The Selection of Distribution Channels in China

This contribution first traces the development of the distribution system in China from state monopoly to one which permits the limited participation of foreign ventures, and examines the problems faced by foreign investors in managing the distribution channels under such a transitional economy. Due to China's abundance of linguistic, cultural and economic differences, combined with growing territorialism at the provincial level, different problems may be encountered in different citieslregions, and therefore foreign investors need to modify their distribution strategies accordingly. Detailed case studies are provided as illustrations.     

The transmission mechanism in a changing world

The paper aims to identify those factors that cause changes in the speed and strength of the international transmission of output shocks from the USA to specified European economies. These factors are identified through the use of generalized impulse response functions conditioned on histories defined by an abrupt transition VAR. The chosen transition variables comprise changes in exchange rates, financial prices, international capital flows, trade links and monetary policy instruments. Besides the identification of asymmetric responses, the proposed model is useful in analyzing the strong effect of the recent US recession on the European economies and changes in business cycle synchronization over time. Copyright © 2007 John Wiley & Sons, Ltd.     

Estimators for the common principal components model based on reweighting: influence functions and Monte Carlo study

The common principal components model for several groups of multivariate observations is a useful parsimonious model for the scatter structure which assumes equal principal axes but different variances along those axes for each group. Due to the lack of resistance of the classical maximum likelihood estimators for the parameters of this model, several robust estimators have been proposed in the literature: plug-in estimators and projection-pursuit (PP) type estimators. In this paper, we show that it is possible to improve the low efficiency of the projection-pursuit estimators by applying a reweighting step. More precisely, we consider plug-in estimators obtained by plugging a reweighted estimator of the scatter matrices into the maximum likelihood equations defining the principal axes. The weights considered penalize observations with large values of the influence measures defined by Boente et al. (2002). The new estimators are studied in terms of theoretical properties (influence functions and asymptotic variances) and are compared with other existing estimators in a simulation study.     

Workers or Employers: Who is Shaping Wage Inequality?

An extensive micro data set matching firms, establishments and their employees, is used to study the determinants of earnings inequality in Portugal and its evolution from 1983 to 1992, with the Theil index, its decomposition, and the decomposition of its change as tools of analysis. The relevance of both worker and employer attributes in shaping earnings inequality and its trend is quantified. The impact of the firm on wage inequality in a European country is compared to the situation in the USA, and the results suggest that a more regulated and centralized European bargaining system might reduce the scope for firm action. A profile of an economy undergoing modernization, where rising labour market inequality signalled the lack of an adequate labour force, can be drawn, with the minimum wage having nonetheless a certain narrowing effect on the earnings distribution.     

Inter-firm Collaboration and Learning: The Case of the Japanese Automobile Industry

This paper investigates the effect of intra-firm Research and Development expenditure and inter-firm collaboration on firm performance. It is proposed that R&D expenditures enable a company to improve knowledge and assimilate the exchange of information within non-routine collaboration activities. The hypotheses are tested by an empirical study on inter-firm technical collaboration in Japanese Automobile firms during the years 1975–1995, using the method of first-order auto-regression on a panel data set. The findings indicate that R&D expenditure increases performance, but do not allow clear conclusions on the effects of collaborations.     

A multiple dispatch and partial backup hypercube queuing model to analyze emergency medical systems on highways

The hypercube is a spatially distributed queuing model based on Markovian analysis approximations, used to analyze the configuration and operation of server-to-customer emergency systems. In the present study we adapted the model to analyze emergency medical systems (EMS) on highways, which operate within particular dispatching policies. The study takes into consideration that: the emergency calls are of different types; the servers are distinct (e.g., rescue ambulances, medical vehicles); only certain servers in the system can service calls in a given region (partial backup); and, depending on the type of call, one or more identical or distinct servers are immediately dispatched to service such calls (multiple dispatch). We also consider that the arriving calls take place either along the highway or at the home location of a server – in which case the server does not need to travel to the call location. Finally, we analyzed the computational results of applying such an approach to the case study of an EMS operating on Brazilian highways.     

When should a firm expand its business? : The signaling implications of business expansion

We examine an incumbent's trade-off between the improved efficiency that business expansion facilitates and the signaling role that business expansion plays in conveying information to potential entrants about the state of demand. We demonstrate that both separating and pooling equilibria survive the Intuitive Criterion. Essentially, in contrast to models with asymmetric information about unit cost, incumbents' benefits from investing in a signal are not necessarily monotonic in the state of demand. We investigate how the extent of informativeness of the outcome depends on the enhanced efficiency that the incumbent's expansion facilitates and the priors of the entrant.     

Licensing information goods

A significant amount of research on patent licensing and the diffusion of knowledge is organized around static frameworks of analysis. Patent holders, however, may face a dynamic problem, namely the intertemporal consistency problem of the durable-goods monopolist that is induced by durability on the demand side. Licensing practices such as exclusive licensing contracts and most favored customer clauses allow patentees to solve or mitigate this dynamic consistency problem. There are situations, however, where these practices are not possible either due to the nature of the patent (the case of information goods) or due to compulsory patenting laws. We study the effects of the intertemporal consistency problem on patent licensing in these situations. Relative to the existing literature, we obtain the following main results: (i) all of the firms that remain in the industry will be using the innovation; (ii) royalty licensing may be superior to fixed-fee or auction licensing from the licensor's point of view; (iii) social welfare and consumer surplus may be lower than when the patent holder can commit not to make additional sales; (iv) even for non-drastic innovations, the price of the good that is produced may be lower than the competitive price corresponding to the initial situation (before the innovation was discovered).