asymmetric peer effects in capital structure dynamics abstract using a semiparametric smooth coefficient partial adjustment model this study finds evidence for asymmetric peer effects on capital structure adjustment speeds between overlevered and underlevered firms overlevered firms adjustment speeds and peer firm shocks have a u shaped relationship while underlevered firms adjustment speeds monotonically increase with peer firm shocks

research on the motion picture industry state of the art and new directions off the beaten track away from theatrical release the motion picture industry has been subject of extensive academic research over the last decades however most scholars focused on the u s theatrical motion picture market the number of research activities regarding even more profitable release windows such as home video or television has been substantially lower although international distribution is essential for a motion picture project to break even there has been little significant re search on most other markets this paper aims at summarizing the current state of research on the motion picture industry particularly from marketing and management perspective revealing research gaps and proposing recommendations for future research endeavors therefore a three pillar scheme is developed to systemize previous findings research on intraorganizational decision making contractual relationships between national stakeholders and international market competition are differentiated since these insights are mainly derived from u s theatrical exhibition they can hardly be applied to other markets and exhibition windows thus potential research areas are identified to expand knowledge of posttheatrical and international markets

using stochastic frontier analysis to measure the impact of weather on the efficiency of electricity distribution businesses in developing economies abstract this paper analyses the influence of weather variables on the efficiency of electricity distribution companies in argentina brazil chile and peru covering 82 firms which represent more than 90 percent of the distribution market of energy delivered for the period 1998 2008 stochastic frontier analysis sfa is applied using a translog input distance function two different approaches are evaluated weather in the production function and weather in the inefficiency term the efficacy of one over the other is determined using nested models weather data are collected from meteorological stations 429 and nasa 3423 coordinates a geographic information system gis is used for locating the firms service areas and their weather conditions a combination of cost only and cost quality models is proposed for cost only models the results suggest that on average there is a significant increase in measured efficiency when weather is incorporated in the production function under the cost quality models on average the effect of weather is much lower this suggests that firms have internalised the effects of weather and have adapted their networks to the environment in which they operate a company level analysis indicates that across models a significant number of companies are affected by weather regulators are advised to make proper adjustments of efficiency scores when specific firms face important efficiency changes due to weather

breaking the wave the contested legitimation of an alien organizational form organizational forms imbued with values of modernity that is rationality efficiency and equity diffuse rapidly around the world nonetheless when sustained by beliefs norms and regulations contrasting with those prevalent in the receiving country their adoption may be delayed and within country legitimation may not proceed smoothly we study the diffusion of multiplex cinemas a form conceived in the us and attuned to the cinema as commerce logic across europe where the cinema as art logic prevails our findings reveal that the cultural meanings embodied by multiplexes shaped the founding rates of this organizational form in three ways first countries with larger normative and regulative distance from the us retarded the adoption of the first multiplex second camouflaged entries and at increasing density opposition from local interest groups were observed third the embodiment of global cultural scripts of progress and modernity allowed multiplexes to overcome local opposition the normative distance of the country from the us amplified the fluctuating dynamics of within country legitimacy a new specification of density dependent legitimation is presented to model the cultural cognitive legitimacy of rationalized but alien organizational forms

close but no cigar the bimodal rewards to prize seeking this article examines the economic effects of prizes with implications for the diversity of market positions especially in cultural fields many prizes have three notable features that together yield an emergent reward structure 1 consumers treat prizes as judgment devices when making purchase decisions 2 prizes introduce sharp discontinuities between winners and also rans and 3 appealing to prize juries requires costly sacrifices of mass audience appeal when all three conditions obtain winning a prize is valuable but seeking it is costly so trying and failing yields the worst outcome a logic we characterize as a tullock lottery we test the model with analyses of oscar nominations and hollywood films from 1985 through 2009 we create an innovative measure of prize seeking or oscar appeal on the basis of similarity to recent nominees in terms of such things as genre plot keywords and release date we then show that oscar appeal has no effect on profitability however this zero order relationship conceals that returns to strong oscar appeals are bimodal with super normal returns for nominees and large losses for snubs we then argue that the effect of judgment devices on fields depends on how they structure and refract information

