technological specialization and the decline of diversified firms we document a strong decline in corporate diversification activity since the late 1970s and we develop a dynamic model that explains this pattern both qualitatively and quantitatively the key feature of the model is that synergies endogenously decline with technological specialization leading to fewer diversified firms in equilibrium the model further predicts that segments inside a conglomerate should become more related over time which is consistent with the data finally the calibrated model also matches other empirical magnitudes well output growth rate market to book ratios diversification discount frequency and returns of diversifying mergers and frequency of refocusing activity

are overconfident ceos born or made evidence of self attribution bias from frequent acquirers we explore the history of mergers and acquisitions made by individual ceos our study has three main findings 1 ceos first deals exhibit zero announcement effects while their subsequent deals exhibit negative announcement effects 2 while acquisition likelihood increases in the performance associated with previous acquisitions previous positive performance does not curb the negative wealth effects associated with subsequent deals and 3 ceos net purchase of stock is greater preceding subsequent deals than it is for first deals we interpret these results as consistent with self attribution bias leading to overconfidence we also find evidence that the market anticipates future deals based on the ceo s acquisition history and impounds such anticipation into stock prices

rival unionism and membership growth in the united states 1900 to 2005 a special case of inter organizational competition this article uses time series data from 1900 to 2005 to explore the effects of rivalry between labor unions as a special case of inter organizational competition holding constant economic and political factors that typically account for changes in union density we investigate how competition from rival labor federations and from independent unions affect both union density and a measure for the density of the dominant federation afl afl cio adjusted for membership changes from mergers and splits we measure competition by the number of unions and the size of rivals while much existing literature measures state regulation with categorical coding for specific periods we measure the effect of state enforcement directly with counts of pro labor and pro management unfair labor practice cases adjudicated by the national labor relations board we assess the effect of left wing political culture using the popular vote for socialist and communist candidates in presidential elections both the number of memb

inserting gm products into the food chain the market and welfare effects of different labeling and regulatory regimes the purpose of this article is to examine the system wide effects of the introduction of genetically modified gm products with and without labeling and to compare these two regimes to a third regime where gm products are not present either because they have not yet been developed or because they have been banned for each regime the decisions and welfare of consumers producers and life science companies are examined the article explicitly incorporates the consumer response to the introduction of gm technology and considers different market structures of the life science sector

management ownership and market valuation an empirical analysis we investigate the relationship between management ownership and market valuation of the firm as measured by tobin s q in a 1980 cross section of 371 fortune 500 firms we find evidence of a significant nonmonotonic relationship tobin s q first increases then declines and finally rises slightly as ownership by the board of directors rises for older firms there is evidence that q is lower when the firm is run by a member of the founding family than when it is run by an officer unrelated to the founder

structural estimation of real options models we propose a numerical approach for structural estimation of a class of discrete markov decision processes emerging in real options applications the approach is specifically designed to account for two typical features of aggregate data sets in real options the endogeneity of firms decisions the unobserved heterogeneity of firms the approach extends the nested fixed point algorithm by rust 1987 optimal replacement of gmc bus engines an empirical model of harold zurcher econometrica 55 5 999 1033 1988 maximum likelihood estimation of discrete control processes siam journal of control and optimization 26 5 1006 1024 because both the nested optimization algorithm and the integration over the distribution of the unobserved heterogeneity are accommodated using a simulation method based on a polynomial approximation of the value function and on recursive least squares estimation of the coefficients the monte carlo study shows that omitting unobserved heterogeneity produces a significant estimation bias because the model can be highly non linear with respect to the parameters

the leading shareholder strategy takeover contests and stock price dynamics abstract this paper analyzes the attractiveness of the leading shareholder strategy control without majority ownership for a potential takeover bidder with a cost of raising funds additional purchases commit the bidder to more aggressive behavior in a takeover battle and thus discourage competing bids at the optimum the bidder thus trades off the cost of buying additional shares with the risk of losing control to another bidder small shareholders payoffs depend instead on the relative management skills of the bidders and on the premium they obtain when competing bidders enter the battle this model can also be interpreted in terms of equilibrium ownership of dominant shareholders facing costs of raising funds and risks of takeover attempts

