Specific Market Conditions Research Articles

Capital and profitability: The moderating role of economic freedom

Using the GMM framework, this paper examines the nexus between capital and profitability in the presence of economic freedom using annual data of US banks ranging from 2002 to 2022. consistent with both the financial stability and regulatory hypotheses, the present study's empirical findings reveal that economic freedom exerts a positive moderating influence on the relationship between bank capital ratio and profitability. The findings are heterogeneous across banks' specific characteristics and market conditions. Furthermore, the results are robust to alternative proxies of profitability. The study's finding is beneficial for policymakers and regulators as liberalization is not always adversely impact the economy; rather, it's a double-edged sword, and they must maintain that delicate balance. The conclusions of this study have meaningful implications for senior bankers and policymakers when formulating strategies for preserving bank value. Specifically, it highlights the importance of considering the interactive role of economic freedom in their decision-making process.

Інноваційні стратегії сталого розвитку підприємств в умовах мінливого ринку

The article analyzes various approaches to innovation development for enterprises operating in volatile markets. It explores critical innovation strategies, including proactive, reactive, imitative, niche, mergers and acquisitions (M&A), open innovation, incremental, and radical strategies. The proposed utilization of these strategies aims to ensure sustainable development for enterprises, considering their specific activities and market conditions. Proactive Strategies are characterized by their focus on anticipating and shaping market trends—proactive strategies position companies as market leaders by developing new products and services ahead of market demand. Analyzing technological trends and innovations is highlighted, enabling enterprises to maintain a competitive edge by staying ahead of competitors. Reactive strategies, however, adapt to changes in market and consumer demand. This approach involves responding swiftly to market shifts and competitive innovations. Imitative Strategies involve replicating or adapting innovations introduced by other companies. Niche Strategies concentrate on serving narrow market segments or specific technological niches. Companies utilizing niche strategies aim to become specialists in their chosen fields, offering unique solutions tailored to specific customer needs. This approach requires deep understanding, specialization, and expertise, allowing enterprises to command premium prices due to the distinctiveness of their products or services. This approach accelerates innovation processes by integrating external capabilities while reducing competitive pressures. However, successful implementation of M&A strategies demands meticulous planning and effective management to achieve synergy between organizations. In conclusion, the article offers a comprehensive framework for selecting and implementing innovative strategies tailored to enterprises’ specific needs and conditions in dynamic market environments. By strategically applying these approaches, enterprises can enhance their innovation capabilities, adapt to market changes effectively, and achieve sustainable development in the long term. Keywords: innovation strategies, sustainable development, dynamic market, proactive strategies, reactive strategies, imitative strategies, niche strategies, mergers and acquisitions, open innovation, incremental strategies, radical strategies, university partnerships, R&D, competitive advantage, market stability.

Specifics of YouTube Functioning as a Popular Video Hosting Platform in the Modern Internet Space

The purpose of the article is to study the main aspects of the development of YouTube video hosting in the modern Internet space and to analyse the strategy for improvement and competitiveness of YouTube as a popular media platform. Research methods. The methodology is based on applying analytical, systemic, empirical, comparative and functional methods. In particular, the author analyses the features of the Internet space as a multi-component integral system, where a high degree of interactivity and consumption of Internet resources can be traced through video hosting; determines that YouTube is the key video hosting; summarises the advantages of YouTube among other video hosting; identifies the problems and contradictions which have caused the platform to be criticised; identifies the main factors contributing to the growth of competitiveness since the creation of the website, as well as the algorithms of YouTube’s functioning in the modern Internet space and the ways to improve it. The scientific novelty is to clarify the specifics of the fundamental properties of the functioning and competitiveness of YouTube video hosting; to predict algorithms for improving the platform, and to identify some technological innovations and tools that will contribute to YouTube’s leadership on the World Wide Web. Conclusions. Today, the Internet is a powerful platform that consumers are actively using. Video hosting services are quite popular among Internet formats, as they experiment with various content in specific market conditions. This very web service is a platform for the potential representation of content, which is updated through active requests and views of recipients. In the context of war, modern machine learning algorithms make it possible to create a regression model that is best suited to choosing a strategy for creating and promoting Ukrainian-language content on video hosting services. YouTube is a powerful online video hosting platform that is constantly improving and experimenting with various content in specific market conditions. While maintaining its leadership position, YouTube is expanding its interaction with other social networks, streaming platforms and services and is confidently competing with many video hosts. YouTube is not just a project, but an empirical reality that is dynamically developing and reflects new high-quality content driven by specific communicative functions, forming a value basis in the process of functioning.

