Foreign Ownership and Productivity: New Evidence from the Service Sector and the R&D Lab

This paper examines the relationship between foreign ownershipand productivity, paying particular attention to two issuesneglected in the existing literature—the role of multinationalsin service sectors and the importance of R&D activity conductedby foreign multinationals. We review existing theoretical andempirical work, which largely focuses on manufacturing, beforepresenting new evidence using establishment-level data on production,service, and R&D activity for Great Britain. We find thatmultinationals play an important role in service sectors andthat entry of foreign multinationals by takeover is more prevalentthan greenfield investment. We find that British multinationalshave lower levels of labour productivity than foreign multinationals,but the difference is less stark in the service sector thanin the production sector, and that British multinationals havelower levels of investment and intermediate use per employee.We also find that foreign-owned multinationals conduct a substantialamount of British R&D. We discuss the implications of theseand other findings for the policy debate on incentives to influencemultinational firms' location choices.     

The price of competitiveness in competitive pricing

This study examines how pricing decisions might be improved. We test the hypothesis that managers have a tendency to overcompete by comparing the performance of managers with the performance of computerized strategies in a Prisoner’s Dilemma pricing experiment. We find that the subjects in our study obtain lower profits than matched computer strategies. The subjects appear to value relative performance against competitors, even when they are explicitly instructed to maximize profits and are compensated based on profits. The implication for managers is that pricing to maximize profits may require tolerating the strong performance of competitors, even to the point of accepting a lower profit than some or all the competitors. If competitiveness means an adversarial, “zero-sum game” view of one’s competitors, then the price of competitiveness in competitive markets such as those in our experiment may be lower profits. Being less competitive may be more profitable. His major areas of research are pricing competition and channels of distribution. His research has been published inMarketing Letters andJournal of Marketing Channels. He has also cowritten a chapter on wholesaler liability for the bookWholesale Distribution Channels: New Insights and Perspectives, edited by Bert Rosenblum. where he directs Vanderbilt’s Center for Services Marketing. His 1995 article “Return on Quality (ROQ): Making Service Quality Financially Accountable” (written with Anthony Zohorik and Timothy Keiningham) won theJournal of Marketing’s Alpha Kappa Psi award for the article that had the greatest impact on the practice of marketing. He has also won best article awards from theJournal of Advertising and theJournal of Retailing. He serves on the editorial boards of seven journals, includingMarketing Science and theJournal of Marketing Research. His books includeService Marketing, Return on Quality, Advertising Media Models, Service Quality, andReadings in Service Marketing.     

Integrating ethics into international marketing strategy: An extension of Robin and Reidenbach's framework

This study proposes and tests an extension of Robin and Reidenbach's (1987) model of integrating ethics into the strategic marketing development process. The model extension may help marketing managers to identify the publics that might be negatively impacted by a given strategic option and the duties marketers may assume to safeguard public welfare in these instances. A sample of 155 marketing practitioners was used to examine how marketers apply ethical values upon entering new markets. This study suggests that, contrary to public sentiment, marketers are sensitive to potential consumer harm and act to minimize this risk.     

PROFITABILITY OF INCREMENTAL EXPENDITURE ON FIBRE PROMOTION

In this paper the impact of changes in wool promotion expenditure and changes in expenditure on the promotion of competing fibres are examined using an equilibrium displacement model. The emphasis is on examining impacts on producer profits net of promotion expenditure and on benefit-cost ratios measuring changes in producer surplus relative to changes in promotion expenditure. It was found, for example, that incremental expenditure on apparel wool promotion on the domestic market is unprofitable but incremental expenditure on promotion of apparel wool on the export market is generally profitable. Further, it was found that increased promotion of cotton and man-made fibres on the export market, with promotion of apparel wool unchanged, would reduce profits to apparel wool producers. Finally, a case is made for improved data availability in order to allow more comprehensive ex-ante and ex-post evaluations of promotion programs, thereby increasing the intensity of scrutiny of promotion programs to a level more in line with that for investment in rural research and development.     

