Name: Arato, Ruth G.
Date: Spring 2010
Major(s): Economics
Thesis Committee: T. Nonnenmacher, S. Martin
Title: Bad Spuds: Problems Within the Maine Potato Industry and the Importance of Hedging its Future Contracts
Abstract: Over the past few decades, the Maine potato industry has fallen from a national leader to a minor player. Futures contracts are an essential aspect of trading commodities. Trading with a volatile commodity such as potatoes can pose a serious threat to the investments of both the buyer and the seller, which is why hedging is commonly used to help decrease risk potential. This paper aims to highlight the importance and effectiveness of hedging within potato futures contracts, specifically focusing on the Maine potato futures, along with the status and factors that influence the state’s industry.
Name: Bobrow, Joshua P.
Date: Spring 2010
Major(s): Economics
Thesis Committee: S. Onyeiwu, S. Casler
Title: The Importance of Defining Strategy: A Case Study of the General Motors Company
Abstract: In every year from 1931 to 2009, General Motors led all Automobile Manufacturers in the number of vehicles sold. General Motor’s strategy, the main reason why the company maintained dominance during that period, has now come under fire because of its recent bankruptcy filing and company mismanagement. This paper questions Michael Porter’s idea of strategy by showing that General Motors possesses unique activities and competitive advantages over other firms in the automobile industry. The mismanagement of a company does not imply the lack of a strategy but, rather, that it is not properly using its competitive advantage. In General Motors’ case, management’s focus on short-term sales and revenue, instead of long-term profitability, reduced General Motors’ competitive edge against other automobile manufacturers. General Motors, however, as in the past, is still one of the market leaders in hybrid technology, safety features and the number of automobiles sold. This paper proposes that the appropriate business strategy is for a company to use its unique attributes and competitive advantages to position itself for long-term viability.
Name: Boscha, Pravin
Date: Spring 2010
Major(s): Economics
Thesis Committee:
Title: The Failure of the International Sugar Agreements
Abstract: The ISA agreements of the 20th century ultimately failed at stabilizing prices. This happened despite the organization’s use of buffer stocks, the inclusion of producers as well as consumers, and a seemingly strict adherence to quotas by member nations. This paper explains the failure of the ISA agreements by accounting for effects of supply and demand shocks such as wars and natural disasters, the misuse of buffer stocks, low barriers to entry into the market, and the use of preferential pricing agreements in lieu of participating in the World Market by member nations.
Name: Brannan, Joshua G.
Date: Spring 2010
Major(s): Economics
Thesis Committee: S. Onyeiwu, J. Sickafuse
Title: The Economic Impacts of Green Technologies on the Auto Industry: A Case Study Examining Toyota
Abstract: In my senior composition project I am exploring how Toyota has created a competitive advantage over U.S. automakers in the last decade. I strongly feel that a first mover in a market has a greater opportunity to gain market leadership, as opposed to later entrants. However, a company must produce efficiently, and plan for the future to maintain its leadership. General Motors was one of the first companies who entered the automobile market, and was able to rise to the top of the industry and remain there for seventy years. I would like to focus on the reasons I feel Toyota was able to overtake General Motors as sales leader in 2008. I would like to explore the current production process Toyota is using to produce their vehicles: Toyota Production System. I also would like to focus on Toyota’s strategy to move into the hybrid market, which is providing the auto industry with a sustainable future focused away from the primarily internal combustion engine.
Name: Buckle, Nicole E.
Date: Spring 2010
Major(s): Economics
Thesis Committee: S. Onyeiwu, S. Casler
Title: An Exploration of the Determinants of Life Expectancy and Cancer Deaths in the United States
Abstract: This senior comp project explores the determinants of health status of U.S. states. It measures health status in two different ways; first, by looking at life expectancies of residents of different states in the United States and secondly, by looking at the number of deaths from cancer per 100,000 people. After collecting data to measure smoking, marital status, race, education, employment, preventative testing, obesity, political affiliation, income, uninsured, number of hospitals and age, multiple regression models are used to determine the health status of states.
The regression results suggest that smoking, marriage, obesity, number of hospitals and political affiliation with the Democratic Party are all significant variables for determining life expectancy. Furthermore, smoking, marriage, race and obesity are all significant variables for explaining cancer deaths. Based on these results, the project proposes policies that would increase life expectancies and decrease cancer deaths.
Name: Conrad, Thomas B.
Date: Spring 2010
Major(s): Economics
Thesis Committee: S. Onyeiwu, J. Sickafuse
Title: Markets for Technology: A Study of Internal Capabilities and the “Not Invented Here” Syndrome
Abstract: The following comprehensive study analyzes the importance that markets for technology have gained over recent years and the benefits a firm can realize from having an open mentality when it comes to innovations. Past research has pointed to internal research and development and external innovation acquisition as having a complementary relationship with each other. A firm must be willing to use some combination of the two sources in its strategy for creation. However, this complementary relationship would not be possible without a firm first establishing an in-house research center and creating its own knowledge. The “Not Invented Here” syndrome is an important aspect to study when thinking about how a firm can begin its own in-house research and development center and its quest for growth and high profit margins. Past research has pointed to this syndrome having a negative connotation and has stated that firms must forget about this syndrome in order to take full advantage of the markets for technology. This study does not believe that this is the case and studies the relationship that internal research and development has on overall firm performance. This study suggests that the relationship between in-house R&D and good overall performance is both positive and significant through a regression framework. These findings imply that some degree of the “Not Invented Here” syndrome is a good strategy at first to help a firm establish innovative know how and expertise. After a firm establishes a strong in-house program, that firm can go out and acquire external knowledge that will add to and supplement their already existing expertise with greater ease. This study sheds light on the importance of starting innovations in-house and then using the absorptive capacity and existing knowledge to find external sources to further their innovations.
