http://som.eldoc.ub.rug.nl/ SOM Research Reports nl_NL To stimulate sales of sustainable products, retailers need to know whether their in-store instruments effectively influence their market shares. This study uses actual sales data and a multilevel modeling approach to describe the market shares of sustainable brands according to price level, price promotions, and shelf layout factors, while controlling for the customer base and competitive environment. As expected, a price premium compared with the leading brand in a category decreases market share for sustainable brands, but the location on the shelf and the arrangement of the entire product category also influence market shares considerably. In particular, where literature has described conflicting findings for horizontal location on the shelf, in our study sustainable brands receive more market share when placed in the middle of the shelf space devoted to the category, and eye level is the best vertical position. Higher market share is observed when the entire category is arranged by brand. This study therefore suggests that where sustainable brands are located on the shelf may be just as important, if not more than, how many facings they have. http://irs.ub.rug.nl/ppn/33230373X Sat, 01 Jan 2011 00:00:00 CET Financial crises are high cost events which can transmit across international borders. Using data from 1883 to 2008 this paper develops a means of mapping changes in the degree of international synchronisation of banking and currency crises through a formal concordance index. This index speci cally accounts for the typically low incidence and potential serial correlation of crisis data. The results show that banking crises were highly internationalised at the beginning of the 20th century, and became far less so in the strong regulatory environment prevailing after the Depression until the 1980s. A strong increase in the synchronicity of international banking crises is revealed during the late 20th and early 21st century. Currency crises began the century as more idioysncratic, but have tended to become more synchronised over the 115 year sample. http://irs.ub.rug.nl/ppn/326079238 Fri, 01 Jan 2010 00:00:00 CET No description abstract http://irs.ub.rug.nl/ppn/32608052X Fri, 01 Jan 2010 00:00:00 CET Indicators of central bank independence (CBI) based on the interpretation central bank laws in place may not capture the actual independence of the central bank. This paper develops an indicator of actual independence of the Bank Indonesia (BI), the central bank of Indonesia, for the period 1953-2008 and compares it with a new legal CBI indicator based on Cukierman (1992). The indicator of actual independence captures institutional and economic factors that affect CBI. We find that before 1999, legal and actual independence of BI diverged substantially. After a new central bank law was enacted, the legal independence of BI increased and converged to actual independence. http://irs.ub.rug.nl/ppn/326810145 Fri, 01 Jan 2010 00:00:00 CET The single-product, stationary inventory problem with set-up cost is one of the classical problems in stochastic operations research. Theories have been developed to cope with finite production capacity in periodic review systems, and it has been proved that optimal policies for these cases are not of the (modified) (s, S)-type in general, but more complex. In this paper we consider a production system such that the production rate is constrained, rather than the amount as is common in periodic review models. Thus, in our case the production rate is positive and finite when the system is on and zero when off, while a cost is incurred to switching on or off. We prove that a long-run optimal stationary policy exists for this single-item continuous review inventory problem with non-zero switching cost and finite production rate, and that this optimal policy has an (s,S)-structure. We also provide an efficient numerical procedure to compute the parameters of the optimal policy. http://irs.ub.rug.nl/ppn/327491353 Fri, 01 Jan 2010 00:00:00 CET In managing networks of stock holding locations, two approaches to the pooling of inventory have been proposed. Reactive transshipm nts respond to stockouts at a location by moving inventory from elsewhere within the network, while proactive redistribution of stock seeks to minimise the chance of future shocks. This paper is the first to propose a hybrid approach in which transshipments are viewed as an opportunity for stock redistribution. We adopt a quasi-myopic approach to the development of a strongly performing hybrid transshipment policy. Numerical studies which utilise dynamic programming and simulation testify to the benefits of using transshipments proactively. In comparison to a purely reactive approach to transshipment, service levels are improved while a reduction in safety stock levels is achieved. The aggregate costs incurred in managing the system are significantly reduced, especially so for large networks facing high levels of demand. http://irs.ub.rug.nl/ppn/328883719 Fri, 01 Jan 2010 00:00:00 CET In this paper we argue that socially responsible policies have positive short-term and long-term impact on equity of global brands. We find that corporate social responsibility towards all stakeholders, whether primary (customers, shareholders, employees and suppliers) or secondary (community), have positive effects on brand equity value, where the secondary stakeholders are even more important than primary stakeholders. In addition, policies aimed at satisfying community interests act as a mechanism to reinforce trust that gives further credibility to social responsible polices with other stakeholders. The result is a decrease in conflicts among stakeholders and greater stakeholder willingness to provide intangible resources that enhance brand equity. We provide support of our theoretical contentions using a panel data composed of 57 global brands, originating from 10 countries (USA, Japan, South Korea, France, the UK, Italy, Germany, Finland, Switzerland and the Netherlands) for the period 2002 to 2007. We use detailed information on brand equity obtained from Interbrand and on corporate social responsibility provided by the Sustainalytics Global Profile (SGB) database, as compiled by Sustainalytics. http://irs.ub.rug.nl/ppn/330737023 Fri, 01 Jan 2010 00:00:00 CET Many companies face the problem of having a substantial number of low-tier customers – clients at the bottom of the customer pyramid. For this segment, it is necessary to either reactivate or terminate the customer relationships to increase profitability. Managers seek to learn more about marketing actions targeted towards low-tier customers and their response towards these actions. Therefore, we conducted a large field experiment in which we implemented a “last call” marketing action for a large sample of low-tier customers of a catalogue retailer (N = 12,000). The action aims at sales reactivation, but in case a customer should not react, the relationship will be terminated. We measure customer response in terms of satisfaction, (positive and negative) word-of-mouth, and purchase behavior. We find no harmful effects from relationship termination, such as dissatisfaction or negative word-of-mouth. The results indicate that the “last call” marketing action reactivates a small fraction of the low-tier customers. These customers remain active in the months following the action period. We discuss managerial implications of our findings and future research on low-tier customer segments. http://irs.ub.rug.nl/ppn/330737317 Fri, 01 Jan 2010 00:00:00 CET Drug benefit-risk analysis is based on firm clinical evidence related to various safety and efficacy outcomes, such as tolerability, treatment response, and adverse events. In this paper, we propose a new approach for constructing a supporting multi-criteria model that fully takes into account this evidence. Our approach is based on the Stochastic Multicriteria Acceptability Analysis (SMAA) methodology, which allows us to compute the typical value judgments that support a decision, to quantify uncertainty, and to compute a comprehensive benefit-risk profile. As an example, we constructed a multi-criteria model for the therapeutic group of second-generation antidepressants. We analyzed Fluoxetine, Paroxetine, Sertraline, and Venlafaxine according to relative efficacy and absolute rates of several common adverse drug reactions using meta-analytical data from the literature. Our model showed that there are clear trade-offs among the four drugs. Based on our experiences from this study, SMAA appears to be a suitable approach for quantifying trade-offs and decision uncertainty in drug benefit-risk analysis. http://irs.ub.rug.nl/ppn/325608849 Fri, 01 Jan 2010 00:00:00 CET No description abstract http://irs.ub.rug.nl/ppn/322495148 Thu, 01 Jan 2009 00:00:00 CET No description abstract http://irs.ub.rug.nl/ppn/317810901 Thu, 01 Jan 2009 00:00:00 CET No description abstract http://irs.ub.rug.nl/ppn/317339907 Tue, 01 Jan 2008 00:00:00 CET In a previous paper we developed a non-standard two-stage recourse model for the dynamic day-ahead paratransit planning problem. Two heuristics, which are frequently applied in the recourse model, contain many details which leads to large CPU times to solve instances of relatively small size. In this paper we simplify both heuristics to decrease CPU time considerably while maintaining the quality of the obtained solutions as much as possible. Numerical experiments on (semi-)realistic instances, inspired by practice, show that our recourse model with fast heuristics provides acceptable solutions within reasonable time. http://irs.ub.rug.nl/ppn/317339532 Thu, 01 Jan 2009 00:00:00 CET This paper uses stochastic frontier analysis (SFA) to examine whether there is a trade-off between outreach to the poor and efficiency of microfinance institutions (MFIs). Using a sample of more than 1,300 observations, our study suggests that outreach and efficiency of MFIs are indeed negatively correlated. http://irs.ub.rug.nl/ppn/31435719X Tue, 01 Jan 2008 00:00:00 CET We provide a literature overview of the linkages between Poverty Reduction Strategy Papers (PRSPs) and the Millenium Development Goals (MDGs) and use novel data to examine their relation. We find that introduction of a PRSP is associated with progress in four of the nine MDG indicators we study. PRSP are effective in respect of implementing defined policies (immunization, school enrolment) but not broader measures of MDG achievement (mortality, literacy, gender equality). Less speedy PRSP development and better quality of formulated policy actions in a PRSP are both helpful in achieving child health