booksite.elsevier.com€¦ · Web viewIn this empirical study, the price elasticity of the demand for telecommunication between Sweden and three destination countries, Germany (FRG),

LiangWebsite Content

Chapter 1: MARKETING1.1 Introduction1.2 Market Segmentation

Modeling Coexisting Business Scenarios with Time-Series Panel Data: A Dynamics-based Segmentation ApproachInternational Journal of Research in Marketing, Volume 29, Issue 2, June 2012, Pages 134–147Catarina Sismeiro, Natalie Mizik, Randolph E. Bucklin

http://www.sciencedirect.com/science/article/pii/S0167811612000080?v=s5

AbstractAt a given point in time, individual consumers may be in different stages of the product adoption or consumption cycle. As a result, different types of behavioral patterns may coexist within a single product market. Existing segmentation approaches typically do not address long-term dynamics in customer response and do not adequately capture this phenomenon. We develop an approach for modeling the coexistence of multiple dynamic behavioral patterns (business scenarios) within a single product market. We apply this approach to physician panel data on drug prescriptions and direct-to-physician promotions. We find markedly different responses across physician segments. For firms that track customer-level marketing activity and sales over time, market segmentation based on dynamic scenarios can provide a new tool for efficient targeting. The proposed approach is straightforward to implement and is scalable to very large samples and continuous testing.

Keywords Sales Force; Segmentation; Marketing-Mix Effectiveness; Econometric Methods; Time-series Modeling

The effect of the marketing–R&D interface on new product performance: The critical role of resources and scopeInternational Journal of Research in Marketing, Volume 25, Issue 1, March 2008, Pages 56–68Mark A.A.M. Leenders, Berend Wierenga

http://www.sciencedirect.com/science/article/pii/S0167811607000705

Abstract


http://www.sciencedirect.com/science/journal/01678116






Although the integration of marketing with R&D is widely recognized as a critical factor for a new product's success, this study shows that not all companies benefit equally from more integration. Using data from the worldwide pharmaceutical industry, the authors show that integration is particularly effective in conjunction with high levels of new product development resources. In addition, the effect of the interaction between integration and new product development resources is stronger for companies with a narrow strategic scope. So, although broadly focused companies often have an advantage with respect to innovation because they can more easily leverage resources to different markets, our results indicate that narrowly focused companies can compensate for this by developing and integrating their marketing–R&D interface.Keywords

R&D–marketing integration; NPD resources; Strategic scope; Performance

Market Segmentation Strategy, Competitive Advantage, and Public Policy: Grounding Segmentation Strategy in Resource-Advantage Theory Australasian Marketing Journal (AMJ), Volume 12, Issue 1, 2004, Pages 7-25Shelby D. Hunt, Dennis B. Arnett

http://www.sciencedirect.com/science/article/pii/S144135820470083X

AbstractMarket segmentation is one of the most widely accepted concepts in marketing. Its fundamental thesis is that, to achieve competitive advantage and, thereby, superior financial performance, firms should (1) identify segments of demand, (2) target specific segments, and (3) develop specific marketing “mixes” for each targeted market segment. However, understanding the competitive circumstance in which segmentation strategy will work requires an understanding of the process of competition. That is, segmentation must be grounded in competition theory. This article examines the nature of market segmentation strategy and identifies the characteristics that a theory of competition must possess if it is to provide a theoretical foundation for it. The criteria are argued to be that a grounding theory must (1) provide for the existence of demand heterogeneity, (2) justify why firms would choose to produce and market a variety of market offerings, and (3) explicate a mechanism by which a market segmentation strategy can lead to superior financial performance. This article argues that resource-advantage theory, a process theory of competition, meets these criteria and, therefore, provides a theoretical foundation for market segmentation strategy. Furthermore, it argues that the use of market segmentation promotes public welfare by prompting the innovations that foster firm-level, industry-level, and societal-level productivity.

KeywordsSegmentation; Competitive advantages; Resource-Advantage theory


1.2.1 Economic UtilityWhy we buy what we buy: A theory of consumption values Journal of Business Research, Volume 22, Issue 2, March 1991, Pages 159-170Jagdish N. Sheth, Bruce I. Newman, Barbara L. Gross

http://www.sciencedirect.com/science/article/pii/0148296391900508

AbstractThis article presents a theory developed to explain why consumers make the choices they do. The theory identifies five consumption values influencing consumer choice behavior. Three representative applications of the theory are illustrated pertaining to choices involving cigarette smoking. The illustrations examined include the choice to buy or not buy (or to use or not use) cigarettes, the choice of one type of cigarette over another, and the choice of one cigarette brand over another. Results of the operationalization of the theory suggest that it may be used to predict consumption behavior, as well as to describe and explain it

1.3 The Marketing Mix Marketing mix response to entry in segmented markets International Journal of Research in Marketing, Volume 18, Issues 1–2, June 2001, Pages 53-66Thomas S Gruca, D Sudharshan, K.Ravi Kumar


AbstractWe extend the analysis of response to entry to a more realistic situation where discrete market segments allocate their demand over a set of available brands in the market. We find that the direction and magnitude of the optimal changes in price and marketing spending depend on the location of the incumbent relative to the entrant and the competitive interdependence of the incumbents as determined by the degree of overlap among the segment's choice sets.Keywords

Response to entry; Segmented markets; Demand

The 4S Web-Marketing Mix modelElectronic Commerce Research and Applications, Volume 1, Issue 1, Spring 2002, Pages 57-76Efthymios Constantinides





AbstractThis paper reviews the criticism on the 4Ps Marketing Mix framework, the most popular tool of traditional marketing management, and categorizes the main objections of using the model as the foundation of physical marketing. It argues that applying the traditional approach, based on the 4Ps paradigm, is also a poor choice in the case of virtual marketing and identifies two main limitations of the framework in online environments: the drastically diminished role of the Ps and the lack of any strategic elements in the model. Next to identifying the critical factors of the Web marketing, the paper argues that the basis for successful E-Commerce is the full integration of the virtual activities into the company’s physical strategy, marketing plan and organisational processes. The four S elements of the Web-Marketing Mix framework present a sound and functional conceptual basis for designing, developing and commercialising Business-to-Consumer online projects. The model was originally developed for educational purposes and has been tested and refined by means of field projects; two of them are presented as case studies in the paper.

KeywordsE-Commerce strategy; E-Commerce marketing; Web Marketing Mix; 4S model

The return of the fifth marketing mix P International Journal of Hospitality Management, Volume 30, Issue 4, December 2011, Pages 763-764Abraham Pizam


Since McCarthy (1964) introduced the concept of the marketing mix and its four P's (Product, Price, Promotion and Place), the notion, existence and usefulness of the above four elements have become an important bedrock in the modern marketing theory. Despite this, a growing number of theorists have questioned the universality of these four elements and claimed that the four P's were product oriented and thus not applicable to other settings such as consumer marketing, industrial marketing, relationship marketing, retail marketing and service marketing. Therefore they proposed various modifications to the mix by adding, eliminating or substituting some of the elements (Constantinides, 2006).

Managing the Marketing MixEyecare Business, 2001, Pages 123-164Gary L. Moss, Peter G. Shaw-McMinn

http://www.sciencedirect.com/science/article/pii/B9780750672382500106


http://www.sciencedirect.com/science/article/pii/S0278431911000818#bib0015




The contemporary value chain concept in eyecare has its foundation in the principles described by Michael Porter in Competitive Advantage, his classic text on business strategy.1 The value chain consists of the systems and operations that a practice uses todeliver premium value to its customers. The goal is to offer a level of performance that ultimately translates into superior revenues and profit. The value chain process starts when the ECP acquires the resources necessary to deliver what is promised (inbound logistics). Next, the ECP develops specific “operations” (practice work processes) that will deliver the products and services to patients (outbound logistics) in a cost-saving manner.1 These two steps are combined with the marketing and sales function to make potential patients aware of the superior value the practice offers. The final result is a patient perception that focuses on high-quality service to “keep them happy.” The value in this model is either the worth of the services patients purchase or the price they are willing to pay for what they receive.1 The implication for eyecare is that, to earn patient loyalty, the ECP must provide value above and beyond what patients expect. This chapter demonstrates how the marketing function enhances the value chain within the eyecare setting and introduces the basic tools available to assist the ECP in marketing endeavors.

Chapter 2: ECONOMICS2.1 Introduction2.2 Markets2.2.1 Supply and Demand

Changing patterns in global lead supply and demandJournal of Power Sources, Volume 116, Issues 1–2, 1 July 2003, Pages 23-31H. Roberts


AbstractThe past decade has seen some very significant changes in the supply and the demand for lead. One of the most obvious developments is the emergence of China—both as the world’s largest producer of primary lead and as a very significant consumer. Perhaps less obvious have been the increasing role of secondary lead in meeting demand for refined metal and the rapid growth in demand for industrial batteries, which have helped to sustain an annual average growth rate in Western World consumption of 3.4% between 1993 and 2000. Patchy knowledge about the lead industry in China has made it difficult to anticipate developments there and has created uncertainty in the global market. This uncertainty, and lead’s poor environmental image, largely undeserved as it may be today, has meant few companies outside the lead business want to be seen participating in it. This is just one factor accounting for the very limited increase in lead mine production for the foreseeable future. With around 75% of lead now being used in batteries and a very high global scrap recycling rate, it is probable that most, if not all, growth in lead demand can be met without an overall increase in mine production. The challenge for the lead industry will be to ensure that sufficient recycling capacity is in place in the right parts of the world to process an increasing quantity of battery and other lead-bearing scrap. Huge investment in the world’s telecommunications infrastructure and IT networks


in the second half of the 1990s created a major market for industrial lead-acid batteries. With the collapse of the market for telecommunications equipment in 2001, lead consumption has fallen sharply and has revealed the extent to which demand growth in recent years has been dependent on this sector.Keywords

Lead supply and demand; Primary; Recycling; Secondary; Lead-acid batteries

Hepatitis C vaccine: supply and demandThe Lancet Infectious Diseases, Volume 8, Issue 6, June 2008, Pages 379-386G Thomas Strickland, Samer S El-Kamary, Paul Klenerman, Alfredo Nicosia


SummaryDespite difficulties associated with extreme variability and mutability of hepatitis C virus (HCV), several vaccines that prevent initial infection or viral persistence, or that clear viraemia in individuals with chronic HCV infections, are currently in development. At least one vaccine that may prevent chronic persistent infections will soon be available for testing. We review the widespread importance of HCV infection and disease, the immune response to HCV and correlates of protection, prevention strategies and vaccine candidates, and groups that will need the vaccine and provide suitable populations for assessing vaccine safety and efficacy. The evaluation of prophylactic vaccines is particularly problematic since distribution must focus upon individuals at high risk of exposure—for example, intravenous drug users and health-care providers in areas with high HCV prevalence. Although there is a huge need for therapeutic vaccines, further immunological hurdles must be cleared before one becomes available

A supply and demand based volatility model for energy pricesEnergy Economics, Volume 31, Issue 5, September 2009, Pages 736-747Takashi Kanamura


AbstractThis paper proposes a new volatility model for energy prices using the supply–demand relationship, which we call a supply and demand based volatility model. We show that the supply curve shape in the model determines the characteristics of the volatility in energy prices. It is found that the inverse Box–Cox transformation supply curve reflecting energy markets causes the inverse leverage effect, i.e., positive correlation between energy prices and volatility. The model is also used to show that an existing (G)ARCH-M model has the foundations on the supply–demand relationship.



Additionally, we conduct the empirical studies analyzing the volatility in the U.S. natural gas prices.Keywords

Energy prices; Volatility; Supply curve; Inverse leverage effect; Volatility-in-mean effect

2.2.2 ElasticityDemand for international telecommunication time-varying price elasticityJournal of Econometrics, Volume 70, Issue 1, January 1996, Pages 243–260Peter Hackl, Anders H. Westlund


AbstractIn this empirical study, the price elasticity of the demand for telecommunication between Sweden and three destination countries, Germany (FRG), United Kingdom, and USA, was investigated. Within the constant parameter framework the structural relations identified to explain the telecommunication demand are similar for the three countries. The short- and long-term price elasticities of the demand derived from the models are in the range that is reported in other empirical studies. However, recursive estimation and the analysis of recursive residuals support theoretical assumptions of time variability of price elasticity. Kalman filtering in various versions, differing in the way of determining the hyperparameters, as well as moving local regression analysis are applied to estimate the trajectories of the price elasticity.Keywords

Telecommunication demand; Price elasticity; Structural change; Kalman filtering; Moving local regression

Simple structural econometrics of price elasticityEconomics Letters, Volume 86, Issue 1, January 2005, Pages 1-6Catherine Cazals, Frédérique Fève, Patrick Fève, Jean-Pierre Florens


AbstractThis paper delivers a methodology for the identification of the price elasticity of demand. The approach relies on a structural model of consumer behavior wherein demand and expenditure depend on a heterogeneity factor. We show that the structural parameters are




not identified in the one-period case. Conversely, in a two-period case, the structural parameters, and thus the price elasticity of demand, are identified for each period.Keywords

Structural model; Heterogeneity factor; Price elasticity

“Does subsidy work? Price elasticity of demand for influenza vaccination among the elderly in Japan Health Policy, Volume 91, Issue 3, August 2009, Pages 269-276Masahide Kondo, Shu-ling Hoshi, Ichiro Okubo


AbstractObjectivesSubsidy for influenza vaccination is often provided to the elderly in order to encourage them to receive a flu shot in developed countries. However, its effect on uptake rate, i.e., price elasticity of demand, has not been well studied.

MethodsJapan's decentralised vaccination programme allows observation of various pairs in price and uptake rate of flu shots among the elderly by the municipality from 2001/2002 to 2004/2005 season. We combine our sample survey data (n = 281), which monitor price, subsidy and uptake rate, with published data on local characteristics in order to estimate price elasticity of demand with panel model.

ResultsWe find price elasticity of demand for influenza vaccine: nearly zero in nationwide, nearly zero in urban area, and −1.07 in rural area.ConclusionsThe results question the rationale for subsidy, especially in urban area. There are cases where maintaining or increasing the level of subsidy is not an efficient allocation of finite health care resources. When organising a vaccination programme, health manager should be careful about the balance between subsidy and other efforts in order to encourage the shots with price elasticity in mind.

KeywordsDemand; Price elasticity; Elderly; Influenza; Subsidy; Vaccination

Price and income elasticities of demand for air transportation: Empirical evidence from US airfreight industryJournal of Air Transport Management, Pages 18-19Junwook Chi, Jungho




http://www.sciencedirect.com/science/article/pii/S0969699711000950Baek

AbstractThis paper examines the demand for airfreight in the US as a function of real income and the price of airfreight between 1996 and 2010. Results show that a unique long-run equilibrium relationship exists between the volume of the US airfreight and the selected variables. The estimated long-run price and income elasticities indicate that US airfreight industry is price and income elastic. It is also found that income is a more powerful determinant of the long-run behavior of US airfreight industry than airfreight priceHighlights► We examine the demand for airfreight in the US as a function of real income and the price of airfreight. ► A unique long-run equilibrium relationship exists between the volume of the US airfreight and the selected variables. ► US income is found to be a more powerful determinant of the long-run behavior of the airfreight industry.Keywords

Airfreight transportation; Airfreight demand analysis

2.3 Gross Domestic ProductRenewable energy: An efficient mechanism to improve GDPEnergy Policy, Volume 36, Issue 8, August 2008, Pages 3045-3052Taichen Chien, Jin-Li Hu


AbstractThis article analyzes the effects of renewable energy on GDP for 116 economies in 2003 through Structural Equation Modeling (SEM) approach. In order to decipher the mechanism of how the use of renewables improves macroeconomic efficiency, we decompose GDP by the “expenditure approach”. Although previous theory predicts positive effects of renewables on capital formation and trade balance, the SEM results show that renewables have a significant positive influence on capital formation only. The result that renewables do not have a significant impact on trade balance implies that renewables do not have an import substitution effect. Thus, we confirm the positive relationship between renewable energy and GDP through the path of increasing capital formation, but not for the path of increasing trade balance.Keywords

Structural Equation Modeling (SEM); Technical efficiency; Renewable energy

Real GDP, real domestic income, and terms-of-trade changesJournal of International Economics, Volume 62, Issue 1, January 2004, Pages 83–106

http://www.sciencedirect.com/science/journal/00221996




http://www.sciencedirect.com/science/article/pii/S0969699711000950Baek

Ulrich Kohli


AbstractReal GDP tends to underestimate the increase in real domestic income and welfare when the terms of trade improve. An improvement in the terms of trade is similar to a technological progress, but when computing real GDP, the national accounts treat the former as a price phenomenon and the latter as a real event. Calculations for 26 countries show that the divergence can add up to more than 10% of GDP in less than two decades. Our analysis has a solid theoretical foundation, being based on the GNP/GDP function approach to modeling the production sector of an open economy.

