Industry-specific Factors Research Articles

Evolution of the supply chain in the Italian railway industry

Purpose – This paper aims to fill the research gap represented by the lack of analysis on the industry's specific factors which affect the evolution of customer‐supplier relationships and the entire supply chain organisation in the railway manufacturing industry by providing an interpretative framework.Design/methodology/approach – The research is based upon an in‐depth longitudinal case study on AnsaldoBreda, the main Italian railway company that is representative of the EU context. The study was conducted over a period of ten years.Findings – The empirical findings highlighted that in recent decades the hierarchical relationships among firms operating in the Italian railway have been modified. Moreover, regarding the evolution of the supply system four main phases are illustrated and the gap with other industrial sectors is remarked.Research limitations/implications – The approach taken restricts the empirical findings to the Italian railway industry. However, various elements show that the case study i...

Does innovation lead to global orientation? Empirical evidence from a sample of Italian firms

Summary This paper analyses the relationship between innovation at firm and industry level, and the global vs regional strategy of multinational enterprises (MNEs). Based on data from a sample of large Italian manufacturing firms, the analysis shows that technological assets affect a firm’s ability to overcome the liability of (regional) foreignness: the extent to which MNEs can exploit their firm-specific technological advantages is greater within their home region, but they also exploit them outside it. Furthermore, the results show that a firm’s foreign (outside the home country) and global sales (outside the home region) are higher, the greater the technology intensity of the industry in which they operate. These findings suggest that, although MNEs tend to operate regionally rather than globally, their strategic orientation is contingent upon firm- and industry-specific factors. Managers need to take the potential for globally exploiting R&D investments into account, even if it may not be equally successful within and outside the home region, and may be constrained by a number of inter-regional barriers.

The evolution of supply chain relationships: An interpretative framework based on the Italian inter-industry experience

This paper adopts an inter-industry analysis approach to compare the supply chain evolution of the railway and aircraft manufacturing industries, highlighting the fact that these industries are going through a period of enormous change involving the production system as a whole. In particular, the paper identifies the supply relationship evolution in both industries and analyses the vertical relationships, thus showing how the circulation of information and technology is a crucial factor for supply chain efficiency. These elements are addressed so that an interpretative framework may be developed to broaden understanding of the industry-specific factors that affect firms’ competitive strategies. The paper synthesises the results of a research program focused on the supply systems of the main Italian companies in the aircraft industry (Alenia Aeronautica) and in the railway industry (AnsaldoBreda).

Industry dynamics with knowledge-based competition: a computational study of entry and exit patterns

I propose a computational model of industry evolution capable of matching many stylized facts. It views the firm as a myopic but adaptive entity whose survival depends on its ability to perform various activities with greater efficiency than its rivals. In this model, the shakeout pattern arises naturally in the early stage of industrial development. I provide a full comparative dynamics analysis of how various industry-specific factors determine the numbers and the rates of entries and exits over time as well as the ages of the exiting firms.

Industry Dynamics with Knowledge-Based Competition: A Computational Study of Entry and Exit Patterns

I propose a computational model of industry evolution capable of matching many stylized facts. It views the firm as a myopic but adaptive entity whose survival depends on its ability to perform various activities with greater efficiency than its rivals. In this model, the shakeout pattern arises naturally in the early stage of industrial development. I provide a full comparative dynamics analysis of how various industry-specific factors determine the numbers and the rates of entries and exits over time as well as the ages of the exiting firms.

Redditivitŕ ed efficienza delle utilities italiane: cluster analysis degli indici di bilancio

