Weathering Tight Economic Times: The Sales Evolution of Consumer Durables Over the Business Cycle

Despite their obvious importance, not much marketing research focuses on how business-cycle fluctuations affect individual companies and/or industries. Often, one only has aggregate information on the state of the national economy, even though cyclical contractions and expansions need not have an equal impact on every industry, nor on all firms in that industry. Using recent time-series developments, we introduce various measures to quantify the extent and nature of business-cycle fluctuations in sales. Specifically, we discuss the concept of cyclical volatility, and derive a dynamic comovement elasticity between the economy as a whole and the cyclical fluctuations in various performance series. To further enhance our understanding of how consumers adjust their purchasing behavior across different phases of the business cycle, two other notable features related, respectively, to the relative size of the peaks and troughs and the rate of change in upward and downward parts of the cycle, are explicitly considered. Of specific interest in this respect are the notion of deepness and steepness asymmetry. We apply these concepts to a broad set (24) of consumer durables, for which we analyze the cyclical sensitivity in their sales evolution. In that way, we (i) derive a novel set of empirical generalizations, and (ii) test different marketing theory-based hypotheses on the underlying drivers of cyclical sensitivity.Consumer durables are found to be more sensitive to business-cycle fluctuations than the general economic activity, as expressed in an average cyclical volatility of more than four times the one in GNP, and an average dynamic comovement elasticity in excess of 2. This observation calls for an explicit consideration of cyclical variation in durable sales. Interestingly, the combined evidence across all durables suggests that asymmetry is present in the speed of up- and downward movements, as durable sales fall much quicker during contractions than they recover during economic expansions. Finally, key variables related to the industrys pricing activities, the nature of the durable (convenience vs. leisure), and the stage in a products life cycle tend to moderate the extent of cyclical sensitivity in durable sales patterns.     

Regulatory Oversight or Lack of Foresight? Implications for Product Recall Policies and Procedures

The regulatory effectiveness, the impact on industry and consumers of product withdrawal and the associated wider issues relating to crisis management represent an under-researched area. The authors describe the mid-2003 government-ordered withdrawal of almost 2,000 complementary and alternative medicines, across multiple brand names, in Australia and New Zealand. The report is based on an examination of the media coverage of the event and on interviews with key informants in manufacturing and retailing and the regulatory system. This massive, multi-brand recall provides an opportunity to examine the effectiveness and efficiency of the management of a cross-border withdrawal from regulatory and consumer policy perspectives and makes recommendations for the management of future recall events. Lynne Eagle is Professor of Marketing, Middlesex University Business School, The Burroughs Hendon, London NW4 4BT, England; Fax: +020-8411-5357; E-mail: l.eagle@mdx.ac.uk. Lawrence C. Rose is Head of Department and Professor of Finance, Department of Commerce, Massey University (Auckland), Private Bag 102-904 North Shore Mail Centre, New Zealand; Fax: +64-9-441-8177; E-mail: l.c.rose@massey.ac.nz. Philip J. Kitchen is Professor of Strategic Marketing, The Business School, University of Hull, Hull, UK HU6 7RX; Fax: +44-0-1482-466637; E-mail: p.j.kitchen@hull.ac.uk. Jacinta Hawkins is an Assistant Lecturer, Department of Commerce, Massey University (Auckland), Private Bag 102-904 North Shore Mail Centre, New Zealand; Fax: +64-9-441-8177; E-mail: j.hawkins@massey.ac.nz.     

Understanding bilateral exchange rate volatility

This paper develops an empirical model of bilateral exchange rate volatility. We conjecture that for developing economies, external financial liabilities have an important effect on desired bilateral exchange rate volatility, above and beyond the standard optimal currency area (OCA) factors. By contrast, industrial countries do not face the same set of constraints in international financial markets. In our theoretical model, external debt tightens financial constraints and reduces the efficiency of the exchange rate in responding to external shocks. We go on to explore the determinants of bilateral exchange rate volatility in a broad cross section of countries. For developing economies, bilateral exchange rate volatility (relative to creditor countries) is strongly negatively affected by the stock of external debt. For industrial countries however, OCA variables appear more important and external debt is generally not significant in explaining bilateral exchange rate volatility.     

An Investigation of the Components of Moral Intensity

While there is considerable interest in the topic of business ethics, much of the research moves towards measuring components with a view to predicting ethical behaviour. To date there has not been a satisfactory definition of business ethics, nor has there been any real attempt to understand the components of a situation that may influence an individual's assessment of that situation as ethical or otherwise. Using Jones's (1991) construct of moral intensity as a basis for investigation, this paper presents some exploratory analysis on the context within which ethical decisions are assessed. The findings reveal that individuals differ in their assessments of the same situation and often use a number of complex reasons to explain whether a situation poses an ethical problem for them. These findings are discussed within a framework of measurement issues and future directions for research.     

Subsidies and Corporate Governance – An Agency Approach

The literature on subsidies conceives state aids as always beneficial to the aid‐receiving firm. However, the picture changes if agency problems are assumed between the managers and owners of the firm. In this case, subsidies may run counter not only to the desired result of the aid grantor but also to the interests of firm owners. Managers may divert subsidies into their own pockets, thereby deflating firm value. Copyright © 2014 John Wiley & Sons, Ltd.     

Changing Routine: Reframing Performance Management within a Multinational

This paper seeks to extend the literature on how change occurs in organizational routines by examining the link between routines and schemata and showing the cognitive and motivational factors involved. Using an in‐depth analysis of a Japanese multinational, we develop an account of how a newly‐implemented centralized performance management routine is interpreted by managers at two subsidiaries. We show how different performances of subroutines emerge into a new ostensive pattern of a routine, and how the cognitive and motivational aspects of individual agency are manifested in this process and how they affect the espoused organizational schema.     

International Financial Flows in Low‐Income Countries

For a sample of low‐income countries, we analyse the behaviour of international financial flows during three periods: (i) the 2003–2007 global boom; (ii) the 2008–2009 crisis; and (iii) the 2010–2012 recovery phase. In particular, we examine aid‐adjusted net financial inflows, debt inflows, foreign direct investment inflows and official reserve outflows. We highlight the role of country characteristics in explaining the cross‐country variation in international financial flows during these different phases.     

Up in Smoke? The Impact of Smog on Risk Perception and Satisfaction of International Tourists in Beijing

This research explored the perceptions of on‐site international tourists towards the smog in Beijing. A scale measuring the degree of tourists' concern about smog conditions was developed. The links among smog concern, risk perception, trip satisfaction and destination loyalty were tested with a structural equation model. Direct relationships were found for the hypothesized effects of smog concern on risk perception and satisfaction. Further, the influence of risk perception on reducing satisfaction as well as the role of satisfaction in forming revisit intention (loyalty) was identified. The broad concerns of this study are applicable across all key Chinese tourism cities visited by international tourists. Copyright © 2015 John Wiley & Sons, Ltd.