Consumer Brand Loyalty in the Chilean Wine Industry

Worldwide, the wine industry has become tremendously competitive, with new world wine countries, such as Chile, Australia, New Zealand, and South Africa becoming relevant players. Consumers are increasingly offered a broad range of wine brands in supermarkets, restaurants, and wine stores. Consequently, wine marketing managers are required to develop strategies for building consumer brand loyalty for their own wines. This study attempts to investigate this issue and tests a model of antecedents of wine brand loyalty with 300 consumers from Chile, a new world wine producer. Results are analyzed with structural equation modeling (SEM). Our results indicate that wine brand satisfaction has the strongest relationship with wine brand loyalty. Additionally, wine experience is positively related to brand trust and brand satisfaction.     

Board independence, firm performance and ownership concentration: Evidence from Chile

What determines the composition of companies' boards in the context of high ownership concentration? Are independent directors important as an internal governance mechanism in companies with high ownership concentration? Do markets favor companies whose controlling shareholders use voting rights to elect professional directors?Using a four-year, 160-company panel data, and controlling for endogeneity, this paper addresses these three related questions, finding that an increase in the proportion of outside directors affects company value. The paper also finds that companies that present more exacerbated agency conflicts tend to incorporate professional directors to the boards, in an effort to improve corporate governance and ameliorate the agency problem.     

The effect of religiosity on luxury goods: The case of Chilean youths

Religion has always rejected the concept of materialism and urged people to live in simplicity and moderation. Nonetheless, reality reveals a different phenomenon. Studies on religion and materialism have found inconsistent results. We examine the effect of religion on materialism and affective attitudes towards luxury goods and the mediating effect of materialism on affective attitude towards luxury goods. We propose the idea that many religious people reject the concept of materialism, but they consider luxury goods consumption compatible with their religious beliefs. 355 university students show that youth consumers with high intrinsic religiosity possess an affective attitude towards luxury goods. The results show that consumers perceived materialism and luxury goods as two separate constructs. Religious consumers reject the concept of materialism as an attachment to worldly possessions, but they maintain their emotional affection towards luxury goods. The results have several implications for both business and religious leaders. First, from a business perspective, there are no significant differences between religious and nonreligious youth consumers, especially in their acceptance of luxury goods. Simply put, religious youth consumers love God, but they also love Gucci (i.e., luxury goods). On the other hand, if religious leaders are teaching their congregations to reject materialism, they may need to shift the focus of their teaching from materialism to the role of luxury goods in their lives and how the purchase and ownership of luxury items may not reflect the true values of their beliefs.     

Comparing theories to explain e-commerce adoption

E-commerce is a strategy for rapid growth, especially by small and medium sized businesses (SMEs). However, the adoption rate of e-commerce by SMEs in Latin America is still undersized. The authors compare the theory of planned behavior (TPB) and the theory of reasoned action (TRA) using structural equation modeling to determine which is better at predicting e-commerce adoption intentions among 210 SME managers/owners in Chile. Contrary to previous research with American respondents, the study does not find significant differences between the two theories. Thus, academics should select the more parsimonious model (TRA) to study e-commerce adoption issues in developing countries.     

Defensive Strategies of Local Companies Against Foreign Multinationals: Evidence from Chilean Retailers

ABSTRACT

Many retailers have been expanding into foreign markets, although not all such attempts at internationalization have been successful. This study examines the actions taken by Chilean retailers that negatively affected the operations of Home Depot, Carrefour and J.C. Penney in Chile. The results show that the strategies employed by local companies have consisted in: (1) becoming informed about the company's strengths and weaknesses, while imitating its best practices; (2) deepening their own market know-how and hiring high-level executives to lead defensive strategies; (3) opening stores in strategic places in order to win advantages concerning location; and (4) investing in technology and the training of employees. The overall effect on the market has been one of concentration and consolidation of the retail industry.

RESUMEN. Muchos retailers se están expandiendo a mercados extranjeros, sin embargo no todos los intentos de internacionalización son exitosos. Este estudio examina las acciones desarrolladas por retailers chilenos que afectaron negativamente la operación en Chile de Home Depot, Carrefour, y J.C. Penney. Los resultados de esta investigación muestran que las estratégicas empleadas por las empresas locales consistieron en (1) informarse en forma anticipada las fortalezas y debilidades de la empresa extranjera e imitando sus mejores prácticas, (2) fortaleciendo su conocimiento del mercado y contratando ejecutivos fuertes para liderar la estrategia defensiva, (3) apertura de locales en ubicaciones estratégicas para bloquear ventajas de localización, y (4) inversión en tecnología y capitación a los empleados. Los efectos sobre el mercado total fue de mayor concentración y consolidación de la industria.