KeywordsReal GDP; GDP deflator; Terms of trade; Real income; Economic growth

The GDP paradox Journal of Economic Psychology, Volume 30, Issue 2, April 2009, Pages 117-135Jeroen C.J.M. van den Bergh


AbstractDespite all theoretically and empirically motivated criticism of GDP as a social welfare and progress indicator, its role in economics, public policy, politics and society continues to be influential. To resolve this paradox, one has to recognize that many economists accept the criticism of the GDP indicator but deny its relevance. This paper evaluates the reasons for denial. This entails five steps: (1) a brief review is offered of the extensive literature showing that GDP per capita (growth) is far from a robust indicator of social welfare (progress); (2) the influence of GDP information on economic decisions by firms, consumers, investors and governments is examined; (3) behavioural explanations for a widespread belief in the relevance of GDP are discussed; (4) the customary arguments in favour of the GDP indicator are analysed; and (5) proposed alternatives to GDP are evaluated. The paper ends with outlining the implications of giving less attention to GDP information in policy and politics. It is argued that removal of the information failure which GDP represents, in monitoring economic progress and guiding public policy, will lead to decisions and developments being more in line with improving human well-being. Moreover, ignoring GDP information is consistent with a perfectly neutral stance regarding economic (GDP) growth. Indeed, an unconditional anti- or pro-growth imperative acts as an unnecessary constraint on our search for human progress.

KeywordsBounded rationality; Information failure; Lock-in; Policy indicators; Economic impact of GDP information



What does the yield curve tell us about GDP growth? Journal of Econometrics, Volume 131, Issues 1–2, March–April 2006, Pages 359-403Andrew Ang, Monika Piazzesi, Min Wei


AbstractA lot, including a few things you may not expect. Previous studies find that the term spread forecasts GDP but these regressions are unconstrained and do not model regressor endogeneity. We build a dynamic model for GDP growth and yields that completely characterizes expectations of GDP. The model does not permit arbitrage. Contrary to previous findings, we predict that the short rate has more predictive power than any term spread. We confirm this finding by forecasting GDP out-of-sample. The model also recommends the use of lagged GDP and the longest maturity yield to measure slope. Greater efficiency enables the yield-curve model to produce superior out-of-sample GDP forecasts than unconstrained OLS regressions at all horizons.

KeywordsTerm structure; Forecasting; Financial markets and the macroeconomy; Monetary policy

Estimation of direct and indirect impact of oil price on growthEconomics Letters, Volume 73, Issue 2, November 2001, Pages 147-153Tilak Abeysinghe


AbstractUsing a new methodology, this paper measures the direct and indirect effects of oil prices on GDP growth of 12 economies. Because of the indirect effect, which is transmitted through a trade matrix, even the net oil exporters like Indonesia and Malaysia cannot escape the negative influence of high oil prices.

KeywordsVARX model; Trade matrix; Direct and indirect effects

2.4 InflationMemories of high inflationEuropean Journal of Political Economy, Volume 28, Issue 2, June 2012, Pages 174-191Michael Ehrmann, Panagiota Tzamourani


Abstract





Inflation has been well contained over the last decades in most industrialized countries. This implies, however, that memories of high inflation are likely to fade, because over time larger parts of the population have never experienced high inflation, whereas those who have might forget. This paper tests whether memories of high inflation affect agents' preferences about the importance attached to price stability, using a large database covering over 50,000 survey responses from 23 countries over the years 1981–2000. It finds that memories of hyperinflation are there to last, whereas those of less drastic inflation experiences tend to erode after around 10 years. The recent decline in the importance attached to price stability does therefore most likely reflect mitigated inflation concerns in an environment of low and stable inflation, but also the consequences of fading memories of high inflation. The longer central banks have successfully delivered price stability, the more important it is for them to engage in a pro-active communication, especially with the younger generations, about the merits of low and stable inflation.

Highlights► Having experienced high inflation affects agents' inflation aversion. ► Memories of hyperinflation have a lasting effect on inflation aversion. ► Whereas memories of less drastic inflation erode after around 10 years. ► With low inflation over the last decades, inflation aversion might thus decline. ► This makes central bank communication about merits of price stability essential.

KeywordsInflation aversion; Inflation memories; Hyperinflation; World Values Survey

Why inflation targeting central banks seem to follow a standard Taylor ruleEconomics Letters, Volume 115, Issue 1, April 2012, Pages 28-30Stefan Kühn, Joan Muysken


AbstractCentral banks only caring about inflation stability seem to follow a standard Taylor rule. The alleged reaction to the output gap could be a reaction of the nominal interest rate to variations in the natural real rate of interest.

Highlights► The output gap is relevant in the Taylor rule even for inflation targeting central banks. ► The interest rate rule should use the natural real interest rate (NRRI) and natural output. ► We establish a theoretical link between the natural output and NRRI. ► This link can cause weight on the output gap in regression when NRRI is not known.

KeywordsTaylor rule; New Keynesian; Endogenous growth

Jointly evaluating the Federal Reserve’s forecasts of GDP growth and inflation


International Journal of Forecasting, Volume 28, Issue 2, April–June 2012, Pages 309-314Tara M. Sinclair, Edward N. Gamber, Herman Stekler, Elizabeth Reid


AbstractIn this paper we jointly evaluate the Federal Reserve staff forecasts of U.S. real output growth and the inflation rate, assuming that the forecasts are to be used as inputs for the Taylor rule. Our simple methodology generates “policy forecast errors” which have a direct interpretation for the impact of forecast errors on the target interest rate given by the Taylor rule. Without interest rate smoothing, we find that, on average, the Taylor rule target interest rate would have been approximately a full percentage point away from the intended target because of errors in forecasting output growth and inflation. Our results are robust to changes in the forecast horizon and to changes in the weights on the variables in the policy rule.

KeywordsMultivariate forecasts; Taylor rule; Monetary policy; Loss function; Policy forecast errors; Greenbook

Are the Fed’s inflation forecasts still superior to the private sector’s? Journal of Macroeconomics, Volume 31, Issue 2, June 2009, Pages 240-251Edward N. Gamber, Julie K. Smith


AbstractWe examine the relative improvement in forecasting accuracy of the Federal Reserve (Greenbook forecasts) and private-sector forecasts (the Survey of Professional Forecasters and Blue Chip Economic Indicators)for inflation. Previous research by Romer and Romer [Romer, Christina, David, Romer, 2000. Federal reserve information and the behavior of interest rates. American Economic Review 90, 429–457], and Sims [Sims, Christopher, 2002. The role of models and probabilities in the monetary policy process. Brookings Papers on Economic Activity 2, 1–62] shows that the Fed is more accurate than the private sector at forecasting inflation. In a separate line of research, Atkeson and Ohanian [Andrew, Atkeson, Ohanian, Lee E., 2001. Are Phillips curves useful for forecasting inflation? Federal Reserve Bank of Minneapolis Quarterly Review 25, 2–11] and Stock and Watson [Stock, James, Watson, Mark, 2007. Why has U.S. inflation become harder to forecast? Journal of Money, Credit and Banking 39] document changes in the forecastability of inflation since the Great Moderation. These works suggest that the reduced inflation variability associated with the Great Moderation was mostly due to a decline in the variability of the predictable component inflation. We hypothesize that the decline in the variability of the predictable component of inflation has evened the playing field between the Fed and the private sector and therefore led to a



narrowing, if not disappearance, of the Fed’s relative forecasting advantage. We find that the Fed’s forecast errors remain significantly smaller than the private sector’s but the gap has narrowed considerable since the mid-1980s, especially after 1994.

KeywordsForecasting inflation; Survey of Professional Forecasters; Blue Chip forecasts; Greenbook forecasts; Naïve forecasts

2.5 Exchange Rates2.5.1 Measuring Exchange RatesThe high-frequency response of exchange rates to monetary policy actions and statementsJournal of Banking & Finance, Volume 35, Issue 2, February 2011, Pages 478-489Carlo Rosa


AbstractThis paper investigates the impact of US monetary policy on the level and volatility of exchange rates using an event study with intraday data for five currencies (the US dollar exchange rate versus the euro, the Canadian dollar, the British pound, the Swiss franc, and the Japanese yen). I construct two indicators of news about monetary policy stemming separately from policy decisions and from balance of risk statements. Estimation results show that both policy decisions and communication have economically large and highly significant effects on the exchange rates, with the surprise component of statements accounting for most of the explainable variation in exchange rate returns in response to monetary policy. This paper also shows that exchange rates tend to absorb FOMC monetary surprises within 30–40 min from the announcement release.

KeywordsHigh-frequency exchange rates; US Federal Reserve; Central bank communication; Monetary policy shocks; News shocks

Elections, exchange rates and reform in Latin AmericaJournal of Development Economics, Volume 92, Issue 2, July 2010, Pages 166-174Rodolfo Cermeño, Robin Grier, Kevin Grier


AbstractIn this paper, we study the link between real exchange rate (RER) depreciation and elections in Latin America. Our contribution is threefold. First, we employ a statistical model that takes into account the pervasive conditional heteroskedasticity found in financial data and includes a wide range of macroeconomic variables as regressors. Second, we test whether the wave of central bank reform that swept the region has had



any effect on the existence or strength of the electoral cycle in exchange rates. Third, we test an additional hypothesis, namely, that financial liberalization may also be an important variable explaining changes in electoral effects on the real exchange rate. In a panel of 9 Latin American countries with available macroeconomic data and a history of exogenous election dates, we confirm the previous findings that real depreciation intensifies after elections even when modeling the significant conditional heteroskedasticity in these data. We also show, for the first time in the literature, that post-election exchange rates are significantly less predictable. We go on to test whether central bank reform has influenced the way in which elections affect the RER in Latin America. If reform has been effective at reducing political manipulation of the exchange rate, then any relationship we see between elections and the RER before central bank reform should be mitigated in the post-reform era. We find that the relationship disappears after reform and that post-reform real exchange rates are also significantly less volatile. Finally, we show that financial liberalization seems to have a stronger effect on the conditional variance of the RER than does central bank reform, but reform has a stronger impact on the conditional mean.

KeywordsLatin America; Elections; Exchange rates; Central Bank Reform; Conditional Heteroskedasticity; Financial liberalization

Asset prices, exchange rates and the current account European Economic Review, Volume 54, Issue 5, July 2010, Pages 643-658Marcel Fratzscher, Luciana Juvenal, Lucio Sarno


AbstractThis paper analyses the role of asset prices in comparison to other factors, in particular exchange rates, as a driver of the US trade balance. It employs a Bayesian structural VAR model that requires imposing only a minimum of economically meaningful sign restrictions. We find that equity market shocks and housing price shocks have been major determinants of the US current account in the past, accounting for up to 30% of the movements of the US trade balance at a horizon of 20 quarters. By contrast, shocks to the real exchange rate have been less relevant, explaining about 9% and exerting a more temporary effect on the US trade balance. Our findings suggest that large exchange rate movements may not necessarily be the key element of an adjustment of today's large current account imbalances, and that in particular relative global asset price changes could be a potent source of adjustment.

KeywordsCurrent account; Global imbalances; Exchange rates; Bayesian VAR


How do exchange rates co-move? A study on the currencies of five inflation-targeting countriesJournal of Banking & Finance, Volume 35, Issue 2, February 2011, Pages 418–429Xiao-Ming Li


AbstractThis paper does three things. First, it explores the type of asymmetry in exchange rate correlation for five inflation-targeting countries. We show their currencies co-move more closely with the currencies of some influential foreign countries during joint appreciations than joint depreciations against a world currency. Second, it establishes empirically the linkage between interest rate differentials and exchange rate correlation. We find evidence that both widening and narrowing interest rate differentials will reduce the correlation. Third, it proposes a new version of the asymmetric dynamic conditional correlation model. The model proves to be capable of providing great insight into the two issues investigated.KeywordsExchange rate correlation; Interest rate differentials; ADCCE model; Inflation-targeting countries

2.5.2 Exchange Rate SystemsFixed exchange rates and tradeJournal of International Economics, Volume 70, Issue 2, December 2006, Pages 359–383Michael W. Klein, Jay C. Shambaugh


AbstractA classic argument for a fixed exchange rate is its promotion of trade. Empirical support for this, however, is mixed. While one branch of research consistently shows a small negative effect of exchange rate volatility on trade, another, more recent, branch presents evidence of a large positive impact of currency unions on trade. This paper helps resolve this disconnect. Our results, which use a new data-based classification of fixed exchange rate regimes, show a large, significant effect of a fixed exchange rate on bilateral trade between a base country and a country that pegs to it. These results suggest an economically relevant role for exchange rate regimes in trade determination since a significant amount of world trade is conducted between countries with fixed exchange rates.Keywords

Exchange rate regimes; Gravity model; Trade; Fixed exchange rate




Exchange rate regime preferences of the international sector. Firm-level evidenceEconomics Letters, Volume 116, Issue 1, July 2012, Pages 26–30José Fernández-Albertos


AbstractThis paper argues that fixed exchange rate regimes are preferred by the international sector only if they are adopted in economies endowed with anti-inflationary policy-making institutions (i.e., independent central banks). Cross-national firm-level data gives strong support to this claim.

Highlights► Internationally-oriented firms’ exchange rate preferences vary across countries. ► Fixed regimes are preferable only if the level of the exchange rate is competitive. ► These firms’ preference for pegs is greater when central banks are independent.

KeywordsExchange rate regime; Political economy; International sector; Central bank independence; Firm surveys

How successful is the G7 in managing exchange rates?Journal of International Economics, Volume 79, Issue 1, September 2009, Pages 78–88Marcel Fratzscher


AbstractThe paper assesses the extent to which the Group of Seven (G7) has been successful in its management of major currencies since the 1970s. Using an event-study approach, the paper finds evidence that the G7 has been overall effective in moving the US dollar, yen and euro in the intended direction at horizons of up to three months after G7 meetings, but not at longer horizons. While the success of the G7 is partly dependent on the market environment, it is also to a significant degree endogenous to the policy process itself. In particular the reputation and credibility of the G7, as well as its ability to communicate a consensus among individual G7 members, are important determinants for the G7's ability to manage major currencies. The paper concludes by analyzing the factors that help the G7 build reputation and consensus, and by discussing the implications for global economic governance.Keywords

Group of Seven; G7; Exchange rate;



Communication; Policy; Adjustment; Success; Event-study methodology; US dollar; Yen; Euro

2.5.3 Purchasing Power ParityCompetitiveness of nations: A knowledge discovery examinationEuropean Journal of Operational Research, Volume 166, Issue 1, 1 October 2005, Pages 185-211Stelios H. Zanakis, Irma Becerra-Fernandez


AbstractThis paper presents the insights gained from the use of data mining and multivariate statistical techniques to identify important factors associated with a country's competitiveness and the development of knowledge discovery in databases (KDD) models to predict it. In addition to stepwise regression and weighted non-linear programming techniques, intelligent learning techniques (artificial neural networks), and inferential techniques (classification and regression trees), were applied to a dataset of 43 countries from the World Competitiveness Yearbook (WCY). The dataset included 55 variables on economic, internationalization, governmental, financial, infrastructure, management, science and technology, as well as demographic and cultural characteristics. Exploratory data analysis and parameter calibration of the intelligent method architectures preceded the development and evaluation of reasonably accurate models (mean absolute error <5.5%), and subsequent out-of-sample validations. The strengths and weaknesses of each of the KDD techniques were assessed, along with their relative performance and the primary input variables influencing a country's competitiveness. Our analysis reveals that the primary drivers of competitiveness are lower country risk rating and higher computer usage, in entrepreneurial urbanized societies with less male dominance and basic infrastructure, with higher gross domestic investment, savings and private consumption, more imports of goods and services than exports, increased purchase power parity GDP, larger and more productive but not less expensive labor force, and higher R&D expenditures. Without diminishing the role and importance of WCY reports, our approach can be useful to estimate the competitiveness of many countries not included in WCY, while our findings may benefit policy makers and international agencies to expand their own abilities, insights and establish priorities for improving country competitiveness.

KeywordsData mining; Knowledge discovery; Statistics; Competitiveness; Country comparisons


Primary Kidney Disease and Post–Renal Transplantation Hospitalization Costs Transplantation Proceedings, Volume 39, Issue 4, May 2007, Pages 962-965K. Ghoddousi, M.K. Ramezani, S. Assari, M.M. Lankarani, M. Amini, H. Khedmat, M.T. Hollisaaz


AbstractBackground and aimThis study sought to assess posttransplantation hospitalizations costs in diabetic and nondiabetic subjects to see whether diabetes mellitus (DM) as a primary cause of end-stage renal disease (ESRD) increased posttransplantation hospitalization costs.

MethodsFrom 2000 to 2005, the hospitalization costs of 387 consecutive rehospitalizations of kidney recipients were retrospectively compared for two groups: patients with ESRD due to DM (n = 71) and those with ESRD of non-DM etiologies (n = 316). The hospitalization costs included the costs of hotel, medications, surgical procedures, paraclinical tests, imaging tests, health personnel time, special services (ie, patient transportation by ambulance), and miscellaneous costs. Societal perspective was used with costs expressed in PPP$ purchase power parity dollars (PPP$) estimated to be equal to 272 Iranian rials.

