modeling global spillover of new product takeoff abstract this article examines the global spillover of foreign product introductions and takeoffs on a focal country s time to takeoff using a novel data set of penetration data for eight high tech products across 55 countries it shows how foreign clout the susceptibility to foreign influences and intercountry distances affect global spillover patterns the authors find that foreign takeoffs but not foreign introductions accelerate a focal country s time to takeoff the larger the country the higher its economic wealth and the more it exports the more clout it has in the global spillover process in contrast the poorer the country the more tourists it receives and the higher its population density the more susceptible it is to global spillover effects cross country spillover effects are stronger the closer the countries are to one another both geographically and economically but not necessarily in terms of culture the model the authors develop also quantifies the spillover between each co

trade taxes and debt repayment in sri lanka the purpose of this article is to estimate the cost of taxing the export import or domestic sectors of sri lanka for the purpose of reducing the national debt a simple gnp model is used to estimate the elasticities that characterise the three aggregate sectors and are used to simulate the effects of taxing for debt servicing the results show that a tax on the import sector generates the largest net savings on trade balance and that the savings from not importing can be substantial however for the period 1977 87 a 10 0 per cent tax on the import sector caused a decline in the growth of the economy by 3 0 per cent the burden of the tax falls heavily on the domestic sector in terms of lost production and increased unemployment

the supply and demand for exports in israel abstract using annual data for israel over the period 1960 1989 we estimate an econometric model for the supply and demand for exports a novel feature is that domestic absorption crowds out export supply exports are imperfect substitutes in world markets for tradeables produced abroad the price elasticity of demand is about 1 3 while the price elasticity of supply is about 1 5 the model is simulated to calculate the effects of policy instruments and other exogenous variables on exports and export prices

on the estimation of simultaneous equations error components models with an application to a model of developing country foreign trade summary an empirical balance of payments model involving the demand and supply of imports and exports for 31 developing countries is estimated utilizing panel data over 1964 1987 in order to compute errorcomponents 3sls estimates of this model which requires different instruments for different equations we propose a generalization of the fuller battese transformation to obtain gmm estimates our empirical results suggest that very little of the short run adjustment in external imbalances is likely to be achieved by exchange rate policies and most of the burden must fall on aggregate demand management

new product diffusion acceleration measurement and analysis it is a popular contention that products launched today diffuse faster than products launched in the past however the evidence of diffusion acceleration is rather scant and the methodology used in previous studies has several weaknesses also little is known about why such acceleration would have occurred this study investigates changes in diffusion speed in the united states over a period of 74 years 1923 1996 using data on 31 electrical household durables this study defines diffusion speed as the time it takes to go from one penetration level to a higher level and it measures speed using the slope coefficient of the logistic diffusion model this metric relates unambiguously both to speed as just defined and to the empirical growth rate a measure of instantaneous penetration growth the data are analyzed using a single stage hierarchical modeling approach for all products simultaneously in which parameters capturing the adoption ceilings are estimated jointly with diffusion speed parameters the variance in diffusion speed across and within products is represented separately but analyzed simultaneously the focus of this study is on description and explanation rather than forecasting or normative prescription there are three main findings 1 on average there has been an increase in diffusion speed that is statistically significant and rather sizable for the set of 31 consumer durables the average value of the slope parameter in the logistic model s hazard function was roughly 0 48 increasing with 0 09 about every 10 years it took an innovation reaching 5 household penetration in 1946 an estimated 13 8 years to go from 10 to 90 of its estimated maximum adoption ceiling for an innovation reaching 5 penetration in 1980 that time would have been halved to 6 9 years this corresponds to a compound growth rate in diffusion speed of roughly 2 between 1946 and 1980 2 economic conditions and demographic change are related to diffusion speed whether the innovation is an expensive item also has a sizable effect finally products that required large investments in complementary infrastructure radio black and white television color television cellular telephone and products for which multiple competing standards were available early on pcs and vcrs diffused faster than other products once 5 household penetration had been achieved 3 almost all the variance in diffusion speed among the products in this study can be explained by 1 the systematic increase in purchasing power and variations in the business cycle unemployment 2 demographic changes and 3 the changing nature of the products studied e g products with competing standards appear only late in the data set after controlling for these factors no systematic trend in diffusion speed remains unaccounted for these findings are of interest to researchers attempting to identify patterns of difference and similarity among the diffusion paths of many innovations either by jointly modeling the diffusion of multiple products as in this study or by retrospective meta analysis the finding that purchasing power demographics and the nature of the products capture nearly all the variance is of particular interest specifically one does not need to invoke unobserved changes in tastes and values as some researchers have done to account for long term changes in the speed at which households adopt new products the findings also suggest that new product diffusion modelers should attempt to control not only for marketing mix variables but also for broader environmental factors the hierarchical model structure and the findings on the systematic variance in diffusion speed across products are also of interest to forecasting applications when very little or no data are available

