Neutrality and Non‐Neutrality of Money In A Classical‐Type Model

Abstract. This paper modifies the simple classical model by introducing capacity utilization that varies across the course of the business cycle. By making the capacity usage a choice variable that turns out to be sensitive to changes in the price level, we show that the classical model loses its fundamental feature, namely the neutrality of money. In our generalized framework, a rise in money supply improves upon all the real variables if the economy suffers from excess capacity, as in recessions and depressions. We demonstrate that our model describes the various economic cross‐currents during the Great Depression extremely well. Thus, monetary policy emerges with an activist role even in a generally classical setting.     

The Level of Compliance with the International Code of Marketing of Breast-Milk Substitutes: Does it Matter to Stock Markets?

The present paper explores, theoretically, and empirically, whether compliance with the International Code of marketing of breast-milk substitutes impacts on financial performance measured by stock markets. The empirical analysis, which considers a 20-year period, shows that stock markets are indifferent to the level of compliance by manufacturers with the International Code. Two important issues emerge from this result. Based on our finding that financial performance as measured by stock markets cannot explain the level of compliance, the first issue refers to what alternative types of mechanisms drive manufacturers who comply the least with voluntary codes such as the International Code. Conversely, from our finding that stock markets do not reward the most compliant, the second issue raised is an inherent weakness of stock markets to fully incorporate social and environmental values.     

Factors Influencing Consumers’ Willingness to Pay for Organic Fruits and Vegetables: Empirical Evidence from a Consumer Survey in India

Numerous consumers confronted with increasing environmental problems, food safety issues, and augmentative health problems increasingly desire to have healthier and more natural foods grown in an eco-friendly manner. Hitherto organic foods only partly benefit from this increasing market environment, and their market share stays rather low despite high growth rates. This article aims to investigate consumers’ willingness to pay (WTP) for organic fruits and vegetables and relevant factors affecting consumers WTP. The contingent valuation method was selected to estimate WTP. Empirical data was drawn from a 250-consumer survey conducted in Bangalore during February 2013. A binomial logistic regression model was applied to obtain the value of WTP and determine the factors influencing it. The results indicated that about 90% of the consumers were willing to pay a premium price ranging between 5% to more than 100% in order to acquire better-quality fruits and vegetables; factors such as family income, size of the family, gender, and other opinion variables such as chemical residue in conventional foods, trust on retailers, taste, and environmental concerns significantly influence consumers’ WTP. More than 87% of the consumers indicated that high price, lack of availability, narrow range, and irregular supply are the major barriers for them to buy these products. The results provide useful evidence to pertinent governmental agencies in terms of assisting in the design of policies for the promotion of organic food production and marketing and reaching the target public. Furthermore, firms involved in the organic foods business may also see benefits when drawing information in order to calibrate marketing strategies.     

Product Attributes as Purchase Determinants of Imported Fruits in Indian Consumers

This study aims to investigate the consumer perceptions and purchase determinants of imported fruits in an emerging economy such as India. A consumer survey was conducted in one of the major urban cities of India. Item measures were related to consumer perceptions, purchase determinants, and consumer-reported willingness to pay price premiums. The data analysis was undertaken using techniques like exploratory factor analysis, logistic regression, and analysis of variance. Consumers associate imported fruits with health, safety, taste, and free from chemicals, whereas extrinsic factors such as storage conditions, store image, appearance, label, country of origin, and price also influence the willingness to purchase imported fruits. The demographic factors having the most impact on consumers’ attribute ratings for imported fruits are age, gender, income, and education. This study highlights the significant purchase determinants that can help marketers of imported fruits to gain higher share in Indian markets.     

Acquisitions and the Information Environment of Firms

This paper investigates how acquisitions affect analyst following of firms. Analyst following increases as a result of a merger. However, all of that increase can be attributed to the changes in firm-specific characteristics resulting from the merger. Changes in analyst following around mergers are positively related to changes in firm size, expenditures on R&D, and the ratio of book to the market value of equity. Finally, the relatedness of merger appears to be an important determinant of analyst following of firms engaged in acquisitions.     