ResultsCompared with the non-DM group, DM patients experienced significantly higher median costs both in total (1262 vs 870 PPP$, P = .001) and in cost components related to hotel (384 vs 215 PPP$, P = .001), health personnel time (235 vs 115 PPP$, P < .001), paraclinical tests (177 vs 149 PPP$, P = .012), and special services (100 vs 74 PPP$, P = .041). The mean of age was higher (P < .001), and the transplantation hospitalization time interval was also shorter in the DM group (median: 2.7 vs 12, P = .025).

ConclusionsConsidering DM as a leading cause of ESRD and its increasing prevalence in some countries, the association between hospitalization costs of posttransplant patients and DM may be of great economic importance to many transplantation centers.

Cost is an important issue for transplantation centers, especially in developing countries where health care systems face greater economic pressures due to restrictions in financial resources. [1], [2], [3] and [4] Financial resource restrictions in many transplant centers make identification of the principal determinants of cost a necessity in resource management.5 Controlling costs and resource utilization associated with renal transplantation is an important goal in health care management.6 In this regard, posttransplantation rehospitalizations are known to be the main contributors to health care utilization after kidney transplantation.7


There is a large pool of evidence indicating that the patients with end-stage renal disease (ESRD) due to diabetes mellitus (DM) are at greater risk for some complications [8], [9] and [10] and more likely to be hospitalized [11], [12], [13] and [14] following renal transplantation compared with other posttransplantation patients. However, to the authors’ knowledge, no study has yet addressed the question “Does primary kidney disease (ie, ESRD etiology) affect posttransplantation health care costs?” This study sought to compare the cost of posttransplantation rehospitalizations in patients with ESRD due to DM versus non-DM etiologies.

A century of purchasing power parity confirmed: The role of nonlinearityJournal of International Money and Finance, Volume 29, Issue 7, November 2010, Pages 1398–1405Hyeongwoo Kim, Young-Kyu Moh


AbstractTaylor (2002) claims that Purchasing Power Parity (PPP) has held over the 20th century based on strong evidence of stationary for century-long real exchange rates for 20 countries. Lopez et al. (2005) , however, found much weaker evidence of PPP with alternative lag selection methods. We reevaluate Taylor’s claim by implementing a recently developed nonlinear unit root test by Park and Shintani (2005). We find strong evidence of nonlinear mean-reversion in real exchange rates that confirms Taylor’s claim. We also find a possible misspecification problem in using the ESTAR model that may not be detected with Taylor-approximation based tests.

Keywords Purchasing power parity; Transition autoregressive process; Inf-t unit root test

2.5.4 Governmental Role and Implications of Exchange Rate ChangesGovernment expenditure and equilibrium real exchange ratesJournal of International Money and Finance, Volume 21, Issue 5, October 2002, Pages 667–692Ronald J. Balvers, Jeffrey H. Bergstrand


AbstractGovernment expenditures (financed by lump-sum taxes) influence real exchange rates potentially via a resource-withdrawal channel and a consumption-tilting channel. Recent theoretical and empirical studies have considered only the effects of government






spending through the resource-withdrawal channel. We solve for the theoretical relationships among the real exchange rate, relative private consumption, relative government consumption, and tradables and nontradables production in a two-country general equilibrium model and then estimate the model’s structural equations. The results suggest that government expenditures influence real exchange rates approximately equally via the resource-withdrawal and consumption-tilting channels and that government and private consumption are complements in utility.

Keywords Real exchange rates; Government expenditure

Switching to floating exchange rates, devaluations, and stock returns in MENA countriesInternational Review of Financial Analysis, Volume 21, January 2012, Pages 119-127Georgios Chortareas, Andrea Cipollini, Mohamed Abdelaziz Eissa


AbstractWe test for the impact of the announcements of floating and/or devaluating the exchange rate on stock returns in three MENA countries after the financial crises they experienced. We, first, use an event-study methodology to test for event-induced abnormal volatility of stock returns in Egypt, Morocco and Turkey. We, then, use three different methodologies to test for abnormal returns: a traditional approach and two approaches that control for event-induced volatility. We find clear evidence of abnormal volatility and abnormal returns due to the floating of the Egyptian and Turkish exchange rates in 2003 and 2001, respectively. In contrast, our results do not show that the devaluation of the Moroccan currency in 2001 resulted in abnormal volatility and/or abnormal returns.

KeywordsExchange rate; Stock returns; Returns volatility; MENA region; Event study; Financial crisis

2.6 Innovation and EconomicsAnalysis of technological innovation from business economics and management Technovation, Volume 26, Issue 3, March 2006, Pages 300-311Jesús Galende


AbstractThis paper identifies and analyses the main contributions to the analysis of firms' innovative activities of five approaches related to business economics and management: industrial organization, transaction costs economy, positive agency theory, resource-



based view and evolutionary theory. Complementarity can be noted among these approaches. They can all be applied for analysing a specific aspect of innovative activity. However, the contributions of evolutionary theory seem to comprise the most comprehensive approach for studying the firm's innovative process from an internal point of view and dealing with its complex characteristics.

KeywordsInnovation; Innovative process; Industrial organization; Transaction costs; Agency theory; Resources and capabilities; Evolutionary theory

Beyond Schumpeter: Nonlinear economics and the evolution of the U.S. innovation systemJournal of Socio-Economics, Volume 27, Issue 1, 1998, Pages 97–115Gregory A. Daneke


AbstractTo the extent that the U.S. has a national innovation system (actually systems), it is in the midst of a dramatic transformation. Essentially, international competition and internal political machinations are causing a shift away from a Schumpeterian system of entrepreneurial capitalism toward a more mercantilistic system. Industrial structures and government policies alike are beginning to mirror their global counterparts. Meanwhile, strategic analyses, both at the level of the firm and the nation state, remain mired in the methods of the past industrial epoch. This conceptual overview contends that the emerging science of nonlinear or advanced systems (chaos and complexity theories) provides a useful addendum to Schumpeter's perspectives. Moreover, tools and strategies derived from nonlinear or advanced systems are better suited to both understanding and managing this transformation.

The elixir (or burden) of youth? Exploring differences in innovation between start-ups and established firmsResearch Policy, Volume 41, Issue 2, March 2012, Pages 319-333Paola Criscuolo, Nicos Nicolaou, Ammon Salter


AbstractDespite the widely acknowledged role of start-ups in economic development, little is known about their innovative activities compared with those of established firms. Drawing on a sample of 12,209 UK firms, we differentiate between services and manufacturing firms and, using a matching estimator approach, demonstrate that start-ups differ significantly from established firms in their innovation activities. We find that in services, being a start-up increases the likelihood of product innovations. However, in



manufacturing, we find no significant differences in the likelihood of product innovation between start-ups and established firms. When examining the returns to innovation, we find that start-ups have a significant advantage both in services and in manufacturing. We explore the implications of these results for theory and policy.

KeywordsEntrepreneurship; Service innovation; Innovative performance; Start-ups; Appropriability regimes

The two sides of proximity in industrial clusters: The trade-off between process and product innovationJournal of Urban Economics, Volume 63, Issue 1, January 2008, Pages 146–162Jean-Marc Callois


AbstractAccording to the literature on industrial districts, the proximity of small firms operating in a similar sector can lead to several positive externalities, which enhance collective efficiency. We investigate this assumption by building a microeconomic model in which a set of small firms trades off two opposite effects. First, the closer they are to each other, the more they can share fixed costs or pool risks, and the more they can innovate on more efficient processes. Second, the closer they are, the less diverse is their cognitive environment, and the less they innovate on products. We find that there is a “bell-shaped relationship” between proximity and the firms' performance. Moreover, equilibrium configurations tend to produce too much proximity from the consumers' and the workers' point of view, but too few proximity from the firms' point of view.Keywords

Industrial districts; Clusters; Industrial organization; Process innovation; Product innovation

Chapter 3: STRATEGY3.1 IntroductionOn what should firms focus in transitional economies? A study of the contingent value of strategic orientations in China International Journal of Research in Marketing, Volume 24, Issue 1, March 2007, Pages 3-15Gerald Yong Gao, Kevin Zheng Zhou, Chi Kin (Bennett) Yim






AbstractThis study examines the roles of strategic orientations (i.e., customer, competitor, and technology) in a transitional economy, China. On the basis of a cross-industry sample of 408 brands, we find that the effects of customer and technology orientations on business performance are contingent on the competitive environment. Specifically, as market demand becomes increasingly uncertain, the effect of a customer orientation on performance turns from positive to negative. Meanwhile, the impact of a technology orientation on performance changes from negative to positive with an increasing level of technological turbulence. However, a competitor orientation has a positive and robust effect on business performance, regardless of whether competition is low or intense.Keywords

Strategic orientation; Competitive environment; Business performance; China

Corporate strategy's task is to build financial valueCreating Value: Successful Business Strategies (Second Edition), 2001, Pages 231-248Shiv S. Mathur, Alfred Kenyon


This chapter begins the examination of corporate strategy by looking at its nature and purpose.The object of all business strategy is to add financial value to the business. Chapter 2 clarified that this is long-term financial value: the qualification ‘long-term’ is therefore always implied when financial value is referred to as the object of business strategy.Earlier chapters have made the following points: Competitive strategy designs and creates individual profitable offerings. Corporate strategy assembles, maintains and upgrades a profitable cluster of

individual offerings for the company. Each offering needs to be evaluated separately for its competitive positioning.

However, as offering F often affects the viability of offerings G, H etc., decisions must in such cases be made collectively about that group of offerings.

In that very process corporate strategy enables offerings to share resources and other inputs so as to reduce unit costs.

The battle of the blue laser DVDs: The significance of corporate strategy in standards battles Technovation, Volume 32, Issue 2, February 2012, Pages 90-98Scott R. Gallagher


Abstract



Markets and industries that require their products to interconnect or utilize important complements are becoming increasingly common. From communication networks to social web sites, network effects have shown themselves to be powerful forces. However, the same feedback effects that make these industries so interesting also makes them difficult to study as often, without an accepted standard, the industry never germinates and grows. This paper takes and refines an existing model for competition in these types of industries and applies it to the recently concluded contest between Sony's Blu-ray and Toshiba's HD-DVD in blue laser DVDs.

Analysis of this standards battle suggests some interesting findings. First, in this case corporate strategy provided a decisive advantage to the Blu-ray alliance led by Sony. Sony appears to have “won” the battle in the U.S. by exploiting a superior corporate strategy to not only provide complementary products as called for by the traditional model (e.g. Hill, 1997) but also by utilizing its technology as a component in an ancillary product, its Playstation 3. Second, a heuristic is proposed for considering indirect network effects to complement “Metcalf's Law” for direct network effects. Finally, Sony paid a high a price to “win” this standards battle.

3.2 Business Portfolio ModelPortfolio management of R&D projects: implications for innovation management Technovation, Volume 21, Issue 7, July 2001, Pages 423-435Juliana Hsuan Mikkola


AbstractGlobalization of markets and new business practices are prompting high-tech firms to reconsider their competitive strategy. The increasing complexity of technologies in addition to shorter product life cycles are also forcing firms to rely on R&D as a source of strategy. More importantly, firms are inclined to evaluate their technologies from a portfolio's perspective in which a set or a sub-set of R&D projects is evaluated together, in relation to each other. Portfolio techniques can help strategic managers in evaluating whether a portfolio of products is adequate from the perspective of long-term corporate growth and profitability. Obviously, when R&D projects are evaluated relative to one another, technical capability management of such projects must be carried out concurrently. In this paper, R&D Project Portfolio Matrix is used as a tool for analyzing a portfolio of R&D projects by linking competitive advantages of a firm to benefits these projects may provide to customers. Examples of batteries for electric vehicles (EV) and hybrid electric vehicles (HEV) are provided to illustrate how such a matrix is used, and some of the implications for innovation management of such projects.

KeywordsPortfolio management; R&D; Innovation; Competitive advantage; Automotive industry


A commonsense approach to portfolio planningLong Range Planning, Volume 15, Issue 2, April 1982, Pages 77–92Robert E. Linneman, Michael J. Thomas


AbstractFor the diversified firm, business portfolio planning offers a way of determining its individual businesses' roles and developing a synergistic corporate strategy. In practice, however, the common tools of portfolio planning—the growth/share and market attractiveness/business position matrices—present problems in that often neither of the matrices is precisely suitable for a given individual business. This article makes use of modifications of the growth/share and market attractiveness/business position matrices in order to make them more operational. The authors believe that a step-by-step ‘shirt-sleeve’ approach to portfolio planning can make this type of analysis accessible and invaluable to a small diversified firm, as well as providing insights to larger corporations with formal planning departments.∗At the time of writing this paper he was a visiting Professor of Marketing at Temple University. The authors would like to acknowledge the valuable assistance given by John D. Kennell, Director of Planning, Sun Gas Company.

Strategic Market Position and R&D Capability in Global Manufacturing Industries: Implications for Organizational Learning and Organizational Memory Industrial Marketing Management, Volume 29, Issue 6, November 2000, Pages 565-574Bryan A Lukas, Simon J Bell


AbstractThis study explores the relationship between R&D capabilities and strategic market positions in the global manufacturing industry. The findings from a study of 106 U.S. manufacturers with international business operations show that: (1) organizations with high business growth have an above average R&D capability to generate new product ideas from R&D, regardless of their level of market share; (2) organizations with high market share have an above average capability to launch line extensions, regardless of their level of business growth; and (3) organizations with both high levels of business growth and market share have an above average capability to generate new product ideas from R&D and an above average capability to launch line extensions. Implications for organizational learning and organizational memory are discussed

3.3 Five-forces ModelThe economic role of the emergency department in the health care continuum: Applying Michael Porter’s five forces model to emergency medicine The Journal of Emergency Medicine, Volume 30, Issue 4, May 2006, Pages 447-453



Jesse M. Pines


AbstractEmergency Medicine plays a vital role in the health care continuum in the United States. Michael Porters’ five forces model of industry analysis provides an insight into the economics of emergency care by showing how the forces of supplier power, buyer power, threat of substitution, barriers to entry, and internal rivalry affect Emergency Medicine. Illustrating these relationships provides a view into the complexities of the emergency care industry and offers opportunities for Emergency Departments, groups of physicians, and the individual emergency physician to maximize the relationship with other market players.

Keywordseconomics; emergency medicine; Porter; industry analysis; competition

Amex’s strategies for launching the smart card innovation Technovation, Volume 24, Issue 10, October 2004, Pages 773-777J. Wonglimpiyarat


AbstractThe objective of this paper is to analyze Amex’s pursuit of strategies in launching the smart card innovation. The study is based on Five Forces Model in Porter, M. (1980) Competitive Strategy. The Free Press, New York, and the Core Competences Building and the Dynamic Capabilities Model in Industrial and Corporate Change 3(3) (1994) 537. The study aims to understand why Amex has to go into a new smart card product. The strategic implications of this paper is that Amex attempts to use past core competences in the travel business in order to build up its new competences — smart card-based products. However, there are problems (e.g. unsettled standardization and electronic forgery) that Amex has to overcome in order to compete with capability products.

KeywordsStrategy; Competences; Competitive advantage; Standards; Competition

An analytic network process approach to operationalization of five forces model Applied Mathematical Modelling, Volume 36, Issue 4, April 2012, Pages 1783-1795Hakyeon Lee, Moon-Soo Kim, Yongtae Park

http://www.sciencedirect.com/science/article/pii/S0307904X11005555

Abstract




The five forces model has been one of the most influential frameworks for strategic management. In contrast to its importance as a centerpiece of textbooks, however, it has attracted less attention from both academic researchers and practicing managers. This is due to its innate weakness, difficulty in operationalization. The vital requisites for operationalizing the five forces model are to deal with it as a complex system composed of interrelated forces and their sub-forces, and to prioritize them with consideration of their interdependency. The tenet of this study is the requisites can be achieved through the analytic network process (ANP). The ANP, which is a generalization of the analytic hierarchy process (AHP), produces priorities of elements in a complex network model with consideration of interdependency among elements. The five forces model is transformed into a network model of the ANP. The ANP procedure is then carried out to obtain the priority weights of the forces. Combining the derived weights and ratings on the forces produces the state-of-industry-competition index (SICI) values that represent the overall competitive condition of a given industry. The working of the proposed approach is provided with the help of a case study example of the Web portal Industry of Korea. The proposed ANP approach is expected to expand the five forces model into a workable system of analysis by improving its analytical power.

KeywordsAnalytic network process; Five forces model; Industry analysis; Strategic framework

3.4 Resource Based View of the Firm Human resources and the resource based view of the firm Journal of Management, Volume 27, Issue 6, November–December 2001, Pages 701-721Patrick M. Wright, Benjamin B. Dunford, Scott A. Snell


AbstractThe resource-based view (RBV) of the firm has influenced the field of strategic human resource management (SHRM) in a number of ways. This paper explores the impact of the RBV on the theoretical and empirical development of SHRM. It explores how the fields of strategy and SHRM are beginning to converge around a number of issues, and proposes a number of implications of this convergence

The resource-based view and transnational technology strategy The Journal of High Technology Management Research, Volume 11, Issue 1, Spring 2000, Pages 59-74John W Medcof


Abstract



Despite its considerable appeal, the Resource Based View of the firm as currently articulated is inadequate for the job of explaining transnational technology strategy, although it does explain some phenomena. Its explanatory power can be significantly increased through the inclusion of a resource portfolio perspective and by the acknowledgement that imitation as well as the pursuit of the unique can be a viable resource strategy.

