knowledge proximity and r d exodus abstract we explore not only how technological leaders and laggards react to agglomeration but within an agglomeration we look at how the relative presence of other leaders laggards and foreign firms affects these firms existing literature argues that technological leaders experience net knowledge outflows and are therefore losers in agglomerations however we do not know if they avoid locations with laggards more so than locations with leaders or vice versa thus we examine how the relative presence of each affects leaders location decisions for technologically lagging firms we argue they will prefer locations with leaders over locations with laggards we further posit that an increasing presence of foreign firms will have a particularly detrimental effect on technologically leading domestic firms as these lose out in the contest for talent contextualized in an emerging market with weak intellectual property rights protection we examine whether these concerns about knowledge spillovers and competition for talent prompt firms to close their r d facilities or remain open using 5798 observations of r d laboratories in india during 2003 2011 we find that while technologically leading firms are more likely to close their r d facilities as the presence of other domestic labs increases laggards are less likely to do so these findings suggest concerns over knowledge spillovers are present especially on the part of technologically leading firms moreover leaders are more concerned by the presence of other leaders technologically lagging firms by contrast are less likely to close r d facilities in the face of these concerns and will prefer staying near leaders over laggards finally we find evidence of foreign firms crowding out domestic technological leaders but not laggards in the competition for talent

silicon envy how global innovation clusters hurt or stimulate each other across developed and emerging markets the authors examine intercluster dynamics among rival global clusters on monthly counts of patents startups and new product commercializations between 1999 and 2014 while controlling for numerous exogenous variables results show that rival innovation clusters facilitate rather than hinder each other s growth due to resources complementarities reverse fertilization occurs from emerging to developed clusters contrary to the received wisdom this study is the first to show intercluster dynamics as important drivers of cluster growth to explain the counterintuitive findings the authors draw upon the coopetition view which suggests mutually beneficial growth across all rival clusters rather than zero sum gains

the changing technology of technological change general and abstract knowledge and the division of innovative labour abstract in the past most innovations have resulted from empiricist procedures the outcome of each trial yielding knowledge that could not be readily extended to other contexts while trial and error may remain the primary engine of innovation developments in many scientific disciplines along with progress in computational capabilities and instrumentation are encouraging a new approach to industrial research instead of relying purely on trial and error the attempt is also to understand the principles governing the behaviour of objects and structures the result is that relevant information whatever its source can now be cast in frameworks and categories that are more universal the greater universality makes it possible for the innovation process to be organised in new ways firms can specialise and focus upon producing new knowledge and the locus of innovation may be spread across both users and producers more generally the use of general and abstract knowledge in innovation opens up the possibility for a division of labour in inventive activity the division of innovative labour the implications for public policy especially that on intellectual property rights are discussed

protecting intellectual property rights are small firms handicapped this paper studies the determinants of patent suits and settlements during 1978 99 by linking information from the u s patent office the federal courts and industry sources we find that litigation risk is much higher for patents that are owned by individuals and firms with small patent portfolios patentees with a large portfolio of patents to trade or other characteristics that facilitate cooperative resolution of disputes are much less likely to prosecute infringement suits however postsuit outcomes do not depend on these characteristics these findings show that small patentees are at a significant disadvantage in protecting their patent rights because their greater litigation risk is not offset by more rapid resolution of their suits our empirical estimates of the heterogeneity in litigation risk can help in developing private patent litigation insurance to mitigate the adverse affects of high enforcement costs

on the relationship between firm size and export intensity export marketing literature supports the view that firm size is positively related to export intensity although the empirical findings have been mixed a number of theoretical arguments are used to support this proposition i e international marketing economies of scale limited managerial and financial resources of small firms decisionmaker s risk perception based on a large survey of the italian manufacturing industry the article falsifies the proposition and challenges some widely held assumptions in export marketing literature

geographic patterns of trading profitability in xetra abstract transaction data from the electronic trading system xetra of the german security exchange is used to explore the relationship between trader location and trading profitability the non discriminatory nature of the electronic trading system and its wide international adoption allows interesting conclusions about the information geography of international equity trading we use spectral analysis to examine trading profitability over intraday intraweek and intraquarter inventory cycles proprietary trader accounts reveal the underperformance of foreign traders at all three trading horizons our analysis confirms the hypothesis of financial market segmentation due to international information barriers

r d appropriability opportunity and market structure new evidence on some schumpeterian hypotheses one of the largest bodies of literature in the field of industrial organization is devoted to the interpretation and testing of several hypotheses advanced by joseph schumpeter 1950 concerning innovation and industrial market structure one set of hypotheses focuses on the role of firm size as a determinant of r d spending and the rate of technological advance another set focuses on the effect of market concentration on r d and technological advance in this paper we reexamine the latter set of hypotheses at the industry level using new data on r d appropriability and technological opportunity collected by levin et al 1984 in a survey of r d executives in 130 industries

