Digital video recorder proliferation and new commercial audience metrics are making television networks' revenues more sensitive to audience losses from advertising. There is currently limited understanding of how traditional advertising and product placement affect television audiences. We estimate a random coefficients logit model of viewing demand for television programs, wherein time given to traditional advertising and product placement plays a role akin to the "price" of consuming a program. Our data include audience, advertising, and program characteristics from more than 10,000 network-hours of prime-time broadcast television from 2004 to 2007. We find that the median effect of a 10% rise in traditional advertising time is a 15% reduction in audience size. We find evidence that creative strategy and product category factors are important determinants of viewer response to traditional advertising. When we control for program episode quality, we find that product placement time decreases viewer utility. In sum, our results imply that networks should give price discounts to those advertisers whose ads are most likely to retain viewers' interest throughout the commercial break.
{"title":"Effects of Advertising and Product Placement on Television Audiences","authors":"Kenneth C. Wilbur, M. S. Goeree, G. Ridder","doi":"10.2139/ssrn.1151507","DOIUrl":"https://doi.org/10.2139/ssrn.1151507","url":null,"abstract":"Digital video recorder proliferation and new commercial audience metrics are making television networks' revenues more sensitive to audience losses from advertising. There is currently limited understanding of how traditional advertising and product placement affect television audiences. We estimate a random coefficients logit model of viewing demand for television programs, wherein time given to traditional advertising and product placement plays a role akin to the \"price\" of consuming a program. Our data include audience, advertising, and program characteristics from more than 10,000 network-hours of prime-time broadcast television from 2004 to 2007. We find that the median effect of a 10% rise in traditional advertising time is a 15% reduction in audience size. We find evidence that creative strategy and product category factors are important determinants of viewer response to traditional advertising. When we control for program episode quality, we find that product placement time decreases viewer utility. In sum, our results imply that networks should give price discounts to those advertisers whose ads are most likely to retain viewers' interest throughout the commercial break.","PeriodicalId":332226,"journal":{"name":"USC Marshall School of Business Research Paper Series","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-06-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127259907","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Patent expiration represents a turning point for the brand losing patent protection as bioequivalent generic versions of the drug quickly enter the market at reduced prices. In this paper, we study how physician characteristics and their prescribing decisions impact the competition among molecules of a therapeutic class, once generic versions of one of these molecules enter the market. Our results suggest that to understand the diffusion of generics in the category marketers should (1) determine the size of physician segments sensitive to marketing activity and prices, and (2) assess the marketing activity of all pharmaceutical firms, whether bioequivalent or not. We further discuss the managerial implications of our results.
{"title":"Can Branded Drugs Benefit from Generic Entry? Switching to Non-Bioequivalent Molecules and the Role of Physician Response to Detailing and Prices","authors":"Jorge González, C. Sismeiro, S. Dutta, P. Stern","doi":"10.2139/ssrn.996552","DOIUrl":"https://doi.org/10.2139/ssrn.996552","url":null,"abstract":"Patent expiration represents a turning point for the brand losing patent protection as bioequivalent generic versions of the drug quickly enter the market at reduced prices. In this paper, we study how physician characteristics and their prescribing decisions impact the competition among molecules of a therapeutic class, once generic versions of one of these molecules enter the market. Our results suggest that to understand the diffusion of generics in the category marketers should (1) determine the size of physician segments sensitive to marketing activity and prices, and (2) assess the marketing activity of all pharmaceutical firms, whether bioequivalent or not. We further discuss the managerial implications of our results.","PeriodicalId":332226,"journal":{"name":"USC Marshall School of Business Research Paper Series","volume":"21 5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125888514","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study the role of institutional investors around the world using a comprehensive data set of equity holdings from 27 countries. We find that all institutional investors have a strong preference for the stock of large firms and firms with good governance, while foreign institutions tend to overweight firms that are cross-listed in the U.S. and members of the Morgan Stanley Capital International World Index. Firms with higher ownership by foreign and independent institutions have higher firm valuations, better operating performance, and lower capital expenditures. Our results indicate that foreign and independent institutions, with potentially fewer business ties to firms, are involved in monitoring corporations worldwide.
