the relationship between the markup and inflation in the g7 economies and australia an i 2 analysis of inflation and the markup is undertaken for the g7 economies and australia we find that the levels of prices and costs are best described as i 2 processes and that except for japan a linear combination of the log levels of prices and costs cointegrate to the markup that is integrated of order 1 it is also shown that the markup in each case co integrates with inflation and that higher inflation is associated with a lower markup in the long run

money inflation and output in romania 1992 2000 abstract money inflation and output are tested for stationarity and found to be integrated of order one we apply the johansen procedure for cointegration to test for the rank of the matrix of cointegration relations one to test for the weak exogeneity of output accepted inflation rejected and money rejected we interpret the unique cointegrating relationship as an extended cagan money demand function we then estimate error correction mechanisms which explain the short run movements of real money and inflation the evidence suggests that in the period considered including the sub sample between the liberalization shocks inflation was largely a monetary phenomenon

price and quantity endogeneity in demand analysis evidence from directed acyclic graphs we propose to use the emerging method of directed graphs to study price quantity endogeneity issues in empirical demand analysis the approach is illustrated through the examination of u s meat consumption we find that for two major meat products beef and poultry retail prices contemporaneously caused quantities consumed thus were predetermined in contrast the quantity consumed of pork appeared to be predetermined relative to its price

the two faces of competition dynamic resourcefulness and the hypercompetitive shift competition in the american economy has fundamentally changed over the last few decades from static to dynamic this study labels this important change the hypercompetitive shift and documents it across 200 industries of the us manufacturing sector during i958 to 1991 for industries that undergo a hypercompetitive shift there is an increase in the cross firm variance in performance and a rotation in the value rivalry relationship from a negative association to an inverted u as a consequence of these competitive changes the strategic focus of firms shifts from careful exploitation of given highly durable strategic assets to the steady creation of many new rapidly depreciable ones the key driver of hypercompetitive shift is the dynamic resourcefulness of an industry or the ease with which new strategic assets can be created determinants of dynamic resourcefulness include the dynamism of related transactors notably consumers and suppliers the knowledge base of the industry and structural condi

entry and exit decisions in flexible teams the present study identifies a major limitation of current research on multinational enterprises mnes joint decision making in a distributed setting is of critical importance in practice but has received little attention in our theories to address this gap in knowledge we examine the effects of flexible decision teams when mnes assess turbulent markets remarkably flexible teams composed of fallible evaluators can outperform what is usually thought of as an optimal decision our main result supports the claims advanced in recent empirical studies structural flexibility can help mnes achieve high levels of performance even in conditions of turbulence

the end of the month as a preferred habitat a test of operational efficiency in the money market this paper argues that an aggregate preferred habitat for investors exists on or about the last day of the calendar month due to standardizations in the nation s payments system resulting in a concentrated flow of funds on this date thus equilibrium yield discounts are predicted for securities maturing on such dates empirical tests on monthly and daily treasury bill data support the principal hypothesis as well as several ancillary hy potheses the results have implications for treasury debt management for the short term cash and debt management practices of businesses and banks and for the empirical esti mation of daily weekly or monthly return premiums on risky securities

a direct test of roll s conjecture on the firm size effect empirical research indicates that small firms earn higher average rates of return than large firms even after accounting for beta risk roll conjectured that the small firm effect might be attributed to improper estimation of security betas the evidence shows that while the direction of the bias in beta estimation is consistent with roll s conjecture the magnitude of the bias appears to be too small to explain the firm size effect

the application of errors in variables methodology to capital market research evidence on the small firm effect errors in variables due to nonsynchronous trading and benchmark error are significant problems for capital market research this paper develops the use of direct and reverse regression to bound true coefficient estimates when the data exhibit error structures arising from these two sources both separately and jointly the approach appears to have broad applicability for capital markets research as an example the paper reexamines the small firm effect to show that it cannot be attributed to nonsynchronous trading or benchmark error in the estimated variance of the market portfolio this result is shown to hold even when the tax selling effect is controlled for by excluding january returns

