indicators poses difficulty in conceptualising and implementing a quality evaluation system based on Balanced Scorecard. Methodologically, the most natural context for Balanced Scorecard conceptualization and estimation deals with Structural Equation Models with latent variables. Partial Least Squares Path Modelling has found increased applications, thanks to its ability to handle complex models. However, the lack of a global optimization criterion makes it difficult to evaluate this procedure. The aim of this article is to propose a methodological conceptualization of the Balanced Scorecard in a new context, as the Health sector, using a suitable statistical approach to estimate causal relationships among specified latent dimensions, together with a model building strategy, a necessary step when expert knowledge is too weak to build a robust and well suited model. Specifically, within the Structural Equation Models framework a two-step model building strategy is presented; the first step build the measurement models based on a clustering (around latent variables) technique and the second step build the structural model based on partial correlations and a procedure that selects the best model in terms of predictive power, measured by the mean of the R ² for the endogenous latent variables. Finally, an application based on administrative archives of Lombardy region (Italy) illustrates the presented methodology.     

Scale effects in endogenous growth theory: an error of aggregation not specification

Modern Schumpeterian growth theory focuses on the product line as the main locus of innovation and exploits endogenous product proliferation to sterilize the scale effect. The empirical core of this theory consists of two claims: (i) growth depends on average employment (i.e., employment per product line); (ii) average employment is scale invariant. We show that data on employment, R&D personnel, and the number of establishments in the US for the period 1964–2001 provide strong support for these claims. While employment and the total number of R&D workers increase with no apparent matching change in the long-run trend of productivity growth, employment and R&D employment per establishment exhibit no long-run trend. We also document that the number of establishments, employment and population exhibit a positive trend, while the ratio employment/establishment does not. Finally, we provide results of time series tests consistent with the predictions of these models.     

Perceptions of Industrial Design: The “Means” and the “Ends”

It is widely accepted that industrial design can play an important role in the development of innovative products, but integrating design‐thinking into new product development (NPD) is a challenge. This is because industrial designers have very different perspectives and goals than the other members of the NPD team, and this can lead to tensions. It has been postulated that the communications between NPD managers and industrial designers are made more difficult because each group uses very different language. This research made the first empirical investigation of the language used by designers and managers in describing “good” and “poor” industrial design. In‐depth interviews were conducted with a sample of 19 managers and industrial designers at five leading companies. Multiple sources of data were utilized, including the repertory grid technique to elicit the key attributes of design, from the perspective of managers and designers. Using a robust, systematic coding approach to maximize the validity and reliability of qualitative data analysis, it was established that managers and industrial designers do not use a completely different vocabulary as previously supposed. Rather, it was found that managers and industrial designers use some common terms augmented by additional terms that are specific to each group: managers are commercially orientated in the “ends” they want to achieve and designers perceive more antecedents (“means”) necessary to achieve their “ends”—iconic design. This research led to a grounded conceptual model of the role of design, as perceived by managers and industrial designers. The implications of the results achieved are wide: they indicate how managers and designers can interact more productively during NPD; they highlight the need for more research on the language of designers and managers; and they point to issues that need to be covered in the education of industrial designers. Finally, this work suggests how managers and designers can engage in a more fruitful dialogue that will help to make NPD more productive.     

The process of supply network internationalisation

This paper explores the process that dynamically links the why's, how's and what's of supply network internationalisation. We propose a conceptual framework that adapts and extends the Uppsala internationalisation model and apply it to analyse nine case studies of Italian footwear and apparel companies involved in relocating some segments of their supply networks to Romania. Consistently with behavioural theories, our findings confirm that internationalisation is an incremental process in which firms gradually increase their international exposure and involvement. However, differently from the Uppsala establishment chain internationalisation model, our cross-case analysis suggests a different typology of supply network internationalisation processes: (1) traditional subcontracting, (2) co-ordinated subcontracting, and (3) supply system relocation. We discuss the theoretical and managerial implications of these findings and suggest directions for further research.     

Proactive and reactive views in the transition towards circular business models. A grounded study in the plastic packaging industry

This article contributes to the studies on the transition towards circular business models in incumbent entrepreneurial firms. The focus of our research is the plastic packaging industry, a paradigmatic case of firms with a high environmental impact who are currently under pressure to change their business models. Following a grounded theory approach, we conducted an exploratory research on five case studies, longitudinally analyzed over two years. The results of our research suggest that the circularity challenge raises dilemmas about how to interpret the transition to sustainability. On one hand, the transition may be interpreted in a reactive way, based on compliance to the law and the highest possible levels of continuity. On the other hand, the transition may be interpreted in a proactive way, based on radical experimentation and openness to change. Our results highlight that the reactive-proactive dilemma unfolds at three interconnected levels: the firm’s network (including the customers), the entrepreneur, and the organization. Our study also suggests that the entrepreneur is in a position to play a pivotal role in the multi-level adoption of a proactive (or reactive) view. More specifically, our longitudinal analysis suggests that if the effectiveness and impact of transition to circularity is to be maximized, then a multi-level proactive view of the circularity transition is key to transforming the three interconnected levels (network, entrepreneur, organization) into a proper, sustainability-oriented innovation ecosystem.

     

Classification of longitudinal career paths

The aim of the present article is to classify, in terms of contractual stability, the careers of the workers in a specified territorial context (Province of Milan-Italy), utilizing large administrative archives. The final goal is a synthetic clustering that identifies individuals in homogeneous groups regarding the longitudinal sequences of contractual typologies occurring in the evolution of vocational experiences during their career, identifying, on the one hand, the worker profiles that remain stable in each contractual typology and on the other hand, the profiles that improve or worsen contractual stability over time. Methodologically, our approach uses a combination of scaling methods to estimate stability scores of each contractual typology and Latent mixture models to cluster similar trajectories. Specifically, the scores of contractual stability were performed by Multidimensional Scaling with individual preferences, taking into account the ordinal nature of distances among contractual typologies and the heterogeneity factors of the subjects. Further, Latent Growth Mixture models, capitalizing the longitudinal property of data sequences, were proposed to identify distinctive, prototypical developmental trajectories of contractual stability within the analyzed population.