efficiency and environmental factors in the us electricity transmission industry the electricity industry in most developed countries has been restructured over recent decades with the aim of improving both service quality and firm performance regulated segments e g transmission still provide the infrastructure for the competitive segments and represent a significant share of the total price paid by final customers however there is a lack of empirical studies that analyse firms performance in the electricity transmission sector in this paper an empirical analysis of us electricity transmission companies is conducted for the period 2001 2009 we use alternative stochastic frontier models that allow us to identify the determinants of firms inefficiency these models also permit us to control for weather conditions potentially one of the most decisive uncontrollable factors in electricity transmission our results suggest that weather conditions clearly have an influence on transmission costs and that there is room for improvement in the management of us electricity transmission systems regulators should also be aware that more adverse conditions generate higher levels of inefficiency and that achieving long term efficiency improvements tends to worsen firms short term relative performance

shrewd crude or simply deluded comovement and the internet stock phenomenon we show that i return comovement among internet stocks during the late 1990s and early 2000 was not exceedingly high ii there was substantial consistency in the manner by which investors distinguished among internet stocks and iii high comovement is most common during periods of price erosion these results cast doubt on the view that the extraordinary appreciation of internet stocks was due to the crude classification of all such stocks as members of a hot category

foreign direct investment spillovers and technical efficiency in the indonesian pharmaceutical sector firm level evidence the spillovers of foreign direct investment fdi on domestic firms performances have been highly debated for many years this article contributes to this debate by analysing spillovers effects on technical efficiency of indonesian pharmaceutical sector using a unique unbalanced panel of highly disaggregated at five digit international standard industrial classification isic 210 firms over the period 1990 1995 1001 observations the stochastic production frontier spf and the data envelopment analysis dea based on malmquist productivity indices mpi have been used to test the spillovers effects of fdi on technical efficiency the empirical results from the spf show that foreign firms are more efficient than domestic competitors and the presence of the former increases the inefficiency of the latter similarly the results from the mpi demonstrate that fdi has a negative and significant impact on technical efficiency changes in domestic competitors but generate positive spillovers to domestic s

returns to scale at large banks in the us a random coefficient stochastic frontier approach abstract this paper investigates the returns to scale of large banks in the us over the period 1997 2010 this investigation is performed by estimating a random coefficient stochastic distance frontier model in the spirit of tsionas 2002 and greene 2005 2008 the primary advantage of this model is that its coefficients can vary across banks thereby allowing for unobserved technology heterogeneity among large banks in the us we find that failure to consider unobserved technology heterogeneity results in a misleading ranking of banks and mismeasured returns to scale our results show that the majority of large banks in the us exhibit constant returns to scale in addition our results suggest that banks of the same size can have different levels of returns to scale and there is no clear pattern among large banks in the us concerning the relationship between asset size and returns to scale due to the presence of technology heterogeneity

systematic departures from the frontier a framework for the analysis of firm inefficiency departures from a production or cost frontier may reflect the systematic effect of conditions that contribute to inefficiency to test whether some portion of frontier function departures can be systematically explained the frontier inefficiency error component is modeled as a function of various causal factors and a random component the functional form of the inefficiency error term model is chosen to assure strict one sidedness preliminary empirical results generated from electric utility data suggest the superiority of including both systematic and random components in the inefficiency error term

do large banks have lower costs new estimates of returns to scale for u s banks this paper presents new fully nonparametric estimates of ray scale and expansion path scale economies for u s banks based on a model of bank costs unlike prior studies that use models with restrictive parametric assumptions or limited samples our methodology uses local polynomial estimators and data on all u s banks over the period 1984 2006 our estimates indicate that as recently as 2006 most u s banks faced increasing returns to scale suggesting that scale economies are a plausible but not necessarily only reason for the growth in average bank size and that the tendency toward increasing scale is likely to continue unless checked by government intervention