change and complementarities in the new competitive landscape a european panel study 1992 1996 this paper addresses three weaknesses in the literature on new organizational forms the limited mapping of the extent of contemporary organizational change confusion about how contemporary changes link together and the lack of systematic testing of the performance consequences of this kind of change drawing on a large scale survey of organizational innovation in european firms the paper finds widespread but not revolutionary change in terms of organization structure processes and boundaries using the economics notion of complementarities the paper develops contingency and configurational approaches to suggest that organizational innovations will tend to cluster in particular ways and that the performance benefits of these innovations depend on their clustering complementarities in performance are explored from both inductive and deductive perspectives consistent with the expectations of complementarity theory high performing firms appeared to be innovating more and differently than low performing firms again consistent with complementarities piecemeal changes with the exception of it were found to deliver little performance benefit while exploitation of the full set of innovations was associated with high performance though few european firms were found to exploit the complementarities of new organizational practices those that did enjoyed high performance premia

natural rate doubts abstract we study the low frequency comovements in unemployment inflation and the federal funds rate in the u s from 1970 through 1979 all three series trended up together after 1979 they all trended down the conventional explanation for the buildup of inflation in the 1970s is that the fed reacted to an increase in the natural rate of unemployment by conducting an overly passive monetary policy we show that this explanation is difficult to reconcile with the observed comovement of the fed funds rate and inflation we argue instead that the source of the inflation buildup in the 1970s was a downward drift in the real interest rate that was translated into a simultaneous increase in unemployment and inflation by passive fed policy our explanation relies on the existence in the data of a positive long run unemployment inflation relationship this is consistent with non superneutrality of money in the long run and hence the title of our paper natural rate doubts

hypercompetition in a multimarket environment the role of strategic similarity and multimarket contact in competitive de escalation the effect of intra industry heterogeneity on hypercompetitive escalation and de escalation in a multimarket environment is examined the authors study two critical dimensions of intra industry heterogeneity strategic similarity which captures similarity in competitive orientation and multimarket contact which captures the degree of overlap between rivals in the multiple markets of the industry theory predicts that both variables influence the intensity of rivalry and competitive disruption the predictions in the literature about the effect of strategic similarity on the intensity of rivalry are mixed while strategic group theory proposes that strategic similarity may lead to lower rivalry other theories focusing on product differentiation the resource based view of the firm and hypercompetitive escalation predict that strategic similarity may actually increase rivalry those diametrically opposed propositions are captured as alternative hypotheses of the effect of strategic similarity with r

australasian money demand stability application of structural break tests estimates of the demand for money provide important foundations for monetary policy setting but if the estimation technique does not explicitly account for structural changes then such estimates will be biased this paper presents an investigation into the level and stability of money demand m1 for australia and new zealand over the 1960 2009 period and demonstrates that both countries experienced regime shifts australia also experienced an intercept shift application of four time series methods provide consistent results with 1984 and 1998 break dates cusum and cusumsq stability tests reveal that m1 demand functions were unstable over the 1984 to 1998 period for both countries although tests for stability are not rejected thereafter

austrian and industrial organization perspectives on firm level competitive activity and performance drawing on the austrian school of economics and the structure conduct performance s c p paradigm of industrial organization the authors present and test a dynamic model of competitive activity and performance they examine the model in two stages first they explore the influence of industry level and firm level cooperative mechanisms on firm level competitive activity second they examine the effect of firm and industry level competitive activity on firm performance the authors use the dynamic model of competitive activity to examine the complex linkages between the firm s environment its actions and its performance outcomes they report a longitudinal analysis of a sample of 1 903 competitive moves undertaken in the software industry hypothesis testing supports the relationships in the model argued from the austrian perspective but provides only partial support for those derived from the s c p paradigm firm level cooperative mechanisms are found to increase the firm s competitive activity a

the evolution of intracorporate domains divisional charter losses in high technology multidivisional corporations modern corporations have become synonymous with the multidivisional form of organization variously interdependent divisions are chartered to look after one or more business areas in effect defining the turf of the division and its purpose within the corporation and collectively defining the corporate domain however once created these divisional charters should not be regarded as rigid they are susceptible to change particularly in fast paced environments such as in high technology industries divisional charters are liable to change as divisions add or subtract businesses to their charter responsibilities these charter changes are seen as an adaptive device for large multidivisional corporations in fast paced environments this paper presents a process model of how divisions change their domains in hypercompetitive contexts focusing on the specific question of how divisions lose all or portions of their business charters the paper is based on a larger inductive study of charter changes in