r d scope economies and plant performance in this article i present an alternative specification of knowledge production and derive a structural econometric model with some desirable properties i provide a simple and less data intensive framework for empirical studies of the relationship between firm performance and r d the main empirical findings are as follows i r d has a positive effect on performance ii the appropriable part of knowledge capital depreciates at a rate of 2 iii there are significant spillover effects of r d across lines of business within a firm and iv there are significant spillovers in r d across firms that belong to the same interlocking group of firms

the effects of linguistic distance and lingua franca proficiency on the stake taken by acquirers in cross border acquisitions we study the effects of linguistic distance and lingua franca proficiency on the equity stake taken by acquirers from 67 countries in 59 092 acquisition targets in 69 host countries we theorize and find that acquirers take lower equity stakes in foreign targets when linguistic distance and differences in lingua franca proficiency between them are high and take higher stakes when the combined lingua franca proficiency of the parties is high we also find that linguistic and cultural distance reduce the impact of the combined lingua franca proficiency of the parties on the level of equity taken which shows that the effective use of a lingua franca is affected by the native tongues and cultures of the parties our results clearly demonstrate that governance research and international business studies can benefit from incorporating language into their explanatory models

do domestic investors have an information advantage evidence from indonesia using transaction data from the jakarta stock exchange i find three pieces of evidence which indicate that domestic investors have an information advantage over foreign investors first foreign investors systematically buy at higher and sell at lower intra day prices than domestic investors second foreign investors tend to sell prior to large positive returns finally the permanent impact of foreign purchases is smaller than that of domestic purchases over time prices at which foreign investors trade have worsened while foreign selling prior to positive returns has disappeared

home bias foreign mutual fund holdings and the voluntary adoption of international accounting standards we test the assertion that a consequence of voluntarily adopting international accounting standards ias is the enhanced ability to attract foreign capital using a unique database that reports firm level holdings of over 25 000 mutual funds from around the world our multivariate tests find that average foreign mutual fund ownership is significantly higher among ias adopters we also find that ias adopters in poorer information environments and with lower visibility have higher levels of foreign investment consistent with firms using ias adoption to provide more information and or information in a more familiar form to foreign investors taken together our findings are consistent with voluntary las adoption reducing home bias among foreign investors and thereby improving capital allocation efficiency

quality ladders and product cycles we develop a two country model of endogenous innovation and imitation in order to study the interactions between these two processes firms in the north race to bring out the next generation of a set of technology intensive products each product potentially can be improved a countably infinite number of times but quality improvements require the investment of resources and entail uncertain prospects of success in the south entrepreneurs invest resources in order to learn the production processes that have been developed in the north all r d investment decisions are made by forward looking profit maximizing entrepreneurs the steady state equilibrium is characterized by constant aggregate rates of innovation and imitation we study how these rates respond to changes in the sizes of the two regions and to policies in each region to promote learning

the geography of equity listing why do companies list abroad this paper documents aggregate trends in the foreign listings of companies and analyzes their distinctive prelisting characteristics and postlisting performance in 1986 1997 many european companies listed abroad mainly on u s exchanges while the number of u s companies listed in europe decreased european companies that cross list tend to be large and recently privatized firms and expand their foreign sales after listing abroad they differ sharply depending on where they cross list the u s exchanges attract high tech and export oriented companies that expand rapidly without significant leveraging companies cross listing within europe do not grow unusually fast and increase their leverage after cross listing foreign listings are becoming an increasingly important strategic issue for companies and stock exchanges alike as companies become global in their product market and investment strategies direct access to foreign capital markets via an equity listing can yield important benefits at the same time the international integration of capital markets has led to unprecedented levels of competition among stock exchanges in this competitive struggle the winners are the exchanges that manage to attract more foreign listings and the attendant trading volume and business opportunities despite the importance of these issues still little is known about which exchanges succeed in capturing more listings from abroad and why this question is intimately related to a second issue namely which advantages companies expect to get from a foreign listing securing cheap equity capital for new investment allowing controlling shareholders to divest on a liquid market preparing for foreign acquisitions or simply enhancing the compa

international evidence on the impact of adopting english as an external reporting language this study investigates the economic consequences of non english speaking companies adopting english as an external reporting language we examine a sample of european companies that initiate the voluntary issuance of an annual report in english in addition to the local language annual report to control for self selection we use a difference in differences design with a propensity score matched control sample we find that adoption of english as an external reporting language is associated with increased foreign ownership decreased information asymmetry and increased analyst following we also find that these benefits are not conditional on the use of ifrs for financial reporting our findings hold if we run a number of robustness checks to control for correlated events creation of an investor relations service provision of conference calls and or changes in management these results are consistent with the language used in the annual report acting as a barrier to investment for some investors and with annual reports issued in english reducing investors information processing costs

