a profile of new venture success and failure in an emerging industry abstract this study examined three types of factors 1 the characteristics of the lead entrepreneur 2 startup processes undertaken during the founding of the firm and 3 firm behaviors after start up including management practices and strategic behaviors associated with new venture success and failure the research involved a field study of 26 small young firms 13 successful and 13 less successful or failed each engaged in the distribution of fresh juices in eight metropolitan centers about 30 of the total market in the united states both quantitative and qualitative data were collected through field work at each firm location a statistical analysis of data collected in a structured questionnaire was the primary method for testing the factors case studies of all of the firms were developed to provide qualitative support for the quantitative findings of the study results from these analyses indicated significant differences between successful and unsuccessful firms in all three categories lead entrepreneurs in successful firms were more likely to have been raised by entrepreneurial parents have had a broader business and more prior startup experience and believed they had less control of their success in business than unsuccessful entrepreneurs successful entrepreneurs seek to reduce risk in their businesses they work long hours have a personal investment in the firm and are good communicators successful firms were those initiated with ambitious goals lead entrepreneurs had a clear broad business idea which provided the adaptive torque required to overcome adversity confrontation and often a troubled financial condition effective startup or purchase required broad planning efforts that considered all aspects of the industry and firm successful firms spent more time planning 237 hours than unsuccessful firms 85 hours the use of outside professionals and advisors for help in solving specific problems during startup was important for success as well as the advice and information provided by other industry participants particularly customers and suppliers most ventures did not have written business plans nearly all purchased firms failed buyers of competitively troubled firms were negatively displaced generally unemployed managers who lacked broad management experience and while often well educated had no prior experience in purchasing a business successful firms were found to be more flexible participative and adaptive organizations these firms had employees who could perform the work duties of others and were likely to be managed in a way that provided these workers with the flexibility to modify their jobs to adapt to changing industry and organizational conditions lead entrepreneurs of successful firms were likely to spend more time communicating with partners customers suppliers and employees than the lead entrepreneurs of unsuccessful firms successful firms sought to become larger firms and embarked upon sales to broad sectors of the market successful firms achieved high market shares with market shares came higher financial returns less successful firms were restricted to narrow market sectors consisting of smaller customers and those more difficult to service while customer service remained an important concern the commodity nature of fresh juices failed to support differentiation and the narrowly focused firm was typified by high product costs and unprofitable operations

technology strategy and financial performance examining the moderating role of the firm s competitive environment abstract success in today s competitive environment requires a company to pursue a coherent technology strategy to articulate its plans to develop acquire and deploy technological resources to achieve superior financial performance this strategy clarifies the company s choices on being a technological pioneer or a follower the breadth of the technology product and process portfolios amounts of investments in internal r d and external sources of technology and levels of technological forecasting to be performed in turn these choices require making decisions on the basic and applied r d to be conduced the intended offensive or defensive uses of the technology and emphasis on incremental and radical r d to date however few studies have attempted to document the collective implications of a company s technological choices for its financial performance in response data from 176 manufacturing companies were used to examine the association between a company s technology strategy and its financial performance and to explore the moderating effect of the environment on the technology strategy performance link therefore the study focused on a company s perceptions of environmental dynamism hostility and heterogeneity dynamism indicated the perceived continuity of changes in an industry hostility referred to the changes in the industry that could adversely impact the firm s operations and performance heterogeneity meant that the environment encompassed many segments with different needs the study developed and empirically tested the following hypotheses 1 h1a pioneering will be highest among firms whose environments are highly dynamic moderately hostile and moderately heterogeneous 2 h1b followership will be highest among firms whose environments are highly hostile and moderately dynamic but low in heterogeneity 3 h2a radical product technologies will be pursued most by firms whose environments are highly dynamic moderately hostile and moderately heterogeneous 4 h2b radical process technologies will be pursued most by firms whose environments are moderately dynamic moderately hostile and moderately heterogeneous 5 h2c incremental product and process technologies will be pursued most by firms whose environments are stable low dynamism benign low hostility and highly heterogeneous 6 h3 the broadest technological portfolios will exist among firms whose environments are characterized by moderate dynamism high heterogeneity and moderate or low hostility 7 h4 r d spending will be highest among firms whose environments are highly dynamic highly heterogeneous and highly benign low in hostility 8 h5 the use of external technology sources will be highest among firms whose environments are highly dynamic highly hostile and highly heterogeneous 9 h6 emphasis on technological forecasting will be highest among firms whose environments are highly dynamic highly hostile and highly heterogeneous 10 h7 the environment is a quasi moderator of the technology strategy performance relationship the results supported the study s hypotheses except h2c and h3 and suggested five ideas for managerial action 1 executives should develop and use a comprehensive technology strategy to ensure that their company achieves superior financial performance 2 executives should be cautious in applying generic prescriptions of how to utilize technological resources to achieve profitability because the financial payoff from technology strategy variables varies from one environment to the other instead executives should examine their company s goals capacity to manage diverse product and process initiatives risk taking orientation resources and the environment 3 attention to developing and using process technology innovation is necessary for success in fact a broad process innovation portfolio is positively associated with return on assets in the overall sample and in three of the study s five clusters 4 managers need to adopt a long term perspective in making r d investments where patient investments over several years are the norm increasing r d spending should not be viewed as a quick fix for the company s poor competitive position 5 whereas the external sources of technology can improve the company s performance managers should identify the conditions under which external sources can be used and educate their employees on the growing importance of these technologies for achieving profitability

competition and coalition formation of renewable power producers we investigate group formations and strategic behaviors of renewable power producers in electricity markets these producers currently bid into the day ahead market in a conservative fashion because of the real time risk associated with not meeting their bid amount it has been suggested in the literature that producers would bid less conservatively if they can form large groups to take advantages of spatial diversity to reduce the uncertainty in their aggregate output we show that large groups of renewable producers would act strategically to lower the aggregate output because of market power to maximize renewable power production we characterize the trade off between market power and generation uncertainty as a function of the size of the groups we show there is a sweet spot in the sense that there exists groups that are large enough to achieve the uncertainty reduction of the grand coalition but are small enough such that they have no significant market power we consider both independent and correlated forecast errors under a fixed real time penalty we also consider a real time market where both selling and buying of energy are allowed we validate our claims using pjm and nrel data

on the instability of financial patterns of failed firms and the predictability of corporate failure abstract the empirical evidence of this study indicates that financial patterns of failed firms are clearly more unstable than those of non failed firms this instability apparently causes significant problems when predicting corporate failure using financial ratios

how does the stock market value corporate social performance when behavioral theories interact with stakeholder theory this study examines how the reference point effect and sunk cost fallacy interact with stakeholder theory and influence how investors evaluate corporate social performance we propose that ex ante pre ipo corporate social performance influences ex post post ipo perceived riskiness and that this relationship is u shaped we also evaluate how ceo duality and company age moderate this u shaped relationship using young and newly public entrepreneurial firms in china and focusing on stock returns in the secondary market empirical results and robustness tests provide strong support for our hypotheses

strategizing by firms in the presence of markets for resources strategizing by firms from the resource based view is concerned with the process through which firms acquire a distinctive bundle of resources that is costly and time consuming for competitors to duplicate or imitate a central question facing any firm therefore is its strategy for accumulating the resources that underpin its production activities in this article the process of resource accumulation is discussed as one involving potentially both internal resource development and external resource acquisition from the perspective of the strategic issues involved in making a choice between these options emerging markets for technologies and know how through licensing and other forms of resource exchange have opened up new avenues through which firms may jostle for advantage the article is concerned with three major aspects of this process illustrating the discussion with cases from biotechnology and pharmaceuticals first the strategizing by firms around the internal development vs external sourcing issue is discussed as informed by the practices of leading firms and how these lend greater variety of strategic options for firms second the potential competitive advantages as well as disadvantages to be secured by firms through the process of external sourcing as compared with the well known potential advantages accruing to incumbents through internal development such as time compression diseconomies and causal ambiguity and third the criteria to be used by firms to strategically evaluate resources individually as contrasted with the strategic evaluation of the resource bundle or totality these criteria it is argued turn on the issues of marginal value contribution resource complementarities and synergies resource variety and transferability involving intellectual property issues successful firms it is argued expand their options through blending internal resource accumulation with external resource leverage thereby deepening their distinctive dynamic capabilities this approach extends the framework of the rbv enabling it to encompass resource driven schumpeterian competition and such aspects of industrial dynamics as specialization modularization and imitative challenge copyright 2003 oxford university press

