new human resource management practices complementarities and the impact on innovation performance in this paper we take our theoretical point of departure in recent work in organisational economics on systems of human resource management hrm practices we develop the argument that just as complementarities between new hrm practices influence financial performance positively there are theoretical reasons for expecting them also to influence innovation performance positively we examine this overall hypothesis by estimating an empirical model of innovation performance using data from a danish survey of 1 900 business firms using principal component analysis we identify two hrm systems which are conducive to innovation in the first one seven of our nine hrm variables matter almost equally for the ability to innovate the second system is dominated by firm internal and firm external training of the total of nine sectors that we consider we find that the four manufacturing sectors correlate with the first system firms belonging to wholesale trade and to the ict intensive service sectors tend to be associated with the second system

product cannibalization and the role of prices the role of brand prices in contributing to product cannibalization is examined price elasticities and reference price theory are used to provide a theoretical foundation and empirical test for the impact of a firm s cheap brand on one of its expensive brands results are consistent with the conclusion that the market share of the company s premium brand was cannibalized by a growth in sales of its cheap brand

network models and financial stability abstract systemic risk is a key concern for central banks charged with safeguarding overall financial stability in this paper we investigate how systemic risk is affected by the structure of the financial system we construct banking systems that are composed of a number of banks that are connected by interbank linkages we then vary the key parameters that define the structure of the financial system including its level of capitalisation the degree to which banks are connected the size of interbank exposures and the degree of concentration of the system and analyse the influence of these parameters on the likelihood of knock on defaults first we find that the better capitalised banks are the more resilient is the banking system against contagious defaults and this effect is non linear second the effect of the degree of connectivity is non monotonic i e initially a small increase in connectivity increases the contagion effect but after a certain threshold value connectivity improves the ability of a banking system to absorb shocks third the size of interbank liabilities tends to increase the risk of knock on default even if banks hold capital against such exposures fourth more concentrated banking systems are shown to be prone to larger systemic risk all else equal in an extension to the main analysis we study how liquidity effects interact with banking structure to produce a greater chance of systemic breakdown we finally consider how the risk of contagion might depend on the degree of asymmetry tiering inherent in the structure of the banking system a number of our results have important implications for public policy which this paper also draws out

minimum market share this paper analyzes a specific model of oligopolistic competition involving product differentiation marketing activities and economies of scale in production this model is consistent with sales response models which have been justified on theoretical and empirical bases it is shown that at a nash equilibrium each firm must have market share equal to zero or greater than a threshold value this result has implications for determination of minimum firm size the effectiveness of a low market share strategy entry barriers and the likelihood of concentration in an industry the paper explores these implications and relates them to various theories and hypotheses in industrial organization and strategic planning

bank networks contagion systemic risk and prudential policy abstract we present a network model of the interbank market in which optimizing risk averse banks lend to each other and invest in non liquid assets market clearing takes place through a t tonnement process which yields the equilibrium price while traded quantities are determined by means of an assortative matching process contagion occurs through liquidity hoarding interbank interlinkages and fire sale externalities the resulting network configuration exhibits a core periphery structure dis assortative behavior and low density within this framework we analyze the effects of a stylized set of prudential policies on the stability efficiency trade off liquidity requirements unequivocally decrease systemic risk but at the cost of lower efficiency measured by aggregate investment in non liquid assets equity requirements also tend to reduce risk hence increase stability though without reducing significantly overall investment on this basis our results provide general support for the basel iii approach based on complementary regulatory metrics

science parks and the performance of new technology based firms a review of recent u k evidence and an agenda for future research science parks were established to stimulate the formation and development of new technology based firms ntbfs despite the potential importance of these institutions as a mechanism for generating technological spillovers and employment growth there has been little systematic analysis of their impact on ntbfs in this paper we review some recent evidence comparing the performance of firms located on and off u k science parks this preliminary evidence suggests that the returns to being located on a science park are negligible we conjecture that these results may be due to imprecise estimates of these returns and may also be masking important differences in the returns to different types of science parks in addition we outline an agenda for additional research on the effects of these institutions on ntbf performance

competitive maps the structure underlying asymmetric cross elasticities a special case of three mode factor analysis is used to portray the systematic structure underlying asymmetric cross elasticities for a broad class of market share attraction models analysis of the variation over retail outlets and weeks reveals competitive patterns corresponding to sales for the major brands in the market as well as patterns reflecting shelf price competition analysis of the brand domain results in a joint space one set of brand positions portrays how brands exert influence over the competition the other set of points portrays how brands are influenced by others the interset distances angles provide direct measures of competitive pressures maps are formed as spatial representations of each of the competitive patterns discovered

a factor analytic probit model for representing the market structure in panel data internal market structure analysis infers both brand attributes and consumer preferences for those attributes from preference or choice data the authors exploit a new method for estimating probit models from panel data to infer market structures that can be displayed in few dimensions even though the model can represent every possible vector of purchase probabilities

a probabilistic choice model for market segmentation and elasticity structure marketing scholars commonly characterize market structure by studying the patterns of substitution implied by brand switching though the approach is useful it typically ignores the destabilizing

