Innovation and new product introductions in emerging markets: Strategic recommendations for the Indian market

While radical innovations and growth strategies supporting such innovations may provide the firm with very high returns, there are also considerable risks in devising and implementing such innovations. Apart from the business risks of venturing into new territories and new markets, radical innovations also carry with them the burden of accounting for market and environmental factors that are often not under the control of the firm. The opportunities presented by the emergence of several Asian markets, such as India and China, are particularly appealing for Western countries willing to expand into these markets. However, market characteristics, institutional development, and customer behaviors bring into sharp focus the choice of a specific innovation and new product development strategy for such markets. This paper examines these various strategic issues in the context of India. The paper concludes with strategic recommendations for managers and some propositions for future academic research.     

Stochastic reaction functions in 2 × 2 duopoly

A reaction function is a contingency plan that specifies how a firm will react to a move made by its competition. This includes the classical Cournot reaction function. Our stochastic reaction functions are the rules by which firms revise their prior distributions on their competitors' sets of actions. The asymptotic stability of a class of stochastic reaction functions is examined in this paper. It is shown that there exists a class of reaction functions that are either asymptotically stable in the Cournot-Nash sense or asymptotically Pareto optimal. Our analysis does not rely on differentiability and other assumptions traditionally imposed in the literature.     

Cheaper,Greener and More Efficient: Rationalising UK Carbon Prices

Current UK energy use policies, which primarily aim to reduce carbon emissions, provide abatement incentives that vary by user and fuel, creating inefficiency. Distributional concerns are often given as a justification for the lower carbon price faced by households, but there is little rationale for carbon prices associated with the use of gas to be lower than those for electricity. We consider reforms that raise carbon prices faced by households and reduce the variation in carbon prices across gas and electricity use, improving the efficiency of emissions reduction. We show that the revenue raised from these reforms can be recycled in a way that ameliorates some of the distributional concerns. Whilst such recycling is not able to protect all poorer households, existing policy also makes distributional trade‐offs, but does so in an opaque and inefficient way.     

Sustainability and business-to-business marketing: A framework and implications

Researchers in several business disciplines have convincingly argued that environmentally responsible strategies can contribute to competitive advantage and superior financial performance. While debates on ecological conservation and environmental practices within marketing have raged for over three decades, much of the focus has been on identifying and targeting the environmentally-conscious consumer. Less attention has been given to marketing's role in a green supply chain and its interface with environmentally-friendly manufacturing and operations. We integrate disparate streams of research and develop a broader framework to understand the appropriate role and focus of business-to-business marketing in the supply chain for achieving environmental sustainability objectives. We identify three major strategies - the reduction of surplus supply of products, reduction of reverse supply, and internal marketing - where marketing's role in environmental sustainability is crucial for achieving superior competitive advantage and financial performance.     

Understanding Retail Managers’ Role in the Sales of Products and Services

This research investigates the influence of retail chain-level activities (e.g., district supervisor directives and policies) and store manager behaviors on the sale of physical products versus services. Using data gathered within a U.S.-based retail automotive parts chain, the authors discover that to sell services, especially in competitive environments, store managers should focus on sales planning and transformative leadership behaviors, which accentuate both the long-term planning horizon and the effects of managerial actions. In less competitive environments though, a more transactional approach (e.g., selling orientation) can be effective for selling services. Alternatively, to sell products, store managers’ selling effort appears to be the most important driver of success, and a transformative leadership approach may be detrimental when the retailer faces a high level of direct competition. In total, the findings suggest that corporate chain activities, such as the level and clarity of store managers’ goals and supervisor monitoring, influence store manager behaviors, which in turn affect the sale of physical products and services.     

CREDIBLY IDENTIFYING SOCIAL EFFECTS: ACCOUNTING FOR NETWORK FORMATION AND MEASUREMENT ERROR

Understanding whether and how connections between agents (networks) such as declared friendships in classrooms, transactions between firms, and extended family connections, influence their socio‐economic outcomes has been a growing area of research within economics. Early methods developed to identify these social effects assumed that networks had formed exogenously, and were perfectly observed, both of which are unlikely to hold in practice. A more recent literature, both within economics and in other disciplines, develops methods that relax these assumptions. This paper reviews that literature. It starts by providing a general econometric framework for linear models of social effects, and illustrates how network endogeneity and missing data on the network complicate identification of social effects. Thereafter, it discusses methods for overcoming the problems caused by endogenous formation of networks. Finally, it outlines the stark consequences of missing data on measures of the network, and regression parameters, before describing potential solutions.     

The Role of Market Sentiment in Asset Allocations and Stock Returns

Abstract

The authors investigate the role of mutual fund flows in incorporating market sentiment into asset prices. They show that retail investors adjust their investments among mutual fund categories in response to changes in market sentiment. Consistent with sentiment-induced price pressure through fund flows, they further find that firms favored by mutual funds, such as large-cap, dividend payers, and firms with high institutional ownership are sensitive to market sentiment. The authors construct a pricing factor representing sentiment risk and find that the sentiment factor is significant in standard asset pricing models and robust to various sorting procedure.     

Mostly harmless simulations? Using Monte Carlo studies for estimator selection

We consider two recent suggestions for how to perform an empirically motivated Monte Carlo study to help select a treatment effect estimator under unconfoundedness. We show theoretically that neither is likely to be informative except under restrictive conditions that are unlikely to be satisfied in many contexts. To test empirical relevance, we also apply the approaches to a real‐world setting where estimator performance is known. Both approaches are worse than random at selecting estimators that minimize absolute bias. They are better when selecting estimators that minimize mean squared error. However, using a simple bootstrap is at least as good and often better. For now, researchers would be best advised to use a range of estimators and compare estimates for robustness.     

How different are corporate social responsibility motives in a developing country? Insights from a study of Indian agribusiness firms

Against the backdrop of increasing foreign direct investment flows in the developing economies in Asia, the investigation of topical aspects of corporate social responsibility (CSR) in the region increases in importance. We examine the CSR motives of four large indigenous agribusiness firms in India with a view of assessing the validity of the claim that CSR in this country, compared to developed countries, is influenced substantially more by moral, cultural, and religious considerations and less by self‐interest and profit seeking. Unlike numerous other investigations of CSR that rely on questionnaires and company reports, our data are drawn from in‐depth interviews and theme analysis revealing some intricate motives behind CSR behavior and business conditions that inspire them. Our findings challenge some previously reported results and indicate that the degree to which such a behavior is affected by the state of economic development and cultural differences may be smaller than is often argued.