Corporate strategy as a source of ideas

This paper looks at a number of others which bear on the interface between Corporate Strategy and R&D Planning to see if a more systematic approach can suggest a sequence to be followed so that Corporate Strategy can be seen as a source of ideas for R&D.
The purpose of R&D is defined in terms of contributing to the competitiveness of the Company or Business Unit being served. The areas of competition or threats from the external environment are then explored using a model taken from Porter's book 'Competitive Strategy'. Each area of competition is considered in turn and strategies identified which might enable the company to maintain its competitive edge. Sub-objectives for the R&D function can then be determined allocating resources and time for their completion.
It is the performance of the R&D function inj fulfilling these sub-objectives which can be the basis of measuring the effectiveness of R&D.     

An empirical model of entry and exit in airline markets

This article considers the effect of airline hub-and-spoke systems on the entry and exit behavior of rival firms in the U.S. airline industry. An analysis of simple entry and exit decisions provides insight into equilibrium conditions that are used to specify discrete choice econometric models. The empirical evidence indicates that hub-and-spoke network characteristics are significant determinants of entry and exit decisions in individual citypair markets.     

A look at the public policy conflict regarding the discovery of accountants' tax accrual workpapers

This article focuses on the conflict in public policy between the need to provide the investing public with accurate information with regard to corporate financial statements and the need to provide the IRS with the necessary tools in order to assure corporate compliance with the tax laws of the country. The conflict arises because of the contention of the IRS that it is entitled to have access to an independent auditor's tax accrual workpapers on the one hand, and the contention by CPAs that such access will prevent adequate disclosure to the independent auditor. The article examines the policy questions on both sides of the issue and concludes that regardless of any decision by the Supreme Court in a pendingcase, Congress should pass legislation to resolve the conflict and clearly identify the scope of any previlage accorded with regard to tax accrual workpapers.     

On public investment, long-run growth, and the real exchange rate

This paper extends the Barro (1990) endogenous growth modelwith productive government services to a two-country world withperfect capital mobility, populated by optimising agents withuncertain lifetimes. It shows that increases in government spendingon infrastructure for the home country result in higher growthrates and a terms of trade improvement. Both these effects arereversed after a point, showing that a hump-shaped curve—similarto the Barro curve, but with different properties—canbe obtained here even with lump-sum taxes. We also examine thewelfare implications of public investment policies, and characterisethe world economy's dynamics.     

Debt and Firms' Relationships: The Italian Evidence

Theories that predict the strategic use of debt by players engaged in a verticalrelationship are tested using an empirical model of debt usage. It is found thatfirms selling mainly to other firms are characterised on average by a higherlevel of debt. No evidence supports the notion that buyers increase their leverageto commit themselves not to behave opportunistically towards their suppliers. Theresults in the paper also suggest that group organisation limits the incentive to usedebt strategically within the holding-subsidiaries relationship.     

An Examination of Changes in Specialists' Posted Price Schedules

New York Stock Exchange specialists disseminate informationto market participants by displaying price schedules consistingof bid prices, ask prices, bid depths, and ask depths. We examinehow specialists update these price schedules in a simultaneousequations model. We find that changes in the best prices anddepths on the limit order book have a significant impact onthe posted price schedule, while the effects of transactionsand order activity are secondary. Furthermore, we show thatspecialists revise prices and depths differently, but find noevidence that they revise the price schedule in response tochanges in inventory.     

The Many Faces of Information Disclosure

In this article we ask: what kind of information and how muchof it should firms voluntarily disclose? Three types of disclosuresare considered. One is information that complements the informationavailable only to informed investors (to-be-processed complementaryinformation). The second is information that is orthogonal tothat which any investor can acquire and thus complements theinformation available to all investors (preprocessed complementaryinformation). And the third is information that substitutesfor the information of the informed investors in that it revealsto all what was previously known only by the informed (substituteinformation). Our main results are as follows. First, in equilibrium,all types of firms voluntarily disclose all three types of information.Second, in contrast to the existing literature, complementaryinformation disclosure by firms strengthens investors' privateincentives to acquire information. Substitute information disclosureweakens private information acquisition incentives. Third, whilecomplementary information disclosure has an ambiguous effecton financial innovation incentives, substitute information disclosureweakens those incentives.     

The Costs and Benefits of Long-Distance Entry: Regulation and Non-Price Discrimination

A primary goal of the 1996 Telecommunications Act isto encourage competition in long-distance telephonemarkets. Four years after passage of thislegislation, Bell Operating Companies (``BOCs') havebeen granted permission to offer long-distanceservices in only one state. The regulatory barrier toentry is justified on grounds that the BOCs have theability to discriminate against incumbentlong-distance carriers in the provision of essentialaccess services. We take this premise as given andquantify the critical level of discrimination requiredto offset the positive consumers' surplus gainsassociated with the enhanced competition resultingfrom BOC entry into long-distance markets.     

The Gradual Response of Market Power to Mergers in the U.S. Steel Industry

Studies of the impact of horizontal mergers on market power typically impose an immediate adjustment of market power following a merger. This paper adopts an alternative procedure to estimate the effect of four mergers on market power in the U.S. steel industry. Namely, by estimating a switching regression model that incorporates profit-maximizing behavior, the results show that mergers generally increased market power in the steel industry. However, it did take some time for market power to fully adjust after each merger.