targets. Setting clearly defined targets and indicators improves progress in education targets. We discuss these findings in the context of other PRSP assessments in the literature and propose future research avenues. http://irs.ub.rug.nl/ppn/31435705X Tue, 01 Jan 2008 00:00:00 CET Abstract We consider a dynamic planning problem for the transport of elderly and disabled people. The focus is on a decision to make one day ahead: which requests to serve with own vehicles, and which ones to assign to subcontractors, under uncertainty of late requests which are gradually revealed during the day of operation. We call this problem the Dynamic Day-ahead Paratransit Planning problem. The developed model is a nonstandard two-stage recourse model in which ideas from stochastic programming and online optimization are combined: in the first stage clustered requests are assigned to vehicles, and in the dynamic second-stage problem an event-driven approach is used to cluster the late requests once they are revealed and subsequently assign them to vehicles. A genetic algorithm is used to solve the model. Computational results are presented for randomly generated data sets. Furthermore, a comparison is made to a similar problem we studied earlier in which the simplifying but unrealistic assumption has been made that all late requests are revealed at the beginning of the day of operation. http://irs.ub.rug.nl/ppn/305430173 Mon, 01 Jan 2007 00:00:00 CET Abstract Extant literature discusses a large number of different entry barriers that may hamper market efficiency or entrepreneurial activity. In practice several of these barriers cohere and stem from the same root. Factor analysis is used to identify the underlying dimensions of these barriers. 7 generic factors have been found that drive the system. In the literature a debate exists between scholars that stress the importance of structural and/or strategic barriers. This paper shows that in the perception of firms both types of barriers are important and argues that the effectiveness of strategic barriers depends on attributes of the market structure. Based on the seven generic factors, a conjoint analysis is carried out to identify the most important factors perceived by firms. The conjoint analysis shows that in particular the barriers rooted in three underlying dimensions require attention of market authorities as they may refrain new entrants from entry: finance, access to distribution channels and strategic action. Remarkably, government rules and regulations, product differentiation, R&D and advertising constitute a minor entry problem according to the firms. http://irs.ub.rug.nl/ppn/305193236 Mon, 01 Jan 2007 00:00:00 CET The paper contributes to a small but growing literature that estimates tax re- action functions of governments competing with other governments. We analyze consumption tax competition between US states, employing a panel of state-level data for 1977-2003. More specifically, we study the impact of a state's spatial characteristics|that is, its size, geographic position, and border length on the strategic interaction with its neighbors. For this purpose, we calculate for each state an average effective consumption tax rate, which covers both sales and excise taxes. In addition, we pay attention to dynamics by including lagged dependent variables in the tax reaction function. We find overwhelming evidence for strategic interaction among state governments, but only partial support for the effect of spatial character- istics on tax setting. Tax competition seems to have lessened in the 1990s compared to the early 1980s. http://irs.ub.rug.nl/ppn/304961620 Mon, 01 Jan 2007 00:00:00 CET We argue that the finding of Hausmann et al. (2005) that a political regime change increases the probability of an economic growth acceleration is wrong and the result of an error in their database. When we correct for this error and stick to the definition of regime change of Hausmann et al., we find that regime changes do not affect the likelihood that a growth acceleration occurs. We also find some evidence that economic liberalization increases the probability of a growth acceleration, independent of whether this acceleration is sustained. http://irs.ub.rug.nl/ppn/304612626 Mon, 01 Jan 2007 00:00:00 CET Recent studies suggest that democracy and globalization lead to ethnic hatred and violence in countries with a rich ethnic minority. We examine the thesis by Chua (2003) that democratization and globalization lead to ethnic violence in the presence of a market-dominant minority. We use different data sets to measure market dominant minorities and employ panel fixed effects regressions for a sample of 107 countries over the period 1984-2003. Our model contains two-way and three-way interactions to examine under which conditions democracy and globalization increase violence. We find no evidence for a worldwide Chua effect, but we do find support for Chua’s thesis for Sub-Saharan Africa. http://irs.ub.rug.nl/ppn/304612650 Mon, 01 Jan 2007 00:00:00 CET This paper discusses the implementation of new regulatory rules in a multistage recourse ALM model for Dutch pension funds. The new regulatory rules, which are called the ‘Financieel Toetsingskader’, are effective as of January 2007 and have deep impact on the issues of valuation of liabilities, solvency, contribution rate, and