An Econometric Model of the Circuit of Capital

The circuit of value outlined in the second volume of Marx's Capital provides a coherent framework for the characterization of macroeconomic phenomena from a classical perspective. This paper builds on Foley's (Journal of Economic Theory, 28 (1982), pp. 300–319) formal reconstruction of the circuit to derive estimable forms for its three critical mechanisms: the production, realization and recommittal lags. The entire model is then estimated for the United States over the period 1948–89 on the basis of the Shaikh and Tonak (Measuring the Wealth of Nations: The Political Economy of National Accounts, Cambridge University Press, New York, 1995) data set, and the results are used to explore a number of current controversies, including (on the basis of simulation exercises) the consequence of various deficit reduction proposals.     

Access Pricing and Network Expansion in Natural Gas Markets

In this paper, we discuss different indirect approaches to cope with local market power in natural gas markets, in particular the extension of pipeline capacity as an instrument to combat nodal market power. One perspective, as expressed in Cremer and Laffont (Eur. Econ. Rev. 46:928–935, 2002) is that a discriminatory access price can correct for market failure and induce an increase in output. We argue, on the contrary, that the opposite holds: non-discriminatory access to the pipeline system will lead to overcapacity, and is thus the preferable strategy.     

A Manager's Perspective on Virtual Customer Integration for New Product Development

Despite the high potential of virtual customer integration (VCI) methods for new product development (NPD) mentioned in the literature, practical use is still limited. This paper aims to provide a deeper understanding of managers’ perspectives on VCI and their intentions to use these methods for NPD. The theory of planned behavior (TPB) served as basis for developing a research model, which considers managers’ cognition, attitude, subjective norms, and perceived behavioral control as important factors affecting their intention to apply VCI. Because more recent literature has expressed doubts about the explanatory potential of the rather simple TPB model, a more complex alternative model was proposed for comparison. The alternative model included the market orientation of the company, the hierarchical position of the innovation manager as well as the manager's level of innovativeness as additional explanatory variables. An empirical online study was conducted in the field of consumer goods and services. Based on a sample of 216 German‐speaking innovation managers, the results show that the model derived from the TPB explains 68% of the variance in the managers’ intention to apply VCI compared with 69% of variance explained by the model containing additional explanatory variables. An extension of the model does not significantly improve its explanatory power. Managers show high interest in virtually integrating customers in NPD processes. Managers consider identification of future customer needs, a broader decision basis, increased efficiency in gathering and use of customer information, and increased customer retention as major advantages of VCI. Disadvantages considered by managers in making their overall judgment are the lack of secrecy and only incremental innovations. The perceived potential contribution of VCI to NPD, the assessment of its general acceptance within the company, and the perceived ability of innovation managers to successfully implement VCI mainly influence the adoption decision. Managers’ attitudes toward VCI have no significant influence on their intention to use VCI. The results suggest that strong promotion of VCI through senior management would enforce the positive effect of subjective norms on applying VCI. Measures such as including VCI on innovation managers’ personal scorecard, trainings offered, and cross‐functional meetings could help speed up VCI in NPD processes by increasing innovation managers’ perceived behavioral control toward VCI.     

Two-stage capital budgeting,capital charge rates,and resource constraints

We study two-stage, multi-division budgeting mechanisms that allocate scarce resources among divisions using capital charge rates. Each divisional manager observes private sequential project information and competes for scarce resources over two stages. The optimal capital charge rates in our two-stage setting can be quite different from those that arise in a single-stage setting. If the firm faces a resource constraint at only the second stage, a less severe constraint can imply more first-stage project initiation, which can lead to higher second-stage capital charge rates. If resources are constrained at both stages, a decrease in the severity of the constraint at just one stage decreases the capital charge rate at that stage but increases the capital charge rate at the other stage because each constraint affects the intensity of competition at both stages. This result holds regardless of whether the scarce resources are fungible or non-fungible across stages.     

Does Strategic Planning Enhance or Impede Innovation and Firm Performance?*

Does strategic planning enhance or impede innovation and firm performance? The current literature provides contradictory views. This study extends the resource‐advantage theory to examine the conditions in which strategic planning increases or decreases the number of new product development projects and firm performance. The authors test the theoretical model by collecting data from 227 firms. The empirical evidence suggests that more strategic planning and more new product development (NPD) projects lead to better firm performance. Firms with organizational redundancy benefit more from strategic planning than firms with less organizational redundancy. Increasing R&D intensity boosts both the number of NPD projects and firm performance. Strategic planning is more effective in larger firms with higher R&D intensity for increasing the number of NPD projects. The results reported in this study also consist of several findings that challenge the traditional views of strategic planning. The evidence suggests that strategic planning impedes, not enhances, the number of NPD projects. Larger firms benefit less, not more, from strategic planning for improving firm performance. Larger firms do not necessarily create more NPD projects. Increasing organizational redundancy has no effect on the number of NPD projects. These empirical results provide important strategic implications. First, managers should be aware that, in general, formal strategic planning decreases the number of NPD projects for innovation management. Improvised rather than planned activities are more conducive to creating NPD project ideas. Moreover, innovations tend to emerge from improvisational processes, during which the impromptu execution of NPD activities without planning spurs “thinking outside the box,” which enhances the process of creating NPD project ideas. Therefore, more flexible strategic plans that accommodate potential improvisation may be needed in NPD management since innovation‐related activities cannot be planned precisely due to the unexpected jolts and contingencies of the NPD process. Second, large firms with high levels of R&D intensity can overcome the negative effect of strategic planning on the number of NPD projects. Specifically, a firm's abundant resources, when allocated and deployed for NPD activities, signal the high priority and importance of the NPD activities and thus motivate employees to acquire, collect, and gather customer and technical knowledge, which leads to creating more NPD projects. Finally, managers must understand that managing strategic planning and generating NPD project ideas are beneficial to the ultimate outcome of firm performance despite the adverse relationship between strategic planning and the number of NPD projects.     