Impact of windfall tax on market dynamics: A Cournot oligopoly model with exogenous shocks

This study explores the nuanced impact of windfall taxes on market equilibrium, introducing an innovative approach within the Cournot oligopoly framework. The paper uses the 0–1 test for chaos to dissect how profit taxation can stabilize market behaviors under bounded rationality. It suggests that higher taxes may prevent collusion, thereby promoting a more competitive environment. The paper demonstrates that while windfall taxes leave regular markets almost unaffected, they can protect firms in chaotic states from adverse outcomes. This research underscores the necessity for policymakers to tailor windfall tax strategies to specific market conditions, potentially driving enhanced market efficiency. Our insights advocate for the judicious application of windfall taxes, which could significantly shape future economic policies.

Creating a Factoring Service Specifically Designed for Small and Medium Enterprises at Pro Credit Bank in Kosovo

Over the course of ten years, Kosovo has implemented policy reforms and worked on establishing a diverse market economy. As a result, small and medium enterprises (SMEs) in Kosovo have experienced significant growth and have played a crucial role in generating employment opportunities, boosting the country's GDP, and increasing the volume of exports. Nevertheless, small and medium-sized enterprises (SMEs) have encountered obstacles in their path to growth as a result of their limited management expertise and financial means, as well as the unpredictability of the business landscape. Consequently, small and medium-sized enterprises (SMEs) frequently encounter challenges during their business activities. The creation of new financial services is of utmost importance, particularly for joint-stock commercial banks in Kosovo, as they face less competition compared to state-owned commercial banks. This need arises from Kosovo's integration and economic development requirements, particularly in the banking sector. Furthermore, factoring is a financial instrument that fulfills the criteria of both commercial banks and small and medium-sized enterprises (SMEs). This study aims to propose the implementation of factoring services as a highly efficient and valuable short-term financial instrument for small and medium enterprises (SMEs) in Kosovo. Additionally, it highlights the significance of factoring services for commercial banks in the region. The primary goal of the first chapter is to provide an introduction to factoring services, as well as a clarification of the conditions necessary for their development. The second chapter provides an overview of the current global factoring industry and the specific market conditions in Kosovo, in order to gain insight into the general conditions for the development of factoring services for Kosovo-based factors. The Kosovo factoring market is currently in its early stages of development. There are significant opportunities for the growth of this service in Kosovo, particularly for pioneers introducing it to the market. Unfortunately, PRO CREDIT BANK was unable to capitalize on being the first to enter the market. Despite the benefits of PRO CREDIT BANK in accessing reliable and high-growth external sources of the Kosovo economy, The small and medium-sized enterprises (SMEs) in Kosovo have had a significant growth rate of 3.8%. PRO Loans Bank has a strong track record of providing financial services to SMEs, which are its main customers. The bank has also established successful partnerships with international and global organizations to get additional capital for loans.

Reflections on the Practice and Future Prospects of Quantitative Trading in China

Based on experiences both in China and internationally, quantitative trading has shown certain positive effects in enhancing trading efficiency and market liquidity. However, it also poses risks of increasing market volatility under specific market conditions, necessitating guided and regulated development. This paper briefly introduces the characteristics of quantitative trading, reviews its development within China, analyzes its advantages and disadvantages, summarizes recent regulatory requirements, and reflects on its future prospects in China. Suggestions for the next steps in the regulated development of quantitative trading are also proposed.