Name: Day, Kevin P.
Date: Spring 2010
Major(s): Economics
Thesis Committee: D. Goldstein, S. Casler
Title: Effective Strategy and Capability Formation during an Economic Recovery: The Financial Services Industry
Abstract: The United States recession that began in late 2007 has been considered to be among the most serious economic downturns the country has experienced since the “Great Depression” of the 1930’s. The severity of the recession and its extended length have provided an opportunity to learn about the origins of the recession and, most importantly, the methods of recovery that will be most effective to firms following a recession of similar magnitude. The correct and effective implementation of strategies and capabilities for a firm amidst a recession can play a major role in the eventual recovery of specific firms and the overall economy from an economic downturn.
A new normal in Financial Services is expected following the recession of the late 2000’s due to unprecedented political, market, and regulatory change. Businesses in the Financial Services industry must adjust their strategies and capabilities to these regulatory changes in order to thrive under new market conditions. Through an analysis of Piper Jaffray’s report describing the new normal, and of past recessions and the Great Depression, several strategies stand out that will take on great importance for businesses in the Financial Services industry during a period of economic recovery. Firms that embark on ethical initiatives, engage in product and process innovation, and take active steps to lower their leverage ratios are expected to thrive as the economy recovers from a recession.
Name: DeAngelis, Courtney M.
Date: Spring 2010
Major(s): Economics
Thesis Committee: S. Onyeiwu, J. Golden
Title:
Abstract:
Name: Donahoe, Lauren
Date: Spring 2010
Major(s): Economics
Thesis Committee: S. Onyeiwu, K. Wick
Title: The Determinants of Sales in the Retail Industry
Abstract: Growing up, I never understood the idea of recreational shopping. I participated in a lot of sports as a child and never had the time to just go and walk throughout the mall leisurely. When I did have the time, I would have no desire to shop. When I bought things, especially clothing, it was because I decided I needed it for whatever reason so I would go and buy it. It was a mission of sorts and nothing would distract me from point A, my house, to point B, the item I was purchasing. I chose this topic for my senior project because it is something that I never understood. What attracts the hundreds of thousands of people to hurry into shopping malls and clothing shops each week? In a particular instance, why do shoppers wake up at 2am to wait in line to buy items on Black Friday?
The reason I chose this topic for my senior project is my interest in the retail industry. Over the past few years, I have really noticed the dominance of this market. Everyday American citizens make purchases. From my own observations, I see the substantial cash flows and traffic of customers that flow through the malls and shopping plazas each day. In particular, I observed the lines and crowded stores during the holiday season. My goal of this project is to uncover the determinants of retail sales and examine the impact of the holiday shopping season on a company’s generated revenue.
I will site various economic data for 1970 to 2007 from various sources to determine which variables GDP, mean household income, advertising expenditure, unemployment rate, and economic growth rate are significant in determining sales in the retail industry. I will also examine online shopping to factor into my retail sales equation. From personal experience, these variables impact my spending so I feel they will help represent the general population as well. I will use regression analysis to determine significance. I will also use a case study on Macy’s, Inc. to examine the holiday shopping season. I will use monthly sales revenue reports to observe the impact of this season on the revenue generated by this retailer. My initial hypotheses are that all economic variables are significant and the holiday season will greatly impact sales as sales will increase during this time period.
Name: Furey, Melanie
Date: Spring 2010
Major(s): Economics
Thesis Committee: S. Onyeiwu, S. Martin
Title: The Implications and Significance of Strategy in Successful Toiling and Machining Shops in Northwestern Pennsylvania
Abstract: The tooling and machining industry has provided the Northwestern Pennsylvania area with critical economic support over the past several years. Tooling and machining provides countless jobs and creates opportunities for other businesses. The importance of the success of this industry cannot be stressed enough. The purpose of this study is to investigate the factors behind the success of the industry and to review literature on the dynamics of the manufacturing sector. Successful tooling and machining shops can use operational effectiveness to become
successful and sustainable and these shops do not need to employ a strategy in order to thrive.
Through regression analysis and two case studies, the determinants of the success of tool shops are also explored. Twenty-eight shops located in Crawford and Erie counties of the Commonwealth of Pennsylvania were used to collect data and conduct interviews. Viking Tool and Gage and Acutec Precision Machining Inc., used as case studies. Results from both the regression analyses and case studies suggest that capital investment has a strong correlation with sales and employment. As well, it is found that involvement in a niche market is not necessary or correlated with growth rates in sales or employment. These results imply that operational effectiveness is a conceivable and profit-sustaining option for tooling and machining shops, contrary to Porter’s hypothesis.
Name: Glebes, Ian W.
Date: Spring 2010
Major(s): Economics
Thesis Committee: T. Nonnenmacher, J. Sickafuse
Title: Outsourcing the Military
Abstract: The United States Military has used outside contractors to support its logistics operations since the founding of the nation. This outsourcing became more substantial since the Vietnam War, culminating with more private contractors employed in Iraq than soldiers. This paper examines the reasons why the military chose to outsource its support services, and the contracting process involved with it including the many transaction costs. The nature of these costs are analyzed in this paper, and, are identified and illustrated in one contract awarded to a private firm.
Name: Gordon, Evan D.
