Advertising Decision Makers' and Consumers' Perceptions of Media Substitutability

The purpose of this article is to assess the perceptions of advertising media substitutability among consumers, media planners, and media providers. Data were collected from three different samples using structured questionnaires and CATI interviewing. The results suggest that some degree of substitution does indeed exist in all three groups. This means that if first media choices are unavailable all groups are likely to consider others as possibly providing the best buying information. This study adds to the scarce literature that focuses on perceptions of media substitutability and provides results for both demand and supply side of the media market. It also suggests that such perceptual studies may be helpful in a re-examination of current policy and advertising management decisions.     

Competitive Advantage and Human Resource Management in SMEs in a Transitional Economy

The article is based on data of the study of 151 small companies in Slovenia by J. Pranikar and others. The study is the first investigation of small firms in slovenia with a sufficiently large number of cases to enable conclusions about the ways in which SMEs are managing to cope with new opportunities and problems. The aim of this article is to investigate a link between competitive advantage and human resource management in SMEs in a transitional economy. Results indicate that a link indeed exists in that human resource efforts in SMEs to a certain degree contribute to the competitive advantage of companies.     

Estimating persistent and transient technical efficiency and their determinants in the presence of heterogeneity and endogeneity

We develop an estimation procedure that generates consistent estimates of the technology parameters, long-run (persistent) and short-run (transient) technical inefficiencies and the marginal effects of their determinants for the stochastic frontier model developed by Colombi et al. (2014, Journal of Productivity Analysis 42, 123) and Kumbhakar et al. (2014, Journal of Productivity Analysis 41, 321). Our approach accounts for three sources of potential endogeneity: (i) unobserved heterogeneity; (ii) simultaneity of input use with both types of technical efficiency; (iii) potential correlation of the noise term with the regressors. Using this approach we examine the effect of direct payments and farm size on the persistent and transient technical efficiency of French crop farms before and after the European Union's Common Agricultural Policy decoupling reform of 2003. Our results show that subsidy payments per hectare of utilised agricultural land had a significant positive effect on persistent technical efficiency and a significant negative effect on transient technical efficiency during the period before decoupling. For the period after the reform, the effect of subsidies is found to be significantly negative for persistent technical efficiency and insignificant for transient technical efficiency. The overall effect of subsidies on technical efficiency is found to be negative in both periods, albeit substantially lower in the period after decoupling. The effect of farm size on technical efficiency is found to be significant only for the period prior to the reform: it reduced persistent technical inefficiency but increased transient technical inefficiency during that period.     

Comparison of Mean-Risk Efficient Portfolios in Asia-Pacific Capital Markets

In order to analyze the performance of mean-risk efficient portfolios, several methods of portfolio comparison have been developed. In this paper we analyze the second-order stochastic dominance efficiency of portfolios on the mean-risk efficient frontier assuming that the risk is represented by standard deviations and concordance matrices set up on the basis of Pearson's linear correlation, Spearman's rho, or Kendall's tau. Empirical analysis of the market returns of selected Asia-Pacific stock markets is carried out considering both the U.S. dollar and euro as reference currencies, and different periods: before and during the subprime crisis. Measures and portfolios on the mean-risk efficiency frontier that should be of interest to at least one risk-averse investor are empirically documented.     

What Drives Clarity of Central Bank Communication About Inflation?

This paper examines whether the clarity of central bank communication about inflation varies with the economic environment. Using readability statistics and content analysis, we study the clarity of communication on the inflation outlook by seven central banks across three continents during the recent decade. We uncover significant and persistent differences in clarity over time and across countries. However, identifying determinants of clarity that are robustly relevant across our sample of central banks proves elusive. Overall, our findings suggest that a single model for clarity of central bank communication is not appropriate. Rather, when studying clarity of communication, country-specific and institution-specific factors are highly relevant.     

Rose effect and the euro: is the magic gone?

This paper presents an updated meta-analysis of the effect of currency unions on trade, focusing on the euro area. Using meta-regression methods such as the funnel asymmetry test, evidence for strong publication bias is found. The estimated underlying effect for currency unions other than the eurozone reaches more than 60%. However, according to the meta-regression analysis, the euro’s trade promoting effect corrected for publication bias is insignificant. The Rose effect literature shows signs of the economics research cycle: reported t-statistic is a quadratic concave function of the publication year. Explanatory meta-regression (robust fixed effects and random effects), that can explain about 70% of the heterogeneity in the literature, suggests that results published by some authors might consistently differ from the mainstream output and that study outcomes are systematically dependent on study design (usage of panel data, short- or long-run nature, number of countries in the data set).     