A system for achieving the strategic goals of the project of chartering the fleet of shipping companies in the post-war period

The beginning of the full-scale invasion of russia into Ukraine caused significant human, economic and political losses, as well as destruction of the shipping system of water transport. Nevertheless, in the future (in the post -war period) all losses received must be restored according to projects and programs in the post-war period. This paper examines the current scientific and applied problem of developing approaches to managing the success of fleet chartering projects based on proacti ve research of shipping companies. The authors have identified the main factors affecting fleet chartering processes: trends in the charter market; the volume of transport work in already developed markets, opportunities to enter new markets, the level of prices for ships, the state of the turbulent environment. The main strategic goals that determine the need to replenish the shipping company's fleet have been established. The main types of fleet replenishment projects corresponding to the following options for fleet replenishment have been identified: shipbuilding, ship acquisition, leasing (bareboat charter), short - and medium-term lease of ships (time charter). Classification of the main types of fleet replenishment projects, regarding their classification features, definition of products, specifics of life cycles, value and composition of stakeholders, which fully characterizes fleet replenishment as an object of project management. As a result of the time charter lease, the company is limited in its rights to the vessel and can only carry out commercial activities, and this type of lease allows solving short- and medium-term tasks related to market activity and the need to replenish the fleet. The concept and model of the proactive formation of fleet chartering project parameters in specific market conditions, taking into account their further development, which ensures the establishment of project product characteristics and the life cycle, taking into account the integral influence of the dynamics of the market conditions related to the project. For each selected type of fleet chartering project, the main classification features, specifics of life cycles, value and composition of participants are established. Thus, the formation of management models for the implementation of innovative projects, programs, in particular in Ukraine in its post-war conditions, in the paradigm of uncertainty of crises in the post-war period, remains relevant.

Applying an Optimum Bucking Method to Comparing the Volume and Value Recovery of Cut-to-Length and Tree-Length Merchandizing Systems in Piedmont and the Coastal Plain

Dynamic prices and markets create value for contractors who can readily evaluate the gross and net income differences for alternative merchandizing systems. The majority of the southern U.S.A. relies on tree-length merchandizing, with occasional identification and merchandizing of logs for a specific market or specific tree dimensions or qualities. Cut-to-length (CTL) merchandizing has generated more value when compared to tree-length (TL) marketing, but these comparisons have been limited to specific stands and markets (specifications and prices). The study objective was to demonstrate a process for evaluating cut-to-length and tree-length merchandizing systems in their production of gross value by applying a dynamic programming stem-level optimum bucking approach that maximizes the stem value given specific market conditions. TL merchandizing resulted in a better volume recovery for both regions, but the value recovery was better for CTL merchandizing. Observing the value recovery by diameter class, DSH classes of up to 100 mm had a similar value in both merchandizing systems, but CTL merchandizing yielded a greater or similar value per cubic meter across the range for larger tree sizes. Access to tree data and merchandizing tools needs to be addressed so wood suppliers and landowners may benefit from stem optimization and sensor technology being embedded into modern harvesters and processors.

Refugee Hiring and Organizational Performance

Prior research on the performance effects of hiring immigrants has mainly considered people who choose to move to other countries. We shift attention to forced migrants (i.e., refugees) and study the relationship between their employment and firm performance. We focus on the specific labor market conditions that refugees face and theorize that performance improves among firms that hire refugees. We explain this relationship using two interconnected mechanisms that revolve around refugees’ limited outside options. First, as refugees have strong incentives to remain employed, they put extensive effort into their jobs, work long hours, and, thereby, reduce the employer’s labor costs related to worker turnover (effort mechanism). Second, as refugees are generally willing to accept low pay, hiring them reduces the employer’s labor costs related to salaries (remuneration mechanism). Moreover, we theorize that greater job insecurity at the hiring firm strengthens both mechanisms because it increases refugees’ perceived risk of being fired and their fear of being unemployed. We find support for our theoretical predictions in a matched sample of 27,782 firms in Denmark covering the period from 2001 to 2016. History: This paper has been accepted for the Organization Science Special Issue on Migration and Organization. Funding: V. Rocha received financial support from the Carlsberg Foundation [Grant CF21-0156]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2021.15980 .

ESG investing versus the market: returns and risk analysis and portfolio diversification in Latin-America