Technological overlap and interfirm cooperation: implications for the resource-based view of the firm Research Policy, Volume 27, Issue 5, September 1998, Pages 507-523David C. Mowery, Joanne E. Oxley, Brian S. Silverman


AbstractThe resource-based view of the firm, with its focus on firm-specific `capabilities', has attracted considerable attention in recent work by management scholars, but has not sparked much empirical analysis. This paper relies on the resource-based view to examine partner choice in interfirm collaborations, emphasizing the role of partners' technological capabilities. Patent citation data are used to measure `technological overlap' between firms before and after alliance formation. Our results provide support for the resource-based view of the firm. Partner selection can be predicted by measures of technological overlap and, once formed, alliances appear to affect firms' technological portfolios in ways predicted by the resource-based view.

KeywordsAlliances; Collaboration; Capabilities; Patents; Resource-based

3.5 Delta ModelThe Delta Model — discovering new sources of profitability in a networked economy European Management Journal, Volume 19, Issue 4, August 2001, Pages 379-391Arnoldo Hax, Dean Wilde II


AbstractThe Delta Model presents a new approach and a new discipline to strategic management. There are four unique contributions: The Triangle (a new set of strategic options); The Adaptive Processes (linking strategy and expectation); The Metrics (aligning Aggregate and Granular Metrics to strategy); Experimentation and Feedback (experimenting in business transformation and monitoring performance). Finally, Michael Porter's Five Forces Model is re-interpreted through the Delta Model.

Keywords



Delta model; Corporate strategy; Business transformation; Internal strategy; Five Forces Model; Strategic options

Rivalry through alliances:: Competitive Strategy in the Global Telecommunications Market European Management Journal, Volume 19, Issue 3, June 2001, Pages 317-331Sylvia Chan-Olmsted, Mark Jamison


AbstractThis article is the first and the qualitative section of a two-part strategy research project which examines the state of the global telecommunications market and assesses the business factors and environmental variables such as country/regional economic profiles, political systems and regional alliances, that influence strategic directions of firms in the converging global telecommunications market. The article specifically investigates the forces contributing to the globalization of telecommunications services, major telecommunications strategies and strategic alliances in the global market, and factors that may have contributed to the outcome of these alliances.

KeywordsTelecommunications; Alliances; Globalization; Competitive advantage

Chapter 4: MANAGEMENT AND LEADERSHIP4.1 Introduction4.2 Team StructureEffects of team knowledge management on the creativity and financial performance of organizational teams Organizational Behavior and Human Decision Processes, Volume 118, Issue 1, May 2012, Pages 4-13Sun Young Sung, Jin Nam Choi


AbstractAn increasing number of organizations are turning to teams for innovation and creativity. The present study investigated the effects of team knowledge management (TKM) on the creativity and financial performance of organizational teams. Our analysis of data collected from 65 sales teams, across 35 branches of a Korean insurance company, showed that team knowledge utilization (but not team knowledge stock) was positively related to team creativity, which in turn predicted team financial performance over the 6-month period. The positive effects of knowledge utilization were stronger when team leaders had a systematic cognitive style and when teams were exposed to high environmental uncertainty. Furthermore, the systematic cognitive style of leaders had a



positive main effect on team creativity and positively moderated the relationship between team knowledge stock and team creativity. The implications of these findings were considered, and some possible directions for future research were suggested.

Staffing approach and conditions for collective learning in project teams: The case of new product development projects International Journal of Project Management, Volume 25, Issue 4, May 2007, Pages 413-422Laurent Bourgeon


AbstractIn the contemporary competitive environment, it becomes crucial for companies to master, promote and keep the collective learning developed during new products development projects. This research discusses the extent to which the approach of staffing the new products development projects’ teams and the logic of career development of project managers have an influence on the collective learning conditions during these projects. After having pointed out the main dimensions of learning in new product development projects and the main dimensions of the logic of project managers’ career development, the empirical data analysis of this research demonstrates that job rotation in projects for functional staff, as an approach of staffing the projects’ teams, makes up favourable conditions for collective learning during the projects.

KeywordsCareer development; Collective learning; Project manager; Project team; Staffing

An integrated method for collaborative R&D project selection: Supporting innovative research teams Expert Systems with Applications, Volume 38, Issue 5, May 2011, Pages 5532-5543Bo Feng, Jian Ma, Zhi-Ping Fan


AbstractCollaborative R&D projects that are applied by innovative research teams (CIRT projects) are supported by government funding agencies in a number of countries due to the complexity and multidiscipline research of innovation. Government funding agencies invest heavily to CIRT projects every year. Thus, it is important to select the desired CIRT projects to avoid undesirable budget consumed. The purpose of this paper is to propose an integrated method for CIRT project selection. In this method, competitiveness and collaboration of candidate innovative research teams (IRTs) are used to assess and select projects. The criteria for competitiveness and collaboration are finalized in light of literature review as well as real situations. A formal decision procedure that aggregates



competitiveness and collaboration performances of CIRTs is then presented. It integrates analytic hierarchy process (AHP), scoring method and weighted geometric averaging method. Some sample data from the National Natural Science Foundation of China (NSFC) is used to illustrate the potential application of the proposed method.

Smaller teams–better teamwork: How to keep project teams small Business Horizons, Volume 48, Issue 3, May–June 2005, Pages 209–214 Martin Hoegl


AbstractScholars and practitioners have long suggested that smaller teams perform better teamwork, yet it is surprising to find that many organizations are using teams of 10 and more members. This paper explains how large team size affects teamwork. Moreover, it suggests four ways to keep teams small: (1) Create a multiteam project; (2) create a core team and an extended team; (3) outsource tasks and define team-external contributions; and (4) keep members on the team only for specific project phases.

KeywordsTeam size; Teamwork; Work organization; Team productivity

Knowledge creation in multidisciplinary project teams: an empirical study of the processes and their dynamic interrelationships International Journal of Project Management, Volume 21, Issue 7, October 2003, Pages 479-486Patrick S.W. Fong


AbstractThis paper reviews key literature on team processes and knowledge creation. Specifically, it assesses and synthesises relevant theories and thoughts to develop a conceptual model of the knowledge creation process. Empirical evidence, collected from two projects—an infrastructure development project and a residential development project—is also exploited as a means of building a conceptual model of knowledge creation. This paper explains the processes of knowledge creation within the context of multidisciplinary project teams. It also considers the dynamic interrelationships between the proposed processes. The paper provides a framework not only for future research to systematically examine and test knowledge creation processes within different team situations, but also to allow management to continuously anticipate knowledge creation activities within their own organisations. This research contributes to studies of organisational knowledge and knowledge creation by providing an explorative account that synthesises the existing literature with empirical evidence. Secondly, this research



contributes to the theoretical development of knowledge creation by focusing on its processes rather than just on its outcomes and implications, which have been the main concern of other researchers. Finally, the development of a multidisciplinary knowledge creation theory contributes to the consolidation of the various dimensions of knowledge-related activities that have in the past been treated in isolation.

KeywordsKnowledge creation; Multidisciplinary project teams; Processes; Dynamic interrelationships

How NASA Builds Teams: Mission Critical Soft Skills for Scientists, Engineers, and Project TeamsSpace Policy, Volume 26, Issue 1, February 2010, Pages 67-68Mirela Schwarz, Lorraine Warren


The author of this book, Charles J. Pellerin has an impressive background at NASA, as the former director of the Astrophysics Division. Here, we learn, he oversaw a budget of $750 million, and was involved in the launch of a dozen satellites, including the Hubble Space Telescope in 1990. As we all now know, Hubble was launched with a flawed mirror which eventually had to be repaired in space. The technical cause of the problem was a faulty calculation by a NASA contractor, but NASA's Failure Review Board finally concluded that a leadership problem was at the heart of the failure. The Board told Congress that NASA's management of its contractor had been so hostile that they were reluctant to report technical problems. Although Pellerin was asked to lead the team that successfully repaired Hubble, it is clear that he was deeply affected by being associated with the original failure. Many of the methods that he used to mount the successful mission to repair Hubble are at the heart of this book, which was written to overcome the problem of ignoring social contexts

4.3.1 MotivationCombining creativity and control: Understanding individual motivation in large-scale collaborative creativity Accounting, Organizations and Society, Volume 36, Issue 2, February 2011, Pages 63-85Paul S. Adler, Clara Xiaoling Chen


AbstractRecent research has shown that management control systems (MCS) can improve performance in contexts characterized by high levels of task uncertainty. This seems to conflict with a second stream of research, which argues that MCSs risk undermining the intrinsic motivation needed for effective performance in such settings. To solve this



puzzle, we build on theories of perceived locus of causality and self-construal and develop an integrative model summarized in 15 propositions. To explicate our proposed solution and to show its robustness, we focus on the class of activities we call large-scale collaborative creativity (LSCC) – contexts where individuals face a dual challenge of demonstrating creativity and embracing the formal controls that coordinate their creative activities with others’. We argue that LSCC requires the simultaneous activation of intrinsic and identified forms of motivation, and simultaneously independent and interdependent self-construals. Against some scholarship that argues or assumes that such simultaneous combinations are infeasible, we argue that they can be fostered through appropriate attraction–selection–attrition policies and management control systems design. We also show how our propositions can enrich our understanding of motivation in other settings, where creativity and/or coordination demands are less pressing

Profiling work motivation of project workers International Journal of Project Management, Volume 28, Issue 2, February 2010, Pages 158-165Ravikiran Dwivedula, Christophe N. Bredillet


AbstractThe purpose of this study is to understand the constructs of work motivation in project-based organizations. We first juxtapose work motivation in traditional and project-based organizations to put forward an operational definition of work motivation for our study. We then present the research methodology where we profile work motivation as perceived by project workers using principal component analysis. We obtain a five factor structure of work motivation. Finally, we discuss these results by putting them within the project management perspective and suggest managerial implications.

KeywordsMotivation; Managing individual; Project management

The performance implications of ambivalent initiative: The interplay of autonomous and controlled motivations Organizational Behavior and Human Decision Processes, Volume 116, Issue 2, November 2011, Pages 241-251Adam M. Grant, Samir Nurmohamed, Susan J. Ashford, Kathryn Dekas


AbstractAlthough initiative is thought to contribute to higher performance, researchers have called for a more comprehensive understanding of the contingencies for this relationship. Building on self-determination theory, we propose that initiative is more likely to predict



performance when individuals experience autonomous and not controlled motivation. Across two studies, we find support for a hypothesized three-way interaction between initiative, autonomous motivation, and controlled motivation in predicting individual performance. In Study 1, the personal initiative reported by job applicants was most positively related to the number of job offers that they received several months later when they experienced high autonomous motivation and low controlled motivation. In Study 2, the objective initiative taken by call center employees was most positively related to the revenue that they generated in subsequent months when they reported high autonomous motivation and low controlled motivation. We discuss theoretical implications for motivation, initiative, proactivity, and performance.

KeywordsInitiative; Autonomous motivation; Controlled motivation; Self-determination theory; Performance; Proactive behavior

Management by motivation Engineering Management International, Volume 1, Issue 1, July 1981, Pages 63-71Tems O.J. Ananaba


AbstractA review of the development of motivational theory leading up to the current concepts has been presented. This was thought to be important, not only for the insights it provided into human behavior, but also because it provides some idea of how we arrived at current concepts of motivational theory.

Although not considered to be motivational theory, the scientific management approach that Frederick W. Taylor proposed in 1911 resulted in greater productivity. However, this approach eventually resulted in widespread job dissatisfaction, which was attributed to the dehumanization of work brought about by separating the thinking process of the worker from the doing part. The problems created by dehumanizing work set the stage for the human relations theorists.

A series of studies conducted between 1924 and 1944 by Elton Mayo of Harvard University concluded that many of the problems confronting managers at that time resulted from the fact that the work environment and the human organism were not well matched. Mayo felt that the problems could be lessened by modifying the work environment so that it would more closely conform to human needs.

A very important study was conducted in 1957 by Frederick Herzberg while he was associated with Psychological Service of Pittsburgh. This Study attempted to discover factors that led to job satisfaction. It is particularly significant because it has been verified by at least ten subsequent studies.


Douglas Murray McGregor (1960) has developed two theories of management that he labels Theory X and Theory Y. Management must be of the Theory Y type for innovation to occur. This type of management sets the stage for the theory of Herzberg to be put into effect.

Managers’ theories of subordinates: A cross-cultural examination of manager perceptions of motivation and appraisal of performance Organizational Behavior and Human Decision Processes, Volume 93, Issue 1, January 2004, Pages 47-61Sanford E. DeVoe, Sheena S. Iyengar


AbstractThe present study sought to examine the relationship between managers’ perceptions of employee motivation and performance appraisal by surveying managers and employees in three distinct cultural regions (North America, Asia, and Latin America) within a single global organization. Three distinct cultural patterns emerged in the theories managers’ held about their subordinates. While North American managers perceived their employees as being more extrinsically than intrinsically motivated, perceptions of intrinsic motivation proved to be a more robust predictor of performance appraisal. Asian managers exhibited a holistic tendency in that they perceived their subordinates as equally motivated by intrinsic and extrinsic factors, and their perceptions of both motivations proved to be comparable predictors of performance appraisal. Latin American managers perceived their employees as being more intrinsically than extrinsically motivated, and accordingly, only their perceptions of intrinsic motivation proved to be significantly correlated with performance appraisal. In contrast to the cultural variations exhibited in manager perceptions, employees consistently reported themselves as being more motivated by intrinsic than extrinsic incentives. Explanations for the distinct cultural patterns that emerged and their implications for the study of culture and organizational behavior are discussed.

KeywordsCulture; Extrinsic/intrinsic motivation; Holism; Performance appraisal; Person perception

4.4 Change Management Change management practices: Impact on perceived change results Journal of Business Research, Volume 64, Issue 3, March 2011, Pages 266–272Andrés B. Raineri


Abstract



Management literature frequently proposes the use of a set of managerial practices in order to facilitate the management of organizational change processes. This paper analyses differences in perception in the use of such practices, between change strategists and change receptors, and the impact these practices have on the outcomes of organizational change programs and on organizational results, in a sample of 90 organizations in Chile. Results show that, for the same change processes, change strategists report a higher use of change management practices than change receptors. Results also show that, during organizational change processes, firms use more frequently practices related to the change preparation stage in comparison to practices related to the change implementation stage. Finally, results show that, after controlling for organizational size, change program intensity, and service versus manufacturing industries, the use of change management practices has a significant impact on the accomplishment of the change program objectives and deadlines, but results do not show an impact on perceived organizational outcomes (changes in sales, financial results of the firm, operational productivity, and employee performance).

KeywordsOrganizational change; Change management practices

Ambidexterity as a dynamic capability: Resolving the innovator's dilemma Research in Organizational Behavior, Volume 28, 2008, Pages 185-206Charles A. O’Reilly III, Michael L. Tushman


AbstractHow do organizations survive in the face of change? Underlying this question is a rich debate about whether organizations can adapt—and if so how. One perspective, organizational ecology, presents evidence suggesting that most organizations are largely inert and ultimately fail. A second perspective argues that some firms do learn and adapt to shifting environmental contexts. Recently, this latter view has coalesced around two themes. The first, based on research in strategy suggests that dynamic capabilities, the ability of a firm to reconfigure assets and existing capabilities, explains long-term competitive advantage. The second, based on organizational design, argues that ambidexterity, the ability of a firm to simultaneously explore and exploit, enables a firm to adapt over time. In this paper, we review and integrate these comparatively new research streams and identify a set of propositions that suggest how ambidexterity acts as a dynamic capability. We suggest that efficiency and innovation need not be strategic tradeoffs and highlight the substantive role of senior teams in building dynamic capabilities.

Chapter 5: PORTFOLIO MANAGEMENT5.1 Introduction5.4 Models of Portfolio Management


5.4.1 Decision AnalysisCombining decision analysis and portfolio management to improve project selection in the exploration and production firm Journal of Petroleum Science and Engineering, Volume 44, Issues 1–2, 31 October 2004, Pages 55-65Michael R. Walls


AbstractRecent advances in modern finance theory and decision science are being utilized in a more systematic fashion by the upstream petroleum industry. Corporate planning groups as well as business units in oil companies are increasingly applying techniques such as decision analysis, simulation, portfolio management, and real options analysis to improve the overall decision making and capital allocation process.

