Showing papers by "HEC Paris published in 2000"
Posted Content•
TL;DR: In this article, the authors build a framework of the multiple consumer benefits of a sales promotion and find that monetary and non-monetary promotions provide consumers with different levels of hedonic benefits (opportunities for value expression, entertainment, and exploration) and three utilitarian benefits (savings, higher product quality, and improved shopping convenience).
Abstract: Are monetary savings the only explanation for consumer response to a sales promotion? If not, how do the different consumer benefits of a sales promotion influence its effectiveness? To address the first question, this research builds a framework of the multiple consumer benefits of a sales promotion. Through a series of measurement studies, the authors find that monetary and nonmonetary promotions provide consumers with different levels of three hedonic benefits (opportunities for value expression, entertainment, and exploration) and three utilitarian benefits (savings, higher product quality, and improved shopping convenience). To address the second question, the authors develop a benefit congruency framework, which argues that a sales promotion’s effectiveness is determined by the utilitarian or hedonic nature of the benefits it delivers and the congruence these benefits have with the promoted product. Among other results, two choice experiments show that, as predicted for high-equity brands, monetary promotions are more effective for utilitarian products than for hedonic products. The authors then discuss the implications of the multibenefit and the benefit congruency frameworks for understanding consumer responses to sales promotions, reexamining the value of everyday-low-price policies, and designing more effective sales promotions.
1,215 citations
TL;DR: In this article, the authors investigate the outcomes and durations of strategic alliances among competing firms, using alliance outcomes as indicators of learning by partner firms, and show that alliance outcomes vary systematically across link and scale alliances.
Abstract: This paper investigates the outcomes and durations of strategic alliances among competing firms, using alliance outcomes as indicators of learning by partner firms. We show that alliance outcomes vary systematically across link and scale alliances. Link alliances are interfirm partnerships to which partners contribute different capabilities, while scale alliances are partnerships to which partners contribute similar capabilities. We find that partners are more likely to reorganize or take over link alliances than scale alliances. By contrast, scale alliances are more likely to continue without material changes. The two types of alliances are equally likely to shut down, at similar ages. These results support the view that link alliances lead to greater levels of learning and capability acquisition between the partners than do scale alliances. Copyright © 2000 John Wiley & Sons, Ltd.
918 citations
TL;DR: In this paper, the authors examine valuation effects of announcements of seasoned equity issuance and assess the impact of the choice of flotation method in the U.K. They conclude that the option to conduct placings enhances the ability of firms to signal their quality and to use a seasoned equity offering to reduce ownership concentration.
244 citations
Posted Content•
TL;DR: The authors used the results of "extreme value theory" to model the multivariate distribution of large returns, using monthly data from January 1959 to December 1996 for the five largest stock markets, and found that the correlation of large positive returns are not inconsistent with the assumption of multivariate normality.
Abstract: Correlation in international equity returns is unstable over time. It has been suggested that the international correlation of large stock returns, especially negative ones, differs from that of usual returns. It is in periods of extreme negative returns that the benefits of international risk diversification are most desired and that the question of international correlation is most relevant to risk-averse agents. If retrun distributions are not multivariate normal, the usual standard deviation and correlation of returns do not provid sufficient information. Additional information can be gained by focusing directly on the properties of extreme returns. While the interest in stock market crashes and booms is large, no study has specifically focused on the correlation between large price movements. A major econometric issue is to specify the multivariate distribution of extreme returns implied by a given distribution of returns. In this paper, we work directly on large returns and study the dependence structure of international equity markets during extremely volatile periods. We use the results of "extreme value theory" to model the multivariate distribution of large returns, using monthly data from January 1959 to December 1996 for the five largest stock markets. We find that the correlation of large positive returns are not inconsistent with the assumption of multivariate normality. However, the correlation of large negative returns is much greater than expected, suggesting that the benefits of international risk reduction in extremely volatile periods have been overstated.