competitive advantages in new corporate ventures the impact of resource sharing and reporting level abstract ideally new ventures born into a corporation s family of existing businesses have a wealth of established resources to successfully draw upon such new corporate ventures do not have to reinvent every wheel there are already marketing programs and plants in place as part of the existing business operations and they should be able to piggyback upon these likewise the managers from across the corporation already have established a brand name and gained important experience in dealing with customers and the new venture should get to ride on these coattails however along with these benefits come costs that may be more than offsetting corporations may try to force the new venture into the established way of doing things in the name of efficiently utilizing existing resources perhaps the new venture will be hamstrung by an effort to coordinate its development with the ongoing operations of the corporation s established businesses it is not at all clear that sharing corporate resources is always a good thing for new corporate ventures some have argued that for new ventures to be successful they often need the direct involvement of top management to see that they get the benefits of corporate resources without suffering the costs this suggests the general hypothesis underlying much of this work reporting to top management will be especially beneficial to new corporate ventures heavily involved in sharing corporate resources in considering this idea we explore the complicated relationship between resource sharing top management involvement and the ability of new corporate ventures to establish a competitive advantage we consider both the relative overall quality and relative production costs as forms of competitive advantage we find that in new corporate ventures heavily involved in resource sharing achieving either of these advantages is highly contingent upon the level of corporate management to which the new venture regularly reports in ventures heavily involved in resource sharing reporting to top ranking managers appears to be beneficial in terms of controlling cost but detrimental in terms of the new venture s overall relative quality in other words when it comes to benefiting from shared corporate resources reporting directly to top management is apparently a two edged sword offering both benefits and costs reporting level appeared to make little difference in new ventures not involved in corporate resource sharing and competitive advantage is complex and counter to some existing theories new theoretical arguments are needed to explain the empirical results we develop three such theories all appropriate for further empirical examination

corporate venturing and value creation a review and proposed framework abstract over the past decade companies worldwide have used corporate venturing cv as a means of revitalizing their operations building new capabilities and achieving strategic renewal creating value for shareholders business interest in cv has stimulated academic interest in the topic resulting in a rapidly growing but fragmented body of literature despite the growing international scholarly interest in cv researchers have devoted little effort to integrating prior findings in a cumulative fashion as a result studies do not build upon one another making it difficult to gauge the progress being made in addressing the fundamental research questions related to cv in this paper we examine the literature on cv seeking to synthesize integrate and link its key findings to do so we analyze this literature over the past decade to identify its major themes and research findings setting the stage for greater coherence in future research on cv we give special attention to the challenges and rewards of theory building in future cv research our review clearly shows that cv is an area of scholarly inquiry that has important implications for managerial practice

coalitional aggregation of wind power this paper explores scenarios in which independent wind power producers form willing coalitions to exploit the reduction in aggregate power output variability obtainable through geographic diversity in the setting of a two settlement electricity market we examine the advantage gained through optimal coalitional contract offering strategies for quantity risk reduction we show that a group of independent wind power producers can always improve their expected profit by cooperatively offering their aggregated power using coalitional game theory we identify sharing mechanisms to fairly allocate the profits to coalition members we show that the resulting coalitional game is balanced guaranteeing that the core of the game is necessarily nonempty in addition we propose a profit sharing mechanism that minimizes the worst case dissatisfaction to recover an imputation in the core finally we illustrate our theoretical results with empirical studies using data from five representative wind farms in upstate new york

determinants and performance impacts of external technology acquisition abstract an important issue technology managers face today and a vital component of any coherent technology strategy concerns the decision to chose between developing technical capabilities internally or acquiring them through external means while there is a clear indication in the literature of a greater reliance on external sources of technology the factors driving this phenomenon and the potential benefit to firm performance have received limited empirical attention this study addresses these issues by testing the relationships between several potential determinants of external technology sourcing and the differential impacts of external vs internal sourcing on firm performance the study addresses three potential determinants of external technology sourcing discontinuous technological change life cycle stage the stage of the resulting life cycle patterns developed around radical technological changes or dtc life cycle intellectual property protection and internally available resources dtc life cycles and the industries built around them are characterized by patterns of competitive behavior and a few key milestones particularly the emergence of a dominant design for example the early stages of the life cycle are characterized by a focus on product technologies as firms compete to develop the technical standard for the industry while the later stages are more concerned with process technologies as firms compete to produce the standard at the lowest cost we argue that dtc life cycle analysis can inform the internal vs external decision and that the evolution from a product based competition to a cost based competition will affect not only the focus of that external sourcing but also the benefits received as a result further we suggest that perceived intellectual property protection and the level of resources available internally to the firm will also impact the decision to source technology externally the growing interest in external technology acquisition would appear to reflect a positive effect on firm performance the literature however is equivocal and often anecdotal focusing only on a limited perspective of firm performance we investigate the relationship between external technology acquisition vs internal technology development and firm performance from three perspectives product market and finance based measures of performance further given that the focus of external technology acquisition will be driven in part by life cycle stage earlier stages focus on product technology and later stages focus on process technology we also study the effect that focus has on related firm performance measures i e how will product related external technology acquisition affect product based performance measures and how will process related external technology acquisition affect cost or finance based measures finally we investigate the impact of internal resource capability on the existing relationship between external technology acquisition and firm performance i e the absorptive capacity argument data collected from 188 u s subsidiaries of both domestic u s and foreign firms were used to test hypothesized relationships among these variables dtc life cycles intellectual property protection internally available resources external technology acquisition and firm performance while not all hypotheses were supported the results on the relationship between external technology acquisition vs internal technology development and the three firm performance perspectives warrant caution for technology managers considering or currently utilizing external sources of technology the more salient results and implications for managers are presented below first regarding the potential drivers for external technology acquisition the results varied with theoretical expectations contrary to theory neither dtc life cycle nor intellectual property protection exhibited a significant relationship to external sourcing in general however consistent with expectations the level of available internal resources did exhibit a direct and negative relationship to external acquisition firms with greater internal resources are less inclined to source externally second technology managers would be well advised to consider a number of issues when approaching the decision to acquire technology externally or develop it internally in all cases where a statistically significant relationship between external technology acquisition and firm performance was found the direction was negative indicating that acquiring technology externally detracts from firm performance further in limited cases that negative relationship is compounded in the presence of internal technology capabilities also a significant relationship was found between external product technology acquisition and product performance measures and not for financial performance measures and between external process technology acquisition and finance performance measures and not for product performance measures as expected and were both negative in other words the dimension of performance most hindered by external technology acquisition is precisely that dimension that managers might strategically target at a given stage in the technology life cycle the availability of technical resources internal to the firm was in all cases positively associated with product market and financial performance measures these results taken together suggest that firm performance is negatively impacted by external technology acquisition firms with internally available resources typically do not tend to seek external technology and when they do in some cases the negative relationship between external sourcing and performance is increased clearly external technology acquisition is not a panacea and great care must be taken to ensure firm success and our findings suggest that all else equal firms may want to err on the side of internal development

