effect of exporter s incentives on foreign distributor s role performance a foreign distributor s motivation to perform local marketing tasks for an exporter is often poor due to agency conflicts and transaction cost constraints characterizing the export channel while exporters may engage in actions such as offering incentives and overseeing partner activities to improve foreign marketing such intrusions into partner operations often fail to enhance the distributor s role performance drawing on motivation theory the authors develop a model explaining the efficiency of different incentive types in enhancing the distributor s motivational context to act on behalf of the exporter thereby improving relationship quality distributor relationship specific investments and consequently distributor role performance the authors use a sample of 278 european exporters to test hypotheses regarding relationship factors that mediate and moderate the incentive role performance relationship the results indicate that the impact of low powered incentives lpis substitutes for the effect of high powered incentives on relationship quality and specific investments the key mediators driving distributor role performance in addition exporter oversight of distributor activities weakens the effectiveness of lpis to increase distributor specific investment the authors derive implications for designing portfolios of incentives with inferences based on efficiently matching incentive induced motivational context with foreign distributor s actions required to accomplish exporter goals

the beginning of online retail competition and its origins an application to personal computers abstract this paper measures cross price elasticity for online and retail personal computers pcs across several years the results indicate that cross price elasticity for 1996 and 1997 was a statistical 0 while in 1998 it was large and statistically significant approximately 3 0 i consider both demand side and supply side explanations for this change my demand side explanations argue that a change in the composition of households shopping in online and retail markets is responsible for the switch the empirical results suggest that these explanations are not correct my supply side explanations argue that changes in business models late in 1997 were responsible instead the first supply side explanation says that expansion by firms from single to multiple distribution channels e g expansion from online only to online and retail drove the new competition both apple and gateway made such expansions late in 1997 and the data provide some evidence that this contributed to online retail competition the second explanation says that the increase in the number of brands offering both physical inspection through a physical location and customizability drove the new competition these changes marked directed efforts to target high end buyers by both types of suppliers the data also support this explanation while i am unable to quantify which has the greater impact it is clear that online retail competition began largely because of these two supply side changes

frictionless commerce a comparison of internet and conventional retailers there have been many claims that the internet represents a new nearly frictionless market our research empirically analyzes the characteristics of the internet as a channel for two categories of homogeneous products books and cds using a data set of over 8 500 price observations collected over a period of 15 months we compare pricing behavior at 41 internet and conventional retail outlets we find that prices on the internet are 9 16 lower than prices in conventional outlets depending on whether taxes shipping and shopping costs are included in the price additionally we find that internet retailers price adjustments over time are up to 100 times smaller than conventional retailers price adjustments presumably reflecting lower menu costs in internet channels we also find that levels of price dispersion depend importantly on the measures employed when we compare the prices posted by different internet retailers we find substantial dispersion internet retailer prices differ by an average of 33 for books and 25 for cds however when we weight these prices by proxies for market share we find dispersion is lower in internet channels than in conventional channels reflecting the dominance of certain heavily branded retailers we conclude that while there is lower friction in many dimensions of internet competition branding awareness and trust remain important sources of heterogeneity among internet retailers

incidents of gray market activity among u s exporters occurrences characteristics and consequences each year the value of gray market products sold throughout the world runs into the billions of dollars past research has stated that exporters of manufactured goods can hardly afford to ignore the possibility of this phenomenon due to the often severe effects on their sales volume margins and relationships with distributors and end users through a survey of export managers of manufacturing firms coupled with a series of qualitative interviews this study investigates how organizational specific control specific and market specific factors drive gray market activity and in turn explores the effects of unauthorized distribution on export performance several factors are shown to evaluate the potential of unauthorized distribution in their export markets namely the centralization of decision making the degree to which the product is standardized channel integration and channel control international experience market volatility and the number of markets served were found to have no effect on gray market activity this contrary to traditional thinking furthermore the effects of gray market activity on strategic versus economic performance is shown to be significantly different each of these issues is discussed in detail along with the implications for export managers

institutionalizing end user demand steering in agricultural r d farmer levy funding of r d in the netherlands abstract the purpose of this paper is to critically examine the institutionalization of demand driven modes of working in the r d planning process and reveal possible weaknesses through an analysis of a system of collective r d funding by farmers the findings indicate that although end users have the opportunity to raise issues that lead to r d queries are influenced by several actors in the r d planning process in such a way that they do not adequately reflect farmers innovation needs conclusions are that more emphasis is required on joint demand articulation and involvement of end users and other stakeholders in the innovation process and on the institutional development of r d funding organizations in order to adopt a more inclusive view on innovation