189 citations
TL;DR: In this article, the authors introduce the concept of cross-sectional dispersion of stock market returns as an alternative to the time-series approach to estimating the global correlation level of equity markets.
Abstract: We introduce the concept of cross-sectional dispersion of stock market returns as an alternative to the time-series approach to estimating the global correlation level of equity markets. Our objective is to derive a simple, instantaneous measure of the general level of global market correlation. Our cross-sectional method of estimating global correlation is dynamic and, using cross-sectional data, gives instantaneous information on the trend of global correlation. The traditional time-series method requires a long period of observations, and overlapping data have to be used to study the change in correlation. Both methods yield similar estimates for a “long” period, however, so a combination of the cross-sectional and time-series approaches should be of practical use to global asset managers.
186 citations
TL;DR: In this paper, a time-varying parameter model was developed to test whether market efficiency has improved in transition economies, and applied to Hungarian and Russian stock markets over the period April 1994 through June 1999.
121 citations
Posted Content•
TL;DR: This article developed a model of price formation in a dealership market where monitoring of the information flow requires costly effort and the result is imperfect monitoring, which creates profit opportunities for speculators who pick off "stale quotes".
Abstract: We develop a model of price formation in a dealership market where monitoring of the information flow requires costly effort The result is imperfect monitoring, which creates profit opportunities for speculators who pick off "stale quotes" Externalities associated with monitoring give rise to multiple equilibria in which dealers earn strictly positive expected profits We obtain various policy implications A switch to automatic execution can improve or worsen spreads and price discovery depending on the specific equilibrium A reduction in the minimum quoted depth tightens the spread but it reduces price efficiency Our analysis is relevant for the SOES controversy given that speculators in our model behave as the real world SOES "bandits" Our model predicts that SOES bandits should trade in stocks with small spreads and that SOES bandit activity should widen the spread We provide empirical evidence consistent with these predictions
105 citations
TL;DR: In this article, the authors compare the quality and information content of risk neutral densities obtained by various methods, including a mixture of log-normal densities, semi-parametric ones based on an Hermite approximation, and Heston's approach assuming a stochastic volatility model.
91 citations
TL;DR: In this article, the authors examine how firms manage their proprietary research and development programs and how they succeed in establishing a co-operative relationship with their environment, using forty interviews conducted in both the US and Europe.
63 citations
TL;DR: Li et al. as mentioned in this paper provide an overview of accounting reform in China since 1993, illustrates the structure of the current (juridicial-based) accounting system and lists the accounting standards being developed.
Abstract: Provides an overview of accounting reform in China since 1993, illustrates the structure of the current (juridicial‐based) accounting system and lists the accounting standards being developed. Contrasts historical Chinese accounting methods with current attempts at international harmonization and identifies some remaining peculiarities, e.g. the dominance of the state, limited application of the prudence principle etc. Criticizes the lack of coherance in accounting regulation and the failure of accounting practice to comply with accounting standards and auditing requirements.
24 citations
TL;DR: In this paper, the existence and regularity of rational expectations equilibria for any informational structure derived from prices were proved for an incomplete financial market exchange economy with nominal assets and a finite number of traders, goods, states and signals.
TL;DR: In this article, the authors compare rational expectations equilibria with different degrees of information revelation through prices, and show that there are always equilibras where information is redundant in the sense of being of no value to the uninformed traders.
Posted Content•
TL;DR: Conditions under which for a generic set of economies, parametrized by endowments and utilities, there exist open sets of equilibria for which allocative and informational efficiency are independent, with implications for monetary policy are given.
Abstract: We compare rational expectations equilibria with different degrees of information revelation through prices. These equilibria arise in a two-period exchange economy with finitely many states and signals, multiple commodities and incomplete financial markets for nominal assets. We show that there are always equilibria where information is redundant in the sense of being of no value to the uninformed traders. We give conditions under which for a generic set of economies, parametrized by endowments and utilities, there exist open sets of equilibria for which allocative and informational efficiency are independent, with implications for monetary policy.