technological innovation in canada a comparison of independent entrepreneurs and corporate innovators abstract this paper compares a sample of 124 independent high technology entrepreneurs with 112 corporate entrepreneurs intrapreneurs involved in developing and introducing high tech innovations across canada the study investigates the general management and technical problems faced by these entrepreneurs and contrasts their approach to such issues as market research financing and production the approaches used by the two groups in analyzing their markets and in planning and financing of innovations are compared and contrasted in general the independent entrepreneurs were technically trained usually possessing engineering training but no general management training or experience neither themselves nor members of their management team corporate entrepreneurs were as likely to come from management backgrounds as technical or else supported their lack of general management skills by adding people to their team with skills in marketing finance and manufacturing their problems were more often defending their ideas to management within the corporation obtaining funding and other resources within the firm and finding a corporate mentor to assist them in such areas as fighting political battles providing rewards and incentives for team members and creating the proper overall environment or culture for innovation within the corporation the lack of general management training and experience by the independent entrepreneurs led them to rate various marketing problems as the most serious difficulties in rating the obstacles to launching their innovations the innovations of the independent entrepreneurs were all new products while some of the corporate innovations were new systems or processes often installed within the corporation so the markets for these innovations were also within the corporation and required less of a marketing effort corporations were also much better prepared to handle problems in the marketing planning and operational areas but they had more problems of an interpersonal nature such as the unwillingness to consider alternative approaches the most significant difference in the obstacles encountered was that independent entrepreneurs listed their five most important problems as marketing difficulties in launching their new products corporate entrepreneurs also rated imperfect market analysis as their most important problem but it was closely followed by the lack of entrepreneurial talent within the company these obstacles lead to the primary recommendation of cooperative agreements of partnerships between large and small firms to solve some of these difficulties corporate responses indicated significant difficulty in gaining support within the corporation while independent entrepreneurs did not have to justify their efforts to a corporate hierarchy

a stage contingent model of design and growth for technology based new ventures abstract stage of growth developmental models have traditionally been used to enhance our understanding of the organizational creation and growth process until recently most of this literature has been primarily conceptual and descriptive this paper presents a stage of growth model theorized to hold for technology based new ventures the model consists of four stages conception and development commercialization growth and stability and views each stage of growth as a reflection of the dominant problems faced over the course of growth by the venture the model predicts that the organization of a venture will be a function ofthe dominant problems that define a stage of growth more specifically it is argued that a technology based venture s rate of growth depends in part on the consistency or fit between its stage of growth and certain structural features of its organization including decision making centralization and formalization and functional specialization in the areas of marketing and sales manufacturing and engineering technology data were collected from 105 technology based ventures in the electronics computer and peripherals industries to test the model the results were generally consistent with the theory and showed that centralization of decision making decreased as the firms moved to higher stages while formalization of decision making increased in higher stages specialization of roles in the functional areas of manufacturing and marketing also increased by stage however specialization in the engineering and technology functions remained high across all stages the contingency hypothesis was also supported indicating that technology based ventures growth is partially attributable to the fit between a venture s stage of growth and aspects of its structure these findings indicate that different patterns of decision making and functional specialization are required at each stage if growth is to be achieved as such this research validates a long standing but untested belief in the venture management field that performance of new ventures depends upon

informal institutions and absorptive capacity a cross country meta analytic study the informal institutions construct has not been well understood in prior research we contribute to the informal institutions literature by developing a generalized two by two conceptualization of institutions that juxtapose the dimension of behavioral uncertainty versus environmental uncertainty and the dimension of informal institutions versus formal institutions in particular we theorize informal institutions based on the extent to which they reduce behavioral uncertainty or environmental uncertainty as well as their alignment with the formal institutional environment with respect to the two types of uncertainty leveraging this fourfold typology we shed new light on the importance of informal institutional conditions in theories of firms absorptive capacity and performance using a cross country meta analytical approach we find that a firm s absorptive capacity is more positively related to performance outcomes in countries with informal institutions that reduce behavioral uncertainty and environmental uncertainty furthermore the misalignment between informal and formal institutions with respect to behavioral uncertainty and environmental uncertainty weakens the relationship between absorptive capacity and performance outcomes overall by re emphasizing the fundamental role of informal institutions in reducing behavioral and environmental uncertainties our typology offers a fine grained perspective to conceptualize informal institutions and constitutes an opportunity to advance theory in informal institutions and international business

venture capital in europe and the financing of innovative companies european venture captial venture capital is considered to be the most appropriate form of financing for innovative firms in high tech sectors venture capital has greatly developed over the last three decades in the united states but much less so in europe where policy makers are striving to help channel more funds into this form of financial intermediation in this paper we provide the first assessment of venture capital in europe we document its development in the 1990s and compare it with that of american venture capital we find the wedge between them to be large and growing we then look at the involvement of venture capital with some of europe s most innovative and successful companies those listed on europe s new stock markets venture capital is effective in helping these firms overcome credit constraints and thus to be born in the first place using a unique hand collected data set from the listing prospectuses and annual reports of these companies we find european venture capital to have a limited effect on their ability to raise equity capital grow and create jobs we conclude that public support of the european venture capital industry should look at both its growth and at its maturation laura bottazzi and marco da rin

a dynamic perspective of internal fit in corporate venturing abstract managers of corporate parents and their ventures have long been faced with the question of how closely to tie the parent and venture a close connection may enable a venture to capitalize on the competencies and resources of the parent however venture autonomy could prevent corporate inertia and bureaucracy from constraining venture growth the lack of consensus on this issue leads us to the first of two complementary research questions that we address in this paper what is the effect of internal strategic fit between a corporate parent and its venture on venture performance we suggest that a tight fit is positively associated with venture performance because of the venture s access to its parent s resources managers and researchers alike have often observed that growing enterprises are dynamic entities in the case of corporate ventures this implies that the relationship between parent and venture evolves over time our second research question directly addresses this issue by asking does the relationship between a corporate parent and its venture s evolve over time and if so how we identify two dimensions of the fit between corporate parents and their ventures relational and economic a relational fit reflects organizational culture and structure while an economic fit is a function of the needs of the venture and the resources of the parent we develop a series of hypotheses and test them with survey data from 97 canadian corporate ventures for the purposes of this study we define success as the ability of a firm to meet internal milestones on schedule we find that the degree of fit between a corporate parent and its venture does affect the success of a venture and that success is associated with high levels of awareness commitment and connection further the relational dimension of the parent venture interface appears to have a greater association with venture success than does the economic dimension our data support the idea that the parent venture relationship is dynamic in nature as ventures in our sample generally lessened their economic connections with their parents as they matured or vice versa we did find however that the relational bonds remained more or less intact the exceptions to these general trends were an increasing emphasis on financial targets along with decreasing ceo involvement as ventures matured both of these findings make intuitive sense greater financial independence is accompanied by greater financial accountability and as a venture gains in both independence and accountability there is less need for the ceo to provide air cover these two issues aside the basic model of enduring relational ties and diminishing economic ties was supported as well the increasing accountability is consistent with our expectation that a close connection is preferable to high venture autonomy

firm specificity in corporate applied r d much corporate research and development r d has characteristics that tie it strongly to the firm in which it takes place and which may make the process of undertaking r d or the outcome of the r d difficult for other firms to duplicate perfectly that is the r d is firm specific this is particularly true for more highly applied r d which tends to involve incremental technological change and often entails alterations and enhancements to existing firm assets production processes and products the often firm specific nature of corporate r d tends to receive relatively little attention in the study of technological innovation this article outlines the primary characteristics of firm specificity in r d and discusses two interrelated consequences of such firm specificity 1 heterogeneity in the r d applications of firms within an industry and 2 increased ability of firms to earn returns to r d often termed appropriability both factors have important implications for firm strategy empirical

start up ventures towards the prediction of initial success abstract there are numerous studies on new product activities that try to measure the relative impact of different factors on success or failure the research on new ventures is less comprehensive and often only a few items are considered this article reports on the early results from a research program that is combining the research on both new products and new ventures to come up with a more comprehensive evaluation of relative success factors the literature was reviewed to determine the most significant factors found in prior work a 68 item questionnaire was developed and used with the chief executives of 24 new technical ventures all associated with the rpi incubator or technology park ten of the 17 factors investigated yielded reliable measurements which were then subjected to siepwise regression analysis to determine the relative impact of each factor on the two success measurements used initial quantified success and initial subjective success it should be recognized that initial success does not necessarily predict ultimate success an area to be investigated in continuing studies the two success measurements were not correlated and the correlations with the independent variables were therefore different initial quantified success showed a strong negative correlation with market attractiveness companies entering smaller or more slowly growing markets were doing better than those in the larger faster growing markets initial quantified success was positively correlated with the level of entrepreneurial characteristics exhibited by the leader s these were the only two variables exhibiting significant relationships with quantified success initial subjective success was negatively correlated with market dynamism rather than market attractiveness negative correlation was also measured with both r d intensity and the organic nature of the firm this latter finding is contrary to much of the new product literature which emphasizes the need for individual independence and initiative such may be the case with new products or ventures within large organizations but in small independent ventures the entrepreneur should provide strong control and guidance a positive correlation was observed with the entrepreneurial characteristics and also with the degree of match between the firm s experience and the new business requirements no significant correlation was observed with 1 product or service uniqueness 2 gross margin or 3 strategic aggressiveness the lack of correlation with these variables is surprising but it may be due to the small size of the sample the research confirmed two items that are understood by most scholars and experienced practitioners the importance of the entrepreneur and the importance of pursuing new ventures that match the technical and market experience of the team the less obvious results are those that suggest that success is favored by strong review and control by the entrepreneur rather than the development of employee initiative and independence also the initial success appears to be coming more readily to firms in more slowly growing or less dynamic markets it will take an expanded sample and a longer time horizon to determine if these initial trends continue to ultimate success