An important element of improving the practice of risk management in the E&P setting is to ensure the proper integration of these analytical techniques in order to leverage their overall capabilities. The Markowitz optimization approach to portfolio analysis, for example, provides the E&P decision maker an efficient set of portfolios, based on minimizing risk subject to a particular return. However, without some guidance as to what level of risk-taking is appropriate for the E&P firm, the portfolio analysis alone does not provide managerial guidance about which of these efficient portfolios is best for the firm. There are, however, important attributes of the decision analysis paradigm that link directly to choices made by the firm regarding modern portfolio analysis. Preference analysis, an important element of a comprehensive decision analysis, provides us a mechanism for measuring and applying a corporate risk-taking policy. Knowing the firm's attitude about taking financial risk is important in terms of selecting the appropriate portfolio of activities. These linkages between decision analysis and portfolio management can improve the overall decision process, and ultimately, firm performance.

KeywordsPetroleum risk; Portfolio management; Decision analysis; Preference theory

A decision analysis of anesthesia management for cataract surgery American Journal of Ophthalmology, Volume 132, Issue 4, October 2001, Pages 528-536Sherman W Reeves, David S Friedman, Lee A Fleisher, Lisa H Lubomski, Oliver D Schein, Eric B Bass


AbstractPURPOSE: To compare the trade-offs in cost and preference of various anesthesia management strategies for cataract surgery.



METHODS: Six strategies, differing in sedation, local anesthetic, and monitoring approach, were chosen for comparison. For each strategy, potential complications, and conversions to different anesthesia approaches were modeled. A panel of physicians and anesthetists, well versed in the literature and practice of the anesthesia management of cataract surgery, assigned preference values to the strategies and potential outcomes (0 to 1 scale). Probability estimates were obtained from a study of 19,557 cataract surgeries and from the panel. Cost estimates were derived from several sources. The model was analyzed to determine the strategies associated with the highest expected preference and lowest expected cost.

RESULTS: The strategy associated with the highest net preference was intravenous sedation with block anesthesia and an anesthesiologist present throughout the case. The expected net preference for this strategy was 19% greater than the net preference for the next most preferred strategy, oral sedation with block anesthesia and an anesthesiologist on call (0.88 versus 0.74), but the expected anesthesia costs per case were much greater ($324 versus $42). Results were sensitive to plausible variation in the preference values assigned to the six initial management strategies and to the cost of topical versus block anesthesia.

CONCLUSION: This analysis emphasizes that cost and preference are important considerations when choosing an anesthesia management strategy for cataract surgery. For some surgeries, substantial cost savings may be available for a small change in preference.

A wide variety of local anesthetic, sedation, and monitoring options is available for cataract surgery. However, little is known about the trade-offs in cost and preference among commonly used management strategies. Other than reports of pain associated with different anesthesia approaches, a recent synthesis of the literature on the anesthesia management of cataract surgery found a scarcity of data concerning the incorporation of patient preferences into management choices.1 While the vast majority of cataract surgeries in the United States are performed with an anesthesiologist or anesthetist present to administer sedation and monitor vital signs,2 preference for this sedation and monitoring approach is largely unknown. Furthermore, substantial international variation in local anesthetic, sedation, and monitoring strategies exists,2 raising questions regarding the relative costs and benefits of various anesthesia management decisions. With more than 1 million cataract surgeries performed annually in the United States at a cost of approximately $3.4 billion to the Medicare program each year, [3] and [4] the choice of anesthesia management strategy has significant clinical and financial implications.

In this study, we conducted a decision analysis to compare the expected costs and benefits of several anesthesia management strategies for cataract surgery. The anesthesia strategies we compared differed in sedation approach (oral or intravenous sedation), local anesthetic technique (topical or ocular block), and monitoring approach (one anesthesia provider present throughout the case, one anesthesia provider covering multiple cases simultaneously, or no anesthesia provider available at all).

This study was conducted using a decision analysis design. Decision analysis is an explicit analytic tool designed to facilitate complex clinical, therapeutic, or diagnostic decisions in which many variables must be considered simultaneously. [5], [6] and [7] A decision model generally takes the form of a tree, where limbs represent alternative management strategies, and branches represent potential outcomes of each strategy. The probability of each potential outcome, as well as some quantifiable measure of the value associated with that outcome, are then added to the tree. The model is analyzed by multiplying the value unit of each outcome by the probability of that outcome’s occurrence. The sum of these products for each strategy limb represents that strategy’s net value. This net value is then compared with the net values of all the other strategies to see which strategy is optimal.

A proposed Multi Criteria Analysis decision support tool for international environmental policy issues: a pilot application to emissions control in the international aviation sectorEnvironmental Science & Policy, Volume 10, Issues 7–8, November–December 2007, Pages 645–653 Diana S. Solomon, Kenneth F.D. Hughey

http://www.sciencedirect.com/science/article/pii/S1462901107000755 AbstractPolicy making at the level of international environmental problems appears to lack a transparent, multi criteria based, decision support ‘tool’. This is due mainly to the highly political, volatile, and contextual nature of issues at this level. The environmental problem of how to regulate emissions from international civil aviation due to their transboundary nature, and the participation of international and domestic players, makes it a ‘wicked’ international environmental problem where policy making has proved problematic. This problem has been used as the basis for developing and pilot testing a tool for contributing to international policymaking, the Multi Criteria Decision Support System (MCDSS). This tool is based on simplifying and integrating key components of Multi Criteria Analysis with a Decision Support System. A preliminary application of the tool explored three options for progressing the reduction of aviation emissions. Testing was based on the allocation of weights to environmental, social, economic and institutional categories, which were each then internally weighted to reflect key criteria in the policy process. Finally, likely performances of each option, against the criteria, were evaluated against Likert scale measures. The outputs from each of these steps were combined to generate a summed best policy option. Conclusions have been drawn and they indicate that the tool is potentially useful especially in the initial stages of policy development. The MCDSS is not an alternative to the international policy process, but rather complements, and makes explicit key tradeoffs in, that process.

KeywordsInternational environmental policy; Multi Criteria Analysis; Decision Support System; Global aviation emissions


5.4.2 Real OptionsReal Option Analysis on Coal-to-oil Project Energy Procedia, Volume 5, 2011, Pages 48-52TENG Yingyue, HAN Liping, LI Changqing, ZHAO hongmei


AbstractAs Coal-to-liquid project is in face of lot uncertainties largely due to the wide fluctuation of oil industry, it is unableto evaluate this project accurately via the traditional NPV analysis method. The paper tries to app ly real optionsanalysis approach to evaluate this Coal-to-liquid project, simulate the fluctuation of oil price by a designed softwareand also compare the operating value and the value of waiting to invest in this Coal-to-liquid project.

KeywordsCoal-to-liquid Project; Real Options; Operation value; The value of waiting to invest.

Management of information technology investment: A framework based on a Real Options and Mean–Variance theory perspective Technovation, Volume 28, Issue 3, March 2008, Pages 122-134Liang-Chuan Wu, Chorng-Shyong Ong


AbstractThe selection of appropriate technology projects has been one of the most significant business challenges of the last decade. Information technology projects, in particular, represent the largest capital expenditure items for most US firms, yet many projects have been unsuccessful. Because of the importance of such investments, there is an urgent need for a framework to analyze them. In this paper, Real Options analysis in conjunction with classical financial theory, namely, the Mean–Variance (MV) model, is used to provide new perspectives on project selection. We develop a quadripartite framework and subsume the risks within its dimensions. Furthermore, we map the corresponding options in each of the quadrants. The framework offers an easy, but comprehensive, way for managers to evaluate potential projects. In addition, we conduct a case study to demonstrate how practitioners can apply the framework. This paper contributes to the technology management field by defining the risk dimensions of technology investments, and providing insights based on interdisciplinary financial theories.

KeywordsFramework; Project selection; Mean–Variance model; Real Options; Risk



In search of innovative techniques to evaluate pharmaceutical R&D projects Technovation, Volume 23, Issue 4, April 2003, Pages 291-296William F. Jacob, Young Hoon Kwak


AbstractThis paper is a conceptual paper that examines a new integrative evaluation approach for pharmaceutical R&D projects. It describes recent changes in the health care economy and the underlying scientific and technological revolution that has markedly altered the business environment in which the pharmaceutical industry operates. Changes in cost and technology resulting from managed care organizations, marketing, generic drugs, new drug development risk, and scientific and technological evolution forced us to think of a new way to evaluate R&D projects in the early phase of the project. These changes have placed increased emphasis on the need for improvements in technology management methodologies. A real options approach, especially when combined with other project risk management processes, offers a significant improvement in project selection and review, and resource allocation decisions.

KeywordsR&D; Project management; Real option models; Risk management

5.4.3 Multi-attribute Utility AnalysisApplying multi-attribute analysis to contractor selection decisions European Journal of Purchasing & Supply Management, Volume 1, Issue 3, September 1994, Pages 139-148Gary D Holt, Paul O Olomolaiye, Frank C Harris


AbstractContractor selection is made onerous by the existence of many decision parameters and several outcome options. Notwithstanding these difficulties, the multi-attribute analysis (MAA) technique facilitates this decision task in being able to evaluate alternatives and indicate optimum choice. Several variations of MAA are presented and the fundamental advantages and disadvantages associated with each are highlighted. An overview of a three-tier MAA procedure designed to encompass the entire selection process culminates in a worked example of contractor evaluation utilizing a computer spreadsheet approach. While the procedure is presented in a construction contracting context, the methodologies cited are of potential benefit in a wide selection of purchasing scenarios.

Keywordsdecision making; modelling; contractor selection; multi-attribute analysis; selection criteria; utility



A decision support system for multiattribute utility evaluation based on imprecise assignmentsDecision Support Systems, Volume 36, Issue 1, September 2003, Pages 65–79 Antonio Jiménez, Sixto Rı́os-Insua, Alfonso Mateos


AbstractThis paper describes a decision support system based on an additive or multiplicative multiattribute utility model for identifying the optimal strategy. This is intended to allay many of the operational difficulties involved in assessing and using multiattribute utility functions. The system admits imprecise assignments for weights and utilities and uncertainty in the multiattribute strategies, which can be defined in terms of ranges for each attribute instead of single values. Inputs can be subjected to different sensitivity analyses, permitting users to test the robustness of the ranking of the strategies and gain insight into and confidence about the final solution. An application of the system to the restoration of a contaminated lake is illustrated throughout the paper.

KeywordsDecision support system; Multiattribute utility functions; Imprecision; Sensitivity analysis

A generic multi-attribute analysis systemComputers & Operations Research, Volume 33, Issue 4, April 2006, Pages 1081–1101Antonio Jiménez, Sixto Ríos-Insua, Alfonso Mateos


AbstractThis paper describes a generic decision support system based on an additive multiattribute utility model that is intended to allay many of the operational difficulties involved in the multicriteria decision-making process. The system accounts for uncertainty about the alternative consequences and admits incomplete information about the decision-makers’ preferences, which leads to classes of utility functions and weight intervals. The additive model is used to assess, on the one hand, average overall utilities, on which the ranking of alternatives is based and, on the other, minimum and maximum overall utilities, which give further insight into the robustness of this ranking. When the information obtained is not meaningful enough so as to definitively recommend an alternative, an iteration process can be carried out by tightening the imprecise parameters and assessing the non-dominated and potentially optimal alternatives or using Monte Carlo simulation techniques to determine useful information about dominance among the alternatives.



KeywordsDecision support system; Additive multiattribute utility function; Incomplete information; Monte Carlo simulation techniques

5.4.4 Modern Portfolio TheoryManaging the retail format portfolio: An application of modern portfolio theory Journal of Retailing and Consumer Services, Volume 17, Issue 1, January 2010, Pages 19-28James R. Brown


AbstractWe apply modern financial portfolio theory (MPT) to managing portfolios of retail formats. The objective of MPT is to maximize overall portfolio return for a given level of portfolio risk. We applied MPT to three prominent hotel firms to determine the ideal mix of formats in their hotel brand portfolios, using revenue per available room (RevPAR) as a proxy for return on investment. We found that all three firms could improve their returns and reduce their risk by reallocating the number of hotel rooms (i.e., scarce resources) across their different retail formats.

KeywordsRetail formats; Modern portfolio theory; Linear programming; Customer satisfaction; Hotels

Portfolio Theory and Cost-Effectiveness Analysis: A Further Discussion Value in Health, Volume 7, Issue 5, September–October 2004, Pages 595-601Pedram Sendi, Maiwenn J. Al, Frans F.H. Rutten


AbstractObjectivesPortfolio theory has been suggested as a means to improve the risk–return characteristics of investments in health-care programs through diversification when costs and effects are uncertain. This approach is based on the assumption that the investment proportions are not subject to uncertainty and that the budget can be invested in toto in health-care programs.

MethodsIn the present paper we develop an algorithm that accounts for the fact that investment proportions in health-care programs may be uncertain (due to the uncertainty associated with costs) and limited (due to the size of the programs). The initial budget allocation



across programs may therefore be revised at the end of the investment period to cover the extra costs of some programs with the leftover budget of other programs in the portfolio.

ResultsOnce the total budget is equivalent to or exceeds the expected costs of the programs in the portfolio, the initial budget allocation policy does not impact the risk–return characteristics of the combined portfolio, i.e., there is no benefit from diversification anymore.

ConclusionThe applicability of portfolio methods to improve the risk–return characteristics of investments in health care is limited to situations where the available budget is much smaller than the expected costs of the programs to be funded.

Keywordscost-effectiveness analysis; diversification; portfolio theory; risk–return characteristics

5.4.5 Portfolio Optimization TheoryPortfolio analysis and the product life cycle Long Range Planning, Volume 15, Issue 6, December 1982, Pages 74-83Hiram C. Barksdale, Clyde E. Harris Jr.


AbstractThis paper explains how the product life cycle and Boston Consulting Group's portfolio matrix can be combined to provide a more comprehensive framework for strategic analysis. The integrated model is more powerful than either concept taken separately because it provides an exhaustive system for classifying a diverse assortment of business units or product/market categories

The mean–variance cardinality constrained portfolio optimization problem: An experimental evaluation of five multiobjective evolutionary algorithms Expert Systems with Applications, Volume 38, Issue 11, October 2011, Pages 14208-14217K.P. Anagnostopoulos, G. Mamanis


AbstractThis paper compares the effectiveness of five state-of-the-art multiobjective evolutionary algorithms (MOEAs) together with a steady state evolutionary algorithm on the mean–variance cardinality constrained portfolio optimization problem (MVCCPO). The main computational challenges of the model are due to the presence of a nonlinear objective



function and the discrete constraints. The MOEAs considered are the Niched Pareto genetic algorithm 2 (NPGA2), non-dominated sorting genetic algorithm II (NSGA-II), Pareto envelope-based selection algorithm (PESA), strength Pareto evolutionary algorithm 2 (SPEA2), and e-multiobjective evolutionary algorithm (e-MOEA). The computational comparison was performed using formal metrics proposed by the evolutionary multiobjective optimization community on publicly available data sets which contain up to 2196 assets.

Chapter 6: FINANCE AND ACCOUNTING6.1 IntroductionTracking the numbers: Across accounting and finance, organizations and markets Accounting, Organizations and Society, Volume 34, Issue 5, July 2009, Pages 619-637Hendrik Vollmer, Andrea Mennicken, Alex Preda


AbstractThis introductory essay reviews recent advances in the emergent field of social studies of finance (SSF) and, subsequently, sets out to illustrate how a closer engagement with SSF might benefit research interests in accounting and vice versa. Finally, it provides a sketch of how mutual engagements across the fields might be intensified in what is identified as an emerging accounting and finance track in the discourse of social science. The prospects of a broader field of research exploring the use of financial numbers across social settings, markets, organizations and cultures are projected, and the possibility of articulating a strong sociological programme of research is considered.

Over the last three decades, Accounting, Organizations and Society has been offering a broad platform for interdisciplinary, accounting-related scholarship. Regularly, this journal has been welcoming scholars from neighbouring fields to get involved in extending the perspectives of accounting research towards a wider and comparative understanding of how various forms of calculative practices affect, and interrelate with, the social settings in which they operate. One interesting new field of study which has taken shape outside accounting research is the field of social studies of finance (henceforth SSF). This field, now emerging at intersections of economic sociology, science and technology studies, cultural anthropology, and cultural geography, has much to offer to researchers interested in the practices, agencies, programmes and technologies of calculation. This introductory essay to the special AOS section will provide a preliminary tour of SSF, explore its intersections with accounting research and test some common ground on which research interests shared across SSF and accounting might be brought to co-operate.

What unifies social studies of finance and those of accounting as “social and institutional practice” (Hopwood & Miller, 1994) is their engagement with social settings characterised by a high frequency of circulating numbers. A remarkable number of researchers have by now become involved in investigating how the use of numbers and a


range of different social settings co-develop, change or persist. Yet, SSF and sociologically oriented accounting research have developed as distinct fields with relatively little interchange. Probably the most palpable difference between SSF and interdisciplinary research in accounting is that the latter has largely focussed on aspects of calculative practices subject to formal organization. Accounting studies have been extending traditional preoccupations with business enterprises towards the employment of numbers in programmes and technologies of government (Miller & Rose, 1990), and the respective roles of accounting professionals (for an overview see e.g. Cooper & Robson, 2006) across the sectors and topologies of a “shifting sphere of the economic” (Hopwood, 1992), moved, moulded and put in place by embedding calculative practices in different kinds of organizations. SSF have, on the other hand, mainly been exploring the construction of markets and market cultures ( [Abolafia, 1996], [Abolafia, 1998] and [Knorr Cetina and Brügger, 2002]) and the roles of calculative models and technologies (“market devices”) in the framing of social and socio-technical interaction in market settings ( [Callon, 1998a], [Callon et al., 2007], [MacKenzie and Millo, 2003], [Muniesa, 2003] and [Preda, 2006]).