density dependence of entrepreneurial dynamics competition opportunity cost or minimum efficient scale this paper reports on a new examination of the well established negative effect of localized density on survival in established industries we attempt to discriminate between three competing but not necessarily mutually exclusive explanations resource competition variations in the opportunity costs of entrepreneurship and geographic variations in minimum efficient scale mes we construct a model of firm growth and survival in which each of these potential causes of density dependence has a transparent parametric effect and we derive six predictions that collectively allow for discriminating empirical tests empirical results using confidential geocoded data from the national longitudinal survey of youth consistently favor the opportunity cost mechanism this paper was accepted by toby stuart entrepreneurship and innovation

a game theoretic model for mergers and acquisitions abstract the corporate merger process is modelled as a bargaining game under certainty the distribution of gains between target and acquiring companies that would be consistent with the nash kalai axioms is determined in principle an operational version of the resulting game theoretic model is fitted to empirical results from 24 recent mergers of companies quoted on the johannesburg stock exchange the model is shown to have good predictive power within this set of data

the founding of specialist firms in a global fragmenting industry the study examines what drives the founding of specialist firms two theoretical explanations are tested for the founding of specialists density dependence and resource partitioning the study finds that specialists foundings are dependent on the population s density at the global level but not at the united states level the evidence from a fragmented industry does not support the resource partitioning hypothesis either at the global level or the united states national level the study shows how multi level analyses can suggest if an industry is multi domestic or globally integrated

a critical exploration of sponsorship infrastructure and new organizations this research focuses on the effects of public sponsorship and regional infrastructure on the emergence and survival of new organizations propositions are tested regarding the joint effects of sponsorship and infrastructure on industrial development in a randomly selected sample of fourteen regions the data include six measures of infrastructure sponsorship as measured by the total dollars spent for economic development and their individual and joint effects on the number of firms and employees in high technology industries for the years 1965 1970 1975 1980 and 1984 this preliminary analysis suggests that variation in the infrastructure and level of sponsorship within a region is related to the birth and survival of new organizations

the ecology of organizational mortality american labor unions 1836 1985 this research analyzes the disbanding rates of the full population of american national labor unions for the period 1836 1985 it tests the hypothesis drawn from population ecology theory that di

differential impacts of country of origin labeling cool econometric evidence from cattle markets abstract country of origin labeling cool occurs routinely for many products in many places but the us implementation of mandatory cool for meat whose purpose is to identify the origin of the livestock used to produce the meat generated much controversy and a major wto dispute that has yet to be settled this paper estimates econometrically differential market impacts of mandatory cool on cattle raised in canada and imported into the united states we find significant evidence of differential impacts of cool through widening of the price bases and a decline in ratios of imports to total domestic use for both fed and feeder cattle

a theory of acquisition markets mergers versus tender offers and golden parachutes we develop a model of the acquisition market in which the acquirer has a choice between two takeover mechanisms mergers and tender offers a merger is modeled as a bargaining game between the acquiring and target firms whereas a tender offer is modeled as an auction in which bidders arrive sequentially and compete for the target at any stage of the bargaining game the acquiring firm can stop negotiating and make a tender offer in equilibrium there is a unique level of synergy gains below which the acquiring firm makes only a merger attempt as it expects to lose in the competition resulting from a tender offer for synergy gains above this level tender offers can occur however to get tender offers target shareholders must give their managers golden parachutes that give higher payoffs in tender offers than in mergers article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

the conditioning effect of time on firm survival an industry life cycle approach in an effort to reconcile theoretical blind spots we integrated research in technology management organizational ecology and evolutionary economics the central premise underlying the resultan

