How Do Firm Financial Conditions Affect Product Quality and Pricing?

How Do Firm Financial Conditions Affect Product Quality and Pricing?

Through the post today I want to convey posts from sources that are useful for you.
Yes ... why not in this book you will know your company's financial influence on product quality and price.

The following quotation.

How Do Firm Financial Conditions Affect Product Quality and Pricing?

Gordon M. Phillips
University of Maryland - Department of Finance, National Bureau of Economic Research (NBER)

Giorgo Sertsios
University of Maryland


March 16, 2010


Abstract:
We analyze the interaction of firm product quality and pricing decisions with financial distress and bankruptcy in the airline industry. We consider an airline's choice of quality and price as dynamic decisions That trade off current for future cash flows of demand from consumers. We examine how airlines mishandled baggage, on-time performance and pricing are related to financial distress and bankruptcy, controlling for the endogeneity of financial distress and bankruptcy. We find That the airline's quality and pricing decisions are differentially Affected by the financial distress and bankruptcy. Product quality decreases Pls airlines are in financial distress, as the financial distress reduces a firm's incentive to invest in quality. In Addition, firms price more aggressively in the financial distress Pls consistent with Them trying to Increase short-term market share and Revenues. In contrast, in bankruptcy increases relative to product quality Pls help the firm is in financial distress.


Gels Classifications: G33, D21
Working Paper Series
Source from: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1572292

Good luck every body