An exploratory investigation of the elements of B2B brand image and its relationship to price premium

Much of the extant work on brand equity in business markets has focused on predicting brand loyalty, as in what brand image elements that make buyers prefer to buy a brand. The question what drives buyers to pay more or less for brands has however been somewhat overlooked, despite price premium being a distinct and economically important outcome of a favourable brand image. In an attempt to answer this question, this paper suggests that the corporate brand image determinants of price premium can be conceptualised into six dimensions: brand familiarity-, product solution-, service-, distribution-, relationship- and company associations. Findings from a small-scale qualitative investigation, based on interviews with buyers of corrugated packaging, are used to illustrate this model as well as to explore its microelements and demonstrate why they can be assumed to be mentally related to buyers' willingness to pay.     

Should emerging market investors buy commodities?

One reason that investors hold commodities is to receive diversification benefits. However, while an extensive set of existing studies demonstrate diversification benefits when investors hold international stocks or bonds, they are generally silent on the implications of holding commodities. Using an asset pricing framework, we investigate the benefits to investors from holding commodities, both individually and in portfolios. Generally, commodity and stock markets are integrated, although there are time-varying benefits to investors that are subject to sample period selection and investment horizon. We show that Asian investors receive positive risk adjusted returns in gold and rice markets but not in any of the other commodity markets investigated. The risk adjusted returns are time-varying: during the Asian financial crisis risk adjusted returns were negative – a penalty for investing in commodities – whereas during the global financial crisis the reverse was true and investors earned positive excess returns. The time-varying nature of the benefits that arise from diversification in commodities and their breakdown during periods of crisis, highlight the problems that investors may face when using commodities for long-term investment in addition to traditional holdings of stocks and bonds.     

Gender differences in optimism

This article examines gender differences in optimism about the economy. We measure optimism using Swedish survey data in which respondents stated their beliefs about the country’s future economic situation. We argue that this measure of optimism is preferable to common measurements in the literature since it avoids confounding individuals’ economic situation with their perception of the future and it can be compared to economic indicators. In line with previous research, we find that men are more optimistic than women; however, men are also more prone to be wrong in their beliefs about the future economic situation. Furthermore, in sharp economic downturns, the gender differences in optimism disappear. This convergence in beliefs can be explained by the amount of available information on the economy.     

Introduction to Institutions,Entrepreneurship and Firm Growth: The Case of Sweden

Small Business Economics -     

» Konsumenten sind offener für Innovation,als viele glauben «

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? Konsumenten sind offener für Innovation, als viele glauben ?     

Are pesticides risk decreasing? The relevance of pesticide indicator choice in empirical analysis

The reduction of adverse health and environmental effects from pesticide use is currently a top priority on the agricultural policy agenda. Efficient pesticide policies must take into account farmers’ application behavior, especially effects of pesticide use on economic risk. However, previous results regarding the direction of risk effects of pesticides are ambiguous. We show that the ambiguity in earlier studies could be due to the pesticide indicator selected. Indicators which fail to account for the heterogeneous properties of pesticides may be inapt for interpreting farmers’ pesticide use decisions. Our analysis, based on a rich panel dataset of Swiss wheat producers with highly detailed information on pesticide use, considers different pesticide indicators and multiple sources of uncertainty. Our key finding is that indicator choice affects the magnitude and sign of estimated risk effects. Estimates of pesticide productivity and risk effects are significantly higher for fungicides, and even reversed for herbicides when we measure pesticide use in simple quantity units (kilogram per hectare) - compared to the quality and intensity corrected Load Index. This means for example, that farmers will ceteris paribus use lower quantities of herbicides, but will increase the overall toxicity of the products applied with increasing risk aversion. We discuss implications of our findings for the design of pesticide policies and agricultural risk management instruments.     

Entrepreneurship,Firm Growth and Regional Development in the New Economic Geography: Introduction

Small Business Economics -     

Inflation and the Constant Growth Model: Reconciling the Literature

We formulate a generalized constant growth valuation model incorporating inflation and capital maintenance. We find that in general there are two sources of growth: growth due to capital maintenance and growth due to net new investments. The generalized version of the constant growth model allows the reconciliation of the existing literature, particularly the works of Gordon and Shapiro (1956), Lally (1988), and Bradley and Jarrell (2008), which all employ particular definitions of capital maintenance. Evaluating the practical relevance of either model we find that each model is best suited for a very particular company set‐up, which does not necessarily correspond to the commonly observed business models. The generalized version of the constant growth valuation model, however, presents a flexible approach that is capable of capturing various conceptions of capital maintenance.     

The Terminal Value and Inflation Controversy

This journal recently published what was effectively a debate between Gunther Friedl and Bernhard Schwetzler (hereafter “F&S”), on the one hand, and Michael Bradley and Gregg Jarrell (“B&J”). B&J initiated the first round of the debate by criticizing the constant growth valuation model, commonly known as the “Constant Growth Model” or “Gordon Growth Model.” The Gordon Growth Model was introduced by Myron Gordon and Eli Shapiro (“G&S”) in a 1956 paper and has long been widely used by corporate and investment practitioners. F&S responded to B&J with a defense of the original G&S formulation. In revisiting this debate, the authors find that the models B&J and F&S advocate are at bottom two different versions of the same G&S constant growth model, but with quite different assumptions about the effect of inflation on the amount of capital reinvestment required to sustain businesses over time. The authors resolve the dispute by showing that both models, when using a consistent set of assumptions about inflation and capital reinvestment, produce identical growth rates and estimates of value. At the same time, however, the authors recognize that the two models (the G&S/F&S model, on the one hand, and the B&J model on the other) are likely to be appropriate for very different kinds of companies, and each for only small subsets of companies.