TL;DR: This example of an interface for Human Intelligence Management shows how useful it is for computer scientists to take account of the characteristics of human intel ligence when they design their software.
Abstract: The Management Cockpit is a management assistance programme. It is an interface between managers and their software. This interface has the physical form of a com puterised meeting room. The Management Cockpit has evolved from the latest research programmes into Human Intelligence Management. It has been designed to amplify the intellectual productivity of the people that work with it. This example of an interface for Human Intelligence Management shows how useful it is for computer scientists to take account of the characteristics of human intel ligence when they design their software. The Management Cockpit runs with the SAP Strategic Enterprise Management software.
TL;DR: In this article, the authors attempt to construct a classification (or division) of intangibles, consisting of a diversity of approaches that deal with this concept, including eleven papers which have been divided into three sections based on their approach and what we can learn from them.
Abstract: This book is an attempt to construct a classification (or division) of intangibles, consisting of a diversity of approaches that deals with this concept. It includes eleven papers which have been divided into three sections based on their approach and what we can learn from them: (1) regulation of intangibles for financial reporting, (2) the state of the art in literature and business practice, and (3) different approaches in classifying intangibles.
Journal Article•
TL;DR: The Lean Production (production au plus juste) model as discussed by the authors is the most widely used PME model in the world, and it has been applied in many enterprises, e.g. in the manufacturing industry.
Abstract: La Lean Production (Production au Plus Juste) constitue le dernier en date des modeles d'organisation industrielle. On constate que malgre l'importance des concepts et des outils developpes elle n'est pas "entree dans les faits" dans les PME. En realite la question de fond que les chefs d'entreprise se posent est : "Tres bien toutes ces nouvelles notions, mais comment je les mets en application dans mon entreprise ? ". A cette question, l'ouvrage apporte une reponse a la fois pratique et operationnelle. C'est dans le cadre d'un programme europeen ADAPT, finance par le Fonds Social Europeen et mis en œuvre par CEFORALP, que la demarche "Lean Production" a ete appliquee dans 56 PME rhonalpines en 1997-1998, puis dans 10 autres en 1999. A l'issue de l'experimentation, 90 % des chefs d'entreprises declarent avoir obtenu des resultats concrets. L'ouvrage propose une methodologie, des approches innovantes et des reflexions sur la competitivite des PME et sur l'importance de la place de l'homme dans ces organisations. Les concepts, la demarche et leur experimentation ont donne naissance a l'entreprise Lean Production". La PME Lean Production est l'entreprise qui agit simultanement et en permanence sur les couts, delais, qualite, reactivite en s'appuyant sur les hommes qui la composent. Enfin cet ouvrage preconise l'action collective, structuree dans des logiques d'obligation de resultat et de perennisation, comme une alternative efficace pour permettre aux PMR d'acceder aux modeles et demarches de progres. Gerard Baglin est professeur au Groupe HEC (Jouy-en-Josas) dans le departement Management Industriel et Logistique. Il a participe a la diffusion des nouveaux concepts en gestion industrielle aupres des etudiants comme des professionnels par ses publications et conferences et par la creation d'outils pedagogiques. Il exerce une activite de consultant au sein du cabinet LMA, specialise dans la strategie industrielle et la mise en oeuvre de methodes et techniques avancees dans l'industrie. Mario Capraro est responsable a CEFORALP (Lyon) des programmes europeens de competitivite des PME. Il a dirige des PME independantes ainsi qu'une filiale d'un grand groupe et a ete charge de cours en informatique et organisation a l'universite Lyon 1. Specialiste en methodologie, il a assume la responsabilite de la conception et la realisation du programme Lean Production et des outils associes. Actuellement, il dirige le nouveau programme ADAPT de competitivite dedie aux PME de Service, la Lean Services et donne ponctuellement des conferences.
Posted Content•
TL;DR: In this article, the authors show that the real impact of a speculative bubble depends on the type of asset that is being speculated on, and that speculative bubbles on equity raise the market value of firms, thus encouraging entrepreneurship, firm creation, investment, and growth.
