how does advertising depend on competition evidence from u s brewing the relationship between market structure and advertising has been extensively studied but has generated sharply opposing theoretical predictions as well as inconclusive empirical findings likely because of severe endogeneity concerns we exploit the 2008 merger of miller and coors in the u s brewing industry to examine how changes in local concentration affect firms advertising behavior well established regional preferences over beer brands and the sharp increase in concentration from the merger make this an excellent setting to analyze this question we find a significant positive effect of local market concentration on advertising expenditures a 100 point increase in the herfindahl hirschmann index measure of concentration increases advertising per capita by about 5 our findings shed light on how and when firms choose to deploy advertising the online appendix is available at https doi org 10 1287 mnsc 2017 2889 this paper was accepted by eric anderson marketing

marketing s impact on firm value generalizations from a meta analysis abstractthe interest in the value relevance of marketing investments has given rise to numerous studies on the marketing finance interface this study integrates extant research findings and establishes empirical generalizations on marketing s impact on firm value specifically the authors conduct a meta analysis of prior econometric elasticity estimates of the stock market impact of marketing actions and marketing assets analyses based on 488 elasticities drawn from 83 studies reveal a mean elasticity of 04 for advertising expenditure variables and of 54 for marketing asset variables among marketing assets customer related assets show a higher mean elasticity of 72 compared with 33 for brand related assets further analyses show that advertising elasticities are lower in more concentrated industries and that marketing asset elasticities are higher during recession times researchers should also be aware that characteristics of the research design e g the type of firm value metric used the om

thinking about need public spending on the regions mackay r r and williams j 2005 thinking about need public spending on the regions regional studies 39 815 828 the uk treasury accepts that need is the correct guide to spending on public services in different parts of the uk but the formula used to decide changes in devolved spending in scotland wales and northern ireland depends on the population it does not compensate for differences in need with devolved spending determined by need there would be consistency across 11 of the 12 uk regions london would be the sole exception the heavy cost of the capital s public services is part of the argument for a more even distribution of income wealth and employment

environment market share and market power in this paper we develop a process model relating market share to firm profits in particular we specify average price and average cost equations as a function of previous year market share position changes in market share environmental conditions and interactions of environmental conditions with the lagged market position and market share change variables we estimate these equations using pims data after controlling for unobservable factors our results suggest that firms with high market shares derive no extra market power benefits except if they operate in environments with little buyer power instead environmental factors and changes in market share most strongly influence price and cost an analysis of the market share associated with maximal firm profits indicates that for the majority of firms in our sample steadily increasing market share does not always associate with increasing profits giving credence to the proposition that more market share is not always better

regional spending a comment on mackay mackay 2001 recently examined the regional pattern of taxation and spending in the uk concluding that for four regions london the south east scotland and northern ireland public expenditure was well above the level expected for their degree of prosperity mackay 2001 had a very approximate measure of the regional pattern of non identifiable government expenditure a major component of the latter is defence spending and a more precise allocation of this suggests that london and the south east get very preferential treatment moreover so does the south west which should be added to the list of well favoured regions this raises important issues of spatial balance and efficiency

nationalism development and integration the political economy of ernest gellner in this paper we show how in gellner we can find a stimulating analysis of the institutional equilibria that characterise agrarian and industrial society and the conditions that make possible institutional change from one equilibrium to another this allows a convincing account of the reasons why some countries industrialised before others and why nationalism had such an uneven impact on the development of market economies we consider the relation between gellner s analysis and other theories of organisation and point out how gellner can help to solve some paradoxes that arise in these theories we also argue that joining gellner s contribution to the analysis of the positional nature of status and power reinforces his conclusion about the necessary stagnation of agrarian societies and the necessary over accumulation of different forms of capitalism we conclude by examining the implications of his analysis for the process of globalisation and its challenge to national states

inequality and violent crime abstract we investigate the robustness and causality of the link between income inequality and violent crime across countries first we study the correlation between the gini index and homicide and robbery rates within and between countries second we examine the partial correlation by considering other crime determinants third we control for the endogeneity of inequality by isolating its exogenous impact on these crime rates fourth we control for measurement error in crime rates by modeling it as both unobserved country effects and random noise finally we examine the robustness of this partial correlation to alternative measures of inequality the panel data consist of nonoverlapping 5 year averages for 39 countries during 1965 95 for homicides and 37 countries during 1970 94 for robberies crime rates and inequality are positively correlated within countries and particularly between countries and this correlation reflects causation from inequality to crime rates even after controlling for ot

