• Journal of Global Scholars of Marketing Science
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• v.18 no.3
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• pp.115-132
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• 2008

Metal industry is one of the most representative heavy industries and the median sales volume of steel and nonferrous metal companies is over one billion dollars in the case America [Forbes 2006]. As seen in the recent business market situation, an increasing number of industrial manufacturers and suppliers are moving from adversarial to cooperative exchange attitudes that support the long-term relationships with their customers. This article presents the results of an empirical study of the antecedent factors of business relationships in metal industry of the United States. Commitment has been reviewed as a significant and critical variable in research on inter-organizational relationships (Hong et al. 2007, Kim et al. 2007). The future stability of any buyer-seller relationship depends upon the commitment made by the interactants to their relationship. Commitment, according to Dwyer et al. [1987], refers to "an implicit or explicit pledge of relational continuity between exchange partners" and they consider commitment to be the most advanced phase of buyer-seller exchange relationship. Bonds are made because the members need their partners in order to do something and this integration on a task basis can be either symbiotic or cooperative (Svensson 2008). To the extent that members seek the same or mutually supporting ends, there will be strong bonds among them. In other words, the principle that affects the strength of bonds is 'economy of decision making' [Turner 1970]. These bonds provide an important idea to study the causes of business long-term relationships in a sense that organizations can be mutually bonded by a common interest in the economic matters. Recently, the framework of structural bonding has been used to study the buyer-seller relationships in industrial marketing [Han and Sung 2008, Williams et al. 1998, Wilson 1995] in that this structural bonding is a crucial part of the theoretical justification for distinguishing discrete transactions from ongoing long-term relationships. The major antecedent factors of buyer commitment such as technology, CLalt, transaction-specific assets, and importance were identified and explored from the perspective of structural bonding. Research hypotheses were developed and tested by using survey data from the middle managers in the metal industry. H1: Level of technology of the relationship partner is positively related to the level of structural bonding between the buyer and the seller. H2: Comparison level of alternatives is negatively related to the level of structural bonding between the buyer and the seller. H3: Amount of the transaction-specific assets is positively related to the level of structural bonding between the buyer and the seller. H4: Importance of the relationship partner is positively related to the level of structural bonding between the buyer and the seller. H5: Level of structural bonding is positively related to the level of commitment to the relationship. To examine the major antecedent factors of industrial buyer's structural bonding and long-term relationship, questionnaire was prepared, mailed out to the sample of 400 purchasing managers of the US metal industry (SIC codes 33 and 34). After a follow-up request, 139 informants returnedthe questionnaires, resulting in a response rate of 35 percent. 134 responses were used in the final analysis after dropping 5 incomplete questionnaires. All measures were analyzed for reliability and validity following the guidelines offered by Churchill [1979] and Anderson and Gerbing [1988]., the results of fitting the model to the data indicated that the hypothesized model provides a good fit to the data. Goodness-of-fit index (GFI = 0.94) and other indices ( chi-square = 78.02 with p-value = 0.13, Adjusted GFI = 0.90, Normed Fit Index = 0.92) indicated that a major proportion of variances and covariances in the data was accounted for by the model as a whole, and all the parameter estimates showed statistical significance as evidenced by large t-values. All the factor loadings were significantly different from zero. On these grounds we judged the hypothesized model to be a reasonable representation of the data. The results from the present study suggest several implications for buyer-seller relationships. Theoretically, we attempted to conceptualize the antecedent factors of buyer-seller long-term relationships from the perspective of structural bondingin metal industry. The four underlying determinants (i.e. technology, CLalt, transaction-specific assets, and importance) of structural bonding are very critical variables of buyer-seller long-term business relationships. Our model of structural bonding makes an attempt to systematically examine the relationship between the antecedent factors of structural bonding and long-term commitment. Managerially, this research provides industrial purchasing managers with a good framework to assess the interaction processes with their partners and, ability to position their business relationships from the perspective of structural bonding. In other words, based on those underlying variables, industrial purchasing managers can determine the strength of the company's relationships with the key suppliers and its state of preparation to be a successful partner with those suppliers. Both the supplying and customer companies can also benefit by using the concept of 'structural bonding' and evaluating their relationships with key business partners from the structural point of view. In general, the results indicate that structural bonding gives a critical impact on the level of relationship commitment. Managerial implications and limitations of the study are also discussed.

