Given uncertain popularity of new products by location, fast fashion retailer Zara faces a trade-off. Large initial shipments to stores reduce lost sales in the critical first days of the product life cycle, but maintaining stock at the warehouse allows restocking flexibility once initial sales are observed.
Much of the recent empirical IO research has been conducted in the context of relatively mature, stable (often consumer packaged goods) markets. In these markets, consumer preferences and competitive interaction are often characterized by relatively stable patterns over time.
We examine empirically and theoretically the relation between firms’ risk and distance to consumers in a production network. We document two novel facts: firms farther away from consumers have higher risk premiums and higher exposure to aggregate productivity. We quantitatively explain these findings using a general equilibrium model featuring a multilayer production process.
We examine the global equity supply chains of U.S. multinationals to explore how tax and nontax country characteristics affect whether firms use foreign holding companies and where they locate them. We find that U.S. multinationals supply equity from headquarters to their foreign operating companies through foreign holding companies located in countries that lightly tax equity distributions.
In this study, the authors conduct a systematic investigation on the evolution in the effectiveness of two important marketing mix instruments, advertising and price, over the business cycle. Analyses are based on 163 branded products in 37 mature CPG categories in the UK, and this for a period of 15 years. The data are a combination of (i) monthly national sales data, (ii) monthly advertising data, (iii) data on the general economic conditions, and (iv) consumer survey data.
The authors analyzed the planning problem for HIV screening, testing and care. This problem consists of determining the optimal fraction of patients to be screened in every period as well as the optimum staffing level at each part of the health care system to maximize the total health benefits to the patients measured by Quality-Adjusted Life-Years (QALYs) gained.
We measure the effects of pre- and postrelease blog volume, blog valence, and advertising on the performance of 75 movies in 208 geographic markets in the United States. We attribute the variation in blog effects across markets to differences in demographic characteristics of markets combined with differences across demographic groups in their access and exposure to blogs as well as their responsiveness conditional on access.
The practice of detailing in the marketing of prescription drugs is undergoing significant changes because of restrictions imposed by regulatory policy as well as by access restrictions placed by physicians. To analyze the strategic impact of these restrictions, we develop a structural model of how pharmaceutical firms compete dynamically to schedule detailing to physicians.
In this paper, we study the effect of a firm’s local channel exits on prices charged by incumbents remaining in the marketplace. Exits could result in higher prices due to tempered competition or lower prices due to reduced co-location or agglomeration benefits. The net effect of these two countervailing forces remains unknown. In addition, little is known about how this effect could change depending on incumbents’ geographic locations.
We use unique worker-plant matched panel data to measure differences in wage changes experienced by workers displaced from closing plants. We observe larger losses among women than men, comparing workers who move from the same closing plant to the same new firm. However, we find a significantly smaller gap in hiring firms with female leadership.
Examining the strategy formation process is central to understanding why some firms in entrepreneurial settings create competitive advantage and succeed while others do not. While existing work shows the value of learning from experience or having a holistic understanding of how the pieces fit together, there is limited empirical research that fuses the two streams. We first review the extant literature on strategy formation in entrepreneurial settings by organizing around this fundamental tension between strategizing by “doing” versus “thinking.” We then describe recent work that blends the two and conclude with a future research agenda.
A pooled Public Use Microdata Sample File of the Census Bureau’s Annual American Community Survey (2011-2015) is used to (1) create a demographic profile of the nation’s older adult population; (2) develop an older adult household typology which encapsulates both generational dynamics and diverse living arrangements; and (3) identify older adults who face the greatest barriers to aging in place. Policies and strategies that support and facilitate successful aging in place for the most vulnerable older adults are discussed.
We examine the validity of the underlying assumption that the tax system favors superstar firms, using both forward-looking and backward-looking measures of firms’ tax burdens. Across multiple specifications, we find little empirical support for the idea that superstar firms are tax advantaged.
Detaching from work is beneficial because it helps employees recover from work demands. However, we argue that detachment may be a trade-off for employees in organizations with higher (vs. lower) levels of performance pressure. Drawing on social self-preservation theory, we hypothesize that evening detachment leads employees working in higher (vs. lower) performance pressure work contexts to experience increased shame at work the next morning.
Virginia’s rapid population growth over the past three decades has been uneven, creating demographic winners and losers, and masks several demographic headwinds that will constrain future growth and competitiveness if left unaddressed, including slowing rates of total and foreign-born population growth, white population decline, deaths of despair, and declining labor force participation among prime working age males and females in the state.
Regulating short selling is difficult and controversial. We review the academic literature on short selling regulation and provide insights for future policymakers and academics. We organize the complex history of short selling regulation into three areas: disclosure requirements, securities lending restrictions, and trading restrictions. We identify, analyze and discuss 45 distinct regulations promulgated during the period 1896 through 2021, primarily by reviewing the academic literature associated with each regulation, including a discussion of the data sources employed. In so doing, we provide several insights regarding the effectiveness of regulatory approaches as well as the wider impact on markets.
North Carolina’s phenomenal migration-driven population growth masks a troubling trend: high rates of death and dying prematurely which, left unchecked, can potentially derail the state’s economic growth and prosperity in the years ahead. On average, 246 North Carolinians died each day during the 2010s, increasing to 317 daily between April 1, 2020 and July 1, 2022. COVID-19 and the substance abuse crisis have played a major role in premature deaths of prime working age citizens of the state. Both people-based and place-based strategies and interventions are urgently needed to address the state’s death crisis.
We examine the intersection of two major trends at online retail platforms: the emergence of retail media, which allows sellers to advertise on retail platforms alongside selling their products, and the platforms' switch away from reselling towards marketplace formats. We study whether and when a retail platform benefits from introducing sponsored advertising, and how the effects change with the platform's selling format. We consider two sellers with different qualities selling through a retail platform. We find that counter to our intuitions, offering sponsored advertising may not always benefit the platform, depending on its selling format.
We reassess whether and to what degree the hiring, development, and promotion decisions of S&P 500 companies has led to misrepresentation of and bias against their minority executives. Instead of the US population benchmark that has conventionally been used to measure misrepresentation, and from such misrepresentation attribute the presence and magnitude of racial bias and discrimination, we measure misrepresentation in US executives using the benchmark of the racial/ethnic densities (RAEDs) of their college cohort peers. Our key result is that the differences between US executive RAEDs and the RAEDs of their college peers are far smaller than those found using the US population, typically by an order of magnitude or more.
Firms' payout decisions respond to expected returns: everything else equal, firms invest less and pay out more when their cost of capital increases. Given investors' demand for firm payout, market clearing implies that the dynamics of productivity and payout demand fully determine equilibrium asset prices and returns. We use this logic to propose a payout-based asset pricing framework and we illustrate the analogy between our approach and consumption-based asset pricing in a simple two-period model. Then, we introduce a quantitative payout-based asset pricing model and calibrate the productivity and payout demand processes to match aggregate U.S. corporate output and payout empirical moments. We find that model-implied payout yields and firm returns go a long way in reproducing key attributes of their empirical counterparts.