foreword for the special section on wind and solar energy uncovering and accommodating their impacts on electricity markets the articles in this special section focus on wind and solar energy and the impact these energy technologies and services will have the utility markets the aim is to give particular focus on some of the areas of investigation that may allow to 1 uncover the impact of renewables on electricity market e g on market clearing outcomes need for ancillary services and investment and to 2 propose methodological innovations being theoretically sound and of practical relevance in order to accommodate substantial shares of renewables in power systems electricity network and markets were designed based on a long history of dealing with various forms of dispatchable generation as well as a fairly predictable inelastic electricity consumption pattern in a centralized top down manner little uncertainty was involved on both generation and demand sides hence allowing for a design of electricity markets accounting for the necessity of a forward optimal allocation with a real time mechanism supporting actual power system operation

the financing threshold effect on success and failure of biomedical and pharmaceutical start ups the theories of technological innovation are examined in the context of the formation and growth of biomedical and pharmaceutical firms analyses are based on detailed data gathered from 26 firms founded between 1968 and 1975 in massachusetts supplemented by a three member expert panel evaluation of the risk associated with use of each firm s products a positive relationship was established between the level of technological sophistication of the firm and the risk associated with use of its products consequently technological advancement of the firm has not necessarily resulted in high economic performance in part because of the high demands put upon the firm s resources and time by the u s food and drug administration approval process the study indicates that the initial financial inputs have a threshold effect on subsequent economic performance of biomedical and pharmaceutical new firms in the sample studied unless these inputs reached the 850 000 to 1 000 000 mark in 1970 1975 dollars technological innovation was negatively mediated by the risk associated with the use of firm s products and by the fda quality control procedures consequently attempts at technological innovativeness are unfortunately detrimental to the economic performance of underfinanced new firms in the biomedical and pharmaceutical industry

market attractiveness resource based capabilities venture strategies and venture performance abstract this research seeks to identify variables that should be related to venture performance it is hypothesized that both market attractiveness and resource based capabilities are directly related to new venture performance in addition specific resource based capabilities are hypothesized to be directly related to the competitive strategies chosen by a firm finally the fit between strategies and resource based capabilities is hypothesized to be related to venture performance the sample consisted of all manufacturing businesses sic codes 20 39 started or reorganized in the corporate form between 1980 and 1991 in nine counties in northwestern pennsylvania as identified by a major marketing research service of the 800 companies surveyed completed questionnaires were returned for 155 representing a 19 response rate the 155 responding companies had a median age of 5 years with a median of 15 employees the major products of companies in the sample included flour lumber household and office furniture plastic containers tools and dies ready mixed concrete pipe fittings measuring devices paint and varnish machine tools electroplate carbon and graphite composite products plastic laminated products circuit boards electronic components and parts for internal combustion engines in general the results confirm the validity of the measures of environmental and organizational characteristics as we have adapted them for new ventures as hypothesized perceived market attractiveness and the overall abundance of resource based capabilities were significantly related to venture performance also in two of three cases the evidence suggests that specific resource based capabilities are related to the firm s stated competitive strategies finally although the relationship between fit and performance is not supported in all cases the performance of the emerging manufacturing ventures included in this sample appears to be enhanced when resource based capabilities are supportive of a cost leadership strategy and when firms seeking to differentiate based on product and service quality have the resource based capabilities to support that strategy the results of this emerging research stream will make an important contribution to our understanding of the factors that impact firm performance for scholars the results provide additional information needed to develop comprehensive new venture performance models a clear understanding of the factors that have a strong influence on venture performance will enable practitioners to better identify viable business opportunities and academicians to provide potential business founders with tools to help them recognize opportunity in addition the identification of appropriate levels of abstraction will provide building blocks for future research that seeks to integrate environmental and firm level constructs

trading wind generation from short term probabilistic forecasts of wind power due to the fluctuating nature of the wind resource a wind power producer participating in a liberalized electricity market is subject to penalties related to regulation costs accurate forecasts of wind generation are therefore paramount for reducing such penalties and thus maximizing revenue despite the fact that increasing accuracy in spot forecasts may reduce penalties this paper shows that if such forecasts are accompanied with information on their uncertainty i e in the form of predictive distributions then this can be the basis for defining advanced strategies for market participation such strategies permit to further increase revenues and thus enhance competitiveness of wind generation compared to other forms of dispatchable generation this paper formulates a general methodology for deriving optimal bidding strategies based on probabilistic forecasts of wind generation as well as on modeling of the sensitivity a wind power producer may have to regulation costs the benefits resulting from the application of these strategies are clearly demonstrated on the test case of the participation of a multi mw wind farm in the dutch electricity market over a year

content and performance of growth seeking strategies a comparison of small firms in high and low technology industries abstract the question of how to grow and gain market share is repeatedly asked by small firm managers yet little help exists in the academic literature in terms of identification of specific business practices and competitive tactics associated with the pursuit of market share growth rather most discussion of appropriate strategies for small firm growth centers around the prescription of broad strategy types e g the often recommended niche strat egy furthermore the environment s potential effects on the viability of growth strategies seldom receive adequate treatment in the small firm strategy literature despite the long acknowledged influence of environmental conditions on strategy content this paper describes a study of the business strategies used by small growth seeking firms in high and low technology industries the construct of strategy was examined from both a micro level focusing on individual strategy dimensions and a macro level focusing on the firms overall strategic postures and patterns of strategy related variables data were collected from the senior executives of 57 small manufacturing firms whose mission strategies were to aggressively increase sales and market share the data indicate that growth seeking firms in high technology industries relative to those in low technology industries 1 rely more heavily on advertising 2 place more emphasis on product related issues e g new product development superior product warranties as a basis for building market share 3 rely more heavily on formal planning activities 4 place more emphasis on customer service support 5 rely more heavily on external financing 6 rely more heavily on premium pricing strategies and 7 have more entrepreneurial strategic postures the data also indicate that an entrepreneurial strategic posture is more positively associated with firm performance among growth seeking firms in low tech industries than among those in high tech industries although there are exceptions to this finding cluster analysis was used to identify the content and performance of various strategies operationally defined as patterns of strategic variables associated with growth seeking firms in high and low technology industries four strategies were identified through this technique two of which are most common among firms in low tech industries one of which is most common among firms in high tech industries and one of which is equally prevalent in both industry types these results corroborate several of the aforementioned findings regarding the effects of industry technological sophistication on dimensions of firm strategy for example they demonstrate the general aversion among growth seeking firms in low tech industries to premium pricing furthermore they suggest that overall growth seeking firms in low tech industries may be somewhat more disposed to pursuing cost leadership strategies and less disposed to pursuing differentiation strategies than growth seeking firms in high tech industries there were no overall performance differences across the four strategy types identified through the cluster analysis however the data suggest that an entrepreneurial strategic posture is most strongly associated with high performance among firms that have a cohesive and focused strategic mix or pattern of strategic decisions this finding holds for growth seeking firms in both industry types

