Generalized quadratic revenue functions

In this paper we focus on the specification of revenue functions in their dual price space. We consider two distance functions–the Shephard output distance function and the directional output distance function–and define both in price space. The former is multiplicative in nature and satisfies homogeneity, whereas the latter is additive and satisfies the translation property. Functional equation methods yield the translog specification in the case of the Shephard distance function and a quadratic specification in the case of the directional distance function. Monte Carlo evidence suggests that the quadratic specification outperforms the translog in large samples and in true models with plenty of curvature.     

International mergers and acquisitions in the UK 1985-94: a comparison of national HRM practices

The paper investigates HRM practices adopted by companies from the USA, Japan, Germany and France in UK companies that they have acquired. UK/UK acquisitions are used as a control. The research is based on a survey instrument applied to 201 companies and interviews with forty. It notes that there is some convergence of HRM practices, in that, for example, all countries researched employ performance-related pay and increase the amount of training in their new subsidiaries. It finds, however, that there is a distinct difference in the HRM practices employed by companies from each of the countries, influenced by the characteristic HR practices common to companies in the country of origin of the parent.     

The Herning-Ikast textile industry: an industrial district in West Jutland

Notions of social inclusion and the need to combat social exclusion have become popular areas of attention in academic and policy circles. The importance of small firms and entrepreneurship as a means to raising inclusion has been emphasized in these new agendas. A priori, there are a number of reasons why small businesses may be regarded as providing opportunities for social inclusion. However, in this paper we argue that the recent expectations of the role of small firms and entrepreneurship in combating social exclusion are over optimistic. Some of the assumptions on which these expectations are based are questioned. Instead, we suggest that attention should start by a clearer understanding of the concept of social exclusion. Individual economic strategies, in the form of small business activity, can make some contribution but because of the complex multidimensional nature of social exclusion, over-inflated claims should be avoided. When these claims are not achieved there may be a danger of a policy backlash against the promotion of business ownership and disaffection amongst those who fail to realize their goals. This paper draws on secondary evidence and concludes with implications for policy and suggestions for further research.     

For the greater good: business networks and business social responsibility to communities

Business networks (co-operative arrangements between independent business organizations) may be the signature organizational form of the contemporary global economy. Many policy-makers and local leaders advocate business network membership as an alternative development strategy for regional economic vitality. The extant literature on business networks has focused on their association with business success. However, little is known about their impact on other aspects of community life. The purpose of this paper is to elaborate the role of network membership on one non-economic dimension of the business community interface. We examined the relationship between business network membership and business social responsibility to communities, defined as the provision of leadership and support for community betterment projects. Data were gathered from telephone interviews with a random sample of 460 non-metro small business operators in the USA. Independent t-tests and ordinary least squares regression analyses controlling for theoretically important variables were conducted. Findings show that networked businesses provide more leadership and support for their communities than non-networked businesses. However, networked businesses were no more likely than non-networked businesses to use local suppliers of goods and services.     

SEMIPARAMETRIC VECTOR MEM

Financial time series are often non‐negative‐valued (volumes, trades, durations, realized volatility, daily range) and exhibit clustering. When joint dynamics is of interest, the vector multiplicative error model (vMEM; the element‐by‐element product of a vector of conditionally autoregressive scale factors and a multivariate i.i.d. innovation process) is a suitable strategy. Its parameters can be estimated by generalized method of moments, bypassing the problem of specifying a multivariate distribution for the errors. Simulated results show the gains in efficiency relative to an equation‐by‐equation approach. A vMEM on several measures of volatility justifies a joint approach revealing full interdependence. Copyright © 2012 John Wiley & Sons, Ltd.     

Advertising and Coordination in Markets with Consumption Scale Effects

Many advertised products are established and have little quality variation. For these products advertising signaling explanations are unconvincing. We develop a coordination model of advertising with consumers observing ads probabilistically and never observing advertising levels. Consumers who fail to see an ad for a product believe it will likely have low sales and so be of low value. Firms advertise to avoid these beliefs. The model's predictions on advertising, market share, and profitability are consistent with observed outcomes. The model produces the time series behavior for prices and market share observed in the data and not available from existing coordination models.     

Regression density estimation using smooth adaptive Gaussian mixtures

We model a regression density flexibly so that at each value of the covariates the density is a mixture of normals with the means, variances and mixture probabilities of the components changing smoothly as a function of the covariates. The model extends the existing models in two important ways. First, the components are allowed to be heteroscedastic regressions as the standard model with homoscedastic regressions can give a poor fit to heteroscedastic data, especially when the number of covariates is large. Furthermore, we typically need fewer components, which makes it easier to interpret the model and speeds up the computation. The second main extension is to introduce a novel variable selection prior into all the components of the model. The variable selection prior acts as a self-adjusting mechanism that prevents overfitting and makes it feasible to fit flexible high-dimensional surfaces. We use Bayesian inference and Markov Chain Monte Carlo methods to estimate the model. Simulated and real examples are used to show that the full generality of our model is required to fit a large class of densities, but also that special cases of the general model are interesting models for economic data.     

Marketing and development out of poverty: introduction to the special issue

• Reducing poverty by meeting the United Nations' Millennium Development Goals (MDGs) is an interdisciplinary undertaking, in which Marketing Science logically plays a role. The papers in this special issue cover a range of methods, from traditional consumer research experiments (on images of poverty, donation behaviour) and sample surveys on the credibility of celebrity marketing, to observational studies of community values and customs (on micro-finance or agricultural enterprise). Consumers of aid appeals, celebrity lobbying and financial services—these methods reveal—are behaviourally complex. They are infused with contradictory, competing and complementary tendencies. Underlying those different tendencies however is a common but often overlooked thread. For poverty to be significantly reduced by 2015, attention needs to be paid not only to goals, that is to task but also towards understanding the human relationships in the poverty reduction market. Marketing practise and research can contribute to poverty reduction by helping build (1) perspective-sharing, (2) accommodation to local needs and (3) appreciation of socio-economic and socio-cultural behavioural systems.

Copyright © 2008 John Wiley & Sons, Ltd.