Market Selection Research Articles

Who Gets Their First Job at a Large Firm? The Distinct Roles of Education and Skills

Young workers' early years in the labor market are a key and formative time. Using data from 31 countries, this article documents the selection of labor market entrants into large firms, which existing literature associates with propitious environments for young workers. The young and inexperienced are underrepresented at large firms compared to experienced and older workers. Entrants who do get their first job at large firms are positively selected in terms of education and cognitive skills. The patterns of large-firm selection (i.e., importance of education vs. skills) somewhat differ between Europe, East and Southeast Asia, and North America.

Changes in the Trade Paradigm and Agency Dilemma in Korea’s Core Export-Leading Industries

Purpose This study investigates the impact of firm dynamics and consequent business durations of incumbents on the productivity growth of vertical integration with capital share (VI) and non-vertical integration with capital share (NVI) structures in Korea’s core export-leading industries. Design/Methodology/Approach A stochastic frontier production function model was applied to unbalanced firm-level panel data for Korea’s IT manufacturing and automobile industries over 2006 2017. Findings Empirical results verified the agency dilemma between stable supply chain and innovation incentive as a catalyst of firm dynamics, and the consequent productivity gain or loss triggered by market exogenous shocks, structural reform, and market selection forces. Firms shifting from a VI to an NVI structure had a negative pre-exit impact on the productivity growth of the VI structure, while they had a significant positive impact on the productivity growth of the NVI structure they entered. All new entrants raised productivity growth in the IT manufacturing industry, while only new NVI entrants promoted productivity growth in the automobile industry. All exiting firms decreased the productivity growth in both industries. All persevering IT manufacturing firms reduced the productivity growth of their structures, whereas only persevering NVI automobile firms lowered the productivity growth of their NVI structure. Research Implications In terms of productivity growth from firms’ entry, exit, and business duration, IT manufacturing firms retained greater competitiveness and resilience than automobile firms under the adverse global value chain conditions of 2012, relative to those before 2012. However, deteriorating technical efficiency caused TFP growth to plunge in both VI and NVI structures in these industries since 2012.

International market selection: a MABA based EDAS analysis framework

Research background: International market selection is an essential issue for big companies that supply food products. Different types of decision factors and different characteristics of different international markets have brought up a complicated decision-making problem for food supply companies. In order to select the most suitable and profitable market, food supply companies have to consider several qualitative and quantitative factors, including social, political, economic, and ecological aspects.
 Purpose of the article: In order to overcome international market selection issues, the current study develops a novel integrated decision-making tool.
 Methods: A novel decision-making model of market analysis is developed as an extended model of Market Attractiveness and Business Attractiveness (MABA) analysis based on the Multiple Attribute Decision Making (MADM). To improve the MABA analysis model, we combine the EDAS method with MABA analysis to empower decision-makers in food supply companies to evaluate several international markets and select the most profitable market for their products.
 Findings & value added: In this study, we first identified the most important and frequently used decision factors for market analysis problems within MABA analysis under two categories: market attractiveness and business attractiveness. To show the proposed methodology's applicability and feasibility, we perform a case study for a food supply company in Iran that supplies products to Middle East and Asian countries. In order to investigate the reliability of the obtained results, we perform a sensitivity analysis concerning the importance of involved decision factors. The proposed decision-making tool results suggest that the model can be used as a reliable tool for market analysis problems. To sum up the long-term value of the study, we have developed a novel decision-making tool using MABA analysis and the EDAS method. No study integrates any MCDM methods with MABA analysis to the best of our knowledge. Integration of EDAS method with MABA analysis empowers decision-makers in market selection division to use more systematic methods for evaluating several markets.

After TikTok: International Business and the Splinternet

The internet is evolving from a globally connected and lightly regulated network to a ‘splinternet’ governed by diverging national policies. Governments are effectively re-creating national borders in digital space by asserting their authority over areas such as data protection, taxation, censorship, and national security. This increasing fragmentation of the internet creates new challenges for companies that use the internet to offer digital products and services (such as apps) internationally. Rather than addressing global markets more or less by default, these digital firms must make strategic choices with respect to foreign market selection, entry modes, local adaptation, and stakeholder management.

Sparse factor model based on trend filtering

We present a model based on trend filtering and regularization for performing factor analysis. Furthermore, the trend filtering method proposed in our model allows incorporating views represented as scenarios. Therefore, factor models can be optimized to explain not only trends of a given data series but also trends reflecting outlooks. As an application to finance, the proposed model constructs a sparse factor model on the trend of an index. Factor analyses on trend-filtered series provide factor models for describing trends, which are valuable for modeling long-term horizons. We also analyze the effect of trends on factor model selection in the US stock market. Further analyses include an investigation of factors during crisis periods and a comparison when various scenarios are considered.