Abstract: This article challenges the conventional wisdom that speculation in financial markets reduces long-run growth. It shows that the real impact of a (rational deterministic) speculative bubble depends on the type of asset that is being speculated on. Speculative bubbles on equity raise the market value of firms, thus encouraging entrepreneurship, firm creation, investment, and growth. On the other hand, speculation on other types of assets is shown to be unambiguously growth-impairing. The model can explain some stylized facts about financial development and growth. Finally, regulatory implications are discussed briefly.
Dissertation•
01 Jan 2000TL;DR: In this paper, the authors analyse the effect of a rapprochement between two entreprises on the performance of the process of apprentissage in a configuration inter-organisationnelle.
Abstract: L'apprentissage organisationnel est souvent considere comme un facteur contribuant a la competitivite des entreprises : il leur permet de mieux s'adapter a leur environnement et aussi de se transformer et d'ameliorer leur fonctionnement interne. L'apprentissage est ainsi compris a la fois comme adaptation et comme processus de detection et de correction d'erreurs. Dans cette recherche, nous etudions l'apprentissage dans le cadre d'une configuration inter-organisationnelle. Plus precisement, nous l'abordons comme un partage de connaissances et de savoir-faire se produisant a l'occasion d'une fusion. Il s'agit donc de montrer comment une entreprise peut apprendre d'une autre a l'occasion d'un rapprochement organisationnel fort. Dans cette perspective, les entreprises engagees dans la fusion doivent en effet s'adapter l'une a l'autre et le rapprochement est compris comme un moyen de reperer et de corriger certains dysfonctionnements: les connaissances, les representations, les savoir-faire, les pratiques sont compares puis ameliores au sein de la nouvelle entite resultant de la fusion. Le processus d'integration est donc envisage ici comme une modalite d'apprentissage fondee sur la comparaison, l'interaction et la collaboration. Dans notre analyse en profondeur d'une fusion, nous avons repere differents processus d'apprentissage et nous avons ete conduits, en nous appuyant a la fois sur la litterature et sur l'etude empirique, a etudier les modifications cognitives et comportementales entrainees par le rapprochement. Parallelement, nous avons mis en relation processus et objets d'apprentissage, ces derniers etant analyses en fonction de leurs caracteristiques et plus particulierement de leur degre de "tacite". Cela nous a permis de construire un cadre d'analyse de l'apprentissage combinant changement cognitif et changement comportemental. Nous y avons integre les objets d'apprentissage et nous avons precise comment ces objets se transformaient dans le processus d'interaction entre les entreprises. Nous identifions ainsi un apprentissage informationnel, un apprentissage du "pourquoi" et un apprentissage du "comment". Notre etude nous a aussi permis de reperer les agents et les lieux d'apprentissage. Cela nous a conduits a aborder les liens entre apprentissages individuel, collectif et organisationnel et aussi de recenser quelques obstacles aux processus d'apprentissage. La fusion entre les deux entreprises etudiees nous a enfin permis d'aborder la dimension strategique de l'apprentissage organisationnel et d'analyser les liens entre le strategique et l'organisationnel. Le rapprochement a en effet ete une source de mutation organisationnelle qui a pris la forme d'une addition, d'une combinaison ou d'une construction de competences permettant de modifier le profil de l'entite et d'ameliorer sa competitivite.
Posted Content•
TL;DR: In this paper, the authors present a guide for foreign managers who want to work in Kazakhstan on major aspects of the country's business culture climate, including how to deal with people.