Strategy choices among internationalizing US airlines

This paper surveys and analyzes the internationalization strategy of US airlines. We first discuss globalization factors acting on the industry, particularly, government actions, the emergence of international markets, competition (including the role of firm specific assets in conferring competitive advantage), and supply cost factors, principally labor, fuel, and aircraft procurement. We then discuss the gains from internationalization, and the recent performance of US airlines, from which we develop internationalization strategy guidelines for airlines, classified as market-oriented and efficiency-oriented. Finally, we trace some broad lessons from the aviation industry for other service sectors facing similar deregulation and globalization pressures.     

Creating mutual value: Lessons learned from ventures serving base of the pyramid producers

The base of the pyramid (BoP) literature is grounded in the proposition of mutual value creation, an important but not yet well-tested relationship between business development and poverty alleviation. This paper begins to address this gap by assessing how business ventures serving BoP producers address local constraints and create mutual value. Using a case study methodology, sixty-four ventures are analyzed to identify the constraints faced by BoP producers. These are classified into productivity and transactional constraints. While the former set of constraints inhibits local value creation, the latter severely diminish the value capture potential of BoP producers. An in-depth analysis of eleven agricultural ventures provides insight into the strategies that ventures use to address constraints and enhance value creation and capture by BoP producers. The findings also indicate that alleviating constraints creates value not only for local producers, but also for the ventures themselves.     

Civil war,public goods and the social wealth of nations

This paper establishes and explores the implications of a somewhat surprising empirical finding. Although civil war adversely affects the performance of social indicators in general, poorer countries lose less, in absolute and relative terms, than richer countries. It is argued that the explanation may lie in the extent to which richer countries have better social (and economic) indicators because of more public goods, and adaptation of economic and social mechanisms to the greater abundance of public goods such as physical infrastructure. Civil war destroys public goods, and therefore damages disproportionately the countries most dependent on them. A further implication of this framework is that the post‐conflict rebound in social indicators should be relatively stronger in poorer countries. The data bear out this prediction. Our results should not of course be read as implying that poorer countries need less support to avoid civil war and to cope with its aftermath. Although their losses are less, they start from a lower base; so even small declines severely impact human well‐being. Properly understood, our results highlight the central role that public goods play in underpinning the social (and economic) wealth of nations.     

Do Stringent Environmental Regulations Reduce International Competitiveness? Evidence from an Inter-industry A nalysis

An increasing interest has emerged among policy makers and academics on the question "Do stringent environmental regulations lead to loss of international competitiveness in terms of declining exports and increasing imports compared with those from the countries which have lower environmental standards and regulations?". This paper examines this issue by conducting an inter-industry analysis of New Zealand manufacturing industries. By analysing the patterns and determinants of comparative advantage of 109 industries over the last 13 years, we found no strong evidence to suggest that environmental standards lead to loss of competitiveness.     

PARTNER CONGRUENCE IN ELECTRONIC DATA INTERCHANGE (EDI)‐ENABLED RELATIONSHIPS

Business partnerships are a prerequisite for an effective supply chain. EDI‐enabled business partnerships are crucial in linking suppliers and customers. This paper develops congruence factors for customer‐supplier EDI partnerships. Data were collected from sixty‐four customer‐supplier dyads of firms using a questionnaire instrument. By factor analyzing thirty‐one items, six congruence factors were identified: top‐level strategic commitment, trading partner flexibility, joint partnering for EDI, readiness for high‐level EDI implementation, EDI infrastructure, and partner communication. Additional analysis revealed that customer firms placed significantly more emphasis on congruence factors than supplier firms except for “joint partnering for EDI.” These findings have implications for assessing business partnerships in the networked economy.