A three-level supply chain network design model with risk-pooling and lead times

This paper considers a single-sourcing network design problem for a three-level supply chain consisting of suppliers, distribution centers (DC’s) and retailers, where risk-pooling strategy and DC-to-supplier dependent lead times are considered. The objective is to determine the number and locations of suppliers and DC’s, the assignment of each location-fixed DC to a supplier and that of each retailer to a DC, which minimizes the system-wide location, transportation, and inventory costs. The problem is formulated as a nonlinear integer programming model, for which a two-phase heuristic solution algorithm is derived based on the Lagrangian relaxation approach. Numerical experiments show that the proposed heuristic is effective and also efficient.     

Following the breadcrumbs: An analysis of online product review characteristics by online shoppers

Consumer-generated product reviews are a driving force behind online purchases; at the same time, unfavorable reviews can discourage interested online shoppers and eventually hurt the brand. The objective of this exploratory study was to analyze a diverse range of characteristics and the valence of online product reviews that would aid in responding to customer dissatisfaction. Product reviews (N = 1982) from Amazon.com were collected and content analyzed. Some of the key findings include the following: (a) price was the most commonly discussed product feature; (b) online shoppers found two-sided reviews to be most informative, contradicting the commonly held assumption that negative reviews were more informative and diagnostic in nature; and (c) ‘no action’ was the most common end action across two-sided and negative reviews, indicating that varying levels of dissatisfaction might not always lead to a negative end action. Implications for marketers are discussed.     

A network text analysis of published papers in service business, 2007–2017: research trends in the service sector

The service sector has become the most important part of the global economy. Thus, Service Business: An International Journal (SB) was launched in 2007 to deliver innovative studies that can provide resonating insights to researchers and practitioners in services. This study analyzed 311 articles published in SB during the past 10+ years (2007–2017) by conducting network text analysis (NTA). The published papers’ keywords link relations were analyzed to create network maps of research topics, ranging from traditional to emerging ideas of researchers. Influential research topics and their clusters were identified using centrality and community analyses. Research trends were identified for the first 5 years (Volume 1–5) and later years (Volume 6–11) separately through NTA. The results reveal interesting change in research topics over time. Common keywords of studies published in the first 5 years were: Service, Innovation, Customer, Strategy, Tourism, and Quality. The primary frequent keywords of articles published during 2012–2017 were: Customer, Quality, Satisfaction, Innovation, Mobile, and Technology. The results of the study shed valuable insights to the researchers and practitioners in the service sector. Applications of keyword network building and analysis methods provided in this study would be helpful to researchers who are interested in exploring trends of emerging new topics.     

On the vulnerability of the oil and gas industry to oil price changes

Previous studies of oil-price economic activity relationships are dominated by macro-level examination of price effects. This study examines the effect of shocks in oil price and its volatility on the oil and gas extraction industry using a Vector Auto-Regressive (VAR) approach. The results show that, in the short-run, positive price and volatility shocks lead to significant increases in oil and gas activities. However, in the long-run, the industry behaves much like the rest of the U.S. economy—price and volatility shocks produce small or insignificant effects. An earlier version of this paper was presented at the 22 ^nd Annual North American Conference of the U.S.A. Energy Economics/International Association of Energy Economics Conference, Vancouver, British Columbia. The authors acknowledge the editorial assistance of Versa Stickle.     

Aggregating Capacity-Limiting Separable Inputs

The concept of separability is closely related to aggregation. Previous studies on separability are important mainly for theoretical contributions, not for empirical results. This paper provides a theoretical justification for using the maximum capacity of a subset of inputs as an aggregate index in empirical settings. The method is demonstrated with two examples, aggregating inputs within a firm and across firms.     