Date: Spring 2010
Major(s): Economics
Thesis Committee: D. Goldstein, A. Moskwa
Title: Determinants of Loan Repayment in the U.S. Microfinance Industry
Abstract: The Microfinance Industry in the United States is facing new challenges and increasing opportunity in light of the current economic environment. Microfinance Institutions are now being viewed as a tool that can help revitalize the economy. With traditional banks denying credit to a greater number of individuals, Microfinance Institutions are being asked to pick up the slack.
With an increased role, the micro-lending organizations are coming under increased scrutiny in regard to how well they manage their portfolios, and in particular, how well they recover their loans.
This project will test the determinants of loan repayment for a microfinance institution in Rochester, NY called The Enterprise Center, and study how their overall structure and operations relate to their loan recovery capabilities
Name: Grossman, Margaret E.
Date: Spring 2010
Major(s): Economics
Thesis Committee: T. Nonnenmacher, K. Wick
Title: Determinants of Price for a Thoroughbred Horse Sold at Auction
Abstract: The following study of the Thoroughbred horse industry will focus on the business side of the industry. By taking a look at auctions, the way individuals behave within the industry, the history and some empirical data, the study attempts to show what factors, if any, are significant when determining the price of a horse sold at auction. The background information of the industry, and the direction the industry is headed in helped to establish which factors were used in the regressions.
The most popular aspect of the industry is racing, but this study will focus on what goes on behind the track, how the horse reaches the capstone of racing. The horses used in this study are not derby winners nor are they big name horses, but because in reality the percent of horses that make it to the big times is small. Therefore, focusing on the general selling and buying of thoroughbreds is the direction in which this research is taken.
Furthermore, this study will attempt to answer questions such as: are there variables that are significant to price, are there determinants that help explain why there are price variations between two horses of the same age and what do these results mean for the industry?
Name: Hess, John R.
Date: Spring 2010
Major(s): Economics
Thesis Committee: A. Baskan, K. Wick
Title: An International Perspective of the U.S. Construction Industry: A Case Study Analysis of Market Strategies in the World’s Construction Industry
Abstract: Construction is the second-largest industry in the United States and is one of, if not the most predominant industry‘s in the global economy. It is important to note that this particular industry is an extremely disaggregated (separate sectors/components) and unpredictable market that responds to levels of conventional economic activity. Domestically speaking, a variety of statistics illuminate the importance of the construction industry to our national economy. However, the U.S. has been losing share in the global markets due intense competition from foreign multi-national companies. In this study, I will discuss the several factors and challenges facing the United States construction industry in order to understand the industry‘s significance for our domestic economy and its impact on the global market. In addition, I will identify and examine the several market strategies in the construction industry to properly assess a case study analysis on the strategies of the highest ranked U.S. international contractor, Bechtel, in comparison to the top ranked international contractor, Hochtief, to determine how Bechtel can improve its competitive strategy to advance it competitive position in the global market to determine if intense competition of foreign construction companies and increasing foreign penetration in the domestic market is the reason for the deterioration of the U.S. competitive position in the global construction market. The final results lead to my conclusion that the most logical explanation for the deprivation of the United States‘ competitiveness and share in the global market lies within an American-based construction firm‘s strategic approach within the international market of the industry.
Name: Hess, Matthew F.
Date: Spring 2010
Major(s): Economics
Thesis Committee: S. Onyeiwu, J. Golden
Title: : CEO Compensation Strategy: Implications for Shareholder Value Maximization
Abstract: Since the major corporate scandals of Enron, Tyco and WorldCom in the early 2000s, CEOs have been under careful watch by the public. More recently, the economic recession beginning in 2007 questions the justification of large CEO paychecks. Previous literature is explored on the subject of CEO compensation, then is analyzed and then used empirically in a case study. This analysis of Starbucks Coffee Company and Terra Industries, a leading nitrogen producer, examines not only how much CEOs are getting paid, but how they are getting paid. This study will explore whether or not different strategies for compensating business leaders affects the performance of the firm and if those strategies align with the interests of the shareholders. Lastly, the study will examine the concept of increased government regulation when it comes to compensating employees.
Name: Huang, Pu
Date: Spring 2010
Major(s): Economics
Thesis Committee: A. Baskan, B. Afrasiabi
Title: Protectionism, Free Trade, and Cooperation-Analysis on Conflict of China and United States Economic Policies and Trade Relationship
Abstract: The trade relationship and economic policies among the two super-powered nations, China and United States, are indisputably important. This paper identifies the major conflicts of this trade relationship and the policies that implement on some of the major trade issues. Along with game theory approach and IS-LM theoretic model, this paper attempts to evaluate the effects of trade policies that promote protectionism, free market and cooperation in this complex trade relationship.
Name: Humes, Autumn L.
Date: Spring 2010
Major(s): Economics
Thesis Committee: D. Goldstein, J. Sickafuse
Title: An Investigation of the Relationship Between Diversification and Performance: A Walt Disney Company Case Study
Abstract: Many firms have diversified from having a single business into having several single business units that make up the entire firm. Generally speaking there are two common paths for a company to undertake when diversifying: related and nonrelated. Richard Rumelt had addressed this topic on a larger scale where he created specific diversification categories. Using his analysis, this paper aims to seek whether The Walt Disney Company has diversified into related businesses. Further, economic research has suggested that a relationship exists between diversification path and performance of a firm. This study will also seek to determine the relationship, if any, exists between the performance of the Disney Company and its diversification path taken.
Name: Hurtuk, Benjamin A.
