Meridians 2:1

The start to a second volume of a new journal is often a time when finally the editor can not only catch her breath, and perhaps even cheer, but can also reflect on the ways in which this new arrival is beginning to grow and develop....https://scholarworks.smith.edu/meridians/1038/thumbnail.jp

Meridians 2:2

As I draft this introduction in early December, 2001, the twenty year war in Afghanistan continues despite some arguments that it is over because the Taliban have been routed from a few of their strongholds in Kabul and Kandahar....https://scholarworks.smith.edu/meridians/1037/thumbnail.jp

Meridians 1:2

The end of the twentieth century marks a time of realignments in the cultural and political economies of gender throughout the world. Protests in many places against the World Trade Organization, the International Monetary Fund, and the World Bank have brought together a range of constituencies which had been fairly remote from each other in the previous decade....https://scholarworks.smith.edu/meridians/1039/thumbnail.jp

Why Funds of Funds?

Private equity funds of funds (FOFs) have become big business. Today, FOFs form 14% of new money raised. I test six explanations for the rise of FOFs. First, I find that FOFs do not generally deliver superior returns. They do, however, do well enough for the limited partners (LPs) that hire them. Second, FOFs allow small LPs to scale upward, to invest in more funds. However, I find that they do not contribute to diversification. What they really do is to provide smaller LPs avenues to lower the cost of fund management. Third, FOFs allow large LPs to scale downward, to invest vast amounts over a short duration. However, the mechanism is imperfect because LPs can either use many FOFs and risk coordination problems among them or few FOFs and risk getting held up. Fourth, FOFs are used by LPs with weaker governance structures. Fifth, there is some evidence that LPs use FOFs to learn to invest in new areas, but the support is weak. Last, the use of FOFs is partly due to cyclical booms.Venture capital, private equity, agency, economies of scale, outsourcing

Meridians 3:1

This issue is the last of the four issues of Meridians that brought me to Smith College from the University of California at Santa Barbara in my two-year post as Founding Editor. I now welcome Myriam Chancy of Arizona State University to her two-year post as next editor of Meridians. I trust she will enjoy working here as much as I have.https://scholarworks.smith.edu/meridians/1036/thumbnail.jp

Inventory Signals

Among practitioners, inventory is often thought to be the root of all evil in operations management. The stock market hates it, the media abhors it, and managers have come to fear it. But high inventory levels can also be the result of strategic buying and high-availability strategies. The problem is that when the market sees lots of inventory, it cannot tell whether it is because of poor or smart operations. We hypothesize that inventory has a signaling role. In our model, publicly- traded firms use inventory levels to signal their operational competence to the market. There is a separating equilibrium that leads some firms to maintain inventory levels below what their capability could achieve. We offer this as one explanation why, for example, stock-outs are pervasive even among operationally competent firms. We provide empirical evidence for the assumptions behind this inventory signaling hypothesis: (1) the market cannot tell the difference between “good” and “bad” inventory; and (2) the counterfactual: the market punishes firms when it can tell that their inventory is bad, such as when they write off supplies. Consistent with these assumptions, we find that inventory levels do not explain firm value. And on average, stocks suffer an abnormal negative return of 7% in the month of announcing inventory write-offs.Inventory, signaling, operations management, asymmetric information