SOUTH–SOUTH TRADE: BEYOND GEOGRAPHY

Starting from a low base, south–south trade has picked up momentum over the last two decades. It is emerging as a new dimension of the global economy and can potentially usher in several benefits for developing economies. The emerging economies of the dynamic south (EEDS) not only provided a striking impetus to south–south trade but also contributed to the changing mise-en-scène of the global economy. However, given the moribund state of the Doha Round, additional policy measures need to be taken by the EEDS.     

Financial deregulation and efficiency: An empirical analysis of Indian banks during the post reform period

The paper investigates the performance of Indian commercial banking sector during the post reform period 1992-2002. Several efficiency estimates of individual banks are evaluated using nonparametric Data Envelopment Analysis (DEA). Three different approaches viz., intermediation approach, value-added approach and operating approach have been employed to differentiate how efficiency scores vary with changes in inputs and outputs. The analysis links the variation in calculated efficiencies to a set of variables, i.e., bank size, ownership, capital adequacy ratio, non-performing loans and management quality. The findings suggest that medium-sized public sector banks performed reasonably well and are more likely to operate at higher levels of technical efficiency. A close relationship is observed between efficiency and soundness as determined by bank's capital adequacy ratio. The empirical results also show that technically more efficient banks are those that have, on an average, less non-performing loans. A multivariate analysis based on the Tobit model reinforces these findings.     

Is sexy better than funny? Disentangling the persuasive effects of pleasure and arousal across sex and humour appeals

Although it is well known that sex and humour can help sell products, hardly any research has examined whether there is something particular about sexual advertisements that makes them more persuasive than other appeals. The present research proposed an empirically robust way to test the persuasiveness of different emotional appeals (sex, humour, control) by matching them on pleasure and arousal levels. Two experiments (N = 162; N = 301) examined the combined persuasive effects of different levels of pleasure (moderate, high) and arousal (moderate, high) for sexual and nonsexual appeals. Study 1 used a 3 (appeal: sexual, humorous, control) × 2 (pleasure level: moderate, high) between-subjects design. Study 2 employed a 2 (appeal: sexual, control) × 2 (arousal level: moderate, high) × 2 (pleasure level: moderate, high) design. The main dependent measures were attitudes towards the ad, attitudes towards the brand, and purchase intentions. The results showed that highly pleasant ads increased persuasion regardless of arousal and content, and that sexual appeals outperformed nonsexual appeals only under conditions of moderate pleasure and high arousal.     

Convenience,Satisfaction, and Post-Purchase Behavior in India's Health Insurance Market

ABSTRACT

Understanding the antecedents and implications of “service convenience” has acquired added importance with consumers' growing desire for ease during product or service exchange. Although the effects of service convenience, as a first-order construct, on post-purchase behavior have been studied in different business contexts, not much has been done in the case of a second-order construct which has been attempted here. The present study seeks to examine the mediating role of consumers' satisfaction as well as the moderating role of organizational and consumer personal factors that have not been sufficiently explored in the marketing literature. Structural equation analysis is adopted to test the hypothesized relationships using responses from 424 consumers who have purchased health insurance from six leading insurers in India. The findings validated that the service convenience affects consumer satisfaction, which, in turn, plays both a direct and mediating role in influencing consumers' repurchase intention. However, the role of organizational and consumer personal factors as moderators between service convenience and consumers' satisfaction could only be established indirectly through post-hoc analysis, which calls for further research. The results have important implications for planning, designing, and managing the health insurance business.     

RISK TYPES AND INTER-FIRM ALLIANCE STRUCTURES*

This paper examines the choice between equity and non-equity forms of inter-firm alliances from an ‘integrated risk’ perspective, which combines relational risk and performance risk in inter-firm alliances. Relational risk relates to co-operation among alliance partners, while performance risk has to do with the hazards of not achieving the performance objectives of an alliance, given co-operation. We suggest that equity alliance is adopted to control relational risk, while non-equity alliance is aimed at minimizing performance risk. Existing studies on the choice of alliance configurations are examined from the proposed risk perspective, and a number of key propositions are advanced for empirical testing and further development of the perspective.     

Incentive Pay, Worker Effort, and Trade Protection

Positive and normative aspects of trade policy are examined when firms offer incentive pay to workers, such as piece-rate pay and profit sharing, to deal with worker moral hazard. Protection increases the incentive pay rate. Its effect on effort depends upon the degree of labor mobility and the type of the incentive pay. In the presence of a piece-rate pay, protection induces second-order welfare losses. But in the presence of profit sharing, there is a direct impact of protection on the incentive-compatibility constraint facing firms and hence there is a first-order positive effect on welfare.     

Trade and Relative Wage in a Global Economy

The effects of trade among similar countries and that among dissimilar countries on the relative wage are examined. Product quality is a choice variable by firms. Quantity production is assumed to satisfy constant costs, while quality production is more skilled-labor intensive than quantity production and obeys increasing costs. Compared to autarky, free trade, by fostering more competition, leads to quality improvement, which in turn tends to increase the relative wage. Trade among similar countries increases the relative wage in all trading countries, while trade among dissimilar countries, in a two-country model, increases it in one country but may increase or lower it in the other.     

Decomposition of inequality measures and a comparative analysis

The main objectives of the paper are to decompose Atkinson's measure into within-group and between-group inequality and to compare it with decompositions of inequality measures, like the Gini coefficient, variance of logarithms, Theil's entropy index and the square of the coefficient of variation. Atkinson's inequality index is given an interpretation of mean order β and then it is decomposed for population subgroups. Various other measures are considered for decompositions and a variety of decomposition schemes for Gini coefficient and other measures in the literature is reviewed and commented upon. Empirical analysis using U.S.A. and U.K. data are performed on the basis of income distribution data classified by family size. For various decomposition schemes, contribution to between size-group and within size-group inequalities are compared in percentage terms. Comparisons are also made over time for the years 1964 and 1974 both for U.S.A. and U.K. and the result indicates that within size-group income inequality has declined while between size group and total income inequality shows an increase. Three important properties of Atkinson's inequality index are proved in the appendix.