Electronic commerce investments, the resource-based view of the firm, and firm market value

Firms have embraced electronic commerce as a means of doing business, either because they see it as a way to improve efficiency, grow market share, expand into new markets, or because they view it as essential for survival. Recent research in the United States provides some evidence that the market does value investments in electronic commerce. Following research that suggests that, in certain circumstances, the market values noninnovative investments as well as innovative investments in new products, we partition electronic commerce investment project announcements into innovative and noninnovative to determine whether there are excess returns associated with these types of announcements. Apart from our overall results being consistent with the United States findings that the market values investments in electronic commerce projects, we also find that noninnovative investments are perceived as more valuable to the firm than innovative investments. On average, the market expects innovative investments to earn a return commensurate with their risk. We conclude that innovative electronic commerce projects are most likely seen by the capital market as easily replicable, and consequently have little, if any, competitive advantage period. On the other hand, we conclude from the noninnovative investment results that these types of investments are seen as being compatible with a firm's assets-in-place, in particular, its information technology capabilities, a view consistent with the resource-based view of the firm.

Asset Price Instability and Policy Responses: The Legacy of Liberalization

The problem of asset price bubbles, and more generally of instability in the financial system, has been a matter of concern since the 1980s but has only recently moved to the center of the macroeconomic policy debate. The main concern with bubbles arises when they burst, imposing losses on investors holding the bubble assets and potentially on the financial institutions that have extended credit to them. Asset price volatility is an inevitable consequence of financial market liberalization and, in extreme cases, generates asset price bubbles, the bursting of which can impose substantial economic and social costs. Policy responses within the existing liberalized financial system face daunting levels of uncertainty and risk. Given the pattern of increasing asset market volatility over recent decades and the policy issues highlighted in this paper, the future looks uncertain. Another significant cycle of asset price movements, especially in one of the major economies, could see a fundamental revision of thinking about the costs and benefits of liberalized financial systems.

Poverty and the economic effects of TB in rural China

OBJECTIVE: To investigate the economic effects of illness on individual tuberculosis (TB) cases in rural China and to use a case-control study to show a strong TB-poverty link. SETTING: In 2002-2004 we studied 160 new smear-positive pulmonary tuberculosis (PTB) cases and 320 age- and sex-matched controls living in neighbouring houses in four rural counties of Henan Province. DESIGN: Cases and controls were interviewed 1-3 months after patients were diagnosed. We used matched multivariate logistic regression to compare cases with controls for poverty status using household income, household assets and relative wealth within the village. We conducted follow-up interviews of patients 10-12 months later to assess economic effects by collecting data on treatment costs, income losses, coping strategies and treatment completion. RESULTS: Poverty is strongly associated with TB incidence even after controlling for smoking and other risk factors. Excluding income losses, direct out-of-pocket treatment costs (medical and non-medical) accounted for 55.5 % of average annual household income, and most TB cases fell into heavy debt. The DOTS cure rate was 91 %. When DOTS was incomplete or not done, mortality was high. CONCLUSIONS: Poverty is both a cause and a devastating outcome of TB. Ongoing poverty reduction schemes in China must also include reducing TB.

Community broadcasting and the enclosure of the public sphere

One of the normative tenets of the Habermasian public sphere is that it should be an open and universally accessible forum. In Australia, one way of achieving this is the provision for community broadcasting in the Broadcasting Services Act. A closer examination of community broadcasting, however, suggests practices that contradict the idea of an open and accessible public sphere. Community broadcasting organizations regulate access to their media assets through a combination of formal and informal structures. This suggests that the public sphere can be understood as a resource, and that community broadcasting organizations can be analysed as ‘commons regimes’. This approach reveals a fundamental paradox inherent in the public sphere: access, participation and the quality of discourse in the public sphere are connected to its enclosure, which limits membership and participation through a system of rules and norms that govern the conduct of a group. By accepting the view that a public sphere is governed by property rights, it follows that an open and universally accessible public sphere is neither possible nor desirable.