emerging high tech firms how durable are their comparative start up advantages abstract successful high tech entrepreneurial firms have been shown to have several common founder characteristics and start up conditions this paper presents a study of the duration of the effect of these characteristics and conditions on a firm s early growth do they have a permanent effect or does the early comparative advantage that they confer to the firm fade away after a few years successful firms being better able to adapt to changing conditions than the others the study is based on the longitudinal analysis of the first 8 years of operations of 73 high tech firms located in various parts of canada founded between 1965 and 1980 by one or several entrepreneurs in microelectronics communications and related fields the sample includes only survivors and manufacturers all the firms being still active and doing some manufacturing at data collection time in terms of firm size start up capital and sources of financing this sample is comparable to other samples of high tech start ups described in the literature and can therefore be assumed to be representative of the industry the importance of the government sector in canada resulted in a very high government orientation of the firms at start up an average 32 of first year sales being to the public sector similar market and firm behaviors may develop in other industrial economies some having very important government sectors e g france italy or high tech markets indirectly driven by governments through major defense and space contractors in the united states the analysis confirms the positive short and medium term impact of such start up characteristics as initial size start up capital past experience in marketing finance and government contracting founder s age market structure and similarity with the market served by a previous employer however except for initial size sales initial government orientation percentage sales to the public sector year i and previous experience in government contracting which tend to be excellent predictors of medium to long term success measured in terms of sales level other start up characteristics show only short term direct effects 3 years for past experience in marketing and finance 1 to 2 years for market structure and similarity of the market served with that of a previous employer they are however indirectly related to success through their effect on initial size and government orientation past experience in government contracting is strongly linked with initial government orientation whereas initial size and initial government orientation are independent of each other initial size and initial government orientation are therefore two independent start up traits that show the longest global direct effect on sales level 8 years the time horizon of this study when regrouping firms by initial size and government orientation other long term at least 8 years effects appear for all the firms size of the previous employer and similarity of technology with that of a previous employer for smaller start ups similarity of their market with that of a previous employer for government oriented firms amount of start up capital past government employment past experience in rd and for non government oriented firms past government employment and past r d experience from a practical point of view these results illustrate the importance of start up conditions behaviors and strategies can evolve as a firm matures but some initial characteristics seem to be clearly associated with sustained comparative advantage either because they lead to larger initial size or good government contracts or because they impact on the general orientation and strategy of the firm considering these start up conditions is therefore useful to the entrepreneur when planning a start up to the venture capitalist when analyzing a start up and to the public sector planner when developing support policies

the temporal nature of growth determinants in new bank foundings implications for new venture research design abstract several authors have suggested the founding period as a critical time in the development of a firm arguing that the resource and decision choices made at this point have a substantive impact on the firm s future yet historically most studies have measured new venture choices considerably after the founding period we suggest that the uniqueness of the founding event is important and test its validity through the examination of two implicit assertions these implicit assertions are those of temporal stability and temporal locus of growth determinants

pros and cons of exposing renewables to electricity market risks a comparison of the market integration approaches in germany spain and the uk abstract the article examines how renewable electricity res e producers are integrated into the electricity market under the support legislations and regulatory frameworks of germany spain and the uk focus is on wind power which faces the highest market integration challenge of all res e the analysis shows that the three countries follow contrasting approaches of exposing res e producers to the market risks of forward electricity markets balancing markets and system planning requirements risk exposure is highest in the uk and lowest in germany from a policy maker s perspective there is a trade off between a high risk and a low risk approach when res e face high market risks a higher level of financial support is required to stimulate res e development than in a low risk environment but the exposure to market risks may also give an incentive to make efficient use of the respective market thus limiting the indirect costs to society the special characteristics of wind energy however put natural limits to the response of wind power plants to market prices and locational price signals and will increasingly influence electricity markets and grid infrastructure these interdependencies should be recognised in the design of res e policies and market regulations

technology strategy and new venture performance a study of corporate sponsored and independent biotechnology ventures abstract new ventures companies eight years or younger play a major role in the development of an emerging high technology industry corporate sponsored new ventures those supported by an established corporation and independent ventures those founded by independent entrepreneurs frequently battle for industry leadership and financial success whereas both venture types use technology to achieve financial and market success little is known about the differences in their technology strategies technology strategy is the plan that guides a new venture s decisions on the development and use of technological capabilities this strategy covers six major areas the first is selecting the pioneering posture where a venture decides whether or not be among the industry s first companies to introduce new products technologies to the market the second is determining the number of products to be introduced to the market the third is choosing the extent of a venture s use of internal and external r d sources internal sources usually refer to in house r d activities external sources may include purchasing or licensing of technology from other companies or joining strategic alliances to acquire that technology the fourth is deciding the level of r d spending the fifth is selecting the combination portfolio of applied and basic research projects whereas basic r d advances science applied r d leads to new products and technologies the sixth and final dimension is the venture s use of patenting to protect any competitive advantages it might gain from its r d activities this article reports the results of a study that explored the differences in the technology strategies and performance of corporate and independent ventures the biotechnology industry was chosen to test the study s hypotheses using 112 ventures seven of the study s hypotheses focused on the potential variations in technology strategy between corporate and independent ventures independent ventures ivs were expected to surpass corporate ventures cvs in pioneering new products technologies using internal r d and emphasizing applied r d cvs were expected to surpass ivs in introducing new products using external r d sources spending on r d and patenting the study s remaining three hypotheses covered possible variations in new venture performance nvp and their sources the results showed that ivs focused more on pioneering pursued a more applied r d portfolio and emphasized internal r d more than cvs cvs utilized external technology sources spent more heavily on r d stressed basic r d and used patenting more intensively than ivs these results were consistent with the hypotheses however contrary to expectations there were no significant differences between cvs and ivs in the frequency of new product introductions probably because most ventures were at the invention rather than the commercialization stage the results on the nvp of cvs and ivs were counter to expectations ivs outperformed cvs probably because of the high motivation of the iv owners who reaped the rewards of growth and profitability also whereas cvs may have greater access to the resources of their sponsors political conflicts and rigid corporate controls might have reduced their ability to achieve competitive advantages the results also indicated that cvs and ivs appeared to gain competitive advantages from different technological choices pioneering a focus on applied r d and extensive use of the internal r d sources were also positively associated with the performance of ivs heavy r d spending the use of both internal and external r d sources frequent product introductions and patenting were positively associated with the performance of cvs finding that technology strategies significantly impacted nvp should encourage executives to consider pursuing a formal technology strategy likewise the finding that different dimensions of technology strategy influenced the performance of cvs and ivs in different ways has practical implications cv managers can learn from their higher performing iv rivals also because established companies frequently acquire ivs information about their technology strategies can be valuable in assimilating the acquired ventures overall the results show that technology strategy is an important factor in enhancing new venture performance

sourcing strategies of european and japanese multinationals a comparison based on a typology of sourcing strategies this study identifies various sourcing patterns adopted by european and japanese multinational manufacturing firms in serving the u s market the study has found that the product s market performance is not at all related to its life cycle stage in world trade or to production location but is positively related to the internal components sourcing and negatively related to the product adaptation the findings strongly support levitt s call for a global product

linking product and process innovations and modes of international sourcing in global competition a case of foreign multinational firms in increasingly complex global competition multinational firms u s and foreign alike have stepped up international sourcing of components and finished products to serve various markets since an increasing portion of global competition is shaped by european and japanese multinational firms with due emphasis on product quality and manufacturing it is an opportune time to examine the like among their product development manufacturing and sourcing activities those european and japanese multinational firms marketing products in the united states are chosen as subjects of this study

a matter of location the role of regional social capital in overcoming the liability of newness in r d acquisition activities laursen k masciarelli f and reichstein t a matter of location the role of regional social capital in overcoming the liability of newness in r d acquisition activities regional studies external knowledge acquisition is a precondition for firms competitive advantage however young firms exhibit a lower propensity to acquire external research and development r d than their older counterparts the paper explores the role of regional social capital in moderating this aspect of the liability of newness the results show that young firms operating in regions with low levels of social capital are less likely to acquire r d externally however this is not the case in regions with high levels of social capital suggesting that the liability of newness in terms of acquisition of external r d does not play a role in these regions