Date: Spring 2010
Major(s): Economics
Thesis Committee: D. Goldstein, J. Golden
Title: Greenwashing in Corporate America
Abstract: Over the past few decades, environmental corporate social responsibility has become more relevant in the business landscape. Corporations are being more conscious of consumer demands by incorporating more environmental friendly practices into their corporate strategy. Greenwashing is when a company will market themselves as an environmentally friendly company when they are still involved in unfriendly environmental practices. Through General Electric’s Ecomagination initiative, GE is attempting to incorporate environmental CSR into the core of their strategy. Did GE create Ecomagination as a way to stay relevant in the new business landscape? Or is GE greenwashing its stakeholders into making the stakeholders believe they are an environmentally friendly company? I want to take a close look at what exactly a corporation has to do to greenwash its stakeholders and if GE is guilty of greenwashing its stakeholders.
Name: Irby, Theresa
Date: Spring 2010
Major(s): Economics
Thesis Committee: T. Nonnenmacher, S. Martin
Title: Safety in the Cruise Line Industry: What is the Optimal Amount of Precaution?
Abstract: There has been little research on the issue of whether cruise lines provide sufficient protection for their passengers. However, statistics confirm that crime and accidents are occurring on cruise ships throughout the world. This has made some organizations question whether cruise lines are taking enough precautionary measures to protect their passengers. This study examines the economic model of the Marginal Hand Rule in evaluating different precautionary measures that could be taken by cruise lines by looking at the marginal costs and marginal benefits. This model can help decision makers in the industry decide what the optimal amount of precaution would be. There are also underlying factors that can affect decisions being made about safety precaution on cruise ships. Perhaps the most important factor to be considered is the jurisdiction under which a cruise ship is sailing. Therefore, a detailed analysis of the legal side of the industry is needed to help understand the reasoning behind certain decisions. Finally, models of optimal precaution are suggested by looking at previous cruise crime cases, determining whether cruise lines were negligent, and if more precautionary measures could be cost-efficient for their company. While the costs and benefits of these models are only estimates, they will provide an example as to how the Marginal Hand Rule could be applied in the cruise industry.
Name: Juber, Patrick J.
Date: Spring 2010
Major(s): Economics
Thesis Committee: D. Goldstein, S. Casler
Title: LEED-Certification, Occupant Satisfaction, and Worker Productivity in Financial Institutions
Abstract: The purpose of this paper is to examine the connections between LEED-certified buildings and occupant productivity. Through examining the steps of the certification process, the different features of “green” buildings, what different things play into productivity, and a case-study analysis of PNC Bank, it will be concluded that buildings that go through the LEED-certification process do see higher productivity rates in employees. Also through having higher productivity, employees are more satisfied and this leads to both employee retention and customer satisfaction. Through examining all these factors, the connections between certification and productivity are clearly defined, and it is well worth the investment for other banks to follow PNC’s initiatives.
Name: Kacerik, Nicole M.
Date: Spring 2010
Major(s): Economics
Thesis Committee: D. Goldstein, S. Martin
Title: Can Cluster Theory Explain the New Trajectory of the economy in Pittsburgh?
Abstract: This section is an examination of the economic conditions in the Pittsburgh region, and seeks to determine whether or not cluster theory can elucidate the new trajectory of the economy. It commences with an account of the economic conditions that existed throughout the early 1900s and transitions into the contemporary conditions that exist within the city. By transitioning through the city’s economic trends, the alteration in conditions is realized and then explored further, acknowledging the characteristics of a cluster.
Various articles scrutinizing Michael E. Porter’s cluster theory were evaluated to establish the necessary attributes that must be present to propose that a cluster exists within a region. I subsequently transition from agglomeration theory to the common traits that contribute to the current definition of an economic cluster. In addition to establishing the essential attributes, I identify specific characteristics one should ascertain in a region to classify it as a cluster. Those distinguishing qualities are thus further analyzed, and specific conditions are noted that have the ability to either prove or disprove the presents of a cluster in a region. Additionally, I verify how clusters promote innovation and foster the economy of the region.
Final conclusions will be established in regards to the research question. Since the theory is so difficult to determine empirically, the study appears to suggest that although there are numerous connections between the various companies that exist within the Pittsburgh region, the available data is inconclusive in positively identifying the region as a cluster. Though many of the characteristics are present, we cannot
Name: Kelly, Nicholas J.
Date: Spring 2010
Major(s): Economics
Thesis Committee: S. Onyeiwu, B. Afrasiabi
Title: The Firm Level Impact of a Green Strategy: An empirical analysis of the impact of going green on financial and operating performance
Abstract: With the recent development of information over the past decade about the scarcity of our natural resources and harm of carbon emissions, a number of American firms have researched and implemented corporate green strategies in order to help reduce these problems. However, an ongoing debate still exists about whether greening a company can actually increase financial performance or whether it is simply an added cost. This study examines the impact of going green on financial and operating performance through five different regression models. In addition the study also examines past literature on corporate greening to defend the benefits of going green. Previous research shows that through intense methods of resource productivity, investment in natural capital, and sustainable value chains firms are able to reduce operating costs, increase financial performance, and gain competitive advantage. In contrast, implementing end of pipe technology as a simple add on solution is where firms experience additional costs. Going green seeks to eliminate the inefficiency in production and not simply reduce it. The empirical models from this study are based on the financial data from 40 publicly traded companies. The main explanatory variable of the models is green power, a statistic provided by the EPA which measures firms use of green energy sources in kilowatts per hour. It is hypothesized in the study that going green enhances both financial and operating performance, based off past research and theory. The results in regression model three confirm both my hypothesis and past theoretical evidence. Model three shows that an increase in green power will increase financial performance in terms of net income. Following the empirical evidence, implications for corporate performance are made based off the results from the study. It can be suggested that a time series model will better explain the benefits of a green strategy as investments in going green take time. Concluding remarks suggest that firms should greatly consider investment in a green strategy to increase their financial performance, and over time gain competitive advantage.