The future of manufacturing

Anyone who looks at the title of this special issue will agree that the intent behind the preparation of this volume was ambitious: to predict and discuss “The Future of Manufacturing”. Will manufacturing be important in the future? Even though some sceptics might say not, and put on the table some old familiar arguments, we would strongly disagree. To bring subsidies for the argument we issued the call-for-papers for this special issue of Journal of Manufacturing Technology Management, fully aware of the size of the challenge in our hands. But we strongly believed that the enterprise would be worthwhile. The point of departure is the ongoing debate concerning the meaning and content of manufacturing. The easily visualised internal activity of using tangible resources to make physical products in factories is no longer a viable way to characterise manufacturing. It is now a more loosely defined concept concerning the organisation and management of open, interdependent, systems for delivering goods and services, tangible and intangible, to diverse types of markets. Interestingly, Wickham Skinner is the most cited author in this special issue of JMTM. He provides the departure point of several articles because his vision and insights have guided and inspired researchers in production and operations management from the late 1960s until today. However, the picture that we draw after looking at the contributions in this special issue is intrinsically distinct, much more dynamic, and complex. Seven articles address the following research themes: 1.new patterns of organisation, where the boundaries of firms become blurred and the role of the firm in the production system as well as that of manufacturing within the firm become contingent; 2.new approaches to strategic decision-making in markets characterised by turbulence and weak signals at the customer interface; 3.new challenges in strategic and operational decisions due to changes in the profile of the workforce; 4.new global players, especially China, modifying the manufacturing landscape; and 5.new techniques, methods and tools that are being made feasible through progress in new technological domains. Of course, many other important dimensions could be studied, but these themes are representative of current changes and future challenges. Three articles look at the first theme: organisational evolution of production and operations in firms and networks. Karlsson's and Skold's article represent one further step in their efforts to characterise “the extraprise”. In the article, they advance the construction of a new framework, based on “the network perspective” by defining the formal elements which compose it and exploring the meaning of different types of relationships. The way in which “actors, resources and activities” are conceptualised extends the existing boundaries of analytical thinking in operations management and open new avenues for research, teaching and practice. The higher level of abstraction, an intrinsic feature of the framework, is associated to the increasing degree of complexity that characterises decisions related to strategy and implementation in the manufacturing and operations area, a feature that is expected to become more and more pervasive as time proceeds. Riis, Johansen, Englyst and Sorensen have also based their article on their previous work, which in this case is on “the interactive firm”. They advance new propositions on strategic roles of manufacturing and discuss why the configuration of strategic manufacturing roles, at the level of the network, will become a key issue and how the indirect strategic roles of manufacturing will become increasingly important. Additionally, by considering that value chains will become value webs, they predict that shifts in strategic manufacturing roles will look like a sequence of moves similar to a game of chess. Then, lastly under the first theme, Fleury and Fleury develop a conceptual framework for the study of production systems in general derived from field research in the telecommunications industry, here considered a prototype of the coming information society and knowledge economy. They propose a new typology of firms which, on certain dimensions, complements the propositions found in the other two articles. Their telecoms-based framework (TbF) comprises six types of companies characterised by distinct profiles of organisational competences, which interact according to specific patterns of relationships, thus creating distinct configurations of production networks. The second theme is addressed by Kyläheiko and SandstroÍm in their article “Strategic options based framework for management of dynamic capabilities in manufacturing firms”. They propose a new approach to strategic decision-making in markets characterised by turbulence and weak signals at the customer interface. Their framework for a manufacturing firm in the digital age leads to active asset selection (strategic investments in both tangible and intangible assets) and efficient orchestrating of the global value net in “thin” intangible asset markets. The framework consists of five steps based on Porter's five-forces model, the resources-based view, complemented by means of the concepts of strategic options and related flexibility issues. Thun, GroÍssler and Miczka's contribution to the third theme brings the human dimension to the debate regarding the future of manufacturing. Their article focuses on the challenges brought to management by the ageing of workers in Germany but, in the arguments that are raised, the future challenges associated to workers and work organisation in every production system become visible and relevant. An interesting point in the approach adopted by the authors is that not only the factual problems and solutions are taken into account but the perception of the managers is brought into the picture. China cannot be absent in the discussion of the future of manufacturing. Therefore, within the fourth theme, Vaidya, Bennett and Liu provide the evidence of the gradual improvement of Chinese companies in the medium and high-tech sectors, by using the revealed comparative advantage (RCA) analysis. The Chinese evolution is shown to be based on capabilities developed through combining international technology transfer and indigenous learning. The main implication for the Western companies is the need to take account of the accelerated rhythm of capability development in China. For other developing countries China's case provides lessons of great importance. Finally, under the fifth theme, Kuehnle's article: “Post mass production paradigm (PMPP) trajectories” provides a futuristic scenario of what is already around us and might become prevalent in the future. It takes a very intensive look at a whole set of dimensions that are affecting manufacturing now, and will influence manufacturing in the future, ranging from the application of ICT to the need for social transparency. In summary, this special issue of JMTM presents a brief, but undisputable, demonstration of the possible richness of manufacturing in the future. Indeed, we could even say that manufacturing has no future if we only stick to the past perspectives. Embracing the new is not easy. The new configurations of production systems, the distributed and complementary roles to be performed by distinct types of companies in diversified networked structures, leveraged by the new emergent technologies and associated the new challenges for managing people, are all themes that are carriers of the future. The Guest Editors of this special issue on the future of manufacturing are strongly convinced that their undertaking has been worthwhile.

