bluuebunny/crossref_metadata_2025 huggingface dataset:
Effective directed tests for models with ordered categorical data
Authors: Cohen Arthur , Madigan David , Sackrowitz Harold B.
Published: July 2003

This paper offers a new method for testing one‐sided hypotheses in discrete multivariate data models. One‐sided alternatives mean that there are restrictions on the multidimensional parameter space. The focus is on models dealing with ordered categorical data. In particular, applications are concerned with R×C contingency tables. The method has advantages over other general approaches. All tests are exact in the sense that no large sample theory or large sample distribution theory is required. Testing is unconditional although its execution is done conditionally, section by section, where a section is determined by marginal totals. This eliminates any potential nuisance parameter issues. The power of the tests is more robust than the power of the typical linear tests often recommended. Furthermore, computer programs are available to carry out the tests efficiently regardless of the sample sizes or the order of the contingency tables. Both censored data and uncensored data models are discussed.
Generalized discriminant analysis based on distances
Authors: Anderson Marti J. , Robinson John
Published: July 2003

This paper describes a method of generalized discriminant analysis based on a dissimilarity matrix to test for differences in a priori groups of multivariate observations. Use of classical multidimensional scaling produces a low‐dimensional representation of the data for which Euclidean distances approximate the original dissimilarities. The resulting scores are then analysed using discriminant analysis, giving tests based on the canonical correlations. The asymptotic distributions of these statistics under permutations of the observations are shown to be invariant to changes in the distributions of the original variables, unlike the distributions of the multi‐response permutation test statistics which have been considered by other workers for testing differences among groups. This canonical method is applied to multivariate fish assemblage data, with Monte Carlo simulations to make power comparisons and to compare theoretical results and empirical distributions. The paper proposes classification based on distances. Error rates are estimated using cross‐validation.
Towards optimal regression estimation in sample surveys
Authors: Berger Yves G. , Tirari Mohammed E.H. , Tillé Yves
Published: July 2003

The Montanari (1987) regression estimator is optimal when the population regression coefficients are known. When the coefficients are estimated, the Montanari estimator is not optimal and can be extremely volatile. Using design‐based arguments, this paper proposes a simpler and better alternative to the Montanari estimator that is also optimal when the population regression coefficients are known. Moreover, it can be easily implemented as it involves standard weighted least squares. The estimator is applicable under single stage stratified sampling with unequal probabilities within each stratum.
On the convergence of moving average processes under dependent conditions
Authors: Baek Jong‐Il , Kim Tae‐Sung , Liang Han‐Ying
Published: July 2003

This paper considers a moving average process for a sequence of negatively associated random variables. It discusses the complete convergence of such a moving average process under suitable conditions. These results generalize and complement earlier results on independent random variables. Also, a conjecture for the case of a sequence of independent and identically distributed random variables is resolved and its moment condition weakened.
A multivariate parallelogram and its application to multivariate trimmed means
Authors: Horng Shiau Jyh‐Jen , Chen Lin‐An
Published: July 2003

This paper introduces a multivariate parallelogram that can play the role of the univariate quantile in the location model, and uses it to define a multivariate trimmed mean. It assesses the asymptotic efficiency of the proposed multivariate trimmed mean by its asymptotic variance and by Monte Carlo simulation.
A note on the correlation structure of transformed Gaussian random fields
Authors: De Oliveira Victor
Published: July 2003

Transformed Gaussian random fields can be used to model continuous time series and spatial data when the Gaussian assumption is not appropriate. The main features of these random fields are specified in a transformed scale, while for modelling and parameter interpretation it is useful to establish connections between these features and those of the random field in the original scale. This paper provides evidence that for many ‘normalizing’ transformations the correlation function of a transformed Gaussian random field is not very dependent on the transformation that is used. Hence many commonly used transformations of correlated data have little effect on the original correlation structure. The property is shown to hold for some kinds of transformed Gaussian random fields, and a statistical explanation based on the concept of parameter orthogonality is provided. The property is also illustrated using two spatial datasets and several ‘normalizing’ transformations. Some consequences of this property for modelling and inference are also discussed.
Non‐parametric group sequential designs in randomized clinical trials
Authors: Bandyopadhyay Uttam , Biswas Atanu
Published: July 2003

This paper examines some non‐parametric group sequential designs applicable for randomized clinical trials, for comparing two continuous treatment effects taking the observations in matched pairs, or applicable in event‐based analysis. Two inverse binomial sampling schemes are considered, of which the second one is an adaptive data‐dependent design. These designs are compared with some fixed sample size competitors. Power and expected sample sizes are calculated for the proposed procedures.
Alignment and Alliances for Research Institutes Engaged in Product Innovation. Two Case Studies
Authors: Weerd‐Nederhof Petra de , Fisscher Olaf
Published: July 2003