effects of ancestral populations on entrepreneurial founding and failure private liquor stores in alberta 1994 2003 until 1993 all liquor stores in the canadian province of alberta were government owned and run in the fall of 1993 the provincial government exited liquor retailing all government stores were shut down and entrepreneurs were allowed to open private liquor stores in this article we take advantage of this abrupt regulatory change in the alberta liquor retailing industry to address two related issues that have received little empirical attention first we investigate how an ancestral population affects processes of legitimation and competition while density dependence theory predicts that legitimation effects outweigh competitive effects at low levels of density will this be the case when a new population replaces a similar ancestral one second beyond density dependence we investigate how ancestral populations affect the locations of new entrepreneurial ventures will entrepreneurs follow ancestral location patterns and will these ancestral locations confer survival advantages to answer these questions we map all private liquor stores on the street map of calgary alberta s largest city from 1994 to 2003 and analyze store founding and failure we use our results to draw implications for theories of density dependence entrepreneurial behavior and industry spatial structure copyright 2011 the author 2011 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

toehold acquisitions shareholder wealth and the market for corporate control this study examines the valuation consequences of control related outcomes that fol low toehold acquisitions we find evidence that toehold acquisitions facilitate valueenhancing control transfers the types of control transfers not only include takeovers but also internal mechanisms such as proxy fights and management turnovers we find that toehold targets experiencing such control transfers exhibit an abnormal increase in share value while those not experiencing such control transfers exhibit an abnormal de crease in share value the results suggest that the positive valuation effect associated with toehold acquisitions reflects the expected benefits of subsequent control transfers

consumer perceptions and the effects of country of origin labeling on purchasing decisions and welfare abstract the study develops a general analytical framework of heterogeneous consumer preferences to examine the effects of country of origin labeling cool regulation on consumer purchasing decisions and welfare we show that while differences in consumer perceptions about cool information namely whether it is viewed as an attribute that differentiates products vertically or horizontally do not alter the nature of the market and consumer welfare effects of mandatory cool the relative strength of consumer preferences for cool are shown to be important in determining the magnitude of these effects in addition our results show that the benchmark used a no cool versus a voluntary cool regime is critical in evaluating the effects of the policy we show that under both horizontal and vertical product differentiation a change from a no cool to a mandatory cool regime decreases increases the welfare of consumers with weak strong preference for cool while a change from a voluntary to a mandatory cool regime leads to an unambiguous loss in consumer welfare

optimal toeholds in takeover contests abstract we offer an explanation for why raiders do not acquire the maximum possible toehold prior to announcing a takeover bid by endogenously modeling the target firm s value following an unsuccessful takeover we demonstrate that a raider may optimally acquire a small toehold even if the acquisition does not drive up the pre tender target price this occurs because although a larger toehold increases profits if the takeover succeeds it also conveys a higher level of managerial entrenchment and hence a lower firm value if the takeover fails we derive new predictions regarding the optimal toehold and target value following a failed takeover we also examine the impact of a rival bidder and dilution

in search of excellence fads success stories and adaptive emulation1 the faddishness of the business community is often noted and lamented but not well understood by standard models of innovation and diffusion we combine arguments about organizational cognition and institutional mimicry to develop a model of adaptive emulation where firms respond to perceived failure by imitating their most successful peers computational experiments show that this process generates empirically plausible cascades of adoption even if innovations are entirely worthless faddish cycles are most robust across alternative treatments of managerial decision making where innovations have modest positive effects on outcomes these results have broad implications for the faddishness of a business community increasingly marked by media driven accounts of success and for the properties of organizational practices that are hot one day and cold the next

understanding the theoretical and empirical content of critiques of u s job creation research although the hypothesis that small firms create the majority of net new jobs is widely believed a number of researchers have attacked this using empirical data since these attacks have been presented as corrections of past methodological errors their authors may influence policy makers this paper argues that the substance of these attacks is a difference in theoretical perspectives even though the researchers claim to focus on methodological differences this paper explains the two underlying economic theories and then reviews the job creation research to demonstrate the relationship between theory and methodology

