2005
2004
2003
MANAGEMENT INFORMATION SYSTEMS
operations management
Market
Responses to the 150-hour Requirement
Ted Williams
No: 2006-01(PDF)
operations management
PERT
Completion Times Revisited
Ted Williams
Forthcoming in INFORMS Transactions on Education
No: 2005-02(PDF,
HTML)
business economics
Evidence
for the natural trade Partners Theory from the Euro-Mediterranean Region
Yener Kandogan
No: 2005-01 (PDF)
business economics
Trade
Creation and Diversion Effects of Europe's Regional Liberalization
Agreements
Yener Kandogan
No: 2004-07 (PDF)
business economics
A Gravity
Model for Components of Imports
Yener Kandogan
No: 2004-06 (PDF)
corporate strategy
Local Knowledge and Role Structure: SMEs' Strategies for a Technology-Based
Flexible Specialization
Tsutomu Nakano
No: 2004-04 (PDF)
corporate strategy
Industries
in a Large-Scale Industrial District: A Component Analysis
Tsutomu Nakano
No: 2004-03 (PDF)
corporate strategy
Bridging
Roles of SMEs in a Large-Scale Industrial District: A Structural Approach
Tsutomu Nakano
No: 2004-02 (PDF)
BUSINESS ECONOMICS
The Role of International Blocs on Trade: A
Comparison Across Gravity Models
Yener Kandogan
No: 2004-01 (PDF)
FINANCE
Option Prices Sustained by Risk-Preferences
Antonio Camara
No: 2003-010
FORTHCOMING IN JOURNAL OF BUSINESS
marketing
Long-term Profit Impact of Integrating Marketing
Communications Program
Kalyan Raman and Prasad A. Naik
No: 2003-09 (PDF)
marketing
Understanding the Impact of Synergy in Multimedia
Communications
Prasad A. Naik and Kalyan Raman
No: 2003-08 (PDF)
FORTHCOMING IN JOURNAL OF MARKETING
RESEARCH
marketing
Complexity Science and Intelligent Automation
Kalyan Raman
No: 2003-07 (PDF)
FORTHCOMING IN THE STAMPING JOURNAL
business eCONOMICS
The Reorientation of Transition Countries' Exports:
Changes in Quantity, Quality and Varieties
Yener Kandogan
No: 2003-06 (PDF)
business eCONOMICS
Does Product Differentiation Explain the Increase in
Exports of Transition Countries?
Yener Kandogan
No: 2003-05 (PDF)
pedagogical studies
On-line Education: Factors that Influence its
Success
Betty Velthouse
No: 2003-04 (PDF)
business eCONOMICS
How much Restructuring did the Transition Countries
Experience? Evidence from Quality of their Exports
Yener Kandogan
No: 2003-03
FORTHCOMING IN COMPARATIVE ECONOMIC STUDIES
corporate strategy
Acyclic
Depth Partition of a Complex Subcontracting Network:
Hierarchies among Industries Embedded in a Large-Scale Industrial District
Tsutomu (Tom) Nakano
No: 2003-02
FORTHCOMING IN SOCIOLOGICAL THEORY AND METHODS
business eCONOMICS
Intra-industry Trade in Transitions Countries:
Trends and Determinants
Yener Kandogan
No: 2003-01
EMERGING MARKETS REVIEW 2003, 4(3), pp.51-64.
Evidence for the natural trade Partners Theory from the Euro-Mediterranean
Region
Yener Kandogan
No: 2005-01 (PDF)
The paper develops a modified triple-indexed gravity model
to measure the trade creation and diversion effects of the preferential
trade agreements in the Euro-Mediterranean region. The model is applied to
different components of imports, since the welfare implications of each
component is expected to be different. Using these measures, the paper
proceeds to look for evidence for the Natural Trade Partners Theory using
three definitions of natural partners. Results show that there is support
for the theory when geographical distance or initial trade volumes are used
to define naturalness only for intra-industry components. Stronger support
is found when complementarity is used to identify natural partners.
Trade Creation and Diversion Effects of Europe's Regional Liberalization
Agreements
Yener Kandogan
No: 2004-07 (PDF)
After a short background on
recent developments in gravity modelling and liberalization agreements in
Europe, this paper measures the trade creation and diversion effects of
major European agreements based on the results of a correctly specified
triple-indexed gravity model with bilateral fixed effects. For each
agreement and partner country, welfare implications are discussed in sectors
of different factor intensities with emphasis on the role of similarity in
income or relative factor endowments between partners, as well as the date
and the reciprocity of the agreement. This is followed by a description of
the characteristics of the non-partner countries that are affected by these
agreements in each sector.
