The author systematically examines one of the important issues of information — establishing the market price. He introduces the concept of «search» — where a buyer wanting to get a better price, is forced to question sellers. The article deals with various aspects of finding the necessary information.

Economics of Information

The resource-based approach is an emerging framework that has stimulated discussion between scholars from three research perspectives. First, the resource-based theory incorporates traditional strategy insights concerning a firm's distinctive competencies and heterogeneous capabilities. The resource-based approach also provides value-added theoretical propositions that are testable within the diversification strategy literature. Second, the resource-based view fits comfortably within the organizational economics paradigm. Third, the resource-based view is complementary to industrial organization research. The resource-based view provides a framework for increasing dialogue between scholars from these important research areas within the conversation of strategic management. Resource-based studies that give simultaneous attention to each of these research programs are suggested.

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The resource-based view within the conversation of strategic management

This study partitions the total variance in rate of return among FTC Line of Business reporting units into industry factors (whatever their nature), time factors, factors associated with the corporate parent, and business-specific factors. Whereas Schmalensee (1985) reported that industry factors were the strongest, corporate and market share effects being extremely weak, this study distinguishes between stable and fluctuating effects and reaches markedly different conclusions. The data reveal negligible corporate effects, small stable industry effects, and very large stable business-unit effects. These results imply that the most important sources of economic rents are business-specific; industry membership is a much less important source and corporate parentage is quite unimportant.

https://www.jstor.org/stable/pdfplus/2486591.pdf

How much does industry matter

A new theory of competition is evolving in the strategy literature. The authors explicate the foundations of this new theory, the “comparative advantage theory of competition,” and contrast them wi...

https://www.jstor.org/stable/pdfplus/1252069.pdf

The Comparative Advantage Theory of Competition

Good corporate reputations are critical because of their potential for value creation, but also because their intangible character makes replication by competing firms considerably more difficult. Existing empirical research confirms that there is a positive relationship between reputation and financial performance. This paper complements these findings by showing that firms with relatively good reputations are better able to sustain superior profit outcomes over time. In particular, we undertake an analysis of the relationship between corporate reputation and the dynamics of financial performance using two complementary dynamic models. We also decompose overall reputation into a component that is predicted by previous financial performance, and that which is ‘left over’, and find that each (orthogonal) element supports the persistence of above-average profits over time. Copyright © 2002 John Wiley & Sons, Ltd.

https://www.jstor.org/stable/pdfplus/3094296.pdf

Corporate reputation and sustained superior financial performance

Since A. A. Berle and G. C. Means published The Modern Corporation and Private Property in I932 their thesis of the separation of corporate ownership from control has given rise to a large literature devoted to elaborating, refuting or testing it. Much theoretical and empirical work has been done on the effects of variation in the location or type of control on company behaviour and performance. Two features which emerge very strongly from this literature are, first, that theoretical categories of 'control type' used are frequently based on a simple dichotomy into 'owner-controlled' versus ' management-controlled' firms rather than a continuum and, second, the corresponding measure of 'control type' is usually a zero-one dummy variable defined on the basis of some arbitrary statistical criterion in terms of the size of a controlling shareholding. Such criteria are usually applied rigidly to all firms with no allowance for differences in shareholding dispersion. This is illustrated by Table i which lists the result of a survey (meant to be representative rather than exhaustive) of methods of classification used in twenty empirical studies. In all these studies the location of control is either the main focus of the analysis or else an explanatory variable in multiple regression analyses (typically with company growth and/or profitability as the dependent variable). Eighteen of them use shareholdings as the main criterion, of which seventeen use the size of the largest bloc (including family holdings) as the relevant variable. This bloc ranges in size from 25 % down to 4 % with io o% and 5 % respectively as the most popular criteria. Berle and Means (I 932), Kamerschen (I968) and Larner (I970) take some account of dispersion in a subjective way; by using their own judgements. Kania and McKean's (I976) variation of their criterion according to the size ranking of the corporation may be interpreted as a rough-and-ready method of allowing for dispersion, making use of the fact that it tends to increase with firm size. The majority of the studies in Table i take no account of the dispersion of the remaining shareholdings, even though some of them go to some lengths to consider other criteria besides shareholding size. Whilst it has always been recognised that the dispersion of the smaller shareholdings has been relevant to control, a major obstacle has been the lack of a suitable way of summarising it. In general there are two approaches to summarising shareholder-size dis-

https://www.jstor.org/stable/pdfplus/2232797.pdf

The Effect of Shareholding Dispersion on the Degree of Control in British Companies: Theory and Measurement