Abstract: The purpose of this paper is to serve as a guide for foreign managers who want to work in Kazakhstan on major aspects of the country's business culture climate Why should one be interested in business culture of Kazakhstan? What is Kazakhstan? Why should one study it? As one of the largest countries in the world in terms of land area with vast natural resources, Kazakhstan recently became open to the world after the break-up of the Soviet Union Favorable geographic position (it is located on two continents, Europe and Asia) makes Kazakhstan an important Eurasian geopolitical crossroad, a bridge between West and East The world of business is becoming global To succeed in this highly competitive environment, one should constantly look for new markets, new relationships and partners, new sources, etc Working in emerging markets is a risky process In order to minimize risks, companies should be kept informed of all changes occurring in the country, but firstly they should be aware of how to deal with people: it is the Human Resource Management aspect that is often underestimated
Journal Article•
TL;DR: The PME Lean Services (PME-LS) as mentioned in this paper is a PME-based approach to service development in the context of the Europarl project, which aims to improve the performance of the PME of service.
Abstract: Les PME de service sont-elles aujourd'hui equipees pour faire face aux changements incessants provenant de leur environnement ? Sous la pression d'une concurrence nationale et internationale accrue sont-elles capables de se differencier ? L'activite des services represente 70% de la valeur ajoutee nationale et les deux tiers des emplois. Au niveau europeen, une recente communication de la commission souligne : - la valeur ajoutee apportee par ce secteur a l'economie represente 72% de celle apportee par l'industrie (aux Etats-Unis elle represente 106%) ; - les services aux entreprises sont un moteur d'amelioration de la competitivite et de l'innovation dans l'industrie ; - les services aux entreprises sont un secteur de l'economie ou competitivite elevee va de pair avec une croissance importante de l'emploi et cette tendance se maintiendra. Malgre l'importance de ses chiffres, on constate pourtant l'absence de d'un environnement affirme permettant l'apprehension, la comprehension et le developpement du secteur des services. Si l'industrie s'est dotee de modeles d'organisation industrielle (le taylorisme et dernierement la Lean Production ou Production au Plus Juste), les entreprises de service n'ont pas autant de demarches et d'outils structures d'amelioration de leur competitivite. Cette situation est d'autant plus critique que de nouvelles donnes emergent et contribuent a l'evolution de la notion de service dans laquelle l'obligation de resultat s'affirme face a l'obligation de moyens. Les PME de service se doivent donc aujourd'hui d'etre plus " agiles et structurees " et adopter des organisations, souples et reactives, leur permettant de mettre en oeuvre des changements continus tout en gardant leur competitivite. C'est dans le cadre d'un programme europeen ADAPT, finance par le Fonds Social Europeen, la DRTEFP, la DRIRE, les entreprises et mis en oeuvre par CEFORALP, que la demarche "Lean Services" a ete appliquee dans 51 PME Rhonalpines (et 10 a Berlin) en 1999. A l'issue de l'experience, 88 % des chefs d'entreprises declarent avoir obtenu des resultats concrets. L'ouvrage propose des idees forces, une methodologie, des approches innovantes et des reflexions sur la competitivite des PME de service et l'importance de la place de l'homme dans ces organisations. La PME Lean Services est l'organisation souple et agile qui AGIT simultanement et en permanence sur les prix, les delais, la reactivite, l'accessibilite, l'adaptation aux besoins et la performance technique en s'appuyant sur les hommes qui la composent. Enfin cet ouvrage propose l'action collective structuree dans des logiques d'obligation de resultat et de perennisation, comme alternative efficace pour permettre aux PME de Service d'acceder aux modeles et demarches de progres. Gerard BAGLIN est professeur au Groupe HEC (Joy-en-Josas) dans le departement Management Industriel et Logistique. Il a participe a la diffusion de nouveaux concepts en gestion des operations aupres des etudiants comme des professionnels par ses publications et conferences et par la creation d'outils pedagogiques. Il exerce une activite de consultant au sein du cabinet LMA, specialise dans la strategie industrielle et la mise en oeuvre de methodes et techniques avancees en gestion. Mario CAPRARO est responsable a CEFORALP (Lyon) des programmes europeens de competitivite des PME.Apres un passage dans le conseil, il a dirige des PME de service independantes ainsi qu'une filiale d'un grand groupe et cree sa propre entreprise de Services.Il a ete charge de cours en informatique et organisation a l'universite Lyon 1. Specialiste en methodologie, il a assume la responsabilite de la conception et la realisation du programme LEAN SERVICES et des outils associes.