On an institutional level, accounting research has, even in its most socially theorized forms, been developing mainly within the boundaries of the accounting discipline and its academic establishments. Researchers involved in SSF appear to be mostly associated with sociology and anthropology units of universities. One might hypothesize that such differences in institutional environments, in line with contrasting professional affiliations, may have been constituting major reasons why correspondence across SSF and interdisciplinary accounting research has remained quite limited. The review elements of this introductory essay would like to indicate why this presents an unfortunate and at least unnecessary state of comparative neglect. Without claiming to be comprehensive either in reviewing or in diagnosing symptomatic shortcomings of an unevenly distributed academic attention, we would above all like to demonstrate the potential of a shared field of research concerned with the circulation of financial numbers across the diverse settings of social life, and we would like to suggest that there is indeed strong potential in a common academic track which social studies of finance and accounting might collectively explore.

Finding a particularly appropriate label for a field opening up for researchers from different scientific disciplines is not easy. Speaking of interdisciplinary finance and accounting studies would perhaps appropriately mirror the self-designation of that particular research tradition – science and technology studies – from which both SSF and social research in accounting have been gaining major theoretical inspirations. Yet opening up interdisciplinarily might not only bring together unaccustomed cohabitants, it might also make it difficult to institutionalize an effective research agenda. In order to articulate itself as a specialized track of scientific discourse, a prospective field of accounting and finance studies might then perhaps need an impulse similar to the one science and technology studies received from David Bloor’s formulation of the strong programme in the sociology of knowledge in the 1970s (Bloor 1992 [originally 1976]). In closing this introductory essay, we would like to put the question to the readers of this special section what a strong programme of research in finance and accounting studies

might look like, encouraging the elaboration of research agendas seeking to transcend boundaries in and between the two fields.

A methodology for analysing and evaluating narratives in annual reports: a comprehensive descriptive profile and metrics for disclosure quality attributes Accounting Forum, Volume 28, Issue 3, September 2004, Pages 205-236Vivien Beattie, Bill McInnes, Stella Fearnley


AbstractThere is a consensus that the business reporting model needs to expand to serve the changing information needs of the market and provide the information required for enhanced corporate transparency and accountability. Worldwide, regulators view narrative disclosures as the key to achieving the desired step-change in the quality of corporate reporting. In recent years, accounting researchers have increasingly focused their efforts on investigating disclosure and it is now recognised that there is an urgent need to develop disclosure metrics to facilitate research into voluntary disclosure and quality [Core, J. E. (2001). A review of the empirical disclosure literature. Journal of Accounting and Economics, 31(3), 441–456]. This paper responds to this call and contributes in two principal ways. First, the paper introduces to the academic literature a comprehensive four-dimensional framework for the holistic content analysis of accounting narratives and presents a computer-assisted methodology for implementing this framework. This procedure provides a rich descriptive profile of a company's narrative disclosures based on the coding of topic and three type attributes. Second, the paper explores the complex concept of quality, and the problematic nature of quality measurement. It makes a preliminary attempt to identify some of the attributes of quality (such as relative amount of disclosure and topic spread), suggests observable proxies for these and offers a tentative summary measure of disclosure quality.

KeywordsBusiness reporting; Disclosure; Disclosure quality; Narratives; Annual reports; Content analysis; Forward-looking information; Non-financial information; Qualitative information

Financial accounting information and corporate governance Journal of Accounting and Economics, Volume 32, Issues 1–3, December 2001, Pages 237-333Robert M. Bushman, Abbie J. Smith


Abstract



This paper reviews and proposes additional research concerning the role of publicly reported financial accounting information in the governance processes of corporations. We first discuss research on the use of financial accounting in managerial incentive plans and explore future research directions. We then propose that governance research be extended to explore more comprehensively the use of financial accounting information in additional corporate control mechanisms, and suggest opportunities for expanding such research. We also propose cross-country research to investigate more directly the effects of financial accounting information on economic performance through its role in governance and more generally.

KeywordsFinancial accounting; Corporate governance; Agency; Moral hazard; Compensation

Experimental research in financial accounting Accounting, Organizations and Society, Volume 27, Issue 8, November 2002, Pages 775-810Robert Libby, Robert Bloomfield, Mark W Nelson


AbstractThis paper uses recent experimental studies of financial accounting to illustrate our view of how such experiments can be conducted successfully. Rather than provide an exhaustive review of the literature, we focus on how particular examples illustrate successful use of experiments to determine how, when and (ultimately) why important features of financial accounting settings influence behavior. We first describe how changes in views of market efficiency, reliance on the experimentalist’s comparative advantage, new theories, and a focus on key institutional features have allowed researchers to overcome the criticisms of earlier financial accounting experiments. We then describe how specific streams of experimental financial accounting research have addressed questions about financial communication between managers, auditors, information intermediaries, and investors, and indicate how future research can extend those streams. We focus particularly on (1) how managers and auditors report information; (2) how users of financial information interpret those reports; (3) how individual decisions affect market behavior; and (4) how strategic interactions between information reporters and users can affect market outcomes. Our examples include and integrate experiments that fall into both the “behavioral” and “experimental economics” literatures in accounting. Finally, we discuss how experiments can be designed to be both effective and efficient

Financial accounting and corporate governance: a discussion Journal of Accounting and Economics, Volume 32, Issues 1–3, December 2001, Pages 335–347 Richard G. Sloan



AbstractBushman and Smith (2001, this issue) provide a useful review of research on the role of accounting in management compensation contracts and an appealing future research agenda that builds on recent research using a cross-country approach. This paper rounds out their discussion by highlighting some limitations of their research agenda, providing a critical review of the contributions of accounting scholars to governance research and highlighting research opportunities on the role of financial accounting in governance mechanisms other than managerial incentive contracts.

KeywordsCorporate governance; Accounting; Contracting

Chapter 7: PRODUCT DEVELOPMENT7.1 Introduction7.2 Product Life CycleInnovation diffusion and new product growth models: A critical review and research directions International Journal of Research in Marketing, Volume 27, Issue 2, June 2010, Pages 91-106Renana Peres, Eitan Muller, Vijay Mahajan


AbstractDiffusion processes of new products and services have become increasingly complex and multifaceted in recent years. Consumers today are exposed to a wide range of influences that include word-of-mouth communications, network externalities, and social signals. Diffusion modeling, the research field in marketing that seeks to understand the spread of innovations throughout their life cycle, has adapted to describe and model these influences.

We discuss efforts to model these influences between and across markets and brands. In the context of a single market, we focus on social networks, network externalities, takeoffs and saddles, and technology generations. In the context of cross-markets and brands, we discuss cross-country influences, differences in growth across countries, and effects of competition on growth.

On the basis of our review, we suggest that the diffusion framework, if it is to remain a state-of-the-art paradigm for market evolution, must broaden in scope from focusing on interpersonal communications to encompass the following definition: Innovation diffusion is the process of the market penetration of new products and services that is driven by social influences, which include all interdependencies among consumers that affect various market players with or without their explicit knowledge.



Although diffusion modeling has been researched extensively for the past 40 years, we believe that this field of study has much more to offer in terms of describing and incorporating current market trends, which include the opening up of markets in emerging economies, web-based services, online social networks, and complex product–service structures.

KeywordsDiffusion; Innovations; New product; Review; Social network; Individual level modeling; Agent based modeling; Multinational diffusion; Competition; Brand; Network externalities; Takeoff; Saddle; Technology generations

Repositioning drugs to enhance a product's lifecycle Drug Discovery Today: Therapeutic Strategies, Volume 8, Issues 3–4, Winter 2011, Pages 97-101Ken Phelps


The high cost of R&D combined with the tiny percentage of drugs that actually achieve regulatory approval has created an environment in which pharmaceutical companies are utilizing previously conducted research and other techniques to expedite the approval process, improve the chance of approval and buy additional years of marketing exclusivity by repositioning drugs with new indications, formulations or methods of administration.

Product life cycle cost analysis: the impact of customer profiling, competitive advantage, and quality of IS information Management Accounting Research, Volume 15, Issue 4, December 2004, Pages 401-414Alan S. Dunk


AbstractLife cycle cost analysis is considered in the literature to be of increasing importance to firms as international competition intensifies and technological change continues. The literature increasingly emphasizes that rapid technological change and shortened life cycles have made product life cycle cost analysis critical to organizations. Although significant benefits are attributed to life cycle cost analysis, there is little evidence regarding the extent of its application in organizational settings. Moreover, there is scant systematic evidence available with respect to the array of factors that may influence its use. However, a review of the literature suggests that customer profiling, competitive advantage, and quality of information system information are three factors potentially impacting the extent to which life cycle cost analysis is used in firms. The results of the



study illustrate first, the degree to which product life cycle cost analysis is used across a random sample of organizations. Second, that all three independent variables play a positive role in affecting the extent to which product life cycle costing is used in firms.

KeywordsProduct life cycle; Customer profiling; Competitive advantage; Quality of IS information

Cross-bidding impact throughout the product life cycleEconomics Letters, Volume 113, Issue 1, October 2011, Pages 80-83Juan-Francisco Pages, Asuncion Mochon


AbstractTwo products at different points of the product life cycle have been chosen to analyse the effect of cross-bidding in competing auctions. The findings indicate that this strategy can have a different impact depending on the phase of the cycle.Highlights► The presence of cross-bidding and sniping strategy has been confirmed. ► Cross-bidders are better off than non-cross-bidders. ► Cross-bidding has a different impact depending on the phase of the product life cycle.

KeywordsOnline auctions; Cross-bidding; Competing auctions; Product life cycle

7.3 Disruption (Disruptive Innovation)Study on Chinese and European automotive R&D – comparison of low cost innovation versus system innovation Procedia - Social and Behavioral Sciences, Volume 25, 2011, Pages 214-226Benjamin Thoma, David O'Sullivan


AbstractChinese carmakers are leapfrogging innovation by levering electric vehicle propulsion technologies and providing low cost solutions. This has become a severe threat for mature global players. On the other hand, European premium carmakers have been able to increase their penetration in emerging markets. Even though premium cars yield higher costs of innovation and offer few possibilities to achieve scale effects, sales have skyrocketed to a record high in 2011. In both cases, manufacturers who can innovate best will emerge as winners in lucrative and expanding markets - regardless of origin or innovation approach. The aim of this paper is to outline disruptive innovation patterns of the Chinese automotive industry and to showcase the system integration capabilities of European carmakers. The paper commences with “the China Price” advantage that plays



a vital role for Chinese carmakers to leapfrog technology gaps. It allows offering innovation at low cost. Also, the local electric vehicle supply chain, government supportiveness and behavior of emerging consumer groups drive growth for new technologies such as electric vehicles in China. Next, the European car industry is characterized with the evolution of key innovations coming to a large extend from German premium carmakers. Consequently, the paper shows how their global success and innovation dominance in the premium segment can be linked to their integrated R&D approach. This comprises system development, modularity concepts, in-house R&D value chain, rigorous planning processes and so forth. In summary, the paper analyses key trends in innovation patterns from the Chinese and European car industry. Furthermore, it shows related market drivers such as regulatory development and consumer behavior. At last, a generic model for new product development is used to compare automotive R&D approaches between China and Europe. The authors conclude with their findings on comparing low cost innovation versus system innovation based on Chinese and European automotive R&D.

KeywordsNew product development; low cost cars; disruptive innovation; China price; electric vehicle; system innovation

Disruptive technology roadmapsTechnological Forecasting and Social Change, Volume 71, Issues 1–2, January–February 2004, Pages 141–159 Ronald N. Kostoff, Robert Boylan, Gene R. Simons


AbstractDisruptive technologies create growth in the industries they penetrate or create entirely new industries through the introduction of products and services that are dramatically cheaper, better, and more convenient. These disruptive technologies often disrupt workforce participation by allowing technologically unsophisticated individuals to enter and become competitive in the industrial workforce. Disruptive technologies offer a revolutionary change in the conduct of processes or operations.

Disruptive technologies can evolve from the confluence of seemingly diverse technologies or can be a result of an entirely new technological investigation. Existing planning processes are notoriously poor in identifying the mix of sometimes highly disparate technologies required to address the multiple performance objectives of a particular niche in the market. For a number of reasons, especially the inability to look beyond short-term profitability, and the risk/return tradeoff of longer term projects, it is suggested that current strategic planning and management processes promote sustaining technologies at the expense of disruptive technologies.


We propose a systematic approach to identify disruptive technologies that is realistic and operable and takes advantage of the text mining literature. This literature-based discovery process is especially useful in identifying potential disruptive technologies that may require the input from many diverse technological and management areas. We believe that this process holds great potential for identifying projects with a higher probability of downstream success. Further, we suggest a process to take the identified potential disruptive technology from the “idea stage” through to the development of a potentially feasible product for the market. This second stage makes use of workshops and roadmapping to codify the ideas of technological and management experts, who were identified in the literature-based discovery stage. Our goal is to describe and explain the pragmatic steps suggested by our innovative and practical process.

The proposed process could identify technologies whose eventual development and application to specific problems would generate innovative products. The goal is to isolate technologies that have the potential to redefine an industry, or alternatively, have the potential to create an entirely new industrial setting. Use the text-mining component of literature-based discovery to identify both the technical disciplines that are likely candidates for disruptive technological products, and experts in these critical technical and managerial disciplines. While we know that this is but one way to investigate nascent disruptive technologies we feel it is imperative that the representatives of these potentially critical technical disciplines are included in the roadmap development process, either as implementers or as consultants.

Every firm is looking for “the next great thing”. Literature-based discovery offers a starting point for identifying at least a portion of the major contributory technical and managerial disciplines necessary for potential disruptive technologies and discontinuous innovations. Combining literature-based discovery with a practical workshop/roadmap process dramatically enhances the likelihood of success.

KeywordsText mining; Literature-based discovery; Innovation; Workshops; Roadmaps; Disruptive technologies; Interdisciplinary; Multidisciplinary; Clustering

A bridge over troubled waters: Bridging organisations and entrepreneurial opportunities in emerging sectors Research Policy, Volume 36, Issue 9, November 2007, Pages 1314-1334Jonathan Sapsed, Andrew Grantham, Robert DeFillippi


AbstractBridging institutions or organisations are regarded as having positive effects in the Sectoral Systems of Innovation (SSI) literature, particularly in compensating for weaknesses in these systems. Yet, we know little about the organisational practices that make their role effective, or the types of innovation paths that they may facilitate within a


system. This paper shows how bridging organisations may promote neglected areas of creativity and potential disruptive innovation. These blocked opportunities tend to emerge at the boundaries of SSI: where old sectors overlap and new trajectories form. We draw on the social networks, entrepreneurship and disruptive innovation literature and analyse an intervention in the UK electronic games industry: the evaluation of business propositions exploiting new gaming platforms such as mobile telephones, DVD and film. Using an innovative co-productive research design, the study shows how the effectiveness of bridging organisation activity depends on key design choices and brokerage capabilities.

KeywordsSectoral systems of innovation; Entrepreneurship; Disruptive innovation; Brokerage; Video games industry

7.4 Adoption and DiffusionUse of experience curves to analyse the prospects for diffusion and adoption of renewable energy technology Energy Policy, Volume 25, Issue 13, November 1997, Pages 1099-1107Lena Neij


AbstractExperience curves are used to analyse the prospects for diffusion and adoption of renewable energy technologies, with special emphasis on wind turbines and photovoltaic (PV) modules. The analysis shows that the possibility of cost reductions of renewable energy technologies is greater than for conventional energy technologies. However, large investments are necessary to make wind turbines and PV modules economically competitive with conventional power plants. The results indicate that the prospects for diffusion and adoption of wind turbines and PV modules will increase if policy instruments are used to bring about diffusion.

KeywordsExperience curves; PV modules; Wind turbines

A time delay model for the diffusion of a new technology Nonlinear Analysis: Real World Applications, Volume 13, Issue 2, April 2012, Pages 643-649Viviana Fanelli, Lucia Maddalena


Abstract



In this paper, we propose a mathematical model with time delay to describe the process of diffusion of a new technology. This model is suitable for modeling diffusion processes of all those technologies that require great initial investments and public subsidies, such as technologies used for producing renewable energy. We consider external factors, such as the government policy and the production costs, that influence the decision of adoption of the new technology. We also consider the internal influence from adopters. The adoption process is described by a delay differential equation. The time delay represents the evaluation stage at which the potential consumers decide whether to adopt the new technology or not. A qualitative analysis is carried out in order to assess the stability of the equilibrium for certain parameters and to find the final level of adopters.

