Marketing challenges of technical industries in developing countries

A rapidly changing technology-based industry such as electronics in the environment of a developing country has many unique problems in organizational marketing. The problems and possible strategies under such conditions are discussed in this article.     

Nature of the relationship between international expansion and performance: The case of emerging market firms

Internationally expanding companies would like to see how they compare with rivals in terms of the effect of internationalization on financial performance (for their sector and their firm). Virtually all such studies have focused on advanced nations. This study, on internationalization of firms based in an emerging economy (India), provides a unique research setting and sheds additional light on this relationship. It tests for the shape of the internationalization–performance curve for emerging market firms, and investigates differences between service firms and manufacturers in the threshold effect between the initial and later stages of internationalization. We find a U-shaped curve depicting the internationalization–performance relationship of Indian firms. Service sector firms tend to gain the positive benefits of internationalization sooner than manufacturing companies.     

Analyzing the underlying dimensions of firm profitability

In this paper we decompose a traditional measure for firm's performance, return on sales, into four components that capture the impact of productivity, price recovery, product mix and capacity utilization, respectively, on a firm's profitability. The new measures are used as an illustration to explain changes in the performance of firms in the US telecommunications industry following deregulation. Changes in the overall profitability margin of these firms are explained by substantial but offsetting changes in their productivity, price recovery ability, product-mix maximization and capacity utilization, that have occurred as a consequence of deregulation. The new measures enable us not only to illustrate relative differences between firms in a given cross-section but also to shed light on how changes take place over time in the different components that underlie firms' profitability.     

Determinants of corporate social responsibility disclosures: Evidence from India

Over the last few decades, a number of studies, mostly in the western countries, have investigated the nature and frequency of corporate social responsibility disclosures, their patterns and trends, and their general relationships with corporate size and profitability. This study seeks to extend the knowledge regarding the relationship between a number of financial and non-financial corporate characteristics and the level of social responsibility disclosures based on an extensive sample of top Indian companies. Corporate size and industry category are found to correlate with the corporate social disclosures of the companies and the corporate reputation as recognised through awards and social ratings has also been observed to be a significant factor that influences the social disclosures made by the Indian companies.     

Imputation of Missing Values in the Fundamental Data: Using MICE Framework

Revolutionary developments in the field of big data analytics and machine learning algorithms have transformed the business strategies of industries such as banking, financial services, asset management, and e-commerce. The most common problems these firms face while utilizing data is the presence of missing values in the dataset. The objective of this study is to impute fundamental data that is missing in financial statements. The study uses ‘Multiple Imputation by Chained Equations’ (MICE) framework by utilizing the interdependency among the variables that wholly comply with accounting rules. The proposed framework has two stages. The initial imputation is based on predictive mean matching in the first stage and resolving financial constraints in the second stage. The MICE framework allows us to incorporate accounting constraints in the imputation process. The performance tests conducted on the imputed dataset indicate that the imputed values for the 177 line items are good and in line with the expectations of subject matter experts.

     

PERFORMANCE OF STUDENTIZED RANGE STATISTIC FOR TWO OUTLIERS IN A LINEAR MODEL

Abstract. In JOSHI and LALITHA (1986) a statistic K is proposed for detecting two outliers present in the opposite directions in a linear model. This statistic reduces to the Studentized range statistic for the case of a simple random sample from a normal population. In this paper, the performance of this statistic is studied. For this an approximate non–null density of the random variables involved in defining the statistic is derived. An exact density is also obtained by using the methods of LALITHA and JOSHI (1986), where the results are proved for Murphy's statistic. A measure of performance is then defined and an example is also given for highlighting the usage of the above said statistic.     

The Subprime Virus

We examine the correlation between prime mortgage default risk and the introduction of subprime mortgages in a local area. We motivate our analysis with a model of a default contagion effect that spreads the effect of a mortgage foreclosure from one property to surrounding properties. Through numerical analysis, we demonstrate the effect of subprime mortgage originations to the risk of prime mortgages. Finally, we offer empirical support for our model by examining the spatial variation in MSA prime mortgage default rates and the level of subprime mortgage activity.     

OEM implementation of supplier-developed component innovations: the role of supplier actions

For suppliers to secure a positive return on their investment in the creation of component innovations, they must ensure that original equipment manufacturers (OEMs) implement these component innovations. The objectives of this study are to (1) identify the activities that suppliers undertake to foster innovation implementation, (2) articulate the theoretical mechanisms that mediate the impact of these activities on innovation implementation, and (3) establish the inter-related effects of these mediating theoretical mechanisms on innovation implementation. The results from a survey of 173 supplier–OEM dyads reveal that functional advantage is the theoretical mechanism that mediates the impact of two supplier actions—knowledge acquisition and installation support—on innovation implementation. The results also show that reputational advantage mediates the effect of innovative OEM endorsement and that relational advantage mediates the effects of supplier asset specificity and supplier innovativeness on innovation implementation. In terms of the inter-related effects of the mediating mechanisms on innovation implementation, the results indicate that relational advantage complements the positive impact of functional advantage on innovation implementation. In addition, the results reveal that innovation implementation has a positive impact on the financial performance of component innovations.     

Belief Networks for Expert System Development in Auditing

This study examines the use of a belief network based expert system for an auditing task—financial distress evaluation for banks. A belief network uses probability measures to store important dependencies across variables of interest in a problem domain, and makes inferences based on observed evidence using probability calculus. This paper discusses how belief network structures can be constructed, and used to assist auditor's in making appropriate recommendations regarding the financial health of a bank under audit. The ability of a belief network to make reliable predictions depends on how well the network structure reflects the underlying dependencies across variables in the problem domain (e.g. financial ratios and the financial health of a bank). The first part of this study illustrates how a computer program developed by the authors can be used to generate and evaluate different feasible belief network structures based on historical data. The program uses an information-theoretic measure to compare the alternative structures. The ability of the program to identify existing dependencies across variables is demonstrated by using it to reconstruct a known network structure from simulated data. Next, the program is used on a database of twelve important bank financial ratios over a three-year period. The predictive ratios identified by the program reflect important areas of a bank's health, such as loan quality, efficiency, profitability and capital adequacy. Finally, a belief revision mechanism is encoded for the belief network structure identified earlier, and is used to illustrate how it can assist auditors in making recommendations about financial health based on a bank's critical financial ratios. The probability estimates provided by the system are validated using data on banks not used in the network design stage, and are found to be reliable.