productivity and efficiency estimation a semiparametric stochastic cost frontier approach this paper proposes a flexible stochastic cost frontier panel data model where the technology parameters are unknown smooth functions of firm and time effects which non neutrally shift the cost frontier the model decomposes inefficiency into firm and time specific components and productivity change into inefficiency change technical change and scale change we then apply the proposed methodology to the norwegian salmon production data and analyze technical efficiency as well as productivity changes

exploring mediators effects of the composition of organizational affiliation on organization survival and mediator performance market mediation literature has been taking primarily a triadic view in studying the role and impact of mediators actors that occupy a middle position on supply and demand conditions in markets mediating organizations facilitate exchange relationships on a continuous basis between multiple networks of interdependent affiliated actors an affiliation structure gives rise to the property of duality whereby the behavior and performance of the affiliates affect the behavior and performance of mediators and vice versa in the context of the banking industry this study examines how the structural properties of the underlying network of affiliated organizations affect the survival of affiliated organizations and the performance of mediating organizations the results show that firms that are affiliated with mediating organizations having high customer set connectedness or with those that are industry specialists increase their chances of survival furthermore mediating organizations having high customer set

the critical trade off identity assignment and box office success in the feature film industry researchers have begun to study markets that are structured in terms of an opposition between market identities in a manner akin to the role pairs analyzed in structural role theory in this paper we analyze the feature film market which came to have such a role structure by the mid 1990s by exploiting the contingency that pertains to the identity of newly released films and the intermediary function played by critics we assess the tendency for offerings to be assigned one or the other of the available market identitiesc independent or major an analysis of the box office success of 396 feature films released in 1997 shows that a film attracted a larger audience when critics who specialized in major releases reviewed the film and implicitly certified it as fit for the mass market such classification was particularly crucial for breaking out of the initial constraints set by theatrical exhibitors however while attaining a major identity was necessary for success in the mass market it was a handicap in penetrating the art house this trade off illustrates how market structures restrict identity in a manner akin that by which role structures place constraints on the identities available to individuals copyright 2003 oxford university press

enjoying the quiet life under deregulation evidence from adjusted lerner indices for u s banks abstract the quiet life hypothesis posits that firms with market power incur inefficiencies rather than reap monopolistic rents we propose a simple adjustment to lerner indices to account for the possibility of forgone rents to test this hypothesis for a large sample of u s commercial banks we find that adjusted lerner indices are significantly larger than conventional lerner indices and trending upward over time instrumental variable regressions reject the quiet life hypothesis for cost inefficiencies however lerner indices adjusted for profit inefficiencies reveal a quiet life among u s banks

getting known by the company you keep publicizing the qualifications and former associations of skilled employees when product quality cannot be ascertained in advance of purchase producers must convince relevant audiences that they are worthy of consideration as quality players we propose that quality oriented producers will selectively publicize information about their skilled employees in anticipation of signaling benefits which include the accrual of visibility and the projection of quality based identities we validate our perspective on publicizing affiliation information by analyzing how a sample of australian wine producers publicized specific career information about their skilled employees i e their winemakers including the names of certain former employers of these individuals copyright 2009 oxford university press