strategic real options under asymmetric information abstract this paper studies the effect of private information on the capital allocation decisions of firms who operate under imperfect competition i analyze two interactive firms one with private information and the other without who must decide when to undertake an irreversible and uncertain investment decision traditional non strategic models of irreversible investment under uncertainty involve a single decision maker and result in an optimal period of delay before the investment is undertaken in a strategic setting firms must balance their desire to delay against competitive advantages from early investment i find that an equilibrium may not exist within the standard continuous framework when the private information is over revenues moreover when an equilibrium does exist the competitive pressures from the uninformed firm are weak this is in contrast to existing models with asymmetric information over costs where an equilibrium always exists and the competitive pressures remain strong hsu and lambrecht 2007 this work shows that the investment timing decision and thus the value of the private information is highly sensitive to the nature of incomplete information

analysis of preference dependencies among objectives in decision problems there are often preference dependencies for the achievement of various objectives this paper suggests a problem oriented approach to address such preference dependencies first a diagnostic analysis is conducted to identify the basis for the dependencies based on this the attributes are divided into components or transformed into an alternate set of attributes with a lesser degree of preference dependence quantification of the value structure by developing a utility function is easier in such cases making use of existing independence concepts

density dependence in the evolution of populations of newspaper organizations a model of density dependence is proposed to explain regularities in the growth and decline of organizational populations density the number of organizations is assumed to be a function of the social processes of legitimation and competition at low density the model predicts that the legitimation process will dominate and will lead to high organizational founding rates and low organizational mortality rates at high levels of density competition will dominate and consequently founding rates will decline and mortality rates will rise the model is tested with hazard function models using data from nine newspaper populations spanning the 19th and 20th centuries and covering over 5200 newspapers analysis offounding rates provides strong empirical support for the model analysis of mortality rates reveals that the model holds for large populations

optimal and strategic timing of mergers and acquisitions motivated by synergies and risk diversification abstract this paper analyses a real options model of mergers and takeovers between two firms experiencing different but correlated uncertainty it is assumed that mergers do not just lead to efficiency gains but are also an act of diversification due to the latter assumption the region where a merger is optimal is a bounded interval and not a half space as in most real options models it is shown that if the roles of the bidder and the target are determined endogenously the option value of the mergers vanishes completely implying that in equilibrium the mergers occur sooner than when these roles are exogenously given it is also shown that mergers can be optimal even if synergies are negative

things change dynamic resource constraints and system dependent selection in the evolution of organizational populations an extensive empirical literature has demonstrated the existence of density dependent selection in organizational vital rates this research has also shown that historical trajectories followed by organizational populations only partly conform to the predictions of the original model inconsistencies with the model s predictions prompt a series of questions why do organizational populations suddenly collapse after reaching a peak why do organizational populations oscillate after collapsing what causes extinction of organizational forms to address these questions scholars have proposed a variety of modifications to the original model of density dependence all have merit but none is completely satisfying the main objective of this study is to narrow the gap between theories models and observed historical trajectories by identifying a unitary analytical framework that can account for the variety of empirical trajectories typically followed by mature organizational populations the model that we present is based on the hypothesis of system dependent selection according to which patterns of resource availability are produced by processes that are partly endogenous to organizational populations the main analytical insight of the study is that under conditions of dynamic resource constraints introduced by system dependent selection the presence of population level inertia leads to a rich variety of historical trajectories during population maturity we show that this result holds in the absence of any particular assumption about the microstructure of organizational populations possible trajectories include sustained oscillations resurgence and extinction

the population ecology of gucci gulch or the natural regulation of interest group numbers in the american states theory the theory of population ecology in contrast to economic theories of groups is used to predict the number of interest groups in the united states hypotheses interest group density is a function of potential constituents potential government goods and services the stability of the political system government age and government size methods regression analysis of u s state data for interest groups in construction agriculture manufacturing welfare the environment and local governments results interest group density conforms to the predictions based on population ecology constituents government goods and services and political stability but not those based on economic theories of group mobilization

the impact of delivery lags on irreversible investment under uncertainty abstract we consider the valuation and rational exercise of irreversible investment opportunities in the presence of revenue uncertainty and delivery lags in order to capture supply side market imperfections in the markets for investment goods we assume that the lag depends on the revenue process faced by the investor we show that such imperfections have a pronounced decelerating impact on rational investment demand as they may increase the value of waiting in excess of the exercise payoff even for projects which otherwise would be perceived as highly remunerative we also consider the comparative static properties of the optimal investment policy and its value and demonstrate that typically increased uncertainty decreases the investment incentives by increasing the value of waiting

