Search results

1 – 10 of over 64000
To view the access options for this content please click here
Article
Publication date: 23 February 2010

Peter Navarro, Philip Bromiley and Pedro Sottile

Business cycles strongly influence corporate sales and profits, yet strategy research largely ignores the possibility that corporate management practices related to the…

Downloads
2392

Abstract

Purpose

Business cycles strongly influence corporate sales and profits, yet strategy research largely ignores the possibility that corporate management practices related to the business cycle influence profitability. This paper aims to offer initial empirical support for the view that high peformance firms use a variety of business cycle management (BCM) practices that low performance firms do not.

Design/methodology/approach

This exploratory study examines the association of firm performance with business cycle management behaviors identified in the prescriptive literature and further developed from a set of case analyses. The empirical analysis uses a matched sample of 35 pairs of high vs low performers from the S&P 500.

Findings

Discriminant and conditional logit analyses provide preliminary evidence that business cycle‐sensitive behaviors such as countercyclical hiring and investment associate positively with firm performance.

Research limitations/implications

Future research should use larger data sets and strictly archival data to overcome the limitations of the small sample size and data coding with some subjective elements.

Practical implications

This research suggests a variety of business cycle related practices dealing with staffing, capital investment, acquisitions and divestitures, capital financing, credit policy, pricing, and advertising may improve firm performance.

Originality/value

This is the first paper to offer evidence of the impact of business cycle related practices across a range of practices and industries.

Details

Journal of Strategy and Management, vol. 3 no. 1
Type: Research Article
ISSN: 1755-425X

Keywords

To view the access options for this content please click here
Article
Publication date: 14 March 2008

Anne‐Marie Croteau, Pierre‐Majorique Léger and Luc Cassivi

This paper aims to investigate the alignment between the information‐processing needs and capabilities during interorganizational relationships through the lenses of both…

Downloads
1849

Abstract

Purpose

This paper aims to investigate the alignment between the information‐processing needs and capabilities during interorganizational relationships through the lenses of both the product and the business relationships life cycle concepts, and the types of information exchanged.

Design/methodology/approach

This paper follows up on a previous empirical study conducted in the automotive sector, investigating the electronic collaboration within the supply chain of a large European Automotive Supplier (EAS). Out of the 61 respondents from this previous study, four illustrative cases are selected to further investigate their information alignment, where each case involves one specific relationship between EAS and its business partners based on the supply chain collaboration classification provided by the German Association of the Automotive Industry (VDA).

Findings

The conclusion is that the phenomenon is bimodal and requires that the different information‐processing needs and capabilities associated with each stage of both the product and the business relationships life cycles should be considered.

Research limitations/implications

The small number of illustrative cases and the specificity of the chosen sector limit the generalizability of the results. Without considering the various types of information‐processing needs and capabilities as well as the stage of both product and business relationships life cycles, a biased conclusion could lead to inappropriate information and communication technology investments and business decisions.

Originality/value

The richness of the cases and the genuine integration of the life cycle concepts and the type of information with the notion of alignment help to identify some key aspects of interorganizational relationships.

Details

Industrial Management & Data Systems, vol. 108 no. 2
Type: Research Article
ISSN: 0263-5577

Keywords

To view the access options for this content please click here
Article
Publication date: 1 August 2016

Kim Hiang Liow

This research aims to investigate whether and to what extent the co-movements of cross-country business cycles, cross-country stock market cycles and cross-country real…

Downloads
2793

Abstract

Purpose

This research aims to investigate whether and to what extent the co-movements of cross-country business cycles, cross-country stock market cycles and cross-country real estate market cycles are linked across G7 from February 1990 to June 2014.

Design/methodology/approach

The empirical approaches include correlation analysis on Hodrick–Prescott (HP) cycles, HP cycle return spillovers effects using Diebold and Yilmaz’s (2012) spillover index methodology, as well as Croux et al.’s (2001) dynamic correlation and cohesion methodology.

Findings

There are fairly strong cycle-return spillover effects between the cross-country business cycles, cross-country stock market cycles and cross-country real estate market cycles. The interactions among the cross-country business cycles, cross-country stock market cycles and cross-country real estate market cycles in G7 are less positively pronounced or exhibit counter-cyclical behavior at the traditional business cycle (medium-term) frequency band when “pure” stock market cycles are considered.

Research limitations/implications

The research is subject to the usual limitations concerning empirical research.

Practical implications

This study finds that real estate is an important factor in influencing the degree and behavior of the relationship between cross-country business cycles and cross-country stock market cycles in G7. It provides important empirical insights for portfolio investors to understand and forecast the differential benefits and pitfalls of portfolio diversification in the long-, medium- and short-cycle horizons, as well as for research studying the linkages between the real economy and financial sectors.