A
Gravity Model for Components of Imports
Yener Kandogan
No: 2004-06 (PDF)
This
paper develops a gravity model to explain different components of imports,
and compares it to the models of total trade and imports from the
literature. It is shown that not only the standard variables in gravity
models but also specific variables from competing trade theories play
different roles for different components of imports. In particular, it is
found that as economic sizes or relative factor endowments become similar,
the volume of intra-industry imports, especially that of its horizontal
component increases. Hence, this model removes a widespread but unnecessary
restriction in the gravity models. An extension of the model shows that
colonial relations are important determinants of inter-industry imports. In
contrast, cultural proximity based on religion and language plays more a
crucial role in determining horizontal intra-industry imports.
The Role of International Blocs
on Trade: A Comparison Across Gravity Models
Yener Kandogan
No: 2004-01 (PDF)
This paper evaluates the additions and adjustments made to the standard
gravity model, and compares each gravity model’s findings on the role of
international blocs. The results suggest that all additions proposed improve
the overall fit. Removing restrictions on the parameters of the model with
the introduction of fixed effects for different years, exporters, importers,
and partners is important to correctly specify the model and analyze the
role of blocs on trade. An analysis of the models with fixed effects for
this purpose show that trade increases with intensity of integration.
The Reorientation of Transition
Countries' Exports: Changes in Quantity, Quality and Varieties
Yener Kandogan
No: 2003-06 (PDF)
The paper analyzes the factors
behind the reorientation of transition countries’ exports to their
non-traditional partners outside their former block. First, the amount of
reorientation is calculated using a gravity model. Then, reasons for the
cross-country differences in the rate of closing the gap between the actual
and potential exports, such as increases in quantity, quality, and variety,
are analyzed using a variety of measures from the literature. The results
show that although exports have increased significantly, as of 1999 they are
still far below the potential in CIS and to a lesser extent in CEEC. Change
in quantity has been the primary reason behind the reorientation of CIS
exports. However, it had smaller effect on CEEC reorientation, where
increase in product variety has been important. Although some quality
improvement is observed in both CEEC and CIS, it had small effect on the
extent of reorientation.
Does Product Differentiation
Explain the Increase in Exports of Transition Countries?
Yener Kandogan
No: 2003-05 (PDF)
The paper analyzes the increase in
transition countries’ exports to their non-traditional trade partners. It
uses four different measures of product differentiation to find out the
extent that the increase in product variety explains this phenomenon. It is
found that opening up to new trade partners first increases the number of
sectors in which trade occurs. This is followed by a brief period of
specialization in some select sectors, and finally an increase in the number
of varieties of products in these sectors. Lastly, the increase in
product variety in CEEC has been much more substantial than in CIS.
How much Restructuring did the
Transition Countries Experience? Evidence from Quality of their Exports
Yener Kandogan
No: 2003-03
FORTHCOMING IN COMPARATIVE ECONOMIC STUDIES
The increase in trade with market
economies is a good sign, but it is not conclusive about the extent of
restructuring experienced in transition countries. This paper explores the
source of the increase in trade with an analysis of their exports’ quality.
Changes in factor intensity and unit values are observed. The exports of
both CEEC and CIS countries in different sectors are analyzed during
1992-1999, which allows examination of the effects of trade liberalizing
agreements on restructuring. I find that although CEEC are in a
significantly better position than CIS due to Europe Agreements, there is
still large number of export products with structural problems in CEEC.
Insufficient FDI, OPT clause in Europe Agreements, not well exploited human
capital are suggested as possible causes.
Intra-industry Trade in
Transitions Countries: Trends and Determinants
Yener Kandogan
No: 2003-01
FORTHCOMING IN EMERGING MARKETS REVIEW
This paper analyzes trends in different
components of trade of transition countries in Eastern Europe and former
Soviet Union with their major partners. To explain the cross-country
differences, the paper points out the important distinction between
inter-industry trade and intra-industry trade (IIT), and horizontal and
vertical IIT in terms of their determinants. Using varieties of gravity
models, it is shown that variables from Increasing Returns Trade Theory,
such as scale economies, similarity of income levels, and number of
varieties produced play important roles in IIT, especially in horizontal IIT,
whereas factors such as comparative advantage, dissimilarity in income
levels, and more developed trade partners of Neoclassical Heckscher-Ohlin
Trade Theory are crucial in determining inter-industry trade as well as
vertical IIT to a lesser degree.
