The relative influence of competitive intensity and business strategy on the relationship between financial leverage and performance

This study empirically investigates the effects of competitive intensity and business strategy on the relationship between financial leverage and the performance of firms. Based on a sample of US manufacturing firms, this study confirms the hypothesis that the cost of debt is higher for product differentiation firms than cost leadership firms. Furthermore, the results indicate that competitive intensity has a negative effect on the leverage-performance relationship, suggesting that competition acts as a substitute for debt in limiting manager's opportunistic behavior. These findings reinforce the need to consider moderating factors such as strategic choice and the environment in which a firm operates when investigating the effects of leverage on performance.     

The influence of accountability on overconfidence and resistance to change: A research framework and experimental evidence

This paper presents a research framework and demonstrates how commitment to a particular course of action might lead to information search that is biased in favour of the chosen alternative. The framework also incorporates accountability as a strategy for mitigating overconfidence and resistance to change.An experiment was conducted to test the predictions of the proposed framework. Results of the experiment indicate that commitment to a particular cost allocation system leads to increased desirability of the chosen system and decreased desirability of the rejected alternative. The results also show that managers who are committed to a particular cost allocation system become too conservative and overconfident in their preferred system, which leads to high resistance to change. These effects, however, were attenuated by making the managers accountable for the negative consequences of their decisions.     

Data sources for managerial economists

Most people think they know what market research is, and generally have a picture of a girl with a clip-board asking about voting intentions. In fact, the term ‘market research’ covers a widely varied family of activities, using different techniques to achieve different purposes. This paper describes the various combinations of research types into which a survey can fall (large sample/small sample, quantitative/qualitative, industrial/consumer, etc.) and discusses the strengths and weaknesses of the different methodologies. It then provides information about the size and structure of the market research industry in the United Kingdom.     

election economics

Economic management is crucial to winning elections, Robert Lind of UBS Phillips and Drew reviews the prospects and outlines possible strategies for victory.