PropósitoSe examina el rendimiento de los índices-ESG en América Latina (AL), evaluando sus características de riesgo y retorno en comparación con los índices convencionales.Diseño/metodología/enfoque:Utilizando un enfoque cuantitativo, analizamos los índices-ESG de Brasil, México, Chile, Perú y Colombia, empleando ratios de Sharpe, Sortino y Omega para medir los rendimientos ajustados al riesgo. Se utiliza análisis de regresión para evaluar la replicabilidad de los índices-ESG por parte de los índices de referencia. Se realizan simulaciones de Monte-Carlo para explorar el aumento en los rendimientos ajustados al riesgo cuando se incorporan los índices-ESG en las carteras.Hallazgos:El estudio aborda preguntas críticas: ¿Pueden los índices-ESG superar a sus índices de referencia? ¿Pueden estos índices-ESG ser replicados por sus contrapartes de referencia? ¿Mejoran los índices-ESG la diversificación de las carteras? Los hallazgos revelan que la inversión en índices-ESG tiene el potential de mejorar los rendimientos y la diversificación de las carteras de inversión.Limitaciones/implicaciones de la investigación –Aunque este estudio se centra en diversas economías de AL, es importante tener en cuenta variaciones en moneda y volatilidad.Originalidad/valor:La principal contribución de este estudio radica en su enfoque en países de AL en el examen de carteras diversas; ofrece valiosos conocimientos sobre el rendimiento de los índices-ESG en esta región en comparación con los índices convencionales.

Evaluation of strategy portfolios

People usually create a portfolio in order to diversify the risk coming from individual investments. To get a high yield with a good level of diversification, investors usually seek professional advice from portfolio managers. However, the true performance of an optimized portfolio usually depends on the correctness of the estimates of the distribution of future returns, which is often a matter of luck rather than skill. Thus, the optimization models may not be better than randomly selected portfolios. Our aim is to find how the so-called strategy portfolios, i.e., portfolios obtained by some decision optimized for a long-run horizon, perform compared to a benchmark, namely, a random investment, under specific market conditions. For this purpose, we evaluate several portfolio strategies over two periods of crisis: the subprime mortgage crisis and the Covid-19 pandemic, as well as run a moving window analysis over a longer horizon. In each case, the results are compared with the performance of random-weight portfolios. We find that if the strategy is minimization, the portfolios perform well; however, for the maximization of the objectives, the results are rather mixed.

Market memory, advance reaction, and retail investor herding

The arrival of new information, in conjunction with investor cognitive biases, has commonly been acknowledged as the main cause of herding behavior. However, whether past market information embedded in market memory influences investor herding has been less explored. We utilize tick-level trading data from the Chinese stock market to examine the impact of the market memory formed of stocks' exceptional performance during their initial trading days on the future herding behavior of retail investors. The empirical results show that the market memory of newly listed stocks is positively correlated with retail investor herding one year later at the appearance of a market-wide upward trend. We also propose an advance reaction channel in which retail investors tend to pay early attention to and preemptively invest in stocks with deep market memory due to their limited attention and the availability heuristic, leading to further herding due to confirmation bias. Our findings show that market information, if not fully incorporated into current stock prices through investor trading, can be partly stored in market memory. When activated by specific market conditions, market memory can be recalled and affect investor behavior and subsequent price dynamics. Our findings provide additional evidence to challenge the efficient market hypothesis (EMH) from the perspective of behavioral finance.

ОСОБЛИВОСТІ ЦІНОВИХ СТРАТЕГІЙ ЯК ФАКТОРУ ПІДВИЩЕННЯ КОНКУРЕНТОСПРОМОЖНОСТІ ПІДПРИЄМСТВ В ГОТЕЛЬНІЙ ІНДУСТРІЇ

The article is devoted to the study of factors affecting the pricing process at hotel industry enterprises. In particular, these are the costs of the enterprise, the rate of profit, the level of demand, seasonality, geographical location, stardom, competition and others. Among these factors, more attention is paid to the study of the specifics of specific price strategies in the hotel industry, which serve as a factor in increasing the competitiveness of enterprises in this industry. The choice and implementation of a price strategy is one of the most important decisions of the management of a hotel enterprise, since profitability and competitiveness in the market depend on it. The list of such strategies includes: pricing strategy based on forecasting, differentiated pricing strategy, dynamic pricing strategy, discount strategy, instant sales strategy, and others. Each of these strategies has its own characteristics and is used by hotels depending on their specific goals, market conditions and customer segmentation. The development of a price strategy and price management tactics in the hotel sector is a constant iterative process. It is impossible to choose a strategy once and stay with it unchanged for a long period. It must constantly adapt to market conditions and situations. The chosen pricing strategy cannot be unambiguous, ideal or immutable. It should include a partial interweaving and combination of different strategies, taking into account the conditions of the external and internal environment. A combination and interchange of strategies is effective. The pricing strategy must be flexible and adapt to market changes. In this context, the strategy of elastic (flexible) price, which involves a quick response to fluctuations in market demand and supply, is of great importance. A correctly chosen pricing strategy can provide a hotel with increased competitiveness. The strategy of flexible prices should be recommended as a means of countering competitive pressure. The faster the hotel reacts to the actions of competitors, the greater the effect of its application. Overall, pricing strategy is a key element of success in the hospitality industry as it helps hotels to increase competitiveness, attract and retain guests, and increase revenue.

