The development of the Gulf region’s air transport networks – The first century

This paper employs the concepts of centrality, intermediacy and proximity to explain the evolution of air transport networks in Asia and applies them to the region surrounding the Arabian Gulf. In doing so the paper provides a structured, historical account of the development of air transport in a region that occupied a central place for important trade routes for thousands of years. The paper argues that there has been a “principal axis shift” so that the role of the region is no longer defined as an intermediate section of the east-west routes. Indeed, the region has come to re-occupy a central place in trade and travel flows serving a fundamentally changed global aviation network building upon the economic and social development within the region.     

Delineating Design Factors that Influence the Global Product Launch Process*

Preparing for and managing the global product launch process offers unique challenges as each targeted country can pose unique differences across the design categories of channel parameters, country mores, language and colloquialisms, and technology infrastructure. Though not an exhaustive list, these have a predominant influence on the global product launch process on a per‐global‐region basis. Using a case‐study methodology, this article draws on the global product launch experiences of two firms, showing that such influences preclude use of a mass‐marketing, standardization approach. Though it appears that certain elements of global product launch may be standardized for purposes of efficiencies, a global product launch appears to require at least some degree of customization. Such thinking parallels a design perspective, which mandates a tailoring of product and marketing mix to encourage early acceptance within the intended global market. To suggest when customization should be employed, four design categories of channel parameters—country mores, language and colloquialisms, and technology infrastructure—appear to have strong propensity to dictate customized design requirements for a worldwide launch, where greater differences across these design categories would mandate more customization toward each respective global region. Post hoc comments by managers in the focal case studies support this and further delineate that these four design factors necessitate keen consideration in the course of planning and enacting activities during the global product launch process. The two cases studies especially show that customized design decisions will likely pertain to launch schedule due to local retailers' calendars, product aesthetics due to local consumer preferences, point‐of‐sale and other marketing communications due to language requirements, and technology enhancements in light of local market acceptability and both social and regulatory expectations. Managers involved in planning a global product launch should therefore heed channel owners—brand owners, retailers, and distributors—so that they give preference to, promote, and sell the respective company's product relative to competitors' products. To assist toward securing such preference status, channel owners should have a role in advising the timing of launch and design considerations (e.g., color and form). Logistic issues, such as delivery and after‐sales support via this channel, are keen considerations as well. Logistics has to be thought through to ensure that demand can be met across all regions for a new product. And with the growing prevalence of Internet worldwide, managers must pay keen attention to cultural references and language used on any Internet site to ensure that the product is properly represented and promoted during its global launch. The process of a global product launch is therefore more than the company's ability to gain access to a particular market; it is the company's ability to understand key design issues per each global region respectively and to respond to pressing global region differences by customizing the total product offering to meet the needs of that global region.     

Costs and Risks of Segregating GM Wheat in Canada

An analytical model was developed to explore prospective costs and risks of alternative testing strategies for a marketing system in Canada which markets both genetically modified (GM) and Non‐GM wheats. The problem is solved using stochastic optimization, base case results are defined, and sensitivities conducted to evaluate impacts of selected variables. Added costs include: testing, rejection, and a risk premium which is required for handlers to be indifferent between the current and the proposed dual system. Protocols would require testing at the point of loading at the primary elevator, and export elevator, and supplementing this information with some form of grower variety declaration. There are several sources of inherent risks in such a system. For buyers, the cumulative impact of these is the risk of receiving GM content in a Non‐GM shipment. For sellers, it is the risk of having a Non‐GM shipment rejected. For sellers, the risk of rejection was typically less than 2%, and for buyers, the risk was typically less than 0.02%. Nous avons élaboré un modèle analytique pour explorer les coûts et les risques potentiels de la mise en place de nouvelles stratégies pour analyser le grain si le Canada décidait de commercialiser du blé génétiquement modifié (GM) et du blé non génétiquement modifié (NGM). Le problème est résolu à l'aide d'une optimisation stochastique; des scénarios de référence sont définis et des tests de sensitivité sont effectués pour évaluer l'impact de variables sélectionnées. Les coûts supplémentaires comprennent les coûts d'analyses, les coûts liés au rejet ainsi qu'une prime de risque exigée pour que les manutentionnaires demeurent indifférents entre le système actuel et le système double proposé. Les protocoles obligeraient la tenue d'analyses au point de chargement du silo primaire ainsi qu'au silo terminal, auxquelles s'ajouterait une certaine forme de déclaration du céréaliculteur sur la variété. Ce genre de système comporte plusieurs sources de risques inhérents. Pour les acheteurs, l'impact cumulatif est le risque de recevoir un chargement de blé NGM contenant du blé GM. Pour les vendeurs, c'est le risque qu'un chargement de blé NGM soit rejeté. Pour les vendeurs, le risque de rejet était généralement inférieur à 2%, et pour les acheteurs, le risque était généralement inférieur à 0.02%.     

