Drawing on the distinction between the ostensive aspects (abstract patterns) and performative aspects (specific actions) of organizational routines, the paper offers a micro-level explanation of capability learning in international new ventures (INVs), that is, firms that internationalize actively from inception. The paper argues that variability in the performative aspects of internationalization routines is associated with improvisational learning and new capability development, whereas variability in the ostensive aspects is associated with trial-and-error learning and existing capability improvement. Furthermore, psychic distance moderates these relationships. Low psychic distance facilitates both improvisation and trial-and-error learning; high psychic distance frustrates learning of both types. Moderate psychic distance makes the success of both learning forms more likely – but only for more experienced INVs. The paper also argues that social capital may mitigate the negative effects of high psychic distance. It contributes to the extant literature by providing a micro-level explanation of how INVs accomplish capability learning and avoid wasteful learning efforts, and by theorizing the moderating effects of psychic distance on the relationships between routine microprocesses and capability learning.

[We solve for a firm's optimal cash holding policy within a continuous time, contingent claims framework using dividends, short-term borrowing, and equity issues as controls assuming mean reversion of earnings. Optimal cash is non-monotone in business conditions and increasing in the level of long-term debt. The model matches closely a wide range of empirical benchmarks and predicts cash and leverage dynamics in line with the empirical literature. Firm value is quite insensitive to changes in the level of long-term debt. The model has interesting implications for asset substitution, hedging, and pecking order. Growth opportunities do not greatly affect cash holding policy.]

AbstractWe assess the operational impacts of Six Sigma program adoptions through an event study methodology, comparing financial data for 200 Six Sigma adopting firms against data for matched firms, which serve as control groups for the analyses. We employ various matching procedures using different combinations of pre‐adoption return on assets (ROA), industry, and size as matching criteria. By comparing performance outcomes across a hierarchy of operating metrics, we establish a pattern of Six Sigma adoption effects that provides strong evidence of a positive impact on ROA. Interestingly, these ROA improvements arise mostly from significant reductions in indirect costs; significant improvements in direct costs and asset productivity are not evident. We also find small improvements in sales growth due to Six Sigma adoption. Cross‐sectional analyses of the performance results reveal that distinctions in Six Sigma impacts across manufacturing and service firms are negligible. Interestingly, we find that the performance impact of Six Sigma adoption is negatively correlated to the firm's quality system maturity (indicated by prior ISO 9000 certification). Further analyses of manufacturing and service firms reveals that Six Sigma benefits are significantly correlated with intensity in manufacturing, and with financial performance before adoption in services. We discuss the implications of these findings for practice and for future research.

Previous research in complaining behavior has focused on product or service failures in which the organization is responsible for the failure. In these cases, researchers have found that consumers feel better about the product failure after complaining about it. In contrast, the authors show that when consumers are to blame for product failure, complaining has a detrimental effect on consumer reactions to the product. In this context, self-threat from the product failure is shown to motivate defensive processing in both the content of complaints and the subsequent downstream product evaluations. The authors establish the role of self-threat in product failure in two ways: (1) by varying the intensity of the threat from product failure and (2) through mitigating negative outcomes through self-affirmation. The article concludes with discussion on how these findings can benefit companies and where this research could seed opportunities for subsequent investigation.

Childhood poverty is linked to a host of physical and psychological disorders during childhood and later in life. In the study reported here, we showed that the proportion of childhood spent in poverty from birth to age 9 was linked to elevated allostatic load, a marker of chronic physiological stress, in 17-year-olds. Furthermore, this prospective longitudinal relationship was mediated by cumulative risk exposure at age 13. The greater the duration of early life spent in poverty, the greater the exposure to cumulative risk. This, in turn, leads to elevated allostatic load. Multiple psychological, biological, and neurological pathways likely account for the social patterning of psychological and physical disease.

According to the terms-of-trade theory, negotiations over tariffs alone, coupled with an effective market access preservation rule, can bring governments to the efficiency frontier. In this paper, we show that the nature of international price determination is important for this central result of the terms-of-trade theory. While the received theory assumes that international prices are fully disciplined by aggregate market clearing conditions, we show here that support for “shallow” integration is overturned, and instead a need for “deep” integration is suggested ? wherein direct negotiations occur over both border and behind-the-border policies ? if international prices are determined through bargaining.

The rise of offshoring of intermediate inputs raises important questions for commercial policy. Do the distinguishing features of offshoring introduce novel reasons for trade policy intervention? Does offshoring create new problems of global policy cooperation whose solutions require international agreements with novel features? In this paper we provide answers to these questions, and thereby initiate the study of trade agreements in the presence of offshoring. We argue that the rise of offshoring will make it increasingly difficult for governments to rely on traditional GATT/WTO concepts and rules—such as market access, reciprocity and non-discrimination—to solve their trade-related problems. (JEL F12, F13, L24)

The authors assess how and why retailer-customized coupon campaigns affect customer purchases. The conceptual model proposes effects on trip incidence and revenues through the mere exposure to campaigns (exposure effect) and the redemption of coupons (redemption effect). The authors propose monetary savings of the coupons, regularity of the campaigns, and coupon fit with customer preferences as moderators. Analysis of data from a group of regional grocery chains that were part of a quasi experiment demonstrates that retailer-customized coupon campaigns have a positive exposure and redemption effect on customer purchases. Mere exposure to customized coupon campaigns contributes more than coupon redemption to campaign returns. Consistent with theoretical expectations, customized coupon campaigns are more effective if they provide more discounts, are unexpected, and are positioned as specially selected for and customized to consumer preferences. The substantial exposure effects suggest that managers should look beyond redemption rates and also consider sales lift from nonredeemers when measuring the effectiveness of customized coupon campaigns.