33 research outputs found
Price adjustment and market structure
The present thesis is concerned with the relationship between price
adjustments in response to changes in economic conditions and industrial
market structure. Its point of departure consists of abandoning the time-honoured
assumption that firms in industrial markets act as if they were
price takers. Instead, attention is focused on the determinants of price
adjustment in a more realistic industrial setting.
Following the introductory analysis, a synthesis is proposed
between the long-standing "administered prices" hypothesis, and the recent
theories associated with the "new view" of Keynes. It is suggested that
both approaches have common theoretical underpinnings which are themselves
closely related to this thesis.
The main body of analysis consists of a theoretical and an empirical
investigation. In the theoretical section, two distinct aspects of the
price adjustment decision are examined. The first concerns the comparative
statics of adjustment and involves an analysis of the factors which determine
the magnitude of price adjustments following changes in cost and demand.
Moreover, the influence of market structure on the adjustment process is
examined through its impact on the costs of search which are associated with
the pricing decision. The second, and no less important aspect of the
theoretical investigation concerns the dynamics of price adjustment. The
object of this analysis is to assess the impact of market structure on the
rate of price adjustment over time.
The two hypotheses developed in the theoretical section are put to
extensive empirical testing. The quantitative analysis involves mainly
time-series and cross-section regressions, but other statistical techniques
such as rank correlation and covariance tests are also employed.
The first of these hypotheses is that price adjustments in response
to short-run changes in demand could be attenuated relative to those occasioned by changes in marginal costs. The rationale for this asymmetry
is based on the unequal impact of search costs. The empirical findings,
whilst by no means conclusive, do not contradict this view.
The second hypothesis suggests that a high degree of industrial
concentration will be associated with high rates of price adjustment. This
is because concentration facilitates the process of dynamic co-ordination
amongst firms by reducing the costs of search. The empirical results come
out strongly in favour of this hypothesis. The consequential implications
regarding "administered prices" and the management of inflation are explored
in the concluding chapter of this thesis
Outsourcing and financial performance: A negative curvilinear effect
This study asks how a firm's degree of outsourcing across all activities influences financial performance. We argue there is an optimal degree of outsourcing, where firms outsource some activities yet integrate others, and that deviations lower performance in a negatively curvilinear fashion. We find empirical support, using 1995 and 1998 data on a sample of manufacturing businesses in the Netherlands, and show that the steepness of the curve increases under conditions of high uncertainty. We show the magnitude of the uncertainty effect on performance outcomes through a post hoc scenario analysis. Thus we provide a specific, theoretically and empirically grounded prediction of how outsourcing affects performance with implications for theory and practice
Institutional, ideological and political influences on local government contracting: evidence from Englad.
Theories of contracting out offer contrasting perspectives on the noneconomic determinants of local government contracting. Some suggest that ideological motives predominate, with contracting decisions reflecting the ideology of ruling parties. Others emphasize political motives, with governments responding to local preferences. In this article, we draw on ideas about isomorphic pressures within organizational fields to examine whether institutional influences might also affect contracting behaviour. Using a spatial auto-regressive probit model, we evaluate whethermimetic pressures as well as ideological and political motives shape the decision to contract out service provision in English local governments. In addition, we analyse whether those factors also determine whether contracting local governments decide to contract with a commercial firm or a not-for-profit provider. The statistical results suggest that the decision to contract out is spatially dependent, and hence reflective of institutional forces. By contrast, political motives and market size considerations shape with whom local governments contract