Name: King, Gregory S.
Date: Spring 2010
Major(s): Economics
Thesis Committee: A. Baskan, K. Wick
Title: The Effects of the North American Free Trade Agreement (NAFTA) on the U.S.-Mexican Service Economy
Abstract: Regional trade agreements have become a crucial part in understanding in the economic relationships between nations in recent history. This paper examines the effects of the North American Free Trade Agreement on the service sector, the largest and fastest growing sector of the economy. Mexico has a comparative advantage in labor relative to the United States making labor more efficient in Mexico. Mexican wages relative to capital earnings are predicted to increase by the theory of factor mobility. Though labor mobility is restricted, capital mobility is possible through foreign direct investment which NAFTA promotes. Empirically, relative wage trends in three major Mexican service divisions are shown to increase with the biggest increase corresponding to the period of NAFTA implementation. The U.S. foreign direct investment trend is also shown to be highly correlated with relative wage increases. The paper concludes with limitations of the model with suggestions for improvement and further investigation into this topic.
Name: Klenotic, Matthew J.
Date: Spring 2010
Major(s): Economics
Thesis Committee: T. Nonnenmacher, S. Casler
Title: The Credit Crisis of 2007: Asymmetric Information, Financial Derivative Products, and the Market for Lemons
Abstract: The aim of this work is to examine the role that asymmetric information played in the Credit Crisis of 2007 with respect to Akerlof’s Lemons Theory. Various market features including a high level of opacity, a complex product, and a significantly skewed informational distribution in favor of the sellers contributed to a colossal market failure. This market failure was manifested in the illiquidity of the derivatives market during and immediately following a shock to the United States housing market. As sellers had far better information than buyers within the collateralized debt obligation (CDO) market, buyers were rightfully wary of the quality of the good being sold following the collapse of the underlying mortgage market. The illiquidity of the derivatives market is predicted by Akerlof’s Lemons Theory, providing strong evidence for the key role of asymmetric information in the Credit Crisis, as hypothesized by this work. Several case studies including Bank of America, Morgan Stanley, and Goldman Sachs provide further real world evidence of the use of asymmetric information to exploit buyers within the CDO market.
Name: Kurth, Jordan
Date: Spring 2010
Major(s): Economics
Thesis Committee: D. Goldstein, A. Moskwa
Title: The Impact of Energy Policy and Regulation on Auto Manufacturers: Europe vs. United States
Abstract: Energy policy and regulation has become a more important focus to not only the government, but also in the view of the public in the United States over the past several years. One major economic industry that is drastically affected by the focus on the environment and future sustainability stemming from these policies and acts is the automotive industry. Major changes are on the rise in the car market, with the financial collapse of the global auto producer General Motors and the increasing demand for fuel efficient vehicles such as hybrids, the new era of the auto industry will be different from what history has presented to us. The focus of this paper is to examine how the energy policies of the United States were detrimental to the advancement of energy efficient vehicles and technology for General Motors, and hence led them to bankruptcy in 2009. General Motors will be compared to their foreign competitor Volkswagen in order to show how advanced environmental regulation of a country in Europe allowed the company to maintain success in terms of stable sales and sustainability. In order to examine the influences of policy on the auto market, a history of each nation’s policies will be reviewed, and then economic theory and principles will be applied to the auto companies to show the resulting decisions and actions of the companies throughout history and up to current times. Upon completion of this study, the role and difference between energy polices and regulation affecting the auto industry of the United States and Europe should be better explained.
Name: Lewis, Evan T.
Date: Spring 2010
Major(s): Economics
Thesis Committee: S. Onyeiwu, B. Afrasiabi
Title: Analysis of Johnson and Johnson’s Business Strategy
Abstract: Today’s global economy makes it difficult for companies to remain competitive. Firm’s must recognize what their core competencies are and use them to their advantage. Michael Porter believes a firm must have a strategy that is unique from their competitors. A firm’s strategy is having distinguishing activities that are not only consistent with each other, but also aren’t easy to imitate. The purpose of this paper is to analyze Johnson and Johnson as an example of how their strategy is a precondition for their success.
Name: Lin, Yuan
Date: Spring 2010
Major(s): Economics
Thesis Committee: D. Goldstein, S. Casler
Title: R & D Performance in China-the Case of Shanghai
Abstract: This study explains the current situation of research and development (R&D) activities in China by studying the pattern of R&D in Shanghai, which is one of China’s main economic centers. The growth of R&D activities of Shanghai is a miniature of this whole developing country. This paper examines the evolutionary process of local and foreign R&D activities, studying factors which affect the development of R&D in Shanghai. Statistical analysis is focused on the role R&D plays in affecting GDP, combining the data for three main regions in China, Beijing, Shanghai and Guangdong from 2000 to 2008. For outside R&D investments, this study pays more attention to foreign R&D strategies by using cases study of three leading high-tech multinational companies in managing their global R&D operations in Shanghai , specifically GE, Motorola and Siemens.
Name: Marker, Kelly K.
