Corporate Sales, Equity Trading, and Risk

This paper proposes and investigates an explanation for a positive association between the signed value of common share returns and trading activity. The mixture of distributions model for stock returns and trading is applied with the added assumption that product sales for a firm is the directing process which generates the flow of information to equity markets. Because trading depends upon information arrival, sales and trading are positively related. Also, because contribution margin is positive, cash flows increase with sales. Dependence of both cash flows and trading on sales implies that returns and trading are also positively related. This explanation is tested in this paper.     

Synthesizing R&D planning and business strategy: some preliminary findings

The need for firms to compete in the longer run by offering superior products at competitive prices requires better integration of R&D, and technology in general, into business strategy development. A survey based on personal interviews of 40 respondents from “Fortune 500” U. S. industrial firms reveals that their shift in emphasis toward new product/process R&D is providing the impetus for placing R&D in a strategic context. However, R&D has not been fully integrated into the strategic planning process of many organizations. The results of the survey reveal that certain communication channels can be more fully utilized to meld R&D planning into business strategy. Specific suggestions to facilitate information exchange, dissemination of planning data, and integration of various R&D plans into a cohesive technology strategy are given.     

Under the influence of a blogger: The role of information‐seeking goals and issue involvement

Bloggers in the postmodern era can influence the behaviour of consumers and alter their perceptions. The current study looks at the blogger influence phenomenon from a different theoretical perspective than existing literature did. By combining information behaviour and communication theory, it proposes a new conceptual framework by relying on the characteristics of the blogger, the blog content, motivation, and goals of information seeker. In this model, information seekers’ objectives and issue the involvement are important drivers of blog selection and determinants of the blog's influence. The framework was empirically tested in a sample of American users of beauty blogs. The results provide a confirmation of the postulated relationships. Three types of blog visits are identified and their effects and their attributes that make a blog influential are examined.     

Environmental Change, Leadership Succession and Incrementalism in Local Government

A theoretical model of strategic budgetary choices in local government is developed and tested. The model assumes that expenditure decisions are a function of changes in environmental circumstances and the characteristics of local leaders. Environmental change is operationalized through measures of workload, munificence and regulatory controls. Leadership succession is defined as the turnover in managerial and political élites. These environmental and leadership variables are included in a multivariate statistical model of budgetary incrementalism. The model is tested on the spending decisions of 402 English local authorities from 1981 to 1996. The empirical results suggest that the extent of budgetary change is influenced strongly by environmental change but weakly by leadership succession. Furthermore, environmental constraints became tighter during the study period. The characteristics of public sector organizations that impose limits on the strategic choices of new leaders are identified.     

Characterization of exponential distribution via regression of one record value on two non-adjacent record values

We characterize the exponential distribution as the only one which satisfies a regression condition. This condition involves the regression function of a fixed record value given two other record values, one of them being previous and the other next to the fixed record value, and none of them are adjacent. In particular, it turns out that the underlying distribution is exponential if and only if given the first and last record values, the expected value of the median in a sample of record values equals the sample midrange.     

Screening,Competition and the Choice of the Cooperative as an Organisational Form

Cooperatives are distinguished from investor-owned firms by different decision-making processes. A model is developed in which more cumbersome decision making by cooperatives may be compensated for by improved decision making. Conditions are derived under which cooperatives become efficient organisational forms. It is also shown that circumstances exist in which investor-owned firms and cooperatives can coexist in equilibrium. Finally, circumstances are identified in which competition results in a prisoners dilemma which comprises investor-owned firms only. Favourable public policy treatment of cooperatives may prevent this equilibrium outcome from occurring.     

Impacts of price and exchange rate policies on pesticide use in the Philippines

Pesticide prices can influence producer decisions to apply pesticides as opposed to nonchemical means of pest control. Those prices are are turn influenced by price and exchange rate policies. The effective rate of protection for nine pesticides commonly applied to vegetables in the Philippines was calculated to determine whether government policies are creating incentives or disincentives to adopt more integrated pest management methods. Calculations found that direct price policies, primarily through an import tariff, tax pesticide use while an overvalued exchange rate subsidizes pesticide use. The net effect is a 6 to 8% pesticide subsidy. This subsidy results in economic surplus gains to vegetable producers and consumers when negative externalities associated with pesticide use are not accounted for. However, recent analysis of human health effects of pesticide use on rice in the Philippines demonstrates that these externalities can be substantial.     

Fellow’s opinion corner: Econometric information recovery

The purpose of this paper is to initiate a discussion on the incorrect nature of our economic–econometric models and methods, and to make a plea for information theoretic recovery methods consistent with the data that we must use and with the questions that we need to ask.