Looking for contagion in currency futures markets

This article tests whether there are pure contagion effects in both conditional means and volatilities among British pound, Canadian dollar, Deutsche mark, and Swiss franc futures markets during the 1992 ERM crisis. A conditional version of international capital asset pricing model (ICAPM) in the absence of purchasing power parity (PPP) is used to control for economic fundamentals. The empirical results indicate that overall there are no mean spillovers among those futures markets, but they are detected during the crisis period. That is, past return shocks originating in any one of the four markets have no impact on the other three markets during the entire sample period, suggesting that these markets are weak‐form efficient. However, this weak‐form market efficiency fails to hold during the market turmoil, especially for British pound and Swiss franc, and the sources of contagion‐in‐mean effects are mainly due to the return shocks originating in three European currency futures markets. As for the contagion‐in‐volatility, it is detected for British pound only because its conditional volatility is influenced by the negative volatility shocks from Canadian dollar, Deutsche mark, and Swiss franc, with Deutsche mark playing the dominant role in generating these shocks. JEL Classifications: C32; F31; G12. © 2003 Wiley Periodicals, Inc. Jrl Fut Mark 23:957–988, 2003     

MANAGING VENDOR INVENTORY IN A DUAL LEVEL DISTRIBUTION SYSTEM

Collaborative arrangements among members of the supply chain have received a great deal of interest in recent years as a means of reducing costs. One such arrangement is vendor managed inventory (VMI). VMI allows the vendor to make decisions concerning the quantity and timing of deliveries to the retailer. Such an arrangement offers the potential of a more efficient supply chain by removing the negative effects of retail ordering policies. A thorough review of the literature was conducted to identify factors likely to impact the performance of a VMI partnership. Computer simulation was used to study the effects of these factors from both the vendor's and retailer's perspectives. The results lend insight into the performance of VMI and guidance for managers as to the environments in which VMI is most effective.     

AN EVALUATION OF PROCESS‐ORIENTED SUPPLY CHAIN MANAGEMENT FRAMEWORKS

Supply chain management (SCM) is implemented by integrating corporate functions using business processes within and across companies. Several process‐oriented frameworks for SCM have been proposed but only two of these provide sufficient detail to enable implementation. We evaluate the Supply‐Chain Operations Reference (SCOR) framework and The Global Supply Chain Forum (GSCF) framework using four criteria and identify their relative strengths and weaknesses.     

The Contingent Value of Responsive and Proactive Market Orientations for New Product Program Performance*

While the benefits of being market oriented are largely accepted, a group of scholars and managers remain skeptical. Marketing scholars have sought to counter the criticisms leveled against market orientation (MO) by arguing that it has both responsive and proactive dimensions. However, few studies have empirically examined the complexity of the effects of these dimensions on firm performance. Drawing on theories of resource‐based advantage and organizational search behavior, this article advances understanding by arguing that responsive and proactive market orientations have curvilinear effects on product development performance, that their interaction may be positively related to product development performance, and that their effects on new product program performance are moderated differentially by the organizational implementation conditions and marketing function power. Survey results of 175 U.S. firms indicate support for most of the hypotheses. Specifically, whereas responsive MO has a U‐shaped relationship with new product program performance, proactive MO has an inverted U‐shaped relationship with new product program performance. Contrary to the arguments presented here, the interaction of both orientations is negatively related to new product program performance. This study finds that both orientations are needed; however, new product program performance is enhanced when one is at higher level and the other is at lower level. Finally, responsive MO is only positively related to new product program performance under specific conditions such as when strategic consensus among managers is high. On the other hand, the positive effect of proactive MO on new product program performance is further strengthened when learning orientation and marketing power are high. Overall, this study suggests that the effects of responsive and proactive MO on new product program performance are more complex than previously theoretically argued and empirically examined.     

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     

Astroturfing Global Warming: It Isn’t Always Greener on the Other Side of the Fence

Astroturf organizations are fake grassroots organizations usually sponsored by large corporations to support any arguments or claims in their favor, or to challenge and deny those against them. They constitute the corporate version of grassroots social movements. Serious ethical and societal concerns underline this astroturfing practice, especially if corporations are successful in influencing public opinion by undertaking a social movement approach. This study is motivated by this particular issue and examines the effectiveness of astroturf organizations in the global warming context, wherein large corporate polluters have an incentive to set up astroturf organizations to undermine the importance of human activities in climate change. We conduct an experiment to determine whether astroturf organizations have an impact on the level of user certainty about the causes of global warming. Results show that people who used astroturf websites became more uncertain about the causes of global warming and humans’ role in the phenomenon than people who used grassroots websites. Astroturf organizations are hence successful in promoting business interests over environmental protection. In addition to the multiple business ethics issues it raises, astroturfing poses a significant threat to the legitimacy of the grassroots movement.     

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.