the monetary model in the presence of i 2 components long run relationships short run dynamics and forecasting of the greek drachma this paper re examines the long run properties of the monetary exchange rate model using data for the drachma dollar and drachma mark exchange rates under the hypothesis that the system contains variables that are i 2 using the recent i 2 test by paruolo on the determination of integration indices in i 2 systems j economet 72 1996 313 356 to examine the presence of i 2 and i 1 components in a multivariate context we find that the system contains two i 2 variables in both cases and this finding is reconfirmed by the estimated roots of the companion matrix do purchasing power parity and uncovered interest rate parity hold in the long run an example of likelihood inference in a multivariate time series model juselius j economet 69 1995 211 240 the i 2 component led to the transformation of the estimated model by imposing long run but not short run proportionality between domestic and foreign money two statistically significant cointegrating vectors were found and by imposing linear restrictions on each vector as suggested by johansen and juselius identification of the long run and the short run structure an applicaion to the islm model j economet 63 1994 7 36 and johansen identifying restrictions of linear equations with applications to simultaneous equations and cointegration j economet 69 1995b 111 132 the order and rank conditions for identification are satisfied but the test for overidentifying restrictions was not significant only for the case of the drachma mark rate the main findings suggest that we reject the forward looking version of the monetary model for the drachma dollar case but not when the drachma mark rate is used a result that is attributed to the monetary and exchange rate policy followed by the greek authorities since greece s joining of the european union furthermore we test for parameter stability using the tests developed by hansen and johansen recursive estimation in cointegrated var models working paper 1993 university of copenhagen and it is shown that the dimension of the cointegration rank is sample independent while the estimated coefficients do not exhibit instabilities in recursive estimations finally it is shown that the monetary model outperforms the random walk model in an out of sample forecasting contest

are technology intensive industries more dynamically competitive no and yes a substantial body of research in management and related public policy fields concludes that recent decades saw greater dynamic competition throughout technology intensive ti industries with widespread steady increase in ti industry and business performance instability as key implications we set this conclusion within a broader framework of purportedly increasing dynamic competition among ti industry businesses and then test for evidence of its performance implications in a large sample of u s businesses operating from 1978 to 1997 in 31 industries with high average research and development expenditure to sales ratios in the full sample we find no evidence of sustained increase in ti industry and business performance instability nor any evidence of significant cross sectional differences in performance instability between ti and non ti industry businesses over these 20 years for a small segment of very high performing businesses from ti industries however we do uncover evidence of declining performance stability and cross sectional differences in performance stability we conclude that assumptions of widespread long term increase in dynamic competition lack robust evidentiary support it is premature to embrace and apply broadly new theoretical perspectives management practices and public policies to ti industry competitive dynamics that may be slightly changed since the late 1970s yet there may be increasing dynamic competition among very high performing ti industry businesses in that small realm careful application of new perspectives practices and policies may lead to deeper insight on business behavior and performance in ti industries

assessing the role of futures position substitutability in a monthly slaughtered pork factor demand by us processors a cointegrated var model approach abstractthis article combines cointegrated var modelling with basic neoclassical production microeconomics in a new way that tests for and illuminates the empirical nature of the monthly us pork processing sector s factor demand for slaughtered pork statistical evidence strongly suggests that the us pork processing sector has a hicksian cobb douglas slaughtered pork demand that arises from applying shephard s lemma to the sector s cost function and that us pork processors treat slaughtered pork and related futures positions as close factor substitutes in the wake of major and ongoing futures market events and trends this study establishes and statistically tests a theoretical link between futures price movements and impacts on the underlying slaughtered pork market through monthly formation of us pork processors factor demand for slaughtered pork evidence suggests that demand agents shift between demands for the two substitutes based on movements in the slaughter futures price ratio that results in

eating your own lunch protection through preemption recent discussions of management practices among successful high technology companies suggest that one key strategy for success is to eat your own lunch before someone else does the implication is that in intensely competitive or hypercompetitive markets firms with a leading position should aggressively cannibalize their own current advantages with next generation advantages before competitors step in to steal the market given the pace of technological and other types of change such strategy often requires creating next generation advantages while the current advantages are still profitable that is trading current profits for future market leadership we capture the tradeoff between a market leader s willingness to reap profits with its current set of advantages and its desire to maintain market leadership by investing in the next generation using a competitive model that determines the equilibrium launch time of a next generation advantage we find that in absence of lower launch costs for an