Price Subsidies and the Demand for Automobile Insurance

This paper tests for regulation-induced adverse selection in the Massachusetts automobile insurance market during the regulated period 1990-2005. The paper demonstrates the application of the Poterba-Finkelstein (2014) unused-observables test for adverse selection in a regulated insurance market using group-level panel data. Differences between rates that incorporate state-mandated restrictions and those based on actuarial estimates provide data on the unused-observables needed for the test. Consistent with regulation-induced adverse selection, unused observables are statistically significant and positive in estimated models of both insurance purchases and loss costs. Robustness checks support the inference that higher-risk drivers account for the results.

Connecting Smallholders’ Marketplace Decisions to Agricultural Market Reform Policy in India – An Empirical Exploration

Governments in developing countries have attempted to reform inefficient agricultural markets through direct interventions, market-oriented approaches, and institutional mechanisms, with one of the aims being improving the lot of smallholder farmers. However, such interventions often fell short of yielding desired results, perhaps because broad macro objectives failed to take into account micro-level processes. This study examines smallholder farmers’ market selection decisions and attempts to establish if these have a bearing on legislative goals of agricultural marketing reforms. Analysis of survey data using binary logistic regression, reveals that farmers choose between two prominent marketplaces – APMC and farm gate – on the basis of factors such as perishability of produce, quality testing infrastructure at the marketplace, and services provided by buyers such as grading and sorting or transportation. Findings are reinforced by an extended part of the study where farmers ranked assumptive marketplace scenarios developed by incorporating different marketplace features. Results demonstrate the possibility of enabling systemic changes in agricultural markets by catering to grassroots decision mechanisms. Implications for policy and relevant players engaged in agricultural markets are discussed.

Construction of power data products based on STP theory

Under the background of digital revolution, the level of power grid intelligence and automation has been improved, and a large number of data of various types have been gathered. Through the analysis of multi-source data of power grid, the new profit growth point of power grid enterprises can be mined. In this paper, the “STP theory” is introduced into the power data commodity market. Through the in-depth analysis of the three elements of power data market segmentation, target market selection and market positioning, the power data product types facing different data trading objects, such as government, power grid itself, third-party enterprises and ordinary users, are constructed. This study will provide a basis for grid companies to explore new data business model.

Managerial levers of market-shaping strategies: An abductive inquiry

ABSTRACT Viewing markets as socially constructed, and thus consciously reconstructable value-creating systems, opens interesting avenues for managerial practice. Strategic decisions regarding markets are no longer limited to market selection or positioning in an existing space; for in addition, markets themselves can be shaped for higher value creation, growth and profitability. Based on an abductive research process that was founded on a continuous literature review and involved 63 executives from 16 firms in two countries, we identified 12 distinct levers that a focal firm wanting to shape their markets can focus on. These managerial levers are further categorized into four themes (1) reworking the exchange process by which the focal firm connects with customers, (2) reshaping the network that supports the exchange process and customers’ use practices, (3) revising the representations that are used to symbolize the market, and (4) reforming the norms that guide all interactions in the market. The developed framework provides an organized and actionable overview of the elements that can form the content of market-shaping strategies, thus illuminating the “black box” between previously explored antecedents and outcomes of such strategies.

Voluntary versus mandatory disclosure

We develop a theory of asymmetries between voluntary and mandatory disclosure. Efficiently designed mandatory disclosure policies are substitutes for excessive voluntary disclosures. The efficient policy takes the form of a lower threshold below which firms must disclose bad news and an upper threshold above which firms voluntarily disclose good news. Hence mandatory disclosures are asymmetric and feature conservative reporting of bad news. The threshold to recognize bad news increases when information is more precise. We also characterize interactions between disclosures and real decisions in environments where information has social value: investment decisions, optimal liquidations, and adverse selection in a lemons market.