Research institutes mainly engage in product innovation for the purpose of applying, testing and usually also transferring knowledge or technology. Managing product innovation processes in this type of environment leads to various problems with the establishment and managent of alliances and alignment. In this paper a systematic analysis of product innovation at two energy research institutes is presented, paying explicit attention to the strategic alliances in terms of alignment mechanisms. The cases illustrate clearly how the research institutes manage their external networks for product innovation, allowing comparison of the strengths and weaknesses of the two research institutes, and an indication of lessons to be learned from each other. The systematic analysis contributes to the identifying of the appropriate product innovaiton objectives to be pursued through strategic alliances, as well as the determination of suitable alignment mechanisms for product innovation. Lessons learned are presented in the area of context and contingency influences, crossing organizational barriers, differences in culture and the balancing of operational effectiveness and strategic flexibility.
Modelling Product Innovation Processes, from Linear Logic to Circular Chaos
Authors: Buijs Jan
Published: July 2003

Product innovation is the focal point of the Delft Design School in the Netherlands. During its more than thirty years of existence different models of the product innovation process were and are used for education and for research. This paper will describe the development of these models. The first models tried to describe the product innovation process in a logical linear order, but recently this logical order has come under discussion. The most recent models try to show the more chaotic character of the product innovation processes in real corporate life. Although this chaotic model better reflects the product innovation practice, for educational purposes it seems to be less useful than the original logical ones. For our teaching we propose the two versions (logic and chaos) of our innovation model as two sides of one coin. This innovation coin is without proper value with one side left blank.
Radical Product Innovations in SMEs: The Dominance of Entrepreneurial Orientation
Authors: Salavou Helen , Lioukas Spyros
Published: July 2003

The present study focuses on strategic factors underlying the adoption of radical product innovations in SMEs. It investigates whether market focus, technological posture and entrepreneurial orientation lead to the adoption of more radical product innovations. The study provides some new evidence on this issue drawing upon data collected from Greek SMEs in the food and beverages industry. More specifically, a logistic regression model is applied to analyse the choice between radical as against incremental product innovations. Empirical results appear to support the claim that it is mainly entrepreneurial orientation that favours the choice of radical product innovations. This suggests that in SMEs the notion of entrepreneurial‐push outweighs both market‐pull and technology‐push arguments. The findings are discussed in the context of Greece, taking into account the specific conditions prevailing. Apart from providing some new evidence in the important area of SMEs, they have also important implications for managers and policy‐makers. In addition, they encourage further theoretical and empirical investigation.
The Last Stage of Product Development: Interventions in Existing Operational Processes
Authors: Smulders Frido , de Caluwé Léon , van Nieuwenhuizen Olivier
Published: July 2003

We explored two questions in two empirical studies. In the first study we wanted to find out whether we could describe the interactions between New Product Development (NPD) and Operations by using a generic theory of change management and interventions. In the second study we explored such interventions during implementation and wanted to find out to what extent these interventions followed the theories of change. Some of the interactions are interventions from NPD to Operations in order to change the work of Operations. We found that these interventions and intended changes fit the theories of change management quite well. This means that the change literature gives good insights into the causes of success and failure of these interventions and could mean that, in some respect, we can apply the knowledge of these theories of change management and interventions to the field of NPD. This insight provides a new and additional perspective: NPD to be seen as a process that uses interventions to facilitate, or provoke, change within operational processes. We see too much attention paid to the project management methods and ‘hard’ theories, for example rationality, control, hierarchy, planning, predicting and prescribing. There is good reason to add the more ‘soft’ theories of change to NPD practice, with extra and explicit attention to learning, trial and error, monitoring, tell and sell, empathy, and co‐operation. NPD practitioners are also very much focused on the product and less (or not at all) on the actual changes that have to take place in production (Operations) related to the implementation of these processes. For successful implementation interventions need to be tuned towards the receiver. The interventionist (i.e. NPD practitioners) must be aware that there is a range of choice if different intervention strategies in order to tune their intervention efforts more effectively towards the receiver. In order to be able to do this, NPD practitioners, as well as the people from Operations, need to become skilled in using a generic theory of intervention and change, such as the one described in this paper, during their interactions.
Coping with Chaos in Change Processes
Authors: Visscher Klaasjan , Rip Arie
Published: July 2003