the effect of poison pill securities on shareholder wealth abstract this paper examines empirical evidence about the effect of poison pill takeover defenses on shareholder wealth i find evidence that announcements of the most restrictive forms of the pill defense are associated with stock price declines also the most restrictive forms of the pill defense are associated with abnormally high rates of defeat of unsolicited tender offers although this evidence is consistent with managerial entrenchment the evidence implies that on average poison pill defenses have seemingly had only a modest effect on firm valuation

uncovering the influence of social venture creation on commercial venture creation a population ecology perspective abstract this study takes a population ecology perspective to uncover the influence that social venture creation exerts on commercial venture creation data from 88 ohio counties during 2003 2007 uncovered a negative relationship suggesting that social ventures compete for resources with commercial ventures at the time of founding additionally we found that income levels in the county affected the inter population dynamics between social and commercial ventures specifically lower income levels exacerbated the competitive relationship between social and commercial ventures low levels of government spending on welfare were found to suppress commercial start up rates

competing bids target management resistance and the structure of takeover bids we examine the structure of initial takeover bids and the frequency of observing competing bids and target management resistance we find the use of cash is not consistently correlated with the frequency of competition or resistance and that the cost of acquiring information about a target is associated with the likelihood of competition and resistance a high bid premium appears to deter competing offers and is also associated with a lower likelihood of resistance finally target management resistance is associated with an increased likelihood of a competing offer arising and a larger increase in target shareholder wealth between the initial public announcement and outcome dates relative to the not resisted subsample for both successful and unsuccessful acquisition proposals article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

the wealth effect of merger activity and the objective functions of merging firms abstract this paper studies the net effects of the long run sequence of events leading to merger and of merger per se on shareholder wealth the appropriate measure of the wealth effect is shown to be the abnormal dollar return cumulated over time using this measure the long run wealth effect of the event sequence culminating in merger is significantly negative for acquiring firms for acquired firms the effect is negative but not significant the immediate impact of merger per se is positive and highly significant for acquired firms but larger in absolute value and negative for acquiring firms the evidence also reveals that measured abnormal rates of return to acquiring firms are sensitive to a slight variation in model specification and dependent on firm size with smaller firms earning significantly negative post merger returns

on the structure of take over models and insider outsider conflicts in negotiated take overs abstract we model a takeover game where the players can bid or bargain without the traditional exogenous constraints on the order length and number of alternating stages in our european setting dominant shareholders can appoint and dismiss management implying that we have an insider outsider conflict rather than a management shareholder agency problem and that the distribution of sizeable private benefits is a crucial issue the bargaining solution determines the price even if no explicit negotiations are observed while bargaining strength and scope for exclusion determine the type of takeover pre negotiated or not discriminatory or not

the dynamics of rapid industrial growth evidence from sweden s information technology industry 1990 2004 sweden s information technology it industry expanded through an inflow of new entrants during the 1990s its evolution was analyzed using ecological models of organizational founding and disbanding controlling for the effects of economic conditions this study analyzed the effects of density dependence age imprinting rate dependence and the origin of new entrants on the industry the results indicate that the inflow was comprised of start ups that proved to be relatively short lived in contrast new entrants that originated as part of incumbent firms that were diversifying in it stabilized the industry by depressing its disbanding rate and facilitating the entry of new firms in explaining the dynamics of the industry the analysis supports the established models of density dependence age dependence imprinting and organizational origin copyright 2009 the author 2009 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

pre tender offer share acquisition strategy in takeovers this paper models the strategic pre tender offer share acquisition problem faced by po tential bidders in takeovers the model provides a rational explanation for the seemingly anomalous empirical evidence that the information about the impending tender offers is not fully conveyed through the potential bidders pre tender offer trades and for the evidence that a large fraction of bidders do not hold any target shares prior to launching the tender offers additional testable implications are also provided