Local Knowledge and Role Structure: SMEs' Strategies for a Technology-Based
Flexible Specialization
Tsutomu Nakano
No: 2004-04 (PDF)
The purpose
of the paper is to reveal structural mechanisms of complex subcontracting
networks in a large industrial district in Ohta, Japan, where over 7,000
firms were engaged in the machine tools industry, applying techniques of
network analysis, based on data from 1994-95. By introducing five different
production styles that the SME suppliers commonly used as explanatory
variables, a role structure, consisting of three clusters of
regularly equivalent SMEs, was regressed. As a result, the production
styles were important in determining the social division of labor among the
SMEs. In other words, strategic decisions of SME proprietors to adopt
specific production styles, in order to specialize in certain areas of
manufacturing, and the roles of SMEs in the subcontracting networks were
inseparable in the geographically bound, large-scale regional economy. From
the structural viewpoint, the cooperative competition in the
technology-based flexible specialization was based on SMEs’
strategic moves to search for positions in the elaborate role structure, by
leveraging their limited economic and human capital with the social capital
of proprietors. These findings suggest that different technological
knowledge and skills should produce distinctive regional production
mechanisms.
corporate strategy
Industries
in a Large-Scale Industrial District: A Component Analysis
Tsutomu Nakano
No: 2004-03 (PDF)
Industrial districts have
been a test site to see how social division of labor among specialized
small- and medium-size enterprises (SME) works, as flexible
specialization theory explains. While large-scale industrial districts
where a variety of manufacturing industries are embedded in regional
supplier networks have been understudied, present research applied the
concept of small world phenomenon to reveal structural mechanisms of
a large-scale industrial district in Tokyo. However, although a large
component of 4,500 firms existed, it did not fit the formula, based on
relational data among 8,347 firms from 1994-95, due to a low clustering
coefficient and a short geodesic distance.
Further, acyclic depth partition of the large component uncovered its mechanism, not as local clustering among Tier-1 suppliers, but as highly clustered, hierarchical supplier networks of leading OEMs, on the one hand, and a relatively short average geodesic distance among 4,500 firms, owing to the complex industry value-chain of linked, but different, manufacturing processes, on the other. Geographically, SMEs in the district filled a supporting role for leading Japanese OEMs that were located Outside Ohta.
Small world theory is not the only formula that can explain formation of large-scale, sparse networks. Flexible specialization is a different “small world.”
corporate strategy
Bridging
Roles of SMEs in a Large-Scale Industrial District: A Structural Approach
Tsutomu Nakano
No: 2004-02 (PDF)
Industrial districts have been a contentious academic topic of increasing
interests. Flexible specialization theory reinterpreted the roles of small-
and medium-sized enterprises (SME), arguing that the social division of
labor among technologically specialized SMEs has a competitive advantage
over mass production by atomized M-form firms, as flexibility and agility
have become crucial in the volatile and relentlessly changing markets
emerged after the 1970s. Contending against the “dual economy” thesis, which
perceived SMEs as “sweat shops” exploited by large firms, the theory also
argued that craft and skills of SME workers are a primary source of
innovations and diffusion of technology. Flexible specialization theory,
however, did not elaborate on interfirm network structure in industrial
districts, largely neglecting industry-specific subcontracting practices
embedded in the regional economy where linked, but different, industries
compose distinctive regional production systems for scope economies.
Instead, the theory and its empirical literature assumed the existence of
randomly distributed, extremely complex subcontracting networks in
large-scale industrial districts, as Sabel called the organization form
“moebius strips organizations.”
Through a graph-theoretic approach of social network analysis, the present research unveiled elaborate subcontracting mechanisms in the complex networks of flexible specialization, as a first attempt in academia. It captured the whole universe of the extremely entangled supplier networks linked to a major Japanese industrial district, or engines of the high-tech manufacturing, based on relational data among 8,347 firms from 1994-95. While there is hardly any formal theory that explains the regional production mechanisms at the level of linked, but different, industries embedded in an industrial district in existence, the present project comparatively studied structural patterns of four key industries embedded in the entangled web, as follows: The electrical appliances and equipments; the computer peripherals and precision machinery; the automotive components and parts; and the general machinery and machine tools. The present analysis disaggregated the interwoven industries not only at the level of OEMs (original equipment manufacturer) located at the top of subcontracting hierarchies, as final assemblers of components and parts, but also at various intermediate levels of SME suppliers, as a series of connected manufacturing stages for the processing of the components and parts.
