Fixed costs per shipment

Exporting firms do not only decide how much of their products they ship abroad but also at which frequency. Doing so, they face a trade-off between saving on fixed costs per shipments (by shipping large amounts infrequently) and saving on storage costs (by delivering just in time with small and frequent shipments). The firm's optimal choice defines a mapping from size and frequency of shipments to fixed costs per shipment. We use a unique dataset of Swiss cross-border trade on the transaction level to infer the size and shape of the underlying fixed costs. The inferred fixed costs are specific to each firm–country–product combination. Our results suggest that the fixed costs per shipment of the average Swiss exporter are large, ranging between 0.82% of the export value in our most conservative specification and 5.4%. We document that the imputed fixed costs per shipment correlate negatively with language commonalities, trade agreements and geographic proximity.     

Monopolistic competition and income dispersion

We develop a model of monopolistic competition that accounts for consumers’ heterogeneity in both incomes and preferences. This model makes it possible to study the implications of income redistribution on the toughness of competition. We show how the market outcome depends on the joint distribution of consumers’ tastes and incomes and obtain a closed-form solution for a symmetric equilibrium. Competition toughness is measured by the weighted average elasticity of substitution. Income redistribution generically affects the market outcome, even when incomes are redistributed across consumers with different tastes in a way such that the overall income distribution remains the same.     

Can we reject linearity in an HAR-RV model for the S&P 500? Insights from a nonparametric HAR-RV

This article tests the linearity assumption underlying the popular heterogeneous autoregressive model for realized volatility (HAR-RV). We implement a consistent model specification test that is robust to both distributional and model misspecification. We find that, using a nonparametric HAR-RV (NPHAR-RV), we are unable to reject the null of linearity.     

Model-based auditing using REA

The recent financial crisis has renewed interest in the value of the owner-ordered auditing tradition that starts from society's long-term interest rather than management interest. This tradition uses a model-based auditing approach in which control requirements are derived in a principled way. A problem with this approach is that it has been proven hard to apply it in modern complex organizations. Making it feasible requires at least an adequate enterprise modeling approach. In this paper, it is shown that the REA ontology fulfills most of the requirements for such a model-based approach. The analysis also suggests some directions in which REA can be extended.     

Effects of agency risks and procedural justice on board processes in venture capital-backed firms

This paper builds a model of the effects of agency risk and procedural justice in the boards of directors of venture capital-backed firms. Such boards are unique in that they consist of managers and outside owners with significant power and incentive to be highly involved in venture governance. The authors integrate agency theory and procedural justice perspectives to develop propositions regarding the effects of agency risk and board processes on the responses to poor performance and conflicts of interest. This integrated perspective suggests that factors that increase perceived agency risks will increase outsiders' tendency to focus efforts on monitoring and controlling board decisions and their propensity to resort to formal means to resolve conflicts. However, the authors suggest that through their effects on trust and positive attributions, fair procedures and interactions will reduce these tendencies. A discussion of the practical and theoretical implications of the proposed model concludes the paper.     

The Educational Choice Anomaly for Principles Students: Using Ordinary Supply and Demand Rather than Indifference Curves

The surprise value of many economic observations makes the economics discipline quite interesting for many students. One such anomaly is that providing “free” education in an effort to reduce the number of dropouts can often result in a lower level of educational quality purchased. This result is easy to show with indifference curves, but many instructors of introductory courses do not introduce this analytical technique. As a consequence, a result that many students find quite interesting is seldom presented. The authors show that it is easy to clarify the educational choice anomaly with ordinary supply and demand curves. Moreover, the exercise of doing so provides students with a greater understanding of benefit/cost analysis as well as consumer and producer surplus.     

Changes in european defence procurement and industrial capabilities

The impact of defence procurement on a country's industrial and technological base can be considerable—among NATO countries, the USA, Britain and France stand out in this regard. Equally, concern is also often expressed about how to safeguard the civil technology base as a necessary foundation for security, broadly conceived. This article examines the changes taking place in the UK, and more broadly in Europe, regarding defence procurement: first, by examining arguments and events regarding defence R&D; and second, through analysing procurement issues relating especially to industrial structures and strategies. Much strategic repositioning by firms is currently taking place, often encouraged by governments, who seem to lack adequate means of regulating the restructuring, thereby creating unintended problems.     

Do citizenship behaviors matter more for managers than for salespeople?

This research was designed to investigate the effects of organizational citizenship behaviors (OCBs) and objective sales productivity on sales managers’ evaluations of their sales personnel’s performance and to examine whether the impact of OCBs on performance evaluations is greater at higher levels of the sales organization hierarchy. Two samples were obtained from the same organization: a sample of 987 multiline insurance agents and a sample of 161 agency managers. Objective measures of sales productivity were obtained for both samples along with evaluations of three dimensions of OCBs and an assessment of overall performance. The results indicate that managers’ evaluations are determined at least as much by OCBs as they are by objective measures of performance. After partialing out common method variance, the results also indicate that OCBs account for a greater proportion of a sales manager’s evaluation than of a sales representative’s evaluation. The implications of these findings are discussed. Scott B. MacKenzie (Ph.D., UCLA, 1983) is a professor of marketing and the Edgar G. Williams Faculty Fellow at the Kelley School of Business at Indiana University. His research on advertising effectiveness, organizational citizenship behavior, and leadership issues can be found in theJournal of marketing Research, Journal of Marketing, Journal of Consumer Research, Journal of Applied Psychology, Organizational Behavior and Human Decision Processes, Personnel Psychology, Journal of Management, andThe Leadership Quarterly. Currently, he serves on the editorial boards of theJournal of Marketing Research, Journal of Marketing, Journal of Consumer Research, andJournal of Consumer Psychology. Philip M. Podsakoff (D.B.A., Indiana University, 1980) is the John F. Mee Professor of Organizational Behavior and Human Resources at the Kelley School of Business at Indiana University. He is the author or coauthor of more than 60 articles and/or scholarly book chapters that have appeared in such journals as theJournal of Marketing, Journal of Marketing Research, Academy of Management Journal, Psychological Bulletin, Organizational Behavior and Human Decision Processes, Journal of Applied Psychology, The Leadership Quarterly, Organizational Dynamics, Research in Organizational Behavior, Journal of International Business Studies, andJournal of Occupational and Organizational Psychology. He serves on the Board of Editors of theJournal of Applied Psychology, Organizational Behavior and Human Decision Processes, andThe Leadership Quarterly. Julie Beth Paine is a doctoral student in management at the Kelley School of Business at Indiana University. Her research interests include competence in performance, performance evaluation processes, and reward systems.     

An empirical study of the impact of information technology intensity in strategic investment decisions

This paper focuses on two issues of the management of strategic information technology investment decisions (SITIDs). First, it examines the outcomes of strategic investment decisions (SIDs) according to the extent of IT intensity in the investment project (termed IT-ness). Second, IT-ness is assessed in realtion to a numberr of dimensions, including decision formulating process, evealuation process and decision content. Empirical testing is based on a sample of 80 SIDs from Taiwanese enterprises. Thw results show that IT-ness is negatively associated with the effectiveness of SIDs and several constructs in the decision process. The implicaitons of this for the evaluaiton and management of SITIDs, and on agenda for further research into the effectiveness of SITIDs, are discussed.