An analysis of new buy and sell recommendations of stocks by security analysts at major U.S. brokerage firms shows significant, systematic discrepancies between prerecommendation prices and eventual ...values. The initial return at the time of the recommendations is large, even though few recommendations coincide with new public news or provide previously unavailable facts. However, these initial price reactions are incomplete. For buy recommendations, the mean postevent drift is modest (+2.4%) and short-lived, but for sell recommendations, the drift is larger (-9.1%) and extends for six months. Analysts appear to have market timing and stock picking abilities.
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New ventures, companies eight years or younger, play a major role in the development of an emerging, high-technology industry. Corporate-sponsored new ventures (those supported by an established ...corporation) and independent ventures (those founded by independent entrepreneurs) frequently battle for industry leadership and financial success. Whereas both venture types use technology to achieve financial and market success, little is known about the differences in their technology strategies.
Technology strategy is the plan that guides a new venture's decisions on the development and use of technological capabilities. This strategy covers six major areas. The first is selecting the pioneering posture, where a venture decides whether or not be among the industry's first companies to introduce new products (technologies) to the market. The second is determining the number of products to be introduced to the market. The third is choosing the extent of a venture's use of internal and external R&D sources. Internal sources usually refer to in-house R&D activities. External sources may include purchasing or licensing of technology from other companies, or joining strategic alliances to acquire that technology. The fourth is deciding the level of R&D spending. The fifth is selecting the combination (portfolio) of applied and basic research projects. Whereas basic R&D advances science, applied R&D leads to new products and technologies. The sixth, and final, dimension is the venture's use of patenting to protect any competitive advantages it might gain from its R&D activities.
This article reports the results of a study that explored the differences in the technology strategies and performance of corporate and independent ventures. The biotechnology industry was chosen to test the study's hypotheses, using 112 ventures.
Seven of the study's hypotheses focused on the potential variations in technology strategy between corporate and independent ventures. Independent ventures (IVs) were expected to surpass corporate ventures (CVs) in pioneering new products (technologies), using internal R&D, and emphasizing applied R&D. CVs were expected to surpass IVs in introducing new products, using external R&D sources, spending on R&D, and patenting. The study's remaining three hypotheses covered possible variations in new venture performance (NVP) and their sources.
The results showed that IVs focused more on pioneering, pursued a more applied R&D portfolio, and emphasized internal R&D more than CVs. CVs utilized external technology sources, spent more heavily on R&D, stressed basic R&D, and used patenting more intensively than IVs. These results were consistent with the hypotheses. However, contrary to expectations, there were no significant differences between CVs and IVs in the frequency of new product introductions, probably because most ventures were at the invention, rather than the commercialization, stage.
The results on the NVP of CVs and IVs were counter to expectations. IVs outperformed CVs, probably because of the high motivation of the IV owners who reaped the rewards of growth and profitability. Also, whereas CVs may have greater access to the resources of their sponsors, political conflicts and rigid corporate controls might have reduced their ability to achieve competitive advantages.
The results also indicated that CVs and IVs appeared to gain competitive advantages from different technological choices. Pioneering, a focus on applied R&D, and extensive use of the internal R&D sources were also positively associated with the performance of IVs. Heavy R&D spending, the use of both internal and external R&D sources, frequent product introductions, and patenting were positively associated with the performance of CVs. Finding that technology strategies significantly impacted NVP should encourage executives to consider pursuing a formal technology strategy. Likewise, the finding that different dimensions of technology strategy influenced the performance of CVs and IVs in different ways has practical implications. CV managers can learn from their higher performing IV rivals. Also, because established companies frequently acquire IVs, information about their technology strategies can be valuable in assimilating the acquired ventures. Overall, the results show that technology strategy is an important factor in enhancing new venture performance.