financial ratio distribution irregularities implications for ratio classification abstract this paper incorporates studies investigating the distributional characteristics of financial ratios to studies related to empirical classification of financial ratios even though the distributional properties of financial ratios have received some attention in prior research the implications of observed results for financial decision making have not been researched in detail the empirical analysis of this study is carried out for 10 ratios on finnish listed firms the results reveal that the observed distribution irregularities have a significant impact on the results obtained from the empirical classification of financial ratios a large part of the time series instability of financial ratio patterns is caused by financial ratio distribution irregularities in addition it is discovered that the interpretation of the underlying financial factors of firms may be affected if distribution irregularities are not paid due attention to

establishing a new business venture unit within a firm abstract the rapid growth of the united states as a whole is basically a story of the discovery and adoption of novel and improved ways of satisfying wants and needs previously these wants and needs have been championed by individuals such as j p morgan finance james b duke tobacco andrew carnegie steel cornelius vanderbilt railroads and john d rockefeller oil each of these entrepreneurs commercialized a new idea or invention the essence of the innovation process each bridged the gap between science and the marketplace by developing and commercializing a marketable innovation although even more of a need to reach the market as quickly as possible exists today the majority of the innovations commercialized each year come from new or smaller organizations often the ones with the least amount of capability and resources to accomplish the task existing businesses especially larger ones are in a much better position to bridge this gap these companies have the existing financial resources business skills and usually the marketing and distribution systems to successfully commercialize a new innovation recognizing this capability large companies have tried to instill an entrepreneurial spirit or an internal venturing program in an attempt to increase the amount and success of new offerings this activity has taken on a variety of forms one of which is the new business venture unit what are the characteristics of a new business venture unit are they more successful at introducing new products than autonomous entrepreneurs these and other questions were addressed in a research project of fortune 1000 firms consisting of a mail questionnaire and in depth personal interviews the majority of these firms did not have a new business venture unit 70 of those firms that did the average age of their unit was 5 3 years and the range of ages was from a few months to 20 years in addition the range of employees in the new business venture unit varied greatly from one to 100 firms in the primary product lines of chemical and medical products computers beauty products and feminine products tended to have new business venture units more than did firms in other product areas these units contained a variety of departments including marketing the most frequent finance and research and development through modest increases in the number of new products introduced each year the new business venture units also significantly increased the per centages of sales attributed to products introduced within the previous three years a good environment for a successful new business venture unit included encouraging new ideas allowing mistakes and failure making available the resources of the firm encouraging teamwork establishing broad per formance goals and an appropriate reward system and having top management strongly support the unit

venture capital investing for corporate development objectives abstract there is a significant new player emerging in the venture capital world whose participation is changing the way that the venture business is done domestic and foreign corporations have discovered that investing in venture capital adds a new dimension to their corporate development strategies and can also make an outstanding return on investment armed with serious amounts of cash aware of the value of an association with their name and frequently possessing marketing power that a small company covets corporations are competing with venture capitalists for the best deals obtaining a corporate partner is now an accepted part of a small company s financing strategy for the corporate development executive this activity provides a useful tool to widen the spectrum of participation in new technologies while retaining the entrepreneurial drive and reducing the cost and exposure of new ventures however it is not a panacea for growth and caution should be exercised to avoid creating unrealistic expectations both entrepreneurs and venture capitalists welcome this source of later stage capital providing it minimizes equity dilution and assists in product development marketing and liquidity for their investment however it is a competitor for the venture capitalists in sourcing deals and a potential adversary for the entrepreneur when objectives clash additionally entrepreneurs and venture capitalists often are suspicious of the corporation in the small company s boardroom the objective of most corporations is the strategic benefits that can result from venture capital investing such as acquisitions technology licenses product marketing rights international opportunities and a window on technology however this objective is frequently mixed with a financial return objective and can lead to a confused strategy participation by corporations can take many different forms but usually begins with investments in several venture capital funds as a limited partner and evolves into direct investments in venture companies formation of a venture development subsidiary by the corporation is a demonstrated way to maximize the strategic rewards if financial return is the only objective then a stand alone venture fund is the best vehicle the most important factors for the strategic success of a corporate program are the creation of a high quality deal stream and the use of outstanding people to interface between the corporation and the venture capital world in addition there has to be a long term commitment active involvement and a carefully devised internal communications strategy to promote and protect the program creation of a formal venture development subsidiary is probably the best way to maximize the strategic objectives lubrizol enterprises operates as such a subsidiary of the lubrizol corporation and utilizes venture capital investing acquisitions partnerships and contract research to develop strategic business units based on leading edge technologies

discriminant characteristics of us banks acquired with or without federal assistance abstract an extensive literature review of statistical studies on merger acquisition and takeover activities in various sectors is presented it reveals a large number of efforts models and pitfalls to classify and predict acquired or bankrupt vs non acquired or healthy firms in this study we considered twenty endogenous bank variables in order to determine the most important characteristics that differentiate us bank mergers acquisitions with or without federal assistance we developed several logistic regression models with only three to five significant variables which classified correctly about 93 of the 299 actual 1987 1988 cases and 89 in the 56 case 1989 holdout sample

entrepreneurship and the initial size of firms abstract it is clear that entrepreneurs and their firms can vary widely nevertheless most of the research to date on entrepreneurship has examined central tendencies with relatively little attention devoted to entrepreneurial diversity this study examines one of the most distinguishing characteristics of young firms initial size the focus is whether smaller start ups differ from larger ones in the backgrounds of the entrepreneurs their processes of starting or the subsequent patterns of development in this longitudinal study an initial sample of 1903 young firms was examined to determine differences in characteristics of the entrepreneurs and in their processes of starting one year later data were obtained from 742 of these firms permitting analysis of how initial firm size was related to subsequent difficulties encountered and changes made as well as to performance as expected along almost every dimension these starting larger firms had the backgrounds that would seem to be necessary for the assembly of substantial resources they tended to have more education more management experience and goals that were more managerial in nature they also were more likely to have partners women were associated more often with smaller ventures but for this sample there were no differences in the representation of minorities between the smaller and larger start ups those starting larger ventures tended to rely more upon external investors and to start ventures more closely linked to their previous jobs both groups of entrepreneurs sought information from a number of sources but those founding larger ventures utilized professional advisors more whereas those starting smaller ventures utilized informal sources in the year after the first questionnaire differences between the two groups were less marked than expected both groups of surviving firms reported low levels of serious problems with the smaller ventures somewhat surprisingly reporting serious problems less often there were not many differences in changes made except that smaller ventures were more likely to lose partners and larger ventures were more likely to add branches or locations both groups reported high rates of mean growth in sales the smaller ventures with their small initial bases showed larger percentage increases smaller ventures also showed higher percentage increases in employment and surprisingly a greater increase in the absolute number of employees somewhat more of the smaller ventures had discontinued both groups included many firms that grew substantially and others that scaled back demonstrating the fluidity and experimentation characteristic of young firms for entrepreneurs and their advisors for public policy makers and for researchers any progress in understanding entrepreneurial processes should in the long run enhance venture performance the patterns observed here indicate that firms of different initial size tend to be associated with particular entrepreneurial characteristics processes of formation and subsequent patterns of development this diversity should be recognized in the development of assistance programs and university courses as well as in the interpretation of previous research for public policy makers the growth of these firms both small and large indicates the potential of economic contributions from entrepreneur ship further the growth of the smaller start ups suggests that even those ventures that appear to have few resources and modest potential can in the aggregate contribute substantially to the economy

corporate venturing allocation of talent and competition for star managers we provide new rationales for corporate venturing based on competition for talented managers as returns to venturing increase firms engage in corporate venturing for reasons other than capturing these returns first higher venturing returns increase managerial compensation to which firms respond by increasing incentives managers increase effort prompting firms to reallocate them to new ventures where the marginal product of effort is highest second as returns to venturing become large corporate venturing emerges as a way to recruit retain managers who would otherwise choose alternative employment we derive several testable empirical predictions about the determinants and structure of corporate venturing

