Strategically employing natural channels in an emerging market

In an era in which the cost efficiencies associated with standardization tend to be the dynamic force that drives international strategy, the growing movement toward understanding and adapting to natural channels of distribution appears to be an anomaly. The authors explore the natural channel phenomena—i.e., the local or national channel that has evolved within a market—within the context of U.S. multinational operations in the emerging market of India. Twenty‐two in‐depth interviews conducted with U.S. multinational international marketing managers engaged in distribution operations in India guide the exploration of the internal and external factors influencing channel strategy. The interviews provide validity for the natural channel model put forth by Griffith and Ryans (1995) while substantially advancing theoretical and managerial insights into the importance of factors influencing distribution. Finally, strategic distribution approaches employed by U.S. multinationals to effectively operate in India are presented. Insights for academics and practitioners are addressed. © 2005 Wiley Periodicals, Inc.     

Developing Decentralized Capacity for Development Policy Analysis: Lessons for Agricultural Development from Food Security and Nutrition Monitoring in Malawi*

Abstract: Lack of sufficient analytical capacity in most of the developing countries in sub-Saharan Africa has been suggested frequently as a major factor determining the appropriateness of development policy interventions. This paper documents an approach implemented in Malawi for the past three years to develop decentralized capacity to analyze development policies and programs. A conceptual framework for identifying the areas of capacity strengthening in development policy analysis is developed. Generalizable lessons from Malawi's experience in decentralized capacity strengthening arc presented. Various issues that relate to enhancing the efficiency of capacity building programmes in sub-Saharan African are addressed. It is argued that continuous dialogue between development researchers and policy decisionmakers and between the trainers in academic institutions and donor agencies is fundamental for achieving the goals of improved capacity for development policy analysis. Résumé: On avance souvent que l'absence de capacité d'analyse suffisante dans la plupart des pays en développcment d'Afrique subsaharienne constitue l'un des facteurs qui conditionne l'opportunité des interventions en matière de politique de développement. Ce document présente unc approche mise en ocuvre au Malawi au cours des trois dernières années en vuc de développer la capacité décentralisée à analyser les politiques et programmes de développement. Il met au point un cadre conceptuel pour l'identification des domaines nécessitant un appui institutionnel au niveau de 1'analysc des politiques de développement. Des leçons susceptibles d'être généralisées sont tirées de l'expérience du Malawi en matière de renforcement de la capacité décentralisée. Diverses questions ayant trait à l'amélioration de l'efficacité des programmes de renforcement des capacités en Afrique subsaharienne sont abordées. Il est avancé que le dialogue permanent entre chercheurs s'intéressant au développcment et décideurs, et entre formateurs des institutions académiques et organismes d'aide est essentielle pour atteindrc l'objectif d'amélioration de la capacité d'analyse des politiques de développement.     

Do adjustment costs explain investment-cash flow insensitivity?

In this paper, I explain two “puzzles” that have been observed in firm level data. First, firms that display a high sensitivity of investment to cash flow (commonly believed to be an indicator of liquidity constraints) usually have large unutilized lines of credit which, presumably, could be used to overcome the shortage of funds. Second, firms that are perceived to be extremely liquidity constrained actually show very little sensitivity of investment to cash flow.I show how a dynamic model of firm investment with liquidity constraints and non-convex costs of adjustment of capital can explain these facts. These two features together imply that firms need to have a certain threshold level of financial resources before they can afford to increase investment. Once they cross this threshold, firms’ investment will be positively correlated with their financial resources until they reach their desired level of capital stock. However, even if investment is sensitive to cash flow, firms may borrow below their credit limit to guard against future bankruptcy or binding liquidity constraints.     

Opening prices on the New York Stock Exchange

The prices of opening transactions on the New York Stock Exchange are determined quite differently from prices of subsequent transactions. This paper tests the null hypothesis that opening prices are as representative of contemporaneous equilibrium stock values as subsequent intra-day transactions prices. With one possible exception, there is no basis for rejecting this hypothesis, despite the very different trading mechanisms used in opening trades and intra-day trades.     

Country-specific equity market characteristics and foreign equity portfolio allocation

Do country-specific equity market characteristics explain variations in foreign equity portfolio allocation? We study this question using comprehensive foreign equity portfolio holdings data and different measures of country-specific equity market factors for 36 host countries. Employing panel data econometric estimations, our investigation shows that foreign investors prefer to invest more in larger and highly visible developed markets which are more liquid, exhibit a higher degree of market efficiency and have lower trading costs. The findings imply that by improving the preconditions necessary for well-functioning capital markets, policymakers should be able to attract higher levels of foreign equity portfolio investments.     

A New Utility‐Consistent Econometric Approach to Multivariate Count Data Modeling

In the current paper, we propose a new utility‐consistent modeling framework to explicitly link a count data model with an event‐type multinomial‐choice model. The proposed framework uses a multinomial probit kernel for the event‐type choice model and introduces unobserved heterogeneity in both the count and discrete‐choice components. Additionally, this paper establishes important new results regarding the distribution of the maximum of multivariate normally distributed variables, which form the basis to embed the multinomial probit model within a joint modeling system for multivariate count data. The model is applied to analyzing out‐of‐home non‐work episodes pursued by workers, using data from the National Household Travel Survey. Copyright © 2014 John Wiley & Sons, Ltd.     

User innovation and entrepreneurship in the virtual world: A study of Second Life residents

While prior studies have investigated factors, processes and pathways traversed in user innovation and user entrepreneurship within the real world, there is scant attention for user innovation and user entrepreneurship that take place within the virtual world. We report on an exploratory study of a select group of user innovators-entrepreneurs in Second Life, using virtual participant observation and in-depth interviews. Results suggest that the paths traversed by user innovators and user entrepreneurs in the virtual life broadly resemble those in the real life as reported in the literature. Interestingly, our study also suggests that Second Life as a virtual world breeds opportunities leading to entrepreneurial acts in the ‘real’ world as well as further opportunities in the Second Life. The virtual world itself, as a technological platform, also generates a range of opportunities. We formulate testable propositions and further link our insights to existing research on the drivers and pathways of user innovation and entrepreneurship in the ‘real’ world (i.e., the role of prior knowledge and networks), Austrian economics theory of entrepreneurial discovery, and creative collective theory.     

Interest rates,saving and investment: Evidence from India

Abstract

The role of interest rates in the process of economic development is examined through an empirical inquiry into the interest rate‐saving‐investment nexus in the Indian economy during the period 1955–95. The results are generally in support of the financial liberalization school of thought. Higher real interest rates seem to promote both financial and total savings, and stimulate private investment. On the investment side, the combined salutary effect of interest rate increases operating through increased debt intermediation and self‐financed capital accumulation outweighs the direct cost effect on investment. Overall, the study casts doubt on the robustness of results coming from the vast cross‐country literature on the subject and calls for systematic time‐series analyses covering a variety of country situations to inform the on‐going policy debate.