In their efforts to change organizations, managers and change consultants are time and again confronted with the limited controllability of organizations, the complexity and indeterminacy of change processes and the uncertain and ambiguous effects of their actions. In short, they are confronted with chaos. Some managers and consultants try to enhance their (illusion of) control over organizations by attempting to reduce chaos, while others accept and embrace chaos and base their change practice on it. This article focuses on the second group. Based on a study of literature and a series of interviews with experienced change consultants, a typology is developed, in which an enlightened modern, an ironic, and a postmodern way of coping with chaos in change processes is elaborated. The typology may help change consultants and managers with the development of their way of working and the articulation of their professional identity.
Estimating the Impact of WTO and Domestic Reforms on the Indian Cotton and Textile Sectors: a General‐Equilibrium Approach
Authors: Elbehri Aziz , Hertel Thomas , Martin Will
Published: July 2003

The agreement to abolish the quotas on textiles and clothing introduced under the Multi‐fiber Arrangement (MFA) will create a new and much more competitive world market for India's exports of textiles and clothing. India's inefficient and costly policies, such as cotton export quotas, the hank yarn obligation, and the restrictive policies on foreign investment that have held back productivity in the Indian apparel sector, will impose serious costs. The authors consider the implications of reforming these policies in an open trading environment using a multiregion, applied general‐equilibrium model. They find that the costs of these policies to India increase substantially following abolition of the MFA; the benefits to India from domestic reforms are considerably enhanced when there is global free trade in textiles and apparel.
Structural Change and Economic Growth in China
Authors: Fan Shenggen , Zhang Xiaobo , Robinson Sherman
Published: July 2003

This study develops a new analytical framework to account for sources of rapid economic growth in China. The traditional Solow approach is expanded to include another source of economic growth—structural change. The empirical results show that structural change has contributed to growth significantly by reallocating resources from low‐productivity sectors to high‐productivity sectors. It is found that the returns to capital investment in both agricultural production and rural enterprises are much higher than those in urban sectors, indicating underinvestment in rural areas. On the other hand, labor productivity in the agricultural sector remains low, a result of the still large surpluses of labor in the sector. Therefore, further development of rural enterprises and an increase in labor flow among sectors and across regions are key to improvements in overall economic efficiency.
Discarding Facts: the Economics of Caste
Authors: Scoville James G.
Published: July 2003

In contrast with previous modeling by Akerlof, the author develops a model of a caste system which utilizes the stylized facts that caste occupations are hereditary, compulsory, and endogamous. Some implications of the model are tested with data from the Census of India.
Toothless Tigers? East Asian Economic Growth from 1960 to 1990
Authors: Grier Robin
Published: July 2003

The author studies East Asian economic performance relative to the experience of a sample of rich, industrialized countries. On combining the coefficients from an augmented Solow model of growth for a sample of industrialized countries with the actual levels of factor accumulation in East Asia, no evidence is found that the region as a whole is over‐achieving. Only Hong Kong and Taiwan can be characterized as over‐achievers. Further, Indonesia and Thailand (when income growth is measured in per‐worker terms) are actually significant under‐achievers, growing slower than forecasted growth in every period.
Transition Problems in Policy Reform: Agricultural Trade Liberalization in India
Authors: Storm Servaas
Published: July 2003

What will be the domestic growth and distributional effects of agricultural trade liberalization in India? How fast should Indian agriculture be liberalized and what policies should characterize the transition? This paper uses Indian agriculture to analyze medium‐term transition problems that arise in many major economic reforms. Employing a dynamic applied general‐equilibrium model, the paper focuses on the implications for policy design of the absence of efficient capital and labor markets and on the distributional consequences of economic reform in the presence of realistic limits on available intervention instruments. The key finding is that trade adjustment should be supplemented by policies that raise land productivity and, because this takes time, the adjustment should be gradual.
Trade Liberalization and the Efficiency of Firms in Indian Manufacturing
Authors: Driffield Nigel L. , Kambhampati Uma S.
Published: July 2003

Has the efficiency of firms in India improved since its liberalization in 1991? The authors attempt to answer this question by analyzing the determinants of firm‐level efficiency in six manufacturing sectors in India while focusing on the effects of liberalization and domestic competition. They find that there was an increase in overall efficiency in the post‐reform period in India in five out of the six sectors. While imports do not seem to improve efficiency, liberalization did increase efficiency in four of the sectors.
Interactions of Informal and Formal Agents in South Asian Rural Credit Markets
Authors: Adams John , Brunner Hans‐Peter , Raymond Frank
Published: July 2003

