A re-examination of the q theory of investment using u.s. firm data

Investment models based on Tobin's q are theoretically appealing, but they have been an empirical disappointment when applied to aggregate time-series data. This paper explores two potential explanations for the poor empirical performance of q investment models, problems arising from aggregation and imperfect competition. The results suggest that aggregation is responsible for spurious evidence of dynamic misspecification and at least partially responsible for an upward bias in estimated adjustment costs. The evidence also suggests that imperfect competition in output markets may have an effect on the investment behaviour of some firms.     

Affective and Cognitive Components of Attitudes in High‐Stakes Decisions: An Application of the Theory of Planned Behavior to Hormone Replacement Therapy Use

Consumers are increasingly encouraged to take charge of high‐stakes decisions such as those regarding medical treatments. However, the important inputs into overall evaluations of risky and important behaviors, such as undergoing medical therapy, are not well understood. The purpose of this research is to study the interplay of cognitive and affective factors in determining consumer attitudes and intentions toward high‐stakes decision behaviors. This is done in the context of consumer choices regarding medical treatments, and specifically, the decision to use (or not to use) hormone replacement therapy (HRT). Overall, both affective and cognitive responses are found to be independent significant predictors of attitude toward HRT use. Moreover, the results support an extended version of the theory of planned behavior model that is useful in predicting consumer's intentions to engage in high‐stakes decision behaviors, such as using HRT. These findings have implications for the design of decision support systems and behavioral change interventions.     

Common Method Variance in Advertising Research: When to Be Concerned and How to Control for It

In this article we discuss and analyze the critical issues related to common method variance (CMV) that are particularly relevant to advertising research and recommend best practices for assessing the effects of CMV in this domain. Specifically, we cover the development of CMV as a domain-specific methodological concern and the underlying sources of CMV that are likely to operate in cross-sectional survey-based studies in the field of advertising. We discuss in detail the available procedural and statistical techniques that can be applied to control for and/or measure the effects of sources of CMV in a single study and across research domains. In addition, we provide a critical look at how these techniques have been employed in past research and make recommendations for future examinations of CMV in advertising research.     

The irreversibility premium

When investment is irreversible, theory suggests that firms will be “reluctant to invest.” This reluctance creates a wedge between the discount rate guiding investment decisions and the standard Jorgensonian user cost (adjusted for risk). We use the intertemporal tradeoff between benefits and costs of changing the capital stock to estimate this wedge, which we label the irreversibility premium. Estimates are based on panel data for the period 1980-2001. The large dataset allows us to estimate the effects of limited resale markets, low depreciation rates, high uncertainty, and negative industry-wide shocks on the irreversibility premium. Our estimates provide a readily interpretable measure of the importance of irreversibility and document that the irreversibility premium is both economically and statistically significant.     

R&D Activities In a Peripheral Region: an Empirical Study with Special Reference to the North East Region of the UK

This study examines the incidence of research and development (R&D) activities, type of R&D undertaken and the incidence of R&D co-operation among manufacturing firms located in a key urban area of the North East England, a peripheral region of the UK. We have found that over 62% of manufacturing firms in this urban growth area to be R&D active, suggesting that R&D active firms tend to be concentrated in urban area s in a peripheral region, as it is the case in the leading regions. However, the incidence of R&D co-operation was found to be relatively low among R&D active firms. It is also found that the key determinants of undertaking R&D to be the existence of a core competence/product and exporting activities. These findings might be of interest to policy makers promoting economic growth via firm’s R&D activities.     

Entry controls in taxi regulation: Implications of US and Canadian experience for taxi regulation and deregulation

This paper assesses the effects of entry regulation and deregulation on taxicab availability and service quality based on the experiences of 43 cities and counties in the United States and Canada. The analysis shows that entry controls have quite different impacts in the two basic markets served by taxicabs: the telephone order (dispatch) market and the cab stand/street hail market. Without entry controls, the cab stand and street hail market experiences an oversupply of cabs, leading to deterioration of vehicle and driver quality. Applied to the dispatch market, however, entry restrictions often lead to deficiencies in taxicab availability. The paper reviews the effectiveness of regulatory approaches for each market and for cities with substantial trip volumes in both markets. Approaches include two-tier systems, flexible forms of entry control, company-level entry qualifications, geographic restrictions and service requirements. These approaches and implications for regulation are discussed.     

Leadership Style: Its Impact on Cross-Functional Product Development

This article reports the results of a study in which cross-functional product development projects in six companies were analyzed. The study was conducted as part of an interdisciplinary research involving technological, organizational, and behavioral analysis. The article draws on an excerpt of the data collected on leadership styles among project managers as well as some data on organizational climate and team learning. Leadership style, especially the leaders' employee orientation, co-varied significantly with how members of the cross-functional teams perceived their work climate and possibilities for innovative learning. The results of the analyses point to the leader's behavior, rather than his power, as an important factor determining the work climate in successful cross-functional product development projects.     

Off site risk assessment and risk minimization guidelines

The du Pont Company has long acknowledged its responsibility for environmental and public safety. In 1938 an Executive Committee resolution cited environmental control as a subject of major concern, and in 1971 that committee called upon each department to determine that their products could be made, used, handled, and disposed of safely.