Rejecting the assumption of random networks in industrial districts, the present paper argues that there are structural patterns peculiar to each of the industries embedded in a large-scale industrial district. The findings clearly showed that the network structure was highly dependent upon the embedded industries, in terms of size of the subcontracting groups, structural patterns between vertically organized hierarchies under the leading OEMs and hub-based, decentralized forms, as a continuum, and linkages among different subcontracting groups within each of the industries. In fact, group-spanning activities were often found in the electrical appliances and equipments and the computer peripherals and precision machinery, while the supplier networks in both the automotive and the general machinery took strictly group-based hierarchical structures under the leading OEMs. The bridging suppliers appeared to fill important roles for the fusion of knowledge and technologies in the large-scale regional economy, as structural holes theory suggests.
Acyclic Depth
Partition of a Complex Subcontracting Network:
Hierarchies among Industries Embedded in a Large-Scale Industrial District
Tsutomu (Tom) Nakano
No: 2003-02
FORTHCOMING IN SOCIOLOGICAL THEORY AND METHODS
The present
research unveiled inter-industry dynamics deeply embedded in the extremely
complex subcontracting networks in a large-scale industrial district, where
over 7000 small- and medium-size enterprises (SME) functioned as suppliers
for leading Japanese manufacturing firms, based on relational data from
1994-95. It analyzed the regional production mechanisms embedded in the
large-scale industrial district, applying the analytical concepts of cycle
and network centrality in combination. Applying the concept of acyclic
network, the analysis converted the complex regional subcontracting networks
into a simpler form. Relative positions of the firms were mapped out across
seven hierarchical clusters, by reorganizing the flows of goods and services
into linked hierarchical stages of manufacturing processes. Based on degree
centrality, relative positions of most central prime buyers were
scrutinized, in order to identify inter-industry linkages among the linked,
but different, industries.
Two key findings were as follows. First, SMEs in the relatively low clusters
collectively filled a role of supporting industries for the leading prime
buyers located at relatively high layers, offering a variety of specialized
manufacturing processes and services. The extended networks were spread out
far beyond the geographical boundary. Second, there was a hierarchical order
among the linked, but different, embedded industries, as the relative
positions of the most central prime buyers indicated.
In contrast to conventional claims that assumed the existence of random
networks in large-scale industrial districts, the present research
articulated the underlying social structure based on quantifiable relational
data, not only between suppliers and buyers, but also among and across the
embedded industries in an industrial district, for the first time in
academia.
Option Prices Sustained by Risk-Preferences
Antonio Camara
No: 2003-010
FORTHCOMING IN JOURNAL OF BUSINESS
This paper investigates the preference and distribution
restrictions that underlie explicit risk-neutral option valuation equations.
It establishes new sufficient conditions in terms of utility functions and
joint distributions of assets' payoffs and state variables for these models
to hold in equilibrium economies where markets are dynamically incomplete.
For example, the paper derives the Black-Scholes model assuming that there
is a representative agent with an exponential utility function of wealth
characterized by constant absolute risk aversion (CARA) preferences.
Aggregate wealth and the underlying stock price are bivariate
normal-lognormal distributed. Both the marginal and the conditional
distributions of wealth play relevant roles in obtaining the pricing kernel
implicit in the model. The result is interesting because it shows that there
is not straightforward link between the Black-Scholes model and constant
proportional risk aversion (CPRA) preferences. The paper also introduces and
investigates many other univariate and multivariate option pricing models.
Long-term Profit Impact of Integrating Marketing
Communications Program
Kalyan Raman and Prasad A. Naik
No: 2003-09 (PDF)
The concept of Integrated Marketing
Communications (IMC) emphasizes the role of synergy, which arises when the
combined effect of multiple activities exceeds the sum of their individual
effects. In this paper, we investigate the effects of synergy on the
profitability of IMC programs in uncertain markets. We develop a dynamic
multimedia model that incorporates both synergy and uncertainty, and use it
to determine the optimal IMC program. Our results generalize the previous
findings to uncertain markets, illuminate the profit implications of IMC
programs, and explain the catalytic effects of synergy in IMC contexts.
Specifically, we find that the expected long-term profit of the advertised
brand increases as synergy increases. Furthermore, synergy neither
increases nor decreases the variability in long-term profit. Finally, we
show that managers should allocate non-zero budget to a catalytic activity
even if it is completely ineffective.
