When some customers are more profitable to serve than others, one might expect sellers to compete more vigorously for the more profitable customers. One way sellers might do this is to sell goods that are purchased primarily by the most profitable customers using a lower mark-up than on other goods. This allows the firms to give discounts to more profitable customers without offering them to le...

This study aims at better understanding the long-term relationships among the software engineering capabilities and business performance of the representative IT firms in Japan. We conducted longitudinal analyses on standardized software engineering capability scores of three surveys and tenyear business performance from 151 firms. Through panel analyses of the best Akaike Information Criteria ...

This paper explores tying in the situation where a multi-product firm without monopoly power competes against several single-product firms. It considers two independent markets: one for a horizontally differentiated good, the other for a homogeneous good. As opposed to the widely accepted opinion that tying may be profitable only in the case of monopoly power, it is shown that under reasonable ...

Prior research demonstrates product market advantages of organizational status but largely neglects factor market advantages. We propose that status is advantageous in labor markets because individuals generally consider employer status a non-pecuniary employment benefit. Dyadic analyses of lateral partner hiring by large U.S. law firms demonstrate two status-based advantages in employee hiring...

This paper provides a theoretical model of an open economy credit channel including currency mismatch and financial fragility where exporting firms have access to international credit but non-exporting firms do not. The impact of the crisis is predicted to be dramatically different for exporters/non-exporters. We examine firms’ access to external finance in four Asian economies after 1997 using...

Mergers and acquisitions can play a transformative role in the evolution of firms and industries and have become an important feature of the US economy, representing about 5% of GDP and 80% of total capital reallocation among large US firms. In this paper, I develop a search-theoretic model of mergers and acquisitions in a dynamic general equilibrium setting and assess the implications for aggr...

This study provides evidence that franchise value improves insurers’ operating performance. Essentially coming from an insurer’s market power, franchise value includes the insurer’s brand royalty, business networking, and underwriting and claim specialty. High franchise value firms who could charge more, have lower operating costs, and have a larger client base are potentially more profitable. ...

This study examines the effect of technology spillovers on firms’ cash holdings. It finds that firms facing greater technology spillovers hold higher cash balances. This effect is more pronounced among financially constrained firms and for firms that are likely to benefit more from diffused technology, e.g., those have newer patents, are more profitable, face better growth opportunities and are...