modeling purchase timing and brand switching behavior incorporating explanatory variables and unobserved heterogeneity the authors use a continuous time semi markov approach to analyze in a single framework the purchase timing and brand switching decisions of households for a frequently purchased product the analysis provides more insights into the dynamics of household purchase behavior than could be obtained from conventional discrete choice models such as logit or probit the authors find that the probability distribution of interpurchase times is not the same for various switching between brands revealing extra information about the purchase timing decisions further they find that though the marketing mix and household demographic variables explain a large part of the variation in the brand switching rates they account for only a small part of the variation in the repeat purchase rates another finding from the analysis is that the rates of switching between brands due to promotional activities such as special displays and price reductions are in reverse order to the share of purchases of the various brands

note extending the rotterdam model to test hierarchical market structures two issues that have implications across a firm s marketing activities are the estimation of the market response functions and the determination of the structure of the market in which its products compete in a recent paper clements and selvanathan clements k w e a selvanathan 1988 the rotterdam demand model and its application to marketing marketing sci 7winter 60 75 describe how the rotterdam demand system can be used to study these two issues in a joint framework in this note we extend their model to test hierarchical market structures using data at the brand form level we also incorporate idiosyncratic response coefficients that capture the effects of advertising and or other nonprice marketing mix variables separate from the effects of a price change these extensions provide additional insights into the nature and extent of competition among brands within a product class

technology and regional policy a case study of northern ireland the importance of technical change through the innovative activity of industry has received a lot of attention in the regional economic literature regional policy has now begun to reflect the changing emphasis in the recent literature and especially the key role of inventive activity in achieving long run self sustaining regional growth this paper concentrates on research activities in terms of inventive inputs r d and innovative outputs especially patented innovations in general the results suggest that there is a low level of technological activity in northern ireland especially in industries that are characterized as being technologically advanced this is partly because external ownership reduces r d activity which in turn reduces innovation outputs but there is also a problem in that companies in northern ireland are relatively unsuccessful at producing new products and processes of the type and quality required in the market place the availability of government sponsored r d grants s

innovations and r d in northern ireland manufacturing a schumpeterian approach harris r and trainor m 1995 innovations and r d in northern ireland manufacturing a schumpeterian approach reg studies 29 593 604 given the importance of r d and innovative outputs and the change in regional policy in the 1980s to encourage an enterprise culture based inter alia on a high rate of innovations this paper attempts to explain the determinants of inventive activities in one of the most disadvantaged regions of the united kingdom a model incorporating the impact of market structure is estimated and it is found that in northern ireland higher r d spending leads to a higher probability of innovating while r d itself is positively affected by higher post innovation price cost margins thus r d spending and innovation outputs are beneficial to profitability and thus presumably the long term growth of firms however while market structure is important the direct effects of monopoly power are if anything negative thus the results presented by geroski 1990 are support

asymmetric and neighborhood cross price effects some empirical generalizations this paper provides some empirical generalizations regarding how the relative prices of competing brands affect the cross price effects among them particular focus is on the asymmetric price effect and the neighborhood price effect the asymmetric price effect states that a price promotion by a higher priced brand affects the market share of a lower priced brand more so than the reverse the neighborhood price effect states that brands that are closer to each other in price have larger cross price effects than brands that are priced farther apart the main objective of this paper is to test if these two effects are generalizable across product categories and to assess which of these two effects is stronger while the neighborhood price effect has not been rigorously tested in past research the asymmetric price effect has been validated by several researchers however these tests of asymmetric price effect have predominantly used elasticity as the measure of cross price effect the cross price elasticity measures the percentage change in market share or sales of a brand for 1 change in price of a competing brand we show that asymmetries in cross price elasticities tend to favor the higher priced brand simply because of scaling effects due to considering percentage changes furthermore several researchers have used logit models to infer asymmetric patterns we also show that inferring asymmetries from conventional logit models is incorrect to account for potential scaling effects we consider the absolute cross price effect defined as the change in market share percentage points of a target brand when a competing brand s price changes by one percent of the product category price the advantage of this measure is that it is dimensionless hence comparable across categories and it avoids scaling effects we show that in the logit model with arbitrary heterogeneity in brand preferences and price sensitivities the absolute cross price effect is symmetric we develop an econometric model for simultaneously estimating the asymmetric and neighborhood price effects and assess their relative strengths we also estimate two alternate models that address the following questions i if i were managing the ith highest priced brand which brand do i impact the most by discounting and which brand hurts me the most through price discounts ii who hurts whom in national brand vs store brand competition based on a meta analysis of 1 060 cross price effects on 280 brands from 19 different grocery product categories we provide the following empirical generalizations 1 the asymmetric price effect holds with cross price elasticities but tends to disappear with absolute cross price effects 2 the neighborhood price effect holds with both cross price elasticities and absolute cross price effects and is significantly stronger than the asymmetric price effect on both measures of cross price effects 3 a brand is affected the most by discounts of its immediately higher priced brand followed closely by discounts of its immediately lower priced brand 4 national brands impact store brands more so than the reverse when the cross effect is measured in elasticities but the asymmetric effect does not hold with absolute effects store brands hurt and are in turn hurt the most by the lower priced national brands that are adjacent in price to the store brands 5 cross price effects are greater when there are fewer competing brands in the product category and among brands in nonfood household products than among brands in food products the implications of these findings are discussed

a panel data based method for merging joint space and market response function estimation multidimensional scaling mds techniques have proven to be useful in understanding market structures at a single point in time in addition to examining snapshots of markets it has been suggested that the construction of longitudinal joint spaces in conjunction with econometric modeling techniques would provide useful insights into the dynamic structure of a market however several pragmatic factors related to data collection have limited the amount of research in this area in this paper a method is proposed that enables researchers to use commonly available consumer diary panel data to construct a time series of joint space maps and then to integrate these maps into market response models two illustrations using longitudinal maps demonstrate successful applications of this methodology