Originality/value

In adding to the existing body of knowledge concerning economic globalization and financial market interdependence, this study evaluates the linkages between business cycles, stock market cycles and public real estate market cycles cross G7 and adds to the academic real estate literature. Because public real estate market is a subset of stock market, our approach is to use an original stock market index, as well as a “pure” stock market index (with the influence of real estate market removed) to offer additional empirical insights from two key complementary perspectives.

Details

Journal of European Real Estate Research, vol. 9 no. 2
Type: Research Article
ISSN: 1753-9269

Keywords

To view the access options for this content please click here

Abstract

Details

Nonlinear Time Series Analysis of Business Cycles
Type: Book
ISBN: 978-0-44451-838-5

To view the access options for this content please click here
Book part
Publication date: 6 August 2018

Kenneth A. Couch, Robert Fairlie and Huanan Xu

Labor force transitions are empirically examined using Current Population Survey (CPS) data matched across months from 1996 to 2012 for Hispanics, African-Americans, and…

Abstract

Labor force transitions are empirically examined using Current Population Survey (CPS) data matched across months from 1996 to 2012 for Hispanics, African-Americans, and whites. Transition probabilities are contrasted prior to the Great Recession and afterward. Estimates indicate that minorities are more likely to be fired as business cycle conditions worsen. Estimates also show that minorities are usually more likely to be hired when business cycle conditions are weak. During the Great Recession, the odds of losing a job increased for minorities although cyclical sensitivity of the transition declined. Odds of becoming re-employed declined dramatically for blacks, by 2–4%, while the probability was unchanged for Hispanics.

Details

Transitions through the Labor Market
Type: Book
ISBN: 978-1-78756-462-6

Keywords

To view the access options for this content please click here
Article
Publication date: 29 January 2021

Javed Iqbal

This paper estimates the sensitivities of the output of the manufacturing industries of the four Southeast countries (Indonesia, Malaysia, Philippines, Singapore) to both…

Abstract

Purpose

This paper estimates the sensitivities of the output of the manufacturing industries of the four Southeast countries (Indonesia, Malaysia, Philippines, Singapore) to both the country-specific and global business cycle fluctuations. The study investigates whether the business cycle exposures of these industries differ to their nature classified as producing durable or nondurable goods and also to booms and recessions.

Design/methodology/approach

Using annual time series data on sectoral manufacturing production indices for major manufacturing industries over the period from 1999 to 2018, this paper uses the seemingly unrelated regression (SUR)–based generalized least square estimator to estimate the exposures of each industry for each of the four countries to local and world business cycle.

Findings

The individual country analysis indicates that generally the sensitivities of the ASEAN manufacturing industries to booms and recessions are different from the pattern observed in the developed countries and Russia. We do not find evidence consistent with the commonly held view among economists and business managers that demand for durable goods flourishes in booms and falls in recessions. Also, very few industries exhibit an asymmetric reaction to booms and busts. However, the analysis of panel data reveals the expected pattern of industrial sensitivities to the local business cycle only.

Originality/value

The paper makes several contributions. Firstly, the model proposed in the paper estimates sensitivities of industries to both the local and global business cycle variations. Secondly, the model enables us to explicitly test the asymmetric reaction of industries to booms and busts. Thirdly, the paper is the first attempt to estimating business cycle exposures for manufacturing industries in emerging markets.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

To view the access options for this content please click here
Article
Publication date: 14 May 2018

Foluso Abioye Akinsola and Sylvanus Ikhide

This paper aims to examine the relationship between commercial bank lending and business cycle in South Africa. This paper attempts to know whether commercial bank lending…

Abstract

Purpose

This paper aims to examine the relationship between commercial bank lending and business cycle in South Africa. This paper attempts to know whether commercial bank lending in South Africa is procyclical.

Design/methodology/approach

The model assumed that the lending behaviour is related to the business cycle. In this study, vector error correction model (VECM) is used to capture the relationship between bank lending and business cycle to accurately elicit the macroeconomic long-run relationship between business cycle and bank lending, as some banks might slow down bank lending due to some idiosyncratic factors that are not related to the downturn in the economy. This paper uses data from South African Reserve Bank for the period of 1990-2015 using VECM to understand the extent to which business cycle fluctuation can affect credit crunch in the financial system. The Johansen cointegration approach is used to ascertain whether there is indeed a long-run co-movement between credit growth and business cycle.

Findings

Results from the VECM show that there are significant linkages among the variables, especially between credit to gross domestic product (GDP) and business cycle. The influence of business cycle is seen vividly after a period of four to five years, where business cycle explains 20 per cent of the variation in the credit to GDP. South African banks tend to change their lending behaviour during upturns and downturns. This result further confirms the assertion in theory that credit follows business cycle and can amplify credit crunch. The result shows that in the long run, fluctuations in the business cycle can influence the credit growth in South Africa.

Research limitations/implications

The impulse analysis result shows that the impact of business cycle shock is very persistent and lasting. This also demonstrates that the shocks to the business cycle result have a persistent and long-lasting impact on credit. This study finds that commercial bank lending in South Africa is procyclical. It is suggested that the South African economy needs forward-looking policies that will mitigate the flow of credit to the real sector and at the same time ensure financial stability.