a new product growth for model consumer durables this article originally appeared in management science january 1969 volume 15 number 5 pp 215 227 published by the institute of management sciences a growth model for the timing of initial purchase of new products is developed and tested empirically against data for eleven consumer durables the basic assumption of the model is that the timing of a consumer s initial purchase is related to the number of previous buyers a behavioral rationale for the model is offered in terms of innovative and imitative behavior the model yields good predictions of the sales peak and the timing of the peak when applied to historical data a long range forecast is developed for the sales of color television sets

response of the equilibrium real exchange rate to real disturbances in developing countries abstract using a simple dependent economy framework this paper outlines the links between the equilibrium real exchange rate and some of its fundamental exogenous determinants mainly terms of trade movements and commercial policy changes drawing on existing studies of trade flows in developing countries it is possible to derive plausible quantitative ranges for the response of the equilibrium real exchange rate to both external and policy induced shocks the results should be particularly relevant in designing real exchange rate targets and rules that allow for movements in the equilibrium real exchange rate in response to various shocks

import compression and export performance in developing countries the debt crisis that began in 1982 forced a number of developing countries that had relied on external financing into rapid adjustment of their current account positions in many of these countries external adjustment mainly took the form of import reduction or what has been termed import compression to generate trade balance surpluses necessary to service the existing stock of foreign debt while the effects of import compression on consumption and growth have been discussed in the literature there has been little concern expressed with regard to the direct effects such a policy can have on export performance this paper develops a model that takes explicit account of the feedbacks between imports and exports that arise through the effects of imported inputs on exports and the availability of foreign exchange on imports empirical tests of this model for 34 developing countries tend to confirm both these hypotheses these results point clearly for additional foreign financing to reduce the need for import compression and its attendant negative effects on the supply of exports

estimation of a macroeconomic model with rational expectations and capital controls for developing countries abstract in many developing countries financial repression and capital controls have implied that the only domestic market determined interests rates have been those in informal markets the absence of data on such interest rates complicates the estimation of key macroeconomic interest rate elasticities this paper describes an econometric technique for extracting representative values of such elasticities from developing country panel data under such constraints and with the maintained assumption that agents form expectations rationally our results confirm the empirical relevance in developing countries of the standard intertemporal and intratemporal substitution assumptions underlying policy prescriptions to get prices right

third world debt and macroeconomic interactions between the north and south in this article the authors examine three issues the causes of the south s debt crisis the nature of the macroeconomic linkages between the north and south and some of the debt rescheduling programmes the crisis was due not only to domestic policies in the south but also to the macroeconomic linkages between the south and the oecd economies these linkages may also play an important part in its cure debt adjustment with growth for the south needs a package of measures including greater co operation on macroeconomic policies and trade issues between north and south and a commonly agreed position on outstanding debt