wind power and electricity prices at the pjm market increased deployment of wind power generation is changing the landscape of power supply around the world when integrated with electricity markets wind power is also widely known to influence the prices cleared at the market this paper examines the effect of wind power generation on the day ahead market prices in the pjm electricity market using robust econometric models and statistical inference results show that the quantified expected benefits to wholesale market participants may be substantial despite the relatively low wind power penetration levels still observed within the pjm jurisdiction relative to other markets the quantified unitary benefits outweigh by a great margin the renewable energy credits given to qualifying wind farms across the market when benefits outweigh the costs incurred to generate them welfare is accrued to this end benefit allocation mechanisms are proposed which may contribute to the continued development of wind power on the roadmap to a cleaner power industry of the future

strategic bidding and rebidding in electricity markets abstract successful deregulation in electricity markets depends crucially on the ability of market regulation to promote and maintain free competition there are however important physical characteristics in electricity markets such as the constraints imposed by the physical transmission infrastructure that have the potential to undermine competition and provide opportunities for market participants to exploit temporary positions of market power in this paper the regional market of queensland australia is analysed it is found that strategic behaviour by generators exists and is closely related to the occurrence of the kind of extreme price events that characterise many deregulated electricity markets in addition rebidding behaviour by base load generators immediately after extreme price events is shown to have negative impacts on the operation of the market the key message is that promotion of competition in electricity markets can have undesirable consequences unless the regulatory policy is carefully designed to counter strategic behaviour by market participants

financial performance patterns of new corporate ventures an alternative to traditional measures abstract this paper describes some of the limitations involved in using traditional performance measures to evaluate new ventures and suggests an alternative we argue that the use of traditional performance measures in the new venture setting can produce misdirected decision making by managers and misleading model development by researchers the traditional performance measures evaluated are return on investment cashflow market share gain and returns to stockholders the alternative performance measured presented is based upon an evaluation of patterns of improvement in return on investment across time these patterns of performance are mapped using regression analysis return on investment is regressed against time and the parameters of the resulting models parameters are themselves used as performance measures the beta coefficient is used to measure the overall rate of change in financial performance from year to year and the coefficient of determination r 2 is used to measure the predictability of change to combine the information available in each of these parameters into a single variable we multiply by r 2 and call the result v thus v is a measure of the velocity of improvement in financial performance across time adjusted for the level of variability in the performance trend much work remains to be done that could substantially improve the usefulness of v to managers and researchers more sophisticated approaches than the one used here might include weighting either or r 2 to fit the particular goal orientation of a given management team other model parameters might be used in conjunction with or in place of or r 2 to increase or improve the information captured in v measures of financial performance other than return on investment roi could also be used as the basis of calculating v even in its current simple form however v appears to be a useful performance measure in 87 of 112 ncvs studied v provided a useful summary of the pattern of performance s development in 25 of 112 cases there were important characteristics of performance that could not be captured by v the most important managerial implication of v entails the shift to evaluating a new venture on the basis of its progress toward a desirable end rather than on the end itself this provides a logical means of evaluating the financial performance of a new venture at an earlier time than would be possible otherwise

does acquiring venture capital pay off for the funded firms a meta analysis on the relationship between venture capital investment and funded firm financial performance abstract researchers and practitioners frequently propose that venture capital vc is an important resource to increase the performance of funded firms especially in environments of uncertainty in this paper we scrutinize these theoretical propositions following an evidence based research approach we synthesize 76 empirical samples on 36 567 firms we find a small positive performance effect of vc investment on funded firm performance however the effect vanishes if researchers control for industry selection effects furthermore we find that the performance effect mainly relates to firm growth while profitability is unaffected we also uncover that performance effects are reduced when the funded firms are very young or very mature in addition studies focusing on ipo events which constitute the majority of studies determine a substantially smaller performance effect we discuss theoretical implications and offer suggestions for future research on vc

modeling the impact of a wind power producer as a price maker wind energy is present in many countries throughout the world the main types of wind sales in electricity markets are via regulated tariffs or pool based markets production companies choose cost effective options for selling wind energy and some markets like the irish electricity market use regulated tariffs to remunerate wind production this paper aims to provide some answers to explain what effect wind offers may have in an electricity market if wind power producers participated in the day ahead market without receiving any premium or aid a price maker optimization model is used to detect its effect on prices the model encompasses energy offers by other technologies using residual demand curves and detailed modeling of wind imbalances it is observed that wind acting as price maker reduces electricity prices and the imbalance penalties help the system operator to reduce imbalances a realistic case study using data from the irish electricity market illustrates the methodology used comparing the effect of imbalance penalties in the models in terms of profit and total imbalance of the system

offshore sourcing reaction maturation and consolidation of u s multinationals the authors conducted a quasi longitudinal investigation of u s multinationals r d manufacturing offshore sourcing strategies and resultant global market performance implications utilizing comprehensive data collected by the 1977 1982 and 1989 benchmark surveys of u s direct investment abroad hypotheses were tested in a path analytic framework despite increased competition at home and abroad causing their global market share positions to weaken in recent years u s multinationals have maintained and even may have improved their global consolidated profitability levels by skillfully exploiting their technological prowess through technology transfer and off shore sourcing rapidly changing roles of u s parent firms and their foreign affiliates in technology development and global sourcing relationships portend a maturing yet arduous shift toward a global rationalization

corporate ventures into industrial markets dynamics of aggressive entry abstract this article reports a study of the effect of aggressive entry by firms venturing into new industrial markets there are three main sets of results first there is a significant correlation between the competitive attractiveness of the target industry and the initial share objective set by the corporation venturing into that industry second the downstream share objective set at the launch of the venture is significantly correlated with several key marketing strategy and investment strategy options made by the firm at the start of operations third if most of these key strategy decisions are made under the assumption that a high share position will rapidly be achieved their resulting performance in terms of both market share and roi is superior to firms which enter with less aggressive share aspirations these results are particularly appealing to the large established firm which has the resources and thus can both afford to absorb the cost of failure and afford to make significant front end investments in aggressive initial marketing expenses and investments in initial plant capacity for such firms a feasible strategy for a new venture into an industrial market could be to if possible but not essential seek industries markets to enter which are less likely to provoke rivalrous responses set aggressive market share targets invest aggressively in initial plant capacity develop aggressive sales force sales promotion advertising service quality and or pricing programs relative to competitors as appropriate to the particular industry being entered the reason we suggest that the programs be aggressive as appropriate is that different strategic options are likely to be more effective in one industry than another for instance aggressive advertising and sales promotions could be more effective for consumables while aggressive sales calling programs and superior service delivery could be the more effective route for capital goods businesses

electricity market participation of wind farms the success story of the spanish pragmatism abstract in the last 10 years more than 15 gw of wind power asociacion empresarial eolica spanish wind energy association nota de prensa press release 17 de enero de 2008 http www aeeolica org doc np 080117 espana supera los 15000 mw eolicos pdf have been installed in spain of which more than 3 5 gw in 2007 furthermore plans are to reach 20 gw by 2010 and there are expectations of an installed capacity exceeding 40 gw by 2020 this article will present the innovative solutions for technical and economical integration that allow to reach such high level wind penetration objectives the system peaks at around 44 gw and is almost isolated it will be described how the regulation has evolved from a pure feed in tariff to a market premium option where technical and economic integration has been a priority today approximately 97 of installed wind capacity accesses the spanish wholesale electricity market market integration has been crucial sending the correct signals to participants to look for the optimum technical solutions technical improvements have come from both wind power producers fault ride through capabilities visibility and controllability of wind power power production forecasting reactive power control and the system operator specific control centre dedicated to renewable energy sources res new security analysis tools gaining technical confidence of wind capabilities