COMPARATIVE FORECAST ACCURACY IN THE NEW SOUTH WALES PRIME LAMB MARKET

The market for Australian prime lamb is characterised by high production seasonality and a highly competitive retail demand. Because these factors often translate into substantial market variability, regular forecasts of supply and demand are important requirements of lamb market participants. There has been some forecasting activity in the state and national lamb markets but it has been a somewhat controversial activity. This paper assesses the comparative forecast accuracy of a range of methods in the New South Wales lamb market. The results indicate that no single method is clearly superior in all situations and the greatest scope for improving forecast accuracy in the New South Wales lamb market is through the use of combined econometric and naive approaches.     

What makes a brand manager effective?

Brands have become increasingly important as a foundation for competitive strategy. Unfortunately, although brand managers are responsible for brand strategy development and execution, little is known about what makes a brand manager effective. A model is developed to understand what intangible capital embodied by brand managers influences brand management capabilities and resultant brand performance. Measures of brand manager intangible capital and brand management capabilities are developed through an iterative scale development process. Hypothesis testing, derived from a survey of brand managers, indicates that brand manager human, relational and informational capital influences brand management capabilities and resultant brand performance, and brand manager intangible capital has an indirect effect on brand performance via brand management capabilities. By delineating and operationalizing the intangible capital and capabilities of brand managers, this study provides a theoretical and empirical foundation for future research on brand managers, tools for assessing current brand manager capital and capabilities, and guidance in relation to intangible capital and capabilities needed by brand managers.     

WHEN ELECTIONS FAIL TO RESOLVE UNCERTAINTY: THE CASE OF THE 2016 U.S. PRESIDENTIAL ELECTION

In this article, we examine whether certain political election outcomes create, rather than resolve, uncertainty in financial markets. We posit that the market uncertainty associated with unanticipated election outcomes is not resolved before or on the election dates. To test this claim, we use the surprise outcome of the 2016 U.S. presidential election and two previous U.S. presidential elections as benchmarks. In contrast to prior elections, we find that the 2016 U.S. presidential election outcome did not resolve market uncertainty. Specifically, we show significant increases in transactions costs, adverse selection costs, and volatility in the days following the election date. We contribute to the literature by suggesting that unexpected elections can engender, rather than resolve, market uncertainty.     

Reward strategy spillover effects on observer cooperation in business networks

Marketing Letters - Drawing on social comparison and equity theory, this study examines the influence of reward strategies a manufacturer in a focal dyad employs on the cooperative behaviors of...     

The effects of behavioral,cognitive, and decisional control in co-production service experiences

Companies are encouraging customers to participate in the process of creating and delivering their offering(s). In this strategy, not only do providers select a level of customer co-production, but also the level of customer control. This study examines the effects of control types (cognitive, behavioral, and decisional) and their interaction on customers’ affective responses in service operations with varying levels of co-production. An extensive two-study design, across two service contexts, tests the interaction of different levels of co-production and control types on customers’ affective responses. Results show when decisional control is low, one additional control type (behavioral or cognitive) in the operational process can compensate for low decisional control. Theoretical and practical implications are discussed.     

Do buyer cooperative actions matter under relational stress? Evidence from Japanese and U.S. assemblers in the U.S. automotive industry

Buyers can create relational stress even as they work cooperatively with suppliers. This study investigates the moderating effects of relational stress on the ability of buyer-initiated cooperative actions to influence a supplier's willingness to invest in technology that will be of benefit to the buyer. Data on 2012 buying situations were collected from Tier 1 suppliers to three U.S. domestic automotive assemblers (Chrysler, Ford, and General Motors) and three Japanese transplant automotive assemblers (Honda, Nissan, and Toyota) over three consecutive years (2003–2005). The results indicate that (1) buyer-initiated cooperative actions of communication, assistance, and supplier involvement increase a supplier's willingness to invest in technology, (2) the relationship-enhancing effect of buyer assistance increases under high relational stress, while the effectiveness of buyer communication decreases, and (3) that the effect of supplier involvement is not significantly influenced by relational stress levels. Furthermore, we found that supplier relations with Japanese transplant assemblers are characterized by higher levels of cooperative actions, lower levels of relational stress, and higher levels of supplier willingness to invest in technology when compared to those of U.S. domestic assemblers.