steepness and deepness in the australian macroeconomy this study uses nonparametric tests the triples test and the bds test to examine whether key australian macroeconomic aggregates exhibit nonlinearities and important steepness and deepness asymmetries at the business cycle frequency evidence is found of nonlinearities but there is little evidence of deepness in the australian macroeconomy however there is evidence of steepness especially concerning labour market variables as well as both the cpi and m3 the evidence suggests that unemployment employment rises falls rapidly in recessions and only recovers slowly over time also positive asymmetries in m3 are reflected in similar asymmetries in the cpi but not in output consumption or investment

early marketing matters a time varying parameter approach to persistence modeling are persistent marketing effects most likely to appear right after the introduction of a product the authors give an affirmative answer to this question by developing a model that explicitly reports how persistent and transient marketing effects evolve over time the proposed model provides managers with a valuable tool to evaluate their allocation of marketing expenditures over time an application of the model to many pharmaceutical products estimated through exact initial kalman filtering indicates that both persistent and transient effects occur predominantly immediately after a brand s introduction subsequently the size of the effects declines the authors theoretically and empirically compare their methodology with methodology based on unit root testing and demonstrate that the need for unit root tests creates difficulties in applying conventional persistence modeling the authors recommend that marketing models should either accommodate persistent effects that change over time or be applied to mature brands or limited time windows only

regional taxing and spending the search for balance the financial settlement has been described as the key to devolution public spending above tax in scotland and wales has been criticized public spending is above tax in seven uk regions including four english regions if we treat equal citizens equally public spending will be above tax in poorer regions there is nothing extraordinary about spending above tax but there are important questions with regard to regional levels of expenditure in four regions london south east scotland and northern ireland public expenditure is well above the level expected for their degree of prosperity this article provides possible explanations

territorial resource allocation in the uk a rejoinder on needs assessment in a recent paper in regional studies kevin morgan argued for the replacement of the barnett formula with a needsbased formula however the case for change is weak in terms of both defining the problem and advocating a solution and it fails to recognize the severe conceptual and measurement problems in such an approach the current system has provided patterns of resource allocation which are reflective of differences in needs it is a simple transparent and objective approach and has flexibility to deal with discrepancies through negotiation with the treasury a needs based approach would not solve the problems of resource allocation as it would provide scope for greater disagreement over the selection and weighting of indicators advocates of such an approach to territorial resource allocation have yet to provide a convincing rationale for change or a coherent model of needs assessment for consideration and are rash to assume that scotland would lose or wales would gain from such changes on the

quality uncertainty search and advertising consumers in this paper we begin to remedy this omission by developing a formal model that shows how risk affects the decisions of riskaverse consumers regarding the amount of search and whether or not to buy advertised products we incorporate risk into the model by assuming that consumers are concerned not only with expected product quality but also with the amount of variation that exists across the qualities available the risk arises not because the quality is itself variable but rather because there is variation in quality across products and consumers cannot evaluate the quality of a particular brand before purchase we consider two sources of information about quality both of which are costly to consumers firms supply consumers with implicit quality signals through advertisements that convey only that a product is advertised but not direct information about the quality of the product and consumers supply themselves with direct quality information through search these methods affect both the expected value of quality received and its riskiness we analyze search and advertising simultaneously in order to model the consumers substitution of one information source for the other we then use the model to show how firms may use advertising as an implicit signal that advertised products are less risky than unadvertised products and to explain why information is primarily provided by firms in some markets whereas in other markets consumers acquire their information through search in addition to explicitly considering risk our model has several other attributes that distinguish it from the extant search literature in order to obtain a meaningful market equilibrium we construct a full partial equilibrium model in which the behavior of both buyers and sellers is examined and the distribution of qualities in the market is endogenously determined this approach is used

begging bowl meets baseball bat lessons for the uk from the australian fiscal model the uk has taken a historic step towards regionalized government with its creation of a scottish parliament and welsh and northern ireland assemblies however this has raised important question marks about the existing funding system the barnett formula the purpose of this article is to examine the experience offered by a mature federal fiscal system namely that of australia the australian system and in particular its fiscal system of distribution is outlined as are the effects of this system and the political manipulations of it that have taken place issues arising and important implications for uk policy makers are then discussed