- The last ten years have witnessed conspicuous changes in European and Italian regulation of public utility services and in the strategies of the major players in these fields. In response to these changes Italian utilities have made a variety of choices regarding size, presence in more or less capital-intensive stages of different value chains, and diversification. These choices have been implemented both through internal growth and by means of mergers and acquisitions. In this context it is interesting to try to establish whether there is a nexus between these choices and the performance of Italian utilities in terms of profitability and efficiency. Therefore statistical multivariate analysis techniques (cluster analysis and factor analysis) have been applied to several ratios obtained from the 2005 financial statement of 34 utilities. First, a hierarchical cluster analysis method has been applied to financial statement data in order to identify homogeneous groups based on several indicators of the incidence of costs (external costs, personnel costs, depreciation and amortization), profitability (return on sales, return on assets, return on equity) and efficiency (in the utilization of personnel, of total assets, of property, plant and equipment). Five clusters have been found. Then the clusters have been characterized in terms of the aforementioned indicators, the presence in different stages of the energy value chains (electricity and gas) and other descriptive variables (such as turnover, number of employees, assets, percentage of property, plant and equipment on total assets, sales revenues from electricity, gas, water supply and sanitation, waste collection and treatment and other services). In a second round cluster analysis has been preceded by factor analysis, in order to find a smaller set of variables. This procedure has revealed three not directly observable factors that can be interpreted as follows: i) efficiency in ordinary and financial management, ii) return on invested capital and return on equity capital, and iii) efficiency of personnel. Cluster analysis has identified four clusters. Each cluster has then been described in terms of the factors, the profitability and the efficiency indicators (Return on Sales, Return on Equity, Return on Assets, Turnover / Personnel Costs, Capital Intensity), the presence in different stages of the energy value chains and the same descriptive variables used for the previous set of clusters. Based on indicators of cost incidence, profitability and efficiency, five cluster have emerged. Based on three non-observable factors (efficiency in ordinary and financial management, return on invested capital and on equity capital, efficiency of personnel) four clusters have emerged. These results suggest that there may be a nexus between the performances of the observed Italian utilities and some of their characteristics, such as size (in terms of total assets), presence in more or less capital-intensive stages of the value chains of different public utility services, and the industries in which these enterprises generate most of their sales revenues (i.e. their core businesses) or, in other words, the extent of diversification. This hints to a couple of avenues for future research, such as the replication of this kind of analysis on a larger sample, with the same or different indicators, and the identification of economies of scale, economies of density, economies of scope and industry-specific factors that may help to explain the results of multivariate statistical analysis of financial statement data. JEL: L940, L950 Key words: utilities, energy, strategy, cluster analysis, factor.

Disentangling the Performance and Entrenchment Effect of Family Shareholding: A Study of Indian Corporate Governance

Using an econometric framework, I have tried to establish the relationship between Tobin's Q and family shareholding. While there is no unequivocal causality established by theories, empirical evidences present wide variation in findings. By controlling several firm and industry specific factors, I found a non-linear relationship between family holding and Q ratio. Many studies have raised the issue of endogeneity in governance literature as it is detrimental to the empirical observations. I have tried to address this issue via instrumental variable regression method. While in several specifications, the curvilinear aspect of the relationship remained intact; I fail to trace any endogeneity problem in ownership variables.

Minimising quality uncertainty by the root-cause and failure analysis method

The occurrence of quality uncertainty due to information asymmetry is a complex phenomenon. This paper attempts to develop a simpler method for minimising quality uncertainty. The paper undertakes a root-cause analysis of quality uncertainty by using an affinity and Interrelationship Diagram (ID). The data generated through the ID is then used for the failure analysis of quality uncertainty. The feasibility of this failure analysis is demonstrated in the Appendix. The issues resulting from this analysis are then prioritised. The comparison of quality uncertainty between developing and developed nations is also unraveled. This mechanism can be used by focusing on the industry-specific factors.

Is Corporate Responsibility Converging? A Comparison of Corporate Responsibility Reporting in the USA, UK, Australia, and Germany

Corporate social reporting, while not mandatory in most countries, has been adopted by many large companies around the world and there are now a variety of competing global standards for non-financial reporting, such as the Global Reporting Initiative and the UN Global Compact. However, while some companies (e.g., Henkel, BHP, Johnson and Johnson) have a long standing tradition in reporting non-financial information, other companies provide only limited information, or in some cases, no information at all. Previous studies have suggested that there are, country and industry-specific, differences in the extent of CSR reports (e.g., Kolk et al.: 2001, Business Strategy and the Environment10, 15–28; Kolk: 2005, Management International Review45, 145–166; Maignan and Ralston: 2002, Journal of International Business Studies33(3), 497–514). However, findings are inconclusive or contradictory and it is often difficult to compare previous studies owing to the idiosyncratic methods used in each study (Graafland et al.: 2004, Journal of Business Ethics53, 137–152). Furthermore, previous studies have relied mainly on simple measures, such as word counts and page counts of reports, to compare the extent of reporting that may not capture significant differences in the content of the reports. In this article, we seek to overcome some of these deficiencies by using textual analysis software and a more robust statistical method to more objectively and reliably compare the CSR reports of firms in different industries and countries. We examine a sample of leading companies in four countries (US, UK, Australia, and Germany) and test whether or not membership of the Global Compact makes a difference to CSR reporting and is overcoming industry and country specific factors that limit standardization. We conclude that GlobalCompact membership is having an effect only in certain areas of CSR reporting, related to the environment and workers, and that businesses from different countries vary significantly in the extent to which they promote CSR and the CSR issues that they choose to emphasize in their reports. These country differences are argued to be related to the different institutional arrangements in each country.