domestic monetary transfers and the inland bill of exchange markets in spain 1775 1885 abstract this article studies the monetary transfers system that was created by the short term inland bill of exchange markets for decades this system was the most practical way of channeling the growing volume of transfers which were taking place as a consequence of the growth of the spanish economy this analysis argues that between 1775 and 1885 the markets involved in this activity became progressively more efficient due largely to the multilateralization of the payment system this situation lasted longer in spain than in the rest of europe since spanish banking was initially slower to develop using univariate and multivariate garch models it was possible to conclude that the inland bill of exchange markets constituted an essential monetary instrument and one that faithfully reflects the integration of monetary markets in spain

an i 2 analysis of inflation and the markup an i 2 analysis of australian inflation and the markup is undertaken within an imperfect competition model it is found that the levels of prices and costs are best characterized as integrated of order 2 and that a linear combination of the levels which may be defined as the markup cointegrates with price inflation from the empirical analysis we obtain a long run relationship where higher inflation is associated with a lower markup and vice versa the impact in the long run of inflation on the markup is interpreted as the cost to firms of overcoming missing information when adjusting prices in an inflationary environment copyright 2001 john wiley sons ltd

money demand instability expectations and policy regimes a note on the case of italy 1964 1986 abstract this paper compares the stability performance of feedback and feedforward specifications of the demand for m2 in italy over the period 1962 1986 a clear change in the monetary policy regime occurred in 1969 1970 together with marked breaks in the processes generating several relevant variables in the mid 70s making this period particularly appropriate for the investigation of the potential role of expectations our main results show that the feedback specification suffers from instability at both relevant dates whereas the feedforward specification is remarkably stable during the policy regime change but displays signs of instability during the mid 70s

banking currency stock market and debt crises in spain 1850 1995 abstractwhat type of crisis is generated when debt increases we extend the literature by framework by introducing currency and stock market crises in the analysis we apply our proposal to the case of spain since this is a country that has experienced a very important amount of financial crises from the nineteenth century onwards we find the same results as the previous literature for the determinants of banking and debt crises but substituting external and public debt with perpetual debt and where perpetual debt has a less important role than crises in the private sector moreover we find evidence in favour of the hypothesis that currency crises depend strongly and positively on financial centre crises and negatively and mildly on perpetual debt we justify the negative relalionship due to an inflation tax we also find evidence in favour of the hypothesis that stock market crises depend only positively and strongly on financial centre crises

monetary transmission mechanisms in spain the effect of monetization financial deregulation and the ems the paper presents a cointegrated var analysis of monetary transmission mechanisms and changes in them after spain joined the ems in 1989 analyses of long run price homogeneity within the i 2 model turned out to be crucial for understanding the joint behavior of money income and prices the empirical findings point to real monetization effects in the pre ems period and the crucial role of shocks to nominal interest rates in particular to the long term bond rate in addition the paper provides further insights on the macroeconomic effects of joining the ems and financial deregulation the increased economic integration within the eu is shown to have fundamentally changed the dynamics of the conventional is lm transmission mechanism and led to decreased effectiveness of monetary policy

the price puzzle in the monetary transmission vars with long run restrictions abstract this study addresses the price puzzle a positive response of prices to monetary tightening in var models by using long run instead of the usual short run restrictions on the us data including output prices and interest rate we find that monetary tightening had a negative effect on prices

the japanese beer wars initiating and responding to hypercompetition in new product development in the mid 1980s the japanese beer industry a stable oligopoly in which competition had traditionally been limited to well understood nonprice dimensions experienced an outbreak of new product hypercompetition which saw a ten fold increase in the industry s new product introduction rate produced a major shake up in firms competitive positions and forced firms to transform themselves in fundamental ways in order to compete effectively surprisingly this hyper competition occurred despite heavy government regulation of the industry driving it were a variety of demographic dietary social economic and distribution trends which affected demand for beer plus the existence of a major player asahi on the edge of bankruptcy and therefore sufficiently desperate to risk a frontal attack on the industry leader kirin at the firm level substantial internal change and the building of new organizational capabilities were required both to initiate and respond to hypercompetition examining in detail th