indexation. Multistage recourse models have proved to be valuable for pension fund ALM. The ability to include the new regulatory rules would increase the practical value of these models. http://irs.ub.rug.nl/ppn/303586176 Mon, 01 Jan 2007 00:00:00 CET Abstract: This paper investigates the strategic monitoring behaviour within a group lending setting. We develop a theoretical model, showing that monitoring efforts of group members differ from each other in equilibrium, as a result of the asymmetry between these members in terms of the future profits they generate with their project. In particular, we show that the entrepreneur with the project that generates the highest future profits also puts in the highest monitoring effort. Moreover, monitoring efforts differ between group members due to free-riding: one member reduces her level of monitoring if the other increases her monitoring effort. This effect is also at play when we introduce a group leader in the model. The individual who becomes the group leader will supply more monitoring effort than in the benchmark case, because of the reduced per unit monitoring costs related to becoming the leader. We empirically test the model using data from a survey of microfinance in Eritrea and show that the group leader attaches more weight to future periods than non-leaders in group lending and that this may explain why a large part of total monitoring is put in by the leader. http://irs.ub.rug.nl/ppn/301931208 Mon, 01 Jan 2007 00:00:00 CET Abstract We show that there may be circumstances in which a principal prefers not to observe the project choice of an agent that acts on her behalf. The ability of the agent is private information. Projects differ with respect to the amount of risk. If the principal can observe the project choice of the agent, the latter will use that choice as a signal. In the separating equilibrium, an agent with high ability then chooses a project that is too risky. If more difficult projects require more effort, there are two opposite effects. The shirking effect implies that the agent chooses a project that is too safe. The signaling effect implies that he chooses a project that is too risky. The net effect is ambiguous. We also discuss the implications of our model for promotion policies. http://irs.ub.rug.nl/ppn/301931496 Mon, 01 Jan 2007 00:00:00 CET Abstract In this paper, we compare standard approaches used to handle losses in logarithmic stochastic profit frontier models with a simple novel approach. We discuss discriminatory power, rank stability and precision of profit efficiency scores. Our new method enhances rank stability and discriminatory power, and improves the precision of profit efficiency scores http://irs.ub.rug.nl/ppn/301931399 Mon, 01 Jan 2007 00:00:00 CET Abstract Municipalities and provinces in the Netherlands, denoted here as local government, have introduced many major accounting changes and changes in other management control aspects since 1985. However, various change initiatives and new instruments were dropped after a short while, were superseded by new reforms, or only used to a limited extent. Interviews with 23 politicians and professional managers in local government made clear that they often were critical about the reasons for and the effects of the changes. For example, fads, a desire to ‘look modern’ and mimicry sometimes played a part in the introduction of the changes. Previous academic research suggests that in several cases the high ambitions of New Public Management have not been realized. However, this explorative paper does not primarily discuss the gap between expected and realized management changes. Instead, it focuses on the actual effects resulting from the accounting changes in the perception of the persons interviewed. The institutionalist approach that is used in this paper focuses on changes in rules, routines and institutions. The institutionalist approach of the accounting changes in Dutch local government suggests that, seen over the longer run, gradually some effects may have been realized that have considerably changed their culture and increased their citizen and result-orientedness. Further, the explorative paper indicates that an institutionalist perspective draws attention to factors and developments that might not be noticed when a more functional and short-term perspective is chosen http://irs.ub.rug.nl/ppn/301931011 Mon, 01 Jan 2007 00:00:00 CET Pro-agricultural policies have had a large and continuing impact on pro-poor growth. Yet over the last three decades, policy support for agriculture has declined for the majority of underdeveloped countries. This paper studies the causes and manifestations of this 'urban' bias both in domestic pricingpolicies and government expenditures, and in international trade and foreign aid regimes. It provides a synthesis of existing research updated with novel analysis and explains the effective neglect of pro-agricultural policies in the context of the currently dominant development paradigms. The authors conclude that urban biases remain highly topical, and a persistent and paramount obstacle to sustained growth and poverty reduction. http://irs.ub.rug.nl/ppn/300383703 Sun, 01 Jan 2006 00:00:00 CET Abstract : We consider delegation in a rent-seeking contest with two players, where delegates have more instruments at their disposal than the