• KDI Journal of Economic Policy
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• v.13 no.1
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• pp.151-166
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• 1991

In this paper, a simple game-theoretic entry deterrence model is developed that integrates both limit pricing and predatory pricing. While there have been extensive studies which have dealt with predation and limit pricing separately, no study so far has analyzed these closely related practices in a unified framework. Treating each practice as if it were an independent phenomenon is, of course, an analytical necessity to abstract from complex realities. However, welfare analysis based on such a model may give misleading policy implications. By analyzing limit and predatory pricing within a single framework, this paper attempts to shed some light on the effects of interactions between these two frequently cited tactics of entry deterrence. Another distinctive feature of the paper is that limit and predatory pricing emerge, in equilibrium, as rational, profit maximizing strategies in the model. Until recently, the only conclusion from formal analyses of predatory pricing was that predation is unlikely to take place if every economic agent is assumed to be rational. This conclusion rests upon the argument that predation is costly; that is, it inflicts more losses upon the predator than upon the rival producer, and, therefore, is unlikely to succeed in driving out the rival, who understands that the price cutting, if it ever takes place, must be temporary. Recently several attempts have been made to overcome this modelling difficulty by Kreps and Wilson, Milgram and Roberts, Benoit, Fudenberg and Tirole, and Roberts. With the exception of Roberts, however, these studies, though successful in preserving the rationality of players, still share one serious weakness in that they resort to ad hoc, external constraints in order to generate profit maximizing predation. The present paper uses a highly stylized model of Cournot duopoly and derives the equilibrium predatory strategy without invoking external constraints except the assumption of asymmetrically distributed information. The underlying intuition behind the model can be summarized as follows. Imagine a firm that is considering entry into a monopolist's market but is uncertain about the incumbent firm's cost structure. If the monopolist has low cost, the rival would rather not enter because it would be difficult to compete with an efficient, low-cost firm. If the monopolist has high costs, however, the rival will definitely enter the market because it can make positive profits. In this situation, if the incumbent firm unwittingly produces its monopoly output, the entrant can infer the nature of the monopolist's cost by observing the monopolist's price. Knowing this, the high cost monopolist increases its output level up to what would have been produced by a low cost firm in an effort to conceal its cost condition. This constitutes limit pricing. The same logic applies when there is a rival competitor in the market. Producing a high cost duopoly output is self-revealing and thus to be avoided. Therefore, the firm chooses to produce the low cost duopoly output, consequently inflicting losses to the entrant or rival producer, thus acting in a predatory manner. The policy implications of the analysis are rather mixed. Contrary to the widely accepted hypothesis that predation is, at best, a negative sum game, and thus, a strategy that is unlikely to be played from the outset, this paper concludes that predation can be real occurence by showing that it can arise as an effective profit maximizing strategy. This conclusion alone may imply that the government can play a role in increasing the consumer welfare, say, by banning predation or limit pricing. However, the problem is that it is rather difficult to ascribe any welfare losses to these kinds of entry deterring practices. This difficulty arises from the fact that if the same practices have been adopted by a low cost firm, they could not be called entry-deterring. Moreover, the high cost incumbent in the model is doing exactly what the low cost firm would have done to keep the market to itself. All in all, this paper suggests that a government injunction of limit and predatory pricing should be applied with great care, evaluating each case on its own basis. Hasty generalization may work to the detriment, rather than the enhancement of consumer welfare.

• KOREAN JOURNAL OF CROP SCIENCE
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• v.34 no.1
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• pp.60-73
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• 1989