the lerner index of monopoly power origins and uses abba lerner s 1934 paper in the review of economic studies is known today as the source of the lerner index of monopoly power by identifying the social loss from monopoly as the diver gence between price and marginal cost rather than the usually accepted p 161 relationship between price and average cost lerner redirected attention from the monopolist s profits to the allocative inefficiency created by the pursuit of those profits this insight is so ingrained in the mind of economists today that it is easy to over look what a significant advance it represented in a paper commemorating lerner s sixtieth birthday paul samuelson 1964 observed that while lerner s insight may seem simple i can testify that no one at chicago or harvard could tell me in 1935 exactly why p mc was a good thing p 173 lerner s reasoning about the social loss from monopoly identified the social optimum with a pareto optimal state of affairs and in the process offered what tibor scitovsky 1984 called the first clear rigorous and definitive statement of pareto optimality p 1 551 these encomia from titans of the discipline refer to a paper written when lerner was a graduate student 1 the lerner index p mc p identified the degree of monopoly with the differ ence between the firm s price and its marginal cost at the profit maximizing rate of output for lerner a bigger wedge between p and mc meant greater monopoly power a profit maximizing firm s monopoly power varied directly and only with the firm s own price elasticity of demand lerner s benchmark for measuring monopoly

new growth accounting this article opens the black box of total factor productivity by decomposing this all in one index into various input embedded and input free productivities in a new growth accounting framework the new method identifies different channels through which growth drivers affect economic growth and finds the most effective way to boost the economy which is unidentified in standard method this new approach uses a varying coefficient stochastic frontier model which integrates the standpoints of the endogenous growth theory and the induced innovation theory into a reduced form productivity analysis the new growth accounting is then applied to study the impacts and contributions of r d investments international trade and structural transformation to world agricultural growth during the period of 1962 to 2014 the empirical results provide new evidence to support the endogenous growth theory and the induced innovation theory indicating the necessity of using the new growth accounting method

a generalized production frontier approach for estimating determinants of inefficiency in u s dairy farms this article investigates farm level efficiency of u s dairy farmers by estimating their technical and allocative efficiency technical inefficiency is assumed to be composed of a deterministic component that is a function of some farm specific characteristics and a random component by doing this we extend the stochastic frontier methodology in which determinants of technicial inefficiency are explicitly introduced in the model given the inputs variations in efficiency of farms are then explained by both deterministic and random components of technical inefficiency the empirical results indicate that a levels of education of the farmer are important factors determining technical inefficiency and b large farms are more efficient technically than small and medium sized farms both technical and allocative inefficiency are found to decrease with increase in the level of education of the farmer

measuring banks market power in the presence of economies of scale a scale corrected lerner index abstract a positive lerner index indicates a welfare loss for consumers due to deviations from marginal cost pricing such a welfare loss may not always be due to market power though in particular marginal cost pricing would result in negative profit for the firm in the presence of economies of scale in such a scenario a positive lerner index could simply reflect the firm s need to earn non negative profits rather than market power we propose a novel scale corrected price cost margin for firms that produce in the economies of scale range we show that this measure is more informative about market power than the lerner index itself as an empirical illustration we analyze market power in the u s banking sector using both the corrected and uncorrected lerner index the corrected lerner index reveals significant market power for u s commercial banks during the 2000 2014 period

can the small dairy farm remain competitive in us agriculture smaller dairy farms in the us are observed to have higher costs than larger farms and whether those higher costs are due to technology or inefficiency has implications for policy to address the small farm if high cost of production on smaller farms is due to a higher cost frontier then to make small farms competitive would require research to devise and design technology that is suitable for small farms if instead high cost is due to inefficiency then educational approaches are needed to ensure small dairy farms use technology efficiently to determine the cause of higher costs on small farms the cost of milk production by farm size was decomposed into frontier and efficiency components with a stochastic cost curve using data on usa dairy farms although the frontier cost of production decreases with farm size that cost reduction is not as pronounced as a cost curve that includes inefficiency the higher cost of production on many smaller farms is caused by inefficiency rather than technology

measuring multi product banks market power using the lerner index abstract the aggregate lerner index is a popular composite measure of multi product banks market power based on total assets as the single aggregate output factor we show that the aggregate lerner index only qualifies as a consistently aggregated lerner index if three conditions hold under these conditions the aggregate lerner index reduces to a weighted average of the product specific lerner indices we test the three conditions for a sample of u s banks covering the years 2011 2017 all three conditions are rejected and we show that they may cause an economically relevant bias to the aggregate lerner index depending on the economic context as a general solution we propose using the always consistently aggregated weighted average lerner index whenever a composite lerner index is needed