main players. We endogenize both the decision to hire a delegate and the contingent fee offered to the delegates. We characterize the situations when either no, one or two players hire a delegate in equilibrium. We show that the decision to hire a delegate depends in a non-monotone way on the size of the contested prize. http://irs.ub.rug.nl/ppn/299114678 Sun, 01 Jan 2006 00:00:00 CET We assess the role of equity markets in the transmission of monetary policy in the EU. We use a structural VAR model based upon the models of Kim and Roubini [2000] and Brischetto and Voss [1999] and we find that there are differences in monetary policy transmission across our sample of countries. The largest output losses following a monetary shock are seen in a core of euro area countries: Austria, Belgium, Finland, France, and Germany. Germany also displays the largest response of prices and is followed by Austria and Finland. Variance decompositions also suggest that the bank based core euro area countries are different from market based countries. As regards the channels of transmission we find no evidence to suggest an equity wealth effect channel in the euro area and only circumstantial evidence for the UK. We do, however, find that those countries that use equity finance (the UK and the Netherlands) suffer smaller output losses following a monetary shock indicating that a bank lending channel is less likely to be present in these countries. http://irs.ub.rug.nl/ppn/298013428 Thu, 01 Jan 2004 00:00:00 CET No description abstract http://irs.ub.rug.nl/ppn/29745188X Sun, 01 Jan 2006 00:00:00 CET Implementing an effective inter-organizational system (IOS) requires significant organizational as well as technical changes. These will affect stakeholders with varying degrees of power and with varying degrees of interest in the system – yet promoters depend on them if the project is to succeed. Identifying stakeholders and understanding their attitudes enables promoters to manage implementation in a way that meets their expectations and encourages acceptance. We examine these issues through an empirical study of a project to introduce an Electronic Patient File (EPF) system in The Netherlands. Few would disagree with the benefits of such a system – yet (at the time of writing) the promoters have been unable to implement it. The paper develops and tests a model of stakeholder management, showing how stakeholders varied in their power to affect the use of the system, and in their interest towards its use. These attitudes reflected their beliefs about the effects of the system on working routines, power, culture and finance. The analysis concludes by comparing the strategies which promoters could use to encourage acceptance. The theoretically based and empirically tested model should be relevant to those leading IOS projects in other sectors. http://irs.ub.rug.nl/ppn/297452126 Sun, 01 Jan 2006 00:00:00 CET We examine to what extent the popularity of an investment style can be attributed to style investing. The style investing hypothesis predicts that assets in the same style show strong comovement with respect to their underlying fundamentals and that reclassifying assets into a new style raises its correlation with that style. We test this prediction by studying how comovement varies with proxies of popularity. We use different kinds of data, such as data on stocks, mutual funds, IPO’s and financial analysts. We provide strong evidence that when popularity of a style is high investors base their demand for stocks on an individual stock level. We also find that style popularity is positively related to style performance. The evidence presented here challenges the view that investors base their asset allocation on a style level instead of an individual stock level. http://irs.ub.rug.nl/ppn/296974234 Sun, 01 Jan 2006 00:00:00 CET We examine the relationship between political instability and economic growth. Using an exploratory factor analysis we identify four dimensions of political instability: (1) mass civil protest, (2) politically motivated aggression, (3) instability within the political regime and (4) instability of the political regime. We show that individual political instability indicators are generally poor proxies for the underlying dimensions of political instability. Our panel estimates for a sample of 98 countries in the period 1984-2003 indicate that the various dimensions of political instability have different effects on economic growth. http://irs.ub.rug.nl/ppn/296644277 Sun, 01 Jan 2006 00:00:00 CET We study an auction where two licenses to operate on a new market are sold, and winning bidders finance their bids on the debt market. Higher bids imply higher debts, which affects product market competition. We compare our results to those of a beauty contest and a standard auction. For the case that debt induces firms to compete more aggressively, we find that consumer prices are lower, and expected firm profits are strictly positive although firms are a priori identical. When debt induces firms to compete less aggressively, we find that firms make zero profits, and consumer prices are higher. http://irs.ub.rug.nl/ppn/296644579 Sun, 01 Jan 2006 00:00:00 CET In this article we discuss freedom of choice in action and its relationship with the concepts of fit and effectiveness from a managerial point of view and