Determinants of entry and exit in the foreign owned sector of UK manufacturing

This paper examines the extent to which foreign entry and exit in the UK is related to domestic industry characteristics. The units of analysis are firm numbers, and thus entry and exit at the industry level are treated as being generated by Poisson processes. This therefore uses quasimaximum likelihood estimation, to estimate entry and exit functions simultaneously. The results demonstrate that foreign entry is attracted by industry level profitability and performance, but that firm specific 'ownership' advantages are also important. The results also demonstrate that inward investors that are motivated by the desire to exploit firm-specific assets, are unlikely to be more transient than domestic firms. This however, cannot be said of those foreign entrants who are attracted to the UK by location advantage or investment incentives.

Real estate research needs of the plan sponsor community:what do the plan sponsor real estate investment managers want to know?

This article reports the results of a web-based survey of real estate portfolio managers in the pension fund industry. The study focused on ascertaining the real estate research interests of the respondents as well as whether or not research funding should be allocated to various research topics. Performance measures of real estate assets and portfolios, microeconomic factors affecting real estate and the role of real estate in a mixed-asset portfolio were the top three real estate research interests. There was some variation by the type and size of fund providing evidence that segmentation is important within the money management industry. Respondents were also queried on more focused research subtopics and additional questions in the survey focused on satisfaction with existing real estate benchmarks, and perceptions of the usefulness of published research. Findings should be used to guide research practitioners and academics as to the most important research interests of plan sponsor real estate investment managers.

The knowledge competitiveness of regional economies: conceptualisation and measurement

Whereas the competitive advantage of firms can arise from size and position within their industry as well as physical assets, the pattern of competition in advanced economies has increasingly come to favour those firms that can mobilise knowledge and technological skills to create novelty in their products. At the same time, regions are attracting growing attention as an economic unit of analysis, with firms increasingly locating their functions in select regions within the global space. This article introduces the concept of knowledge competitiveness, defined as an economy’s knowledge capacity, capability and sustainability, and the extent to which this knowledge is translated into economic value and transferred into the wealth of the citizens. The article discusses the way in which the knowledge competitiveness of regions is measured and further introduces the World Knowledge Competitiveness Index, which is the first composite and relative measure of the knowledge competitiveness of the globe’s best performing regions.

Who gains from whom? Spillovers, competition and technology sourcing in the foreign-owned sector of UK manufacturing

There is a growing literature explaining foreign direct investment flows in terms of 'technology sourcing', whereby multinational firms invest in certain locations not to exploit their firm-specific assets in the host environment, but to access technology that is generated by host country firms. However, it is far from clear whether the literature has found significant evidence of such activity beyond a few isolated examples. This paper extends this work by allowing for the possibility of multinational enterprises (MNEs) sourcing technology not only from host country firms but also from each other within a host economy. The paper demonstrates that MNEs in the UK do indeed appropriate spillovers both from indigenous firms and from other foreign investors, but that there are also significant competition effects that act to reduce productivity in certain industries. The paper also explores which countries' affiliates gain most from technology sourcing in the UK, and which generate the greatest spillovers within the foreign-owned sector. © Scottish Economic Society 2005.

Market orientation in a multiple stakeholder orientation context:implications for marketing capabilities and assets

Does a market orientation approach focus too heavily on customers at the expense of other stakeholders? Managers also need to address the interests of other stakeholders when making marketing decisions. This gives an orientation to each stakeholder group, which exist simultaneously, giving a multiple stakeholder orientation profile (MSOP). In the reported empirical study of senior marketing executives, this weakness is addressed, by taking a simultaneous multiple stakeholder orientation approach. The study identified where marketing capabilities and assets are both different and similar among executives with a market focus in their MSOPs, and those with other MSOPs. © 2004 Elsevier Inc. All rights reserved.

Measurement of productivity index with dynamic DEA

Fare, Grosskopf, Norris and Zhang developed a non-parametric productivity index, Malmquist index, using data envelopment analysis (DEA). The Malmquist index is a measure of productivity progress (regress) and it can be decomposed to different components such as 'efficiency catch-up' and 'technology change'. However, Malmquist index and its components are based on two period of time which can capture only a part of the impact of investment in long-lived assets. The effects of lags in the investment process on the capital stock have been ignored in the current model of Malmquist index. This paper extends the recent dynamic DEA model introduced by Emrouznejad and Thanassoulis and Emrouznejad for dynamic Malmquist index. This paper shows that the dynamic productivity results for Organisation for Economic Cooperation and Development countries should reflect reality better than those based on conventional model.