on the estimation of technical and allocative inefficiency using stochastic frontier functions the case of u s class 1 railroads in this paper the author considers specification and estimation of technical and allocative inefficiency in a cost minimizing framework using panel data some distinguishing features of the model are 1 the functional form of the production technology is flexible enough to allow elasticity to vary across firms 2 allocative inefficiency coming from managerial errors ou t of inertia ignorance etc are separated from random errors in optimization 3 the panel nature of the data allows the estimation of input and firm specific allocative inefficiency together with technical inefficiency and 4 subdivision of the sample period allows one to make efficiency comparisons of each firm over the subperiods and to check the stability of the parameter estimates copyright 1988 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the liability of good reputation a study of product recalls in the u s automobile industry in this paper we explore opposing theoretical claims about how organizational reputation affects market reactions to product defects on the one hand good reputation could be a disadvantage because expectations about product quality are more likely to be violated by defects in highly reputed products on the other hand a good reputation could be an advantage because of strong inertial effects on reputation orderings we empirically test these competing hypotheses using data on product recalls in the u s automobile industry from 1975 to 1999 our results support for the idea that reputation can be an organizational liability in that highly reputed firms suffer more market penalty as a result of their product recalls we also propose that the reputational effects are moderated by two important factors substitutability and generalism specialism our results show that having few substitutes with an equivalent level of reputation or a focused product identity stemming from specialism buffers the negative market reactions to product recalls we conclude with a discussion on the implications of these results for institutional reputation and status theories

bank competition and financial stability in asia pacific the impact of bank competition on financial stability has been a focus of academic and policy debate over the last two decades and particularly since the 2007 08 global financial crises beck 2008 oecd 2011 under the traditional competition fragility view banks cannot earn monopoly rents in competitive markets and this results in lower profits capital ratios and charter values this makes banks less able to withstand demand or supply side shocks and encourages excessive risk taking marcus 1984 alternatively the competition stability view suggests that competition leads to greater stability a less competitive banking market may lead to more risk taking if the big banks are deemed too important to fail and as such obtain implicit or explicit subsidies via government safety nets mishkin 1999 in addition banks with more market power tend to charge higher loan rates which may induce borrowers to assume greater risk leading to greater default in competitive banking markets loan rates are lower too big to fail issues and safety net subsidies are smaller and this results in a positive link between bank competition and stability boyd and de nicolo 2005 it could also be the case as noted by martinez miera and repullo 2010 that bank competition and stability are linked in a non linear manner and in a similar vein berger et al 2009 argue that competition and concentration may coexist and can simultaneously induce stability or fragility

corruption and inefficiency theory and evidence from electric utilities we investigate the determinants of the efficiency of firms with a focus on the role of corruption we construct a simple theoretical model where corruption increases factor requirements of firms because it diverts managerial effort away from factor coordination we then exploit a unique dataset comprising firm level information on 80 electricity distribution firms from 13 latin american countries for the years 1994 to 2001 as predicted by the model we find that more corruption in the country is strongly associated with more inefficient firms in the sense that they employ more inputs to produce a given level of output the economic magnitude of the effects is large the results hold both in models with country and firm fixed effects the results survive several robustness checks including different measures of output and efficiency and instrumenting for corruption other elements associated with inefficiency are public ownership inflation and lack of law and order but corruption appears to play a separate and more robust role

investment climate and firm productivity an application to vietnamese manufacturing firms abstractthe fundamental aspect of a national competitive advantage is a good investment climate understanding the role of the investment climate in generating firm productivity has received extensive attention by policymakers and economists in many countries the article studies the effect of different dimensions of the investment climate on firm productivity using a large dataset of vietnamese manufacturing firms the article finds that deficiencies in the investment climate are prejudicial to firm productivity and competition furthermore in examining the effect of corruption in association with the quality of the business environment the study also investigates the possibility that corruption may compensate firms for a bad investment climate or at least may neutralize the negative impact of inefficient government regulations in other words corruption acts as speed money to improve the efficacy of the provision of public services or provides leeway for entrepreneurs to bypass the inefficient reg

