Leonard J. Paas

Mokken scaling characteristic sets and acquisition patterns of durable- and financial products

Abstract The combinations in which durable products (durables) are owned and the order of acquisition are useful pieces of information for marketing and other purposes. The topic of this paper is the application of Mokken Scale analysis to determine the combinations in which durables are owned and to find orders of acquisition. Moreover, it is shown that the discussed procedures can also be applied to the products offered by financial service providers (financial products). PsycINFO classification: 2240; 3920

Entrepreneurial motivation and small business growth in Rwanda

Purpose – The purpose of this study is to investigate the relationship between entrepreneurial motivation and small business growth in one of the poorest emerging countries: the African least developed country (LDC), Rwanda. Design/methodology/approach – On the basis of theoretical resources and a pre-study of interviews with local experts in Rwanda, the authors developed a survey for this study. Based on primary data from 133 Rwandan small business owners, the authors conducted an exploratory factorial analysis to uncover the underlying factors. Subsequently, the authors conducted regression analyses to test the hypotheses. Findings – The analyses show that the predictors for the growth of small businesses can be divided into three factors: one factor with a mix of motivations related to family background, necessity and opportunity motivations; one factor with items predominantly related to opportunity motivation; and one factor with items related to necessity motivation. The first factor has the stronge...

A dynamic analysis of stock markets using a hidden Markov model

This paper proposes a framework to detect financial crises, pinpoint the end of a crisis in stock markets and support investment decision-making processes. This proposal is based on a hidden Markov model (HMM) and allows for a specific focus on conditional mean returns. By analysing weekly changes in the US stock market indexes over a period of 20 years, this study obtains an accurate detection of stable and turmoil periods and a probabilistic measure of switching between different stock market conditions. The results contribute to the discussion of the capabilities of Markov-switching models of analysing stock market behaviour. In particular, we find evidence that HMM outperforms threshold GARCH model with Student-t innovations both in-sample and out-of-sample, giving financial operators some appealing investment strategies.

Acquisition Pattern Analysis for Relationship Marketing: A Conceptual and Methodological Redefinition

Traditionally, relationship marketing focuses upon the interaction between suppliers and consumers. In this article, the authors propose that relationship marketing cannot ignore another type of (long-term) interaction: the one between consumers and products. Both types of interaction should be taken into account when assessing the nature and the quality of the relationship. The relevant literature on consumer–product interactions is limited. Existing theoretical concepts, including brand loyalty, cannot adequately cover the full notion of consumer–product interactions. Acquisition pattern analysis (APA) seems capable of providing an alternative. It provides an insight in the structure of product sets and acquisition orders. However, the available techniques for APA cause confusion by their emphasis on either the structure or the order of product acquisitions. The authors propose a methodological improvement, which has analytical implications as well. A study on purchases of financial products demonstrates the proposed alternative approach, and managerial implications are discussed.

Decision-making and small business growth in Burundi

Purpose This paper aims to investigate the effect of decision-making, in terms of the effectuation and causation orientation of small business owners, on the growth of their small businesses in an uncertain environment: Burundi. Design/methodology/approach On the basis of primary data from a pre-study of 29 expert interviews, a questionnaire was developed and was filled in by 154 small business owners in Burundi’s capital, Bujumbura. Subsequently, correlation analyses, a factor analysis and regression analyses were performed to test the hypotheses. Findings While, on the one hand, the findings show that small business owners who perceive the environment as uncertain are more effectuation-oriented than causation-oriented; on the other hand, the findings show that effectuation and causation orientations do not influence later small business growth. Therefore, other determinants for small business growth in an uncertain environment should be further explored. Originality/value This paper fills the research gap of decision-making in relation to small business growth from the entrepreneurs who are among the billion people who live in absolute poverty. On the basis of Western studies, effectuation might be more present in contexts of dealing with many uncertainties of future phenomena, and that it is often positively correlated with firm growth. In contrast, this paper shows that neither an effectuation orientation nor a causation orientation significantly affects small business growth in a context that can be assumed as highly uncertain.

Acquisition patterns of products facilitating financial transactions: a cross‐national investigation

Cross‐selling is an important issue for contemporary marketing practice, as this facilitates offering the right product to the right customer. Relevant for cross‐selling of financial products is the order in which consumers acquire such products. Previous research shows that most consumers acquire financial products used for asset accumulation purposes in similar orders. However, the literature does not report studies on acquisition patterns of products for facilitating financial transactions (e.g. chequebooks, credit cards). In this paper we propose a consumer need hierarchy, influencing consumer acquisitions of transactional products. Consecutively Mokken scale analysis is applied to investigate acquisition patterns of six transactional products in 17 European countries. The final section of the paper presents a discussion on the relevance of our results in terms of marketing purposes, emphasising cross‐selling applications.