Capitalizing Non-cancelable Operating Leases

There have been recent international moves to require the capitalization of non‐cancelable operating leases. Most prior research on the constructive capitalization of leases has been undertaken on US data. The results from US studies may not apply to international firms because non‐US operating lease contracts may differ in lease term, discount rates, and renewal options. This study presents the financial statement impact of constructive capitalization for 38 firms listed on the New Zealand Stock Exchange. New Zealand is an appropriate institutional setting because the required footnote disclosures for operating leases are similar to the International Accounting Standard. The method of constructive capitalization follows the general approach developed by Imhoff, et al. (1991) . The results show that constructive capitalization has a material impact on reported liabilities and financial ratios. The results suggest that, relative to present value procedures of constructive lease capitalization, heuristics used by analysts lead to the overstatement of lease liabilities and lease assets. However, the use of single cross‐sectional parameters (e.g., discount rates, lease life) results in constructed lease assets and liabilities that are similar to more elaborate firm‐specific procedures.     

Selecting Influential Business-to-Business Customers in New Product Development: Relational Embeddedness and Knowledge Heterogeneity Considerations

This study examines how the most influential business‐to‐business (B2B) customers, both existing and potential, involved in providing input to a new product development (NPD) project influence new product advantage. As the relational literature suggests, involving customers who have had close and embedded relationships with a firm's new product organization, such as a firm's largest customers, and customers who have been involved in past collaborative activities, should lead to the development of superior products. To the contrary, the innovation literature suggests that a firm may become too close to its large, embedded customers resulting in less innovation and in lower performing products. Also, the relationship between the heterogeneity of the knowledge of the most influential customers and new product advantage is examined. A contingency perspective is hypothesized such that the degree of product newness sought in the project moderates the effects of both relational embeddedness and knowledge heterogeneity on new product advantage. Empirical findings from a sample of 137 NPD projects support this contingency view. For projects seeking to develop incremental products, where the product being developed is an extension or an enhancement to an existing product, new product advantage tended to be higher in projects using embedded or homogeneous customers. For incremental projects, projects using less‐embedded or heterogeneous customers tended to have lower product performance. For projects following a highly innovative product strategy, new product advantage tended to be higher in projects that involved heterogeneous customers. These heterogeneous customers provided NPD projects with a diversity of perspectives, competencies, and experiences that fostered significant product innovations. The study contributes to the literature by empirically testing relational and innovation theories in NPD projects and by providing evidence on the importance of relational embeddedness and knowledge heterogeneity in selecting influential customers in NPD projects.     

MARKET TIMING OF INTERNATIONAL STOCK MARKETS USING THE YIELD SPREAD

We use probit modeling to forecast bear stock markets in the United States and in eight major foreign stock markets. In general, we find that the U.S. yield spread contains more important market‐timing information than does the home‐country yield spread for profitable market timing. At a 35% probability screen, our simulations show that the U.S. dollar (representative local currency) investor could earn a median compound annual return across eight foreign (non‐U.S.) stock markets of 15.75% (17.67%) by following a market‐timing strategy versus a median buy‐and‐hold return of 13.56% (16.55%).     

Ricardian Equivalence and Fiscal Policy Effectiveness in Japan

The present paper asks whether there is a limit to the potential for government spending to stimulate output in the Japanese economy. Overlapping generations and Ricardian infinite horizon representative agent models are developed, in which the government spending multiplier falls as the level of spending rises. Consistent with the Ricardian hypothesis, vector autoregressions (VAR) indicate that the timing of taxes has little impact on national output. Conversely, the impact of government spending is significant. However, using non–linear VAR techniques, the author finds empirical evidence for the hypothesis of a regime–dependent government spending multiplier that falls as spending rises.