product market competition and the value of innovation evidence from us patent data this study investigates the relationship between product market competition and the market value of innovation using firm level patent data of us firms over the period 1977 2005 we find that there is an inverted u shaped relationship between competition and the value of innovation furthermore we show that there is an asymmetric causal effect of intensifying product market competition on the market value of innovation using a quasi natural experiment based on tariff cut events for us manufacturing firms between 1977 and 2006 a firm s incentive to innovate tends to get stronger in response to a tariff cut when product market competition is very mild while it tends to get weaker when very severe

the measurement and sources of technical inefficiency in the indonesian weaving industry production function models are estimated with a time series of cross section data on indonesian weaving establishments the sources of technical inefficiency are investigated three firm attributes are identified as being potentially related to firm efhciency tbey are firm ownership age and size the importance of these attributes as sources of inefficiency in the indonesian weaving industry is investigated and the implications of the find ings discussed

betrayal as market barrier identity based limits to diversification among high status corporate law firms1 why are some diversified market identities problematic but others are not we examine this question in the context of high status corporate law firms which often diversify into one low status area of work family law fl but face a barrier strong disapproval from existing clients that prevents diversification into another such area plaintiffs personal injury law pil drawing on a qualitative study of the boston legal market we argue that this barrier reflects a situation where loyalty norms have been violated and it surfaces because service to individual plaintiffs is tantamount to betraying the interests of corporate clients our analysis clarifies identity based limits to diversification indicating that they are rooted in concerns about the firm s commitments as well as its capabilities and suggests a more general refinement of theory on status and conformity

estimating the potential for electricity savings in households abstract improving efficiency in the use of energy is an important goal for many nations since end use energy efficiency can help to reduce co 2 emissions furthermore since the residential sector in industrialised countries requires around one third of the end use electricity it is important for policy makers to estimate the scope for electricity saving in households to reduce electricity consumption by using appropriate steering mechanisms we estimate the level of technical efficiency in the use of electricity using data from a swiss household survey we find an average inefficiency in electricity use by swiss households of around 20 to 25 bottom up economic engineering models estimate the potential in switzerland to be around 15 in this paper we use a sub vector input distance frontier function based on economic foundations our estimates lie at the upper end of the electricity saving potential estimated by the afore mentioned economic engineering approach

semiparametric smooth coefficient stochastic frontier model this paper proposes a semiparametric smooth coefficient spsc stochastic production frontier model where regression coefficients are unknown smooth functions of environmental factors z technical inefficiency is specified in the form of a parametric scaling function which also depends on the z variables thus in our spsc model the z variables affect productivity directly via the technology parameters as well as through inefficiency a residual based bootstrap test of the relevance of the environmental factors in the spsc model is suggested an empirical application is also used to illustrate the technique

efficiency technical change and returns to scale in large us banks panel data evidence from an output distance function satisfying theoretical regularity abstract this paper provides parametric estimates of technical change efficiency change economies of scale and total factor productivity growth for large banks those with assets in excess of 1 billion in the united states over the period from 2000 to 2005 this is done by estimating an output distance function subject to theoretical regularity within a bayesian framework we find that failure to incorporate theoretical regularity conditions results in mismeasured shadow revenue and or cost shares which in turn leads to perverse conclusions regarding productivity growth our results from the regularity constrained model show that total factor productivity of the large us banks grew at an average rate of 1 98 over the sample period however our estimates also show a clear downward trend in the growth rate of total factor productivity and our decomposition of the primal divisia total factor productivity growth index into its three components technical change efficiency change and economies of scale indicates that technical change is the driving force behind this decline