WHAT DO WORKING CAPITAL AND HABIT TELL US ABOUT THE CO-MOVEMENT PROBLEM?

2014 ◽  
Vol 20 (1) ◽  
pp. 342-361 ◽  
Author(s):  
Yi-Chan Tsai
Keyword(s):  
Durable Goods ◽  
Habit Formation ◽  
Empirical Studies ◽  
Production Costs ◽  
Working Capital ◽  
Financial Friction ◽  
Nondurable Goods ◽  
Monetary Policy Shock ◽  
Interest Rate Shock ◽  
Movement Problem

Empirical studies find that expenditures on both durable and nondurable goods fall following a contractionary monetary policy shock. However, in standard two-sector models with staggered nondurable goods prices and flexible durable goods prices, consumption of durables rises whereas that of nondurables falls in response to a contractionary policy shock. To resolve this co-movement problem, I extend the model to include a realistic financial friction that firms must pay for their productive inputs prior to production, i.e., working capital, along with habit formation in nondurable goods consumption. Following a positive interest rate shock, the working capital channel raises production costs, thereby discouraging production of both durable and nondurable goods. Furthermore, habit formation induces households to smooth the growth rate of nondurable goods consumption, and hence mitigates the fall in the nondurable goods sector. The model solves the co-movement problem and successfully generates a more sensitive response in the durable goods sector, as observed in the data.

Using Computer Simulation to Validate and Optimize the Design of an Innovative Electronic Packaging Concept

2000 ◽  
Author(s):  
Dagmar Beyerlein ◽  
Lee Hornberger
Keyword(s):  
Computer Simulation ◽  
Integrated Circuit ◽  
Empirical Studies ◽  
Simulation Software ◽  
Production Costs ◽  
Raw Material ◽  
Annual Production ◽  
Plastic Packaging ◽  
Software Application ◽  
Microchip Encapsulation

Abstract Reducing integrated circuit (IC) plastic packaging production costs by improving the transfer mold and leadframe designs is a costly and time-consuming process. Rather than building mold and leadframe prototypes to perform empirical studies, this research describes how C-MOLD, a microchip encapsulation simulation software application, was used to validate and optimize an innovative mold and leadframe design that has the potential to reduce raw material waste associated with packaging by more than 59%. Estimates indicate that the proposed design will cut annual production costs by more than $600,000.

Using Computer Simulation to Validate and Optimize the Design of an Innovative Electronic Packaging Concept

2001 ◽  
Vol 123 (4) ◽  
pp. 366-371
Author(s):  
Dagmar Beyerlein ◽  
Lee E. Hornberger
Keyword(s):  
Computer Simulation ◽  
Integrated Circuit ◽  
Empirical Studies ◽  
Simulation Software ◽  
Production Costs ◽  
Raw Material ◽  
Annual Production ◽  
Plastic Packaging ◽  
Software Application ◽  
Microchip Encapsulation

Reducing integrated circuit (IC) plastic packaging production costs by improving the transfer mold and leadframe designs is a costly and time-consuming process. Rather than building mold and leadframe prototypes to perform empirical studies, this research describes how C-MOLD, a microchip encapsulation simulation software application, was used to validate and optimize an innovative mold and leadframe design that has the potential to reduce raw material waste associated with packaging by more than 59 percent. Estimates indicate that the proposed design will cut annual production costs by more than $600,000.

SEPARABILITY, AGGREGATION, AND EULER EQUATION ESTIMATION

2000 ◽  
Vol 4 (4) ◽  
pp. 547-572 ◽  
Author(s):  
Adrian R. Fleissig ◽  
A. Ronald Gallant ◽  
John J. Seater
Keyword(s):  
Durable Goods ◽  
Time Preference ◽  
Revealed Preference ◽  
Nondurable Goods ◽  
Consumption Data ◽  
Positive Rate ◽  
Lagged Effects ◽  
Divisia Aggregates ◽  
Special Case ◽  
Separability Structure

We derive a seminonparametric utility function containing the constant relative risk aversion (CRRA) function as a special case, and we estimate the associated Euler equations with U.S. consumption data. There is strong evidence that the CRRA function is misspecified. The correctly specified function includes lagged effects of durable goods and perhaps nondurable goods, is bounded as required by Arrow's Utility Boundedness Theorem, and has a positive rate of time preference. Constraining sample periods and separability structure to be consistent with the generalized axiom of revealed preference affects estimation results substantially. Using Divisia aggregates instead of the NIPA aggregates also affects results.

