Inventory investment & control: How have UK companies been doing?

Since the 1980s UK manufacturers have been exposed to the strong promotion of inventory control and reduction as a component of Just-in-Time (JIT), World Class Manufacturing (WCM) and Supply Chain Management (SCM) supported by a range of Enterprise Resource Planning System (ERPS) software packages. There is evidence that these ideas have found extensive favour in practice although existing research studies have also shown that inventory control and reduction is challenging and its impact on performance appears mixed. However, the questions of whether inventory reduction has been achieved and whether it has been beneficial to corporate performance have not been subject to systematic investigation in the UK setting. This study rectifies this deficiency by providing evidence on inventory and inventory turnover levels and trends in UK manufacturers over the two decades ending in 2005. This is supplemented, by benchmarking UK companies against those of Japan, USA and Germany, by investigating possible factors that can explain variation in inventory levels, and by exploring the association between high standards of inventory control and the financial performance of companies.     

Beyond the Return on Advertising: Elasticity of the Return on Advertising as a Diagnostic Metric to Maximize Profit

With increased marketing expenditures, managers need to be equipped with valid and reliable measures capable of showing links between marketing investments and a firm's profitable performance. In this paper we demonstrate that traditional return on advertising (ROA) can be a misleading metric if a firm's goal is profit maximization. Then, we introduce a new diagnostic tool: the elasticity of ROA and show how this metric can help marketing managers to choose more profitable levels of advertising. This new measure has the same virtues as other traditional measures of elasticity and provides real advantages over the conventional metrics.     

Two elementary schools’ developing potential for sustainability of engineering education

The Next Generation Science Standards present a way for engineering lessons to be formally integrated into elementary classrooms at a national level in the United States. Professional development programs are an important method for preparing teachers to enact the new engineering practices in their science classrooms. To better understand what contextual factors help a professional development program have a sustained effect on the implementation of engineering, we closely examined two elementary schools within the same school district that participated in the same professional development program but had very different outcomes in their lasting implementation of engineering. Using the case study method, we corroborate quantitative and qualitative sources of data measuring students’ learning and attitudes; teachers’ learning, attitudes, and implementation fidelity; perceived teacher community; and administrative support. Our analysis revealed that although the professional development program had district-level administrative support, there was considerable variation between schools in how teachers’ perceived school level support. In addition, teachers at the sustaining school collaborated and co-taught with one another. Our findings support previous literature on the role of administrative support and teacher learning communities. We discuss practical ways that professional development programs can seek to foster a context which is supportive of sustaining curriculum change for engineering.     

Earnings conservatism and audit committee financial expertise

Using an Australian sample of 494 firm‐year observations, this study finds that accounting financial expertise is the primary type of expertise that influences earnings conservatism, rather than nonaccounting financial expertise. The association between accounting financial expertise and conservatism holds only when the accounting financial expert(s) on audit committees is (are) independent. Overall, results suggest that audit committee accounting financial expertise is important in recognising the asymmetrical timeliness of losses. Findings provide a better understanding of the dynamics between audit committee financial expertise and earnings conservatism and demonstrate the importance of accounting financial expertise in improving financial reporting quality.     

Empirical Specification Requirements for Two-Constraint Models of Recreation Choice

Two-constraint models are common in recreation-demand analysis because of the important role time can play in consumer choices. Two versions of Roy's identity hold for these models and imply coefficient restrictions on empirical demand functions. The two-constraint restrictions are fully observable and can be expressed in a form analogous to the Slutsky–Hicks equations in single-constraint consumer models. Empirical specifications that use full prices and full budgets can be consistent with the two-constraint models, both when the marginal value of time is exogenous and is endogenous, but models with full prices and money income alone are not.     

How efficient is maize production among smallholder farmers in Zimbabwe? A comparison of semiparametric and parametric frontier efficiency analyses

The controversial Fast Track Land Reform Programme in Zimbabwe that redistributes commercially-owned farmland to smallholder households has caused concerns about the efficiency of agricultural production in the country. In this paper, we estimate the efficiency of resource use among smallholder farmers in Zimbabwe when producing maize, the staple crop in the country. Using both a semiparametric model and a fully parametric stochastic frontier model, we find significant production shortfalls for smallholder maize production. While labor, capital, and land all significantly affect the total output, the estimated mean efficiency score for farms with less than 10 hectares of land (A1) appears to be under 0.75, and for the entire sample (A1 and A2) it ranges between 0.595 and 0.772. There clearly exists a great potential for maize farmers to improve the technical efficiency and increase the total output. Gender and age of the household head, access to extension services, and activities of other crops significantly affect the technical efficiency of smallholder maize production in Zimbabwe. We also find that all farms operate under increasing returns to scale and that the technical efficiency score tends to increase with the level of output.     

State Lotteries, Isolation and Economic Growth in the U.S.

This paper uses a Granger causality test adapted for use with cross-section time series data, to (1) test the relationship between lottery revenue and state economic growth (per capita income), and (2) address the importance of cross-border purchases in the relationship. Neither issue has been empirically tested previously. Previous evidence (Caudill, et al., 1995) suggests that states surrounded by lotteries are more likely than isolated states to introduce lotteries. But the empirical results here suggest that lotteries do not contribute to economic growth unless the state is isolated from other state lotteries. The importance of isolation suggests that cross-border purchases (exports) of lottery tickets have a significant impact on the effectiveness of lotteries as fiscal policies, and that defensive lotteries (those introduced to keep citizens from buying tickets from neighboring states) are ineffective.     

Do Wall Street economists believe in Okun’s Law and the Taylor Rule?

We use data from the Wall Street Journal’s semi-annual survey of professional economists to test whether individual economists’ six-month-ahead predictions of real GDP growth, unemployment, short-term interest rates and inflation reflect Okun’s Law and the Taylor Rule. We conclude the economists believe real growth is less responsive to unemployment-rate changes than the textbook version of Okun’s Law; we also find the economists believe the Federal Reserve sets short-term interest rates by placing more weight on unemployment and less weight on inflation than the Taylor Rule prescribes.     

‘Neither rhetoric nor reality’ a comment on Turnbull and Wass

In their article Peter Turnbull and Vicki Wass examine a model of ‘Marksist management’. This piece will argue, by means of deconstructing their model along the themes that they raised, that the evidence presented by the authors, and the conclusions that they draw from them, are flawed in three respects. They are as follows: first, the use of the dichotomy of ‘rhetoric’ versus ‘reality’ is a false one; second, the data are selected from employees at one store, and are thus an unrepresentative sample; third, the research methodology used does not account for differences between stores.