我们使用来自27个国家的股票持有的综合数据集来研究全球机构投资者的作用。我们发现，所有机构投资者都对大型公司和治理良好的公司的股票有强烈的偏好，而外国机构倾向于增持在美国交叉上市的公司和摩根士丹利资本国际世界指数(Morgan Stanley Capital International World Index)成份股。外资和独立机构持股比例较高的公司估值较高，经营业绩较好，资本支出较低。我们的研究结果表明，外国和独立机构，与公司的业务联系可能较少，参与了全球范围内的公司监测。
{"title":"The Colors of Investors' Money: The Role of Institutional Investors Around the World","authors":"Miguel A. Ferreira, Pedro Matos","doi":"10.2139/ssrn.885777","DOIUrl":"https://doi.org/10.2139/ssrn.885777","url":null,"abstract":"We study the role of institutional investors around the world using a comprehensive data set of equity holdings from 27 countries. We find that all institutional investors have a strong preference for the stock of large firms and firms with good governance, while foreign institutions tend to overweight firms that are cross-listed in the U.S. and members of the Morgan Stanley Capital International World Index. Firms with higher ownership by foreign and independent institutions have higher firm valuations, better operating performance, and lower capital expenditures. Our results indicate that foreign and independent institutions, with potentially fewer business ties to firms, are involved in monitoring corporations worldwide.","PeriodicalId":332226,"journal":{"name":"USC Marshall School of Business Research Paper Series","volume":"44 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121723684","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Conventional wisdom is that the performance of a new technology starts below that of an exiting technology, crosses the performance of an older technology once and ends up at a higher plateau, so tracing a single S-shaped curve. As such, to stay competitive, managers need to switch from an old technology to a new one before the former matures. We test this premise in 23 technologies across six markets. The results strongly refute the existence of a single S-shaped curve of technological evolution. We find that technologies evolve through a series of jumps, whose pattern and frequency is intrinsic to a technology but increasing over time. Most importantly, jumps occur even after a long plateau of no improvement or apparent maturity. The results suggest that managers vigilantly study the internal dynamics of their technology rather than use simplistic rules of thumb for investing in technologies.
{"title":"The S-Curve of Technological Evolution: Marketing Law or Self-Fulfilling Prophecy?","authors":"A. Sood, G. Tellis","doi":"10.2139/ssrn.981532","DOIUrl":"https://doi.org/10.2139/ssrn.981532","url":null,"abstract":"Conventional wisdom is that the performance of a new technology starts below that of an exiting technology, crosses the performance of an older technology once and ends up at a higher plateau, so tracing a single S-shaped curve. As such, to stay competitive, managers need to switch from an old technology to a new one before the former matures. We test this premise in 23 technologies across six markets. The results strongly refute the existence of a single S-shaped curve of technological evolution. We find that technologies evolve through a series of jumps, whose pattern and frequency is intrinsic to a technology but increasing over time. Most importantly, jumps occur even after a long plateau of no improvement or apparent maturity. The results suggest that managers vigilantly study the internal dynamics of their technology rather than use simplistic rules of thumb for investing in technologies.","PeriodicalId":332226,"journal":{"name":"USC Marshall School of Business Research Paper Series","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133896984","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In channel structures characterized by a powerful retailer e.g., Wal-Mart, Home Depot, the dominant retailer's acceptance of a manufacturer's new product often determines the success of the new offering. Focusing on a manufacturer in such a market, we develop an approach to positioning and pricing a new product that directly incorporates the retailer's acceptance criteria into the development process. Our method also accounts for the retailer's product assortment and the competing manufacturers' potential reactions in wholesale prices. Our method merges individual-level conjoint models of preference with game-theoretic models of retailer and manufacturer behavior that are specific to the institutional setting of the focal manufacturer. The application of our approach in the context of a new power tool development project undertaken by this manufacturer also highlights the potential of our approach to other analogous institutional settings.