enhancing international customer supplier relationships through it resources a study of taiwanese electronics suppliers the growing popularity of outsourcing and offshore partnering activities raises the issue of what strategies are appropriate for firms to successfully manage customer supplier relationships in the international context little has been written about how information technology it systems may impact on international exchange relationships in the present study we report on how suppliers use it as a strategic resource to govern their international exchange relationships with multinational enterprise customers taking the supplier s perspective we propose that two types of it resources it advancement and electronic integration create value for suppliers with respect to innovativeness and market performance we argue that this value creation process is mediated by three specific forms of governance cooperativeness output monitoring and behavior monitoring to test these arguments primary data obtained from 240 taiwanese electronics suppliers are used for hypothesis testing the survey results provide evidence that suppliers it resources enable them to work effectively with their international key customers importantly of the three governance mechanisms cooperativeness has the strongest impact on supplier performance owing to supplier electronic integration post hoc analysis revealed that cultural distance does not play a role in moderating the relationship between it resources and governance mechanisms in international exchange

developing successful trust based international exchange relationships trust is a central construct in relationship marketing yet the literature provides mixed empirical evidence on the trust performance linkage also there is limited research on how to build trusting international buyer seller relations we develop a comprehensive model integrating performance enhancing mechanisms and antecedent processes of trust in import export relationships our survey results from importers trading with overseas manufacturers suggest that existing levels of trust have a positive effect on relationship performance outcomes achieved 1 year later importantly trust takes on greater importance in enhancing performance under conditions of high interdependence whereas in circumstances of low interdependence trust has no discernible effect the findings also indicate that interfirm psychic distance internal uncertainty and exporter transaction specific assets and opportunism are related to importer trust implications for academics and practitioners are addressed

setting efficient incentives for agricultural research lessons from principal agent theory a conceptual analysis of important issues in the organization and management of academic research is presented principal agent theory is applied to derive optimal compensation schemes for scientists when they differ in ability risk aversion cost of effort and reservation utility and to show the optimal trade off between institutional risk and scientists abilities implications for an efficient organization of research are derived including how scientists incentives should be structured to elicit optimal research efforts and direction whether research direction should be centralized or decentralized and whether the organization of research should be through external competitive grantsor program and institutional funding copyright 2000 oxford university press

present at the biotechnological revolution transformation of technological identity for a large incumbent pharmaceutical firm abstract management of successful incumbent firms experience difficulty in recognizing the need for and effecting change in the firm s technological identity after an externally generated shift in the industry s technological trajectory nonetheless some large pharmaceutical firms have transformed their technological identity in drug discovery from a chemical random screening to biological drug design model we report how one of the world s most successful incumbents transformed technically sophisticated senior management championed the transformation it was achieved primarily through hiring many new scientists embodying biotechnology existing personnel acquired the expertise or left continual self transformation is part of the corporate ethos some differences in incumbent and entrant technology remain incumbents use a wider range of techniques consistent with their complementary assets publication and incentive compensation policies are driven by the need to attract and retain the best scientists professor firm collaborations are ubiquitous often non public and best identified in quantitative analyses by co publishing collaborations with new biotechnology firms are used primarily to substitute for developing internal expertise judged of marginal value no drug discovery collaborations exist with other major incumbents we identify another seven or eight incumbents similarly transforming as indicated by top scientific talent and patenting success

encouraging private sector research for tropical agriculture summary agricultural needs in poor tropical countries differ significantly from those in temperate rich countries yet little agricultural research is performed on products for the tropics private research is particularly concentrated in rich countries this is a result of significant failures in the market for research and development r d in particular the difficulty of preventing the resale of seed in developing countries to encourage private r d in tropical agriculture traditional funding of research may be usefully supplemented by a commitment to reward developers of specific new agricultural technologies rewards tied to adoption may be especially useful in increasing up take an illustration of how a commitment to reward developers of new agricultural technologies might work is provided

determinants of patent rights a cross national study abstract this paper presents an index of patent rights for 110 countries for the period 1960 1990 the index is used to examine what factors or characteristics of economies determine how strongly patent rights will be protected the evidence does indicate that more developed economies tend to provide stronger protection but the underlying factors which influence patent protection levels are the country s level of research and development r d activity market environment and international integration which are correlated with its level of development the results qualify however that r d activity influences patent protection levels after a nation s research sector reaches a critical size an implication of this is that to raise patent protection levels in weakly protecting countries it is important to foster a significant research base in those countries and thereby create incentives for protecting patent rights

