When counterfeits raise the appeal of luxury brands

Counterfeiting is a widespread practice throughout the world. The conventional wisdom is that it affects branded goods negatively. In this paper, however, we suggest that counterfeiting may actually benefit certain luxury brands. By means of two studies, we show how the market presence of luxury counterfeit items can increase consumers’ willingness to pay for original brands. In Study 1, we show that the presence of luxury counterfeits can increase consumers’ willingness to pay for well-known original brands, but not for lesser-known ones. Brand awareness plays a moderating role in the positive relationship between counterfeiting and willingness to pay (WTP). In Study 2, we address the psychological mechanisms that explain this increased willingness to pay. The results show that consumers’ (a) pleasure at being envied, (b) pleasure in distinguishing themselves, and (c) perception of the quality of the original goods fully mediate the relation between the presence of counterfeit in the market and consumers’ WTP for originals. We subsequently discuss the theoretical and managerial implications of the two study results.     

An Improved Two‐step Regularization Scheme for Spot Volatility Estimation

We are concerned with the problem of spot volatility estimation in the presence of microstructure noise. We introduce an estimator based on the technique of multi‐step regularization. A preliminary form for such an estimator was proposed in Ogawa (2008) and was shown to work in a real‐time manner. However, the main drawback of this scheme is that it needs a lot of observation data. The aim of the present paper is to introduce an improvement to this scheme, such that the modified estimator can work more efficiently and with a data set of smaller size. The technical aspects of implementation of the proposed scheme and its performance on simulated data are analysed. The scheme is tested against other spot volatility estimators, namely a realized volatility type estimator, the Fourier estimator and three kernel estimators.     

Corporate trade credit and inventories: New evidence of a trade-off from accounts payable and receivable

Trade credit is an important source of finance for firms and has been well researched, but the focus has been on financial trade-offs. In this paper, we consider the trade-offs with inventories and develop a simple model that recognizes the incentives a firm faces to offer and receive trade credit. Our model identifies the response of accounts payable and accounts receivable to changes in the cost of inventories, profitability, risk and liquidity, and importantly, this influence operates through a production channel. Our results support the model and complement many existing studies focused on explaining the financial terms of trade credit.     

MNCs,Technological Innovation and Regional Systems in the EU: Some Evidence in the Italian Case

The increasing appreciation of the role of multinational corporations (MNCs) in the generation of technology across national boundaries has been facilitated by the recent trend for MNCs to establish internal and external networks for innovation. The development of cross-border corporate integration and intra-border inter-company sectoral integration makes it increasingly important to examine where and how innovative activity by MNCs is internationally dispersed and regionally concentrated. By using patents granted to the largest industrial firms for innovation located abroad-arranged by the host region-we test the nature of the relationship between the foreign-owned and the indigenous company profiles of technological specialisation in the Italian regions. We argue the MNC networks for innovation in Europe conform to a geographical hierarchy of regional centres. Accordingly, the technological specialisation of foreign-owned affiliates in different regional locations depends upon the position of the region in the hierarchy, i.e. whether the regional system is at the top of the hierarchy (higher order location) or is a lower order regional centre.     

Corporate Socially Responsible Initiatives and Their Effects on Consumption of Green Products

Corporate social responsibility (CSR) research has focused often on the business returns of corporate social initiatives but less on their possible social returns. We study an actual company–consumer partnership CSR initiative promoting ecologically correct and conscious consumption of bottled mineral water. We conduct a survey on adult consumers to test the hypotheses that consumer skepticism toward the company–consumer partnership CSR initiative and the moral emotion of elevation mediate the relationship between company CSR motives perceived by consumers and consumer behavioral responses following this CSR initiative. Favorable consumer behavioral responses, in turn, relate positively to consumer support of other green products. The results provide scholars and managers with means of improving their understanding and handling of company–consumer partnership CSR initiatives.     

