The asymptotic relative efficiencies of tests and the derivatives of their power functions

Abstract

For comparing two consistent tests of a simple null hypothesis H ₀ : θ = θ₀ against a given alternative hypothesis H ₀ : θ = θ₁, the measure most frequently used is the asymptotic relative efficiency (ARE), due to Pitman (1948). The ARE is defined as the limit of the reciprocal of the ratio of sample sizes required to attain the same power. The limit is taken as sample sizes tend to infinity and simultaneously θ₁ → θ₀, this being necessary to keep the powers of the tests bounded away from 1.     

Network Effects in the Governance of Strategic Alliances

We argue that the stock of prior alliances between participantsin the biotechnology sector forms a network that serves as agovernance mechanism in interfirm transactions. To test howthis network substitutes for other governance mechanisms, weexamine how equity participation and pledged funding in strategicalliances vary with two features of the way alliance participantsare positioned in the network of past deals: proximity, or howclose two firms are to one another in the network; and centrality,or how deeply a firm is embedded in the network. As centralityand proximity increase, equity participation (measured by sizeand propensity) diminishes, whereas pledged funding increases.     

How strategy-making processes can make a difference

Strategy-making is usually portrayed in dichotomous terms: rational vs. incremental, or formulation vs. implementation. It may, however, be more valid to think of organizations as entities capable of developing resources and skills in multiple strategy-making process modes. This paper first develops measures to identify firms with different levels and types of strategy-making process ‘capability’ then examines empirically their relationships to five dimensions of perceived performance, using data collected from a sample of 285 top managers. Results indicate that firms with high process capability–the simultaneous use of multiple strategy-making process modes–outperfom single-mode or less process-capable organizations.