Using data from surveys of automobile buyers collected in 1990 and 2000 in a natural experiment setting, the authors study the determinants of use of the Internet as a source of information on automobiles, its impact on the use of other sources, and its impact on total search effort. The results indicate that the Internet draws attention in approximately the same proportion from other sources. The results also show that those who use the Internet to search for automobiles are younger and more educated and search more in general. However, the analysis also indicates that they would have searched even more if the Internet had not been present.
The authors contributed equally to this article and are listed in alphabetical order. They acknowledge the helpful comments of the three anonymous JMR reviewers, Sharan Jagpal, and Brian T. Ratchford. The authors also thank David Walls for providing the ACNielsen EDI data and S. Abraham Ravid for giving them access to his data.
SUMAN BASUROY, KALPESH KAUSHIK DESAI, and DEBABRATA TALUKDAR*The contribution of this research lies in the use of real-world data to test several hypotheses about the role of two signals-sequels and advertising expenditures-in the motion picture industry. The authors analyze the data with a dynamic simultaneous-equations model of the drivers and the interrelationships of the behaviors of movie audiences, studios, and exhibitors. Specifically, the authors test for the attenuating role of third-party information sources, such as critics' review consensus and cumulative word of mouth, on the strength of the two aforementioned signals. The authors find evidence of such an effect both at the release phase across movies and over the postrelease phase for any movie. Notably, they hypothesize and show that sequels and advertising expenditures have a positive interaction effect on box office revenues. This is an important finding because though most firms use multiple signals for their products, empirical work on the interaction of two or more signals is rare. This study offers several new and interesting empirical insights into the market dynamics of the motion picture industry.
Research summary:We examine why a firm takes specific competitive action in nonmarket and resource-market spaces, particularly when it perceives threats from informal and foreign competitor groups, respectively. We address this question by combining insights from competitive rivalry, strategic groups, and nonmarket strategy literatures in an emerging economy context. Specifically, we theorize how threats from informal and foreign rival firms in an emerging market influence a firm's engagement in corruption activities and its investments in HR training, respectively. We also argue that the likelihoods of such focal firm actions against competitor group threats differ, contingent on the focal firm's market and resource profiles. Results from the empirical analyses, with survey data from the Indian IT industry, provide broad support to our hypotheses. Managerial summary: Based on a World Bank dataset on the Indian IT industry, this study finds that corruption and HR training are pursued by firms in emerging economies as mindful strategies against specific types of rivals-informal and foreign firm rivals, respectively, and are not pursued simply as culturally-based practices. Multinational companies may need to understand that domestic firms in emerging countries will engage in corruption strategically to reduce their costs and time to market of their products/services. Therefore, multinational firms may need to devise suitable strategies other than corruption to reduce their costs and time to market if they wish to compete with firms in emerging economies for customers who don't care about ethical issues and will buy a cheaper product/service that is delivered quickly. Copyright
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