Understanding the Impact of Synergy in Multimedia
Communications
Prasad A. Naik and Kalyan Raman
No: 2003-08 (PDF)
FORTHCOMING IN JOURNAL OF MARKETING
RESEARCH
Many advertisers adopt the
integrated marketing communications perspective that emphasizes the
importance of synergy in planning multimedia activities. However, the role
of synergy in multimedia communications is not well understood. Hence, the
authors investigate the theoretical and empirical effects of synergy by
extending a commonly used dynamic advertising model to multimedia
environments. They illustrate how advertisers can estimate and infer the
effectiveness of, and synergy between, multimedia communications by applying
Kalman filtering methodology. Using market data on Dockers®
brand advertising, they first calibrate the extended model to establish the
presence of synergy between TV and print ads in consumer markets. Next,
they derive theoretical propositions to understand the impact of synergy on
media budget, media mix, and advertising carryover. One of the propositions
reveals the surprising finding that, as synergy increases, advertisers
should not only increase the media budget, but also allocate more
funds to the less effective activity. The authors also discuss the
implications for advertising overspending. Finally, they generalize the
model to include multiple media, differential carryover and asymmetric
synergy, and identify important topics for further research.
Complexity Science and Intelligent Automation
Kalyan Raman
No: 2003-07 (PDF)
FORTHCOMING IN THE STAMPING JOURNAL
Supply chain management is topping boardroom agendas in
the United States and abroad as a vital part of the “race-day” capabilities
required for success, according to analysts at an internationally
prestigious consulting company. M.I.T. professor Charles H. Fine reinforces
this fact, observing that “supply chain design is the meta-core competency
for organizations.” But it is a competency hard to attain because
complexity runs rampant in modern supply chains. Modern supply chains are
complex because they involve interactions between multiple parties with
conflicting objectives, difficult coordination issues between those parties,
information distortions caused by lack of alignment between the incentives
of the individual players, conflicts between what is best for the individual
and for the system. The intrinsic complexity of supply chains calls for new
management and optimization tools, and the emerging area of Complexity
Science (CS) provides those tools. My interest in supply chain management (SCM)
is rooted in both the academic and business worlds. As a business school
professor, I teach SCM in my MBA classes, conduct research on SCM and
publish papers devoted to SCM optimization. As a Complex Systems
specialist, I have strong research interests in the 21st century
technologies that enable superior SCM performance. Finally, as a
consultant, I have worked with companies to show them how CS technologies
can create superior performance in business areas driven by information
technology, such as SCM.
According to the President of a major company, supply chains can be
characterized as networks that “optimize the flow of materials and services,
information and money. Networks focus on the ultimate customer. They are
designed and managed so that one member does not benefit at the expense of
another. World-class networks are highly adaptive; they focus on speed;
they are innovative.” Hardly anyone would dispute the desirability of these
qualities; but most would also agree that the supply chains at their own
firms are far from the idyllic state of affairs described in the above
characterization. Competency in supply chain management (SCM) is important
because it is indispensable to driving the quality of the firm’s supply
chain closer to the ideal. In the absence of such competency, the SCM
definition above would remain an aspiration rather than a concrete reality.
This tutorial introduces new techniques and ideas for narrowing the gap
between aspiration and actuality in SCM by drawing upon the most powerful
concepts of Complexity Science (CS). Since my goal is to influence
practitioners and encourage their usage of CS in real-world applications, I
have focused exclusively on CS ideas that have already enjoyed success in
commercial settings.
MANAGEMENT INFORMATION SYSTEMS
On-line Education: Factors that Influence its
Success
Betty Velthouse
No: 2003-04 (PDF)
This research attempted to identify
personality and learning style factors that influenced a student’s
experience with on-line learning. The Myers-Brigg’s personality assessment
and David Kolb’s Learning Style Inventory were used along with a demographic
questionnaire to gather data. The personality characteristics, elements of
learning style, and selected demographics were correlated with student
satisfaction, belief in mastery, ability to apply concepts, and preference
for on-line learning tools. While some trends emerged and some insights were
gleaned, many ‘findings’ are still too intuitive and more research is
needed.
Accredited by
AACSB International and the
North
Central Association of Colleges and Schools.
Last update 20February2003
This page is maintained by the School of
Management
Copyright © 2003 the Regents of
the University of Michigan
To obtain a hardcopy of one of these papers, please send a check for $5 to the University of Michigan-Flint and email yener@umflint.edu