{"title":"New Product Development Under Channel Acceptance","authors":"L. Luo, P. K. Kannan, B. Ratchford","doi":"10.1287/MKSC.1060.0240","DOIUrl":"https://doi.org/10.1287/MKSC.1060.0240","url":null,"abstract":"In channel structures characterized by a powerful retailer e.g., Wal-Mart, Home Depot, the dominant retailer's acceptance of a manufacturer's new product often determines the success of the new offering. Focusing on a manufacturer in such a market, we develop an approach to positioning and pricing a new product that directly incorporates the retailer's acceptance criteria into the development process. Our method also accounts for the retailer's product assortment and the competing manufacturers' potential reactions in wholesale prices. Our method merges individual-level conjoint models of preference with game-theoretic models of retailer and manufacturer behavior that are specific to the institutional setting of the focal manufacturer. The application of our approach in the context of a new power tool development project undertaken by this manufacturer also highlights the potential of our approach to other analogous institutional settings.","PeriodicalId":332226,"journal":{"name":"USC Marshall School of Business Research Paper Series","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115974204","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Radical innovation is an important driver of the growth, success, and wealth of firms and nations. Because of its importance, authors in a variety of disciplines and time periods have addressed this topic. They have proposed many hypotheses about the drivers of innovation in firms across nations, including factors such as religion, geography, number of scientists and engineers, country culture, intellectual property protection, patents, R&D, and firm culture. The authors test these hypotheses using survey and archival data across 759 firms drawn from 17 major world economies. Results contradict many prior assertions about the appropriate metric for innovation and the drivers of innovation.Results show that: 1) Commercialization of radical innovations has an important impact on a firm's financial performance and as such is a more valid measure of innovation than patents. 2) The internal culture of a firm is the strongest driver of radical innovations. Its impact exceeds that of all other factors proposed in the literature.
{"title":"What Drives Innovation in Firms Across Nations? A Culture of Innovation","authors":"G. Tellis, Jaideep Prabhu, Rajesh Chandy","doi":"10.2139/ssrn.961477","DOIUrl":"https://doi.org/10.2139/ssrn.961477","url":null,"abstract":"Radical innovation is an important driver of the growth, success, and wealth of firms and nations. Because of its importance, authors in a variety of disciplines and time periods have addressed this topic. They have proposed many hypotheses about the drivers of innovation in firms across nations, including factors such as religion, geography, number of scientists and engineers, country culture, intellectual property protection, patents, R&D, and firm culture. The authors test these hypotheses using survey and archival data across 759 firms drawn from 17 major world economies. Results contradict many prior assertions about the appropriate metric for innovation and the drivers of innovation.Results show that: 1) Commercialization of radical innovations has an important impact on a firm's financial performance and as such is a more valid measure of innovation than patents. 2) The internal culture of a firm is the strongest driver of radical innovations. Its impact exceeds that of all other factors proposed in the literature.","PeriodicalId":332226,"journal":{"name":"USC Marshall School of Business Research Paper Series","volume":"182 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114141197","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper presents a theory of the allocation of authority in an organization in which centralization is limited by the agent's ability to disobey the principal. We show that workers are given more authority when they are costly to replace or do not mind looking for another job, even if they have no better information than the principal. The allocation of authority thus depends on external market conditions as well as the information and agency problems emphasized in the literature. Evidence from a national survey of organizations shows that worker autonomy is related to separation costs as the theory predicts.
{"title":"Disobedience and Authority","authors":"J. Matsusaka, A. Mariño, Ján Zábojník","doi":"10.2139/ssrn.914106","DOIUrl":"https://doi.org/10.2139/ssrn.914106","url":null,"abstract":"This paper presents a theory of the allocation of authority in an organization in which centralization is limited by the agent's ability to disobey the principal. We show that workers are given more authority when they are costly to replace or do not mind looking for another job, even if they have no better information than the principal. The allocation of authority thus depends on external market conditions as well as the information and agency problems emphasized in the literature. Evidence from a national survey of organizations shows that worker autonomy is related to separation costs as the theory predicts.","PeriodicalId":332226,"journal":{"name":"USC Marshall School of Business Research Paper Series","volume":"74 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122959216","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines daily open-to-close returns of major stock market indices on the New York Stock Exchange, Tokyo Stock Exchange and the London Stock Exchange over the 1985-1990 period, which encompasses the October 1987 Stock Market Crash. We estimate volatility spillover effects across the 24 hour day using a GARCH-M model. We find evidence that volatility spillover effects emanating from Japan have been gathering strength over time, especially after the 1987 Crash. This may reflect a growing awareness by domestic investors of the economic interdependence of international financial markets since the 1987 Stock Market Crash.