the impact of economic contractions on the effectiveness of r d and advertising evidence from u s companies spanning three decades the critical role of research and development r d and advertising in the marketing strategy of the firm is well established this paper conceptually and empirically examines why and how much the effectiveness of these two marketing instruments differs between times of economic expansions versus periods of economic contractions and whether these results depend on the cyclicality of the industry in question we consider a key marketing metric market share and a key financial metric firm profit our empirical setting is 1 175 u s firms across a time period spanning over three decades we find that r d and advertising contribute to firm performance but that their effectiveness is not constant across the business cycle increasing advertising share in contractions has a stronger effect on profit and market share than increasing advertising share in expansions likewise investments in r d in contractions lead to higher gains in market share and profit than r d investments in expansions albeit only in subsequent years if in contractions the firm faces tight budget constraints and has to choose between either maintaining r d or advertising our simulation results show that maintaining r d is associated with better company performance we find that advertising effectiveness in general and in contractions in particular is systematically moderated by the degree of cyclicality of the industry in which the firm operates in relatively stable industries advertising effects are small or even nonsignificant and they do not go beyond the year the firm advertises however in highly cyclical industries advertising effects are long lasting its total effect being 50 larger market share and 200 larger profits than in industries of average cyclicality the effect of industry cyclicality on advertising effectiveness is especially pronounced in contractions collectively these findings provide valuable and actionable insights into how firms should respond to contractions in order to grow profits and market share

riding the waves revealing the impact of intrayear category demand cycles on advertising and pricing effectiveness abstractgoing beyond traditional seasonality this research introduces the concept of the intrayear category demand cycle this phenomenon reflects demand cycles most consumer packaged goods categories experience throughout the year with periods of higher demand following periods of lower demand the author argues that acknowledging the existence of these cycles and understanding their impact on both advertising and pricing effectiveness and practice is critical for marketers specifically the author demonstrates how both advertising and price elasticities and observed advertising and prices evolve along these cycles for a unique set of 252 brands ranging from high advertising high priced premium mass brands to low advertising low priced value niche brands in 61 consumer packaged goods categories overall both advertising efectiveness and observed advertising are found to be stronger at demand peaks surprisingly consumer reactions to price decreases are weaker at demand peaks whereas reactions

a look on the cost side market share and the competitive environment in this paper we develop a model relating market share to average costs we start with a theoretical model of the factors that affect the firm s average cost curve partitioning these factors into a measurable firm and competitive environment characteristics and b unobserved factors that are either fixed random or follow a first order autoregressive process we then link this theoretical model to an empirical model in which we specify three average cost equations for the organizational areas of purchasing production and marketing main effects for initial lagged market share position as well as their interactions with factors characterizing the firm s competitive environment represent the variables of key theoretical interest in our equations we estimate these equations using pims data and control for fixed contemporaneous and autoregressive unobservable factors our results suggest that market share can often lead to market power in the form of lower average costs however the firm s operating environment greatly moderates the effect of market share on average cost in particular we find that market share position only leads to lower average costs when the organizational unit operates in a competitive environment that gives it both motivation and ability to realize power from its market share position

investment incentives in bilateral trading abstract we characterize the surplus maximizing trading mechanism under two sided incomplete information and interim individual rationality when one party can make a value enhancing specific investment this mechanism exhibits a trade off between providing investment incentives and inducing voluntary participation we analyze how the trading area of the optimal mechanism is further distorted in order to provide investment incentives applications of our main results and the underlying geometric analysis to institutional design issues are also provided

marketing budget allocation across countries the role of international business cycles a key conundrum facing organizations is how to adjust marketing budgets in response to the business cycle while most firms use procyclical spending spending less during economic contractions academic studies often recommend countercyclical spending spending more during contractions which begs the following question what is the right thing to do the spending problem is compounded further when demand is not just driven by one country s business cycle but by the nonsynchronized business cycles of multiple countries as is the case for tourism marketing aiming to attract tourists originating from different countries we derive insights into the best way to allocate marketing budgets across countries under varying economic conditions we show that the allocation decisions are driven by the procyclical versus countercyclical nature of three factors unit sales marketing effectiveness and per unit profit contribution to study how unit sales and marketing effectiveness respond to the business cycle