Misallocation and financial market frictions: Some direct evidence from the dispersion in borrowing costs

Financial frictions distort the allocation of resources among productive units—all else equal, firms whose financing choices are affected by such frictions face higher borrowing costs than firms with ready access to capital markets. As a result, input choices may differ systematically across firms in ways that are unrelated to their productive efficiency. We propose an accounting framework that allows us to assess empirically the magnitude of the loss in aggregate resources due to such misallocation. To a second-order approximation, the framework requires only information on the dispersion in borrowing costs across firms, which we measure—for a subset of U.S. manufacturing firms—directly from the interest rate spreads on their outstanding publicly-traded debt. Given the observed dispersion in borrowing costs, our approximation method implies a relatively modest loss in efficiency due to resource misallocation—on the order of 1 to 2 percent of measured total factor productivity (TFP). In our framework, the correlation between firm size and borrowing costs has no bearing on TFP losses under the assumption that financial distortions and firm-level efficiency are jointly log-normally distributed. To take into account the effect of covariation between firm size and borrowing costs, we consider a more general framework, which dispenses with the assumption of log-normality and which implies somewhat higher estimates of the resource losses—about 3.5 percent of measured TFP. Counterfactual experiments indicate that dispersion in borrowing costs must be an order of magnitude higher than that observed in the U.S. financial data, in order for misallocation—arising from financial distortions—to account for a significant fraction of measured TFP differentials across countries.     

External Venturing and Discontinuous Strategic Renewal: An Options Perspective

This study examines the relationship between a firm's venturing activities and its undertaking of strategic renewal. The study was motivated by some important gaps in the corporate entrepreneurship literature on venturing and renewal. The extant literature has not focused on the different types and dimensions of firms' renewal activities. In particular, discontinuous renewal involving shifts in firms' core businesses is not well understood. Moreover, the conditions that drive firms to undertake strategic renewal have not been examined. For example, it is not known how venturing increases or reduces the benefits of undertaking renewal. This study focuses on a discontinuous form of renewal involving major changes in firms' core businesses and examines firms' external venturing activities that complement their internal development. We examine corporate venture capital (CVC) investments, which are direct minority equity investments made by established companies in privately held ventures. Discontinuous renewal is conceptualized as resulting from a set of related, and often sequential, managerial decisions. The first managerial decision is to initiate growth in a business that is relatively newer or smaller for the organization. The second decision is to move away, or even withdraw completely, from the current core business that enabled prior growth and prosperity for the firm and served as its primary revenue earner. Employing a real options perspective, we argue that CVC investments create growth options in new and existing businesses but do not result in firms' withdrawal from existing businesses. Therefore, we expect CVC activity to be negatively associated with the likelihood of a firm undertaking discontinuous renewal. We also propose that the benefits of withdrawing from existing businesses are even lower, and the costs even higher, for firms in dynamic industries and for firms that possess strong internal capabilities. The predictions of the study are tested using longitudinal data on 477 firms from the 1990 Fortune 500 list for the period 1990–2000. We find support for all our predicted hypotheses. These results help address important limitations in the corporate entrepreneurship literature. The study also contributes to the real options and organizational capabilities literatures.     

The Role of Information Feedback in the Management Group Decision-Making Process Applying System Dynamics Models

The research project addresses the influence of feedback information on the decision process supported by the application of system dynamics models. A user-friendly application was developed and used in the experiment with decision groups. The participants were 174 undergraduate management science students. They had the task of determining the optimum business strategy by maximizing the multiple criteria function under three experimental conditions: a ₁) an indivIDual decision process without the support of a system dynamics model, a ₂) an indivIDual decision process supported by a system dynamics model, and a ₃) a decision process supported by a system dynamics model and subject interaction via computer mediation. The hypotheses that the indivIDual decision process supported by a system dynamics model yields higher Criteria Function values than one without a system dynamics model, as well as the decision process supported by both a system dynamics model and subject interaction yields higher Criteria Function values than one supported by a system dynamics model alone were confirmed.     

Contribution of financial market segments at different stages of development: Transition,cohesion and mature economies compared

What is the impact of financial sector segments at different stages of development? We apply a production function approach to investigate the impact of the credit, bond and stock segments in nine EU-accession countries over early years of transition (1996–2000) and compare these to mature market economies and to countries at intermediate stage. We find that the transfer mechanisms differ over the development cycle (from bond markets to educational attainment to labor participation) and that financial market segments with links to the public sector (but not stock markets) contributed to stability and growth in transition economies.