defensive marketing strategies this paper analyzes how a firm should adjust its marketing expenditures and its price to defend its position in an existing market from attack by a competitive new product our focus is to provide usable managerial recommendations on the strategy of response in particular we show that if products can be represented by their position in a multiattribute space consumers are heterogeneous and maximize utility and awareness advertising and distribution can be summarized by response functions then for the profit maximizing firm it is optimal to decrease awareness advertising it is optimal to decrease the distribution budget unless the new product can be kept out of the market a price increase may be optimal and even under the optimal strategy profits decrease as a result of the competitive new product furthermore if the consumer tastes are uniformly distributed across the spectrum a price decrease increases defensive profits it is optimal at the margin to improve product quality in the direction of the defending product s strength and it is optimal at the margin to reposition by advertising in the same direction in addition we provide practical procedures to estimate 1 the distribution of consumer tastes and 2 the position of the new product in perceptual space from sales data and knowledge of the percent of consumers who are aware of the new product and find it available competitive diagnostics such as the angle of attack are introduced to help the defending manager this article was originally published in marketing science volume 2 issue 4 pages 319 360 in 1983

srisk a conditional capital shortfall measure of systemic risk we introduce srisk to measure the systemic risk contribution of a financial firm srisk measures the capital shortfall of a firm conditional on a severe market decline and is a function of its size leverage and risk we use the measure to study top financial institutions in the recent financial crisis srisk delivers useful rankings of systemic institutions at various stages of the crisis and identifies fannie mae freddie mac morgan stanley bear stearns and lehman brothers as top contributors as early as 2005 q1 moreover aggregate srisk provides early warning signals of distress in indicators of real activity received june 7 2011 accepted april 18 2016 by editor geert bekaert

modeling asymmetric competition the effects of the marketing actions of one brand can be distributed among its competitors market shares in a complex manner this paper presents and illustrates methods for modeling brand competition and brand strategies in markets where competitive effects can be differentially and asymmetrically distributed we discuss the empirical specification parameter estimation and competitive strategy implications of the models proposed price and advertising competition among eleven brands of an australian household product is used to illustrate the application of these procedures

the size distribution of innovating firms in the uk 1945 1983 a survey of 4 378 significant innovations shows that firms with fewer than 1 000 employees commercialized a much larger share than is indicated by their share of r and d expenditures innovations per employee have been consistently above average in firms with more than 10 000 employees and have become so in firms with fewer than 1 000 intersectoral variation in the size distribution of innovating firms can be explained as a function of r and d based technological opportunities and of technological ease of entry by user firms with principal activities outside the sector copyright 1987 by blackwell publishing ltd

using neoclassical consumer choice theory to produce a market map from purchase data this article presents a new model for estimating the spatial representation of objects and preference vectors from actual choice behavior of individuals or households it is based on neoclassical economic theory of consumer choice the model integrates both decisions of which good s to buy and the quantity of purchase overall preference is decomposed into price effects and intrinsic preference for the good a maximum likelihood method for estimating the model parameters is described and illustrated using choice data of ketchup brands collected by the use of electronic supermarket scanners

employment changes and input output linkages in key technology industries a comparative analysis bathelt h 1991 employment changes and input output linkages in key technology industries a comparative analysis reg studies 25 31 43 in order to achieve a better understanding of employment changes and input output linkages of key technology firms it was considered necessary to undertake a survey among key technology firms identified by three digit sic codes from five key technology regions in north america the regions of boston massachusetts research triangle north carolina atlanta georgia ottawa ontario and canada s technology triangle around kitchener waterloo ontario were included a total of 160 interviews was conducted among key technology firm executives managers with a rejection rate of only 10 overall significant growth activities were identified in each of the regions resulting in a total of about 40 000 new jobs during the 1980s within the firms surveyed employment in key technology industries was found to be extremely concentrated in large firms and specific secto

service innovation embeddedness and business performance evidence from northern ireland this paper explores the factors that determine innovation by service firms and in particular the contribution of intra and extra regional connectivity subsequently it is examined how service firms innovation activity relates to productivity and export behaviour the empirical analysis is based on matched data from the 2005 uk innovation survey the uk component of the 4th community innovation survey cis and the annual business inquiry for northern ireland evidence is found of negative intra regional embeddedness effects but there is a positive contribution to innovation from extra regional connectivity particularly links to customers relationships between innovation exporting and productivity prove complex but suggest that innovation itself is not sufficient to generate productivity improvements only when innovation is combined with increased export activity are productivity gains evident

r d appropriability opportunity and market structure new evidence on some schumpeterian hypotheses one of the largest bodies of literature in the field of industrial organization is devoted to the interpretation and testing of several hypotheses advanced by joseph schumpeter 1950 concerning innovation and industrial market structure one set of hypotheses focuses on the role of firm size as a determinant of r d spending and the rate of technological advance another set focuses on the effect of market concentration on r d and technological advance in this paper we reexamine the latter set of hypotheses at the industry level using new data on r d appropriability and technological opportunity collected by levin et al 1984 in a survey of r d executives in 130 industries