Exploitation of fibre characteristics in temperature sensing and radio-over-fibre applications

The development of sensing devices is one of the instrumentation fields that has grown rapidly in the last decade. Corresponding to the swift advance in the development of microelectronic sensors, optical fibre sensors are widely investigated because of their advantageous properties over the electronics sensors such as their wavelength multiplexing capability and high sensitivity to temperature, pressure, strain, vibration and acoustic emission. Moreover, optical fibre sensors are more attractive than the electronics sensors as they can perform distributed sensing, in terms of covering a reasonably large area using a single piece of fibre. Apart from being a responsive element in the sensing field, optical fibre possesses good assets in generating, distributing, processing and transmitting signals in the future broadband information network. These assets include wide bandwidth, high capacity and low loss that grant mobility and flexibility for wireless access systems. Among these core technologies, the fibre optic signal processing and transmission of optical and radio frequency signals have been the subjects of study in this thesis. Based on the intrinsic properties of single-mode optical fibre, this thesis aims to exploit the fibre characteristics such as thermal sensitivity, birefringence, dispersion and nonlinearity, in the applications of temperature sensing and radio-over-fibre systems. By exploiting the fibre thermal sensitivity, a fully distributed temperature sensing system consisting of an apodised chirped fibre Bragg grating has been implemented. The proposed system has proven to be efficient in characterising grating and providing the information of temperature variation, location and width of the heat source applied in the area under test.To exploit the fibre birefringence, a fibre delay line filter using a single high-birefringence optical fibre structure has been presented. The proposed filter can be reconfigured and programmed by adjusting the input azimuth of launched light, as well as the strength and direction of the applied coupling, to meet the requirements of signal processing for different purposes in microwave photonic and optical filtering applications. To exploit the fibre dispersion and nonlinearity, experimental investigations have been carried out to study their joint effect in high power double-sideband and single-sideband modulated links with the presence of fibre loss. The experimental results have been theoretically verified based on the in-house implementation of the split-step Fourier method applied to the generalised nonlinear Schrödinger equation. Further simulation study on the inter-modulation distortion in two-tone signal transmission has also been presented so as to show the effect of nonlinearity of one channel on the other. In addition to the experimental work, numerical simulations have also been carried out in all the proposed systems, to ensure that all the aspects concerned are comprehensively investigated.

Entry modes and performance of foreign direct investment in China

How does a firm choose a proper model of foreign direct investment (FDI) for entering a foreign market? Which mode of entry performs better? What are the performance implications of joint venture (JV) ownership structure? These important questions face a multinational enterprise (MNE) that decides to enter a foreign market. However, few studies have been conducted on such issues, and no consistent or conclusive findings are generated, especially with respect to China. It’s composed of five chapters, providing corresponding answers to the questions given above. Specifically, Chapter One is an overall introductory chapter. Chapter Two is about the choice of entry mode of FDI in China. Chapter Three examines the relationship between four main entry modes and performance. Chapter Four explores the performance implications of JV ownership structure. Chapter Five is an overall concluding chapter. These empirical studies are based on the most recent and richest data that has never been explored in previous studies. It contains information on 11,765 foreign-invested enterprises in China in seven manufacturing industries in 2000, 10,757 in 1999, and 10,666 in 1998. The four FDI entry modes examined include wholly-owned enterprises (WOEs), equity joint ventures (EJVs), contractual joint ventures (CJVs), and joint stock companies (JSCs). In Chapter Two, a multinominal logit model is established, and techniques of multiple linear regression analysis are employed in Chapter Three and Four. It was found that MNEs, under the conditions of a good investment environment, large capital commitment and small cultural distance, prefer the WOE strategy. If these conditions are not met, the EJV mode would be of greater use. The relative propensity to pursue the CJV mode increases with a good investment environment, small capital commitment, and small cultural distance. JSCs are not favoured by MNEs when the investment environment improves and when affiliates are located in the coastal areas. MNEs have been found to have a greater preference for an EJV as a mode of entry into the Chinese market in all industries. It is also found that in terms of return on assets (ROA) and asset turnover, WOEs perform the best, followed by EJVs, CJVs, and JSCs. Finally, minority-owned EJVs or JSCs are found to outperform their majority-owned counterparts in terms of ROA and asset turnover.