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The objective of this work was to quantify the contribution of fortification (defined here as adding nutrients beyond traditional enrichment standards) to dietary nutrient intakes in the United ...States. A list of fortified foods was developed that was relevant at the time of the analyses, and prefortification (naturally occurring) nutrients in the fortified foods were determined from industry-supplied data. Using dietary data from the 1989–1991 Continuing Survey of Food Intakes by Individuals (CSFII), intakes of nine nutrients were determined both as reported in the CSFII (i.e., postfortification) and also by using prefortification nutrient levels for the identified fortified foods. We report data for the total population age ≥ 1 y based on respondents (n = 11,710) with 3 d of dietary data, as well as select age/gender subgroups. All data were weighted. Fortification substantially increased the intakes of all nutrients examined except calcium, in all age/gender groups but especially in children. In numerous cases, fortification was responsible for boosting median or 25th percentile intakes from below to above the RDA. The breakfast cereal category was responsible for nearly all the intake of nutrients from fortified foods, except vitamin C for which juice-type beverages made as great or a greater contribution. These data from 1989 to 1991 serve as a useful baseline with which to compare contributions of fortification as the practice expands. The large contribution of fortification even in 1989–1991 suggests that continued monitoring of fortification practices, using methods such as those presented here, is important. J. Nutr. 131: 2177–2183, 2001.
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The efficiency of bank branches Berger, Allen N.; Leusner, John H.; Mingo, John J.
Journal of monetary economics,
09/1997, Volume:
40, Issue:
1
Journal Article
Peer reviewed
Open access
An understanding of bank branch efficiency may help resolve a number of conceptual, measurement, and policy questions about efficiency at the bank level. We measure the efficiency of over 760 ...branches of a large U.S. commercial bank. We find that there are about twice as many branches as would minimize costs, but this may be optimal from a profitability standpoint because ‘overbranching’ raises revenues from providing extra customer convenience. X-inefficiencies are quite large, over 20% of operating costs. These findings may help explain some efficiency results commonly found in bank-level analysis, and have important implications regarding bank M&As and interstate branching.
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The menu-cost interpretation of sticky prices implies that the probability of a price change should depend on the past history of prices and fundamentals only through the gap between the current ...price and the frictionless price. We find that this prediction is broadly consistent with the behavior of nine Philadelphia gasoline wholesalers. Nevertheless, we reject the menu-cost model as a literal description of these firms' behavior, arguing instead that price stickiness arises from strategic considerations of how customers and competitors will react to price changes.
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Most high-frequency asset returns exhibit seasonal volatility patterns. This article proposes a new class of models featuring periodicity in conditional heteroscedasticity explicitly designed to ...capture the repetitive seasonal time variation in the second-order moments. This new class of periodic autoregressive conditional heteroscedasticity, or P-ARCH, models is directly related to the class of periodic autoregressive moving average (ARMA) models for the mean. The implicit relation between periodic generalized ARCH (P-GARCH) structures and time-invariant seasonal weak GARCH processes documents how neglected autoregressive conditional heteroscedastic periodicity may give rise to a loss in forecast efficiency. The importance and magnitude of this informational loss are quantified for a variety of loss functions through the use of Monte Carlo simulation methods. Two empirical examples with daily bilateral Deutschemark/British pound and intraday Deutschemark/U.S. dollar spot exchange rates highlight the practical relevance of the new P-GARCH class of models. Extensions to discrete-time periodic representations of stochastic volatility models subject to time deformation are briefly discussed.
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Farmers' management practices can have a significant effect on agricultural pollution. Past research has analyzed factors influencing adoption of a single management practice. But often adoption ...decisions about many practices are made simultaneously, which suggests use of a polychotomous-choice model to analyze decisions. Such a model is applied to the choice of alternative management practices on cropland in the Central Nebraska Basin and controlled for self-selection and the interaction between alternative practices. The results of the choice model are used to estimate the economic and environmental effects of adopting alternative combinations of management practices.
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We compare execution costs (market impact plus commission) on the New York Stock Exchange (NYSE) and Nasdaq for institutional investors. The differences in cost generally conform to each market's ...area of specialization. Controlling for firm size, trade size, and the money management firm's identity, costs are lower on Nasdaq for trades in comparatively smaller firms, while costs for trading the larger stocks are lower on NYSE. The cost differences estimated from a regression model are, however, sensitive to the choice of time period.
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A hedonic price function for wine is estimated using Swedish data, 1989–1991. Implicit prices for quality attributes are determined
not from a regression of variety price on a vector of quality ...attributes, but rather from a regression of quantity sold (adjusted for weeks of availability) on price and quality attributes. Such a ‘reduced form’ is justified by the assumption that prices and attribute contents can be taken as exogenous to the Swedish consumer. Price elasticity is estimated to be about — 1.65 holding quality constant, showing that Swedish consumers are highly sensitive to price. Estimates of the implicit valuations of quality attributes are shown to differ greatly from those obtained from the more usual hedonic regression with price as the dependent variable.
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