public and private returns from joint venture research an example from agriculture public research institutions are turning increasingly to the private sector for additional financial support such a trend in the short run lessens the need for public research expenditures but may in the long run prove to be very costly to the economy as a whole this is because private funding increases the chance that the direction of research will shift so that private benefits are enhanced such a shift is especially costly if public research funds are then not forthcoming that would have the potential of producing the maximum level of benefits to the economy as a whole a case study of canadian barley research is used to illustrate this problem

funding structure and management of public agricultural research in the united states hypotheses about state agricultural experiment stations are investigated formula funding is found more productive than competitive grant funding possibly owing to transactions costs of reviewing and misallocations of pork barrel funding heavier administrator involvement in problem choice is found to enhance productivity of applied research where approach and product can be well specified in advance but detracts from productivity of pretechnology research where response to individual incentives may lead to more timely adaptations stronger vertical integration of pretechnology applied sciences and extension activities is found to increase productivity suggesting the importance of strongly science based applied research and practical understanding of pretechnology sciences

mail versus mall a strategic analysis of competition between direct marketers and conventional retailers consumers now purchase several offerings from direct sellers including catalog and internet marketers these direct channels exist in parallel with the conventional retail stores the availability of multiple channels has significant implications for the performance of consumer markets the literature in marketing and economics has however been dominated by a focus on the conventional retail sector this paper is an effort toward modeling competition in the multiple channel environment from a strategic viewpoint at the outset a parsimonious model that accommodates the following consumer and market characteristics is introduced first the relative attractiveness of retail shopping varies across consumers second the fit with the direct channel varies across product categories third the strength of existing retail presence in local markets moderates competition fourth in contrast with the fixed location of the retail store that anchors its localized market power the location of the direct marketer is irrelevant to the competitive outcome the model is first applied in a setting where consumers have complete knowledge of product availability and prices in all channels in the resulting equilibrium the direct marketer acts as a competitive wedge between retail stores the direct presence is so strong that each retailer competes against the remotely located direct marketer rather than against neighboring retailers this outcome has implications for the marketing mix of retailers which has traditionally been tuned to attract consumers choosing between retail stores in the context of market entry conditions under which a direct channel can access a local market in retail entry equilibrium are derived our analysis suggests that the traditional focus on retail entry equilibria may not yield informative or relevant findings when direct channels are a strong presence next the role of information in multiple channel markets is modeled this issue is particularly relevant in the context of direct marketing where the seller can typically control the level of information in the marketplace sometimes on a customer by customer basis e g by deciding on the mailing list for a catalog campaign when a certain fraction of consumers does not receive information from the direct marketer the retailers compete with each other for that fraction of the market the retailer s marketing mix has to be tuned in this case to jointly address direct and neighboring retail competition the level of information disseminated by the direct marketer is shown to have strategic implications and the use of market coverage as a lever to control competition is described even with zero information costs providing information to all consumers may not be optimal under some circumstances in particular when the product is not well adapted to the direct channel the level of market information about the direct option should ideally be lowered the only way to compete with retailers on a larger scale with a poorly adapted product is by lowering direct prices which lowers profits lowering market information levels and allowing retailers to compete more with each other facilitates a higher equilibrium retail price in turn this allows a higher direct price to be charged and improves overall direct profit on the other hand when the product is well adapted increasing direct market presence and engaging in greater competition with the retail sector yields higher returns the finding that high market coverage may depress profits raises some issues for further exploration first implementing the optimal coverage is straightforward when the seller controls the information mechanism as in the case of catalog marketing the internet in contrast is an efficient mechanism to transmit information but does not provide the sellers with such control over the level of market information a key reason is that the initiative to gather information on the internet lies largely with consumers the design and implementation of mechanisms to control aggregate information levels in electronic markets can therefore be an important theme for research and managerial interest second direct marketers have traditionally relied on the statistical analysis of customer records to decide on contact policies the analysis in this paper reveals that these policies can have significant strategic implications as well research that integrates the statistical and strategic aspects could make a valuable contribution the paper concludes with a discussion of issues for future research in multiple channel markets including avenues to model competition in settings with multiple direct marketers

incentives between firms and within this paper reviews the significant progress in agency theory i e the economic theory of incentives during the 1990s with an eye toward applications to supply transactions i emphasize six recent models in three pairs 1 new foundations for the theory of incentive contracts 2 new directions in incentive theory and 3 new applications to supply transactions by reviewing these six models i hope to establish three things first the theory of incentive contracts needed and received new foundations second new directions in incentive theory teach us that incentive contracts are not the only source of incentives finally and especially relevant to supply transactions the integration decision is an instrument in the incentive problem