The Non–durable Consumption Expenditure Decision–making Process: Lessons from the Australian Experience

1998 ◽  
Vol 23 (2) ◽  
pp. 19-27
Author(s):  
Martin M Tolar ◽  
Paul W B Hyland ◽  
Charles E O'Mara
Keyword(s):  
Durable Goods ◽  
Decision Making Process ◽  
Consumption Expenditure ◽  
Nondurable Goods ◽  
Goods And Services ◽  
Durable Consumption ◽  
Indian Experience ◽  
Consumer Markets ◽  
Australian Experience ◽  
Insight Into

In recent years⁄ the Indian economy has undergone a number of reforms, resulting in a more marketoriented economy. These reforms have also seen the emergence of a growing middle class with a high disposable income. This increased prosperity has led to increases in demand for both durable and nondurable consumer items. This paper by Tolar⁄ Hyland, and O'Mara reports upon a study of Australian consumers that is designed to provide manufacturers, retailers, and distributors of nondurable goods and services with an insight into what information influences consumers to purchase these items. In doing so, the paper also reports upon India's developing consumer markets. The results of the survey are then applied to the Indian experience with a view to presenting Indian managers with an insight into what determinants consumers take into consideration when purchasing non-durable goods and services.

scholarly journals Exploring the Relationship between Working Capital Management, Profitability and Capital Structure

2017 ◽  
Vol 2 (1) ◽  
pp. 38-45
Author(s):  
Abdalla Geth Abdussalam ◽  
Mohd Ridzuan Darun
Keyword(s):  
Capital Structure ◽  
Empirical Studies ◽  
Relevant Literature ◽  
Cash Flows ◽  
Jel Classification ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Main Component ◽  
The Relationship

Objective - This paper explores the relationship between working capital management (WCM), profitability and capital structure. A preliminary framework provides an understanding of the role of WCM components with capital structure and profitability. Methodology/Technique - From the review of empirical studies it is confirmed that WCM is a main component in the financial aspects of the firms as even though WCM is targeted for the short-term decisions it has effect on the firm for the long-run. Findings - Companies need to use working capital policy and procedures in order to navigate performance. Emphasizing on WCM would lead to formal cost controls and performance together with firm's growth and productivity. The framework is set to help financial manager of the firms to balance the costs and benefits of debt and equity and reduce common obstacles on managing cash flows for long-term fixed investment. Novelty - The preliminary framework is original and unique that will contribute towards the enrichment of relevant literature. Practically, this study contributes to provide a better understanding of the managers and enable them to apply WCM strategies and make sure the firm is able to meet the stakeholder requirements. Type of Paper Review Keywords: Working Capital Management; Capital Structure; Profitability; JEL Classification: O16, M41.

scholarly journals PENGARUH PRODUCTION COST, SALES VOLUME, DAN WORKING CAPITAL TERHADAP NET PROFITS PERUSAHAAN ( STUDI KASUS PADA PERUSAHAAN FOOD AND BEVERAGE YANG TERCATAT DI BURSA EFEK INDONESIA ( BEI) PERIODE 2014 - 2018)

2020 ◽  
Vol 8 (2) ◽  
pp. 61-72
Author(s):  
Indah Ayu Rachmawati ◽  
Alean Kistiani Hegy Suryana ◽  
Yunita Niqrisah Dwi Pratiwi
Keyword(s):  
Significant Influence ◽  
Production Cost ◽  
Production Costs ◽  
P Value ◽  
Sales Volume ◽  
Working Capital ◽  
Independent Variables ◽  
Food And Beverage ◽  
The Impact