Minimum wages and the wage distribution in Estonia

Abstract: This article studies how changes in the statutory minimum wage have affected the wage distribution in Estonia, a post-transition country with little collective bargaining and relatively large wage inequality. The analyses show that the minimum wage has had substantial spillover effects on wages in the lower tail of the distribution; the effects are most pronounced up to the twentieth percentile and then decline markedly. The minimum wage has contributed to lower wage inequality and this has particularly benefitted low-wage segments of the labour market such as women and the elderly. Interestingly, the importance of the minimum wage for the wage distribution was smaller during the global financial crisis than before or after the crisis.     

Wealth transfer taxation: an empirical investigation

We present an empirical model of wealth transfer taxation in the revenue systems of the G7 countries—Canada, France, Germany, Italy, Japan, the UK, and the US—over the period from 1965 to 2009. Our model emphasizes the influences of population aging and of the stock of household wealth in an explanation of the past and likely future of this tax source. Simulations with the model using U.N. demographic projections and projections of household wealth suggest that even in France and Germany where reliance on wealth transfer taxation has been increasing for part of the period studied, wealth transfer taxes can be expected to wither away as population aging deepens over the next two decades. Our results indicate that recent tax designs that rely upon the taxation of wealth transfers to preserve equity in the face of declining taxation of capital incomes may be, in this respect, politically infeasible for the foreseeable future. We conclude by using the case of wealth transfer taxation to raise the general question of the extent to which the consistency of a proposed reform with expected political equilibria ought to play a role in the design of a normative policy blueprint.     

The effects of company offshoring strategies on consumer responses

This paper develops a unique theoretical framework for explaining consumer reactions to corporate offshoring by testing the impact of the decision to offshore or to maintain domestic activities on two dependent variables: consumer attitudes toward the company and word-of-mouth communication. We conduct two controlled experiments administered in the field with adult consumers. Study 1 analyzes the processes underlying consumer reactions to corporate offshoring from the perspective of the perceived moral harm and good that offshoring produces. Results verify the mediating role of positive and negative moral emotions (i.e., gratitude and righteous anger) felt by consumers. Study 2 demonstrates the moderating role of consumer perceived risk of offshoring on the linkage between company offshoring and the same moral emotions and through these moral emotions on consumer attitudes toward the company and word-of-mouth communication. An unexpected finding is the mediation of the positive moral emotion of elevation on consumer attitudes.     

Organic Consumption as a Change of Mind? Exploring Consumer Narratives Using a Structural Cognitive Approach

An innovative qualitative approach to analyze consumer narratives and biographies was applied to gain insight into consumer decision making and dynamic behavioral patterns in the purchase of organic foods. We adapted Gardner's (2004 Gardner , H. ( 2004 ). Changing minds: The art and science of changing our own and other people's minds. Cambridge , MA : Harvard Business School Press . [Google Scholar]) change-of-mind framework to organic food consumption. Regular consumers trust organic products because they believe that they are healthier and tastier than the equivalent nonorganic product. This belief is built upon day after day by their experiences and by word of mouth: a growing stock of information supports their food choice and confidence in organic food. Occasional consumers have strong beliefs about the better taste and the higher quality of organic food in general. The choice to (regularly) buy organic food is a matter of largely unnoticed inner development. The results allow us to draw some conclusions relating to the determinants of the future demand for organic food in Italy.     

Should They Stay or Should They Go? Attitudes Towards Immigration in Europe

This paper examines the main determinants of individual attitudes towards immigration in Europe. Our results suggest that both economic and non‐economic variables shape attitudes towards immigration, but the relative importance of these factors depends crucially on the race/ethnicity of the arriving immigrants. While fears over labour market competition are more likely to shape attitudes towards the arrival of same race immigrants, more exposure to immigrants reduces opposition towards the arrival of different race immigrants. These findings persist after controlling for socioeconomic characteristics, and after exploiting the data to allow for cohort‐specific effects.