supporting innovation and venture development in established companies abstract accumulated research findings call into question the ability of established corporations to develop and manage new ventures successfully this article argues that the problem comes in large part from failing to differentiate between the requirements of administrative management geared to managing existing activities and holding things in place to ensure continuation of already developed activities and the requirements of entrepreneurial management designed to create change by developing something new the two kinds of management are in tension and may interfere with each other but every established organization needs both in order to get both innovation and efficiency innovations and new ventures have four particular characteristics that account for their special management requirements uncertainty knowledge intensivity competition with alternative courses of action and boundary crossing thus entrepreneurial management to support creation of the new puts a stress on such features as visionary leadership patient money planning flexibility team continuity stability and interfunctional cooperation but the usual requirements of administrative management in established corporations contradict these principles thus some companies try to set their new ventures apart from the old to avoid conflicts in management requirements however this this only partially solves the problem all companies need both to manage ongoing activities and to create new ones with the proportions of each depending on the nature of the business they need to strike a balance between administrative and entrepreneurial management the problem of venture development in established corporations occurs when administrative management comes to dominate and innovation is not valued sufficiently the command system of administrative management needs to be replaced by a mutual adjustment system high innovation companies build mutual adjustment into their design they allow flexibility to move into an entrepreneurial mode they are characterized by broader jobs structures built around small business units or functionally complete project teams cultures stressing the ability of people to contribute more over time and easy access to the key power tools of information support and resources a more entrepreneurial corporation minimizes hard and fast rules and procedures governed by a rigidly defined command structure and emphasizes instead flexibility and broadly skilled sets of employees in flexible units that can be grouped or regrouped as changing circumstances require large corporations must institute deliberate programs to encourage innovation and entrepreneurship including removing the roadblocks of unnecessary administrative requirements encouraging integration across departments and functions changing budgeting and accounting procedures and providing internal venture capital and special project funds discretionary time and new business performance measures

strategic alliances and the rate of new product development an empirical study of entrepreneurial biotechnology firms abstract a key to success in industries populated by entrepreneurial high technology firms is the rate at which the firm develops new products rapid product development creates significant advantages for entrepreneurial firms including access to early cash flows external visibility legitimacy and early market share the higher a firm s rate of new product development the more likely the firm is to achieve and maintain these first mover advantages this is particularly true in industries such as pharmaceuticals where the effectiveness of patent protections leads to patent races in which a winner take all scenario exists but even in industries where patent protection is weak the advantages of being first in terms of market preemption reputation effects experience curve effects etc can still be of major importance we argue that one way an entrepreneurial firm can increase its rate of new product development is by entering into strategic alliances with firms that possess complementary assets the basic proposition advanced is that a firm s rate of new product development is a positive function of the number of strategic alliances that it has entered however the relationship between strategic alliances and the rate of new product development may be nonlinear specifically although strategic alliances may initially have positive effects on the rate of new product development this relationship may exhibit diminishing returns moreover past some point it is possible that negative returns may set in thus the relationship between the number of alliances and the rate of new product development may be an inverted u shape two reasons can be given to support such a relationship first not all alliances will make an equal contribution to increasing the rate of new product development the economic law of diminishing returns suggests that the more alliances a firm engages in the more likely it is to enter some alliances whose marginal contribution is relatively minor such a phenomenon on its own is enough to suggest diminishing returns second gaining access to complementary assets through strategic alliances is not without risks malperformance may occur when the firm discovers that the complementary assets provided by the partner are a poor match fail to live up to the promises made by the partner or a partner may opportunistically exploit an alliance expropriating the firm s know how while providing little in return these problems arise because the effectiveness with which the firm can select and manage alliance partners is likely to be negatively related to the number of alliances the firm is managing due to information processing requirements the quality of partner search and the ability to monitor the partners actions will decline as the firm increases the number of alliances in which it is involved this reasoning leads to a prediction that past some point alliances will be increasingly vulnerable to malperformance this raises not only the possibility of diminishing returns to the number of alliances but also negative returns as the number of alliances increases past some critical point this proposed relationship between alliances and new product development was tested on a sample of 132 biotechnology firms the results provide strong evidence to support the inverted u shaped relationship between the number of strategic alliances and the rate of new product development therefore at low levels strategic alliances are positively related to new product development but as the number of alliances increases the benefits begin to decrease and at high levels the costs of an additional alliance actually outweigh the benefits

the advantage chain antecedents to rents from internal corporate ventures abstract in this article we argue that the resource based perspective on strategy offers a useful basis for understanding the contributions to the firm of corporate ventures the heart of the resource based view of the firm lies in arguments set forth by penrose and by nelson and winter penrose 1959 argued that differential mechanisms for resource combination and utilization result in heterogeneity among firms even among firms with similar factor endowments nelson and winter 1982 argued that behavior in particular behavior with respect to the utilization of firm resources becomes routinized over time people are often unable to describe or reconstruct well honed repetitive routines with ease van de ven 1986 consequently no two firms are likely to develop identical routines and it is often difficult for one firm to copy routines originated in another the idea that resources may be combined in routinized but relatively idiosyncratic ways suggests that firms will develop enduring differences in resource profiles and consequently in strategic potentialities over time consider the benefits a corporate venture can offer entering new markets making a new product developing a new technology or reconfiguring internal processes all require changes to existing resource configurations and routines these changes can allow the firm to discover ways of combining its resources and to the extent that the new combinations incorporate difficult to imitate routines it will take some time before that combination can be matched by competitors in other words venturing is one mechanism through which a firm gains superior insight about and access to firm specific resources with future rent potential value so a substantive and desirable outcome of venturing is the generation of valuable new resource combinations specific to the firm which it alone may exploit the article presents a model of those conditions that are necessary antecedents to streams of ricardian rent from the venture five such conditions are proposed all of which must be met if the firm is to derive rents from its venturing activities the first antecedent to securing rent streams from venturing is the emergence of causal understanding of the drivers of the venture s performance new causal understanding creates insight into new opportunity areas next team proficiency is essential to translate causal understanding into coordinated delivery of the product or service to the market new competences emerge as a result of evolving causal understanding and team proficiency which allow the organization to achieve new purposes from these new competences there may then develop distinctive competences that will differentiate the firm from competing organizations these distinctive competences may then become competitive advantages if they can be deployed in delivering product or service attributes that are preferred by the market to the offerings of competitors and competitors cannot readily duplicate them rents can only ensue when these inimitable competitive advantages allow a firm to achieve either distinctive efficiency in the firm or distinctive value for the customers the final section of the article offers ways in which this framework could be used first for research purposes and secondly by venture management

patterns of growth competitive technology and financial strategies in young ventures abstract young independent technology based ventures have an increasingly complex array of strategic choices about how they can grow while simultaneously competing on the basis of their technological capacity and skills in their markets given the central importance of these choices to the success of the venture there should be a close integral relationship among them similarly financial strategy choices also enter this relationship growth and competition place tremendous resource demands on the young technology based venture and financial strategy choices therefore must also be factored into the choice taking process the choice taking perspective is basic to this inquiry as other researchers have pointed out young entrepreneurial ventures typically do not utilize highly formalized strategic planning processes robinson and pearce 1983 strategy formation in such firms tends to be informal and episodic strategy may be revealed best through the pattern or set of choices taken at a point in time and over time from a choice taking perspective then the critical questions become the following a are there identifiable patterns of growth technology and financial choices b what factors shape or determine which choices are taken and c are these patterns related to venture performance these questions were explored by using data from a survey of 100 ceos of young independent technology based firms across three industries the results generally support the idea that patterns of choices can be identified several of these patterns are related to the ventures demographic characteristics such as form of ownership and scope of sales importantly stage of development was not related to those patterns nor to the performance of the ventures the highest performing ventures were found to be pursuing internal innovation through r d for product breakthroughs this finding is surprising since young ventures at the stage at which most were found in this sample would traditionally be expected to emphasize product extensions and modifications we need to better understand why young ventures would choose to innovate internally for breakthroughs in their growth stages and how well they are able to do so a major implication of this research is that the ceos of young technology based ventures are being presented with a much larger menu or array of choices at many points in time than conventional stage based models of venture development have postulated one explanation of this possibility is that the firm life cycle is being compressed by relatively new conditions such as the availability of more and earlier capital through joint venturing and alliances and shorter product life cycles indeed a follow up survey a year later with 77 ceos from this sample confirmed that joint ventures and alliances were the number one choice being pursued to gain access to distribution channels and new markets what is troubling about this possibility is that the skills and capacities of these young ventures may be limited in comparison with the richness and complexity of the available choices in the follow up survey the sources of information that were by far the most relied upon for strategic decision making were other internal senior managers and board members outsiders such as lawyers ranking distantly behind the leaders of these ventures need to be fully supported in evaluating negotiating and managing these often highly complex relationships