RESUMO. Muitos varejistas têm expandido seus negócios para mercados estrangeiros, embora nem todas estas tentativas de internacionalização tenham sido bem sucedidas. Este estudo examina as aç[otilde]es implementadas por varejistas chilenos, as quais afetaram negativamente as operaç[otilde]es da Home Depot, Carrefour e J.C. Penney no Chile. Os resultados mostram que as estratégias empregadas pelas companhias locais consistiram em: (1) informar-se sobre os pontos fortes e fracos da companhia, ao mesmo tempo em que replicavam suas melhores práticas; (2) aprofundar o conhecimento a respeito de seu próprio mercado e contratar executivos de alto nível para liderar estratégias defensivas; (3) promover a abertura de lojas em locais estratégicos com o objetivo de conquistar vantagens relativas à localização; e (4) investir em tecnologia e no treinamento de funcionários. O efeito global desses movimentos no mercado tem sido o de promover a concentração e a consolidação da indústria varejista.     

Challenges for the Chilean economy under cyclical shocks, 1999–2016

A brief summary of the evolution of economic policies and growth in Chile since 1973 is presented, distinguishing between four periods: 1973–89 with average growth of 2.9 percent, 1990–98 with 7.1 percent (notably above the 3.2 percent Latin American average), 1999–2013 with 3.9 percent, and 2014–16 with 1.9 percent, explaining the main forces underlying these sharp differences. Analysis focuses on the fiscal and external disequilibrium associated with the fiscal treatment of the copper price and the adoption of a free exchange rate since 1999. Subsequently, the focus is on the macroeconomic situation in 2013 and five sources of accumulated disequilibria that suggested a high probability of significant deceleration of the economy. The article ends with a discussion of the actual deceleration in more recent years, converging with the negative average outcome of the region, and concludes that worsening economic performance has been associated mainly with the shift from the coherent countercyclical policies of the 1990s to the procyclical opening of the capital account, liberalization of the exchange rate, and adoption of sharp inflation targeting overcoming other relevant macroeconomic targets since then.     

Radical Political Regimes in the Americas and MNC Responses

Abstract

This paper introduces a dynamic conceptual model to describe US multinational corporations' responses to radical political regime changes in contemporary Latin America. The model describes four stages in the MNC response process: (1) the nature of the radical revolution in the host nation; (2) the new economic paradigm created by the revolutionary government; (3) the adjustments and readjustments made by both parties (the state and MNC) within the newly defined rules; and (4) the end result or outcome of the re-positioning process. Moderating the impact of the creation of the new economic paradigm are the host nation's national history, the host nation's domestic actors, US hegemonic power, international actors and economic development models. Within this mix, both state and MNC power influence what each other wants and can get from the other. This leads to a “negotiated” outcome from whence the response from the MNC is made. The revolutionary regimes in Chile (1970-1973) and Nicaragua (1979-1990) are examined within the context of the proposed conceptual model.     

Market Orientation in the Chilean Small Business Context

Abstract

Market orientation has been considered a key factor in successful business operations across different markets. To test this assertion, the authors examine the influence of a firm's market orientation on small business performance in the Chilean retail environment. They go on to report empirical information about the characteristics of the market-oriented retailers in Chile. The Kohli, Jaworski, and Kumar (1993) MARKOR scale is used in the study to assess the market orientation in the context of a developing country environment. Data for the study were collected from small retailers in Chile through self-administered questionnaires using a drop-off/pick-up method. The results show a significant correlation between market orientation and small business performance. Path analyses found that the best structure among the Market Orientation dimensions is: Intelligence Generation→ Intelligence Dissemination → Responsiveness. Moreover, these performance measures differed significantly among the three different partitions obtained using a k-means cluster analysis. The findings indicate that the MARKOR scale is both valid and reliable in a diverse Chilean small business environment.     

Effective experimental controls for research in international accounting: Further thoughts

This paper responds to recent research by Ruland et al. [Ruland, W., Shon, J., Zhou, P., 2007. Effective controls for research in international accounting. Journal of Accounting and Public Policy, 26(1), 96–116.] that addresses the effectiveness of experimental controls for research in international accounting, with focus on Ndubizu and Sanchez [Ndubizu, G.A., Sanchez, M.H., 2006. The valuation properties of earnings and book value prepared under US GAAP in Chile and IAS in Peru. Journal of Accounting and Public Policy 25 (2)]. We attempt to remove some misconceptions about effective experimental controls that have surfaced in the debate. We argue that theory and refined proxies alleviate many of the control issues that have surfaced in the literature.     

Review Essay: Is a Chilean-Style Tax on Short-Term Capital Inflows Stabilizing?

Open Economies Review - In the wake of the 1997–1998 East Asian financial crisis, some economists recommended that affected countries adopt a Chilean-style tax on short-term capital inflows...