Striving to be green: the adoption of total quality environmental management

Many firms are undertaking environment-friendly organizational change by applying the philosophy of total quality management with its emphasis on reducing waste and increasing efficiency. Their objective is to improve their management of pollution and increase customer satisfaction. This article investigates the factors that lead to total quality environmental management (TQEM) by large firms. We find that internal considerations stemming from a firm's technical capability, size (absolute and relative to competing firms), extent of operations and volume of past emissions are strongly associated with the TQEM adoption decision. The first four factors are proxies for the firm's costs and capabilities of adopting TQEM while the fifth factor is related to the benefits from increasing efficiency and waste reduction, and thus proxies for internally generated demand for TQEM. The desire to improve a firm's image with customers, earning good-will with regulators and the anticipation of future regulations do not appear to be associated with the adoption of TQEM. Thus, this article's main conclusion is that the adoption of TQEM is associated mostly with internal factors and motives.     

The financial contribution of customer-oriented marketing capability

This article assesses the financial contribution of marketing capability. In contrast with previous research, which conceptualizes marketing capability as the deployment of marketing resources to achieve sales, this study conceives marketing capability as the deployment of marketing resources to achieve the ultimate objectives of customer satisfaction and brand equity (i.e., customer-oriented marketing capability [COMC]). Thus, this research disentangles the dynamic relationships among marketing resources, sales, customer satisfaction, and brand equity through the use of network Data Envelopment Analysis to capture COMC. According to what the value relevance perspective proposes, COMC positively influences the growth of Tobin’s q and improves the growth of analysts’ recommendations. These findings remain robust and consistent with the use of additional measures and methods common to the marketing and financial literatures. Our study provides tools and a framework for analysis for managers to maximize their ability to use marketing strategy to drive performance.     

The European unemployment problem: its cause and cure

The stubbornly high unemployment experienced by European countries since the mid-1970s have led to a major reconsideration of the natural rate paradigm. Traditional theories which describe movements of unemployment as fluctuations around a moving natural rate have been challenged by hysteresis theories. The question arises how one can discriminate between these competing theories. To this end, we estimate a time-varying parameter model of the unemployment rate for the US, UK, Germany, and France. The parameters of the model were estimated jointly by maximum likelihood estimation using the Kalman filter algorithm. When the moving natural rate model is tested against the alternative of a unit root process, the unit root hypothesis is resoundingly rejected. Among the determinants of the natural rate institutions that alter labour market incentives for workers appear to have been more important than institutions that affect labour demand.     

Corporate Environmental Management and Environmental Efficiency

This paper examines the potential of environmental management systems (EMSs) to provide opportunities for reducing toxic releases cost-effectively and increasing environmental efficiency of a sample of S&P 500 firms. We use directional distance function to estimate firm-specific environmental efficiency. A truncated regression model with bootstraping is then estimated to analyze the determinants of the environmental efficiency of firms. The analysis shows that the comprehensiveness of an EMS, pressures to reduce toxic releases cost-effectively, innovativeness of firms and the threat of costly regulations in the future lead firms to become more environmental efficient. Regression results indicate that increasing the comprehensiveness of EMS by adopting one additional practice benefits the average firm by approximately US$ 35.5 million by increasing its environmental efficiency by 0.3%.     

Can herding improve investment decisions?

Existing models show that herding in decisions can cause significant information loss, inferior information aggregation, and impaired decision making. However, we show that in a multistage decision setting with endogenous information production, herding on the initial decision can actually result in superior aggregate information and improved decisions. This is because the possibility of herding by a follower incentivizes the leader to increase its ex ante information production to an extent that it can dominate the information loss from herding. Examples include decisions to enter new markets, fund R&D, and provide early‐stage venture capital.     

Zone-quadratic preference,asymmetry and international reserve accretion in India: An empirical investigation

Empirical estimates of the Reserve Bank of India's (RBI) intervention reaction function suggest that the central bank actively intervenes in the foreign exchange market to contain volatility but this intervention is neither continuous nor linear. It is better described by a nonlinear policy reaction function with a target range as opposed to a point target. It responds much more vigorously to appreciating or depreciating pressure outside the target range but the response is much more muted within the range. Moreover, the tolerance band is asymmetric i.e., the RBI responds much more strongly to appreciating pressure than depreciating pressure. Such a policy response in an era of continuous net capital inflows accounts for the large build-up in foreign exchange reserves witnessed in India in the recent past.     

Understanding the Opportunistic Approach to Disinflation

One approach to achieving price stability is to undertake a deliberate path to an ultimate goal of low inflation—deliberate disinflation. In contrast an opportunistic strategy for disinflation has gained credence in recent years though on the face of it suboptimal. Our procedure is to seek a set of sufficient conditions under which the opportunistic strategy is optimal for a central bank maximising the preferences of the representative agent. We find that such a sufficient set of conditions consists of adaptiveness in expectations and an asymmetry in the Phillips curve of a specific sort.

     

Non‐Mandatory Approaches to Environmental Protection

The approach to environmental protection has been evolving from a regulation‐driven, adversarial 'government‐push' approach to a more proactive approach involving voluntary and often 'business‐led' initiatives to self‐regulate their environmental performance. This has been accompanied by increasing provision of environmental information about firms and products to enlist market forces and communities in creating a demand for corporate environmental self‐regulation by signaling their preferences for environmentally friendly firms. This paper provides an overview of the non‐mandatory approaches being used for environmental protection and surveys the existing theoretical literature analyzing the economic efficiency of such approaches relative to mandatory approaches. It also discusses empirical findings on the factors motivating self‐regulation by firms and its implications for their economic and environmental performance. It examines the existing evidence on the extent to which information disclosure is effective in generating pressures from investors and communities on firms to improve their environmental performance.     

The Structure of Licensing Contracts

Industrial organization theory has explored several issues related to licensing, but empirical analyses are extremely rare. We amass a new and detailed dataset on licensing contracts, and use it to present some simple 'facts' concerning licensing behavior. Our analysis reveals robust cross-industries differences in several contractual features, such as exclusivity, cross-licensing, ex-ante versus ex-post technology transfers, and licensing to related versus unrelated parties. We offer an interpretation of these facts based on cross-industry variation in the strength of intellectual property rights.     

The Bright Side of Internal Capital Markets

We examine capital expenditure decisions of discount firms in response to Wal-Mart's entry into their markets. Before Wal-Mart's entry, focused incumbents and discount divisions of diversified incumbents are similar in size, geographic dispersion, and firm debt levels. However, discount divisions of diversified firms are significantly more productive. After Wal-Mart's entry, diversified firms are quicker to either "exit" the discount business or "stay and fight." Also, their capital expenditures are more sensitive to the productivity of their discount business. Internal capital markets function well, as transfers are away from the worsening discount divisions. It appears diversified firms make better investment decisions.