Date: Spring 2010
Major(s): Economics
Thesis Committee: D. Goldstein, S. Casler
Title: Cluster Policy as a Catalyst for Urban Revitalization: A Case Study of Dublin, Ireland’ ICT Sector
Abstract: Cities around the world are plagued with severe economic and social troubles. Policy-makers have struggled for decades to find suitable solutions for these problems. Past solutions have many times made problems worse or have done nothing at all. For true revitalization there must be economic development. Michael Porter’s cluster theory involving the economic geography of firms and institutions in a particular field may be able to explain how a region can create wealth and economic development. However, Porter does not believe that governments and policy-makers can create industry clusters from nothing. Many governments have attempted to re-create California’s Silicon Valley with limited success.
Dublin, Ireland, as well as Ireland’s economy as a whole, has seen significant economic development and growth in the last twenty years. Many critics argue that Ireland’s revitalization was credited only to foreign direct investment. By looking at Dublin’s high-tech cluster and its development insight might be found about cluster creation and policy. The purpose of this study is to determine if an industry cluster can be created and used as a policy tool for the revitalization of urban areas.
Name: McGill, Samuel T.
Date: Spring 2010
Major(s): Economics
Thesis Committee: S. Onyeiwu, b. Afrasiabi
Title: The Implications of an Environmentally Focused Strategy: The Case of General Electric
Abstract: What to do with climate change has become one of the most polarizing debates in recent discourse. Because of things like environmental degradation, ecosystem depletion, global warming, resource constraints, and population growth governments and the people of the world have been hard pressed to take immediate action. Where the discussion often turns sour is how does going green fit into the global economic landscape? Despite the polarizing effect that the words climate change and green have had on discourse, businesses are beginning to recognize that in order to operate in a world of resource constraint and environmental degradation that they must become green. The purpose of this paper is to examine the implications of a firm using an environmentally focused strategy. The case focuses on one of America’s largest companies: General Electric Co. The case will use the principles of sustainability and ecological economics to examine the implications of GE’s environmentally focused strategy, Ecomagination, and how it has affected its business practices. The case will also examine how GE’s environmentally focused strategy has affected the company’s performance.
Name: McLamb, Matthew M.
Date: Spring 2010
Major(s): Economics
Thesis Committee: T. Nonnenmacher, S. Martin
Title: Tool and Die Firms-Performance of Strategic Groups
Abstract: The tool and die industry in northwestern Pennsylvania is an important contributor to the economy of the region. This research gauges the performance of firms in this industry. Beginning with a historical perspective to gain and understanding of the industry, this paper diagnoses which firms in the industry are the highest performers. Using information gathered during the summer of 2009, through a process of interviewing firm owners or operators, conclusions will be made on the basis of strategic group member ship and the importance of mobility barriers to this industry, and its firms’ performance.
Name: Pyo, Ranhee
Date: Spring 2010
Major(s): Economics
Thesis Committee: S. Onyeiwu, S. Martin
Title: Configuration and Multinational Performance:A Case Study of Hyundai Motor Company
Abstract: Through a case study of Hyundai, this thesis shows the importance of configuration strategy and locational choices in the investment and operations of multinational corporations. In the late 1990s, Hyundai Motor Company (HMC) achieved the level of economies of scale with a yearly production of 2 million units. An increasing level of domestic production brought HMC to consider fundamental structural change and globalization. There is no doubt that Hyundai Motor Company had come to need fundamental structural change and globalization, because it could not continue to depend on the domestic market for sustained growth.
In the process of its global expansion, Hyundai Motor Company’s efforts in Canada were not successful because of the poor handling of the relationship with its foreign employees; however, later it successfully used labor-intensive methods in populated countries such as India, China and more skillfully combined its management from the home country with local technicians. Hyundai’s Chinese company has become the 4th largest car seller in China after utilizing localized design and marketing. In the meantime, HMC also set up its technical operation in America and initiated a sales incentive of a ten-year warranty which proved successful in the United States.
This paper will describe the growth of this successful Korean automobile company and will explore how the issues of configuration and coordination relate to its global success.
Name: Reed, Amanda
Date: Spring 2010
Major(s): Economics
Thesis Committee: T. Nonnenmacher, J. Sickafuse
Title: An Economic Analysis of the Profitably of Reward Loyalty Programs within the Sporting Goods Industry
Abstract: With the current economic situation, consumers are spending less money. When consumers must purchase, they look for the best prices and possible future savings. Firms must keep demand high for their products in tough economic times. A possible method of motivating additional consumer purchasing is the implementation of loyalty, reward, or frequency programs that establish loyal buying behavior by providing a benefit or incentive for repeat purchasing. By looking at market characteristics and customer preferences, I evaluate the economic profitability of reward loyalty programs and apply those findings to the sporting goods industry. The potential for higher revenues are balanced with the disadvantages associated with reward loyalty programs such as high costs, complexities of maintaining the program and difficulties reversing such programs. Analysis of multiple reward loyalty programs in one sector will be interesting because the firms that adopt reward loyalty programs are within competitive markets, including the sporting goods industry. While the type of goods/service in the industry is important, customer preferences experienced by the industry are equally important. The combination of customer preferences and market characteristics are key to the general analysis of reward loyalty programs and my specific application of reward loyalty programs in the sporting goods industry.