KeywordsDelay differential equation; Innovation diffusion; Asymptotic behavior

Slowing the adoption and diffusion process to enhance brand repositioning: The consumer driven repositioning of Dunlop Volley Business Horizons, Volume 48, Issue 5, September–October 2005, Pages 385-391Michael Beverland, Michael Ewing


AbstractWhat should you do when your brand becomes ‘hot’ overnight among influential endorsers? Do you exploit this sudden rise in popularity and mainstream the brand, or do you attempt to slow the diffusion process and seek to understand how to market to these consumers? Drawing on the case of Dunlop Volley in Australia, we argue that mainstreaming the brand by targeting later adopters results in a short-term fashion cycle rather than creating long-term brand value. Since these brands are ‘discovered’ by consumers, marketers must first understand the value system underlying this adoption and then fit the marketing program to these values. In the case of Dunlop Volley, slowing diffusion rates was achieved through four tactics: the rejection of hard sell marketing, appearing authentic, targeting alternative distribution channels and delaying launch to the mainstream audience. These activities ensured the ongoing credibility of the brand with endorsers and helped revitalize a long-thought ‘dead’ brand.

KeywordsBrand turnaround; Positioning; Adoption and diffusion

7.5 Discontinuities in the Product Life CycleImportant research questions in technology and innovationIndustrial Marketing Management, Volume 37, Issue 6, August 2008, Pages 629-632Gerard J. Tellis




1. IntroductionConsumers today have a better standard of living than consumers had a decade ago and much better off than consumers had a hundred years ago. That improvement is due to technological innovation. The landscape of firms in high tech markets steadily changes. Firms that stand still face the danger of decline and extinction. Firms that innovate grow to dominate their markets. The force that facilitates this change is technological innovation. Today, as in prior eras, the wealth of nations is driven not so much by their possession of raw materials, but by how they or the firms within their borders translate those resources into superior products and services through technological innovation. Thus, technological innovation is a critical driver of the improvement in consumers' living standards, the survival, growth, and success of firms, and the wealth of nations. Understanding innovation is of great importance because of its huge impact at these three levels of consumers, firms, and nations.

Researchers in a vast number of disciplines have studied various aspects of technological innovation. However, those in marketing have a unique advantage. Adopting a consumer orientation helps in understanding technological evolution because all innovations ultimately aim to produce better products for consumer welfare. Thus researchers in marketing have a unique vantage point in researching and understanding this phenomenon. This essay aims to point out some important research questions in technological innovation from a marketing perspective.

Profiling technology diffusion categories: Empirical test of two models Journal of Business Research, Volume 31, Issues 2–3, October–November 1994, Pages 155-162James R. Taylor, Eric G. Moore, Edwin J. Amonsen


AbstractThe authors provide an empirical test of two models which predict the technological adoption categories of small businesses for Hewlett Packard laser printers. The two models tested were a psychographic model as proposed in the book, Crossing the Chasm, and a more traditional benefit-price model. The adoption categories were defined by the sequence of laser printer model changes from 1985 to 1990. The results suggest that the benefits model predicts the buyer adoption better than the psychographics model. The study represents an exploratory phase of a future conclusive research project.

7.6 Dominant DesignA new approach for understanding dominant design: The case of the ink-jet printer Journal of Engineering and Technology Management, Volume 25, Issue 3, September 2008, Pages 137-156Neil Clymer, Shigeru Asaba



AbstractWe study dominant design strategies concerning the allocation of technological resources for ink-jet printers. We find that the dominant design for each firm can be quantitatively represented by the number of ink-jet patents in nine categories of a matrix that distinguishes patents according to method of implementation and type of module. Further, we find that annual firm ink-jet revenue from 1990 through 2000 is positively correlated with a balanced dispersion of patents across the nine categories. Results suggest that higher revenues will accrue to firms in integrated industries when resources are balanced among important sub-technologies in the dominant design.

KeywordsDominant design; Ink-jet printing; Patents; Technology strategy

Modelling and forecasting the diffusion of innovation – A 25-year review International Journal of Forecasting, Volume 22, Issue 3, 2006, Pages 519-545Nigel Meade, Towhidul Islamhttp://www.sciencedirect.com/science/article/pii/S0169207006000197

AbstractThe wealth of research into modelling and forecasting the diffusion of innovations is impressive and confirms its continuing importance as a research topic. The main models of innovation diffusion were established by 1970. (Although the title implies that 1980 is the starting point of the review, we allowed ourselves to relax this constraint when necessary.) Modelling developments in the period 1970 onwards have been in modifying the existing models by adding greater flexibility in various ways. The objective here is to review the research in these different directions, with an emphasis on their contribution to improving on forecasting accuracy, or adding insight to the problem of forecasting.The main categories of these modifications are: the introduction of marketing variables in the parameterisation of the models; generalising the models to consider innovations at different stages of diffusions in different countries; and generalising the models to consider the diffusion of successive generations of technology.

We find that, in terms of practical impact, the main application areas are the introduction of consumer durables and telecommunications.

In spite of (or perhaps because of) the efforts of many authors, few research questions have been finally resolved. For example, although there is some convergence of ideas of the most appropriate way to include marketing mix-variables into the Bass model, there are several viable alternative models.



Future directions of research are likely to include forecasting new product diffusion with little or no data, forecasting with multinational models, and forecasting with multi-generation models; work in normative modelling in this area has already been published.

KeywordsDiffusion models; Technology forecasting; Telecommunications forecasting; Marketing

Chapter 8: OPERATIONS8.1 Introduction8.2 Total Quality ManagementThe benefits of total quality managementComputerized Medical Imaging and Graphics, Volume 25, Issue 2, March 2001, Pages 217–220H.P.A Geraedts, R Montenarie, P.P van Rijk


AbstractIn this article, we will review the implementation of the ISO 9000 quality system in the Department of Nuclear Medicine. We will also discuss the benefits of working with the ISO 9000 standards and explain why we have shifted our focus from ISO 9000 towards the EFQM model. After an introduction concerning Total Quality Management and the EFQM model, we will describe how we have used the EFQM model to date and how we intend to implement TQM in the future.

KeywordsQuality management; Nuclear medicine; EFQM; ISO 9000 certification; Implementation

Total quality management and corporate culture: constructs of organisational excellence Technovation, Volume 24, Issue 8, August 2004, Pages 643-650Z. Irani, A. Beskese, P.E.D. Love


AbstractThere is a need for an appropriate culture to support the scope of Total Quality Management (TQM). Customer focus, systems approach, teamwork, involved management and continuous improvement are the aspects of TQM that facilitate improved organisational success, growth, and competitiveness. Many companies are now complementing continuous improvement with innovation, which is seen as the successful exploitation of new ideas. A clear synergy appears between these two corporate success factors as they are often integrated under an appropriate corporate culture for exploitation. The results of this can support substantial improvements in business performance and competitiveness of the company. With this in mind, this paper discusses the concept of corporate culture, places this social construct within the arena of TQM,



and highlights the relationships that exist among culture, quality, and competitiveness using a case study.

KeywordsCorporate culture; TQM; Continuous improvement; Case study

Facilitating implementation of total quality management through information technology Information & Management, Volume 36, Issue 6, December 1999, Pages 287-299Grace Au, Ivan Choi


AbstractThere is growing interest in the service industries in the adoption of quality management programs to improve their operational efficiency and market competitiveness. Deming’s total quality management (TQM) philosophy is one of the well-known ones. The TQM emphasizes continuous improvement through statistical control and the continuous training of people in the principles of quality management. One of the main implementation issues is the large volume of data that must be statistically analysed. Although recent researches have reported on how TQM is applied in various industries, few have discussed the importance of information technology in ensuring a successful TQM program. This paper reports on the application of information technology in the TQM process and how it can support management decisions. A case example is included to support these views.

KeywordsTotal quality management; Quality control information system; Statistical process control; Continuous improvement

8.3 VariabilityQuality and variability in diagnostic radiology Original Research ArticleJournal of the American College of Radiology, Volume 1, Issue 2, February 2004, Pages 127-132Hillel R. Alpert, Bruce J. Hillman


AbstractAchieving and delivering optimal quality of care in radiology requires continual self-examination by the profession, particularly with regard to technical, interpretive, and communication skills. The importance of empirical data pertaining to quality and variability in radiology, the underlying causes of error, and the sources of variability are discussed. Key measures (e.g., receiver operating characteristics, κ) and approaches (professional audits and peer reviews, surveys, inspections, and risk management



programs) used in improvement efforts are reviewed, and data from key studies are highlighted. Diagnostic errors are important because of their connection to outcomes and the wide variability observed with modalities such as chest radiography and mammography.

KeywordsQuality of health care; physicians’ practice patterns; medical errors; diagnostic imaging

Classifying variability modeling techniques Information and Software Technology, Volume 49, Issue 7, July 2007, Pages 717-739Marco Sinnema, Sybren Deelstra


AbstractVariability modeling is important for managing variability in software product families, especially during product derivation. In the past few years, several variability modeling techniques have been developed, each using its own concepts to model the variability provided by a product family. The publications regarding these techniques were written from different viewpoints, use different examples, and rely on a different technical background. This paper sheds light on the similarities and differences between six variability modeling techniques, by exemplifying the techniques with one running example, and classifying them using a framework of key characteristics for variability modeling. It furthermore discusses the relation between differences among those techniques, and the scope, size, and application domain of product families.

KeywordsClassification; Software product family; Variability management; Variability modeling

8.4 Continuous Improvement8.4.1 Lean ManufacturingThe Benefits of Lean Manufacturing: What Lean Thinking has to Offer the Process Industries Chemical Engineering Research and Design, Volume 83, Issue 6, June 2005, Pages 662-673T. Melton


How many people in the manufacturing industry can truly say that they have not heard of LEAN? Not many. Yet how many of these believe in lean, have implemented lean, are the passionate change agents who have convinced senior stakeholders than lean is the way forward for their company? Less. Much Less. Lean is a revolution—it isn’t just about using tools, or changing a few steps in our manufacturing processes—it's about the



complete change of our businesses—how the supply chain operates, how the directors direct, how the managers manage, how employees—people—go about their daily work. Everything. So what is this revolution, and how is it impacting the process industries? The background of lean thinking is based in the history of Japanese manufacturing techniques which have now been applied world-wide within many types of industry.

Keywordslean manufacturing; waste; value; flow; value stream; bottleneck

Advancing lean manufacturing, the role of ITComputers in Industry, Volume 60, Issue 4, May 2009, Pages 235-236Jan Riezebos, Warse Klingenberg


AbstractThis introduction to the special issue discusses the changing role of information technology (IT) in advancing lean production. Lean principles and techniques have been applied in a wide variety of organisations, from make-to-stock to engineer-to-order industries, and even in typical service sectors, such as healthcare. In order to apply lean principles in various areas, variants were developed of well-known techniques, such as Kanban, Kaizen, SMED, and 5S. IT is used to develop such variants. Over the years, the role and use of IT in the application of the lean principles has changed. In this introduction, we discuss the main findings of the papers that were selected for publication in this special issue.

KeywordsInformation technology; Lean production

8.4.2 Plan-Do-Study-Act CycleUsing a Plan-Do-Study-Act Cycle to Introduce a New OR Service Line Original Research ArticleAORN, Volume 92, Issue 3, September 2010, Pages 335-343Don K. Nakayama, Timothy N. Bushey, Irene Hubbard, Dawn Cole, Amanda Brown, Timothy M. Grant, Issam J. Shaker


AbstractIn 2008, a multidisciplinary team at the Medical Center of Georgia, Macon, began a one-year Plan-Do-Study-Act (PDSA) cycle to implement a high-quality pediatric surgery service line. The PDSA team defined goals, objectives, and measurable performance metrics and then reviewed cases and aggregated data monthly to identify and improve clinical, process, instrument, and supply problems as well as patient transfer issues. The



PDSA cycle led to improvements in team performance, communication, and patient transfer and decreased the number of problems associated with instruments, supplies, equipment, and surgeon tardiness.

Keywordsplan-do-study-act; surgical team performance; system-based practice; quality improvement; pediatric surgery

Basics of Quality Improvement in Health Care Mayo Clinic Proceedings, Volume 82, Issue 6, June 2007, Pages 735-739Prathibha Varkey, M. Katherine Reller, Roger K. Resar


With the rapid expansion of knowledge and technology and a health care system that performs far below acceptable levels for ensuring patient safety and needs, front-line health care professionals must understand the basics of quality improvement methodologies and terminology. The goals of this review are to provide clinicians with sufficient information to understand the fundamentals of quality improvement, provide a starting point for improvement projects, and stimulate further inquiry into the quality improvement methodologies currently being used in health care. Key quality improvement concepts and methodologies, including plan-do-study-act, six-sigma, and lean strategies, are discussed, and the differences between quality improvement and quality-of-care research are explored.

KeywordsCQI, continuous quality improvement; DPMO, defects per million opportunities; PDSA, plan-do-study-act; QI, quality improvement; TPS, Toyota Production System; VSM, value stream mapping

8.4.3 Six SigmaWhat is Six Sigma? Reinforced Plastics, Volume 48, Issue 7, July–August 2004, Pages 46-49Jennifer Markarian


Six Sigma is both a philosophy and a methodology that improves quality by analysing data with statistics to find the root cause of quality problems and to implement controls. Although Six Sigma is typically first implemented to improve manufacturing, the method can also be used in other business processes, such as product design and supply chain management. Jennifer Markarian reports on how Six Sigma can benefit both big and small companies.



Design for Six Sigma through collaborative multiobjective optimization Computers & Industrial Engineering, Volume 60, Issue 1, February 2011, Pages 43-55Chantal Baril, Soumaya Yacout, Bernard Clément


AbstractThis paper presents a global methodology for designing product for Six Sigma. First, we combine a feasibility-modeling technique with an interactive multiobjective algorithm taking into account the decision maker’s preferences (IMOP) to generate several Pareto-optimal solutions that maintain a probability of constraint satisfaction. These solutions are called reliable Pareto-optimal solutions.The solutions found by the algorithm fulfill as much as possible the decision makers’ requirements. Second, we develop a procedure for choosing a solution for implementation from among the reliable Pareto-optimal solutions generated by the algorithm. This procedure is based on the robust design and philosophy of Six Sigma. Finally, the critical characteristics are identified to help the managers develop the manufacturing system and its related control plans in order to achieve quality products. The proposed methodology is applied to vehicle crash-worthiness design optimization for side impact with structural weight and front door velocity under side impact as objectives.

KeywordsCollaborative multiobjective optimization; Six Sigma; Robustness; Reliability

8.5 Supply Chain Coordination: Information SharingDynamic capabilities and operational capabilities: A knowledge management perspective Journal of Business Research, Volume 60, Issue 5, May 2007, Pages 426-437Gabriel Cepeda, Dusya Vera


AbstractThis paper contributes to the clarification of the link between operational (how you earn your living) capabilities and dynamic (how you change your operational routines) capabilities. In doing so, the article builds on a knowledge management (KM) perspective to capture KM processes behind the development and utilization of dynamic capabilities and to examine their impact on operational capabilities. Empirical evidence is provided by performing survey research with a sample of 107 firms in the information technology and communication industry in Spain. The article includes conclusions and practical steps for managers with an interest in KM practices supporting dynamic capabilities.

KeywordsKnowledge management; Dynamic capabilities; Operational capabilities; Organizational knowledge



Information sharing in supply chains Omega, Volume 33, Issue 5, October 2005, Pages 419-423P. Fiala


AbstractSupply chain is defined as a system of suppliers, manufacturers, distributors, retailers and customers where material, financial and information flows connect participants in both directions. Most supply chains are composed of independent agents with individual preferences. It is expected that no single agent has the power to optimise the supply chain. Supply chain management is now seen as a governing element in strategy and as an effective way of creating value for customers. The so-called bullwhip effect, describing growing variation upstream in a supply chain, is probably the most famous demonstration that decentralised decision making can lead to poor supply chain performance. Information asymmetry is one of the most powerful sources of the bullwhip effect. Information sharing of customer demand has an impact on the bullwhip effect. Information technology has lead to centralised information, shorter lead times and smaller batch sizes. The analysis of causes of the bullwhip effect has lead to suggestions for reducing the bullwhip effect in supply chains by strategic partnership. Supply chain partnership leads to increased information flows, reduced uncertainty, and a more profitable supply chain. The cooperation is based on contacts and formal agreements. Information exchange is very important issue for coordinating actions of units. New business practices and information technology make the coordination even closer. Information sharing and strategic partnerships of units can be modelled by different network structures.

KeywordsSupply chain; System dynamics; Bullwhip effect; Information sharing; Cooperation

Chapter 9: BUSINESS LAW9.1 ContractsChina's new Labour Contract Law: No harm to employment? China Economic Review, Volume 20, Issue 3, September 2009, Pages 558-572Yu-Fu Chen, Michael Funke


AbstractIn January 2008, China adopted a new labour contract law. This new law represents the most significant reform to the legislation on employment relations in mainland China in more than a decade. The paper provides a theoretical framework on the inter-linkages between labour market regulation, option value and the choice and timing of



employment. All in all, the paper demonstrates that the Labour Contract Law in its own right will have only small impacts upon employment in the fast-growing Chinese economy. Rather, possibly induced increasing unit labour costs may adversely affect employment.