exit in duopoly under uncertainty this paper examines a declining duopoly where the firms must choose when to exit from the market the uncertainty is modeled by letting the revenue stream follow a geometric brownian motion we consider the markovperfect equilibrium in firms exit strategies with a low degree of uncertainty there is a unique equilibrium where one of the fi rms always exits before the other however when uncertainty is increased another equilibrium with the reversed order of exit may appear ruining the uniqueness whether this happens or not depends on the degree of asymmetry in the firm specifi cp arameters

dynamic capital structure choice and investment timing abstract the paper considers the problem of an investor that has the option to acquire a firm initially this firm is run as to maximize shareholder value where the shareholders are risk averse to do so it has to decide each time on investment and dividend levels the firm s capital stock can be financed by equity and debt where less solvable firms pay a higher interest rate on debt revenue is stochastic we find that the firm is run such that capital stock and dividends develop in a fixed proportion to the equity in particular it turns out that more dividends are paid if the economic environment is more uncertain we also derive that the relationship between the levels of risk aversion of the current shareholders and the potential investor is a significant determinant in establishing whether the firm is a profitable takeover target for the investor

designing optimal m a strategies under uncertainty abstract the recent surge in ma the alternative is to design an acquisition program that allows moving in small steps by acquiring a minor company first and the larger prominent player later on we employ a dynamic game theoretic real options model to investigate the effect of uncertainty and synergies on the strategy choices and also consider alternative contract designs for the acquisition program such as hostile friendly or mixed our findings reveal that firms prefer acquisition programs to big leap strategies when the industry exhibits high levels of uncertainty and can occur even when the acquisition of the first target destroys value moreover some acquisition programs profit from a first mover pass through where the acquirer can jointly utilize his first mover advantage when negotiating with multiple targets finally novel testable hypotheses are derived from the model

technological platforms and diversification as the invention of fundamental new sciences spawns subsequent research discovery and commercialization core technologies branch into new applications and markets some of them evolve over time into many derived technologies whereas others are essentially dead ends the pattern of evolution and branching is called a technological trajectory an intriguing question is whether some firms can ride the trajectory by developing proprietary experience in a platform technology because the knowledge is proprietary firms that originate in industrial fields based on a platform technology acquire the technological skills to diversify and to mimic the branching of the underlying technological trajectory the ability to compete in hypercompetitive markets depends on the acquisition of know how that is applicable to a wide set of market opportunities such capabilities serve as platforms into quickly evolving markets to respond rapidly to market changes a firm must have already acquired fundamental compet

the order and size of entry into international markets abstract when entering markets managers must decide when to enter as well as how many resources to commit to the entry the study finds that larger initial resource commitments do not result in higher market share and market survival in international markets instead to improve performance in international markets managers should strive to be first entrants further first entrants typically commit fewer resources suggesting that this strategy can be pursued by firms with limited resources

a game theoretic model of corporate takeovers by major stockholders this paper models the exchange between cash and decision power among all stockholders in a company with two major stockholders it investigates the feasibility and profitability of corporate takeovers and shows the existence under some conditions of pairs of nash equilibrium strategies that result in one major stockholder taking control of the company finally it solves for threat resistant strategies takeover offers that will not be outbid for both major players and concludes with a threat resistant nash equilibrium solution to the model

market and welfare effects of second generation consumer oriented gm products we examine the economic effects of the introduction of consumer oriented genetically modified gm products into the food system by developing a model of heterogeneous consumers and producers that allows for vertical and horizontal differentiation between the products available to consumers the model facilitates the estimation of consumer and producer surpluses in the product utility and product net returns spaces results show that the introduction of consumer oriented gm products can change the relationship between gm and conventional and organic products from one of vertical to one of horizontal product differentiation and can enhance both economic welfare and the market acceptance and growth of agricultural biotechnology

