On the value relevance of customer satisfaction. Multiple drivers and multiple markets

Existing research implicitly assumes that all factors known to influence customer satisfaction are likewise important for investor behavior. However, if investors do not equally value activities targeting different satisfaction drivers, managers focusing on short-term stock returns might over- or under-emphasize certain satisfaction drivers to the detriment of the long-term success of the firm. Therefore, we extend prior research on the value relevance of customer satisfaction by assessing the relationship between the dynamics of key satisfaction drivers and contemporaneous risk-adjusted stock returns. Moreover, we compare three major markets using a dataset covering nearly the entire set of car brands sold between 2004 and 2008. Our results show that investors react to information related to perceived product quality, whereas, surprisingly, the cost of ownership and dealer service quality are unimportant despite the importance attributed to them in consumer research. Furthermore, we observe that information concerning the U.S. market dominates that of the UK and German markets.     

K. William Kapp's theory of social costs and environmental policy: Towards political ecological economics

The paper analyzes the contribution of K. William Kapp, widely considered one of the founders of Ecological Economics. This paper will demonstrate how K. William Kapp developed his theory of social costs into a framework for environmental policy development, i.e. the basis for Political Ecological Economics. The latter provides the most comprehensive and non-utilitarian alternative to the main neoclassical approaches provided by Arthur Pigou and Ronald Coase. Kapp determined basic human needs to be necessary values operational for policymaking via politically derived and scientifically determined social minima (criteria) and socio-ecological indicators. This “rational humanism” was inspired by Weber's concept of substantive rationality and informed by John Dewey's pragmatic instrumentalism. The paper concludes that Kapp's contribution is important enough to cement its place in the broader school of Ecological Economics.     

From Medics to Managers: The Ascent of the Entrepreneur

Where one stands to engage with the world is not as some New Age Psychologists continue to argue, completely free and self-determined. Rather, it is formed largely beyond one’s control and is fraught with both dangers and opportunities. This pre-determined point of view is referred to as the Assumptive World (Parkes, 1975). This is defined as a “strongly held set of assumptions about the world and the self that is confidently maintained and used as a means of recognizing, planning and acting…Assumptions such as these are learned and confirmed by the experience of many years” (Parkes, 1975, p. 132). There are, further, levels and intensities of assumptions, as refined by Janoff-Bulman, R. (1992). These assumptions form the centre point of our world and our consciousness. They are so much a part of us that we tend not to challenge them. Though unchallenged, these assumptions nevertheless drive our behaviors, set our expectations, and operationalize our moral views.     

The Potential for Appreciative Inquiry in Tourism Research

Tourism is an engine of economic growth, but its capacity to contribute to good health is only starting to be documented. This paper describes a forthcoming research project with the Ethiopian immigrant community in the Australian state of Victoria. The project aims to discover if writing about positive holiday experiences that involve visits to friends and relatives improves the community's mental health – alleviates depression levels and increases levels of happiness. The role of holidays in improving mental health is of increasing interest to the tourism industry. This research note highlights the importance of understanding the benefits of holidays for individual well-being; this paper outlines a methodological approach for investigating these benefits.     

Non‐farm employment and incomes in rural Cambodia

Rural households in Cambodia derive income from various sources. On average, non‐farm income accounts for more than 60 per cent of total household income. However, the average masks the substantial heterogeneity of non‐farm employment. We account for this heterogeneity and find significant differences in non‐farm participation and incomes across segments of the income distribution. The poor and the less well‐educated participate less in the non‐farm sector, and when they do work in the non‐farm sector, they work in low‐paid jobs and earn lower incomes. Accounting for endogeneity and sample selection issues, we conduct an empirical enquiry of the determinants of participation in non‐farm activities and of non‐farm incomes. As expected, we find that education plays a major role in accessing more remunerative non‐farm employment. Interestingly, we do not find evidence that women, ethnic minorities, or the land‐poor are disadvantaged in access to the non‐farm sector. Geographical location plays a role in access to and income from non‐farm employment, indicating the importance of local context.     

Adjustment patterns to commodity terms of trade shocks: The role of exchange rate and international reserves policies

We analyze the way in which Latin American countries have adjusted to commodity terms of trade (CTOT) shocks in the 1970–2007 period. Specifically, we investigate the degree to which the active management of international reserves and exchange rates impacted the transmission of international price shocks to real exchange rates. We find that active reserve management not only lowers the short run impact of CTOT shocks significantly, but also affects the long run adjustment of REER, effectively lowering its volatility. We also show that relatively small increases in the average holdings of reserves by Latin American economies (to levels still well below other emerging regions current averages) would provide a policy tool as effective as a fixed exchange rate regime in insulating the economy from CTOT shocks. Reserve management could be an effective alternative to fiscal or currency policies for relatively trade closed countries and economies with relatively poor institutions or high government debt. Finally, we analyze the effects of active use of reserve accumulation aimed at smoothing REERs. The result support the view that “leaning against the wind” is potent, but more effective when intervening to support weak currencies rather than intervening to slow down the pace of real appreciation. The active reserve management reduces substantially REER volatility.     

Strategic decision making in business relationships: A dyadic agent-based simulation approach

This study employs agent-based simulation to model strategic decision making in business relationships, examining the influence of two important strategy drivers in business relationships (performance and power) on relationship success (relationship survival and performance). The study offers insights into the complex and evolutionary interaction and feedback effects between networking strategy choice, relationship performance and power. Findings show that although certain strategies may be desirable for firms to manage their business relationships, they are not necessarily as successful in all situations. Results indicate that a trade-off exists between relationship context and performance which needs to be considered in strategic networking decisions. Further, the study shows that too many strategy changes cause relationships to become unstable and thus negatively affect performance. The authors refer to this phenomenon as strategy volatility — the rate at which actors change their networking strategies within relationships. This phenomenon arises when too many variables influence firms' decision making and thus cause firms to frequently change their strategy. Although strategy volatility has a relationship safeguarding effect in the short term, this effect diminishes over time.     

Life Events as Windows of Opportunity for Changing Towards Sustainable Consumption Patterns?

Strategies for motivating households towards sustainable consumption are confronted with the challenge of addressing seldom-reflected-upon routines, which cannot easily be changed. We investigate whether life-course transitions can serve as starting point for sustainable consumption interventions, assuming that during such transitions people already need to adapt their behavioural routines and are thus more receptive to interventions. The effects of two different campaigns (information mailing and personal consultation) were evaluated for people experiencing two different kinds of life events (childbirth and relocation). The experimental study found that the consultation campaign had significant effects on sustainable consumption concerning some of the focussed on behaviours, but did not have greater effects on the life-events groups. Mailing of information did not result in significant behavioural changes. To get a clearer picture about the impact of life-course transitions on everyday routines and susceptibility to interventions, additional qualitative interviews were carried out. The results indicate that everyday routines and consumption patterns change during life-course transitions, but with heterogeneous results regarding sustainability. The interviews revealed that the preparation phase preceding life events and a rather short period after them are decisive for changes in routine. Tentative explanations for the low impact of the consultation campaign on the persons in life-course transition are that the campaign addressed the target groups too late and that its design was not specifically adapted to these target groups.