on the organisation of agricultural research in the united kingdom 1945 1994 a quantitative description and appraisal of recent reforms abstract in this paper we review recent radical changes in the structure and funding of agricultural and food research in the united kingdom we assemble data on the contributions of both public and private institutions during the past fifty years to put these changes in greater perspective they are then explained by the interaction of proactive governmental policies for the agricultural and food industries driven by external considerations with more reactive policies motivated by problems particular to these industries essentially the assumption that government intervention is required only when market incentives fail has dictated that public funding should be reallocated from technology transfer activities and productivity enhancing and near market research to basic research which affects a broader range of industries than just the food and agriculture industries and to public interest research on pressing problems of food safety and environmental protection we conclude that the much heralded notion of progress through partnership of the public and private sectors is not succeeding since the latter has not taken up the research abandoned by the former

aggregate private r d investments in agriculture the role of incentives public policies and institutions most observers have come to agree that research and development rd for example are they complements or substitutes if they are substitutes then additional private agricultural r d expenditures may not result in larger total agricultural research expenditures the objective of this article is to present econometric evidence quantifying the effects of economic incentives public policies and institutions on national aggregate private agricultural r d investments or expenditures previous studies have generally emphasized only one or at most two of these issues but the primary hypothesis of this article is that all three are important and that interactions exist among them although the european union eu is undergoing major economic integration member countries continue to exhibit substantial differences in institutions public policies size and relative importance of agriculture hence these countries provide a good set of observations for testing our main hypothesis a model is formulated and fitted

university licensing of patents for varietal innovations in agriculture there has been a sharp increase in the number of patented agricultural products from public universities in the united states we develop an experiment to examine the revenue stream to universities from licensing plant based innovations in the experiment we asked subjects to bid for access for a patented input that would be used to manufacture a differentiated product treatments were employed to solicit bids that were financed by fees royalties and a combination of the two mechanisms under exclusive and non exclusive contracts the literature studying the economics of downstream duopoly competition in quantity suggests that revenues for the innovator would be greatest under a non exclusive contract that uses fees and royalties in our experiment we allow more than two firms to obtain access to the patent in the non exclusive treatments and our empirical results suggest that innovator revenues are greatest when royalties are used alone in a non exclusive contract

the organization of agricultural research in western developed countries abstract this paper reviews agricultural research structural and organizational changes in western developed countries examines new financing prospects for agricultural research and provides some tentative conclusions about which organizations are best positioned to provide services for the twenty first century given that these countries face many similar economic political scientific and agroclimatic factors and fiscal issues we can expect a set of similar new developments that have potentially important and widespread long run implications after three common developments are outlined principles of impure public good financing are applied leading to the following agricultural science policy recommendations i new political jurisdictions should be formed to finance research e g new alliances across countries and subregions within large countries ii intellectual property rights should be strengthened to increase the total amount and share of total public and private agricultural research that is privately financed and conducted i e the private sector should find it profitable to undertake a large share of applied research but not be expected to finance public sector agricultural research and iii the public sector should redirect its research efforts increasingly to areas that are socially worthwhile but not privately undertaken e g in the basic and pretechnology areas on environmental resources food safety and human nutrition and policy finally large countries that have developed a system of shared public and private financing and performance and decentralized public support of agricultural research seem best positioned for meeting the needs of the twenty first century

impact of institutions and public research on private agricultural research abstract the objective of this paper is to present econometric evidence of the effects of economic incentives and institutions on national aggregate private agricultural r d investments an econometric model of national aggregate annual private r d investment is specified and fitted to panel data consisting of seven eu countries austria germany italy the netherlands portugal spain and sweden over 1984 1995 we find strong impacts of both incentives and institutions on private agricultural r d investment including institutional factors strengthens the story and in some cases greatly changes the results

public agricultural r d design and technological spill ins a dynamic model the paper presents a dynamic model for the analysis of the national agricultural research systems narss strategy in a context of increasing globalisation both intersectoral and international technology spill ins may greatly affect the nars design and this paper proposes an analytical framework for its study when major spill ins are present these spill ins are calculated by applying the yale technology concordance ytc methodology a var vec model is then specified to detect empirically given the calculated spill ins what nars design prevails in a dynamic framework the model is estimated for the italian agriculture data and provides evidence of close dependency on external r d sources