An empirical analysis of strategy types

Using the PIMS SPIYR data base, which pools cross-section and timeseries data, an empirical study to identify business strategy types was undertaken. Using a two-stage methodological approach combining principal component and cluster analysis on both a consumer products and an industrial products data base, two sets of strategy typologies were identified. Six strategy types were identified for consumer products: (1) harvest, (2) builder, (3) cashout, (4) niche or specialization, (5) climber, and (6) continuity. For industrial products, four strategy types were identified: (1) low commitment, (2) growth, (3) maintenance, and (4) niche or specialization. A discussion of the characteristics of each strategy type is offered.     

Non-Parametric Regression Models of Deviations from Othogonality in the Expectations Theory of the Term Structure

Regression tests of the expectations theory of the term structure typically reject the null hypothesis of orthogonality between implied forecast errors and the yield spreads. In the statistical literature on the term structure, these rejections are sometimes attributed to time-varying liquidity premia, and Engle et al . (1987) suggest that the ARCH-M model of time-variation in the liquidity premium may be sufficient to account for rejections of the expectations theory. We use non-parametric (kernel) regression to explore the regression test results on a number of data sets, and find some evidence of a persistent deviation from orthogonality for large absolute values of the spread. Incorporating ARCH-in-mean into models of the term premium indicates that this specification does explain significant time variation in liquidity premia, but the effect does not apepar to be sufficient to account for all of the deviations from orthogonality of forecast errors and spreads.     

CARE/CEASA Roundtable on Managing Uncertainty and Risk

Two distinguished Morgan Stanley “alumni” discuss how their management of risk and uncertainty has not only preserved but increased the profitability of their businesses. In both cases—one involving a commodities trading operation and the other a long‐short hedge fund—the key has been to find cost‐effective ways to “cut off the left tails” of the distribution by avoiding naked long or short positions and creating option‐like payoffs with limited downside. In the case of the hedge fund, the combination of longs and shorts with the use of other risk‐reducing strategies has enabled the fund's managers to produce twice the market's returns with only half the volatility (and only one losing year) during the 18‐year life of the fund. In the case of the commodities trading operation, the strategy is described as combining ownership of physical assets with the use of option pricing models to create what amount to “long gamma positions in the asset” that “produce payoffs regardless of whether the asset goes up or down in value.”     

Uneven Development and the Destabilization of the North: a Keynesian view

Can Keynesian theory illuminate the questions of rising North–South trade in manufacturing, industrial relocation from North to South, rising wage inequality and unemployment in the North, and the consequent breakdown of Northern labour movements as effective political forces? I think so. Indeed I will argue here that the main relevance of Keynesian theory today may lie in its capacity to capture the dynamics of the North–South relationship, and especially the influence of Northern macroeconomic policy and Northern business cycles on industrial trading patters.     

SME Competitive Strategy and Location Behavior: An Exploratory Study of High-Technology Manufacturing

Forty-four Scottish small and medium-sized high-technology manufacturing firms were surveyed regarding their technology strategies and the impact of regional- and site-specific infrastructure requirements on their location behavior. An empirically derived typology of technology content for high-technology firms was developed via cluster analysis and utilized, together with selected technology and manufacturing strategy variables, to investigate whether significant linkages existed between these variables and firms' related location decisions. Results suggest that location decisions are directly correlated to a firm's competitive strategy and that they should actually be considered a dynamic dimension of strategy rather than a static one-time choice.