The paper provides a realistic explanation for the persistently large loan costs in the informal and formal credit markets of South Asia. In the presence of the adverse selection problems that arise from information asymmetries and discrepancies in credit services, price competition in somewhat differentiated products is sufficient to generate the high interest rate convergence observed in Nepalese credit markets. Most prior literature emphasizes collusion as the cause and leads to ineffective entry‐oriented policy prescriptions. The new interpretation stresses the need to reduce information asymmetries, product differentiation, and moral hazard risks, while widening the spatial orbits of agent competition.
Restoring Macroeconomic Stability through Fiscal Adjustment: a Real–Financial CGE Analysis for India
Authors: Naastepad C. W. M.
Published: July 2003

Developing‐country attempts to regain macroeconomic stability through fiscal adjustment are often unsuccessful in reducing inflation and balance‐of‐payments (BoP) disequilibrium. This paper examines why this may be so in the light of India's experience with stabilization in response to the BoP crisis in 1991. It does so using a novel real–financial computable general‐equilibrium model. Focusing on credit rather than money, the model goes beyond earlier modeling approaches by (1) incorporating credit rationing, (2) recognizing the dual role of credit for working capital and investment, and (3) allowing for switches between credit‐constrained, capacity‐constrained, and demand‐constrained, regimes. The simulations indicate that the macroeconomic effects of monetized deficit reduction differ widely depending on the mode of financing and on initial conditions in real and financial markets. Whenever fiscal reform leads to a squeeze on available working capital credit, deficit reduction will lead to only a limited inflation decline and a modest BoP improvement.
Dynamics of Business Cycles in Asia: Differences and Similarities
Authors: Kim Sunghyun Henry , Kose M. Ayhan , Plummer Michael G.
Published: July 2003

The paper documents the extent of similarities and differences of business cycle characteristics of the Asian countries and compares the cyclical regularities in this region with those of the G‐7 countries. The Asian economies are generally more volatile than the G‐7 countries, but the amplitude of economic fluctuations in the Asian countries tends to decrease over time. Comovement and persistence properties of business cycles in the Asian countries are very similar to those of the G‐7 economies. The authors find that while the patterns of business cycle fluctuations in the main macroeconomic aggregates display important similarities, the behavior of fiscal and monetary policy variables exhibits significant differences across the Asian countries. Moreover, there is a high degree of comovement between the individual country business cycles and different measures of the Asian business cycle, indicating that there is a regional business cycle specific to the Asian countries.
Economic Growth in a Cross‐section of Nonindustrial Countries: Does Colonial Heritage Matter for Africa?
Authors: Price Gregory N.
Published: July 2003

The paper investigates the effects of Sub‐Saharan African colonial heritage on economic growth in a sample of nonindustrial countries. An empirical Solow growth model is specified in a way that allows an examination of whether or not growth in Sub‐Saharan Africa reflects a legacy of extractive colonialization strategies, motivated by a hostile disease environment that resulted in extractive growth‐retarding institutions that persisted after independence. Parameter estimates suggest that the partial effects of extractive institutions engendered by a twentieth century colonial heritage account for approximately 30% of the growth gap between the former colonies in Sub‐Saharan Africa and other nonindustrial countries.
Environmental Protection and Urban Unemployment: Environmental Policy Reform in a Polluted Dualistic Economy
Authors: Daitoh Ichiroh
Published: July 2003

This paper explores sufficient conditions for the welfare‐improving environmental policy reform in the Harris–Todaro economy. A rise in the pollution tax rate in the urban manufacturing has spillover effects on the two labor market distortions: the less‐than‐optimal manufacturing employment and the urban unemployment. If both are weakened the welfare improves. Otherwise, we need to develop an alternative sufficient condition. It is shown that there exists a range of welfare‐improving pollution tax rates, and that it corresponds to the lower values of tax rate. This range may shrink by the wage subsidy policy and the technological change toward less pollution‐intensive techniques.
The Sri Lankan Unemployment Problem Revisited
Authors: Rama Martín
Published: July 2003

High unemployment in Sri Lanka has been attributed to unrealistic expectations, to queuing for public sector jobs, and to stringent job security regulations. However, the empirical evidence supporting these explanations is weak. This paper analyzes individual records from the 1995 Labor Force Survey, and time series for wages in the formal and informal sectors of the economy. The paper rejects the unrealistic‐expectations hypothesis by comparing the impact of education on the actual wages of those who have a job and on the lowest acceptable wages of the unemployed. But it finds substantial rents associated with jobs in the public sector, and in activities protected by high tariffs or covered by job security regulations. A time‐series analysis of the impact of unemployment on wage increases across sectors suggests that many among the unemployed are waiting for “good” job openings, but are not interested in readily available “bad” jobs.
Oil outlook to 2020
Authors: Shihab‐Eldin Adnan , Hamel Mohamed , Brennand Garry
Published: July 2003

