ANALYSIS OF POVERTY AND EFFICIENCY: AN EARNINGS FRONTIER APPROACH

The paper introduces the concept of an earnings frontier in explaining monthly consumption expenditure (a proxy for income) in terms of human capital and endowments of a household. Individuals who translate their potential earning into actual earnings enjoy a fully efficient position. In contrast, individuals who earn less than their potential earnings suffer from some kind of earnings inefficiency. The paper estimates an earnings frontier using the Corrected Ordinary Least Square (COLS) method and classifies households in terms of efficiency scores. Splitting the sample into an efficient and an inefficient part based on the estimated frontier and a bench mark efficiency score, the status of poverty in the two parts (groups) is studied. The poverty gap between the groups is then decomposed into a characteristics effect and a coefficients effect using the familiar Oaxaca decomposition methodology. The paper also tries to establish a link between the notion of efficiency and the coefficients effect in the Oaxaca decomposition methodology. The results obtained are interpreted in light of the poor but efficient hypothesis.     

Understanding commercialization of technological innovation: taking stock and moving forward

The commercialization of technological innovation, which is key to entrepreneurial success, represents a combination of several entrepreneurial activities. Building on research in management, strategy, entrepreneurship, and economics, this research summarizes 194 articles from 62 journals, categorizing them into six broad entrepreneurial activity themes: sources of innovations, types of innovation, market entry competence and feasibility, protection, development, and deployment. This review and synthesis suggest a framework of commercialization and an agenda for future research along with recommendations and guidance for future research. The proposed agenda provides topics and research questions for research, as well as related recommendations regarding the study and practice of the commercialization of innovation.     

Product market pricing power, industry concentration and analysts’ earnings forecasts

This is the first study to establish a link between product market power and analysts’ earnings forecast accuracy and bias. Relating two different dimensions of market power to earnings forecastability, we document that (a) a firm’s relative pricing power and (b) its industry concentration are strong positive determinants of analysts’ earnings forecast accuracy. We find that forecasting earnings of higher market power firms is less complex due to their ability to withstand cost shocks as well as greater informational-efficiency enjoyed by such firms. Further, forecast optimism increases with weakening product market pricing power and with lower industry concentration. The knowledge derived from this study will hopefully improve the accuracy of equity valuation, and thereby engender better buy-side (stock selections) and sell-side recommendations by analysts. Our analysis also suggests that brokerage firms compensating analysts based on forecast accuracy need to adjust for the differential in the information complexity of different industries.     

Impact of injuries on work performance among the surgical blacksmiths of West Bengal

The manufacture of surgical instruments is one of the leading small-scale industrial sectors in West Bengal, India. The present study was undertaken to assess the rate, type and cause of injury incidents among surgical blacksmiths and whether these incidents affected the work performance of the blacksmiths. A cluster of 216 skilled and 225 unskilled blacksmiths (male), engaged in the manufacture of surgical instruments, was selected from Baruipur subdivision as study subjects. The study included: 1) completion of a questionnaire; 2) measurement of physical parameters; 3) incident records; 4) statistical analysis of the data. The present study revealed that the blacksmiths suffered very frequently from work-related injuries. The number of injuries that occurred during 2004 - 2005 for skilled and unskilled blacksmiths was 1413 and 1610 respectively. Unskilled blacksmiths were disproportionately affected. These injuries resulted in a high rate of lost workdays, i.e. 517 and 742 workdays for skilled and unskilled workers respectively. The study thus indicated that surgical blacksmiths are highly prone to injuries in their occupation, mostly affecting the fingers (23% and 23%) and back region (21.7% and 22%) in both groups, which consequently affected their health, productivity and work performance.     

Endogenous Imitation and Technology Absorption in a Model of North–South Trade

Abstract

This paper considers the transfer of technology from the North to the South that occurs through trade in high-technology goods and explicitly models the ‘reverse-engineering’ process that allows the South to assimilate new technologies. A key finding of this study is that the South's rate of growth is dictated by the size of the country's human capital, which determines its absorptive capacity and its ability to assimilate knowledge from the North. We find that while a Southern country that is poor in human capital can only imitate, Southern countries that possess sufficiently large human capital endowments, beyond a certain threshold, signal the onset of innovation. We also find that the North enjoys a higher rate of innovation and growth with trade than without. North's gains are the highest when it trades with a human-capital ‘poor’ South, because imitation increases South's demand for Northern intermediates. But trade with the Southern countries that are human capital rich (and therefore involved in innovation), dampens their demand for Northern imports, adversely affecting North's growth. The model predicts growth convergence between the North and a South that is well passed the threshold for innovation.     

Strategic group theory： A customer-oriented view

Barney and Hoskisson （1990） argue that the strategic group research has neither established the existence of strategic groups, nor their relationship to firm performance. The primary reason behind the unsatisfactory results is the lack of a theoretical framework： what strategic variables to include in the analysis and their relative importance; the definition of an industry, and how to make competitive strategy operational. First, the author presents a customer-oriented theory of management which submits that, like Procter and Gamble, understanding customers should be the primary focus of a business. Second, the author proposes an integrated approach to competitive strategy. Because customer-perceived quality is far more critical to long-term success than any other factor, it should be the centerpiece of competitive strategy. The author suggests that competitive strategy should be divided in two interdependent dimensions： external and internal. It is the external strategy that should be considered the primary dimension because it reflects the customers＇ perspective, and provides a sense of direction regarding how the internal resources should be used. Next, the author presents an operational framework of competitive strategy which proposes that the best route to market share leadership in consumer markets is competing in the mid-price segment, offering superior quality compared to competition at a somewhat higher price： （1） to maintain an image of quality, and （2） to ensure that the strategy is profitable and sustainable. Finally, the author offers a framework of business or industry definition that extends Abell＇s （1980） three dimensions to seven. He suggests that an integrated approach to market segmentation provides the foundation for conducting strategic group analysis in consumer markets. So, in strategic group research, we need a bottom-up approach that begins with a product-market segment. In each product market, real competition occurs at the brand level. This is the ground where actual competitive wars are fought, and this is where the rich dynamics of competition often come to light.     

Managerial characteristics and willingness to send employees on expatriate assignments

This paper examines the characteristics of managers that influence their willingness to send employees on expatriate assignments. Data from 336 senior managers in a major U.S. professional services firm indicate that managers who are higher up in the organizational hierarchy are more willing to send employees on expatriate assignments. In addition, our findings show that managers who have more extensive international experience are more inclined to send employees on such assignments and that managers with expatriate experience themselves are much more willing to send their employees overseas, regardless of whether they currently work with international clients. © 2009 Wiley Periodicals, Inc.     

An Empirical Examination of the Divergence between Managers’ and Analysts’ Earnings Forecasts

We study circumstances when analysts’ forecasts diverge from managers’ forecasts after management guidance, and the consequences of this divergence for investors and analysts. Our results show that investors’ return response to earnings surprises based on analyst forecasts is significantly weaker when analyst and management forecasts diverge, and that this attenuating effect is stronger when the management forecast is more credible. When the divergent management forecast is more accurate than the analyst consensus forecast, the subsequent‐quarter analyst consensus forecast is significantly more accurate than that of the current quarter, and exhibits less serial correlation. Overall, our findings suggest that, when analyst and management forecasts diverge, investors find the two sources to contain complementary information, and analysts learn to improve their subsequent forecasts.