using a designing perspective. We have give our perspectives on fit as a construction, on freedom of choice and on dynamics. We regard the traditional interpretation of fit as static and deterministic and continued ideas of Thompson, Donaldson en Gresov & Drazin. The Systems Theory of Control does offer ways to gain more insight into theories about fit. A new dynamic concept does offer a conceptual framework for determining whether the actions at t1 and t2 may lead to results at t3. The levels of aggregation were 1 2 3 introduced for analytical purposes mainly. This advances the discussion about freedom of choice in action and fit and effectiveness by a small step. http://irs.ub.rug.nl/ppn/296196576 Sun, 01 Jan 2006 00:00:00 CET While mass customization is the tailoring of products and services to the needs and wants of individual customers, web site customization is the tailoring of web sites to individual customers’ preferences. Based on a review of site customization applications, the authors propose a model with four different levels standardization, adaptation, passive personalization, and active personalization). Each of these levels requires a different level of involvement of both the supplier and the customer. Based on an extensive review literature the authors then develop conceptual models of the determinants of site customization from both a customer’s and a supplier’s point of view. Both models contain the factors that determine the willingness of a party (customer or supplier) to get actively involved in web site customization. Some factors have a positive impact on the willingness to customize while others have a negative impact. Managers engaged in site customization projects should realized that site customization is not an undisputed topic. Its success will be context dependent. The presented conceptual models can be used to analyze the essentials of a particular context and to assess the potential of web site customization. http://irs.ub.rug.nl/ppn/296644498 Sun, 01 Jan 2006 00:00:00 CET Since about 1985, Dutch municipalities and provinces, i.e. local government, initiated many reforms and change projects in the field of their management control, which are lumped together here as ‘management changes’. Was the introduction of these changes mainly based on functionalist, ‘rational’ considerations, that is, a wish to improve economic performance, as New Public Management suggests? Or did economically seen irrational considerations perhaps also play a part, for example, a wish to follow new management trends and to look ‘modern’? Based on documents and interviews with 23 politicians and professional managers in twelve Dutch municipalities and two provinces, this explorative paper examines experiences with various management changes implemented by local government as part of New Public Management (NPM), and with subsequent related changes. In addition, it discusses ‘change initiating factors’ that may have contributed to the high amount of major change initiatives that were started in a rather short space of time. Some of these factors are, for example, budgets cuts, trends and more demanding citizens/voters. One important change initiating factor that was mentioned is uncertainty amongst politicians, which is a consequence of the increased political volatility amongst voters. This factor suggests that, now and in the near future, for politicians and professional managers it could be ‘politically rational’ to try to increase the (economic) performances of their organization. Several authors have questioned or criticized the effects of NPM’s and government’s focus on economic efficiency and effectiveness. However, taking the change initiating factors into consideration, the paper speculates that in the future, too, it could be a rational survival strategy for politicians and managers to focus on initiatves that are intended to enhance performance and efficiency http://irs.ub.rug.nl/ppn/29604475X Sun, 01 Jan 2006 00:00:00 CET The difference between the performance of growth and value portfolios presents an interesting puzzle for researchers in finance. Most studies showed that value stocks outperform growth stocks. This is the so-called value premium. In this article, we try to find an answer to the question as to why value stocks generate superior returns to growth stocks by dividing growth and value stocks into switching- and fixed-style stocks. We show that the difference in returns between value and growth stocks is caused by frequently rebalancing portfolios and find a value premium for the switching-style stocks and a growth premium for the fixed-style stocks. We will try to find an explanation for this phenomenon using the behavioral finance explanation that investors are unable to process information correctly. We use earnings announcement return data to test whether expectations of investors about future growth are too extreme. http://irs.ub.rug.nl/ppn/294962808 Thu, 01 Jan 2004 00:00:00 CET The theoretical literature on a firm’s choice of debt maturity argues that a borrowing firm can signal its value in asymmetric information setting by borrowing short. This well-known fact is based on Flannery (1986). This paper questions the use of debt maturity as a signalling device. We demonstrate that Flannery’s (1986) signalling outcome is vulnerable on two accounts. First, the separating