OPEC's World Energy Model, OWEM, is used to develop the outlook for oil demand and supply to 2020. The reference case assumes world economic growth averaging 3.3 per cent per annum, while OPEC's Reference Basket of seven crudes remains mainly in the target range of US $22–28 a barrel, in nominal terms. With no additional assumed policy measures, for example, to reduce CO2 emissions, the reference case sees world oil demand rising from 76 million barrels a day in 2000 to 89 mb/d in 2010 and 107 mb/d in 2020. More than three‐quarters of this increase comes from developing countries. The most important sector for a demand increase is transportation, accounting for 60 per cent of the rise globally. On the supply side, the oil resource base is not considered a constraint to satisfying this increase in demand. Non‐OPEC production is expected to continue to grow during the current decade, and to stabilise at a level of 53–55 mb/d beyond 2010. OPEC production is projected to reach 36 mb/d by 2010 and 52 mb/d in 2020.

It is important, however, to recognise the uncertainties pervading such an assessment. For example, it is not clear how future economic growth, energy policies and technology will develop over this time horizon, and this inevitably clouds any assessment of future oil demand and supply. In an attempt to quantify one aspect of such uncertainty, other feasible economic growth rates have been assumed, the results of which suggest that OPEC output by 2010 could be 4–5 mb/d higher or lower than in the reference case, while the range is clearly even greater in the years to 2020. Moreover, policy reactions to such developments could compound the uncertainty. On the other hand, such alternative economic growth could place pressure upon oil prices to move outside OPEC's price band of $22–28/b.

These uncertainties illustrate the scope of the challenges confronting the oil industry, especially given the long lead‐time nature of oil industry investment, in making economically sound investment decisions that are geared to ensuring that sufficient capacity exists. Market stability, at reasonable and sustainable prices, is a key prerequisite for rising to these challenges, and, since market forces alone are not enough to guarantee this, a broad base of cooperative efforts will be needed to increase the chances of meeting this fundamental objective.
The importance of weighted variables to OPEC's production quota allocation
Authors: Al‐Osaimy Mahmoud , Yahyai Aziz
Published: July 2003

The objective of this paper is to estimate a weighted variables formula that could be used to calculate OPEC quota distribution. Instead of assigning an arbitrary weight to each of the selected variables included in the formula, we estimate weights based on historical data, using regression analysis. Six national characteristics of OPEC Member Countries, related to oil and socio‐economic factors, are considered in the estimation. Time‐series are used from 1982 to 2001, for each OPEC Member Country. The results show that the estimated weights are sensitive to the periods considered in the analysis, as well as the number of variables selected. However, there is no specific optimum way of dealing with the sensitive, complex quota issue.
The efficiency of natural gas futures markets
Authors: Mazighi Ahmed El Hachemi
Published: July 2003

Recent experience with the emergence of futures markets for natural gas has led to many questions about the drivers and functioning of these markets. Most often, however, studies lack strong statistical support.

The objective of this article is to use some classical statistical tests to check whether futures markets for natural gas (NG) are efficient or not. The problem of NG market efficiency is closely linked to the debate on the value of NG. More precisely, if futures markets were really efficient, then: 1) spot prices would reflect the existence of a market assessment, which is proof that speculation and the manipulation of prices are absent; 2) as a consequence, spot prices could give clear signals about the value of NG; and 3) historical series on spot prices could serve as “clean” benchmarks in the pricing of NG in long‐term contracts. On the whole, since the major share of NG is sold to power producers, the efficiency of futures markets implies that spot prices for NG are driven increasingly by power prices.

On the other hand, if futures markets for natural gas fail the efficiency tests, this will reflect: 1) a lack of liquidity in futures markets and/or possibilities of an excess return in the short term; 2) a pass‐through of the seasonality of power demand in the gas market; 3) the existence of a transitory process, before spot markets become efficient and give clear signals about the value of NG.

Using monthly data on three segments of the futures markets, our findings show that efficiency is almost completely rejected on both the International Petroleum Exchange in London (UK market) and the New York Mercantile Exchange (US market). On the NYMEX, the principle of “co‐movement” between spot and forward prices seems to be respected. However, the autocorrelation functions of the first differences in the price changes show no randomness of price fluctuations for three segments out of four. Further, both the NYMEX and the IPE fail, with regard to the hypothesis that the forward price is an optimal predictor of the spot price. Consequently, unless we have an increase in the liquidity of spot markets and an increase in the relative share of NG spot trading, futures markets cannot be considered as efficient.
Electric load forecasting for northern Vietnam, using an artificial neural network
Authors: Bhattacharyya Subhes C. , Thanh Le Tien
Published: July 2003