KeywordsChina; Labour Contract Law; Real options; Employment

Having the cake and eating it too: efficient penalty clauses in Common and Civil contract law International Review of Law and Economics, Volume 22, Issue 4, December 2002, Pages 381-406Aristides N Hatzis


AbstractIn this paper we examine one of the areas where there is a marked difference between Civil and Common contract law, that of the enforcement of liquidated damages and more particularly of penalty clauses. Common law judges are quite reluctant to enforce liquidated damages, especially if they believe that they include penalty clauses which are not enforceable. On the contrary, in almost all European contract laws liquidated damages are readily enforced, as are penalty clauses when they are not manifestly excessive. Although most law and economics scholars have criticized Common law courts for the non-enforcement of penalty clauses, there is a sizable minority of scholars who have defended the Common law “non-enforcement” policy on the ground that penalty clauses are inefficient because they hinder efficient breach. However, and despite the merits of the arguments advanced by advocates of the non-enforcement of penalty clauses, we believe that Common law’s rejection of penalty clauses is inefficient. We further show that the Civil law solution to the problem is not only comparatively more efficient, but that it can also appease the worries of those scholars who are afraid that efficient breaches will be deterred. The solution that Civil law systems give to the problem manages to enforce the parties’ wishes and to avoid deterring efficient breaches. However, we point out that in order for the Civil law systems to take advantage of this superiority, the interpretation of their Civil Codes should be guided by economic analysis and the respect to the wishes of the contracting parties.

KeywordsLiquidated damages; Penalty clauses; Civil law; Common law; Efficient breach

Effective incomplete contracts and milestones in market-distant R&D collaboration Research Policy, Volume 41, Issue 2, March 2012, Pages 346-357Martin Kloyer, Joachim Scholderer



AbstractR&D outsourcing is often conducted during the early, market-distant stages of the innovation process. However, the main obstacle to this potentially efficient interfirm specialization is the high danger of moral hazard. Most organizational mechanisms fail to control that type of opportunism because of information asymmetries, even ex post. In the theory of incomplete contracts, this problem is mitigated by assigning the control rights to the supplier. To date, empirical studies have mainly investigated the interfirm distribution of the control rights. However, we do not know yet which concrete control right is crucial with regard to supplier opportunism, which is the decisive dependent variable. Our study addresses this research gap. For the first time, we extend the empirical focus from biotechnology and pharmaceutical firm alliances to a cross-industry sample of 113 collaboration cases. The results show the effectiveness of contracts that ex ante assign patent ownership rights to the supplier. The findings are also relevant for management practice because the majority of practitioners do not use this contract type yet, although there is no sign of an effective alternative.

9.2 TortsTort law and probabilistic litigation: How to apply multipliers to address the problem of negative value suitsInternational Review of Law and Economics, Volume 30, Issue 3, September 2010, Pages 236–243Jef De Mot, Ben Depoorter


AbstractThis article advances a proposal that increases access to justice for valuable lawsuits that are currently discouraged by litigation costs. Our proposal converts claims with negative expected values into positive expected value claims by implementing a novel system involving flexible conditional multipliers. Our proposal has two components. First, under the proposed system a plaintiff is allowed to select a damage multiplier that determines the amount of damages the plaintiff receives if the litigation is successful. Second, courts select cases for litigation randomly with a probability inverse to the multiplier selected by the plaintiff.

KeywordsLitigation; Procedure; Tort law

Causality and causation in tort law International Review of Law and Economics, Volume 24, Issue 4, December 2004, Pages 507-523Robert Young, Michael Faure, Paul Fenn




AbstractThis paper considers alternative approaches to dealing with causal uncertainty in strict liability tort regimes. Beginning from the philosophical literature on causing, a distinction is made between the scientific idea of causality and the legal idea of causation. This distinction is generalized to a context of causal uncertainty and associated probabilities are constructed. It is shown that a rule of proportional liability whereby the tortfeasor pays damages in proportion to the probability in causation of them having caused the damage would be socially efficient. This contrasts with the implied use of the probability in causality by the courts and in the law and economics literature on causal uncertainty.

KeywordsCausality; Causation; Tort law

9.2.1 Product LiabilityProduct liability, entry incentives and market structure International Review of Law and Economics, Volume 20, Issue 2, June 2000, Pages 269-283Stephen F. Hamilton, David L. Sunding


AbstractThe article characterizes the entry incentives provided by increases in product liability under various forms of competition. It is demonstrated that the entry of small, high-cost firms is likely to occur in imperfectly competitive markets when the average damage increases with industry output. Special cases are considered, including Cournot–Nash oligopoly and dominant firm-competitive fringe

A note on the optimality of (even more) incomplete strict liability International Review of Law and Economics, Volume 31, Issue 2, June 2011, Pages 77–82Florian Baumann, Tim Friehe, Kristoffel Grechenig


AbstractThis paper starts from the premise that liability is incomplete and establishes that firms may nevertheless invest excessively in care. This may justify a (further) reduction in the level of liability from a social standpoint, thereby arguing against seeking to approach full compensation as close as possible. In our framework, firms are liable under product liability, but also invest in care to prevent consumers’ switching to competitors. Affecting




the partition of consumers by means of care-taking is not desirable from a social standpoint. Consequently, it may be optimal to reduce liability below a given level of incomplete compensation in order to adjust firms’ care incentives.

Research highlights► Liability is often incomplete. ► Nevertheless, firms may invest excessively in care due to market forces. ► Thus, it may be socially optimal to further reduce the level of liability.

KeywordsTort law; Product liability; Care level; Incomplete compensation; Market forces

Liability and information transmission: The advantage of negligence based rulesEconomics Letters, Volume 92, Issue 1, July 2006, Pages 63–67Eberhard Feess, Ansgar Wohlschlegel


AbstractIt is usually taken for granted that strict liability is superior to negligence for unilateral accidents. We show that the contrary holds if some potential injurers and the court have inferior information about expected accident costs, as negligence standards may serve as an information transmission device.

KeywordsLiability rules; Negligence; Rational expectations

9.3 Intellectual PropertyIntellectual property protection and innovation: an inverted-U relationshipEconomics Letters, Volume 109, Issue 2, November 2010, Pages 99–101Yuichi Furukawa


AbstractThis paper shows in an endogenous growth model without scale effects that the relationship between intellectual property protection and innovation can be inverted-U-shaped. The inverted-U relationship emerges from an interaction between learning-driven and R&D-driven technological advances.

KeywordsPatent; Learning; Growth; Scale effect; R&D



Business enterprise R&D, technological change, and intellectual property protectionEconomics Letters, Volume 96, Issue 1, July 2007, Pages 120–126Sunil Kanwar


AbstractVery little empirical evidence exists on the relationship between intellectual property rights and innovation. Existing studies tend to be indirect and do not consider the influence of IPRs on innovation per se; nor do they adequately allow for the endogeneity of IPRs. Correcting for these omissions, we show that the strength of intellectual property protection has a strong positive influence on innovation.

KeywordsInnovation; IPRs; Endogeneity

Intellectual property protection related to technology in China Technological Forecasting and Social Change, Volume 72, Issue 3, March 2005, Pages 339-348Wenqi Liu


AbstractThe state of protection for technology in China is widely criticized from the point of view of incompleteness of the legal system as a whole. Much research dwells on the gap between the Chinese legal system and that in industrialized countries or international agreements. In comparison with the developed countries, China lacks core technologies. While holders of such technologies encounter serious problems in China, the Chinese government is not in an enviable position either. Due to the internal impetus and external pressure on China to strengthen protection for technology, China has made a giant stride and made a substantial progress in legislation, enforcement and other areas. However, designing an appropriate system for technology protection is so complex that China will unavoidably face many challenges. The reforms to be carried out in China will be based on the balance between economic and political consideration.

KeywordsTechnology; Protection; Development

9.4 Employment LawAnalysis of employment protection laws and unemployment benefitsEconomics Letters, Volume 99, Issue 1, April 2008, Pages 144-146Yoon-Kyung Chung, Jinook Jeong




AbtractThis paper presents an empirical model that analyzes the relationship between Employment protection legislation and unemployment benefits. We emphasize the censoring and arbitrary weights problems and propose an alternative method that resolves both problems simultaneously.

KeywordsEmployment protection legislation; Unemployment benefits; Censoring problem; Weight estimation

Employment laws in developing countries Journal of Comparative Economics, Volume 37, Issue 1, March 2009, Pages 3–13Simeon Djankov, Rita Ramalho


We survey the research on the effect of employment laws in developing countries, using papers published since 2004. The survey is further supported by cross-country correlation analyses. Both exercises show that developing countries with rigid employment laws tend to have larger informal sectors and higher unemployment, especially among young workers. A number of countries, especially in Eastern Europe and West Africa, have recently undergone significant reforms to make employment laws more flexible. Conversely, several countries in Latin America have made employment laws more rigid. These reforms are larger in magnitude than any reforms in developed countries and their study can produce new insights on the benefits of labor regulation.

KeywordsEmployment laws; Development; India; Latin America

9.4.1 Employment at WillEvolution of employment structures and regional specialisation in the EU Economic Systems, Volume 28, Issue 1, March 2004, Pages 35-59Enrico Marelli


AbstractThis paper investigates the differentiated employment structures of the European regions, their evolution over time and their implications for economic growth. The analysis focuses on the distribution of employment between the main productive sectors over the period 1983–1997 in 145 regions of the EU. Some clusters of regions which are structurally similar are identified. Finally, in order to show the importance of the




economic structure for long-run growth, the productive structures are related to convergence in per-capita incomes. The main results show that convergence and persistence in employment structures may coexist; structural differences are greater within rather than between countries; and, finally, convergence in incomes is improved by the homogenisation of productive structures, although the industrial sector maintains a key role in the growth processes.

KeywordsRegional structure; Regional specialisation; Employment dynamics; European integration; Convergence

Great Expectations: Law, Employment Contracts, and Labor Market PerformanceHandbook of Labor Economics, Volume 4, Part B, 2011, Pages 1591-1696W. Bentley MacLeod


AbstractThis chapter reviews the literature on employment and labor law. The goal of the review is to understand why every jurisdiction in the world has extensive employment law, particularly employment protection law, while most economic analysis of the law suggests that less employment protection would enhance welfare. The review has three parts. The first part discusses the structure of the common law and the evolution of employment protection law. The second part discusses the economic theory of contract. Finally, the empirical literature on employment and labor law is reviewed. I conclude that many aspects of employment law are consistent with the economic theory of contract—namely, that contracts are written and enforced to enhance ex ante match efficiency in the presence of asymmetric information and relationship specific investments. In contrast, empirical labor market research focuses upon ex post match efficiency in the face of an exogenous productivity shock. Hence, in order to understand the form and structure of existing employment law we need better empirical tools to assess the ex ante benefits of employment contracts.

KeywordsEmployment law; Labor law; Employment contract; Employment contract Law and economics

Novelty and new firm performance: The case of employment systems in knowledge-intensive service organizations Journal of Business Venturing, Volume 24, Issue 4, July 2009, Pages 338-359Jennifer E. Jennings, P. Devereaux Jennings, Royston Greenwood




AbstractThis paper investigates a question at the core of entrepreneurship research: how does novelty affect new venture performance? We address this question for a type of factor-market innovation deemed critical in the contemporary economy: novelty in employment systems. Our longitudinal study of new firms in a knowledge-intensive service industry shows that the relationship between employment-system novelty and organizational productivity is curvilinear and U-shaped. We also find suggestive evidence that new firms with employment systems exhibiting discrepant degrees of novelty (i.e., combinations of highly conforming and highly novel practices) are less productive than those with coherent employment systems.

KeywordsNovelty; Human resource management; New firm performance; Legal profession

9.4.2 Workers’ CompensationBehavioral economic engineering Journal of Economic Psychology, Volume 33, Issue 3, June 2012, Pages 665-676Gary E. Bolton, Axel Ockenfels


AbstractEconomic engineering is the science of designing real-world institutions and mechanisms that align individual incentives and behavior with the underlying goals. This paper discusses why behavioral economic engineering is a promising research field, how behavioral phenomena may affect economic engineering, and the role of theory and laboratory experiments for behavioral economic engineering in practice. We provide examples, many from our own work.

KeywordsEconomic engineering; Behavioral economics; Experimental economics

Medical costs in workers' compensation insurance: commentJournal of Health Economics, Volume 16, Issue 5, October 1997, Pages 619-622J.Paul Leigh, Michael M. Ward


AbstractProfessors Baker and Krueger ignore some costs associated with workers' compensation. Because of these costs, the contention that physicians willfully exploit the workers' compensation system for their own gain is questioned.

Keywords



Compensating wage; Market structure

Knocking at the wrong door: Insured workers' inadequate psychiatric care and workers' compensation claims International Journal of Law and Psychiatry, Volume 30, Issues 4–5, July–October 2007, Pages 416-426Robert M. Hamm, David M. Reiss, Robindra K. Paul, Harold J. Bursztajn


AbstractObjectiveTo describe the prevalence of inadequately evaluated and treated psychopathology among insured workers making workers' compensation claims for psychiatric disability whose cases were reviewed by one forensic psychiatrist. To assess the relationship of inadequate evaluation and treatment to the outcomes of these workers' compensation claims.

MethodsRecords of a series of 185 workers' compensation cases reviewed in 1998 and 1999 by a California forensic psychiatrist were abstracted. Patient factors (gender, Axis II pathology, psychosocial circumstances, substance abuse), case factors (psychiatric injury secondary to physical injury, or secondary to psychological stresses), type of provider (mental health, or other), adequacy of evaluation and treatment, forensic psychiatrist's recommendation, and claim outcome were categorized. The relationships between case characteristics, adequacy of care, and claim outcome were described.

Results22% of cases had adequate evaluation, 48% superficial, and 30% had no evaluation. 11% had adequate treatment, 67% superficial, and 22% had no treatment. Compared to claims for psychiatric disability related to a physical injury, claims related to psychosocial stresses more often had superficial diagnostic evaluations and treatments. Those with superficial treatment were less likely to have their claim granted (19.3%) than those with no treatment (47.5%) or those with adequate treatment (36.8%). Success of claim was not related to provider type.

ConclusionsThe majority of the studied workers with employer-provided health insurance who sought workers' compensation for disability due to mental illness did so inappropriately, in that the workplace did not cause the psychopathology. Their seeking workers' compensation was plausibly due to the observed inadequate evaluation and treatment available through their employer-provided health insurance. The adequacy of their care influenced the likelihood their claim would be granted. The relations observed here merit further research to establish their generality and to determine their causes.

Keywords


Workers compensation; Psychiatric injury; Workplace; Psychiatric evaluation; Mental health parity; Health insurance; Managed care; Disability

Incentive effects of workers' compensation insurance Journal of Public Economics, Volume 41, Issue 1, February 1990, Pages 73-99Alan B. Krueger

http://www.sciencedirect.com/science/article/pii/004727279290057M

AbstractThis paper uses micro-level data from the Current Population Survey to estimate the determinants of participation in state workers' compensation programs in the United States. The principal finding is that higher workers' compensation benefits are associated with greater participation in the workers' compensation program, after accounting for a variety of covariates. In addition, the waiting period is found to have a substantial negative effect on program participation. Finally, time-series estimates based on the cross-sectional model show that the growth in workers' compensation claims in the 1970s corresponds reasonably well with the growth in real benefits in this time period.

The consequences of labor market flexibility: Panel evidence based on survey data European Economic Review, Volume 49, Issue 5, July 2005, Pages 1225-1259Rafael Di Tella, Robert MacCulloch


AbstractWe introduce a new data set on hiring and firing restrictions for 21 OECD countries for the period 1984–1990. The data are based on surveys of business people in the countries covered, so the indices we use are subjective in nature. Controlling for country and time fixed effects, and using dynamic panel data techniques, we find evidence that increasing the flexibility of the labor market increases both the employment rate and the rate of participation in the labor force. A conservative estimate suggests that if France were to make its labor markets as flexible as those in the US, its employment rate would increase 1.6 percentage points, or 14% of the employment gap between the two countries. The estimated effects are larger in the female than in the male labor market, although both groups seem to have similar long-run coefficients. There is also some evidence that more flexibility leads to lower unemployment rates and to lower rates of long-term unemployment. We also find evidence consistent with the hypothesis that inflexible labor markets produce “jobless recoveries” and introduce more unemployment persistence.

KeywordsJob security provisions; Subjective data; Employment; Unemployment


http://www.sciencedirect.com/science/article/pii/004727279290057M

Documents

booksite.elsevier.com€¦ · Web viewIn this empirical study, the price elasticity of the demand for telecommunication between Sweden and three destination countries, Germany (FRG),