ABSTRAK   Dalam penelitian ini memiliki tujuan untuk mengetahui dampak dari Production Cost ( Biaya Produksi) , dampak Sales Volume ( Volume Penjualan) dan dampak Working Capital (Modal Kerja) terhadap Net Pr0fits (Laba bersih) pada perusahaan Food and Beverage yang tercatat di (BEI) Bursa Efek Indonesia dari 2014 sampai 2018 . Variabel bebas dalam penelitian ini adalah Produstion Cost, Sales Volume, Working Capital, and Net Profits. Hasil penelitian ini antara lain yaitu secara parsial Production Cost (X1) terhadap Net Profits (Y) menunjukkan thitung sebesar 0.502 dan p-value (Sig) 0.618 lebih besar dari alpha 5%. Artinya terdapat dampak positif dan juga tidak signifikan antara Production Cost (X1) dan Net Profits (Y). Pengaruh Sales Volume (X2) terhadap Net Profits (Y) menunjukkan nilai thitung 6.352 dan p value (sig) sebesar 0.000 yang lebih kecil dari alpha 5%. Artinya ada dampak positif dan juga signifikan antara Sales Volume (X2) terhadap Net Profits(Y). Pengaruh Working Capital (X3) terhadap Net Profits(Y). menunjukkan nilai thitung 8.920 dan p value (sig) sebesar 0.000 yang lebih kecil dari alpha 5%. Artinya ada dampak positif dan juga signifikan antara Working Capital (X3) terhadap Net Profits (Y). Secara bersama – sama atau secara simultan bahwa Pengaruh Production Costs (X1), Sales Volume (X2), Working (X3) terhadap Net Profits (Y) menunjukkan Fhitung 144.507 dan p value (sig) sebesar 0.000 yang lebih kecil dari alpha 5%. Artinya ada pengaruh positif dan juga signifikan antara Production Cost (X1), Sales Volume (X2), Working Capital (X3) terhadap Net Profits (Y) secara bersama – sama.     ABSTRACT This analysis has the aim of being able to determine the impact or break-even of production costs, sales volume, and working capital on Food and Beverage companies that have net profits and these companies are listed on the Indonesia Stock ExchangeThe independent variables in this study are Production Cost, Sales Volume, Working Capital, and Net Profits. The results of this study, among others, were partially Production Cost (X1) to Net Profits (Y), which showed that the tcount was 0.502 and the p-value (Sig) 0.618 was greater than 5% alpha. This means that there is a positive and insignificant impact between Production Cost (X1) and Net Profits (Y). The effect of Sales Volume (X2) on Net Profits (Y) shows a tcount of 6,352 and a p value (sig) of 0.000 which is smaller than 5% alpha. This means that there is a positive and significant impact between Sales Volume (X2) on Net Profits (Y). Effect of Working Capital (X3) on Net Profits (Y). shows the value of t count 8.920 and p value (sig) of 0.000 which is smaller than alpha 5%. This means that there   is a positive and significant impact between Working Capital (X3) and Net Profits (Y). Together or simultaneously, the effect of Production Costs (X1), Sales Volume (X2), Working (X3) on Net Profits (Y) shows Fcount of 144.507 and p value (sig) of 0.000 which is smaller than alpha 5%. This means that there is a positive and significant influence between Production Cost (X1), Sales Volume (X2), Working Capital (X3) on Net Profits (Y) together.  

Pursuing premium: comparing pre-owned versus new durable markets

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chadwick J. Miller ◽  
Daniel C. Brannon
Keyword(s):  
Brand Loyalty ◽  
Durable Goods ◽  
Consumer Preferences ◽  
Product Line ◽  
Data Set ◽  
Content Type ◽  
Nondurable Goods ◽  
The Relationship ◽  
Vintage Clothing

Purpose The purpose of this paper is to investigate whether consumers in pre-owned durable goods markets (such as pre-owned automobiles) purchase products with higher premium/luxury positioning in a vertical line-up compared to consumers in new durable goods markets. The moderating role of brand loyalty on choice is also investigated. Design/methodology/approach The hypotheses are tested using a data set that includes the sales of new and pre-owned vehicles from an independently owned automotive dealer in the Northwestern USA during the first nine months of 2017 (N = 200). An ordered logit regression is used to estimate the relationship between consumers’ purchase of pre-owned vs new vehicles and the premium-level of the model that they choose, while controlling for the vehicle price. Two experimental robustness tests are conducted to provide empirical evidence of the proposed theoretical process. Findings Consumers who purchased pre-owned vehicles chose models with higher premium/luxury positioning compared to consumers who purchased new vehicles, even when controlling for price. This effect was moderated by brand loyalty, such that consumers’ premium-level of purchase was magnified if they previously owned a vehicle of the same brand. The results of an experimental robustness test indicated that consumers’ preference for pre-owned vehicles with higher premium/luxury positioning was because of greater perceptions of the quality along the dimensions of versatility, performance and prestige. Practical implications Sellers of complex durable goods (e.g. automobiles) should consider segmenting their upselling strategies for pre-owned vs new products. They should specifically focus more effort on the upselling of pre-owned durables as buyers appear more likely to pursue premium/luxury alternatives compared to new durables. Further, they should focus upselling efforts for pre-owned durables on brand loyal consumers. Originality/value To the best of the authors’ knowledge, this work is the first to examine consumers’ desire for pre-owned durable goods with premium/luxury positioning in a vertical product line-up. Further, it is also the first to explore the role of brand loyalty in shaping consumer preferences for premium/luxury pre-owned durable goods. As such, it makes an important contribution to an emerging literature exploring the appeal of premium and luxury pre-owned goods. Much work in this area has focused on the motivations that consumers have for buying pre-owned premium and luxury nondurable goods, such as vintage clothing or accessories. By contrast, the present research investigates the appeal of premium/luxury positioning for complex, pre-owned durable goods (vehicles), which are more difficult for consumers to evaluate at the point-of-purchase.

