Investment opportunities and R&D investments in family and nonfamily firms

The firm’s investment opportunity set (IOS) reflects the prospective growth opportunities related to physical and human capital investments. IOSs are largely firm specific, embedded in assets-in-place, or generated by experience curves, learning-by-doing, and other similar phenomena. However, the value of an IOS can be destroyed if a firm does not exercise the option to invest. In this study, we theorize that a firm’s ability to invest in R&D is conditional on the availability of a favorable IOS. We test our theoretical propositions in the European business environment using a sample of large publicly traded firms with concentrated ownership. Our findings support the notion that the IOS is a significant determinant of corporate R&D investments, but the magnitude of this effect depends on the identity of the ultimate owner. Specifically, the sensitivity of R&D investments of family- and state-owned corporations is higher to favorable IOS than that of widely held corporations, suggesting these firms are more responsive to favorable IOS than others. By introducing the IOS dimension, our results have interesting implications for both theory and practice.     

The Italian hedge funds industry: An empirical analysis of performance and persistence

This study analyses Italian hedge funds performance and persistence. The peculiarity of the Italian hedge fund industry is that 95% of the hedge funds are funds of hedge funds (FoHF), whereas only 5% of them employ other investment styles. Using monthly data on FoHF provided by MondoHedge, we examine the impact of both market variables and funds’ own characteristics on funds performance using panel data. We find that the European, the Japanese and the emerging markets equity markets, and the commodity market have a positive impact on Italian FoHF performances, while the US Bond Market negatively affects them. Moreover, we find performance fees and notice days to have a negative impact on funds performances. Finally, we test the presence of performance persistence. Employing two different nonparametric methods, we find that funds performances are persistent on a monthly and quarterly basis, while the regression-based parametric method provides evidence of persistence only on a monthly basis.     

Ramsey pricing including CO2 emission cost: An application to Spanish airports

The long-term growth in the air transport is leading to the need to expand airport infrastructure but this has serious environmental implications. Thus, there is the need to establish an alternative to the traditional airport pricing structure for landing fees, which reflects the overall costs that air transport operators impose on others. Airport pricing should provide a sound guide for future investments, and at the same time reflect whether additional facilities are needed and at what price, by taking into account all costs, including environmental costs. This paper analyses one application of Ramsey Pricing on uncongested Spanish airport, by considering the CO₂ emission costs as a valuable input.     

The generalized bin packing problem

In the Generalized Bin Packing Problem (GBPP), given two sets of compulsory and non-compulsory items characterized by volume and profit and a set of bins with given volume and cost, we want to select the subset of profitable non-compulsory items to be loaded together with the compulsory ones into the appropriate bins in order to minimize the total net cost. Lower and upper bounds to the GBPP are given. The results of extensive computational experiments show that the proposed procedures are efficient and the bounds are tight.     

First steps towards cross-national transfer in integrating mobility management and land use planning in the EU and Switzerland

This paper is based on research carried out in an EU Framework project, concerning the better integration of mobility management (MM) with land use planning. The objective of the paper is to analyse how, and how far, policies in this field of action can transfer from one member state to another, and to compare this to the theory of policy transfer put forward by Dolowitz and Marsh (2000), using their theory as an analytical framework, but also informing that theory. After providing a definition of this form of integration, the paper explains how far MM and land use planning are currently integrated in the EU member and other states covered in the research (Sweden, Germany, Spain, Lithuania, Poland, Slovenia, Switzerland, the UK, as well as Ireland and the Netherlands). It then presents the results of planning simulation workshops in five of these countries, where a group of planning professionals from each state considered real development sites and how MM could be integrated with the development. It shows that there is scope for transfer but concludes that barriers such as language, differing planning traditions, and the problem of transferring a new policy idea within a country will limit the scope of policy transfer significantly. Nonetheless, it sees a role for EU projects of this nature in encouraging initial consideration of new policy ideas.     

Psychological Meaning of Products and Product Positioning

New product positioning is an issue increasingly being considered by new products managers. An article on this topic by Crawford appeared in this Journal in 1985. Roberto Friedmann and Parker Lessig employ the concept of psychological meaning of products to discuss why and how Crawford's new product positioning typology affects the consumer. They present arguments to show that the psychological meaning of products and Crawford's typology address product positioning from complementary and converging perspectives. They also argue that psychological meaning of products can be a valuable managerial planning tool.     