This paper employs a feed‐forward neural network with a back‐propagation algorithm for the short‐term electric load forecasting of daily peak (valley) loads and hourly loads in the northern areas of Vietnam. A large set of data on peak loads, valley loads, hourly loads and temperatures was used to train and calibrate the artificial neural network (ANN). The calibrated network was used for load forecasting. The mean percentage errors for the peak load, valley load, one‐hour‐ahead hourly load and 24‐hour‐ahead hourly load were −1.47%, −3.29%, −2.64% and −4.39%, respectively. These results compare well with similar studies.
The ‘Culture’ of Exclusion: Representations of Indigenous Women Street Vendors in Tijuana, Mexico
Authors: Novo Carmen Martínez
Published: July 2003

Representations of indigenous women vendors are contrasted with the ways indigenous women see themselves. Some images are openly hostile, whereas others discriminate against these women through a form of paternalistic love. For example, the understanding of indigenous women as outsiders from different social spaces and deviants from middle‐class gender norms suggests that they are ‘undeserving poor’ whose interests should not be considered. On the other hand, the concept of indigenous ‘culture,’ as defined and shaped by some non‐Indian academics, has further marginalized Tijuana's indigenous migrants. While defending the right of indigenous migrants to use public spaces, academics have characterized manifestations of poverty as the traditions of this ethnic group.
A New Nationalism for a New Era: The Political Ideology of Mexican Neoliberalism
Authors: O'Toole Gavin
Published: July 2003

The structural economic reforms justified by neoliberal ideas that transformed Mexico's statist political economy in the 1980s posed a direct challenge to the nationalism inherited from the revolutionary era that had long served to legitimise the interventions of the social state. This article examines the strategy adopted by the administration of President Carlos Salinas de Gortari (1988–1994) to reconcile the rival ambitions of neoliberalism and nationalism and its reasons for doing so. It does so by examining ideas concerning the state, society and the individual found in writing and speeches published in political organs and the press during this period.
Looking for Sustainability: Environmental Coalitions across the State‐Society Divide
Authors: Lemos Maria Carmen , Looye Johanna W.
Published: July 2003

This paper compares environmental policymaking in two Brazilian cities, Rio de Janeiro and Cubatão. It examines the formation of state‐society synergistic interactions in the public policymaking process and their effect on long term sustainability of social mobilization. It concludes that whereas social capital can be constructed in the context of policymaking, it is critically dependent on a concerted effort from both state and society actors to build trust in their daily interactions. The Cubatão and Carioca River cases show that state‐society synergy had little effect on the ability of the policy coalitions formed for pollution clean up to sustain themselves over time. Instead, there are indications that rather than a constraint, the flexible and informal nature of such coalitions may have been a critical factor in their ability to carry out policy successfully.
Market Effects of Recognition and Disclosure
Authors: Barth Mary E. , Clinch Greg , Shibano Toshi
Published: July 2003

Our recognition and disclosure model reveals that price informativeness is determined by the interaction of the qualities of three information sources—the recognized amount, the disclosed information, and the information revealed by price—and accounting expertise acquisition. It also reveals that recognition of an accounting amount alters each of these, thereby affecting price informativeness. Perhaps surprisingly, we find that recognition of a highly unreliable accounting amount, rather than simply disclosing it, can result in greater price informativeness. Likewise, recognition of a highly reliable amount can result in lower price informativeness. Our findings suggest that, because of the effects of aggregation, basing recognition decisions on reliability alone is too simplistic. Reliability relative to relevance is key, not reliability per se. We also find that recognition and disclosure affect the coefficients in a regression of price on accounting amounts.
Capital Gains Taxes and Equity Trading: Empirical Evidence
Authors: Blouin Jennifer L. , Raedy Jana Smith , Shackelford Douglas A.
Published: July 2003

Individual investors have an incentive to defer selling appreciated stock until it qualifies for tax‐favored, long‐term capital gains treatment. Shackelford and Verrecchia [2002] show that these incentives can affect equity trading around public disclosures. This article provides some empirical support for their theory with evidence of price increases and equity constrictions around announcements of quarterly earnings and additions to the S&P 500 index. We find share returns rise and trading volume falls with the incremental taxes saved by deferring the sale of appreciated property. The price increases, however, are temporary, reversing in subsequent trading days. The results are consistent with buyers believing the compensation to sell before long‐term qualification (through higher prices) is less costly than holding an inappropriately weighted portfolio. This finding—that personal capital gains taxes affect equity trading—adds to a growing literature that challenges longstanding assumptions that firm value is independent of shareholders and their taxes.
Confirming Management Earnings Forecasts, Earnings Uncertainty, and Stock Returns
Authors: Clement Michael , Frankel Richard , Miller Jeffrey
Published: July 2003