Name: Rendulic, Alyssa
Date: Spring 2010
Major(s): Economics
Thesis Committee:
Title: The Contemporary Knowledge Worker and the Management Strategies that Sustain Competitive Advantage
Abstract: With the current economic situation, consumers are spending less money. When consumers must purchase, they look for the best prices and possible future savings. Firms must keep demand high for their products in tough economic times. A possible method of motivating additional consumer purchasing is the implementation of loyalty, reward, or frequency programs that establish loyal buying behavior by providing a benefit or incentive for repeat purchasing. By looking at market characteristics and customer preferences, I evaluate the economic profitability of reward loyalty programs and apply those findings to the sporting goods industry. The potential for higher revenues are balanced with the disadvantages associated with reward loyalty programs such as high costs, complexities of maintaining the program and difficulties reversing such programs. Analysis of multiple reward loyalty programs in one sector will be interesting because the firms that adopt reward loyalty programs are within competitive markets, including the sporting goods industry. While the type of goods/service in the industry is important, customer preferences experienced by the industry are equally important. The combination of customer preferences and market characteristics are key to the general analysis of reward loyalty programs and my specific application of reward loyalty programs in the sporting goods industry.
Name: Rhodes, Dan
Date: Spring 2010
Major(s): Economics
Thesis Committee:
Title: Through the Lock-in Glass: German Economic Convergence Path Dependence as Applied to Monetary and Fiscal Policy in the European Economic and Monetary Union
Abstract: This paper uses a microeconomic model known as path dependence in a macroeconomic way to describe the economic convergence of the European Economic and Monetary Union through German monetary and fiscal policies. This is important because it shows how a country like Germany can insulate itself from economic downfall through integration with other countries. This theoretical path dependent model starts with Germany’s entrance into the EMU and its acceptance of the Euro as its currency, as well as its acceptance of certain political and economic criteria which it must uphold to stay fiscally converged with the other EMU countries. Accepting the Euro leads Germany to an inevitable non-sovereign monetary policy as well as a fiscal policy which is dependent upon the wishes of the monetary authority. Scenarios which use the IS-LM macroeconomic model approach, prove that accommodating fiscal policy must be used to be able to react efficiently to monetary shocks. This step of the path dependence approach leads directly to macroeconomic convergence. Using basic business cycle theory, this paper shows how business cycles, coupled with monetary policy, shape the government spending or taxes into counter-cyclical fiscal policy. After the theory is explained, the composition enters an empirical section, which is used to show that, through the analysis of six major macroeconomic variables, Germany’s decision to join the EMU was efficient as per the regulations of path dependence.
Name: Riaz, Arish
Date: Spring 2010
Major(s): Economics
Thesis Committee: D. Goldstein, J. Sickafuse
Title: Investing in the Future: An Economic Analysis of a Potential Wind Turbine for Acutec Precision Machining, Inc
Abstract: The purpose of this study is to find whether or not it is economically feasible for Acutec Precision Machining, Inc. to install a wind turbine on their property for renewable energy production. This study utilizes the annual wind data (analyzed in a separate report) from Acutec’s site to predict the economic feasibility. When calculating the feasibility, government incentives such as rebates and tax credits are taken into consideration, as well as the fixed installation costs, estimated maintenance costs, payback period, and financing options. The results obtained are from two different financial models. Each of these models is used for three different types of wind turbines to predict the best option. This report does not make any attempts to analyze the environmental impacts of this wind project and a separate study is highly advised.
Name: Sharrow, Eric
Date: Spring 2010
Major(s): Economics
Thesis Committee:
Title: (Daimler-Chrysler Merger: What Went Wrong)
Abstract: This paper is a study of mergers and acquisitions and uses the Daimler-Chrysler merger as a case study. Some mergers are successful, and others are failures. I was interested to find the cause to this claim. The mergers that failed are what particularly sparked my interest, especially as to why the companies participated in the merger in the first place. The second chapter of this paper discusses economic theories surrounding mergers and acquisitions. The third chapter studies empirical evidence that supports the theories presented in chapter two. In the fourth chapter of this paper, I discuss the Daimler-Chrysler merger in detail and apply some of the theories and empirical evidence. In the final chapter of this paper, I look forward to the future of the U.S. auto market. I hope that this paper allows us to obtain a better understanding of mergers and acquisitions.
Name: Sinnott, Jessica
Date: Spring 2010
Major(s): Economics
Thesis Committee:
Title: Operational Effectiveness in Public High Schools
Abstract: Theory of corporate strategy and operational effectiveness has been explored extensively. Michael Porter explores the differences between strategy and operational effectiveness. Operational effectiveness is when one firm does similar activities better than another firm, whereas strategy is when a firm has differentiated and unique activities. Porter argues that operational effectiveness is necessary for an organization to be successful, but strategy is what supports sustainability. This paper examines operational effectiveness in the education system. The hypothesis of this paper is that operational effectiveness activities are significant to the success of high schools, but strategy is important for high schools to have sustainable performance. Strategies of high schools are not examined in this paper due to research constraints. A model is developed to explain variance in academic performance by operational effectiveness variables in New Jersey high schools. This paper finds that some operational effectiveness activities are significant to academic performance of high schools. There is, however, unexplained variance that may be due to other factors such as strategy. Further investigation is needed to explore whether or not strategy affects academic performance.
Name: Steltzer, Drew
Date: Spring 2010
Major(s): Economics
Thesis Committee: S. Onyeiwu, C. Allison
Title: General Motors vs. Toyota: Case Study comparing a non-strategy for Alternative Energy versus a Toyota’s Alternative Energy Vehicle
Abstract: The automotive industry has seen many changes over the past one hundred years. One of the most important changes has been the shift towards alternative energy vehicles. Toyota’s creation of the first hybrid vehicle has created a new market segment and has made Toyota the global market share leader. Contrary to Toyota is General Motors, the former largest automotive producer in the world is almost being pushed into bankruptcy by the Obama administration. This case study states how General Motors is in this current position because of the company’s lack of an alternative energy strategy. While Toyota, over the last five years has captured GM’s once held global market share because of Toyota’s alternative energy strategy. I am going to be using Michael Porter’s concepts from his “What is Strategy?” piece when assessing Toyota and GM strategy. This study will say Toyota stayed within Porter’s strategic concepts while General Motors failed to stay on course regarding Porter’s ideas on strategy.