Exploring Gender Effects in a Mobile Advertising Context:On the Evaluation of Trust, Attitudes, and Recall

This study examines how gender affects mobile advertising acceptance in Japan. Drawing upon cultural, socioeconomic, and industry-specific factors, five hypotheses and two research questions are formulated for four dependent variables (trust, attitude toward the ad, attitude toward the brand, and ad recall) and two independent variables (gender and ad type). User frequency was considered a covariate. An empirical survey was conducted in Japan: Forty thousand respondents were randomly selected, and 3,254 responses were received. Two mobile campaigns (one durable and one nondurable good) were used as stimuli. Multivariate data analysis found significant multivariate effects as well as univariate effects. There was a significant interaction effect of gender and ad type on ad recall. In closing, the study’s implications are discussed.

Footloose Multinationals in Belgium?

Using firm level panel data for the years 1996-2001, covering all sec- tors of the economy, the impact of multinational ownership on the exit decisions of firms located in Belgium is estimated. In this analysis, I clearly distinguish for nationality of ownership, allowing for differences between firms that are foreign- owned and multinationals rooted in the domestic economy. Controlling for vari- ous firm- and industry-specific factors, it is found that while foreign multination- als are more likely to shut down operations compared to national firms in both manufacturing and service sectors, domestic multinationals only exhibit signifi- cantly higher exit rates in the manufacturing industries. The analysis has import- ant policy implications, especially in terms of the desirability of the large impact of multinational firms on employment and output generation in Belgium. JEL no. D21, F23, L20, L25

Correlates of Suicide in Building Industry Workers

Suicide within the construction industry in Queensland, Australia was reportedly high in a recent Royal Commission report. The current study examined the incidence and causes of suicide in this industry using psychological autopsy and focus group investigations. A total of 64 male suicides occurred over the seven-year period, representing a crude suicide rate of 40.3 per 100,000, significantly greater than the working age Australian male rate. Young employees were at excessive risk with separation/divorce, relationship problems, and untreated psychiatric conditions the major contributors. Focus groups emphasized the importance of work/home interface factors and industry-specific factors preceding suicide.

Footloose Multinationals in Belgium?

Using firm level panel data for the years 1996-2001, covering all sectors of the economy, the impact of multinational ownership on the exit decisions of firms located in Belgium is estimated. In the analysis, I clearly distinguish for nationality of ownership, allowing for possible differences between firms that are foreign-owned and multinationals rooted in the domestic economy. Controlling for various firm- and industry-specific factors, it is found that while foreign multinationals are more likely to shut down operations compared to national firms in both manufacturing and service sectors, domestic multinationals only exhibit significantly higher exit rates in the manufacturing industries. The analysis has important policy implications, especially in terms of the desirability of the large impact of multinational firms on employment and output generation in Belgium.

Option Chain and Change Management: a Structural Equation Application

The aim of this work is to establish empirically with a structural equation model (SEM) the existence of links between the options perceived by the members of an industry, the expectation of future rents produced by the exercise of these options and firm or industry specific factors. The theoretical part of this work is based on the notion of option chain developed by Bowman and Hurry (1993). The empirical part is on the video-game industry. A questionnaire based dataset on 211 video-game creators allows us to represent the concepts of potential and real option from a strategic point of view. The study shows that the relations between perceived opportunities, capacities building and rent expectations are shared by the members of this industry and can be expressed as options.

Sources of gains from international portfolio diversification

This paper looks at the determinants of country and industry specific factors in international portfolio returns using a sample of forty eight countries and thirty nine industries over the last three decades. Country factors have remained relatively stable over the sample period while industry factors have significantly increased during the last decade and dropped again since 2000. The importance of industry and country factors is correlated with measures of economic and financial international integration and development. We find that financial market globalization is the main driving force behind the changes in relative magnitude of the different shocks. Country factors are smaller for countries integrated in world financial markets and have declined as the degree of financial integration and the number of countries pursuing financial liberalization has increased. Higher international financial integration within an industry increases the importance of industry factors in explaining returns. Economic integration of production also helps in explaining returns. Countries with a more specialized production activity have higher country shocks.

