Channel evolution: A framework for analysis

This article proposes a comprehensive model for analyzing the environmental forces that affect channel length. The marketing literature regards channel length as a succinct, key measure of channel structure. Transactional cost analysis offers an integrative explanation of the seemingly contradictory phenomena and varied interpretations found in the channels literature. The central thesis of this article is that the developmental process alters the balance between performing channel tasks externally and internally and thereby channel structure. The article also interprets from a transactional cost perspective how selected cultural, political, and urban market concentration factors account for enduring differences in channel structure among nations at similar levels of development.     

Extent of hedging in the US lodging industry

This study investigates the extent of hedging in a sample of lodging firms over a five-year period from 2000–2004. The findings document that lodging firms predominantly use interest rate swaps and options to manage interest rate risk exposure. Lodging firms primarily use these instruments as cash flow hedges of their long-term debt liability. The findings indicate that the hedging decision should be modeled separately using a two-step model. The results are robust to alternative specifications and provide evidence to show financial leverage, floating rate debt, information asymmetry, firm size, cash flow volatility and diversification, to be significantly related to the amount of hedging.     

Changing competitive dynamics in network industries: An exploration of sun microsystems' open systems strategy

An integral part of competition is to deny rivals access to proprietary technical knowledge. Yet, Sun Microsystems provides rivals easy access to its technical knowledge and encourages them to enter its workstation market. This paper employs theoretical insights on technological systems and network externalities to understand Sun's open systems strategy. The paper also explores the changing nature of competition in network industries–industries characterized by network externalities and built around technological systems.     

Are pricing policies an impediment to the success of customer solutions?

In an era of declining pricing power and increased global competition, customized solutions appear to be an effective way to build competitive advantages without the debilitating effects of price competition. Solutions involve provision of an integrated combination of goods and services that are designed to meet a business customer's specific needs. Premium prices and higher margins can be extracted by solution providers, who now have considerable incentives to design and market innovative solutions for their customers. We examine the applicability of various pricing frameworks and pricing practices in the context of two industries — business process outsourcing and power generation equipments. Our interviews suggest that firms predominantly use traditional pricing strategies; new strategies for solution pricing are only emerging; and, successful firms are currently using hybrid pricing models. We find that the solutions that we observed among practitioners are not what theory would suggest as true solutions but what would be described by theory as bundled products. We also find that solutions are in the eye of the beholder, i.e., if customers can de-bundle offerings, they are not true solutions. We extend our findings to academic theory and to the practice of developing and pricing solutions.     

Spread behavior around board meetings for firms with concentrated insider ownership

For a set of firms with concentrated insider ownership, we find that (a) the bidask spread changes significantly around the board meeting dates, and (b) the actual number of transactions by insiders increases following the board meetings. We also find that there is a statistically significant relationship between spread and the number of insider trades surrounding the board meeting dates. Furthermore, neither an increase in the number of insider transactions nor any significant relationship between insider trading and the spread is observed for the same set of firms around non-board meeting dates.     

Sale of monopoly information and behavior of rivaling clients: A theoretical perspective

This paper studies a three-stage Bayesian-Cournot game where rivaling firms sign contracts with an information monopoly to purchase proprietary information. The rivaling firms use the external information to create competitive advantage over one another. Knowing the rivalry among its clients, the information monopoly can exploit them by playing one client against another. The information-selling strategy depends on the clients' in-house information technology, the uncertainty of the economic environment, and the number of potential clients. The existence of an information market makes rivaling producers worse off and consumers better off. It is possible that the service of the information monopoly is a private good but a social bad.     

A SUGGESTED SIMPLE PROCEDURE TO OBTAIN BLUE ESTIMATOR OF GLOBAL BETA

Common stocks are typically traded on numerous exchanges both domestically and internationally. The price behaviour of stocks traded in multimarket settings provides investors with additional information regarding the risk characteristics of those shares. In this paper we provide a simple procedure to obtain the best linear unbiased (BLUE) estimator of relevant systematic risk (beta) of a stock by incorporating as much information as is possibly available in the market place.