Diffusion of a new product under network effects: the US DVD market

We formulate a model that captures the inter-dependence between hardware demand and software supply – indirect network effect – in the DVD industry. The identification of the network effect comes from the difference in software availability across two different formats: VHS and DVD. We find that a 1% increase in the number of DVD titles raises the demand for DVD players by 0.87%. Simultaneously, a 1% increase in video player ownership leads to a 0.14% increase in the variety of video titles. Our simulations show that hardware manufacturers might be able to internalize the network externality to increase total industry revenues.     

Exploring supportive and developmental career management through business strategies and coaching

The shift toward individualistic career management requires a supportive and developmental career approach. Using coaching practices as a manifestation of such an approach, this study reports on coaching and other career practices that are part of supportive and developmental career management in a Belgium sample (n = 154). Three other types of career management were identified as well. Supportive and developmental career management was most present in organizations that had a past or current prospector strategy, and was the least present in past or current defenders. The type of business strategy organizations indicated to pursue in the future did not have an influence on the type of career management they currently had. © 2012 Wiley Periodicals, Inc.     

TOTAL FACTOR PRODUCTIVITY ESTIMATION: A PRACTICAL REVIEW

Abstract This paper aims to provide empirical researchers with an overview of the methodological issues that arise when estimating total factor productivity at the establishment level, as well as of the existing (parametric and semi‐parametric) techniques designed to overcome them. Apart from the well‐known simultaneity and selection bias, attention is given to methodological issues that have emerged more recently and that are related to the use of deflated values of inputs and outputs (as opposed to quantities) in estimating productivity at the firm level, as well as to the endogeneity of product choice. In discussing the estimation procedures applied in the literature, attention is given to recent developments in the field. Using data on single‐product firms active in the Belgian food and beverages sector, the most commonly applied estimators are illustrated, allowing for comparison of the obtained productivity estimates by way of a simple evaluation exercise.     

Globalization drives strategic product switching

Using firm-level panel data for Estonia, we analyse the impact of international competition on firm dynamics, considering both firm closedown and product switches. We contribute to the literature in two important ways: first, this is the first paper to study the determinants of exit and product switching in an emerging market; and second, we consider explicitly the role of export opportunities. Our results indicate that globalization does not affect firm exit significantly but it is an important factor explaining why firms choose a different core product. Previous studies on industrial countries have shown that product switching has been a defensive strategy against low-cost imports. In contrast, our results suggest that Estonian firms change their core products as an offensive strategy to take advantage of the export opportunities created by a globalized economy.     

Footloose Multinationals in Belgium?

Using firm level panel data for the years 1996–2001, covering all sectors of the economy, the impact of multinational ownership on the exit decisions of firms located in Belgium is estimated. In this analysis, I clearly distinguish for nationality of ownership, allowing for differences between firms that are foreign-owned and multinationals rooted in the domestic economy. Controlling for various firm- and industry-specific factors, it is found that while foreign multinationals are more likely to shut down operations compared to national firms in both manufacturing and service sectors, domestic multinationals only exhibit significantly higher exit rates in the manufacturing industries. The analysis has important policy implications, especially in terms of the desirability of the large impact of multinational firms on employment and output generation in Belgium. JEL no. D21, F23, L20, L25     

The impact of regulatory review time on incremental and radical innovation: evidence from the high-risk medical device market

Journal of Regulatory Economics - We theoretically and empirically study the effect of variation in regulatory review time on firms’ choices between radical and incremental innovations. We...     

Book review

Many households include a family member with a disability. For these households, who consumes together, where they consume and when the consumption occurs often represent a complicated, nuanced set of tradeoffs. Based on in-depth interviews with families that include a child with a disability, we examine how a family makes an inclusion/exclusion decision and how the decision factors into the ongoing project of creating the family that is uniquely theirs. The analysis suggests that the decision-making is closely tied to the nature of the child's disability and that the type of disability is central to the family's narrative regarding its decision. Also, an important driver of the family's inclusion/exclusion decision is the process of self-stigmatization by non-disabled family members. The analysis shows that the implications of who in the family is included in the consumption, and the experience the family has as a result of the inclusion/exclusion decision reflect and reinforce the collective family's identity.     

Last-Minute Bidding in Sequential Auctions with Unobserved, Stochastic Entry

Using a dataset of calculator auctions on eBay, we first show that last-minute bidding is not merely the result of bidders’ going to the next-to-close auction. Instead, bidding is concentrated at the end of the period in which the auction is the next to close, suggesting the existence of strategic last-minute bidding. Then, we model repeated, ascending price auctions for homogeneous goods with unobserved, stochastic entry. We show that the dynamic game has a pure-strategy symmetric equilibrium in which entrants always reveal themselves by bidding in the auction in which they arrive, and bidding occurs at the last minute.