Originality/value

Most research papers rarely distinguish between the demand side and supply side of credit procyclicality. This report is presented to develop an econometric model that will examine demand side procyclicality. This study adopts more realistic and novel methods that will help in explaining the relationship between bank lending and business cycle in South Africa, especially after the global financial crisis. This report is presented with a concise and detailed analysis and interpretation.

Details

Journal of Financial Regulation and Compliance, vol. 26 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

To view the access options for this content please click here
Article
Publication date: 2 March 2012

Kimmo Alajoutsijärvi, Tuija Mainela, Pauliina Ulkuniemi and Emma Montell

The aim of this paper is to identify the effects of business cycles on industrial business‐to‐business relationships within extremely volatile industries.

Downloads
5477

Abstract

Purpose

The aim of this paper is to identify the effects of business cycles on industrial business‐to‐business relationships within extremely volatile industries.

Design/methodology/approach

The paper is an in‐depth case study on Outotec plc, a leading provider of technologies for the mining and metal industries.

Findings

The study identifies the changes in a business relationship during a business cycle as the dominance between the parties and the cooperative and the competitive nature of the relationship alternate.

Practical implications

The study identifies ways to smooth the effects of business cycles in extremely volatile industries from the viewpoint of a project‐based technology provider.

Originality/value

While a significant amount of macroeconomic research on cycles and a few studies on industry‐specific business cycles can be found, this study is a rare example of company‐specific research on surviving business cycles.

To view the access options for this content please click here
Article
Publication date: 16 July 2018

Sungsoo Kim and Brandon byunghwan Lee

This paper aims to clarify the relationship between corporate capital investments and business cycles. Specifically, a major purpose of this paper is to investigate…

Abstract

Purpose

This paper aims to clarify the relationship between corporate capital investments and business cycles. Specifically, a major purpose of this paper is to investigate whether there are inherent differences in corporate investment patterns and whether the stock market exhibits different reactions to the value relevance of capital expenditures across different business conditions.

Design/methodology/approach

The authors use pooled ordinary least square regressions with archival stock price data and financial data from CRSP and Compustat. The authors regress buy and hold returns on the main test variables and control variables that are identified to be related to the investment literature.

Findings

This paper provides empirical evidence that US firms’ capital expenditures are more value relevant to capital market participants during expansionary business cycles and, conversely, less value relevant during contractionary business cycles. This evidence validates previous literature that has found the information content of capital expenditures to be uncertain and cyclical in nature.

Research limitations/implications

The main limitation of this paper, as with other work dealing with stock returns and archived financial data, is that the authors try to match stock returns with contemporaneous financial data in an association study context. The precise mapping in this methodology is always challenging and has been questioned in the literature.

Practical implications

This paper has various implications for capital market participants. Capital expenditures are good news for investors, but they will make a better investment when firms make capital investments during an expansionary period. Creditors deciding whether to extend credit to firms would benefit from more accurate information on the viability of long-term investment. The results also suggest to creditors that an excessive number of loans during the contractionary period may be suboptimal because firms’ returns on capital investment are smaller in that period than in the expansionary period.

Social implications

Given the valuation of implications of long-term capital investments across different business conditions, this paper sheds light on asset allocations for mutual funds, institutional investors who are entrusted with investors’ investments including retirement funds.

Originality/value

This paper fulfils an identified need to study how capital investments are valued differently across different business conditions.

Details

Studies in Economics and Finance, vol. 35 no. 3
Type: Research Article
ISSN: 1086-7376

Keywords

To view the access options for this content please click here
Book part
Publication date: 30 September 2010

Kajal Lahiri

Transportation plays a central role in facilitating economic activities across sectors and between regions and thus should be essential to business cycle research. In this…

Abstract

Transportation plays a central role in facilitating economic activities across sectors and between regions and thus should be essential to business cycle research. In this chapter, we identify four coincident indicators representing different aspects of the transportation sector. Foremost among them is the index of transportation services output (TSI) presented in the previous chapter. Following the long-standing methodology of National Bureau of Economic Research (NBER) business cycle research, the other three indicators that we include are payroll, personal consumption and employment – all pertaining to the transportation sector. Using a composite of the four indicators, we define the classical business cycle and growth cycle chronologies for the transportation sector. We find that, relative to the economy, business cycles in the transportation sector have an average lead of nearly 6 months at peaks and an average lag of 2 months at troughs. Similar to transportation business cycles, growth slowdowns in this sector also last longer than the economy-wide slowdowns by a few months. This study underscores the importance of transportation indicators in monitoring cyclical movements in the aggregate economy.

Details

Transportation Indicators and Business Cycles
Type: Book
ISBN: 978-0-85724-148-1

1 – 10 of over 64000