Acquisition pattern analysis for evolutionary database marketing

Insight into the order in which clients acquire products can be important for determining relevant cross-sell offers for the firms clients and for the development of long-term relationships with clients. Acquisition pattern analysis studies the prototypical orders in which products are acquired. However, previous studies into acquisition patterns were based on survey data. This paper investigates the applicability of acquisition pattern analysis to transactional data, the most commonly available data in business settings.

Causation and effectuation behaviour of Ethiopian entrepreneurs: Implications on performance of small tourism firms

The purpose of this paper is to investigate the implications of causation and effectuation behaviour of Ethiopian entrepreneurs on the eventual performance of their newly established small firms. It adds new knowledge and insights to advance the theory of effectuation by extending its scope into the domain of entrepreneurial behaviour and firm performance and by testing one of the operationalized scales in an African context.,This empirical research is conducted amongst Ethiopian tour operators (n=118) based on primary data from the field. The scales are based on Chandler et al. (2011), which are adapted to fit to the tourism sector and validated in an African context using a two-stage exploratory factor analysis (EFA). Hierarchical multiple regression is used to assess the ability of entrepreneurs’ behaviour (i.e. causation and effectuation) at the startup phase to predict the eventual performance of their newly established firms (self-reported changes in employment size, sales, profit and assets) over three years (January 2012-2015).,The findings reveal a varied effect of causation and effectuation on financial and non-financial measures. Causation is positively related to an increase in employment size, whereas the overall effect of effectuation is positively related to financial performance measures, although its dimensions vary in their effects on sales, profit and assets increase. The paper concludes that causation and effectuation have varied implications on firm performance. In other words, unlike the findings of other research in Western contexts, a strong empirical support is not found to claim that effectuation is superior to causation in outcomes such as firm performance in Ethiopian context.,While this paper provides a new data set for entrepreneurship literature, its findings may lack generalisability. Not only it is industry specific (tourism sector), but also it is conducted in a single African country (Ethiopia). Despite its limitations, the paper adds new knowledge and insights for empirical studies in entrepreneurship field on the effects of entrepreneurs’ behaviour, such as causation and effectuation; on firm performance. Future research should focus on other economic sectors and in different African countries before making generalisations about the effect of causation and effectuation behaviour of African entrepreneurs on firm performance.,The findings of this paper can be used in other hospitality and tourism sectors like hotels and souvenir shops since tour operating business includes a broad range of service activities such as sightseeing, accommodation, transportation, recreational activities and shopping. Besides, these results have practical implications to prepare and provide business and management training tools to enhance entrepreneurial and managerial skills of owners of small tourism firms in Ethiopia. The findings of the study can also be applied in other African countries with similar culture and business environments to promote tourism development and success in Africa.,There have been hardly any empirical studies that are undertaken on the implications of entrepreneurial behaviour such as causation and effectuation on the performance of small tourism firms, particularly in an African context. The paper addresses this research gap in entrepreneurship literature in drawing on empirical evidence from small tourism firms (tour operators) in Ethiopia.

Interdependence and contagion in international stock markets: A latent Markov model approach

In the last decades, interdependence among financial markets of different countries has represented a preferred topic in both theoretical and empirical studies. The prime focus of this paper is on the detection and evaluation of financial contagion and herd behaviour, which are accounted as predominant features of international markets. To this purpose we suggest to exploit the framework provided by latent Markov modelling, which we find extremely useful for detecting and defining the different stock market phases, referred to as regimes. Furthermore, we investigate the transitions between market phases by means of the regime switching probabilities, still provided within latent Markov models. The comparison between the dynamics of the latent stochastic processes underlying the observed time series of the international stock market returns provides significant insights on the level of their interdependence and on the measurement of contagion effects during financial crises. Our work contributes to the existing literature on both financial time series analysis and clustering and introduces a powerful and innovative approach for evaluating the linkages of the stock markets in different countries.

The Dynamic Analysis and Prediction of Stock Markets through the Latent Markov Model

In this paper we show how the latent Markov model can be used to define different conditions in the stock market, called market- regimes. Changes in regimes can be used to detect financial crises, pinpoint the end of a crisis and predict future developments in the stock market, to some degree. The model is applied to changes in monthly price indexes of the Italian and US stock market in the period from January 2000 to July 2009.