Two field experiments were carried out to assess the applicability of a central composite design (CCD) in determining optimum culture condition of an early rice cultivar, Unbongbyeo in southern Korea. A central composite design with two replicates was applied to five levels of five factors such as the number of hills per 3.3m2, the number of seedlings per hill, the levels of nitrogen, the transplanting date and the seedling age (Experiment 1). The levels of planting density were ranged from 30 hills to 150 hills per 3.3m2 ; the number of seedlings per hill from 1 seedling to 9 seedlings per hill; the levels of nitrogen application from 1 kg/l0a to 21 kg/l0a; the transplanting date from June 15 to July 5; the seedling age from 25 days to 45 days. A fractional factorial design was applied to three levels of five factors tested in CCD (Experiment 2). Yield per hill and per unit area were examined and the results obtained from both experiments were compared. The benefits from the central composite design were discussed. Maximum yield of brown rice per unit area was obtained at the combination of the central levels of one of five factors when the other four factors were fixed at central point. Furthermore, brown rice yield per unit area affected by interaction of two factors was maximized at the central point when the remain three factors being fixed at the central level. The responses of five factors to brown rice yield per hill and unit area were found to be a saddle point in both designs. Actual values of the stationary points were 107 hills per 3.3 m2, 4 seedlings per hill, 10 kg nitrogen per l0a, transplanting date of rice on June 26 and 33 days of seedling age in the central composite design. Brown rice yield per unit area at the stationary points were estimated 439 kg/l0a in the central composite design and 442 kg/l0a in the fractional factorial design. Considering the number of experimental treatment combinations, the central composite design was rather convenient in reducing the number of treatment combinations for similar information. It was more convenient for an experimenter to present the results from the central composite design than those from the fractional factorial design. Considering the optimum yields of brown rice per unit area at the stationary points being verified as saddle points in both designs. inter-heterogeneity of each of the factors should be avoided in setting up factors in pursuit of inducing unidirectional response of the factors to yield. Even though both the lower and higher levels in the central composite design being beyond the region of an experimenter's interest. they were considered highly valued in interpretation of the results. Conclusively. the central composite design was found to be more beneficial to optimize culture condition of paddy rice even with several levels of various factors were involved.

• Journal of the Korean Wood Science and Technology
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• v.6 no.2
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• pp.3-19
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• 1978

Five species, Abies koreana Wilson (A. koreana), Castanopsis cuspidata var. Sieboldii Nakai (C. Cuspidata). Machilus thunbergii Sieb. et Zucc. (M. thunbergii), Styrax japonica (S. japonica), and Quercus acuta Thunberg(Q. acuta) growing in the southern part of Korea were selected for the investigation of wood properties. In order to evaluate the wood properties of these five species, anatomical, physical, mechanical, chemical and pulping characteristics were investigated. And this study also covered wood technological problems related to the drying, gluing, debarking, flooring, and wood workability so that these species might serve to the best advantage. The results obtained were summarized as follows: 1. The trunk of A. koreana with many knots was straight. However, the trunks of S. japonica and C. cuspidata were crooked. 2. A. koreana showed the longest and the widest ill the fiber morphology; 2.97mm in length, 39.3${\mu}$ in width. In general, fiber width of all the species investigated were greater than those of other Korean hardwoods. 3. The specific gravity of Q. acuta was 0.74${\pm}$0.03, and that of A.koreana was 0.34${\pm}$0.02. The range of specific gravity of the other species was 0.47-0.52. 4. The adsorption of water was propotioned inversely with the specific gravity, but the adsorption of humidity was proportioned with the specific gravity. In spite of their medium density, S. japonica showed the greatest adsorption, and M. thunbergii the least. The water adsorption of cross section was twice greater than that of lateral direction, and there was a slight difference in between the radial and the tangential direction. 5. Shrinkage for tested five species was ranged from 5.36 to 10.24% in tangential direction, and 2.83~6.13% in radial direction. Q. acuta recorded the greatest shrinkage rate, and A. koreana the least. The greater was the specific gravity, the larger was the shrinkage rate. 6. The mechanical properties of Q. acuta were similar to those of Quercus mongolica which grow in Kangwon-Do. Strength properties of C. cuspidata, M. thunbergii, A. koreana were equivalent to those of other Korean commercial woods with similar specific gravity, except S. japonica which showed slightly higher strength than that of other species with similar density. 7. Higher glue joint strength for urea and phenol adhesieves was recorded in the species of M. thunbergii and C. cuspidata, however, high-density species(Q. acuta) and even low-density species(A. koreana) did not show good joint strength. 8. The attractive figure of M. thunbergii in texture seemed to he appreciated for decoration. And the grain and texture of other species were proper for furniture and building materials. 9. All of the species except Q. acuta were considered good for wood workability. 10. The denser the specific gravity was, the longer the drying time took. However, severe drying defects were formed in M. thunbergii whose density was medium. 11. All the species were considered suitable for the flooring wood expect A. koreana whose density was light. 12. Pentosan component in all the species was great, and the amount of extractives in Q. acuta was worth noticing. 13. Yield in kraft pulp was above the level of economic pulp yield, i.e. 45% in all species. 14. Debarking was easy in the species of A. koreana and M. thunbergii, and debarking after being boiled in water was the most efficient in all species.