analyzing unexpected density dependence effects on organizational births in new york s life insurance industry 1842 1904 organizational ecologists argue that numbers of firms density dependence significantly affect industrial development rising numbers of firms are thought to legitimize a young industry leading persons to launch new firms in the industry but in a more crowded older industry increasing numbers of companies are expected to intensify competition producing a decline in organizational births since this argument dominates ecological theory results that challenge it must be explained i identify six reasons for such results only a few of these explanations have been evaluated empirically and the ideas rarely have been assessed with respect to organizational births therefore i address these explanations in order to resolve unexpected density dependence effects on foundings in new york s life insurance industry from 1842 to 1904 measuring numbers of life insurance operators at both the state new york and national u s levels of analysis resolves the unexpected density dynamics in this study and produces a coherent pattern of density findings further numbers of mutual savings banks and numbers of small life insurers in new york created competitive pressures in the life insurance business leading persons to abandon carrier entrepreneurship entrepreneurship also suffered when the life insurance industry was dominated by a few large sellers more generally the evidence shows that new york was divided into two insurance submarkets and that carrier organizers reacted to legitimation and competition trends in the submarket occupied by domestic insurers i conclude that once we consider the reasons for unexpected density dynamics the core model of density dependence offers a cogent explanation for industrial evolution

after minimalism transformations of state bar associations from market dependence to state reliance 1918 to 1950 compared to conventional approaches we conceptualize transformations in populations of organizations in terms of shifts in their relative embeddedness in markets and states as organizations expand beyond minimalist conditions of existence states and markets offer alternative solutions to the core problems of persistence obtaining resources managing competition and constructing legitimacy by analyzing the movers and stayers in a population of state bar associations that split into two co existing forms of organization one primarily reliant on the market and the other primarily dependent on the state we demonstrate that a two stage transition to a new form can be explained by the complementary interplay of resource dependency and neo institutional theories organizations are more likely to move from reliance on the market to reliance on the state if 1 their market performance has been unsuccessful 2 states are willing and able to solve organizational problems 3 organizations are younger and less established and 4 compelling alternative models have been propagated by moral entrepreneurs and adopted by influential states

leverage premium and timing in corporate acquisitions abstract this paper investigates how leverage affects the dynamics of acquisitions pursuing this objective the optimal leverage premium and timing are jointly determined we show that leverage increases with growth prospects acquisition synergies whereas an ambiguous effect is produced by volatility additionally we show that levered acquisitions occur sooner and lead to higher premiums to target firms when compared to a deal fully financed by equity these impacts are similar to those produced by taxation

product demography of de novo and de alio firms in the optical disk drive industry 1983 1999 little theory and research addresses the ways organizational context affects the demography of products we examine this question here by focusing on an organization s mode of market entry specifically we explore differences between firms entering a market de novo start up and those entering de alio diversification from another market we analyze all products ever shipped in the worldwide optical disk drive odd industry 1983 1999 we find an almost paradoxical empirical pattern whereby de novo firms typically introduce products with widely agreed upon better that is universally more appealing technological characteristics yet these products generally stay on the market for a shorter time than those of de alio firms whose products generally display less appealing technological features

employing identities in organizational ecology this paper argues for greater attention to employment based organizational identities in ecological theory and research i define and explore three dimensions of particular relevance to labor market identities sharpness resonance focus and authenticity the paper offers some speculations regarding i when labor market identities are most decisive for organizations ii how product market and labor market identities interact iii how employment based organizational identities might be operationalized and iv how greater attention to such identities would illuminate key issues in organizational ecology copyright 2004 oxford university press

implementing cool comparative welfare effects of different labeling schemes country of origin labeling cool is being implemented in different forms and degrees in the united states and other countries across the world the first implementation of mandatory country of origin labeling mcool in the united states was for seafood in 2005 this is an example of partial mcool because it exempts the foodservice sector and excludes processed seafood from labeling using a conceptual framework we analyze the welfare impacts of partial mcool when compared to no voluntary and total mandatory cool taking into account imperfect competition in the downstream markets information asymmetry and diversion of low quality product to the unlabeled market the model is general enough to apply to any incomplete regulation for which the perceived low quality product is required to be labeled such as the labeling of genetically modified food in the european union our results show that when consumers have a strong enough preference for domestic relative to imported product regulators can overestimate the gain in consumer welfare from partial mandatory labeling if they ignore the diversion of lower quality imports to the unlabeled sector we show that if the preference for domestic product is large enough total mcool benefits the home market the most overall including domestic consumers and producers but not the imperfectly competitive downstream agents however if total mcool is too costly to implement partial mcool is the second best solution but only if consumers falsely believe the unlabeled product to be of higher quality than it truly is our results suggest more research is needed to determine the extent to which consumers value the information provided by mcool and to enable regulators to consider the welfare impact of diversion in evaluating incomplete mandatory labeling regulations