equilibrium established by Flannery is not driven by the incentive compatibility. Second, derivations of the separating equilibrium appear to be vulnerable due to the lack of the refinements of pooling equilibria. If correct constraints are provided, the parameter space for the separating equilibrium shrinks, moderating the signalling role of debt maturity. http://irs.ub.rug.nl/ppn/294685839 Sun, 01 Jan 2006 00:00:00 CET This paper compares the use of capital budgeting techniques of Dutch and Chinese firms, using data obtained from a survey among 250 Dutch and 300 Chinese companies. Our main aim is to analyse the use of capital budgeting techniques by companies in both countries from a comparative perspective to see whether economic development matters. The empirical analysis provides evidence that Dutch CFOs on average use more sophisticated capital budgeting techniques than Chinese CFOs do. At the same, however, our results suggest that the difference between Dutch and Chinese firms is smaller than might have been expected based upon the differences in the level of economic development between both countries, at least with respect to the use of methods of estimating the cost of capital and the use of CAPM as the method of estimating the cost of equity. http://irs.ub.rug.nl/ppn/294686029 Sun, 01 Jan 2006 00:00:00 CET Wanzenried (2003, International Journal of Industrial Organization 21(2), 171-200) considers a two-stage differentiated goods duopoly model with demand uncertainty linking firms’ capital structure choice to their output market decisions. Unfortunately, her analysis is flawed. We correct for this, and solve the model umerically to find some results that are qualitatively different from hers. First, in equilibrium, the use of debt always yields lower firm profits, i.e. even in the case of complements. Second, the equilibrium debt level decreases as demand becomes more volatile. We also discuss some problems with the debt contract commonly used in the strategic debt literature. http://irs.ub.rug.nl/ppn/291409172 Wed, 01 Jan 2003 00:00:00 CET Time series factor analysis (TSFA) and its associated statistical theory is developed. Unlike dynamic factor analysis (DFA), TSFA obviates the need for explicitly modeling the process dynamics of the underlying phenomena. It also differs from standard factor analysis (FA) in important respects: the factor model has a nontrivial mean structure, the observations are allowed to be dependent over time, and the data does not need to be covariance stationary as long as differenced data satisfies a weak boundedness condition. The effects on the estimation of parameters and prediction of the factors is discussed. The statistical properties of the factor score predictor are studied in a simulation study, both over repeated samples and within a given sample. Some apparent anomalies are found in simulation experiments and explained analytically. http://irs.ub.rug.nl/ppn/289322812 Sat, 01 Jan 2005 00:00:00 CET It is widely confirmed by many computational experiments that a greedy type heuristics for the Traveling Salesman Problem (TSP) produces rather poor solutions except for the Euclidean TSP. The selection of arcs to be included by a greedy heuristic is usually done on the base of cost values. We propose to use upper tolerances of an optimal solution to one of the relaxed Asymmetric TSP (ATSP) to guide the selection of an arc to be included in the final greedy solution. Even though it needs time to calculate tolerances, our computational experiments for the wide range of ATSP instances show that tolerance based greedy heuristics is much more accurate an faster than previously reported greedy type algorithms http://irs.ub.rug.nl/ppn/289323576 Sat, 01 Jan 2005 00:00:00 CET This paper develops a conceptual framework for the role of social capital in the political economy of innovation, growth and reform, with illustrations from developing and transition countries. It identifies separate but related roles for the individual and communal interpretations of social capital. It argues that economic growth via innovation requires the creative destruction of individual social capital linkages and discusses the roles of communal social capital and formal market institutions in the process. A negative externality associated with creative destruction implies the possibility of growth accelerations as well as growth traps. http://irs.ub.rug.nl/ppn/289322421 Sat, 01 Jan 2005 00:00:00 CET In April 2004, the European Union adopted a new legislative framework for genetically modified (GM) organisms. This framework regulates the placing on the market of GM products, and demands these products to be labeled as such. We present a duopoly model with vertical differentiation and mandatory labeling, where one firm produces the conventional product. We assume the GM product to have lower marginal cost, and lower value to consumers. We analyze the effects of introducing the GM good on output, prices, and welfare. We also study contamination and costly testing of convential goods. http://irs.ub.rug.nl/ppn/289322707 Sat, 01 Jan 2005 00:00:00 CET We consider the following model. First, two firms choose locations on a Hotelling line. Second, they play a repeated price-setting game, in which they may be able to collude. Transportation costs are quadratic. We show that if firms collude in the