new organizational forms and strategies for managing in hypercompetitive environments strong forces of change globalization demographic shifts e g aging population and declining fertility rates advances in information technology demassification of society and hypercompetition are reshaping the competitive landscape worldwide as a result companies in most industries are not only undergoing rapid and radical change but are also experiencing a fundamental shift in the rules of competition and the way the game of competition is played the old genteel stable oligopolies that defined competition during the 20th century are rapidly restructuring in their place are emerging markets fraught with uncertainty diverse global players rapid technological change widespread price wars and seemingly endless reorganization that transition is occurring not only in the united states but also in europe latin america and asia in this issue we demonstrate that as predicted by those early researchers a dramatic and far reaching shift has occurred in the nature of competition in most ind

a structured var for denmark under changing monetary regimes using recently developed statistical tools for analyzing cointegrated 1 2 data this article models money income prices and interest rates in denmark the final model describes the dynamic adjustment to short run changes of the process to deviations from long run steady states and to several political interventions it provides new insights about the effects of the liberalization of trade and capital in a small open european economy

european integration and monetary transmission mechanisms the case of italy the focus in this paper is on the monetary transmission mechanism in italy and how it has changed with the increased independence of the italian central bank and the increasingly fixed exchange rates of the erm the sample period 1974 1994 is divided into two parts approximately corresponding to the different systems based on a var model for money income prices and interest rates the cointegration properties of the data in nominal and real terms are analysed long run price homogeneity is empirically rejected and the economic and econometric consequences for a real money analysis are described altogether we find little evidence that the use of m2 and the short interest rate as intermediate targets has effectively controlled price inflation in this period copyright 2001 john wiley sons ltd

macroeconomics and agriculture in tunisia this article aims to analyse the impact of changes in the monetary policy and the exchange rate on agricultural supply prices and exports the methodology used is based on the multivariate cointegration approach ten variables are considered interest and exchange rates money supply inflation agricultural output and input prices agricultural supply and exports income and the rate of commercial openness the sample period covers annual data from 1967 to 2002 due to the short sample period two subsystems are considered first long run relationships are identified in each subsystem second both subsystems are merged in order to calculate the short run dynamics the results indicate that changes in macroeconomic variables have an effect on the agricultural sector but the reverse effect does not hold

inter capital relations and the network organisation redefining the work and employment nexus the blurring of organisational boundaries associated with networks of organisations suggests the need to reconsider how work and employment are shaped by shifting inter capital relations traditional theories of the internalised employment relationship understate its inter relationship with both the form of inter capitalist competition and the type of inter capitalist production relations also existing theories of inter organisational contracting do not adequately address how these are shaped by employment relations both within and between organisations an alternative approach provides a new perspective for considering forms of countervailing power to protect workers interests in a capitalist system continuously shifting from integrated to non integrated forms copyright 2005 oxford university press

market incumbency and technological inertia this paper uses a case study and a simple mathematical model to study the link between the incumbency and incentives to innovate and introduce drastically new products it identifies the conditions under which fears of self cannibalization are particularly likely to lead incumbents to soft pedal such innovations

a re interpretation of the linear quadratic model when inventories and sales are polynomially cointegrated summary estimation of the linear quadratic model the workhorse of the inventory literature traditionally takes inventories and sales to be first difference stationary series and the ratio of the two variables to be stationary however these assumptions do not always match the properties of the data for the last two decades in the united states we propose a model that allows for the non stationary characteristics of the data using polynomial cointegration we show that the closed form solution has other recent models as special cases the resulting model performs well on aggregate and disaggregated data copyright 2006 john wiley sons ltd

demand for money in the selected oecd countries a time series panel data approach and structural breaks time series panel data estimation methods are used to estimate the cointegrating equations for the demand for money m1 for a panel of 11 organization for economic cooperation and development oecd countries for which consistent quarterly data are available the effects of financial reforms are analysed with structural break tests and estimates for alternative sub samples our results for the post reform sub samples show that the income elasticity of the demand for money has decreased and response to interest rate changes has increased