a theory of employment unemployment and sickness beatty c fothergill s and macmillan r 2000 a theory of employment unemployment and sickness reg studies 34 617 630 this paper explains how the measurement of unemployment is distorted by the way that sickness is defined and counted by social security systems drawing on the concepts of hidden sickness the queue for jobs and hidden unemployment and on empirical observations from the uk it shows how job loss can result in increased recorded sickness rather than recorded unemployment it also shows how this process may vary between localities and countries the argument has profound implications for perceptions of the true extent of unemployment and of labour market disparities between regions beatty c fothergill s et macmillan r 2000 l emploi le chomage et la maladie une theorie reg studies 34 617 630 cet article chercheaexpliquer comment la mesure du chomage s avere fausseeacause de la fac on dont la secu definit maladie et la comptabilise puisant dans des notions de

price and advertising effectiveness over the business cycle abstract firms are under increasing pressure to justify their marketing expenditures this evolution toward greater accountability is reinforced in harsh economic times when marketing budgets are among the first to be reconsidered to make such decisions managers must know whether and to what extent marketing s effectiveness varies with the economic tide however surprisingly little research addresses this issue therefore the authors conduct a systematic investigation of the business cycle s impact on the effectiveness of two important marketing instruments price and advertising to do so they estimate time varying short and long term advertising and price elasticities for 150 brands across 36 consumer packaged goods categories using 18 years of monthly u k data from 1993 to 2010 the long term price sensitivity tends to decrease during economic expansions whereas long term advertising elasticities increase during contractions the long term own and cross price elasticities increase moreover

automatic stabilisers european union and national unity tradition seems to require that economists argue forever about the question whether in any disequilibrium situation market forces acting alone are likely to restore equilibrium now this is certainly an interesting question but as social scientists we surely must address ourselves to the broader question is the disequilibrium situation likely to be corrected at all by market or nonmarket forces or by both acting jointly it is our contention that nonmarket forces are not necessarily less automatic than market forces hirschman 1958 p 63 emphasis in the original hirschman and myrdal 1957 consistently insist that the image of a relentlessly taut economy can be a check to curiosity and a bar to true enquiry a proper search for understanding hirschman and myrdal h and m suggest must relax the assumptions which ensure fully informed price signals and reactions that are automatic elastic responsive only then can one approach an economy which is consistent with reality an economic system where bargains and contracts are made at prices which do not clear markets where resources remain unemployed underemployed unrecognised and where there are problems in encouraging adjustment to constantly changing opportuni ties in such an imperfect but realistic economy there may be a role for nonmarket forces h and m make stronger claims given particular emphasis by hirschman is the idea that non market forces emerge naturally inevitably even without conscious volition when the market fails to discover reasonable balance society will recognise will sense the gap and state policies and social institutions will emerge in an attempt to bridge it the argument applies to different forms of balance and has links to myrdal s claim

assessing relative spending needs of devolved government the case of healthcare spending in the uk ball r eiser d and king d assessing relative spending needs of devolved government the case of healthcare spending in the uk regional studies the block grants allocated to the uk s devolved administrations are not determined by any estimate of their spending needs there are increasing calls to replace the current grant allocation mechanism with one that explicitly considers the devolved administrations spending needs this paper compares two existing formulae for estimating healthcare spending needs used by the national health service nhs to allocate resources within england and scotland by applying both formulae to the devolved administrations it is found that these formulae provide very similar estimates of the devolved administrations healthcare spending needs and both formulae imply that the current distribution of resources across the devolved administrations may be inequitable

identifying generalizable effects of strategic actions on firm performance the case of demand side returns to r d spending this paper provides an approach for assessing generalizable effects of strategic actions on firm performance we identify five key issues that need to be addressed before one can have confidence in the obtained strategic generalization in addition we suggest a methodology for attacking each of these five issues we then illustrate this framework using the example of demand side returns to r d spending we document two empirical generalizations in this research first and foremost we show that demand returns to r d spending depend on whether the firm has ability and motivation to take advantage of the r d investment thus only firms with high ability and motivation leverage the r d investment into monopoly rents in the form of subsequent price increases second we show that the concept of a firm needing both ability and motivation to sustain returns from a strategic action generalizes across strategic actions we make two other conclusions about empirical approaches to strategy research first to pro