location matters an examination of trading profits the electronic trading system xetra of the german security exchange provides a unique data source on the equity trades of 756 professional traders located in 23 different cities and eight european countries we explore informational asymmetries across the trader population traders located outside germany in non german speaking cities show lower proprietary trading profit their underperformance is not only statistically significant it is also of economically significant magnitude and occurs for the 11 largest german blue chip stocks we also examine whether a trader location in frankfurt as the financial center or local proximity of the trader to the corporate headquarters of the traded stock or affiliation with a large financial institution results in superior trading performance the data provide no evidence for a financial center advantage or of increasing institutional scale economies in proprietary trading however we find evidence for an information advantage due to corporate headquarters proximity for high frequency intraday trading

trading frictions and house price dynamics we model liquidity in housing markets the model provides a simple characterization for the joint process of prices sales and inventory we compare the implications of the model to certain properties of housing markets the model can generate the large price changes and the positive correlation between prices and sales that we see in the data unlike the data prices are negatively autocorrelated and high inventory predicts price appreciation we investigate several amendments to the model informational frictions show promise

the impact of language barriers on trust formation in multinational teams this study systematically investigates how language barriers influence trust formation in multinational teams mnts on the basis of 90 interviews with team members team leaders and senior managers in 15 mnts in 3 german automotive corporations the authors show how mnt members cognitive and emotional reactions to language barriers influence their perceived trustworthiness and intention to trust which in turn affect trust formation the authors contribute to diversity research by distinguishing the exclusively negative language effects from the more ambivalent effects of other diversity dimensions their findings also illustrate how surface level language diversity may create perceptions of deep level diversity furthermore their study advances mnt research by revealing the specific influences of language barriers on team trust an important mediator between team inputs and performance outcomes it thereby encourages the examination of other team processes through a language lens finally their study suggests that multilingual settings necessitate a reexamination and modification of the seminal trust theories by mayer davis and schoorman and by mcallister in terms of practical implications the authors outline how mnt leaders can manage their subordinates problematic reactions to language barriers and how mnt members can enhance their perceived trustworthiness in multilingual settings

the relative performance of real estate marketing platforms mls versus fsbomadison com we compare house sales on a for sale by owner fsbo platform to multiple listing service mls sales and find that fsbo precommission prices are no lower but that fsbo is less effective in terms of time to sell and probability of a sale we do not find direct evidence of the importance of network size as a reason for the lower effectiveness of fsbo we do find evidence of endogenous platform differentiation patient sellers use fsbo while patient buyers transact more often on the mls where they avoid patient sellers we discuss the implications for platform competition two sided markets and welfare

language policies and practices in wholly owned foreign subsidiaries a recontextualization perspective this study adopts a recontextualization perspective on language policies and practices in wholly owned foreign subsidiaries drawing on a field study of 101 subsidiaries in japan we develop a contingency model that distinguishes between four different types of recontextualization with characteristic language policies and practices developing locally adaptive developing globally integrated established locally adaptive and established globally integrated our analysis shows how each of these four types is accompanied by specific problems and challenges in particular it elucidates five important aspects of language implementation 1 the emergence of language praxis from the interplay of headquarters strategies and local responses 2 the hybridization of language practices 3 the central role of key actors such as subsidiary presidents in recontextualization 4 the pervasive power implications of language policies and practices and 5 the multifaceted implications for strategic human resource management by so doing our analysis opens up new avenues for context specific and practice oriented studies of language in multinational companies

why are some regions more innovative than others the role of small firms in the presence of large labs we study the impact of small firms on innovation in regions where large labs are present small firms generate demand for specialized services that lower entry costs for others this effect is particularly relevant in the presence of large firms that spawn spin outs caused by innovations deemed unrelated to the firm s overall business we examine msa level patent data during the period 1975 2000 and find that innovation output is higher in regions where both a sizable population of small firms and large labs are present the finding is robust to across region as well as within region analysis and the effect is stronger in certain subsamples in a manner that is consistent with our explanation

direct foreign ownership institutional investors and firm characteristics in this paper we characterize foreign ownership using a dataset of ownership and attributes of swedish rms the analysis reveals that foreigners show a preference for large rms rms paying low dividends and rms with large cash positions on their balance sheets when we further analyze the preference for large rms we nd that market liquidity and presence in international markets measured through export sales or listings on other exchanges seem to characterize foreign holdings better than rm size alone foreigners also tend to underweight rms with a dominant owner importantly we demonstrate that most of the features associated with foreign ownership are driven by the fact that foreign investors typically are mutual funds or other institutional investors hence we identify an institutional investor bias rather than a foreign investor bias finally using ownership data on a country level we conclude that the results are particularly strong among u s investors who comprise the largest institutions among foreign investors 2001 elsevier science s a all rights reserved jel classixcation g1 g15

information aggregation in a noisy rational expectations economy abstract this paper analyzes a general equilibrium model of a competitive security market in which traders possess independent pieces of information about the return of a risky asset each trader conditions his estimate of the return both on his own private source of information and price which in equilibrium serves as a noisy aggregator of the total information observed by all traders a closed form characterization of the rational expectations equilibrium is presented a counter example to the existence of fully revealing equilibrium is developed