Cost-Reducing Investment, Competition, and Industry Dynamics

We demonstrate the possibility of shake-out of firms and emergence of interfirm heterogeneity along the (socially optimal) dynamic equilibrium path of a competitive industry with free entry and exit, even when there is no uncertainty and all firms are ex ante identical with perfect foresight. Atomistic firms with upward-sloping marginal cost curves undertake investment in firm-specific cost reduction. They earn negative net profits in early periods, compensated later by strictly positive net profits; no entry occurs after the initial time period. Some firms may exit before others even while other firms earn positive net profits.     

A cross-cultural study of the persuasive effect of fear appeal messages in cigarette advertising: China and Canada

This exploratory study investigated the moderating influence of culture on the persuasive power of fear appeal advertisements differing on type of fear. The conceptual framework for the study was based on Rogers' Protection Motivation model and incorporated type of fear, physical and social, as an independent variable and culture as a moderating variable. An experiment was conducted on a sample of 173 Anglo-Canadian and 180 Chinese subjects. The findings revealed that the physical threat ads had a much greater effect on the Anglo subjects than on the Chinese. Most importantly, these ads brought about an attitude change for the Anglos, but not for the Chinese. For the social fear ads, contrary to predictions, only the Anglos reacted to the ads. They tended to score higher than the Chinese on attitude towards smoking as well as on behavioural intentions.     

CAN INDONESIA DECENTRALISE SUCCESSFULLY? PLANS,PROBLEMS AND PROSPECTS

Indonesia is engaged in an unprecedented social and economic experiment. Responsibility for much government expenditure is being decentralised, largely to local (district) rather than to provincial governments. If this process is successful, the world's most centralised large country could become one of its most decentralised. This paper considers the issues arising as preparations for decentralisation are finalised, and as the socialisation of its plans and practices is considered by the central government, the People's Representative Council, the decentralised units of government, and the public. These issues were identified partly through interviews with local government officials. They include policy and administrative matters yet to be resolved, such as local budgeting, financial management and auditing practices, personnel decentralisation, local taxation, borrowing by local governments, and the match between revenues and expenditures. A major theme is the importance of a continuing national and local discussion on the goals and processes of decentralisation.     

Influence of strategies and heuristics on farmers' response to change under uncertainty

Hierarchical Decision Models of woolproducers' decisions provide unique insights into the impact of major price changes. Producers' lagged response in some contexts appear to be due to the ambiguous decision environment they face, their strategic goals and responses to that environment apart from lags caused by factors such as attitude to risk, expectations adjustment, adjustment costs and learning costs. Much of the response to major price changes comes from strategic decisions to change enterprises rather than marginal changes to existing enterprises. In ambiguous environments, methods may need to be found that incorporate simplifying behavioural rules and strategies.     

Rating Cooperative and Commercial Bank Bonds: a comparative approach

Abstract ** :  The primary objective of this article is to find whether bonds issued by commercial and cooperative banks are rated similarly or not. We then compare the performance of two quantitative methods, namely seemingly unrelated regressions (SURE) and recursive partitioning algorithm (RPA), at explaining bond ratings based on the same set of quantitative indicators. Using the regression model, cooperative banks' credit risk is more sensitive to the quality and size of assets. For commercial banks, elements relative to debt more clearly stand out. In the RPA model, a subtree for the financial cooperatives is created which provides evidence of some differentiation in the rating process. Also, the RPA model outperforms the parametric method whether performance is measured by the percentage of correct classification or the size of the average rating prediction error.     

Entry and exit in retailing: Incentives, barriers, displacement and replacement

In this study the determinants of entry and exit and the interrelationship between these market phenomena are investigated. We examine incentives, barriers, displacement and replacement for a panel data-set of 23 Dutch shoptypes for the 1981–1988 period. Results indicate that profit as a ratio of modal income, growth of consumer spending and growing unemployment are important incentives to enter and disincentives to exit. Requirements of floorspace and professional skills appear to reduce entry rates. We find evidence for entry and exit to interact but not to be simultaneously determined. The implication being that entry (exit) has a separate influence on exit (entry) next to market incentives and entry and exit barriers.     

mortgage interest tax relief reform

Mortgage interest tax relief is unjustified, say Professor Roy Wilkinson, of the Sheffield University School of Management, and Margaret Wilkinson. They argue that it should be phased out.     

Organizational energy: an empirical study in Indian R&D laboratories

Analyzing the way organizations function and the processes that operate within these organizations is an important managerial responsibility. We have adopted a people–oriented approach called organizational energy to develop a simple process for diagnosing the level of satisfaction of scientists working in R&D laboratories. Psychic energy as reflected in different work activities in an organization is manifested in energy generating and energy draining activities that can be reduced to an energy count. The present study assesses the use of mental energy by scientific personnel working in three national laboratories in India with the objective of increasing the energy count for improving organizational effectiveness. We hope that the results can be used as the basis for initiating action to improve the motivation and utilization of scientists in India, to support the overall goal of self–reliance in science and technology.