Firm Efficiency Differences and Distribution in the Kenyan Manufacturing Sector

Abstract: This article provides empirical evidence on technical efficiency differences and efficiency distribution for three Kenyan manufacturing subsectors, namely food, metal and textile, using an unbalanced panel data covering two periods. Econometric production frontiers are estimated for each subsector in each period. The confidence predictions for these efficiencies were, however, found to be quite wide. The results indicate variation of technical efficiency estimates of the sampled firms in each period. The technical efficiency distribution for each subsector changed not only in relation to itself, but also in relation to the other subsectors across the two periods of analysis. The efficiency distribution of the firms for both food and textile (metal) subsectors improved (declined) during the study period but with the food subsector firms remaining relatively inefficient. The improvement of the technical efficiency distribution for both the textile and food subsectors is an indication of intra‐plant improvement during the period of analysis. The decline of the technical efficiency distribution for the metal subsector suggests that the market orientation during the structural reform period did not promote firm efficiencies or the firms were slow in responding to the reforms.     

Dominant markets,staggered openings,and price discovery

This study examines information incorporation and price discovery in closely related markets that witness staggered openings. A theoretical model is presented. In this framework, one market, termed dominant, is the venue where most of the price discovery occurs, and the other is termed secondary. The model predicts heightened volatility and order flow in each market when it opens first compared with when it opens second. The effects are predicted to be more pronounced in the dominant market, and is linked to the process of information incorporation. Tests conducted using futures on crude oil (dominant) and gasoline (secondary), two related markets that witness staggered openings, reveal findings consistent with the model's predictions. © 2010 Wiley Periodicals, Inc. Jrl Fut Mark     

A new look at the forward premium “puzzle”

We decompose the spot and forward rates into (permanent) nonlinear trend components and (transitory) stationary components. We examine the unbiasedness of the permanent (transitory) component of the forward rate in predicting the permanent (transitory) component of its corresponding future spot rate. The transitory component of the future spot rate under reacts to the transitory component of the forward rate. However, the permanent component of the forward rate is an unbiased predictor of the permanent component of the future spot rate. A robust nonlinear cotrending relation is also found between the forward and future spot rates and the hypothesis of the forward‐rate unbiasedness is sustained in the long run. These results suggest that the forward rate better explains the long‐term behavior of the future spot rate. Simulation analysis shows that if the transitory component of the forward rate fully predicts the transitory component of the future spot rate, the forward premium puzzle disappears. © 2010 Wiley Periodicals, Inc. Jrl Fut Mark 31:599–628, 2011     

The relevance of irrelevance in brand communication

Brand managers strive to achieve an outstanding position in the psyche of the user by differentiating the product and service. In order to do so, brands are now often promoted by communications that focus on a trivial attribute difference. The current study tests both how the use of such an irrelevant attribute affects the perceptions of the consumer and how they rate the brand when the irrelevance of the attribute is previously revealed. The results of a controlled experiment (n = 894) show that the use of irrelevant attributes generally has a positive effect on buying behavior and that this effect is obtained even when the actual irrelevance is previously proven to the consumer. Further, the results are consistent across a variety of outcome variables, including attention, perceived uniqueness, price fairness, attitude toward the brand, and intention to buy the brand. © 2010 Wiley Periodicals, Inc.     

The effect of consumer emotional disclosure on fairness perceptions

One way consumers cope with an unfair consumption experience is to express how they felt about it. Understandably, these disclosures are often rich with emotion. Does emotional disclosure in this context influence consumers' perceptions of fairness? Drawing hypotheses from the emotional disclosure literature, this research reveals that writing about emotions improves consumer fairness perceptions and satisfaction. However, the benefit of emotional disclosure disappears if the disclosure is solicited by the company perceived to be responsible for the unfairness and they do not offer redress. The findings lead to the recommendation that companies provide and facilitate opportunities for consumers to disclose to third parties the emotions arising from consumption experiences perceived as unfair. Implications for managing customer feedback, complaints, and negative word‐of‐mouth are discussed. © 2011 Wiley Periodicals, Inc.     

Materialism,fashion consumers and gender: a cross‐cultural study

The purpose of this study was to examine the relationships among materialism, gender and fashion consumer groups from two countries – one representative of an individualistic culture (US) and one representative of a collectivistic culture (Korea). Participants were 397 students from a university in Korea (n = 221) and a university in the US (n = 176) who completed the questionnaire. The materialism construct showed adequate reliability for participants in both cultures. Fashion change agents scored higher on materialism (centrality and success) than fashion followers. Females scored higher on materialism than males which seemed to be based on higher scores on the centrality subscale. Participants from the US and Korea differed on all three subscales of materialism with US participants scoring higher on centrality but lower on success and happiness than Korean participants. The findings of this study provide valuable implications for fashion marketers and retailers in Korea and US. The findings are limited to Korean and US consumers and cannot be generalized to other cultures. This paper fills a gap in the literature by comparing materialistic values between genders and fashion consumer groups in an individualistic culture (US) and a collectivistic culture (Korea).     

Health,Education and Emergence from the Development Trap

Abstract: This paper studies the emergence of developing countries from a development trap. It shows that countries whose dynamics exhibits several growth peaks can be considered as cases of equilibrium jump. Applying this criterion to a sample of 65 countries that were initially very poor in 1950, it identifies 13 such countries, called ‘emerging economies’. Comparing emerging and non‐emerging economies in the 1950s and early 1960s, it shows that economic take‐offs starting in the 1960s can be related to health and education in the early 1950s, while other possible factors, such as savings, openness and democracy are not significant.     

Comparison of Effects from Different Institutions: Public Credit Guarantee in Korea*

We aim to compare the activities of the two main credit guarantee institutions in Korea. There has been mounting criticism that although these institutions were mandated to play different roles in financing small and medium‐sized enterprises (SME), their operations are, in fact, similar, and many SME receive overlapping support from both institutions. Using the propensity score matching method (allowing for multiple, mutually exclusive support scenarios) to compare the effects of PCG on different institutions, the present study provides suggestions to help the government make decisions regarding the consolidation of PCG funds. The results suggest that the institutions function differently and target different SME. However, overlapping support enables firms to expand their sales only, indicating the existence of inefficiency in the case of overlapping support to firms.     

Corporate Venture Capital and Its Contribution to Intermediate Goods Firms in South Korea*

Set by government, corporate, financial and individual sources, venture capitalists in Korea have adapted themselves to the new and uncertain venture capital market through stand‐alone and syndicated investments. The present study raises questions about whether various financial sources contributed differentially to their portfolio firms during the market boom of 2000. Results show that no single capital source showed better performance, and only corporate venture capitalists contributed to intermediate goods firms. The latter finding might reflect the unique ability of corporate venture capitalists to use vertical value‐chain linkages for their investments.