The Mixed Blessings of Technological Innovativeness for the Commercial Success of New Products

This study addresses the contradiction that, although technological innovativeness of new products is often seen as a major driver of competitive advantage and commercial success, empirical research is not always able to show a significant performance influence. In order to find an explanation, the effects of technological innovativeness are decomposed as its influence on the market, the innovating firm, and the firm's environment is considered. The proposed model is tested on a sample of new product development projects. In order to avoid systematic biases, this paper uses a longitudinal survey design with two informants and a sample that includes both incremental and highly innovative projects. The results show that technological innovativeness has both positive and negative effects on the commercial success of new products. On the one hand, technological innovativeness can increase customer value, which in turn has a positive effect on success. On the other hand, incorporating new technologies into new products also implies changes in the innovating firm and potentially in its environment. These changes have a negative impact on commercial success. The positive and negative effects compensate for each other, so that the total effect of technological innovativeness on commercial success is close to zero. The findings imply that firms developing new products through incorporating radically new technologies often seem to underestimate the inherent complexities with respect to both internal and external changes. Developing and introducing new products with a radically changed technology also implies anticipating the need for new competences, processes, structures, and network partners. Social and political resistance against technological changes, large investments in new infrastructures, and the long duration of these changes additionally become frequent features of such innovation endeavors. Hence, firms embarking on a path of exploiting radically new technologies should consider those complexities very carefully when making their new product development decisions.     

Job profile research for the purchasing profession

The study reported in this article is based on theories about job and competence analysis and a project in which job profiles were developed that were aimed at providing a framework of reference for evaluating in‐service training programmes for purchasing professionals (professional buyers of goods and services in various sectors of the economy) provided by a training institution of an association for purchasing management. This project was commissioned as part of the permanent maintenance policy of the training institution, but also based on experience with an earlier comparable project, and concerns about test development using job profiles and related attainment targets. The study is part of a research programme on course development for professional training. Ideas about course content validation were explored and tested. The article addresses the issue of trustworthiness and uncertainty reduction in the job profile research process. It specifically looks at the methods used in job profile development and perennial research problems that are related to that, such as stratification of a professional sector, sector‐specificity of job information, formatting job profiles, and the value added of small‐scale in‐depth analyses of work processes versus large‐scale job surveys. It concludes that small‐scale, context‐related analyses of jobs adds most value, but that this is not sufficient for ensuring faith in the study results. Large‐scale surveys complement the in‐depth analyses in this respect. So using a mix of in‐depth and large‐scale methods is recommended in conducting job profile research.     

Multicomponent Efficiency Measurement and Shared Inputs in Data Envelopment Analysis: An Application to Sales and Service Performance in Bank Branches

In most applications ofDEA presented in the literature, the models presented are designedto obtain a single measure of efficiency. In many instances however,the decision making units involved may perform several differentand clearly identifiable functions, or can be separated intodifferent components. In such situations, inputs, in particularresources, are often shared among those functions. This sharingphenomenon will commonly present the technical difficulty ofhow to disaggregate an overall measure into component parts.In the present paper, we extend the usual DEA structure to onethat determines a best resource split to optimize the aggregateefficiency score. The particular application area investigatedis that involving the sales and service functions within thebranches of a bank. An illustrative application of the methodologyto a sample of branches from a major Canadian bank is given.     

Exhaustible Resources, Monopolistic Competition, and Endogenous Growth

One of the central analytical findings of the growth literature is that continuous growth is possible even in an economy with exhaustible resources. Based on this result, this paper addresses the question of whether different equilibrium trajectories which lead to a balanced growth path are possible within an endogenous growth model with incomplete competition. Although the Solow-Stiglitz condition is violated due to a monopolistic sector, we nevertheless demonstrate that steady growth in per capita consumption is possible under the condition that the rate of entry of new monopolists exceeds that of the average monopolist's decline in output. As a necessary but not sufficient condition for indeterminacies in a growing economy, this paper demonstrates that the partial production elasticity of capital must be smaller than that of the exhaustible resource.     

Heribert Schatz emeritiert

Ohne Zusammenfassung