In this study we examine the association among confirming management forecasts, stock prices, and analyst expectations. Confirming management forecasts are voluntary disclosures by management that corroborate existing market expectations about future earnings. This study provides evidence that these voluntary disclosures affect stock prices and the dispersion of analyst expectations. Specifically, we find that the market's reaction to confirming forecasts is significantly positive, indicating that benefits accrue to firms that disclose such forecasts. In addition, although we find no significant change in the mean consensus forecasts (a proxy for earnings expectations) around the confirming forecast date, evidence indicates a significant reduction in the mean and median consensus analyst dispersion (a proxy for earnings uncertainty). Finally, we document a positive association between the reduction of dispersion of analysts' forecasts and the magnitude of the stock market response. Overall, the evidence suggests that confirming forecasts reduce uncertainty about future earnings and that investors price this reduction of uncertainty.
Do Expert Informational Intermediaries Add Value? Evidence from Auditors in Microcap Initial Public Offerings
Authors: Weber Joseph , Willenborg Michael
Published: July 2003

Do expert informational intermediaries add value? We address this question by examining the informativeness of the audit report contained in the prospectus associated with a firm's initial public offering (IPO). At the time of the IPO, there is a relative lack of information to facilitate the establishment of equity values, suggesting that the information provided by outside “experts” (e.g., auditors, underwriters) is particularly important. In this article we study small, non‐venture‐backed IPOs, a segment of the market with the poorest long‐run performance and where the prestigious audit firm is often the sole (if any) expert present. We find that the pre‐IPO opinions of larger auditors are more predictive of post‐IPO negative stock delistings. Of particular note, the opinions of the national‐tiered firms are comparably predictive to those of the Big 6, though this finding emerges only after we consider the selectivity‐based differences in the clients that hire these national firms. Our findings also indicate that, for larger auditors the presence of a pre‐IPO going‐concern opinion is more strongly associated with first‐year stock returns and that larger auditors are more likely to give such opinions to their distressed clients. Overall, we address a deficiency in the literature relating to “the paucity of evidence on the value of auditor opinions to investors” (Healy and Palepu [ 2001 p. 415]).
Evidence on the Joint Determination of Audit and Non‐Audit Fees
Authors: Whisenant Scott , Sankaraguruswamy Srinivasan , Raghunandan K.
Published: July 2003

In this study we investigate whether the characteristics of clients, auditors, and the auditor‐client relationship simultaneously determine audit and non‐audit fees. As done in prior studies, we maintain that fees proxy for the level of service provided and follow the physical flow of knowledge. Estimating single‐equation models of audit and non‐audit fee models, we confirm prior findings of an association between audit and non‐audit fees. Studies conclude that such evidence is consistent with knowledge spillovers between the two services. However, we document empirically that audit and non‐audit fees are simultaneously determined. Because the data indicate audit and non‐audit fees are jointly determined, we then investigate whether previously documented associations between audit and non‐audit fees are the result of biased estimation induced by using endogenous variables in single‐equation models. In contrast to results from single‐equation estimations, we find no association between audit and non‐audit fees using a simultaneous specification of the fee system, suggesting that single‐equation estimations suffer from simultaneous‐equations bias. In sum, the findings are not consistent with the existence of economies of scope from the joint performance of audit and non‐audit services after controlling for the joint behavior of audit and non‐audit fees. Given the ongoing debate over the level of allowed non‐audit services by auditors, the argument for the joint provision of audit and non‐audit services is less justified than if joint‐supply benefits had been documented.
The Effect Of Stock Splits On Liquidity And Excess Returns: Evidence From Shareholder Ownership Composition
Authors: Dennis Patrick , Strickland Deon
Published: July 2003

We examine the influence of firm ownership composition on both the abnormal returns at the announcement of a stock split and liquidity changes following a stock split. We find three results. First, the largest post‐split increase in institutional ownership occurs for firms that had low institutional ownership before the split. Second, changes in liquidity are negatively related to the level of institutional ownership before the split. Last, the abnormal return following a split is negatively related to the level of institutional ownership before the split. These findings are important as they shed new light on the source of stock split announcement returns.
Book Reviews
Authors: Nelson Beebe , Kahn Kenneth B.
Published: July 2003

Books reviewed in this issue:

Roger Bean and Russell W. Radford

The Business of Innovation: Managing the Corporate Imagination for Maximum Results

 Elaine Dundon

The Seeds of Innovation: Cultivating the Synergy That Fosters New Ideas

 Jacqueline Byrd and Paul Lockwood Brown

The Innovation Equation: Building Creativity and Risk Taking in Your Organization

Books received for possible review in a future issue:

 Ashish Arora, Andrea Fosfuri, and Alfonso Gambardella

Markets for Technology: The Economics of Innovation and Corporate Strategy

 Paul Belliveau, Abbie Griffin, and Stephen Somermeyer, editors

The PDMA Toolbook for New Product Development

 Vincent Bozzone

Speed to Market: Lean Manufacturing for Job Shops

 John Seely Brown and Paul Duguid

 The Social Life of Information

 Amiya K.Chakravarty

Market Driven Enterprise: Product Development, Supply Chains, and Manufacturing

 Henry Chesbrough

Open Innovation: The New Imperative for Creating and Profiting from Technology

 Kenneth Carlton Cooper

The Relational Enterprise: Moving beyond CRM to Maximize All Your Business Relationships

 Edmund B. Fitzgerald

 Globalizing Customer Solutions

 Eliezer Geisler

 Creating Value with Science and Technology

 Tim Jones

Innovating at the Edge: How Organizations Evolve and Embed Innovation Capability

 Robert C. Megantz

Technology Management: Developing and Implementing Effective Licensing Programs

 David Moschella

Customer‐Driven IT: How Users Are Shaping Technology Growth

 Jeffrey H. Rohlfs

Bandwagon Effects in High‐Technology Industries

 Gerald Zaltman

How Customers Think: Essential Insights into the Mind of the Market

The reviews of three recent books on innovation in this issue are by Kumar Nochur, Ph.D., president of Vidya, Inc.
“Honey, Have You Seen Our Hamster?” Consumer Evaluations of Autonomous Domestic Products
Authors: Rijsdijk Serge A. , Hultink Erik Jan
Published: July 2003

Several autonomous products have been launched in the marketplace in the past few years. These autonomous products do not need any human intervention but operate on their own. An example of such an autonomous product is the self‐initiating, independent vacuum cleaner that determines when a floor or room needs to be vacuumed, and does the job by itself, returning to the charging station when it needs to recharge its battery. It is unclear, however, to what extent consumers appreciate this autonomy. Autonomous products take over tasks from the user, which leaves the user the opportunity to take part in other activities. However, consumers may also consider these products complex and the use and purchase of such products risky. In addition, people often show a desire for control and may be reluctant to hand over some control to autonomous products. The advantages of autonomous products may thus be partly compensated by several disadvantages.

The present study aims to explain overall consumer appreciation for autonomous products by integrating the above‐mentioned factors in a conceptual model. This conceptual framework was tested in an experiment (N=77). The results reveal that consumers perceive highly autonomous products as more risky and complex than less autonomous products. Perceived risk negatively influenced overall consumer appreciation whereas complexity did not affect consumers' appreciation. Relative advantage, however, compensates the negative effect of perceived risk on overall consumer appreciation. Also, contrary to our expectations, we found that people with a high desire for control perceive less risk. We conclude with managerial implications for developers and marketers of autonomous domestic products.
Managing the Sources of Uncertainty: Matching Process and Context in Software Development
Authors: MacCormack Alan , Verganti Roberto
Published: July 2003

There is increasing interest in the literature about the notion of a contingent approach to product development process design. This interest stems from the realization that different types of projects carried out in different environments are likely to require quite different development processes if they are to be successful. Stated more formally, a contingent view implies that the performance impact of different development practices is likely to be mediated by the context in which those practices operate. This article provides evidence to support such a view.

Our work examines whether projects in which the development process matches the context achieve superior performance. We focus on two sources of uncertainty that generate challenges for project teams: platform uncertainty, reflecting the uncertainty generated by the amount of new design work that must be undertaken in a project; and market uncertainty, reflecting the uncertainty faced in determining customer requirements for the product under development. We develop hypotheses for how these sources of uncertainty are likely to influence the relationships between a number of specific development practices and performance. We then test these hypotheses using data from a sample of 29 Internet software development projects.

Our results provide evidence to support a contingent view of development process design. We show that in projects facing greater uncertainty, investments in architectural design, early technical feedback, and early market feedback have a stronger association with performance. The latter relationships are influenced by the specific sources from which this uncertainty stems: platform uncertainty mediating the impact of early technical feedback and market uncertainty mediating the impact of early market feedback. Our results also indicate that while greater uncertainty is associated with making later changes to a product's design, this practice is not associated with performance.

Our findings suggest that managers carefully must evaluate both the levels and sources of uncertainty facing a project before designing the most appropriate process for its execution. In particular, they should explore the use of specific development practices based upon their usefulness in resolving the specific types of uncertainty faced. Importantly, these decisions must be made at the start of a project, with purposeful investments to create a process that best matches the context. Reacting to uncertainty ex‐post, without such investments in place, is unlikely to prove a successful strategy.