Advertising competition in presidential elections

Presidential candidates purchase advertising based on each state’s potential to tip the election. The structure of the Electoral College concentrates spending in battleground states, such that a majority of voters are ignored. We estimate an equilibrium model of multimarket advertising competition between candidates that allows for endogenously determined budgets. In a Direct Vote counterfactual, we find advertising would be spread more evenly across states, but total spending levels can either decrease or increase depending on the contestability of the popular vote. Spending would increase by 13 % in the extremely narrow 2000 election, but would decrease by 54 % in 2004. These results suggest that the Electoral College greatly increases advertising spending in typical elections.     

Firms’ location decision across asymmetric countries and employment inequality

This paper analyzes the effect of globalization (lower trade costs) on production and trade patterns if, firms are vertically linked, stages of production differ in labor-factors intensity and countries differ in labor-factors prices. In order to reflect the “Continental Europe” experience, relative wages are assumed fixed and spatial changes in production are translated into changes in relative (skilled to unskilled) employment levels. The asymmetry in factors prices across countries results in a unique agglomeration equilibrium for a broad range of trade costs. At low trade costs, firms’ location depends on production costs—vertical specialization occurs. This paper also provides a consistent explanation of the observed increase in employment inequality between skilled and unskilled workers in relatively high-unskilled wage countries.     

Macht der Neuen Medien?

Virtual reality media mark the latest milestone in media evolution in respect to the media’s capacity to involve users’ senses and perceptual resources. Therefore, these new media are assumed to hold an especially strong potential to influence their users. Based on a conceptual model from presence research, this study explicates the potentially powerful effects of virtual media as users’ impression of ?being overwhelmed‘ by the medium, which can manifest in different steps (e.g., attraction of attention, suspension of disbelief, or presence). Subsequently, an experiment (N = 85) tests the impact of key characteristics of virtual media (sensory immersion and interactivity) on the conceptualized different steps of ?being overwhelmed‘. The study uses the example of a virtual museum. Both self-report data and a machine-based procedure (Secondary Task Reaction Times) are applied to measure the state (types) of ?being overwhelmed‘. Results indicate that the general assumption of powerful effects of virtual media should be specified in terms of person x situation models because the subjects’ personal characterists also affected the qualitiy and intensity of users being ?overwhelmed‘.     

The appropriateness of RAPM: toward the further development of theory

One of the few areas in management accounting and control research that has attained critical mass concerns the organizational and behavioral effects of budgeting. Many studies in this area focus on the use of budgets for managerial performance evaluation, and revolve around the construct Reliance on Accounting Performance Measures (RAPM). Despite the volume of the RAPM literature, concern has been expressed about its current state in terms of both theoretical progress and methodological practice. This paper provides an overview of the RAPM literature, and explains some important points of critique. In response to this critique, the last part of the paper explores the possibility for a further development of RAPM theory that is based on the concept of uncertainty. ©     

Chain liability in multitier supply chains? Responsibility attributions for unsustainable supplier behavior

When it becomes publicly known that products are associated with suppliers that engage in unsustainable behaviors, consumers protest, as Nestlé, Zara, and Kimberly Clark, among others, have learned. The phenomenon by which consumers hold firms responsible for the unsustainable behavior of their upstream partners suggests the notion of “chain liability.” This study aims to generate insights into the antecedents and consequences of such consumer responsibility attributions. Using data from four vignette-based survey experiments, the authors find that the chain liability effect increases if an environmental degradation incident (1) results from supplier behavior rather than force majeure, (2) results from a company decision rather than the decision of an individual employee, and (3) is more severe. Responsibility attributions do not differ with varying organizational distance from the supplier, firm size, strategic importance of the supplied product, or the existence of environmental management systems. The chain liability effect also creates strong risks for the focal firm; higher responsibility attributions increase consumers’ anger and propensity to boycott. Therefore, firms should work to ensure sustainable behavior throughout the supply chain, to protect them from chain liability.     