analysis of global bifurcations in a market share attraction model in this paper we demonstrate how the global dynamics of an economic model can be analyzed in particular as an application we consider a market share attraction model widely used in the analysis of interbrand competition in marketing theory we analyze the local and global dynamic properties of the resulting two dimensional noninvertible dynamical system in discrete time the main result of this paper is given by the study of some global bifurcations that change the structure of the attractors and their basins these bifurcations are investigated by the use of critical curves a powerful tool for the analysis of the global properties of noninvertible two dimensional maps 2000 elsevier science b v all rights reserved jel classixcation e32 m30

technical note aggregating individual purchases to the household level household level panel data are the input for many types of marketing studies an interesting but until now unaddressed question is what is the effect of aggregating individual members purchases to the household level under standard assumptions the answer is unambiguous the household brand switching pattern looks more zero order than the typical individual family member s behavior when the standard assumptions are relaxed the overall spirit of the results do not change these conclusions give comfort to those who use brand switching data to partition product categories those looking for variety seeking behavior from household data are given some cause for concern as well as reasons for reinterpreting previous studies

choice map inferring a product market map from panel data this paper describes choice map a model that infers a product market map from panel data choice map is a stochastic brand choice model a random utility quantal choice model and a multidimensional scaling procedure choice map combines the parsimony of stochastic choice models the rationale of random utility models and the ability of multidimensional scaling procedures to simultaneously infer both brand positions and consumer preferences from preference choice data choice map assumes that consumers have stationary purchase probabilities for the observational period which makes the model best suited to frequently bought mature product categories neither experimental nor survey data are required traditional mapping methods that scale such data may not yield the same structure for low involvement products as will a procedure like choice map that scales behavioral data choice map s descriptive and predictive validity exceeds that of an alternative stochastic brand choice model the dirichlet multinomial for a test data set

a unified approach to identifying estimating and testing demand structures with aggregate scanner data a one to one map between a specific demand structure and a restricted cross elasticity matrix is developed and tested using a random utility model the resulting demand structure can be used to evaluate a firm s ability to differentiate its products and can help determine if demand is characterized by factors that are easy to change similar brands are assumed to share common attributes that are stochastically evaluated by the consumer resulting in a random utility model with correlated errors the map results in more precise cross elasticity estimates and can be used to both identify and test possible structures

the evolution of internal market structure we present a dynamic factor analytic choice model to capture evolution of brand positions in latent attribute space our dynamic model allows researchers to investigate brand positioning in new categories or mature categories affected by structural change such as entry we argue that even for mature categories not affected by structural change the assumption of stable attributes may be untenable we allow for evolution in attributes by modeling individual level time specific attributes as arising from dynamic means the dynamic attribute means are modeled as a bayesian dynamic linear model dlm the dlm is nested within a factor analytic choice model our approach makes efficient use of the data by leveraging estimates from previous and future periods to estimate current period attributes we demonstrate the robustness of our model with data that simulate a variety of dynamic scenarios including stationary behavior we show that misspecified attribute dynamics induce temporal heteroskedasticty and correlation between the preference weights and the error term applying the model to a panel data set on household purchases in the malt beverage category we find considerable evidence for dynamics in the latent brand attributes from a managerial perspective we find advertising expenditures help explain variation in the dynamic attribute means

technical note a note on optimal strategic pricing of technological innovations the experience curve phenomenon of falling marginal costs associated with accumulated output or production experience has given rise to dynamic pricing models optimal pricing policies will depend upon the nature of the dynamic demand and cost functions in this note we shall show that the demand function employed by bass bass f m 1980 the relationship between diffusion rates experience curves and demand elasticities for consumer durable technological innovations j bus 53 july s51 s67 when taken in conjunction with the experience curve cost function leads to a multiperiod pricing strategy which is always less than the myopically optimal price further we present a dynamic programming algorithm for the multiperiod strategy in which we have explored the effects on discounted profits of myopic pricing versus multiperiod pricing the results of this comparison may to some be somewhat surprising and may have managerial significance

external ownership of industry and government policy some further evidence for northern ireland harris r i d 1990 external ownership of industry and government policy some further evidence for northern ireland reg studies 25 45 62 this paper considers the causes and consequences of external ownership and control of manufacturing in northern ireland the province is an interesting example of a branch plant economy since government regional policy has been particularly responsible for encouraging inward investment the effect of external control on occupational structures inter firm linkages technological development and plant closures is assessed using various and often unique databases the results obtained suggest that high levels of external ownership in northern ireland lead to proportionately more unskilled as opposed to skilled manual workers linkages tend to be truncated leading to generally lower levels of integration into the local economy rd and there appears to have been a higher propensity for closure if the plant w

when does lag structure really matter in optimizing advertising expenditures a paper by bultez and naert in the may 1979 issue of management science tentatively concludes that profits are relatively insensitive to misspecification of the lag structure of advertising we examine the conditions under which a firm s profits are most likely to be sensitive to the misspecification of the lag structure our analysis indicates how this sensitivity is related to a the form of the true lag structure b the demand function c the cost function and d the firm s discount rate

the anatomy of industry r d intensity distributions using firm data disaggregated by industry we establish a set of regularities in the distribution of firm r d intensities within manufacturing industries we show how a simple probabilistic process in which chance influences a key unobserved determinant of r d and firm size conditions the returns to r d can account for these regularities and other features of the distributions the model provides a unified noncausal explanation of a series of long observed relationships across mean r d intensity market concentration and the coefficient of variation it also offers a novel explanation for the inverse relationship between r d productivity and firm size jel 031