Price convergence among Indian cities: A cointegration approach

Price dynamics in Indian cities were examined using cointegration analysis. We identified and calculated a common trend for prices in 25 major cities in India. Impulse response functions were obtained to calculate the rates of convergence to the prices and we found that the half-life of any shock is very small for Indian cities. Although a close to 3-month half-life seems too fast, there is some indication in the literature that half-life can be much smaller than the conventional rates of 3–5 years. We have calculated half-life using the panel unit root method, and found that estimates of half-life from cointegration analysis provide a faster convergence rate than estimates using the panel unit root method. We also analyzed how shock can be transmitted from one city to another and found no systematic behavior of transmission from one city to another.     

Inference of Seasonal Cointegration: Gaussian Reduced Rank Estimation and Tests for Various Types of Cointegration*

An extension of Gaussian reduced rank estimation of Ahn and Reinsel (Journal of Econometrics, Vol. 62, pp. 317–350, 1994) to seasonal periods other than four is presented. Simple adjustments for estimation that are necessary because of complex‐valued seasonal unit roots are presented in detail and the asymptotic distribution of the estimators that takes the same form as that in Ahn and Reinsel (1994) is derived. Tests for contemporaneous cointegration and common polynomial cointegrating vectors (PCIVs) for different seasonal unit roots are presented. Finite sample properties are briefly examined through a small Monte Carlo simulation study and a numerical example is presented to illustrate the methods.     

INTEREST RATE CHANGES AND COMMON STOCK RETURNS OF FINANCIAL INSTITUTIONS: REVISITED

In this paper the interest rate sensitivity of common stock returns of financial firms is re-examined. Considered here are (1) current, anticipated, and unanticipated changes in interest rates; (2) depository and nondepository firms; and (3) three different-maturity interest rate indices. Results lend strong support for a negative effect of both current and unanticipated interest rate changes. Although some exceptions are observed, stock returns of most subsectors of both financial and nonfinancial firms are not sensitive to anticipated interest rate changes. The findings of this study are robust to the choice of a particular model of interest rate expectations.     

Enforcement and Control of Piracy,Copying, and Sharing in the Movie Industry

We review strategies that movie distributors have used to cope with piracy, copying, and sharing of movies in the United States in four categories: “hard goods” commercial piracy, consumer theft of pay TV signals, consumer copying and sharing of videos and pay TV, and (mostly in prospect) Internet file sharing. In the past, distributors have mainly sought to raise costs of engaging in these activities by increasing legal jeopardy, advantaging anti-copy technology, and reducing original sources of supply. They appear to have effectively reduced or contained most piracy, copying, and sharing of movies in the U.S., at least with analog media. Movie distributors are following similar strategies with digital media, including Internet file sharing. Digital media raise the stakes because of lower costs of copying or sharing and higher quality of outputs. Digital outputs are not always as high quality as source originals, however, and digital rights management (DRM) technologies potentially improve distributor control. The movie studios now face technological, demand, and political uncertainties in the U.S., notably in maintaining or achieving technically compatible DRM systems to control file sharing and PPV/VOD copying. Implications for foreign markets and directions for research are discussed. Some sections of this article draw substantially on David Waterman (2005a). Hollywood’s road to riches (Cambridge, MA: Harvard University Press).     

A comparative analysis of leveraged recapitalization versus leveraged buyout as a takeover defense

Two types of defensive scheme—leveraged buyout (LBO) and leveraged recapitalization (LR)—are examined. In particular, this article examines (1) whether the two similar defensive tactics affect stockholder returns differently and (2) what firm attributes are associated with stockholder gains in LBO and LR announcements. This study finds that stocks of both LBO and LR firms, on average, exhibit significant positive abnormal returns during the announcement period, but that the latter experience substantially smaller returns than the former. This study further finds that while mitigation of agency problems associated with a firm's free cash flow is present for both LR and LBO firms, it is more pronounced for the LBO firms. These results provide evidence that a firm with higher free cash flow could benefit a greater reduction of agency costs by going private through a LBO plan than by remaining public through a LR plan.