Planned Flexibility: Linking Anticipation and Reaction in Product Development Projects

The early phases of a product development project (i.e., concept generation and product planning) are commonly acknowledged to play a central role in the success of product innovation. Early decisions are unlikely to be changed during downstream phases, unless high costs and time are experienced. They have therefore the highest influence on project performance. However, early analysis and problem solving is also a difficult task, because the necessary information and insights are not available until one gets into detailed design. Most companies are locked in this dilemma between anticipation (i.e., anticipating decisions in the early phases of product development, where influence on performance is substantial) and reaction (i.e., delaying decisions to downstream phases, where information and opportunities are manifest). This article investigates early development practices in 18 Italian and Swedish companies, operating in the vehicle, helicopter, and white-goods industries. It shows that neither anticipation nor reaction may be considered a best practice in absolute terms. Rather, it identifies four possible approaches to manage the early phases (detailed, selective, comprehensive, and postponed), where anticipation and reaction have different balances. In addition, the article shows how anticipation and reaction are not contradictory or mutually exclusive, but strongly interact with each other through a mechanism that we call planned flexibility, i.e., the capability to build flexibility into the development process due to decisions taken early in the project.     

Innovation and Product Development Strategies in the Italian Motorcycle Industry

The motorcycle industry in Italy offers fertile ground for anyone interested in developing a better understanding of the role innovation plays in enhancing a firm's competitive position. This industry includes both domestic and Japanese firms, with companies ranging from high-volume manufacturers to specialty or niche producers. Firms trying to gain a competitive edge in this crowded field must contend with not only advances in product and process technology, but also the whims of fashion. In a survey of top-level marketing and product development managers from eight leading firms in the Italian motorcycle industry, Moreno Muffatto and Roberto Panizzolo explore the innovation models these firms employ to enhance their competitive position. Their study has the following objectives: categorizing the various competitors in terms of their product and market strategies and their product development and innovation strategies; highlighting differences between the methods of Italian and Japanese firms competing in this market; analyzing the relationships between firms, as well as the roles suppliers play in the various innovation strategies; and identifying the various organizational models employed by the firms in this industry. Different product and market strategies are identified on the basis of three variables: total production volume, the number of different products offered, and the number of different engine capacities offered. Using these variables, the companies in the study are categorized as volume producers, specialists, or niche specialists. The firms are further differentiated on the basis of the relative emphasis each places on product technology and design, product innovation, product variety, and time-based competition. In the firms studied, partnerships play a key role in new product development. Nearly every firm participates in joint projects, most often involving development of either an entire vehicle or an engine. Other partnerships involve firms in countries that offer emerging markets for the motorcycle industry. Organizational structures and strategies employed by the volume producers in this study include: the large product leader, who oversees concept definition and product planning; the project leaders group, which coordinates all phases of development, including activities assigned to external groups; the project managers matrix, a matrix organizational structure with a strong product orientation; and the business unit program manager, who oversees all projects within an independent business unit.     

Export transitions

This paper uses a broad multi-country dataset to describe the main stylized facts about export performance in the last four decades. First, transition probability matrices are computed to look at changes in the position of countries at the world distribution of the export to GDP ratio. It finds that transitions toward high export ratios have been mainly experienced by Asian countries, but also that some reformers, like Mexico and Chile, have been able to improve their position relative to other studied economies. African countries mainly sunk to the bottom part of the world distribution, although they constitute only half of the economies with relatively bad export performance. In the consideration of the structural factors that may play an important role for long-run transitions, the results suggest that more open economies and those with better institutions are more likely to move to high export ratios in the long-run. Second, the within-country experiences are analyzed for identifying episodes of export transitions. Using an event study methodology, a very weak association is found between export transitions and investment rate. In contrast, the results suggest that transitions are potentially driven by improvements in financial development. Finally, favorable terms of trade, increments in productivity, and reductions in exchange rate distortions are not found to be a catalyst for export transitions.