Бліц-масштабування в стратегічній конфігурації управління транспарентністю розвитку підприємств на основі цифрової когерентності

In the investment environment, which is formed under the influence of management processes in the real sector of the economy, a kind of «vicious circle» arises: the use of outdated, technologically backward production equipment leads to the production of products that lose both price and especially non-price competitiveness, which leads to a decrease in investment attractiveness and complicates the attraction of investment loans. The blitz-scaling strategy has become popular in various industries, including the technology sector. Companies, able to scale their products or services quickly, can find success in the market by means of a rapid gaining of a share. That being said, results may vary depending on the specific industry and market conditions. In recent years, the importance of digital transparency has become even greater due to the demands of society and the growing role of ethical aspects in doing business. Businesses that demonstrate openness and responsibility in the use of digital technologies can expect greater support and trust from customers, investors, and the public. Ensuring transparency and high standards of ethics is crucial to trusting customers and partners because of the ethical aspects of the use of digital technologies. The strategic configuration of enterprise transparency management based on digital coherence is not just a task for enterprises, but also a necessity for their success in the era of digital transformation. Consistent implementation of these principles will allow not only to survive in the face of change, but also to thrive, realizing its existing and hidden potential in a world where digitalization is becoming the norm. Building a model of strategic configuration of enterprise development transparency management based on digital coherence is an important aspect of successful functioning in the modern digital world. This is the basis for the development of strategic plans, which determines the vector of development, avoids differences in the understanding of tasks, contributing to the formation of a common understanding of the goal and ways to achieve it. All these aspects of building transparency in enterprise development through digital technologies pave the way for sustainable success and increased competitiveness in a rapidly changing business environment.

The safe haven feature of gold in the recent crisis

The global repercussions of the COVID-19 pandemic had a substantial adverse impact on the overall economy, resulting in equity markets decline worldwide. Amidst this turbulent environment, plagued with uncertainty, investors have redirected their attention towards secure assets to protect their capital. In that context the main objective is to reevaluate whether gold still demonstrates the qualities of a safe haven investment during unprecedented events like the COVID-19 pandemic and the Ukrainian war, events distinct from past crisis we have experienced for example 2008 and 1987. For the same reason, a rolling regression between gold and the S&P500 index was employed, taking into account the time-varying properties of daily returns and opting for an optimal window size. The findings indicate that significant negative slope coefficients coincide with the COVID-19 pandemic and the initiation of the Ukrainian war. These results offer empirical evidence that gold continues to maintain a robust position as a safe haven in the perception of investors. Nevertheless, it is essential to emphasize that there is no universally applicable safe haven; the safety features of different assets fluctuate over time, depending on the specific market conditions and the nature of financial turmoil.

Bonuses, options, and bank strategies

This study focuses on the management financial incentives that banking institutions adopt, with the purpose of best serving their corporate strategies. Specifically, a comparative study is carried out between medium- and long-term incentives, under the form of option-based pay, and short-term incentives, which take the form of bonus-based pay. Banking institutions should seek for the best balance between the two types of compensation, weighing their pros and cons under the specific market conditions they face. The paper advocates in favor of including the options modality in incentive packages, given that it stimulates the alignment of interests between owners and managers, allowing these last ones to act in an independent but responsible manner. Bonuses, in turn, require additional shareholders’ supervision, which might be advantageous when the need to reverse harmful effects of poor performance arises. The developed theoretical model is complemented with two numerical exercises (one with simulated data and the other with real data) that corroborate the model’s conjectures.

