The Innovation Process and the Development of a Sustainability Strategy

ABSTRACT

This article analyzes what influences a firm's choice of strategy—why some firms stick to defensive strategies while others rely on offensive ones. With this in mind a survey was conducted on mineral sector companies associated with the Brazilian Mining Institute. The results show that the majority of companies use an offensive strategy and that some companies use more than one strategy at the same time. That is, they possess a corporate strategy and a sustainability strategy.     

Multidimensional principal–agent value for money in healthcare project financing

Value for money (VfM) is a key parameter for the public sector in the choice between a public–private partnership (PPP) and traditional procurement, especially for healthcare infrastructure. This paper investigates the differences in what VfM means to the public and private sectors.     

Making Location Decision Based on Regional Industrial Capabilities: A Case of a Distributor

This article presents a structured process to make facility location decisions based on regional industrial capabilities. It presents a framework for collecting business intelligence on major cities of the region of interest. In the next step, the collected business intelligence is incorporated into a quantitative decision analysis model for facility location. While the proposed framework is generic and builds on the existing international business and supply chain management literature, the article mainly focuses on the facility location problem of a distribution firm that is not well represented in the literature. Two cases—one each for new and established distributors who are trying to sell to the Mexican market—are presented in the article.     

Export transitions

This paper uses a broad multi-country dataset to describe the main stylized facts about export performance in the last four decades. First, transition probability matrices are computed to look at changes in the position of countries at the world distribution of the export to GDP ratio. It finds that transitions toward high export ratios have been mainly experienced by Asian countries, but also that some reformers, like Mexico and Chile, have been able to improve their position relative to other studied economies. African countries mainly sunk to the bottom part of the world distribution, although they constitute only half of the economies with relatively bad export performance. In the consideration of the structural factors that may play an important role for long-run transitions, the results suggest that more open economies and those with better institutions are more likely to move to high export ratios in the long-run. Second, the within-country experiences are analyzed for identifying episodes of export transitions. Using an event study methodology, a very weak association is found between export transitions and investment rate. In contrast, the results suggest that transitions are potentially driven by improvements in financial development. Finally, favorable terms of trade, increments in productivity, and reductions in exchange rate distortions are not found to be a catalyst for export transitions.     

Service quality control mechanisms in franchise networks

This paper reports the study of some factors that influence the control intensity exerted by franchisors on the service quality provided by the franchised units of their networks and what interdependencies exist between the different mechanisms that can be used to monitor service quality. On the one hand, three control mechanisms of conformance quality are considered, namely audits, mystery shoppers, and mandatory purchase of inputs and products. On the other hand, polls are used to monitor perceived quality by customers. There are two main findings. First, control intensity is greater in those industries in which customers tend to be non-repetitive. Second, four complementary relationships are found between control mechanisms: between audits and mystery shoppers, between audits and polls, between mandatory purchase of inputs or products and mystery shoppers, and between mandatory purchase of inputs or products and polls.     

Agricultural price transmission across space and commodities during price bubbles

This article investigates agricultural price transmission during price bubbles. The empirical approach concerns the horizontal transmission of cereal prices both across different market places and across different commodities. The trade policy intervention put forward to mitigate the impact of price exuberance is considered. The analysis is performed using Italian and international weekly spot (cash) price data over years 2006–2010, a period of generalized turbulence of agricultural markets. Firstly, the properties of price time series are explored; then, interdependence across prices is specified and estimated by adopting appropriate cointegration techniques. Results suggest that the bubble had only a slight impact on the price spread and the temporary trade‐policy measure, when effective, has limited this impact.     

Decentralized trade, random utility and the evolution of social welfare

We study decentralized trade processes in general exchange economies and house allocation problems with and without money. The processes are affected by persistent random shocks stemming from agents’ maximization of random utility. By imposing structure on the utility noise term—logit distribution—one is able to calculate exactly the stationary distribution of the perturbed Markov process for any level of noise. We show that the stationary distribution places the largest probability on the maximizers of weighted sums of the agents’ (intrinsic) utilities, and this probability tends to 1 as noise vanishes.     

Economics of externalities and public policy

In this paper we study a particular case of “multiple” externalities associated to the production of a good/activity, whose external effects can change from positive to negative depending on the level of output (intersecting externalities). To analyze their impact on the public policy we propose a very simple two-agent partial equilibrium model in the technological context of externalities. In a static framework, the centralized solution always implies an optimal policy, which may consist of taxation or subsidization depending on the individual optimum and on the technology parameters. In a dynamic model with local knowledge of the efficiency function and instantaneous output adjustments, such an optimal policy can be structurally stable or unstable. In the latter case, under small changes of the parameters the policy may switch from low taxation/subsidization to high taxation/subsidization or vice versa, or even jump discontinuously from taxation to subsidization or vice versa. Furthermore, the decentralized solution based upon “tradable rights” can be economically equivalent to the centralized solution in the form of taxation policy but the two solutions may be not politically equivalent.

Victim or Victimizer: Firm Responses to Government Corruption

What is the relationship between government corruption and firm performance? To address this question, I conduct a review of articles published in the leading management journals on government‐business interactions pertaining to rent‐seeking activities and integrate findings from the fields of international business, social issues in management, public organization, institutional change, and corporate political activity. I find that while much empirical work corroborates the earlier findings suggesting a corrosive impact of government corruption on firm performance in general, management research also points to the heterogeneous impact of government corruption on individual firm performance, driven by the strategic activities conducted by firms in response to corruption. I propose an integrative model of firm strategy vis‐à‐vis corruption that predicts the activity choice of the firm as predicated by its organizational structure, political resources, industry regulation, and surrounding political and social institutions.     

Statistical tests for multiple forecast comparison

We consider a multivariate version of the Diebold–Mariano test for equal predictive ability of three or more forecasting models. The Wald-type test, $S$, which has a null distribution that is asymptotically chi-squared, is shown to be generally invariant with respect to the ordering of the models being compared. Finite-sample corrections for the test are also developed. Monte Carlo simulations indicate that $S$ has reasonable size properties in large samples but tends to be oversized in moderate samples. The finite-sample correction succeeds in correcting for size, but only partially. For the size-adjusted tests, power increases with sample size, as expected. It is speculated that further finite-sample improvements can be achieved using Hotelling’s $T^2$ or bootstrap critical values.