{"title":"The Effects of the 1987 Stock Crash on International Financial Integration","authors":"Yasushi Hamao, Ronald W. Masulis, Victor K. Ng","doi":"10.7916/D8FX7J0N","DOIUrl":"https://doi.org/10.7916/D8FX7J0N","url":null,"abstract":"This paper examines daily open-to-close returns of major stock market indices on the New York Stock Exchange, Tokyo Stock Exchange and the London Stock Exchange over the 1985-1990 period, which encompasses the October 1987 Stock Market Crash. We estimate volatility spillover effects across the 24 hour day using a GARCH-M model. We find evidence that volatility spillover effects emanating from Japan have been gathering strength over time, especially after the 1987 Crash. This may reflect a growing awareness by domestic investors of the economic interdependence of international financial markets since the 1987 Stock Market Crash.","PeriodicalId":332226,"journal":{"name":"USC Marshall School of Business Research Paper Series","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-05-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130385681","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Why do firms make large cash payouts, given the tax advantages of retention? The dividend puzzle is based on the premise that low or near-zero payouts are optimal (although not uniquely so) in frictionless markets, hence should be strictly optimal when payouts are taxed. This logic reflects misunderstandings about the nature of payout policy irrelevance in frictionless markets and the implications of adding personal taxes to the standard finance model. In frictionless markets, all optimal policies require substantial payouts. Those with low or near-zero distributions are strictly sub-optimal, and are infeasible given rational expectations. Payout policy irrelevance does not carry over to general equilibrium, so it is inappropriate to conclude that many or most firms can make low payouts for extended periods. Imposition of personal taxes perturbs the frictionless equilibrium on the margin, but does not alter the implication that all optimal policies require substantial payouts. In short, the standard finance model (with or without taxes) implies, requires, and predicts the large payouts observed in the world.
{"title":"Payout Policy Irrelevance and the Dividend Puzzle","authors":"H. DeAngelo, L. Deangelo","doi":"10.2139/ssrn.528704","DOIUrl":"https://doi.org/10.2139/ssrn.528704","url":null,"abstract":"Why do firms make large cash payouts, given the tax advantages of retention? The dividend puzzle is based on the premise that low or near-zero payouts are optimal (although not uniquely so) in frictionless markets, hence should be strictly optimal when payouts are taxed. This logic reflects misunderstandings about the nature of payout policy irrelevance in frictionless markets and the implications of adding personal taxes to the standard finance model. In frictionless markets, all optimal policies require substantial payouts. Those with low or near-zero distributions are strictly sub-optimal, and are infeasible given rational expectations. Payout policy irrelevance does not carry over to general equilibrium, so it is inappropriate to conclude that many or most firms can make low payouts for extended periods. Imposition of personal taxes perturbs the frictionless equilibrium on the margin, but does not alter the implication that all optimal policies require substantial payouts. In short, the standard finance model (with or without taxes) implies, requires, and predicts the large payouts observed in the world.","PeriodicalId":332226,"journal":{"name":"USC Marshall School of Business Research Paper Series","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125160812","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Although the number of dividend paying industrials declines by more than 50% over the last two decades (Fama and French (2001a)), aggregate real dividends paid by industrials increase over the same period. Dividends increase despite a precipitous decline in the number of payers because (i) the reduction in payers occurs almost entirely among firms that pay very small dividends, and (ii) increased real dividends from the top payers swamp the modest dividend reduction associated with the loss of many small payers. These secular changes reflect high and increasing concentration in the supply of dividends which, in turn, reflect high and increasing earnings concentration. For example, 26 firms with real earnings of $1 billion-plus account for 63.4% and 46.8% of aggregate industrial earnings and dividends in 2000. Our findings on dividend concentration cast doubt on the empirical validity of the dividend clientele and signaling hypotheses.
{"title":"Are Dividends Disappearing? Dividend Concentration and the Consolidation of Earnings","authors":"H. DeAngelo, L. Deangelo, Douglas J. Skinner","doi":"10.2139/ssrn.318562","DOIUrl":"https://doi.org/10.2139/ssrn.318562","url":null,"abstract":"Although the number of dividend paying industrials declines by more than 50% over the last two decades (Fama and French (2001a)), aggregate real dividends paid by industrials increase over the same period. Dividends increase despite a precipitous decline in the number of payers because (i) the reduction in payers occurs almost entirely among firms that pay very small dividends, and (ii) increased real dividends from the top payers swamp the modest dividend reduction associated with the loss of many small payers. These secular changes reflect high and increasing concentration in the supply of dividends which, in turn, reflect high and increasing earnings concentration. For example, 26 firms with real earnings of $1 billion-plus account for 63.4% and 46.8% of aggregate industrial earnings and dividends in 2000. Our findings on dividend concentration cast doubt on the empirical validity of the dividend clientele and signaling hypotheses.","PeriodicalId":332226,"journal":{"name":"USC Marshall School of Business Research Paper Series","volume":"77 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2002-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117072887","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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