Equipment replacement policy: a survey

Over the past ten years there has been a considerable increase in application of theoretically correct measurement methods in determining the economic life of equipment. Approximately 89% of the firms surveyed have equipment replacement policies. The discounted rate of return method is the most widely used in determining the service life of equipment; the MAPI formula is not widely used. Difficulties in applying a replacement policy can be classified into three groups: operational, organizational, and economic. The problems mentioned most often are operational. In organizational difficulties there is usually a lack of coordination between staff and line managers. Economic problems are generally the limited funds available for equipment replacement. Formal educational programs are lacking for the development of equipment replacement managers. For the firms having replacement policies, individuals with engineering degrees are preferred over those in other disciplines for the management of the equipment replacement policy.     

Estimation of a non-invertible moving average process: The case of overdifferencing

The effect of differencing all of the variables in a properly specified regression equation is examined. Excessive use of the difference transformation induces a non-invertible moving average (MA) process in the disturbances of the transformed regression. Monte Carlo techniques are used to examine the effects of overdifferencing on the efficiency of regression parameter estimates, inferences based on these estimates, and tests for overdifferenccing based on the estimator of the MA parameter for the disturbances of the differences regression. Overall, the problem of overdifferencing is not serious if careful attention is paid to the properties of the disturbances of regression equations.     

Union games: technological unemployment

Summary. Given a production economy, we define union games by considering strategic behavior of the suppliers of factors. We refer to the Nash equilibria of this game as union equilibria. We analyze situations where the unemployment of factors is supported as a union equilibrium. The degree of unemployment depends on technological conditions. This allows us to model a source of unemployment which differs from the usual sources provided in the literature. We state a limit result that demonstrates that, as the market power of unions decreases, the corresponding sequence of union equilibria converges to the Walrasian equilibrium, that is, to full employment of factors. We also provide some examples that illustrate the main results.Received: 21 October 2004, Revised: 14 December 2004, JEL Classification Numbers: D51, C72. Correspondence to: Emma Moreno-GarcíaE. Moreno acknowledges financial support from the Research Grant BEC2000-1388-C04-01 (Ministerio de Ciencia y Tecnología and FEDER). G. Fernández de Córdoba and E. Moreno acknowledge financial support from the Research Grant SA091/02 from Junta de Castilla y León. We are indebted to C. Alós-Ferrer, C. Pita, D. Anisi, J. A. Ortega, F. Jimeno, J. P. Torres-Martínez, M. Steinert and C. Hervés for helpful comments and insights. We are particularly grateful to T. Kehoe and an anonymous referee for suggestions that improved this paper.     

Learning by doing,spillovers and shakeouts

This paper studies industry evolution driven by non strategic learning by doing and spillovers. We characterize a dynamic process of cost and output changes and its effect on welfare and industry profits. The paper gives conditions for shakeouts to occur and analyzes the key factors affecting these conditions. Since shakeouts could lead to a long-run social loss due to higher market concentration, there is a role for a government to play in limiting unnecessary shakeouts. The most effective way to do so is to enhance spillovers.JEL Classification: L11, L13, O31Correspondence to: Michael TroegeWe would like to thank Hans Mewis, Christophe Moussu and an anonymous referee for valuable comments and suggestions. We also benefited from comments of seminar participants at WZB, Humboldt University, Northwestern University and the EEA/ESEM 1999 meetings. Part of the research was carried out while Michael Tröge was visiting Northwestern University. Financial support by the German Research Council (DFG) is gratefully acknowledged.     

