Requiem for a lightweight: The Northrop f-20 strategic initiative

This study focuses upon the recently discontinued F-20 program of the Northrop Corporation. Northrop's strategic initiative is analyzed historically and comparatively, and the implications of the program failure are discussed with respect to government procurement policy, defense contracting, international trade and arms transfer, and global competition in aerospace.     

REPEAL OF PROHIBITION: A BENEFIT‐COST ANALYSIS

In spite of an estimated increase in annual alcohol‐related motor vehicle costs of $2.767 billion (1947 dollars), the net social benefit of repeal of alcohol Prohibition amounts to $432 million per annum in 1934–1937, about 0.33% of gross domestic product. Total benefits of $3.25 billion consist primarily of increased consumer and producer surplus, tax revenues, and reduced criminal violence costs. A Monte Carlo simulation shows the probability of negative net benefits is 16%. The estimated price elasticity of demand for spirits, beer, and wine are –.60, ?.56, and –.51 respectively, which is consistent with the modern literature. (JEL D61, I18, K420, I120)     

Services,industry evolution,and the competitive strategies of product firms

Services of different types have become increasingly important for product firms. While these firms mainly focus on products, managers and researchers lack a comprehensive framework to understand when to make significant investments in particular kinds of services. We identify three categories of product‐related services from a product firm—smoothing and adapting services, which complement products, and substitution services, which enable customers to pay for the use of a product without buying the product itself. We develop propositions about the relative level of these different kinds of services vis‐a‐vis industry evolution, as well as suggest how these services affect industry structure. We draw upon various literatures, though we conclude that the relationship between products and services is more complex and richer than any one literature suggests. Copyright © 2014 John Wiley & Sons, Ltd.     

The rate and potential of capability development trajectories

This paper examines differences in the rate and potential of firms' capability development trajectories. Capability development trajectories are the paths over which firms' capabilities change with experience and other activities. While prior research focused on factors affecting capability development rate (the fraction of the gap between a firm's current and potential capability eliminated with each unit of activity), we argue that capability development trajectories also differ in potential (the maximum capability level a firm could achieve through repeating a given set of activities over time). We develop and estimate a formal model of capability development, showing that larger underwriting projects lead to a lower rate of improvement toward higher potential capabilities, and derive implications for research on industry dynamics and the nature of competitive advantage. Copyright © 2013 John Wiley & Sons, Ltd.     

The Value of Transferable Skills

Most studies on skill transferability focus on the return to capabilities developed in the initial job and disregard the different characteristics of the origin and the destination industries. In contrast, this article assesses the borders of skill transferability by comparing the return to skills for firm stayers, firm changers in the same industry, and firm changers to other industries. Based on a sample of Portuguese employees in retail banking, our results confirm significant inter‐firm and inter‐industry skill transferability. Difference‐in‐differences estimates with propensity score matching show that firm switchers benefit from a wage premium compared to firm stayers. However, the wage premium drops sharply when movers leave the banking sector.     

Taxes and Financial Constraints: Evidence from Linguistic Cues

Using a new measure of financial constraints based on firms’ qualitative disclosures, we find that financially constrained firms—firms that use more negative words in their annual reports—pursue more aggressive tax planning strategies as evidenced by: (1) higher current and future unrecognized tax benefits, (2) lower short‐ and long‐run current and future effective tax rates, (3) increase in tax haven usage for their material operations, and (4) higher proposed audit adjustments from the Internal Revenue Service. We exploit the unexpected closures of local banks as exogenous liquidity shocks to show that firms’ external financial constraints affect their tax avoidance strategies. Overall, the linguistic cues in firms’ qualitative disclosures provide incremental information beyond traditional accounting variables or commonly used effective tax rates to reveal and predict tax aggressiveness, both contemporaneously and in the future.