The Effect of Salary History Bans on Wages, Learning, and the Gender Pay Gap

A number of important jurisdictions have recently enacted salary history bans to combat the gender pay gap. This paper models the effect of such bans by augmenting the standard asymmetric learning setting with efficiency wages, such that wages themselves are both necessary to motivate optimal production and informative of employee ability. We demonstrate that, in the absence of other public signals, wage disclosure can result in an equilibrium of symmetric learning. Imposing a ban reverts to asymmetric learning, with adverse selection in the lateral hiring market and higher wages for new entrants to the labor market. We extend our model to include a form of taste-based discrimination that matches both the empirical characteristics of the gender pay gap and the biases cited by proponents of bans: some firms consistently but unconsciously under-evaluate the ability of their incumbent female workers, leading to failure to promote, lower wages, and anchoring in the lateral job market. Wage disclosure allows high-performing women to escape discriminatory firms, although some degree of anchoring and wage gap persists. In contrast, bans may reduce the gender wage gap, but do so at the expense of high-performing women, who may be trapped at discriminatory firms. Efficiency also declines under a ban, as trapped high-skill women under-produce. These results imply that the wage gap (and the welfare of working women, particularly high-performers) is better addressed through policies that promote efficient job switching.

Globalisation entry decision-supporting tool for international construction risks

Having made a globalisation decision, a contracting firm subsequently needs to make market selection decisions that are influenced by the level of uncertainty or the risks involved, the probability of winning the bid and the expected profitability, or based on generally expected utility. This paper aims to develop a globalisation entry decision-supporting tool integrating resource-based view (RBV), dynamic capabilities and Porter’s generic value chain for international project selection. Through the combination of a questionnaire survey and an interview survey analysed by partial least squares structural equation modelling, a globalisation entry decision-supporting tool for facilitating project selection decision for contractors venturing internationally was developed. This study attempts the usage of an anomaly-seeking method in combining theories from three streams of strategic management concepts – namely, RBV, dynamic capabilities and Porter’s generic value chain theories – into an integrated decision-supporting tool for risk forecasting and project selection in the international construction market. This study contributes to the knowledge of risk assessment by enhancing the current international entry decision tools with a firm’s capability component. The model developed enables a firm to be informed of the combination of the firm’s capabilities needed to lower the exposure to certain risks.

International Trade and Technological Competition in Markets with Dynamic Increasing Returns

We build a simple dynamic model to study the effects of technological learning, market selection and international competition in the determination of export flows and market shares. The model features two countries populated by firms with heterogeneous productivity levels and sales. Market selection in each country is driven by a finite pairwise Polya urn process. We show that market selection leads either to a national or to an international monopoly in presence of a static distribution of firm productivity levels. We then incorporate firm learning and entry-exit in the model and we show that the market structure does not converge to a monopoly. In addition, we show that the extended model is able to jointly reproduce a wide ensemble of stylized facts concerning intra-industry trade, industry and firm dynamics.

Quero exportar, mas para onde? Uma proposta de método para seleção de mercados internacionais

Objective of the study: to develop a method for the selection of international markets, in order to answer: how to select the most appropriate foreign market to the company's needs? Methodology / approach: This is a technological article whose intervention was to establish a target market in Africa that presented the greatest potential for attractiveness and accessibility. The ranking method was applied, preceded by a cut line (by clustering) of countries without the minimum requirements and the most attractive and accessible market was established through the decision matrix tool. Main results: The market selection started by defining the African continent and 49 countries were clustered, excluding unattractive ones, resulting in: South Africa, Angola, Algeria, Egypt and Morocco. Subsequently, ranking was applied and Angola was the target market selected for export. Theoretical / methodological contributions: Contributes methodologically using a blend of methods, clustering and ranking, which allows you to select the target market according to objective criteria. Relevance / originality: In view of the existing international market selection models, this method proposal is positioned as an improvement, as it brings two differentials, clustering as the cut line, and the decision matrix as a tool for ranking countries. Managerial contributions: The business contribution is to have a simple and accessible method, which takes into account the specificities of attractiveness and accessibility for a specific product, so that the selection of international markets is based on objective and not merely intuitive criteria, thus increasing the assertiveness in choosing the target market.

Market Selection and the Information Content of Prices

We study information aggregation when n bidders choose, based on their private information, between two concurrent common‐value auctions. There are k s identical objects on sale through a uniform‐price auction in market s and there are an additional k r objects on auction in market r, which is identical to market s except for a positive reserve price. The reserve price in market r implies that information is not aggregated in this market. Moreover, if the object‐to‐bidder ratio in market s exceeds a certain cutoff, then information is not aggregated in market s either. Conversely, if the object‐to‐bidder ratio is less than this cutoff, then information is aggregated in market s as the market grows arbitrarily large. Our results demonstrate how frictions in one market can disrupt information aggregation in a linked, frictionless market because of the pattern of market selection by imperfectly informed bidders.