Art as an investment: Short and long-term comovements in major painting markets

This paper examines the short and long-term price linkages among major art and equity markets over the period 1976–2001. The art markets examined are Contemporary Masters, French Impressionists, Modern European, 19^th Century European, Old Masters, Surrealists, 20^th Century English and Modern US paintings. A global equity index (with dividends and capitalisation changes) is also included. Multivariate cointegration procedures, Granger non-causality tests, level VAR and generalised variance decomposition analyses based on error-correction and vector autoregressive models are conducted to analyse short and long-run relationships among these markets. The results indicate that there is a stationary long-run relationship and significant short and long run causal linkages between the various painting markets and between the equity market and painting markets. However, in terms of the percentage of variance explained most painting markets are relatively isolated, and other painting markets are generally more important than the equity market in explaining the variance that is not caused by innovations in the market itself. This suggests that opportunities for portfolio diversification in art works alone and in conjunction with equity markets exist, though in common with the literature in this area the study finds that the returns on paintings are much lower and the risks much higher than in conventional financial markets.The authors would like to thank delegates to the 14th Australasian Finance and Banking Conference, University of New South Wales, seminar participants at the Queensland University of Technology and Massey University, Masaki Katsuura, and two anonymous referees for helpful comments on earlier versions of this paper. The financial assistance of a Queensland University of Technology, Faculty of Business Research Initiative Grant is also gratefully acknowledged.     

Some brief notes on the “unfinished business” of qualitative inquiry

The paper argues that there are a variety of implicit issues in qualitative inquiry that need to be addressed if the area is to develop in some normal science sense. This unfinished business is concerned with a deeper investigation of basic terms that are now simply taken for granted, such as theme and pattern. It also includes the need to develop rules which will assist in making and justifying how qualitative interpretations are made from the implicit processes of inference. Specific suggestions are made for accomplishing these issues.     

Do norms of decision-making styles,organizational design and management affect performance of Japanese firms? an exploratory study of medium and large firms

The success and resilience of Japanese firms have led many scholars and practitioners to theorize and speculate about the impact of what they have termed the 'Japanese management style' upon performance. There have been few studies that have attempted to explore empirically the links between the way Japanese firms organize, manage and decide, and their performance. This paper investigates the association between norms of decision-making style, organizational design and management, and some measures of firm performance. The empirical pattern of norms was assessed on the basis of responses of a random sample (N = 349) of Japanese managers. The study demonstrates that while there appears to be no support for the proposition that certain norms universally affect performance, in some sectors the impacts of norms on decision-making style, organizational design and management may be significant. The study concludes with the implications for theory building of this empirical exploration.     

Mokken scale analysis for polychotomous items: theory,a computer program and an empirical application

This paper contains three subjects. First, an extension of Mokken's nonparametric item response models from dichotomous items to items with two or more ordered answer categories is proposed. Second, a computer program to analyze multicategory item scores is presented. This program is called MSP. The analyses by means of MSP are based on the multicategory extension of Mokken's theory. Finally, an application of MSP to empirical multicategory test data is presented in order to illuminate its possibilities.     

Robustness to the unavailability of data in block designs

We present general results for finding or boundingt _maxB , the maximum number of arbitrary whole blocks of observations which can be removed from a block design, and still leave all of the elementary treatment contrasts estimable. The block sizes may be larger than the number of treatments. The results are applied to BBDs, reinforced BIBDs and BBDs, BTIBDs, and a series of variance balanced incomplete block designs with two block sizes. Also given for most of these designs, are results fort _max, the maximum number of arbitrary, scattered observations that can become unavailable, and still leave all of the elementary treatment contrasts estimable.The work was undertaken while Dr. Whittinghill was visiting Ohio State University, and supported by a grant from the Natural Sciences Division, Colby College, Waterville, Maine.     

The impact of capacity expansion on the market value of the firm

This paper empirically investigates the impact of capacity expansion decisions on the market value of the firm. Event study methodology is used to estimate the abnormal change in stock prices around capacity expansion decision announcements. On the day of the announcement, the magnitude of the price change is abnormally high, evidenced by a significantly positive mean standardized square of the abnormal change (Beaver's U-statistic). We also analyze factors that we could affect the direction and magnitude of the abnormal change in the stock prices. We find that the change in price on the day of the announcement is positively and significantly related to the real growth rate of the industry, and negatively and significantly related to the variability of demand. A negative relationship between the price change and industry capacity utilization is also found which can have important implications for companies which follow the wait-and-see approach to capacity expansion decisions. We also find management ownership to be a significant predictor in explaining stock price changes around these announcements.