A time series analysis of Danish markets for pork, chicken, and beef

We offer a first-time empirical depiction of Danish dynamic meat price/quantity transmissions by formulating, estimating, and testing a VAR model of market-clearing quantities and prices of the Danish pork, chicken, and beef markets. The analysis illuminates how these markets dynamically handle shocks, and it is demonstrated that: (i) the three meats are close substitutes; (ii) chicken and pork market shocks have own-market and cross-market effects that occur rapidly and swiftly, while beef market shocks have more enduring impacts on pork and chicken markets; (iii) prices are in general more endogenous than quantities; and (iv) the price of chicken is much more endogenous than the prices of pork and beef.     

Pay fairness and intrinsic motivation: the role of pay transparency

The fairness of managerial pay can be judged in terms of its distributive justice properties (‘is my pay fair when compared to others’) and its procedural justice properties (‘is my pay fairly determined’). While both types of justice have been studied extensively in the organizational literature, their relative importance in predicting work-related outcomes is still open to debate. In this paper, we provide field evidence that the relationship between pay justice and managers' intrinsic motivation is moderated by pay transparency, which is the extent to which managers know each other's pay levels. In a homogeneous sample of 139 Slovenian bank managers, we find that procedural justice is a better predictor of intrinsic motivation when pay transparency is low, and that distributive justice is a better predictor of intrinsic motivation when pay transparency is high. These findings that are congruent with fairness heuristic theory (Van den Bos, Lind, Vermunt and Wilke 1997a) suggest the importance of considering pay transparency for understanding and designing fair managerial pay systems.     

Panel unit root tests in the presence of a multifactor error structure

This paper extends the cross-sectionally augmented panel unit root test (CIPS$CIPS$) proposed by Pesaran (2007) to the case of a multifactor error structure, and proposes a new panel unit root test based on a simple average of cross-sectionally augmented Sargan–Bhargava statistics (CSB$CSB$). The basic idea is to exploit information regarding the m$m$ unobserved factors that are shared by k$k$ observed time series in addition to the series under consideration. Initially, we develop the tests assuming that m⁰$m^0$, the true number of factors, is known and show that the limit distribution of the tests does not depend on any nuisance parameters, so long as k≥m⁰−1$k\ge m^0-1$. Small sample properties of the tests are investigated by Monte Carlo experiments and are shown to be satisfactory. Particularly, the proposed CIPS$CIPS$ and CSB$CSB$ tests have the correct size for all   combinations of the cross section (N$N$) and time series (T$T$) dimensions considered. The power of both tests rises with N$N$ and T$T$, although the CSB$CSB$ test performs better than the CIPS$CIPS$ test for smaller sample sizes. The various testing procedures are illustrated with empirical applications to real interest rates and real equity prices across countries.     

Specifying formatively-measured constructs in endogenous positions in structural equation models: Caveats and guidelines for researchers

Formatively-measured constructs (FMCs) are increasingly used in marketing research as well as in other disciplines. Although constructs operationalized by means of formative indicators have mostly been placed in exogenous positions in structural equation models, they also frequently occupy structurally endogenous positions. The vast majority of studies specifying endogenously-positioned FMCs have followed the common practice of modeling the impact of antecedent (predictor) constructs directly on the focal FMC without specifying indirect effects via the formative indicators. However, while widespread even in top journals, this practice is highly problematic as it can lead to biased parameter estimates, erroneous total effects, and questionable conclusions. As a result both theory development and empirically-based managerial recommendations are likely to suffer. Against this background, the authors offer appropriate modeling guidelines to ensure that a conceptually sound and statistically correct model specification is obtained when a FMC occupies an endogenous position. The proposed guidelines are illustrated using both covariance structure analysis (CSA) and partial least squares (PLS) methods and are applied to a real-life empirical example. Implications for researchers are considered and ‘good practice’ recommendations offered.     

Financial integration,specialization, and systemic risk

This paper studies the implications of cross-border financial integration for financial stability when banks' loan portfolios adjust endogenously. Banks can be subject to sectoral and aggregate domestic shocks. After integration they can share these risks in a complete interbank market. When banks have a comparative advantage in providing credit to certain industries, financial integration may induce banks to specialize in lending. An enhanced concentration in lending does not necessarily increase risk, because a well-functioning interbank market allows to achieve the necessary diversification. This greater need for risk sharing, though, increases the risk of cross-border contagion and the likelihood of widespread banking crises. However, even though integration increases the risk of contagion it improves welfare if it permits banks to realize specialization benefits.