The Reconstruction of the “Youth Ideal” in Narrative Advertising

2017 ◽  
pp. 247-268 ◽  
Author(s):  
Gülten Arslantürk
Keyword(s):  
Discourse Analysis ◽  
Life Course ◽  
Durable Goods ◽  
Social Institutions ◽  
Consumer Society ◽  
Life Stages ◽  
Nondurable Goods ◽  
Depth Interviews

It is asserted that the period of aging and society has a high correlation while aging can be considered as a formation of social institutions that provide a specific type of discourse in a life course. It is assumed that this discourse can have the potential to construct hierarchical stratification among age grades which can also cause ageism. It is asserted that a so-called postmodern world is constructed in a discourse where youth and its related ideals are centered in all life activities, which can commonly be observed in advertisements. The aim of this study is to find out how narrative advertisements reconstruct the ideals of the youth in a consumer society by the help of making semi-structural in-depth interviews with people from four different life stages. Three narrative advertisement examples from three different categories such as; service, durable goods and nondurable goods will be chosen and be analysed through discourse analysis.

scholarly journals Understanding the Real-World Impact of Geographical Indications: A Critical Review of the Empirical Economic Literature

2020 ◽  
Vol 12 (22) ◽  
pp. 9434
Author(s):  
Áron Török ◽  
Lili Jantyik ◽  
Zalán Márk Maró ◽  
Hazel V. J. Moir
Keyword(s):  
Rural Development ◽  
Economic Impact ◽  
Value Chain ◽  
Empirical Studies ◽  
Production Costs ◽  
Market Size ◽  
Geographical Indications ◽  
The European Union ◽  
Export Markets ◽  
Unequal Distribution

In our study, we tried to collect empirical studies focusing on the economic impact of Geographical Indications (GIs). Using a systematic literature review approach, we investigated three different aspects: market size, price premium and impacts on rural development. Based on the findings of studies both from the grey and academic literature, the results are quite mixed. Though the number of GI-related empirical studies has risen in recent years, there is a lack of economic data to support policies related to GIs, even in the European Union (EU), where the most important GI system exists. Overall, it is impossible to draw any general conclusions about the economic impact of GIs. Some countries have remarkable GI market size, and some GI products have a determinative role in both domestic and export markets; however, it is not general. Again, some particular GI products of some regions could gain significant price premiums, but due to the associated higher production costs and unequal distribution in the value chain, it might not result in higher producer incomes. The most conflicting empirical results were found in how GIs can contribute to regional prosperity, as evidences of the harmful effects of GIs on rural development were also identified.

scholarly journals Consumer Spending and the Economic Stimulus Payments of 2008

2013 ◽  
Vol 103 (6) ◽  
pp. 2530-2553 ◽  
Author(s):  
Jonathan A Parker ◽  
Nicholas S Souleles ◽  
David S Johnson ◽  
Robert McClelland
Keyword(s):  
Durable Goods ◽  
Lower Income ◽  
Consumer Expenditure ◽  
Consumer Spending ◽  
Total Response ◽  
Nondurable Goods ◽  
Electronic Transfer ◽  
Household Spending ◽  
Consumer Expenditure Survey ◽  
Economic Stimulus

We measure the change in household spending caused by receipt of the economic stimulus payments of 2008, using questions added to the Consumer Expenditure Survey and variation from the randomized timing of disbursement. Households spent 12–30 percent (depending on specification) of their payments on nondurable goods during the three-month period of payment receipt, and a significant amount more on durable goods, primarily vehicles, bringing the total response to 50–90 percent of the payments. The responses are substantial and significant for older, lower-income, and home-owning households. Spending does not vary significantly with the method of disbursement (check versus electronic transfer). (JEL D12, D14, E21, E62)

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