The effect of annual changes in automobile fuel economy standards

Since 1978 the Federal government has regulated the fuel economy of new cars sold in the United States. The purpose of Corporate Average Fuel Economy (CAFE) standards is to lessen the national dependence on foreign oil. Through the use of theoretical and empirical models this paper examines the impact of CAFE standards on the automobile industry and on energy consumption. It is shown that CAFE standards may or may not save energy. If CAFE does save energy, it does so at a prohibitive cost to the economy. CAFE standards are also shown to have a number of perverse impacts on the automobile industry as well as consumers.     

Health and economic growth in high-income countries revisited: evidence from an augmented production function for the period 1980–2009

This paper uses time series data for seven industrialized countries from 1980–2009 to explore the causality between health care expenditure (HCE) and economic growth. We have set up a classical Cobb–Douglas production function including HCE, labor, capital, and an augmented function additionally including the number of patent applications (as a proxy for technology and research) and the total number of tertiary education students (as a proxy for education). Our results show that there is a long-run relationship between growth and HCE. As regards causality, in the classical production function, evidence for mutual causality between GDP and HCE is noted only in France, Germany and England, causality from HCE to GDP is noted in Italy and Japan, while no causality whatsoever is evidenced in Canada and USA. However, a completely different situation is unveiled when the augmented production function is used with mutual causality being noted in all perused variables. The novelty of our study lies first in that it contributes to the health-growth nexus literature for high-income countries which has been quite controversial and second it sets off new variables whose omission might be one of the reasons of the result dichotomy. Results of this study will be very useful for high-income countries currently afflicted by the economic crisis and embark on HCE curtailments or revisions.     

ECONOMIC INTERACTIONS: CHINA VIS-A-VIS HONG KONG

Hong Kong's role has been integral to China's unprecedented economic growth, but privatization ranks first in importance. Another key factor is Beijing's putting economic reform before political reform. Giving democracy to a society in chaos likely makes matters worse. Hong Kong and China both have profited from their partnership. As China has opened up to allow transformation into a market economy, Hong Kong has provided informational impetus for change, a capitalist model to copy, and middleman functions for China to participate in outside-world goods and financial markets. The collapse of Communism in China and elsewhere has increased the supply of cheap labour perhaps by 2 billion. Manufacturing countries with expensive labour and high cost welfare programmes—such as those in the United States, Canada, and Europe—will have difficulty. Capitalists in these countries will do well by investing abroad but not in their own countries. Though wrong in detail, the factor price equalization theorem—that international movement of goods and international movement of factors of production are equivalent—basically is correct. If China continues moving toward privatisation and joining the international community, it will become fiercely competitive, and prospects will be bright for both China and Hong Kong. However, China's recent drift from capitalism clouds those prospects. Fundamentally, three kinds of rights systems exist: (i) a capitalist system, with well defined private property rights, protected by law, where control of resources is based on ownership; (ii) a hierarchical system, such as Communism, where control of resources is based on one's rank in the hierarchy; (iii) a system of corruption, where control of resources is based on bribes and patronage. China rapidly had been making a transition from the second system to the first but recently seems to have derailed into the third. In any case, Communism's collapse is one of the great events in human history. The hero of that event is Deng Xiaoping—not Gorbachev, nor Thatcher, nor Reagan. Hong Kong, by contributing significantly to China's capitalist movement, has led the Communist world to change.     

The effect of customers' emotional responses to service failures on their recovery effort evaluations and satisfaction judgments

