Consequences of customer loyalty to the loyalty program and to the company

Gaining customer loyalty is an important goal of marketing, and loyalty programs are intended to help in reaching it. Research on loyalty programs suggests that customers differentiate between loyalty to a company and loyalty to a loyalty program, yet little is known about the consequences of these two types of loyalty. Therefore, our study intends to make two main contributions: (1) improving our understanding of the constructs ??program loyalty?? and ??company loyalty??, (2) investigating the relative impact of the two types of loyalty on preference, intention, and purchase behavior for the case of a multi-firm loyalty program. Results indicate that company loyalty influences a customer??s choice to visit a particular provider and to prefer it over competitors, but it is not a strong predictor of purchase behavior. Conversely, program loyalty is a far more important driver of purchase behavior. This implies that company loyalty primarily attracts customers to a particular provider and program loyalty ensures that once inside the store, more money is spent.     

The financial accelerator and monetary policy rules

Comparing Bernanke et al.’s (1999) financial accelerator model to a comparable model without an operational financial accelerator mechanism, we find that financial acceleration is reduced when monetary policy reacts to the output gap and when firm-specific volatility rises.     

Entrepreneurial strategy v. accounting accuracy in ‘calculating’ capital and income

Both entrepreneurs and accountants ??calculate?? capital and income but their procedures diverge. The paper examines this divergence and the respective calculational objectives of entrepreneurs and accountants in the business enterprise. For the entrepreneur, capital and income are ex ante calculational judgments of prospective income gain from strategic use of the enterprise??s capital goods. But the accountant must shun entrepreneurial judgments to ??calculate?? the contemporary net market value of enterprise??s capital goods at a specified date. Hence, the accountant??s calculation of income is the net contemporary increase in the market value of the enterprise??s capital goods. These accounting calculations facilitate assessment of the success of an enterprise strategy. But critics assert that accounting practice ignores the need of external investor??s for accurate information on enterprise prospects. The paper concludes with a critique of accounting regulation and explores the feasibility and means of privatizing the entrepreneurial choice of accounting techniques.     

Simplifying numerical analyses of Hamilton–Jacobi–Bellman equations

We introduce a simple method for computing value functions. The method is demonstrated by solving for transitional dynamics in the Uzawa and Lucas endogenous growth model. We use the value function approach to solve both the social planner??s optimization problem in the centralized economy and the representative agent??s optimization problem in the decentralized economy. The complexity of the Hamilton?CJacobi?CBellman equations is significantly reduced to an initial value problem for one ordinary differential equation. This approach allows us to find the optimal controls for the non-concave Hamiltonian in the centralized case and to identify the symmetric equilibrium in the decentralized case.     

Schumpeter’s Theory of Economic Development: 100 years of development

This article sheds light on the impact of Schumpeter’s Theory of Economic Development over the last 100?years, and identifies insights from that work that are less well-known, but that have the potential for informing current developments in evolutionary economics. We identify these insights by tracing the development of Schumpeter’s ideas in Theory of Economic Development, which he revised heavily between the first and second German and the English editions. We not only report material lost in the process and developments in Schumpeter’s thinking that can be read off of the revisions, but also indicate how the newfound material can inform and inspire evolutionary economics today.     

When parties are not teams: party positions in single-member district and proportional representation systems

Theoretical analyses of party positions commonly assume that parties act as teams to maximize their legislative representation. This assumption runs counter to another line of theorizing in which individual legislators maximize their own chances of winning reelection. To resolve this tension, the paper presents a model of party platform choice that relaxes only the assumption that parties are teams in the classical two-party spatial model. Platforms are chosen by majority rule among all legislators within a party. Politicians seek to win their own seats in the legislature, but they must run under a common party label. In both single-member district and proportional representation systems, equilibrium platforms are shown to diverge substantially, with one party located near the 25th percentile of the voter distribution and the other near the 75th percentile, rather than converge to the median. The model also yields predictions concerning short-term economic shocks, incumbency advantages, and gerrymandering.     

Interorganisationales Kostenmanagement – Erfolgspotenzial oder Kooperationsrisiko?

Zusammenfassung Interorganisationales Kostenmanagement (IOCM) stellt einen Ansatz dar, um in der Wertsch?pfungskette Kostenoptimierungen über Unternehmensgrenzen hinweg zu erschlie?en. Zahlreiche Fallstudien zeigen, dass IOCM eine partnerschaftliche Zusammenarbeit der beteiligten Unternehmen erfordert und erfolgssteigernd wirken kann. Der Beitrag untersucht im Rahmen einer gro?zahligen Befragung anhand eines Strukturgleichungsmodells, inwieweit der Beziehungskontext ausschlaggebend für den Erfolg des IOCM ist. Basierend auf Aussagen der Transaktionskosten-, Konflikt- und Austauschtheorie wird gezeigt, dass IOCM nur unter bestimmten Voraussetzungen erfolgssteigernd wirkt. Die Daten basieren auf einer Erhebung bei 164 Automobilzulieferern aus Deutschland.      

Tariff effects on MNC decisions to engage in intra-firm and arm's-length trade

Abstract .  Using confidential firm-level data from the Bureau of Economic Analysis (BEA) on activities of U.S. multinational corporations (MNCs) and their Canadian affiliates, we study the dramatic growth of intra-firm and arm's-length U.S.-Canada trade over the 198495 period. We find that decisions to engage in intra-firm and arm's-length trade are essentially unrelated to tariff and transport cost reductions over this sample period. Thus, we find that the increase in trade occurred almost entirely on the  intensive  rather than the  extensive  margin. This is consistent with case study evidence in Keane and Feinberg (2006), where MNC executives consistently indicate that the modest tariff reductions of the 198495 period were not sufficient to justify fixed costs of overhauling international supply chains. Our results have important implications for recent influential models of international trade that rely on sensitivity of intra-firm trade to tariffs at the  extensive  margin to explain how small tariff declines could have led to the explosion of intra-firm trade since the 1980s. We also find that initial conditions (i.e., 1983 tariffs) are uncorrelated with whether firms engaged in intra-firm or arm's-length trade activity at the start of the sample period. This result is surprising as it implies that firms/industries with a greater propensity to engage in trade were not, in general, successful at lobbying for more favourable tariff treatment.