Identifying Sources of Heterogeneity for Empirically Deriving Strategic Types: A Constrained Finite-Mixture Structural-Equation Methodology

The resource-based view (RBV) of the firm suggests that strategic deployment of capabilities allows strategic business units (SBUs) to exploit distinctive competencies and create sustainable competitive advantage. Following the RBV, we propose a new predictive methodology for deriving typologies of SBUs that accommodates heterogeneity among SBUs with respect to their strategic capabilities, how effectively they are employed, and performance. Statistically, we devise a constrained finite-mixture structural-equation procedure that simultaneously accounts for firm capabilities, performance outcomes, and the relationships between them. The procedure allows for a comprehensive modeling and grouping of entities, and simultaneously provides a diagnosis of the sources of heterogeneity via the flexibility of estimating a series of nested models. Managerially, our proposed methodology is grounded in the strategic type and RBV literature and can capture the effects of environmental and industry-specific factors. Using data obtained from 216 SBUs in the United States for illustration, the results show that our derived four mixed-type solution dominates the four-group, Prospectors-Analyzers-Defenders-Reactors classification as well as a number of other nested model solutions in terms of objective statistical fit criteria for this data set, suggesting a more contingency-driven strategic stance adopted by these SBUs. We conclude with a discussion of the theoretical and managerial benefits of an improved methodology for empirically deriving strategic typologies.

Concentrated Announcements on Clustered Data: An Event Study on Biotechnology Stocks

In spring 2000, three events—two political statements by bill clinton and tony blair and a breakthrough announcement by celera genomics—had a major impact on biotechnology stocks. We analyze their effects over a comprehensive set of biopharmaceutical companies, using a composite return-generating model with an industry-specific patent-based factor. Our results show that stocks can be clustered according to their responsiveness to political and scientific events. Furthermore, we emphasize different impacts on the market value of intangible assets for each cluster, suggesting that growth options are valued with different criteria for therapeutics, and technology-based subsectors.

Internationalisation in Malaysian furniture firms: gradual or rapid internationalisation?

The study of the initial steps in a firm's international development has traditionally been dominated by various forms of the 'stage theory', but these theories have been challenged more recently by evidence that rapid internationalisation can take place in certain firms – contradicting the notion of gradual development that was an essential aspect of the stage-model perspective. Moreover, earlier studies and models have been developed in industrialised countries. The present study examines the internationalisation of Malaysian furniture firms and concludes that the traditional stage models are not suited to understanding the development of these firms. The firms did not expand in a gradual manner, and did not choose markets that were 'psychically close' to Malaysia. The emerging literature on 'born globals' was a better tool for understanding the development of these firms. However, this literature must be complemented with country-specific and industry-specific factors, if full understanding of the international expansion of firms in developing countries, such as Malaysia, is to be achieved.

Plant-level dynamics and aggregate productivity growth in the Turkish meat-processing industry: Evidence from longitudinal data

The authors examine how plant-level dynamics contribute to aggregate productivity growth in the Turkish meat-processing industry. An aggregate productivity decomposition approach that utilizes plant-level longitudinal data is used to achieve this goal. Their results are consistent with the empirical literature in the sense that productivity enhancement within existing plants is the main source of aggregate productivity growth in this sector. However, their analysis generally suggests that plants that exit the meat-processing industry tend to be more productive than entering plants, especially in the posteconomic crisis period studied. Even though the latter insight is not consistent with the existing empirical literature, they show that these results tend to support R. Caballero and M. Hammour's (2000) contention that institutional factors such as industry structure (i.e., mature vs. infant industry) and economic crisis conditions (i.e., pre- vs. postcrisis periods) affect the nature of plant dynamics' contributions to aggregate productivity growth. Overall, the study's results reveal that industry-specific institutional factors must be taken into consideration when shaping policies aimed to improve and sustain aggregate productivity growth. [JEL Classifications: D24, L25, O12]. © 2006 Wiley Periodicals, Inc. Agribusiness 22: 91–107, 2006.

Demutualization and Public Offerings of Financial Exchanges

Almost all exchanges around the world were member-owned, organized as non-profit, mutual organizations, until the early 1990s. However, the last 10 years have seen a dramatic change in the organizational structure of exchanges as they have demutualized and evolved into for-profit entities usually owned by investors rather than just members. This demutualization process is frequently accompanied by a public listing of shares allowing for wide spread ownership. These are major changes for a sector that plays a critical role in the financial markets and the capital raising process. We argue that these changes are being driven by technological, regulatory and industry specific factors and should have wide ranging consequences both for the exchanges as well as market participants. We find that demutualized exchanges have performed well both in terms of returns to shareholders and operating performance. However, demutualization is a relatively recent phenomenon with limited history and therefore the results must be interpreted cautiously.