overlapping portfolios contagion and financial stability abstract we study the problem of interacting channels of contagion in financial networks the first channel of contagion is counterparty failure risk this is captured empirically using data for the austrian interbank network the second channel of contagion is overlapping portfolio exposures this is studied using a stylized model we perform stress tests according to different protocols for the parameters we study neither channel of contagion results in large effects on its own in contrast when both channels are active at once bankruptcies are much more common and have large systemic effects

market versus corporate structure in plant level innovation performance this paper examines the effect which market and corporate structure have on the extent of innovation for a sample of circa 300 manufacturing plants located in scotland innovation is defined as the introduction of a commercially significant new product at the establishment level the theoretical model of geroski 1990 is extended to incorporate plant level variables such as size multiplant operation the presence of r d facilities and external indigenous ownership a distinction is made between the direct and indirect effects of these variables negative binomial estimations indicate that corporate structure influences are more important in determining the number of innovations than market structure and barrier to entry variables plant size foreign ownership and the presence of r d are all positively associated with innovation direct effects greatly outweigh indirect effects tobit estimations on the number of innovations per employee support the findings of acs and audretsch 1988 that smaller enterprises are more innovation intensive than larger enterprises at least up to a limit of around 1200 employees the positive effect of r d arises principally from increasing the probability of a plant becoming an innovator rather than from making a plant more innovation intensive by contrast the importance of size lies principally in encouraging further innovations among plants which are already innovators but less than proportionately with the increase in employment size

modelling the innovation value chain innovation events the introduction of new products or processes represent the end of a process of knowledge sourcing and transformation they also represent the beginning of a process of exploitation which may result in an improvement in the performance of the innovating business this recursive process of knowledge sourcing transformation and exploitation comprises the innovation value chain modelling the innovation value chain for a large group of manufacturing firms in ireland and northern ireland highlights the drivers of innovation productivity and firm growth in terms of knowledge sourcing we find strong complementarity between horizontal forwards backwards public and internal knowledge sourcing activities each of these forms of knowledge sourcing also makes a positive contribution to innovation in both products and processes although public knowledge sources have only an indirect effect on innovation outputs in the exploitation phase innovation in both products and processes contribute positively tocompany growth with product innovation having a short term disruption effect on labour productivity modelling the complete innovation value chain highlights the structure and complexity of the process of translating knowledge into business value and emphasises the role of skills capital investment and firms other resources in the value creation process

estimating the confidence interval for the optimal marketing mix an application to lead generation the dorfman steiner theorem has provided the marketing community with a powerful result for allocating resources between competing marketing mix variables it is well known that the optimal allocation of resources is in direct proportion to their demand elasticities to implement this result the marketing manager must know the elasticities of the various marketing elements under his her control since the precise values of these elasticities is rarely if ever known the manager must use estimates of the elasticities in allocating the resources point estimates of the elasticities can be obtained from laboratory or field experiments and from econometric models in both cases these estimates are known with uncertainty this paper discusses the appropriate method for incorporating uncertainties in the point estimates of the elasticities to yield rigorous confidence intervals applicable to the ratio of the elasticities an empirical example is used to illustrate the methodology

measuring r d in small firms how much are we missing the oecd surveys on r d are considerably biased towards underestimating r d in small firms this conclusion is derived from the author s comparison between the official dutch r d survey and the findings of his own survey among 3000 firms although being based on dutch observations only the author s considerations have an impact on other oecd countries since the official dutch r d survey is fully compatible with those in other countries the findings call into question the results from a number of empirical studies bearing on subjects such as market structure and r d firm size and r d or r d and growth

knowledge capabilities and manufacturing innovation a us europe comparison roper s youtie j shapira p and fernandez ribas a knowledge capabilities and manufacturing innovation a usa europe comparison regional studies this paper presents a comparative analysis of factors contributing to the innovation performance of manufacturing firms in georgia usa wales uk the west midlands uk and catalonia spain enabled by comparable survey data multivariate probit models are developed to estimate how various types of firms innovative activities are influenced by links to external knowledge sources internal resources absorptive capacity and public innovation support the results suggest the potential for mutual learning for the european study regions there are insights about how universities in georgia support innovation for georgia and catalonia there are lessons from uk firms about better capturing potential complementarities between innovation activities additional implications for innovation measurement and knowledge base development are discussed roper s

breeding competitive strategies we show how genetic algorithms can be used to evolve strategies in oligopolistic markets characterized by asymmetric competition the approach is illustrated using scanner tracking data of brand actions in a real market an asymmetric market share model and a category volume model are combined to represent market response to the actions of brand managers the actions available to each artificial brand manager are constrained to four typical marketing actions of each from the historical data each brand s strategies evolve through simulations of repeated interactions in a virtual market using the estimated weekly profits of each brand as measures of its fitness for the genetic algorithm the artificial agents bred in this environment outperform the historical actions of brand managers in the real market the implications of these findings for the study of marketing strategy are discussed

liaisons dangereuses increasing connectivity risk sharing and systemic risk the recent financial crisis poses the challenge to understand how systemic risk arises endogenously and what architecture can make the financial system more resilient to global crises this paper shows that a financial network can be most resilient for intermediate levels of risk diversification and not when this is maximal as generally thought so far this finding holds in the presence of the financial accelerator i e when negative variations in the financial robustness of an agent tend to persist in time because they have adverse effects on the agent s subsequent performance through the reaction of the agent s counterparties 2012 elsevier b v all rights reserved

