The importance of organizational structure and forecasting in determining firm performance is widely acknowledged in the strategy and economics literature. This effect is evident in consumer car leasing, where two fundamentally different organizational forms, manufacturer-owned captive lessors and their independent competitors, write a wide variance of future car value forecasts in their lease contracts. These two types of lessors forecast and contract these residual values in very different ways that lead to significant performance differences. Yet variation across independent lessors also demonstrates that the sources of forecasting capabilities are not solely determined by ownership structure. Other distinct firm characteristics may lead to forecasting capabilities specific to estimating vehicle depreciation.; This dissertation empirically examines how differences in organizational structure and capabilities affect forecasting and risk management in consumer car leasing. In Chapter Two I use automobile transaction data to identify how car manufacturers use leasing subsidiaries to market low-demand vehicles, and how conflicts in organizational focus limit their ability to manage risk. Chapter Three examines the industry shakeout in car leasing, and how firm forecasting capabilities led to performance differences among independent lessors. This chapter first empirically identifies how the combination of uncertain product characteristics, manufacturer involvement, and the winner's curse led to inaccurate forecasting and ultimately firm exit. I then find that industry specialization and related experience aid residual value forecasting while size can create a costly positive forecasting bias. The fourth chapter adds market survey data to examine how consumers use leasing to upgrade to more expensive vehicles, and discusses the effect this has on manufacturer profitability.
展开▼
