Measuring and predicting heterogeneous recessions

This paper examines the usefulness of a more refined business cycle classification for monthly industrial production (IP), beyond the usual distinction between expansions and contractions. Univariate Markov-switching models show that a three regime model is more appropriate than a model with only two regimes. Interestingly, the third regime captures ‘severe recessions’, contrasting the conventional view that the additional third regime represents a ‘recovery’ phase. This is confirmed by means of Markov-switching vector autoregressive models that allow for phase shifts between the cyclical regimes of IP and the Conference Board's Leading Economic Index (LEI). The timing of the severe recession regime mostly corresponds with periods of substantial financial market distress and severe credit squeezes, providing empirical evidence for the ‘financial accelerator’ theory.     

Connecting Eastern and Western Perspectives on Management: Translation of Practices Across Organizations,Institution and Geographies

The exchange of academic knowledge increasingly flows in both directions, from West to East and East to West. The result is a rich and ever increasing development of theory and understanding of practice, which is expected only to gain further momentum in the future. This paper seeks to help establish a foundation for further development of this fertile exchange of ideas between East and West. We reflect on the research focus of the main theories in management studies in East and West. We discuss the topics of East and West in selected areas of management studies, including competitive strategy, strategic leadership, and the human resource management to offer avenues for future research. Translating practices between the two contexts creates institutional, leadership, strategy and organizational challenges while providing new promising research avenues and opportunities to integrate East and West perspectives. We also offer a more critical view on the relationship between West and East, focusing specifically on the role of power and power relations in making sense of how management and organization studies treat issues of cultural, institutional and philosophical divergence.     

Strategy on a Page: An ArchiMate‐based tool for visualizing and designing strategy

Nowadays, organizations need to be able to adjust more rapidly to the circumstances of their environment, at a strategic, tactical, and operational level. However, most software tools are designed to support the tactical and operational levels, while at a strategic level there are not many options available. In this paper, we propose a software tool which supports modelling of strategic information, covering several well‐known strategy techniques, and also facilitates the design of highly customizable management dashboards. To validate our proposed software tools, we perform two case studies, with two inherently different organizations, namely a public university and an investment fund.     

A nearly perfect market?

Internet shopbots allow consumers to almost instantly compare prices and other characteristics from dozens of sellers via a single website. We estimate the magnitude of consumer search costs and benefits using data from a major shopbot for books. For the median consumer, the estimated benefit from simply scrolling down to search lower screens is $6.55. This amounts to about 60% of the observed price dispersion and suggests that consumers face significant search costs, even in this “nearly-perfect” market. Price elasticities are relatively high compared to offline markets (−7 to −10 in our base model). Furthermore, contrary to the common assumption, search intensity is not correlated with greater price sensitivity. Instead, consumers who search multiple screens put relatively more weight on non-price factors like brand.     

Two Lighthouses to Navigate: Effects of Ideal and Counter-Ideal Values on Follower Identification and Satisfaction with Their Leaders

Ideals (or ideal values) help people to navigate in social life. They indicate at a very fundamental level what people are concerned about, what they strive for, and what they want to be affiliated with. Transferring this to a leader–follower analysis, our first study (n = 306) confirms that followers’ identification and satisfaction with their leaders are stronger, the more leaders match followers’ ideal leader values. Study 2 (n = 244) extends the perspective by introducing the novel concept of counter-ideals (i.e., how an ideal leader should not be) as a second, non-redundant point of reference. Results confirm that a leader’s match on ideal and on counter-ideal values have independent effects in that both explain unique variance in followers’ identification and satisfaction with their leader. Study 3 (n = 136) replicates the previous results in an experimental scenario study and provides evidence for the proposed causal direction of the underlying process. We conclude that counter-ideal values might be an additional point of reference that people use to triangulate targets above and beyond ideal values and discuss the implications of our findings for value research and management.     

Adult Mortality,AIDS, and Fertility in Rural Malawi

The future course of fertility is a major determinant of economic development in many sub‐Saharan countries, so understanding how HIV/AIDS affects childbearing is of great interest. We show that fertility responds negatively to female mortality and positively to male mortality and that the overall fertility response is small. The negative effect of female mortality is in line with earlier studies that only focus on women and their infection and mortality risks, while the finding of a positive effect of adult‐male mortality is novel. One interpretation of this finding is that women who perceive a high risk of their husbands' or grown‐up sons' deaths are likely to want to have more children to ensure future support.     

Testing for ARCH in the presence of additive outliers

In this paper we investigate the properties of the Lagrange Multiplier [LM] test for autoregressive conditional heteroscedasticity (ARCH) and generalized ARCH (GARCH) in the presence of additive outliers (AOs). We show analytically that both the asymptotic size and power are adversely affected if AOs are neglected: the test rejects the null hypothesis of homoscedasticity too often when it is in fact true, while the test has difficulty detecting genuine GARCH effects. Several Monte Carlo experiments show that these phenomena occur in small samples as well. We design and implement a robust test, which has better size and power properties than the conventional test in the presence of AOs. We apply the tests to a number of US macroeconomic time series, which illustrates the dangers involved when nonrobust tests for ARCH are routinely applied as diagnostic tests for misspecification. Copyright © 1999 John Wiley & Sons, Ltd.