external ownership and innovation in the united kingdom this paper examines the impact of ownership and a variety of other variables on the likelihood of innovation and the presence of an r d function within a national sample of uk defence related firms it is shown that foreign ownership has a negative indirect impact upon innovation mixed support is found for the schumpeterian approach to innovation involvement in export markets technological opportunity and r d collaboration are shown to have a positive impact on innovation

derivation of covariance probit elasticities the full covariance probit model is highly regarded due to the flexibility with which it can represent cross brand effects explicit formulae for these cross brand effects for the general n brand case have never appeared in print nor have the direct elasticities for the model this note fills that omission

basel iii capital surcharges for g sibs are far less effective in managing systemic risk in comparison to network based systemic risk dependent financial transaction taxes in addition to constraining bilateral exposures of financial institutions there exist essentially two options for future financial regulation of systemic risk first regulation could attempt to reduce the financial fragility of global or domestic systemically important financial institutions g sibs or d sibs as for instance proposed by basel iii second it could focus on strengthening the financial system as a whole by reducing the probability of large scale cascading events this can be achieved by re shaping the topology of financial networks we use an agent based model of a financial system and the real economy to study and compare the consequences of these two options by conducting three computer experiments with the agent based model we find that re shaping financial networks is more effective and efficient than reducing financial fragility capital surcharges for g sibs could reduce systemic risk but they would have to be substantially larger than those specified in the current basel iii proposal in order to have a measurable impact this would cause a loss of efficiency

resource and capability constraints to innovation in small and large plants in an attempt to enhance firm s competitiveness policy initiatives have sought to encourage more firms to innovate with a particular focus on small firms the success of such initiatives however depends on a clear understanding of the factors that are constraining innovation activity and whether these differ for firms of different sizes this paper examines those resources and capabilities that firms identify as constraining their innovation activity the difference in these for small and larger plants and the actual impact of these perceived constraints on the probability of innovating and the degree of innovation success drawing on longitudinal data the paper demonstrates that innovation is an evolutionary process with the constraints to innovation being different for small and larger plants from a policy perspective initiatives to overcome constraints to innovation in small plants should extend beyond those of finance to include greater networking opportunities cost reduction programmes and marketing strategies to increase the profit margin on new products human resource management practices on implementing change and easier access to information about new technologies in contrast policies to promote innovation in larger plants should focus on minimising the risk of development and enhancing access to specialist expertise

innovative opportunity pursuit human capital and business ownership experience in an emerging region evidence from ghana this study explores whether an entrepreneur s ability to assemble and leverage human capital particularly specific human capital relating to prior business ownership experience is associated with seven types of product and work practices innovation in an emerging region namely ghana logistic regression estimation revealed that portfolio entrepreneurs were more likely than novice entrepreneurs to report innovation tried multinomial logistic regression analysis revealed that portfolio entrepreneurs were more likely than other entrepreneurs to report innovation tried and introduced if the goals of policy are to increase the quality of new business start ups and maximize investment returns there is a case to target assistance to portfolio entrepreneurs

chapter 6 market share models publisher summary this chapter describes that three basic principles motivate the specification of the market share models market share models should be competitive descriptive as well as predictive and profit oriented being fundamentally competitive implies that one cannot know the effect or effectiveness of a marketing action without accounting for the actions of competitors market share models are models for understanding how the marketing efforts of every brand impact the results in a competitive marketplace only by describing the influence of each marketing instrument can one gain a basis for marketing planning prediction alone is not enough time series models that forecast the future from the past sales provide no insight into how sales are generated the emphasis on being descriptive also embraces the need to understand the areas in which consumer choice probabilities are synonymous with market shares as well part of the goal of description transcends what can be done by market share models alone managers need to understand that their efforts have potentially competitive effects and potentially market expansive effects in sales response models these effects are comingled but by combining descriptive market share models for the competitive effects with descriptive category volume models for the market expansive effects managers obtain a much richer understanding of the market the profit oriented goal of market share analysis urges us to ask how the firm s allocations of resources to aspects of the marketing mix produce bottom line results

the evolution of new industries and the determinants of market structure several empirical regularities concerning firm growth rates and industry firm size distributions have been developed by studying primarily mature industries the primary purpose of this article is to bring together and extend empirical regularities on the evolution of new industries and to use these regularities to gain further insight into the forces governing industry evolution to explain these regularities a model is constructed which emphasizes how factors governing the early evolution of industries may shape their market structure at maturity it stresses how chance events and exogenous factors that influence the number of potential entrants to the industry the growth rate of incumbents and the ease of imitation of industry leaders will influence the ultimate number and size distribution of firms in the industry

what is the minimal systemic risk in financial exposure networks abstract we quantify how much systemic risk can be eliminated in financial contract networks by rearranging their network topology by using mixed integer linear programming financial linkages are optimally organized whereas the overall economic conditions of banks such as capital buffers total interbank assets and liabilities and average risk weighted exposure remain unchanged we apply the new optimization procedure to 10 snapshots of the austrian interbank market where we focus on the largest 70 banks covering 71 of the market volume the optimization reduces systemic risk measured in debtrank by about 70 showing the huge potential that changing the network structure has on the mitigation of financial contagion existing capital levels would need to be scaled up by a factor of 3 3 to obtain similar levels of debtrank these findings underline the importance of macro prudential rules that focus on the structure of financial networks the new optimization procedure allows us to benchmark actual networks to networks with minimal systemic risk we find that simple topological measures like link density degree assortativity or clustering coefficient fail to explain the large differences in systemic risk between actual and optimal networks we find that if the most systemically relevant banks are tightly connected overall systemic risk is higher than if they are unconnected