This study examines the role of customer emotions in the context of service failure and recovery encounters. It investigates how customers' emotional responses to service failures influence their satisfaction judgments after accounting for cognitive antecedents of satisfaction. The study also considers how customers' emotional responses to service failures influence how they evaluate an organization's recovery efforts. The research is conducted by surveying customers about their satisfaction judgments in two service settings, restaurants and hotels. The results suggest that customers' emotional responses to service failures will influence their recovery effort evaluations and satisfaction judgments in some circumstances and that the effects of emotion vary across industry settings. This study identifies the types of efforts that are most effective in helping customers “recover” from the negative emotions caused by service failures. Amy K. Smith (Ph.D., University of Maryland) is currently an assistant professor of marketing at George Washington University. Her research focuses on customer assessments of services, customer satisfaction and retention, customer service, serice failure and recovery, and customer-service provider relationships in both business-to-consumer and business-to-business markets. Her research has been published in the Journal of Marketing Research and the Journal of Service Research. Ruth N. Bolton is currently a Ruby K. Powell Professor of Marketing in the Michael F. Price College of Business at the University of Oklahoma. Her research focuses on how organizations can growth the value of their customer base through customer service and support. Her research has been published in the Journal of Retailing, the Journal of Marketing, Marketing Science, Marketing Letters, the Journal of Marketing Research, and the Journal of Service Research.     

On the unique features of post-disaster humanitarian logistics

Logistic activity can be thought of as a socio-technical process whereby a social network of individuals orchestrates a series of technical activities using supporting systems such as transportation and communications. To understand the functioning of the entire system requires proper consideration of all its components. We identify seven key components: the objectives being pursued, the origin of the commodity flows to be transported, knowledge of demand, the decision-making structure, periodicity and volume of logistic activities, and the state of the social networks and supporting systems. Based on our analysis of the differences between commercial and humanitarian logistics, we pinpoint research gaps that need to be filled to enhance both the efficiency of humanitarian logistics and the realism of the mathematical models designed to support it.We argue that humanitarian logistics is too broad a field to fit neatly into a single definition of operational conditions. At one end of the spectrum we find humanitarian logistic efforts of the kind conducted in long-term disaster recovery and humanitarian assistance, where operational efficiency – akin to commercial logistics – is a prime consideration. At the other, post-disaster humanitarian logistic operations involved in disaster response and short-term recovery activities represent a vastly different operational environment, often in chaotic settings where urgent needs, life-or-death decisions and scarce resources are the norm. The huge contrast between these operational environments requires that they be treated separately.     

Victim or Victimizer: Firm Responses to Government Corruption

What is the relationship between government corruption and firm performance? To address this question, I conduct a review of articles published in the leading management journals on government‐business interactions pertaining to rent‐seeking activities and integrate findings from the fields of international business, social issues in management, public organization, institutional change, and corporate political activity. I find that while much empirical work corroborates the earlier findings suggesting a corrosive impact of government corruption on firm performance in general, management research also points to the heterogeneous impact of government corruption on individual firm performance, driven by the strategic activities conducted by firms in response to corruption. I propose an integrative model of firm strategy vis‐à‐vis corruption that predicts the activity choice of the firm as predicated by its organizational structure, political resources, industry regulation, and surrounding political and social institutions.     

Pre-positioning hurricane supplies in a commercial supply chain

Inventory control for retailers situated in the projected path of an observed hurricane or tropical storm can be challenging due to the inherent uncertainties associated with storm forecasts and demand requirements. In many cases, retailers react to pre- and post-storm demand surge by ordering emergency supplies from manufacturers posthumously. This wait-and-see approach often leads to stockout of the critical supplies and equipment used to support post-storm disaster relief operations, which compromises the performance of emergency response efforts and proliferates lost sales in the commercial supply chain. This paper proposes a proactive approach to managing disaster relief inventories from the perspective of a single manufacturing facility, where emergency supplies are pre-positioned throughout a network of geographically dispersed retailers in anticipation of an observed storm's landfall. Once the requirements of a specific disaster scenario are observed, supplies are then transshipped among retailers, with possible direct shipments from the manufacturer, to satisfy any unfulfilled demands. The manufacturer's pre-positioning problem is formulated as a two-stage stochastic programming model which is illustrated via a case study comprised of real-world hurricane scenarios. Our findings indicate that the expected performance of the proposed pre-positioning strategy over a variety of hurricane scenarios is more effective than the wait-and-see approach; currently used in practice.