location stage, they choose locations that coincide with the social optimum, provided that the discount factor is high enough. If the discount factor is lower, the firms locate further apart. Furthermore, we show that if firms choose locations non-cooperatively, they both locate in the middle of the line, again provided that the discount factor is high enough. If the discount factor is lower, the firms locate further apart. Thus, with the possibility of a price cartel and a discount rate that is sufficiently high, Hotelling’s principle of minimum differentiation is restored. http://irs.ub.rug.nl/ppn/277137497 Sat, 01 Jan 2005 00:00:00 CET This paper analyzes whether the effects of monitoring and social ties of the group leader and other group members on repayment performance of groups differ, using data from an extensive questionnaire held in Eritrea among participants of 102 groups. We hypothesize that the monitoring activities and social ties of the group leader have a stronger positive impact on the repayment performance of groups. The results show that social ties of the group leader do have a positive effect on repayment performance of groups, whereas this is not true for social ties of other group members. We do not find evidence for the hypothesis that monitoring activities of the group leader have a stronger positive impact on group repayment performance. All variables measuring monitoring activities, either of the group leader or the other group members, are found to be statistically insignificant. http://irs.ub.rug.nl/ppn/288213971 Sat, 01 Jan 2005 00:00:00 CET ERP systems are software packages that enable the integration of transactions oriented data and business processes throughout an organization. ERP implementation can be viewed as an organizational change process: many problems related to ERP implementation are related to a misfit of the system with the characteristics of the organization. This article uses the evidence of a case study to uncover some important dimensions of the organizational change issues related to ERP implementation. The study shows how ERP implementation can impact the interests of stakeholders of the ERP-system and how these groups may react by influencing the course of events, for example by altering the design and implementation in ways that are more consistent with their interests. Understanding the possible impact of ERP on particular interests of stakeholders may help project managers and others to manage ERP implementations more effectively. http://irs.ub.rug.nl/ppn/288212517 Sat, 01 Jan 2005 00:00:00 CET This paper derives optimal loan policies under asymmetric information where banks offer loan contracts of long and short duration, backed or unbacked with collateral. The main novelty of the paper is that it analyzes a setting in which high quality firms use collateral as a complementary device along with debt maturity to signal their superiority. The least-cost signaling equilibrium depends on the relative costs of the signaling devices, the difference in firm quality and the proportion of good firms in the market. Model simulations suggest a non-monotonic relationship between firm quality and debt maturity, in which high quality firms have both long-term secured debt and short-term secured or non-secured debt. http://irs.ub.rug.nl/ppn/288135245 Sat, 01 Jan 2005 00:00:00 CET Multinational enterprise performance is one of the most researched topics in the strategic management literature over the last thirty years. Despite the proliferation of studies, the dispute over the relation between firms’ international investment activities and corporate performance has not yet reached a consensus. This paper’s contribution is threefold. First, we focus on entry by West European multinational enterprises into Central and East European countries. Second, we develop a multi-theory argument, combining insights from transaction cost, new institutional, behavioral, resource-based and international strategy theories. Third, we estimate the determinants of managerial satisfaction with subsidiary performance with questionnaire data for a sample of 198 subsidiaries. http://irs.ub.rug.nl/ppn/28810739X Sat, 01 Jan 2005 00:00:00 CET Inter-organizational systems (IOS) are ICT-based systems that enable organizations to share information and to electronically conduct business across organizational boundaries. Especially since the increasing availability of the Internet, there have been less technological barriers to implement IOS. However, that does not imply that IOS-possibilities are implemented successfully in all occasions: other barriers may remain. Innovation is not only a technical process of ‘solving problems’, it also involves economic and political processes in which interests are articulated, alliances are built and outcomes are struggled over. To explore this observation, this paper presents a model that helps to describe and analyze IOS from a power and interest perspective of multiple parties. To illustrate this model, eight case studies of IOS are discussed, of which two in more depth. After that, we will put the findings of the analysis in a broader perspective. The paper concludes with the assertion that the scope for the design of an effective IOS depends on a combination of technical, economic and social http://irs.ub.rug.nl/ppn/288105621 Thu, 01 Jan 2004 00:00:00 CET