research note multinational diffusion models an alternative framework the literature on cross national diffusion models is gaining increased importance today due to the needs of present day managers new product sales growth in a given nation or society is affected by many factors rogers 1995 and of these sociocontagion or word of mouth has been found to be the most important factor that characterizes the diffusion process bass 1969 moore 1995 hence it is interesting and perhaps challenging to analyze what would happen if a new product diffuses in parallel in two neighboring but culturally different countries not only will we expect the diffusion process in the two countries to be different but we will also expect some interaction among them especially if the two societies mingle with each other there are two streams of research in cross national diffusion the first type focuses on exploring the differences between diffusion processes in two countries and finding out whether those differences can be attributed to social and cultural differences between the countries involved examples of this type of research are found in takada and jain 1991 gatignon et al 1989 helsen et al 1993 and kumar et al 1998 these studies did find some relationship between the cultural differences of the countries studied and the differences in the diffusion process the second stream of research focuses on modeling explicitly the interaction between the diffusion processes in two countries the interaction is typically captured through lead lag effect eliashberg and helsen 1996 kalish et al 1995 where the sales process in the lead country i e the country where the product was first introduced is modeled to affect the sales process in the lag country i e the country where the product was introduced a few years later another method to study the interaction among the diffusion processes in two countries was suggested by putsis et al 1997 who used a mixing model to empirically explore the existence of such interactions these studies basically observed that when a new product is introduced early in one country and with a time lag in subsequent countries the consumers in the lag countries learn about the product from the lead country adopters resulting in a faster diffusion rate in the lag countries ganesh and kumar 1996 formulized this effect as the learning effect and subsequently ganesh et al 1997 found this learning effect to be influenced by country specific factors cultural similarity economic similarity and time lag elapsed between the lead and the lag countries and product specific factors continuous vs discontinuous innovation and the presence or absence of a standardized technology a careful analysis of the extant literature on the second stream of research would reveal that neither the learning effect model nor the mixing model can be modified to accommodate the other model our contribution to the literature exactly addresses this point in this paper an alternative framework is proposed that has two unique features first the framework is flexible enough to not only account for the lead country affecting the lag countries and vice versa but also to accommodate the simultaneous interaction among countries in explaining the diffusion processes in the countries concerned using multiple product categories and a variety of new product introduction situations we empirically demonstrate the flexibility and efficiency of our proposed framework we found strong evidence of all types of interactions namely lead lag lag lead and simultaneous which evidence suggests that one cannot afford to omit any of the interactions the second unique feature of our paper is the estimation procedure that we used because statistical estimation of a dynamic process that includes lead lag lag lead and simultaneous types of causality within a single framework is not straightforward we suggest an iterative estimation procedure for the estimation this new procedure not only proved to be flexible in accommodating different types of interaction but also converged rather quickly in all of the cases that we empirically tested noting that the statistical properties of these estimators are not generally available we carried out a simulation exercise that clearly revealed the efficiency of the proposed estimation procedure after analyzing the interaction we went further and showed that the magnitude of the cross national influences is affected by certain country specific and product specific factors the flexibility of the proposed method over the existing methods is demonstrated through obtaining superior forecasts with the proposed method several interesting insights for managers concerned with formulating international marketing strategies are offered

different approaches of modelling reaction lags how do chilean manufacturing exports react to movements of the real exchange rate this study examines the relationship between export supply and the real exchange rate using annual chilean data for the period 1960 1996 the hypotheses to be tested are first that the real exchange rate does matter for the supply of exports contrary to studies relying on quarterly data and second that the impact of a real depreciation only ceases to be positive and significant after about two three years four different distributed lag models were considered as potentially adequate and useful to depict the impact of the real exchange rate over time even though all four models assumed different underlying lag structures they all point to the importance of maintaining a competitive real exchange rate over time the transfer function model is particularly well suited in shaping any lag structure in that it is not presumptive in form

the real exchange rate and macroeconomic performance in sub saharan africa abstract pooled time series and cross section data for 33 countries in sub saharan africa ssa confirm the negative relationship between the real exchange rate rer misalignment and economic performance economic growth imports exports saving and investment macroeconomic instability also slows growth and other indicators of performance higher levels of misalignment are accompanied by higher levels of macroeconomic instability both lower levels of rer misalignment and instability lead to better economic performance the edwards model of rer determination performs well for the region black market premia tend to show a greater degree of misalignment in rer than alternative measures

trade and payments regime and the balance of payments in ghana abstract by 1982 the ghanaian economy was in the doldrums facing a severe foreign exchange constraint this state of the economy was attributed partly to the trade and exchange rate policies which had created distorsions and disincentives against exporting in particular and production in general since 1983 ghana has for the second time embarked on a trade and payments liberalization program this study examines the effect of the changing trade and payments regime on the balance of payments of ghana it provides some answers as to why the first liberalization episode was not sustained it also contrasts the experience of controlled and liberalized trade regime episodes the paper concludes by providing some lessons from the ghanaian experience

