Corporate strategic responses to foreign entry: insights from prospect theory

Purpose – The purpose of this paper is to address how firms adapt their product and geographic diversification as a response to foreign rivals penetrating their domestic market by adopting a behavioral perspective to understand firm-level strategic responses to foreign entry. Design/methodology/approach – The study proposes that strategic responses to foreign entry selected by domestic incumbents have both a framing component and a related, strategic choice component, with the latter including changes in product and geographic market diversification (though other more business strategy-related responses are also possible, e.g. in product pricing and marketing). This study tests a set of hypotheses building on panel data of large US firms. Findings – The study finds, in accordance with our predictions, that domestic incumbents reduce their product and geographic diversification when facing an increase in import penetration. However, when increased market penetration by foreign firms takes the form of FDI rather than imports, the corporate response appears to be an increase in product and geographic diversification, again in line with our predictions. Originality/value – The study develops a new conceptual framework that is grounded in prospect theory, but builds on recent insights from mainstream international strategic management studies (Bowen and Wiersema, 2005; Wiersema and Bowen, 2008).

Prospect theory, diversificação ingênua e propensão a risco de especialistas em mercado: evidência empírica no Brasil

The Prospect Theory is one of the basis of Behavioral Finance and models the investor behavior in a different way than von Neumann and Morgenstern Utility Theory. Behavioral characteristics are evaluated for different control groups, validating the violation of Utility Theory Axioms. Naïve Diversification is also verified, utilizing the 1/n heuristic strategy for investment funds allocations. This strategy causes different fixed and equity allocations, compared to the desirable exposure, given the exposure of the subsample that answered a non constrained allocation question. When compared to non specialists, specialists in finance are less risk averse and allocate more of their wealth on equity.

Trading up: the prospect of greater regulatory convergence in North America

Incluye Bibliografía

Innovation and economic development: theoretical retrospect and prospect

Includes bibliography

The prospect for equity

Includes bibliography

Prospect, evaluation and characterization of aeolian energy

Spanish version available

Prospect on intergalactic magnetic field measurements with gamma-ray instruments

Observing high-energy gamma-rays from Active Galactic Nuclei (AGN) offers a unique potential to probe extremely tiny values of the intergalactic magnetic field (IGMF), a long standing question of astrophysics, astropa rticle physics and cosmology. Very high energy (VHE) photons from blazars propagating along the line of sight interact with the extragalactic background light (EBL) and produce e + e − pairs. Through inverse-Compton interaction, mainly on the cosmic microwave background (CMB), these pairs generate secondary GeV-TeV compo- nents accompanying the primary VHE signal. Such secondary components would be detected in the gamma-ray range as delayed “pair echos” for very weak IGMF ( B< 10 − 16 G ), while they should result in a spatially extended ga mma-ray emission around the source for higher IGMF values ( B> 10 − 16 G ). Coordinated observations with space (i.e. Fermi) and ground- based gamma-ray instruments, such as the pre sent Cherenkov experiments H.E.S.S., MAGIC and VERITAS, the future Cherenkov Telescope Array (CTA) Observatory, and the wide-field detectors such as HAWC and LHAASO, should allow to analyze and finally detect such echos, extended emission or pair halos, and to further characterize the IGMF.

A fuzzy risk attitude classification based on prospect theory

Traditional methods do not actually measure peoples’ risk attitude naturally and precisely. Therefore, a fuzzy risk attitude classification method is developed. Since the prospect theory is usually considered as an effective model of decision making, the personalized parameters in prospect theory are firstly fuzzified to distinguish people with different risk attitudes, and then a fuzzy classification database schema is applied to calculate the exact value of risk value attitude and risk be- havior attitude. Finally, by applying a two-hierarchical clas- sification model, the precise value of synthetical risk attitude can be acquired.

The Yanque prospect (Peru): from polymetallic Zn-Pb mineralization to a nonsulfide deposit

The Yanque nonsulfide Pb-Zn deposit (inferred resources 12.5 Mt @ 3.7% Pb and @ 3.5% Zn) is located in the Andahuaylas-Yauri ore province (Cuzco, southern Peru). The deposit occurs within a base metal mineralized district, centered on the medium-sized Dolores porphyry copper. A thorough geological, mineralogical and geochemical study has carried out in order to define: the relationships between the Dolores Cu-porphyry ore and the Yanque Zn-Pb polymetallic mineralization, and the characteristics of the economic nonsulfide concentrations. Both sedimentary and igneous rocks constitute the backbone of the Yanque-Dolores area. The sedimentary lithologies belong to the Soraya, Mara and Ferrobamba Fms. (upper Jurassic-middle Cretaceous). The Yanque orebody is hosted by the Mara Fm., which prevailingly consists of a siliciclastic sedimentary breccia. The original sulfide mineralization consisted of galena, pyrite and sphalerite. The host rock has been affected by a strong hydrothermal alteration, characterized by prevailing sericite/illite, as in the typical porphyry-related phyllic-argillic alteration stage, and by minor kaolinite, dolomite and quartz. Minor element geochemistry, characterized by Sb, As, Mn, Ag and locally also by Cu, points to magmatic-hydrothermal related mineralizing fluids. The Pb isotopic compositions from Dolores and Yanque sulfides are similar, and are typical of the Tertiary magmatically-derived ores in this part of Peru. The hydrothermally altered rocks at Yanque have the same Pb isotopic compositions as the sulfides, thus confirming the hypothesis that the Yanque primary Zn-Pb mineralization may have been produced by hydrothermal circulation related to the emplacement of the Dolores Cu-porphyry, as it is the case of other porphyry Cu systems associated with polymetallic mineralization elsewhere. However, no simple genetic model for the mineralization involving just one fluid circulation episode is able to explain the data. The Yanque economic nonsulfide ore association consists of sauconite, hemimorphite, smithsonite and cerussite, which result from the weathering and alteration of the original sulfide mineralization. Zinc is allocated mainly in sauconite (Zn-smectite), rather than in carbonates: a factor strictly related to the prevailing siliciclastic character of the host rock. Distinctive features of the Yanque orebody are the comparable ore grades for both Pb and Zn (3.5% Zn and 3.7% Pb), and the inverse supergene chemical zoning. In fact, contrary to other supergene ores of this type, zinc prevails in the top zone of the Yanque deposit, whereas lead content increases with depth. Considering the different mobility of the two metals in solution, it may be assumed that most of the primary zinc that was the source for the Yanque nonsulfides was originally located far from the position occupied by the galena mineralization, whose remnants have been observed on site. Zinc sulfides may have been originally contained in the eroded rock volumes that surrounded the actual deposit: the zinc-rich solutions have possibly migrated through the siliciclastic Mara Fm. and precipitated the nonsulfide minerals by porosity filling and replacement processes. In this sense, the Yanque secondary Zn-Pb deposit could be considered as a special type of “Exotic” mineralization.