Name: Suchora, Steven
Date: Spring 2010
Major(s): Economics
Thesis Committee:
Title: Application of SP and RP Methods of Modeling Consumer Choice for Market Research on the SAT Operating System TM as a Commercial Product
Abstract: The purpose of this project is to identify key characteristics of the target market for the SAT Operating SystemTM, a software product for graphing calculators developed by Calc-Tech LLC, the purpose of the software is to help students increase their scores during the SAT test. This project accomplishes this goal through the use of stated preference (SP) and revealed preference (RP) surveys issued to members of the target market. The aggregate responses on these surveys reflect the characteristics of the target market. This data will be used to help Calc-Tech LLC. improve its current product and extend its reach to the target for the purpose of increasing efficiency and effectiveness of Calc-Tech’s current marketing strategies.
Name: Suders, Shane
Date: Spring 2010
Major(s): Economics
Thesis Committee: A. Baskan, B. Afrasiabi
Title: The Austrian Business Cycle Theory and the 2007/2009 Recession
Abstract: I will explore the viability of The Austrian Business Cycle Theory (ABCT) and its capacity to fit the “stylized facts” of the recent U.S. housing bubble and recession. ABCT is part of the heterodox Austrian School of economics, primarily derived from the work of Freidrich Hayek and Ludwig Von Mises. However, as Roger Garrison explains in the introduction to the anthology The Austrian theory of the Trade Cycle: “…there is no single canonical version of the [Austrian] theory.”
In order to understand the Austrian Business Cycle Theory, it is necessary to understand the theoretical and methodological framework of the Austrian school. This school of thought rejects most mathematical modeling of, and aggregation of macroeconomic phenomena. In order to engage with this theory on its own terms, we must understand the endogenous “stylized facts” of the theory. It is necessary to build up a substantial view of the history of Austrian methodology and theory in order to do so.
ABCT distinguishes between “…savings-induced growth, which is sustainable, [and] a credit-induced boom, which is not” (Garrison, 1996). The theory of a business cycle created and sustained by expansion of credit via changes in the interest rate fits the facts of the 2007-2009 recession very well. Furthermore, Philip Baggus and others have also found within the Austrian framework endogenous explanations for asset bubbles also caused by credit fueled booms, an analysis which is applicable to the recent housing market bubble and collapse.
Name: Suen, Joel
Date: Spring 2010
Major(s): Economics
Thesis Committee:
Title: The cause and Effects of Exclusive Contracts: A Case Study of Apple Computer and AT&T Wireless
Abstract: This senior project examines why exclusive contracts exist, what they accomplish, and in what scenarios they enhance efficiency. The first chapter provides an introduction to exclusive contracts as well as an in depth overview of the rest of the paper. The next chapter sets up a theoretical transaction cost based theoretical framework that describes several models as well as costs and benefits of exclusive contracts. The empirical chapter follows with three studies that use regressions to examine exclusive contracts. The fourth chapter applies the theory to a case study of the exclusive contract between the Apple iPhone and AT&T Wireless. Overall, this paper finds that the most important problem that exclusive contracts solve is that of opportunistic behavior. Furthermore, the case study argues that Apple and AT&T do not violate antitrust laws and that they used an exclusive contract to prevent AT&T from taking advantage of the up front investment Apple made. Because of large switching costs, a prediction is also made that Apple will continue to deal exclusively with AT&T.
Name: Tudi, Dominic
Date: Spring 2010
Major(s): Economics
Thesis Committee:
Title: Green Buildings in the Construction Industry: The Role of Environmental Labeling Systems
Abstract: Green initiatives have become a major focus of economic progress in the U.S. due to the scientific claims of global warming and environmental degradation. Many companies have incorporated holistic strategies that promote sustainable development in the pursuit of economic growth. This paper examines the new innovative methods and designs that have surfaced in the construction industry as a result of the anthropogenic movement. Environmental assessment methods are established guidelines instituted by organizations that have the social motives to promote green construction and design. The current market is dominated by several key firms that act as the benchmark for green building principles. Green construction is still in the initial stages of adoption but existing environmental assessment methods have lowered the transaction costs of green building. This paper considers the current path of the construction industry and the influence that environmental assessment tools have on the adoption process of green construction.
Name: Versaw, Kimberly
Date: Spring 2010
Major(s): Economics
Thesis Committee:
Title: An Economic Analysis of Overseas Expansion: The University of Pittsburgh Medical Center and Spain
Abstract: United States’ corporations from a variety of industries are continuing to expand their operations in foreign markets. The question that will be answered in this study is: Why do these U.S. corporations choose to develop and expand abroad? Corporations within the healthcare industry have begun to develop sites abroad in order to enhance foreign healthcare systems by providing several different services. The University of Pittsburgh Medical Center (UPMC) has entered the foreign market by providing management services and advanced technologies that have helped current healthcare providers abroad. The Spanish healthcare system provides all taxpaying citizens healthcare along with a private insurance option as the system is becoming more decentralized. Spain’s national health system has many setbacks, such as long waiting lists for specialists, a lack of up-to-date technology, and quality management and care. These setbacks can be alleviated with UPMC’s intervention, especially in the oncology services. The movie Planta Cuarta demonstrates the need for up-to-date technology and specialized oncology centers.