competition strategy and price dynamics a theoretical and empirical investigation the authors explore how competition affects dynamic pricing of new products dynamics of diffusion saturation and cost reduction due to experience are all considered with emphasis on the last t

too interconnected to fail financial network of us cds market topological fragility and systemic risk a small segment of credit default swaps cds on residential mortgage backed securities rmbs stand implicated in the 2007 financial crisis the dominance of a few big players in the chains of insurance and reinsurance for cds credit risk mitigation for banks assets has led to the idea of too interconnected to fail titf resulting as in the case of aig of a tax payer bailout we provide an empirical reconstruction of the us cds network based on the fdic call reports for off balance sheet bank data for the 4th quarter in 2007 and 2008 the propagation of financial contagion in networks with dense clustering which reflects high concentration or localization of exposures between few participants will be identified as one that is titf those that dominate in terms of network centrality and connectivity are called super spreaders management of systemic risk from bank failure in uncorrelated random networks is different to those with clustering as systemic risk of highly connected financial firms in the cds or any other financial markets is not priced into their holding of capital and collateral we design a super spreader tax based on eigenvector centrality of the banks which can mitigate potential socialized losses

commercial use of upc scanner data industry and academic perspectives the authors report the findings from an exploratory investigation of the use of upc scanner data in the consumer packaged goods industry in the u s the study examines the practitioner community s view of the use of scanner data and compares these views with academic research forty one executives from ten data suppliers packaged goods manufacturers and consulting firms participated in wide ranging in person interviews conducted by the authors the interviews sought to uncover key questions practitioners would like to answer with scanner data how scanner data is applied to these questions and the industry s perspective regarding the success that the use of scanner data has had in each area the authors then compare and contrast practitioners views regarding the resolution of each issue with academic research this produces a 2 2 classification of each question as resolved or unresolved from the perspectives of industry and academia along the diagonal of the 2 2 issues viewed as unresolved by both groups are important topics for future research issues deemed resolved by both groups are correspondingly of lower priority in the off diagonal cells industry and academics disagree these topics should be given priority for discussion information exchange and possible further research practitioners reported that scanner data analysis has had the most success and been most widely adopted for decision making in consumer promotions i e coupons trade promotions and pricing for example logit and regression models applied to scanner data have revealed very low average consumer response to coupons which has directly led to reduced couponing activity managers also reported high levels of comfort with and impact from analyses of trade promotions and price elasticities while industry views most of the issues in these areas to be resolved academic research raises concerns about a number of practices in common commercial use these include price threshold analysis and trade promotion evaluation using baseline and incremental sales in product strategy advertising and distribution management practitioners reported that the use of scanner data has had more limited development success and impact in the case of new product decisions scanner data use has been slow to develop due to the inherent limitations of historicaldata for these decisions and a heavy reliance on traditional primary research methods in advertising scanner data is widely analyzed with models but confusion among practitioners is very high due to controversies about methods e g what level of data aggregation is best and conflicting results in distribution and retail management scanner data use has tremendous potential but a mixed track record to date thus practitioners view the use of scanner data as unresolved for most issues in product strategy advertising and distribution this view is largely though not entirely consistent with academic research which has only begun to address many of the key questions raised by practitioners in light of the large number of unresolved issues and mixed record of scanner data use to date the authors offer aseries of specific recommendations for immediate and long term research priorities that are likely to have the greatest impact on commercial utilization of upc scanner data topics of immediate priority include price thresholds and gaps baseline and incremental sales base price elasticity competitive reactions measurement of advertising effects management of brand equity rationalization of product assortments and category management long term priorities include a greater emphasis on profitability versus sales or market share developing prescriptive models versus descriptive models and the need for industry standards

investigating a neglected part of schumpeter s creative army what drives new to the market innovation in micro enterprises schumpeterian arguments related to creative destruction place small entrepreneurial firms at the centre of the innovation process the exclusion of micro enterprises with less than 10 employees from most innovation surveys means however that we know relatively little about innovation among this group of firms here using new survey data on a thousand micro enterprises we explore the determinants of new to the market innovation the basis for the schumpeterian creative destruction cd process our results provide strong support for the interactive nature of micro enterprise innovation and suggest the potential value of a model of interactive creative destruction icd contrary to some other recent evidence market based and supplier based collaboration both prove important for new to the market innovation our results suggest the importance of micro enterprises as sources of new to the market innovation and the potential value of including such firms in future innovation studies

systemic risk in financial systems we consider default by firms that are part of a single clearing mechanism the obligations of all firms within the system are determined simultaneously in a fashion consistent with the priority of debt claims and the limited liability of equity we first show via a fixed point argument that there always exists a clearing payment vector that clears the obligations of the members of the clearing system under mild regularity conditions this clearing vector is unique next we develop an algorithm that both clears the financial system in a computationally efficient fashion and provides information on the systemic risk faced by the individual system firms finally we produce qualitative comparative statics for financial systems these comparative statics imply that in contrast to single firm results even unsystematic nondissipative shocks to the system will lower the total value of the system and may lower the value of the equity of some of the individual system firms