preemption and rent equalization in the adoption of new technology we study the adoption of a new technology to illustrate the effects of preemption in games of timing we show that the threat of preemption equalizes rents in a duopoly but that this result does not extend to the general oligopoly game if the gain to preemption is sufficiently small then the optimal symmetric outcome which involves late adoption is an equilibrium this contrasts with reinganum s result that in precommitment equilibria there must be diffusion we develop a new and richer formalism for modeling games of timing which permits a continuoustime representation of the limit of discrete time mixed strategy equilibria

when fashion is fleeting transitory collective beliefs and the dynamics of tqm consulting we analyze changes over time in the types of consulting firms offering total quality management services when tqm was a booming management fashion consultants tended to be generalists with weak links to the technical foundations of the practice after the fashion went bust tqm consulting was increasingly populated by specialists with quality control expertise these results suggest that fashionable practices can return to their technical roots after the hype is over reversing the usual institutional trajectory they also help explain why fashion booms are so fragile and how management practices can be sustained once a boom is over

industry competition and firm human capital this paper argues that objective and subjective human capital may have substantial impact upon organizational performance in a competitive context objective human capital pertains to such features as education and experience whereas subjective human capital relates to personality characteristics the argument is illustrated by presenting the results of two empirical studies 1 a cross section 1990 1991 analysis of about 50 incumbents in the flemish furniture industry concentrating on the impact of subjective human capital particularly the chief executive officer s ceo s locus of control personality on financial performance and 2 a longitudinal 1970 1992 analysis of a cohort of 100 entrants into the dutch audit industry focusing on the influence of objective human capital particularly education and experience on exit by merger and acquisition m a or diaspora both studies support the claim that objective and subjective human capital matters for example flemish furniture firms headed by a ceo with an internal locus of control trait reach higher levels of financial performance and dutch audit firms with a high proportion of personnel with business experience are more likely to exit the industry over the years as a result of diaspora finally the data of the flemish furniture and dutch audit industries are re analyzed so as to compare the impact of human capital variables on small firm performance in both industries this re analysis reveals that in both industries the impact of human capital variables is more pronounced in large firms compared to small businesses

new size measurements in population ecology in organizational ecology the analysis of the impact of competition between populations on vital ratios is relatively underdeveloped this paper addresses this issue by developing new competition measurements that focus on the importance of organizational size the application of these measurements in the case of competition between organizational subforms in a population and their impact on mortality rates demonstrate their usefulness for modelling competition specifically the results show how levels of competition between firms in a population can be more clearly analysed when the rival population mass or concentration indices are used

markup pricing in mergers and acquisitions this paper studies the relation between the premiums in takeover bids involving exchange listed target firms from 1975 91 and the pre announcement stock price runups the evidence shows that the pre bid runup and the postannouncement increase in the target s stock price the markup are generally uncorrelated with little substitution between the runup and the markup the runup is an added cost to the bidder this finding has important implications for assessing the costs of insider trading it also raises interesting questions about the role of information from public capital markets in private takeover negotiations

an empirical investigation of the impact of antitakeover amendments on common stock prices abstract antitakeover amendments are amendments to a corporation s charter that impede the ability of an outsider to gain control of the firm a number of individuals and institutions have onjected to such amendments on the grounds that they are not in the best interests of the shareholders of the firms that adopt them this paper employs event time methodology to investigate the impact of antitakeover amendments on the common stock prices of firms that adopt them the results indicate that the announcement of such amendments is associated with a positive revaluation of stock price contrary to the concerns of their critics we conclude that antitakeover amendments are proposed by managers who seek to increase the value of the firm and are approved by stockholders who share that objective