mixing behavior in cross country diffusion diffusion models represent one of the key successes in marketing science we understand a great deal about what influences and shapes within country diffusion patterns however we understand far less about what influences and shapes cross country or inter country diffusion patterns clearly for firms operating in a truly global environment understanding to what extent prior adoption in one country affects current and consequently future adoption in another country can be an important consideration further understanding how the pattern of interaction across countries impacts the diffusion process can have profound implications for product launch strategies for new durable products in this paper we address the extent to which prior adoption of a new product in one country affects adoption in other countries in particular we investigate the importance of the pattern of interaction what we call mixing across countries in the context of a new product diffusion model more specifically mixing refers to the pattern of communication within and across countries for example do italians communicate only with other italians or do they influence consumers in other countries understanding and empirically estimating how these mixing patterns across countries influence the subsequent diffusion process is the central research objective of this paper while previous research in marketing addressing cross country diffusion has assumed very specific forms of cross country interaction the present study develops and estimates a flexible form of mixing that allows for the simultaneous estimation of mixing patterns across multiple countries in particular we examine the effect of mixing behavior across populations on new product adoption viewing mixing as occurring across a continuum with segregation no mixing at one end and random mixing at the other intermediate forms of mixing lie along this continuum and are called bernoulli mixing in order to produce generalizable results we obtained sales data on four product categories in the european community ec nations vcrs from 1977 1990 microwave ovens 1975 1990 compact disc players 1984 1993 and home computers 1981 1991 for each product data were collected for 10 ec nations great britain germany france italy spain belgium denmark netherlands sweden and austria a diffusion model that incorporates cross country prior adoption cross country mixing patterns and individual country covariates was estimated simultaneously across the 10 countries for each of the four products on the basis of the empirical results we conclude that mixing behavior across segments is an important consideration in new product diffusion specifically the observed pattern of mixing and the strength of cross segment influences are important considerations in allocating the marketing mix during product introduction stages the practical implication of mixing behavior is that if one wishes to understand diffusion in belgium for example it is important to not only know the diffusion parameters in belgium but also those in other ec nations accordingly these results should be of interest to managers responsible for coordinating new product launches across countries and to researchers interested in investigating cross country diffusion issues as an example of the strategic implications of the results we note that under bernoulli mixing future country launches will benefit not only from prior adoption in countries with high overall contact rates but in particular from countries with high rates of contact with other countries although there is some variance across products in general germany france italy and spain are the most gregarious as measured by the rate of contact the results suggest that a strategy of first focusing on germany france italy and spain will maximize adoption in subsequent countries each of these countries tends to have a higher percentage of its contacts with individuals internal to its borders as well as with other countries this suggests that these countries would have relatively quick adoption internally while having a strong influence externally further for countries such as denmark netherlands austria and sweden a higher percentage of their contacts are derived from outside their borders thus seeding the diffusion process by introducing first in germany france italy and spain would benefit later adoption in countries such as denmark netherlands austria and sweden although the strength of the individual country influence varies from product to product this result is generally consistent across the four products

social contagion and income heterogeneity in new product diffusion a meta analytic test standard diffusion models capture social contagion only coarsely and do not allow one to operationalize different contagion mechanisms moreover there is increasing skepticism about the importance of contagion and as has long been known s shaped diffusion curves can also result from heterogeneity in the propensity to adopt we present hypotheses about conditions under which specific contagion mechanisms and income heterogeneity are more pronounced and test these hypotheses using a meta analysis of the q p ratio in applications of the bass diffusion model the ratio is positively associated with the gini index of income inequality in a country supporting the heterogeneity in thresholds interpretation the ratio also varies as predicted by the gamma shifted gompertz diffusion model but the evidence vanishes after controlling for national culture as to contagion the q p ratio varies with the four hofstede dimensions of national culture for three of them in a direction consistent with the social contagion interpretation furthermore products with competing standards have a higher q p ratio which is again consistent with the social contagion interpretation finally we find effects of national culture only for products without competing standards suggesting that technological effects and culturally moderated social contagion effects might not operate independently from each other

lead markets country specific drivers of the global diffusion of innovations abstract globally successful innovations have commonly been preferred first in one country or region before being adopted internationally countries that first adopt an internally successful innovation can be described as lead markets this paper presents the lead market concept of developing global innovations the lead role of a market is discussed first theoretically and then by use of a system of five country specific factors demand advantages price advantages export advantages transfer advantages and market structure advantages the applicability of this system of lead market factors is then evaluated in a detailed case study of the cellular mobile telephone industry it is finally suggested that companies can harness lead markets for the development of global innovations by developing and refining innovations in close interaction with the local environment of a lead market a company can focus on a narrow range of preferences and feedback lowering the risk of being locked into idiosyncratic environments and generate true global innovations a method for identifying potential lead markets is briefly discussed