incentivizing resilience in financial networks when banks extend loans to each other they generate a negative externality in the form of systemic risk they create a network of interbank exposures by which they expose other banks to potential insolvency cascades in this paper we show how a regulator can use information about the financial network to devise a transaction specific tax based on a network centrality measure that captures systemic importance since different transactions have different impact on creating systemic risk they are taxed differently we call this tax a systemic risk tax srt we use an equilibrium concept inspired by the matching markets literature to show analytically that this srt induces a unique equilibrium matching of lenders and borrowers that is systemic risk efficient i e it minimizes systemic risk given a certain transaction volume on the other hand we show that without this srt multiple equilibrium matchings exist which are generally inefficient this allows the regulator to effectively stimulate a rewiring of the equilibrium interbank network so as to make it more resilient to insolvency cascades without sacrificing transaction volume moreover we show that a standard financial transaction tax e g a tobin like tax has no impact on reshaping the equilibrium financial network because it taxes all transactions indiscriminately a tobin like tax is indeed shown to have a limited effect on reducing systemic risk while it decreases transaction volume

does location matter for firms r d behaviour empirical evidence for danish firms in this paper we analyse whether regional location matters for danish firms r d performance in accordance with kleinknecht and poot s 1992 survey we test the urban hierarchy hypothesis stating that firms in urban agglomerations are more likely to perform r d than firms elsewhere using a micro dataset for danish firms obtained by merging danish r d statistics with account data the evidence of the influence of location on both the probability for undertaking r d and r d intensity is mixed but basically not in favour of any urban hierarchy in danish r d other non regional factors such as size of firm sectoral dummies classified according to pavitt s taxonomy and the dummy controlling for ict service industries are also estimated to have significant influence on firms r d behaviour furthermore the age of a firm only affects its r d intensity significantly cet article cherche a analyser si oui ou non la localisation regionale est importante pour le comportement des entreprises danoises quant

modelling small business growth and profitability this paper develops a simple structural model relating small business performance to firms market position and the characteristics of their owner managers attention focuses on two questions what determines firms choice of business strategy and how does strategy choice change subsequent business performance taking into account both relationships the paper examines the links between the performance of a large group of irish small businesses over the 1993 94 period and their market and owner managers characteristics in 1991 the analysis suggests three main empirical results first firms turnover growth and return on assets are only weakly related in the short term above average growth rates are therefore no guarantor of high profitability moreover a number of characteristics of firms market position and their owner managers are found to have the opposite effects on profitability and growth rates secondly our data provides no evidence of the persistence of turnover growth rates above or below the average above average profit rates were also found to persist only in the very short term thirdly small firm performance is shown to depend strongly on strategy choice with turnover growth being particularly strategy dependent this highlights the importance for small firms of making the correct strategy choices a point emphasised by the negative profitability and growth effects of some strategy choices one strategy choice that had positive effects on both profitability and growth was the development of new export markets

the role of knowledge in r d efficiency past research has recognized that both demand and capability influence the allocation of r d resources scholars have had an easier time getting a grip on demand than on capability while it has been recognized that knowledge is an important part of capability to date formalization of knowledge and its role in r d activity has been unsatisfactory this paper models the role of knowledge in r d various sources of such knowledge are considered the model throws a different light on analyses that employ a knowledge capital stock and also illuminates the dual private and public nature of technological knowledge

effects of price promotions on variety seeking and reinforcement behavior a stochastic model is proposed to examine how changes in frequency of price discounts affect brand choice decisions of consumers who exhibit variety seeking and reinforcement behavior it is shown that the effect on choice depends on whether the brand offering discounts is a major or minor brand in the product category this model extends the existing literature on stochastic models of variety seeking behavior by explicitly incorporating switching due to promotions along with intrinsic switching due to variety seeking the model yields testable hypotheses which are supported in a laboratory experiment and on analyses of the iri cracker data

an exogeneity test for a simultaneous equation tobit model with an application to labor supply a test of weak exogeneity in the simultaneous equation tobit model is proposed and illustrated using a female labour supply model estimated using cross section data the test statistic can be simply output from any standard tobit maximum likelihood package and is asymptotically efficient the procedure provides consistent estimators for the simultaneous tobit model whose asymptotic covariance matrix is a simple extension of the usual tobit formula we also provide the lagrange multiplier test of weak exogeneity this abstract was borrowed from another version of this item

openness and innovation home and export demand effects on manufacturing innovation panel data evidence for ireland and switzerland abstract recent studies in the tradition of schmookler have re emphasised the potential role of demand in stimulating innovation here we reconsider the role of home and export market demand in stimulating manufacturing innovation using comparable panel data for two small open economies ireland and switzerland our analysis is based on the estimation of reduced form innovation production functions using panel data estimators over the sample period 1994 2005 for a range of innovation indicators however we find little evidence of any significant market demand effects with innovation performance instead determined largely by firm level capability effects and characteristics in policy and strategy terms this suggests the continued value of measures to improve innovation capability regardless of market demand conditions in more methodological terms our results suggest the validity of the usual assumption implicit in modelling innovation outputs that supply side factors predominate

monopolist pricing with dynamic demand and production cost this paper deals with pricing of a new product over time by a monopolist who maximizes the discounted profit stream the interdependency of cost and demand on cumulative production makes the problem inherently dynamic cost is assumed to be declining with cumulative production learning curve effect while demand is a function of price and cumulative sales representing word of mouth and saturation effects the paper addresses this problem in a general framework that includes several previous results as special cases and provides new insights in other situations while the learning curve and word of mouth effect cause prices to be lower than the price that maximizes immediate revenues the saturation factor has the opposite effect the price path over time is affected by these factors and the interest rate we characterize the price path under several different situations and interpret the results for policy guidelines