Market Segmentation and Competition in Health Insurance

In the United States, households obtain health insurance through distinct market segments. We explore the economics of this segmentation by comparing coverage provided through small employers versus the individual marketplace. Using data from Oregon, we find households with group coverage spend 26% less on covered health care than households with individual coverage yet face higher markups. We develop a model of plan choice and health spending to estimate preferences in both markets and evaluate integration policies. In our setting, pooling can both mitigate adverse selection in the individual market and benefit small group households without raising taxpayer costs.

Аналіз конкурентоспроможності товару при виборі цільового ринку

The study of the analysis of product competitiveness in the selection of the target market is carried out. The following tasks are solved: the concept and essence of competitiveness are characterized, the actual methods of competitiveness analysis are described. It is proved that to determine competitiveness it is necessary to take into account a large number of marketing indicators (marketing parameters), or to choose the best for them. It is substantiated that in the future it is important to develop a classification of marketing parameters, methods of their evaluation, recommendations for the evaluation of each. The emergence of marketing criteria in the assessment of competitiveness will more accurately calculate the indicator of competitiveness, to identify the benefits of the product in the market. Parameters and factors of competitiveness, important for both the producer and the consumer, can often be uncertain, which prevents the improvement and change of the company's position in the market of its choice. At the same time, taking into account a large number of marketing parameters will allow you to more accurately calculate competitiveness. One of the promising tasks is to develop a definition of competitiveness for a reasonable assessment of the company's position in the market, taking into account more marketing indicators. In the future it is important to develop a classification of marketing parameters, methods of their evaluation, recommendations for the evaluation of each. The emergence of marketing criteria in the assessment of competitiveness will allow you to more accurately calculate the indicator of competitiveness, to identify the benefits of the product in the target market.

An Empirical Analysis of Stochastic Dominance and Portfolio Selection in the Stock Market: Evidence from Nigeria

This study carried out an empirical test of stochastic dominance application on portfolio selection in the Nigerian stock market. December daily stock price of ten (10) listed insurance firms in the period 2014 to 2020 were selected and tested for stochastic dominance occurrence. The findings indicate that the selection of firm stock followed the Markowitz mean-variance and risk preference behavior of investors in the stock market. It also shows that two (2) firm stocks were first order stochastically dominant (FSD), four (4) stocks of firms were second order stochastically dominant while nine (9) stocks were third order stochastically dominant (TSD) in the period after the stock market meltdown in Nigeria. The study recommends that future researchers should empirically investigate portfolio dominance on a sector by sector basis. This will guide potential investors at selecting securities on the basis of mean-variance and utility function.

Multi-period mean-variance portfolio selection in a regime-switching market with a bankruptcy state and a state-dependent uncertain exit-time

Multi-period mean-variance portfolio selection in a regime-switching market with a bankruptcy state and a state-dependent uncertain exit-time

The Darwin Is in the Details

Electronics can be defined as electromagnetic technology dealing with information, and meta-electronics as a field encompassing all the synergistic technologies in which electronics plays a dominant role. Examining the broad field corresponding to this definition we realize that its history starts some seventy years earlier than the customarily accepted birth of electronics, and, what is more significant, that electronics undergoes a true evolution. This new evolution creates rich, diverse structures similar to those created by the biological evolution. Like biology, electronics is non-teleological, which allows for its unlimited evolutionary development. We propose electronic analogies of all essential biological categories, at all levels: population, speciation, common ancestor, phenotype, extended phenotype, co-evolution, convergent evolution, evolutionary arms race, extinction and mass extinction, hierarchical levels, generative entrenchment, genes, alleles, genome, genetic pool, recombination, mutation, genetic drift, lateral gene transfer, etc. The evolutionary algorithm operating in electronics, like a Darwinian one, includes variation within a population of device models, heredity, natural (market) selection, and a form of selection based on aesthetics and fashion which resembles sexual selection. Algorithm is especially similar to artificial selection (domestication), thus possessing directionality in the variational part. Electronic development is orders of magnitude faster than biological, accelerated by that directionality and by other distinct, identifiable mechanisms. Speciation in electronics, as in biology, is best represented on a phylogenetic tree, which starts from a common ancestor (electric telegraph), but lately exhibits a unification trend. If continued, this trend may lead to the appearance of a common descendant absent in biology. Our analysis may explain emerging anti-social aspects of electronics and our conclusions add new urgency to recent concerns with unchecked development of Artificial Intelligence.