Introduction. Motivation: Why DEA? Overview and Plan of the Book. An Introduction to Frontier Efficiency Concepts and Data Envelopment Analysis. Introduction. The Need for Weights in the Public Sector. The Nature of a Frontier Efficiency Comparison. The Measurement of Efficiency in Data Envelopment Analysis. Returns to Scale. Total Factor Productivity Measurement in English Local Education Authorities: A Non-Parametric Approach. Introduction. Measurement in the Public Sector. The Efficiency of Educational Production in English Local Education Authorities. A Preliminary Evaluation of the Peer Group. Appraisal. Appendix 3.1: Local Education Authority Data Set. Total Factor Productivity Measurement in Local Prisons and Remand Centres: A Further Application of Data Envelopment Analysis. Introduction. Analytical Background to Relative Efficiency Measurement. Empirical Investigation of Prison Efficiency. Inert Production: A New Interpretation with DEA. Conclusion. Appendix 4.1: Local Prisons and Remand Centres Data Set. Programme-Efficiency Implications of Data Envelopment Analysis. Introduction. The Cost Efficiency of a Multi-Branch Public Spending Programme: The Case of Local Prisons and Remand Centres. Evaluation of the Impact of a New Reference Technology on Branch and Programme Efficiency. Excess Costs and the Nesting of Empirical DEA Technologies. Additional Sources of Variation in Excess Costs: The Identification of Scale Inefficiences. Sensitivity of the Returns to Scale Measure. Conclusion. The Interpretation of Efficiency in Data Envelopment Analysis. Introduction. The Definition of Best-Practice. The Definition of Pareto Efficiency and the DEA Efficiency Score. A New Utility Basis for DEA Efficiency. The DEA Target as a Pareto Improvement. Some Remaining Difficulties with the DEA Target. Conclusion. Aspects of the Discriminating Power of Data Envelopment Analysis. Introduction. The Need for Clustering of LEA Performance. Results on LEA Efficiency after Clustering. Aspects of the Discriminating Power of DEA. Conclusion. A Conclusion and Appraisal. The Public Sector and DEA. Overview of the Empirical Results. Directions for Future Research. References. List of Tables. List of Figures.

Public Sector Efficiency Measurement: Applications of Data Envelopment Analysis

This paper considers the extent to which the short-run dynamic behavior and long-run equilibrium levels of profitability differ among firms within the same industry. Movements in profits are modeled in terms of firm specific deviations from average industry profits, and industry specific deviations from economy-wide average returns. Applied to a sample of 217 large U.K. firms, 1951-77, the results suggest that considerable heterogeneities exist within most industries. That is, most firms' profitability experience differs considerably from those of their closest rivals. Copyright 1987 by Blackwell Publishing Ltd.

The Convergence of Profits in the Long Run: Inter-Firm and Inter-Industry Comparisons

This article assesses whether a regulatory law and higher quality regulatory governance are associated with superior outcomes in the electricity industry. The analysis, for 28 developing economies over 1980–2001, draws on theoretical and empirical work on the impact of telecommunications regulators in developing economies. Controlling for privatization and competition and allowing for country-specific fixed effects, both regulatory law and higher quality regulatory governance are positively and significantly associated with higher per capita generation capacity. This positive impact increases for more than 10 years, as experience develops and regulatory reputation grows. The results are robust to estimating alternative dynamic specifications (including error correction models), to inclusion of economy governance political risk indicators, and to controlling for possible endogeneity biases. The article concludes with a short discussion of causality in panel data modeling of governance models and the policy...

The Impact of Regulatory Governance and Privatization on Electricity Industry Generation Capacity in Developing Economies

The authors review a number of studies on the effectiveness of utility regulatory agency and governance arrangements for the electricity industry, particularly for developing countries. They discuss governance criteria and their measurement, both legal frameworks and surveys of regulatory practice. They also discuss the results from econometric studies of effectiveness for regulatory agencies in the electricity and telecommunications industries and compare these with the results from econometric studies of independent central banks and their governance. The authors conclude with a discussion of policy implications and of priorities for information collection to improve understanding of these issues.

/pdf/regulatory-effectiveness-the-impact-of-regulation-and-2guxx6ydyv.pdf

John Cubbin

Papers

The Effect of Shareholding Dispersion on the Degree of Control in British Companies: Theory and Measurement

Public Sector Efficiency Measurement: Applications of Data Envelopment Analysis

The Convergence of Profits in the Long Run: Inter-Firm and Inter-Industry Comparisons

The Impact of Regulatory Governance and Privatization on Electricity Industry Generation Capacity in Developing Economies

Regulatory Effectiveness : The Impact of Regulation and Regulatory Governance Arrangements on Electricity Industry Outcomes