A Service Perspective on IBM’s Brand

Today, global conditions challenge traditional views of management, marketing, and economics. The goods-dominant view, centered on the notion of production and consumption, is being subsumed by the service-dominant view, centered on the notion that business value is cocreated by interaction of economic entities. Here, we consider IBM and its brand, showing that it reflects - and always has reflected — the service-dominant view of value cocreation.     

Political Connectedness and Firm Performance: Evidence from Germany

Abstract. This paper investigates politically connected firms in Germany. With the introduction of a new transparency law in 2007, information on additional income sources for all members of the German parliament became publicly available. We find that members of the conservative party (CDU/CSU) and the liberal party (FDP) are more likely to work for firms than members of left‐wing parties (SPD and The Left) or the green party (Alliance 90/The Greens). Politically connected firms are larger, less risky and have lower market valuations than unconnected firms. They also have fewer growth opportunities, but slightly better accounting performance. On the stock market, connected firms significantly outperformed unconnected firms in 2006, i.e. before the publication of the data on political connections. Differences in stock market performance were much smaller in 2007.     

SUCCESSFUL IN THE LONG RUN: A META‐REGRESSION ANALYSIS OF PERSISTENT FIRM PROFITS

We study the profit persistence literature by applying meta‐regression analysis (MRA) to a set of 36 empirical papers, which analyze the persistence of abnormal firm profits over time. The analyzed literature provides evidence for a mediocre degree of persistence in abnormal profits. An initial analysis of the distribution of reported profit persistence estimates reveals some degree of excess variation. This points toward publication bias that favors significant results independent of their algebraic sign. The MRA, however, reveals that publication bias is particularly favoring results that indicate profit persistence and thus contradict the neoclassical model of perfect competition. Moreover, the MRA enables to control for heterogeneity driven by the study design. We find that the analyzed country (developing vs. developed), the applied econometric approach, as well as the analyzed period of time are significant drivers of heterogeneity in reported persistence estimates.     

Residual value forecasting using asymmetric cost functions

Leasing is a popular channel for marketing new cars. However, the pricing of leases is complicated because the leasing rate must embody an expectation of the car’s residual value after contract expiration. This paper develops resale price forecasting models in order to aid pricing decisions. One feature of the leasing business is that different forecast errors entail different costs. The primary objective of this paper is to identify effective ways of addressing cost asymmetry. Specifically, this paper contributes to the literature by (i) consolidating prior work in forecasting on asymmetric functions of the cost of errors; (ii) systematically evaluating previous approaches and comparing them to a new approach; and (iii) demonstrating that forecasting using asymmetric cost of error functions improves the quality of decision support in car leasing. For example, if the costs of overestimating resale prices are twice those of underestimating them, incorporating cost asymmetry into forecast model development reduces costs by about 8%.     

The Impact of Agricultural Extension and Roads on Poverty and Consumption Growth in Fifteen Ethiopian Villages

This article investigates whether public investments that led to improvements in road quality and increased access to agricultural extension services led to faster consumption growth and lower rates of poverty in rural Ethiopia. Estimating an Instrumental Variables model using Generalized Methods of Moments and controlling for household fixed effects, we find evidence of positive impacts with meaningful magnitudes. Receiving at least one extension visit reduces headcount poverty by 9.8 percentage points and increases consumption growth by 7.1 percentage points. Access to all-weather roads reduces poverty by 6.9 percentage points and increases consumption growth by 16.3 percentage points. These results are robust to changes in model specification and estimation methods.     

Consumer’s Perception of Fruit Innovation

The objective of the present report is to explore consumers’ perception of fruit and fruit product innovations, in particular nutritionally enriched/fortified fruit and laser-tattoo labeled fruit. These innovations may modify consumers’ visual representation of fruit, influencing their perceptions of fruit integrity. The research included 537 face-to-face interviews with shoppers at the point of sale and was analyzed with the use of factor analysis and multivariate logistic regression. Results show that the consumers pursue “nature integrity–oriented” innovation, for both health and environment-oriented innovation. The consumer is cautious toward innovation and accepts it if the final product keeps its original familiarity. Consumers are more inclined toward innovation if they have a higher education level, are young or middle age, or have a higher income. To conclude, innovation is positively perceived if it respects consumers’ perception of fruit as being intrinsically natural. Innovation in fruit and fruit products should be tested against consumers’ acceptance.     

Die Erwartungen der Wirtschaft für 2017

In 2016, Germany’s economic sectors had mixed fortunes. Gross domestic income increased by 1.8% in total. The prospects for 2017 are hardly better and subject to uncertainties. Above all the results of the US presidential election and Brexit give cause to fear protectionist tendencies, which are especially adverse for the German export-oriented industries. As a result the representatives of industry and services associations expect in 2017 rather modest growth rates.