global takeoff of new products culture wealth or vanishing differences the authors study the takeoff of 16 new products across 31 countries 430 categories to analyze how and why takeoff varies across products and countries they test the effect of 12 hypothesized drivers of takeoff using a parametric hazard model the authors find that the average time to takeoff varies substantially between developed and developing countries between work and fun products across cultural clusters and over calendar time products take off fastest in japan and norway followed by other nordic countries the united states and some countries of midwestern europe takeoff is driven by culture and wealth plus product class product vintage and prior takeoff most importantly time to takeoff is shortening over time and takeoff is converging across countries the authors discuss the implications of these findings

inequality and the us import demand function in this paper we build a model of trade in vertically differentiated products and find that income inequality can affect the demand for imports even in the presence of homothetic preferences the empirical importance of changes in inequality on the demand for imports is then assessed by examining panel data for 36 developing and developed countries for the 1980 1997 period we find significant evidence supporting our prediction that inequality has a large influence on the demand for imports moreover we find that in line with the predictions of our theoretical model this influence is positive for high income countries countries that produce the high quality variety of the vertically differentiated product and negative for low income countries countries that produce the low quality variety of the vertically differentiated product

the korean financial crisis and the soft budget constraint abstract a panel of korean firms is used to test for the soft budget constraint sbc in bank lending before and after the 1997 1998 financial crisis sbc is present if a firm can borrow from its bank despite being in financial distress which we define by a low altman s z score we find that prior to 1997 financially distressed firms were able to borrow while after the crisis their ability to borrow declined substantially we also demonstrate that sbc was a significant factor in the firms propensity to default during the crisis

foreign exchange reserves and import demand evidence from latin america this paper investigates the impact of foreign reserves domestic real income and relative import prices on import demand for seven latin american countries we differentiate empirically between the short run and long run impact of reserves income and prices on imports the paper has three main results first we show that there exists a unique long run relationship among real imports real income relative import prices and real foreign exchange reserves for all seven countries second we find that increases in foreign exchange reserves exert a significant positive effect on import demand in both the long run and the short run in all countries however the economic impact of foreign exchange reserves is rather small finally we find that the long and short run impact of real domestic income on import demand is positive as well while the effect of relative prices is negative

growing growing gone cascades diffusion and turning points in the product life cycle research on the product life cycle plc has focused primarily on the role of diffusion this study takes a broader theoretical perspective on the plc by incorporating informational cascades and developing and testing many new hypotheses based on this theory on average across 30 product categories the authors find that i new consumer durables have a typical pattern of rapid growth of 45 per year over 8 years ii this period of growth is followed by a slowdown when sales decline by 15 and stay below those of the previous peak for 5 years iii slowdown occurs at 34 population penetration and about 50 of ultimate market penetration iv products with large sales increases at takeoff tend to have larger sales declines at slowdown v leisure enhancing products tend to have higher growth rates and shorter growth stages than nonleisure enhancing products time saving products tend to have lower growth rates and longer growth stages than nontime saving products vi lower probability of slowdown is associated with steeper price reductions lower penetration and higher economic growth vii a hazard model can provide reasonable predictions of the slowdown as early as the takeoff the authors discuss the implications of these findings

cross national laws and differences in market response international differences in general and cultural differences in particular exert profound influence on what people buy in modeling market response highly visible international differences in purchase behavior seem to lead to an assumption by management scientists that there are large parallel international differences in market response to such things as price and advertising in an interpretive review of market response models we do find international differences in response parameters but we also find that parameter differences due to cross national factors tend to be smaller than differences related to technical characteristics of the model or to product market specifics we suggest two new intermediate categories of generalizability between the extremes of everything is the same and everything is different we also argue that one promising approach to international generalization is through appropriate statistical adjustment of parameters from existing models

modeling multinational diffusion patterns an efficient methodology the objective of this study is to develop an econometric model for the diffusion of innovations at the individual country level but which also allows the parameters of the process to differ systematically across countries the conceptualization rests on behavioral and spatial theories of diffusion and extends the domain to international markets the cross national model of innovation diffusion which is developed highlights substantive differences and similarities among international markets it also provides estimates for the diffusion parameters even for countries where sales data are not available thereby yielding some insights into the nature of the expected diffusion pattern in these countries prior to market entry