planning media schedules in the presence of dynamic advertising quality a key task of advertising media planners is to determine the best media schedule of advertising exposures for a certainbudget conceptually the planner could choose to do continuous advertising i e schedule ad exposures evenly overall weeks or follow a strategy of pulsing i e advertise in some weeks of the year and not at other times previous theoretical analyses have shown that continuous advertising is optimal for nearly all situations however pulsing schedules are very common in practice either the pract ice of pulsing is inappropriate or extant models have not adequately conceptualized the effects of advertising spending over time this paper offers a model that shows pulsing strategies can generate greater total awareness than the continuous advertising when the effectiveness of advertisement i e adquality varies overtime specifically ad quality declines because of advertising wearout during periods of continuous advertising and it restores due to forgetting effects during periods of no advertising such dynamics make it worth while for advertisers to stop advertising when ad quality becomes very low and wait for ad quality to restore beforestarting the next burst again as is common in practice based on the extensive behavioral research on advertising repetition and advertising wearout we extend the classical nerlove and arrow 1962 model by incorporating the notions of repetition wearout copy wearout and ad quality restoration repetition wearout is a result of excessive frequency beca use ad viewers perceive that there is nothing new to be gained from processing the ad they withdraw their attention or they become unmotivated to react to advertising information copy wearout refers to the decline inad quality due to passage of time independent of the level of frequency ad quality restoration is the enhancement of ad quality during media hiatus as a consequence of viewers forgetting the details of the advertised messages thus making ads appear like new when reintroduced later the proposed model has the property that when wearout effects are present a strategy of pulsing is superior to continuous advertising even when the advertising response function is concave this is illustrated by a numerical example that compares the total awareness generated by a single concentrated pulse of varying duration blitz schedules and continuous advertising the even schedule this property can be explained by the tension between the pressure to spend the fixed media budget quickly to avoid copy wearout and the opposing pressure to spread out the media spending over time to mitigate repetition wearout the proposed model is empirically tested by using brand level data from two advertising awareness tracking studies that also include the actual spen ding schedules the first data set is for a major cereal brand while the other is for a brand of milk chocolate such advertising tracking studies are now a common and popular means for evaluating advertising effectiveness in many markets e g millward brown narketmind in the empirical tests the model parameters are estimated by using the kalman filter procedure which is eminently suited for dynamic models because it attends to the intertemporal dependencies in awareness build up and decay via the use of conditional densities the estimated parameters are statistically significant have the expected signs and are meaningful from both theoretical and managerial viewpoints the proposed model fits both the data sets rather well and better than several well known advertising models namely the vidale wolfe brandaid litmus and trackermodels but not decisively better than the nerlove arrow model however unlike the nerlove arrow model the proposed model yields different total awareness for different strategies of spending the same fixed budget thus allowing media planners to discriminate among several media schedules given the empirical support for the model the paper presents an implementable approach for utilizing it to evaluate large numbers of alternative media schedules and determine the best set of media schedules for consideration in media planning this approach is based on an algorithm that combines a genetic algorithm with the kalman filter procedure the paper presents the results of applying this approach in the case studies of the cereal and milk chocolate brands the form of the best advertising spending strategies in each case was a pulsing strategy and there were many schedules that were an improvement over the media schedule actually used in each campaign

the role of market orientation in advertising spending during economic collapse the case of turkey in 2001 the authors investigate the role of market orientation in advertising spending during economic contraction they use the 2001 economic collapse in turkey as the empirical context in which to test hypotheses regarding why some firms increase their advertising spending in a contraction period while the majority of firms cut back analyzing market orientation at the level of its intelligence and responsiveness facets they find the responsiveness facet to be positively associated with increases in advertising spending but observe the intelligence facet to be negatively associated with advertising spending importantly positive shifts in advertising spending during the economic contraction predict better subsequent business performance the opposing roles of the intelligence and responsiveness facets disappear in a subsequent economic expansion period these findings have managerial and theoretical implications firms that nurture the responsiveness facet of market orientation during economic contractions go

business cycle asymmetries characterisation and testing based on markov switching autoregressions tests for business cycle asymmetries are developed for markov switching autoregressive models the tests of deepness steepness and sharpness are wald statistics which have standard asymptotics for the standard two regime model of expansions and contractions deepness is shown to imply sharpness and vice versa whereas the process is always nonsteep two and three state models of u s gnp growth are used to illustrate the approach along with models of u s investment and consumption growth the robustness of the tests to model misspecification and the effects of regime dependent heteroscedasticity are investigated

animal spirits through creative destruction we show how a schumpeterian process of creative destruction can induce rational herd behavior by entrepreneurs across diverse sectors as if fueled by animal spirits consequently a multisector economy in which productivity improvements are made by independent profit seeking entrepreneurs exhibits regular booms slowdowns and downturns as part of the long run growth process our cyclical equilibrium has higher average growth but lower welfare than the corresponding acyclical one we show how a negative relationship can emerge between volatility and growth across cycling economies and assess the extent to which our model matches several features of actual business cycles