Export-specific investments, competitive advantage, and performance in Vietnamese SMEs: The moderating role of domestic market conditions

We develop a conceptual model, based on the theories of Resource-based View, Industrial Organization, and Institution-based View, that examines the effect of export specific investments on creating competitive advantage in export markets, as well as the impact of this advantage on the firm’s export performance. With a sample obtained from 159 Vietnamese SME exporters, we confirm that investments in export-related human, innovation, marketing, and financial resources help to generate both a cost reduction-based and product differentiation-based export competitive advantage that are conducive to enhanced export performance. The association between export-related resource investments and cost reduction-based or product differentiation-based competitive advantage was also found to be moderated by specific domestic market conditions, namely institutions, infrastructure, bureaucracy, and competition.

Do peer effects matter in bank risk? Some cross-country evidence

This paper empirically investigates whether peer effects play a significant role in shaping banks’ risk. We use panel data from more than 550 public banks in 32 economies during the period of 2000––2018. By estimating the directional pairwise connectedness between banks to identify the heterogeneous influence that peers may exert to banks’ performance, we find supportive evidence that banks’ risk is positively associated with that of their peers. This finding is consistent with the hypothesis that banks may learn from their peers when making their own risk-taking decisions. Our result remains consistent when we use various approaches to mitigate the potential endogeneity problems, employ various indicators of bank risk, and exercise some other robustness checks. Furthermore, our findings reveal that peer effects exhibit variations in response to some specific bank characteristics and market conditions.

Multi-Attribute Gain Loss (MAGL) method to predict choices

A better method named MAGL (Multi-Attribute Gain Loss) is proposed to predict choices made by consumers in a multi-attribute setting. The MAGL method uses the tenets of prospect theory, Kauffman’s complexity theory, norm theory, and context-dependent choice theory. Since the choice processes are often found to be affected by the context or the choice set, the proposed MAGL method is able to model and predict the context-dependent choice behavior of consumers. The predictions of the MAGL method are useful to marketing/product managers in designing new products. The output of the MAGL method can be analyzed to determine which combination of attribute values is outperforming in a specific competitive market condition. A decision support system can be designed and developed for marketing/product managers where they can experiment by introducing, redesigning, or removing products and simulate the market share of various products for a similar consumer population.

Decision making for sexed semen and beef semen in dairy production

Breeding strategies using sexed semen on younger and supe­rior animals and beef semen on older and inferior animals are becoming widely used in the dairy industry because it bal­ances the number of replacements produced and required while bringing extra income of selling crossbreed beef calves that are more valuable than dairy calves. The value proposition also implies genetic improvement because of greater breed­ing selection and shorter intergenerational interval, which can be captured in improved milk productivity. The best semen-type breeding strategy is farm specific and dependent on herd reproductive performance and ever-changing market condi­tions. Hence, the need to use models and projections to assert the optimal semen-type breeding strategy that optimizes the net return of each farm under specific market conditions. We analyzed the economic value of using alternative breeding strategies using sexed, beef and conventional semen using 2 ap­proaches. A short-term approach contained in a user-friendly decision support tool, the Premium Beef on Dairy Program, assessed the income from calves over semen costs over a breed­ing cycle whereas a long-term approach, using the Animal Life Cycle submodule of the Ruminant Farm Simulation Model, included additionally breeding, rearing and feed costs, and slaughter, heifer and milk sales revenues. Important in the long-term evaluation was the milk value change as a proxy for genetic improvement. Both approaches consistently pointed out that the advantage of the sexed/beef semen is positively related to herd reproductive performance. The greater the reproduc­tive performance the more the economic opportunity. With medium to high reproductive performance (above ~20% 21-d pregnancy rate), the Premium Beef on Dairy Program found the maximum income from calves over semen cost occurred when sexed semen was used in the first 2 heifer breedings and first and second lactation superior cows, while the rest of the heifer breedings were made with conventional semen and the rest of the cow breedings were made with beef semen. These results were consistent in the long-term analysis, which indi­cated that even a slightly more aggressive breeding approach using sexed semen in all heifer breedings resulted in the best net return in the long-term when the extra value of increased milk productivity became the most important economic factor. Although the short-term analysis did not include the herd dy­namics and milk changes, it still produced the right trend and directionality for decision making. The recommendation is to use the Premium Beef on Dairy user-friendly tool according to a herd’s reproductive performance and market conditions, and repeat the analysis constantly as the management and market circumstances change. When a deep and long-term analysis is necessary, the use of the Life Cycle Assessment submodule from the RuFaS is critical. Thus, both approaches are useful and complementary.