Resale price maintenance for supply chains distributing products with demand uncertainty

This paper explores the economic roles of resale price maintenance (RPM) in supply chains for a specific product, when consumers have taste heterogeneity and the manufacturer faces demand uncertainty. Two transaction schemes within supply chains are compared: (1) RPM, and (2) decentralized pricing in a competitive market environment. With decentralized pricing, a manufacturer loses the incentive to produce a product in categories where the probability that the manufacturer fails to design the product as suitable to public tastes of consumers is high. However, RPM resolves the problem and induces the manufacturer to supply the good, bringing positive surplus to consumers.     

Product design strategies in technological shifts: An explorative study of Italian design-driven companies

This article analyzes the relationship between technological shift and product design strategies in the Italian lighting industry, where design players have experienced a discontinuous technological shift due to the introduction of LED (Light Emitting Diode) technology.     

Product Touch and Consumers’ Online and Offline Buying: The Role of Mental Representation

As offline retailers struggle to compete with online ones, the importance of a consumer’s ability to touch a product prior to purchase becomes important to study. Prior research has found inconsistent results on whether product touch facilitates consumers’ product-related decision making. Some studies report a positive effect, whereas others do not. The current research reconciles this inconsistency and draws retailing implications. Across three experiments, we show that the effect of product touch on consumers’ purchase intentions and willingness to pay for a product being evaluated is evident when consumers’ mental representation of the product is concrete, but not when abstract. We further show that perceived risk and perceived ownership simultaneously mediate this moderating effect of mental representation. Implications are drawn for both offline and online retailers.     

Quality in competitive fresh produce supply chains with application to farmers' markets

Fresh produce supply chains have special characteristics, notably, that the quality of the product (fruit or vegetable) deteriorates continuously over time, even under ideal conditions. In this paper, we begin with explicit formulae for fresh produce quality deterioration based on chemistry and temperature and provide a path-based framework. We then focus on farmers' markets, the popularity of which has been growing due to consumers' greater awareness of and interest in product quality and emphasis on health. Farmers' markets, as examples of direct to consumer channels and shorter supply chains, are studied in the framework of game theory in both uncapacitated and capacitated versions. A case study of apples in Massachusetts, under various scenarios, including production disruptions, provides quantitative evidence of the applicability of our supply chain network approach.     

Diversification and sophistication of livestock products: The case of African countries

This study assesses the level of sophistication of livestock products in Africa by evaluating technology intensity and economic complexity of each product. Using trade data from 1995 to 2012, livestock commodity exports are classified based on technology intensity. Employing a method of reflection in computing the economic complexity of export products, we find that one fifth of African livestock commodity exports are manufactured with low technology while the rest is composed of raw materials. The results also show that the ten most complex livestock commodities represent about a third of African livestock total exports while the world level is almost double this figure. Yet African countries spend a huge share of their wealth on importing complex products. The results imply that by exporting non-complex products Africa loses nearly a third of the total value of its livestock exports. To boost the value of livestock products, African countries should exploit their untapped potential while securing the domestic market to achieve import substitution. This can be done by integrating with global value chains or developing niche markets at the regional or international markets and improving productive capabilities.     

Celebrity endorsements: Investigating the interactive effects of internalization,identification and product type on consumers’ attitudes and intentions

In line with Kang and Herr's work (2006), this research questions the ELM's contention that celebrity credibility serves foremost as a peripheral element in a persuasive communication context. Nevertheless, in a different light to the Kang and Herr's ‘either-central-or-peripheral-role’ of a source characteristic, this research advances that celebrity credibility plays concomitantly central and peripheral roles in a persuasive message context depending on product involvement and brand-purchase motive. Particularly, this research uses the notions of ‘source internalization’ and ‘source identification’ (Kelman, 1961) to theorize that source credibility can have a concomitant dual role (peripheral and central) in a persuasion context. More precisely, this research investigates the interactive effects of source identification and internalization with product involvement as well as brand-purchase motives on consumers' attitudes and intentions. Source internalization is predicted to have persuasive effects in the contexts of high-involvement as well as informational products. Source identification is predicted to have persuasive effects in the context of low-involvement as well as transformational products. The findings of two experiments show that celebrity credibility acts through only a single route (i.e., only internalization has persuasive effects) uniformly across different product involvement levels and brand-purchase motive types. We interpret these results with the lens of the ‘match-up’ hypothesis (Kamins, 1990).     

Entry and capital structure mimicking in concentrated markets: The role of incumbents’ financial disclosures

We examine whether the public availability of product market incumbents' financial disclosures leads to greater capital structure mimicking of incumbents by entrants. Exploiting a change in disclosure enforcement for German private firms in the mid-2000s, we find entrant-incumbent mimicking rises substantially in concentrated markets once incumbents' financial statements are publicly available. Additional tests exploring potential mechanisms are more consistent with interfirm learning underlying the effect than alternative channels. Our findings shed light on the effects of competitor financial statement disclosure on private firms’ initial financing decisions and highlight how capital structure dependencies among peer firms arise.     

Is there a profit premium for market-oriented firms? A panel data investigation

ABSTRACT

This paper provides an empirical investigation of the impact of market orientation on firms' economic performance during the period 1998–2012 using a panel of Italian manufacturing firms. We introduce a dynamic concept of market orientation, in that we define a market-oriented firm as one that persistently undertakes product and marketing innovation, while at the same time introducing organizational changes and training efforts to manage and improve its knowledge assets over the long term. This notion of market orientation is therefore crucially related to the so-called dynamic capability approach. The related empirical model shows that being a market-oriented firm significantly affects profitability, in a framework in which this latter is simultaneously estimated with productivity, thus allowing for more precise estimates of the profit premium which is earned accordingly.     

The capital market spillover effect of product market advertising: Evidence from stock price synchronicity

We analyze whether product market advertising has a spillover effect on stock price synchronicity by transmitting firm-specific information to the capital market and attracting more investor attention. Using a sample of Chinese listed firms from 2009 to 2017, we find that firms with greater advertising expenditures have lower stock price synchronicity. The results are robust after we address endogeneity concerns. In accord with our hypothesis that product market advertising increases the amount of firm-level information capitalized into stock prices through the information channel, we find that the impact of advertising on synchronicity is more pronounced for firms with a higher degree of information asymmetry and firms in the consumer-product industry. Further tests show that product market advertising enhances the ability of current period returns to reflect future earnings, and thus rules out that the negative relationship between advertising and synchronicity is driven by noise trading. Our results imply that product market advertising plays an informative role and improves information efficiency in a capital market.     

Trade credit and supplier competition

This paper examines how competition among suppliers affects their willingness to provide trade credit financing. Trade credit extended by a supplier to a cash constrained retailer allows the latter to increase cash purchases from its other suppliers, leading to a free rider problem. A supplier that represents a smaller share of the retailer’s purchases internalizes a smaller part of the benefit from increased spending by the retailer and, as a result, extends less trade credit relative to its sales. In consequence, retailers with dispersed suppliers obtain less trade credit than those whose suppliers are more concentrated. The free rider problem is especially detrimental to a trade creditor when the free-riding suppliers are its product market competitors, leading to a negative relation between product substitutability among suppliers to a given retailer and trade credit that the former provide to the latter. We test the model using both simulated and real data. The estimated relations are consistent with the model’s predictions and are statistically and economically significant.