TL;DR: In this paper, the authors report the results of a survey of the content and learning materials used in courses in financial statement analysis in Europe and the United States, finding that courses in Europe have similar characteristics with respect to course content (heavy emphasis on basic tools of analysis).
Abstract: The paper reports the results of a survey of the content and learning materials used in courses in financial statement analysis in Europe and the United States. Courses in Europe and undergraduate courses in the US exhibit similar characteristics with respect to course content (heavy emphasis on basic tools of analysis). Graduate courses in the US place heavier emphasis on coverage of generally accepted accounting principles and on applications of basic analytical tools. Differences in course content appear related to where the financial statement analysis course lodges within the accounting curriculum.
Posted Content•
TL;DR: In this article, the authors compare different modes of extending liability to third parties motivated by the problem that firms may exert too little preventive care if damages are likely to exceed their equity, and show that the optimal allocation can always be implemented by a liability regime of full "financial responsibility", that is mandatory liability coverage for total harm that can be fulfilled either by, an insurer or by a lender.
Abstract: We compare different modes of extending liability to third parties motivated by the problem that firms may exert too little preventive care if damages are likely to exceed their equity. In our model, moral hazard about the choice of care that can be mitigated through stochastic monitoring, we show that the optimal allocation can always be implemented by a liability regime of full "financial responsibility," that is mandatory liability coverage for total harm that can be fulfilled either by, an insurer or by a lender. All other liability regimes are shown to lead to distortions in the capital and debt structure. The difference between our results and related models finding liability below the level of harm to be optimal is explained by our treatment of safety monitoring and of optimal monitoring-dependent insurance contracts. The mechanism is robust vis-a-vis the introduction of risk aversion, provided that optimal wealth transfer are taken into account.
01 Jan 2000
TL;DR: In this paper, the authors study competitive equilibria with moral hazard in economies with aggregate risk and where trading occurs with an incomplete set of financial assets, and show that moral hazard is compatible with trading in competitive linear contracts, and gives rise to no manipulation problem.
Abstract: We study competitive equilibria with moral hazard in economies with aggregate risk and where trading occurs with an incomplete set of ...nancial assets. The main conclusion of the paper is that, contrary to the individual risk economies, moral hazard is compatible with trading in competitive linear ...nancial contracts, and gives rise to no manipulation problem. We establish existence of nonmanipulable equilibria provided that there are no relative price e¤ects (e.g. a one-commodity economy), and that ...nancial markets display nonlinearly homogeneous payo¤s (e.g., nominal), and are su¢ciently incomplete. Finally, we justify the linear contract as the optimal pricing schedule in a speci...c trading game with an auctioneer. Journal of Economic Literature Classi...cation Numbers: D50, D82.
TL;DR: In this article, the authors take ethical theory as the starting point for their discussion of the philosophic concepts applicable to the company and attempt to show how stoic thought can enhance our understanding of controllability.
Abstract: Ethics – both within philosophy and in the new disciplines of “applied ethics” and “business ethics” – is a vogue subject these days and, as such, calls for a few cautionary words. The resurgence of ethics has engendered two main schools of criticism: one which sees it as a passing fad, a simple and superficial expression of a deeper crisis, a consequence of the decline in ideology, grand systems and “philosophic and religious thought”, or as a corollary of the uncertainty and failure of politics. The more corrupt the times, the stronger the concern for morality. The other which sees the use and worship of ethical imperatives as yet another ploy by companies to enhance their image and cow their workforce into submission. There is, however, a third more rewarding and constructive approach which, while it heeds the not altogether unfounded warnings of the other two, expresses a genuine interest in ethics – an interest stimulated paradoxically by a number of well‐publicised scandals. Our paper seeks to understand and acknowledge the need for ethics in the world of business. We take ethical theory as the starting point for our discussion of the philosophic concepts applicable to the company and attempt to show how stoic thought can enhance our understanding of controllability.