how firms respond to financial restatement ceo successors and external reactions although past studies have paid considerable attention to firms reputations few have investigated the actions that firms take following a reputation damaging event we identify firms involved in financial earnings restatements and examine whether naming a successor ceo with specific qualities serves to signal the seriousness of a firm s efforts to restore its reputation using theories of market signaling we argue that attributes of successor ceos significantly influence the reactions of key external constituencies in particular firms with more severe restatement tend to name successors who have prior ceo or turnaround experience and a more elite education the naming of such successors results in more positive reactions from the stock market financial analysts and mass media we argue that these attributes send messages to stakeholders and the broader public about the ceo s credibility and the firm s efforts

who appropriates centrality rents the role of institutions in regulating social networks in the global islamic finance industry this study explains and tests the effects of country level institutions on the distribution of centrality rents between two sets of actors in an interorganizational network building on the literature on corporate elites we propose that a cohesive elite following organizational logics other than profit maximization diverts centrality rents and induces costs on firms and that macro institutions act as external governance mechanisms to shape this relationship we develop our theory in the emerging islamic finance industry where shariah scholars connect firms and constitute a religious corporate elite while central scholars in this network create legitimacy for firms they also shirk and cause information leakage suggesting a negative centrality performance relationship for the firms country level institutions such as government regulation and democracy we argue ameliorate these effects by influencing this religious elite s institutional logic and restraining their actions while institutions developed from within the industry strengthen the power of the elite testing our theory in a network of 367 scholars and 396 institutions over 31 countries using multi level methods we indeed find a negative centrality performance relationship that is ameliorated by stronger government regulation but exacerbated by better developed industry specific institutions as well as a negative relationship between democratic and regulatory institutions and centrality

a status based model of market competition this article explores the significance of status processes for generating and reproducing hierarchy among producers in a market it develops a conception of a market as a status order in which each

getting off to a good start the effects of upper echelon affiliations on underwriter prestige the initial public offering ipo is one of the most critical events in the lifetime of a young firm prior research has shown that firms tend to have successful ipos if they go public with the endorsement of a prestigious lead underwriter this paper examines the antecedents to receiving endorsement by a prestigious underwriter and links this to the experience base of a firm s upper echelon we theorize that the amount and type of upper echelon experience serve as important symbols of a young firm s legitimacy to critical outsiders we introduce a typology of upper echelon experience that distinguishes between upper echelon upstream horizontal and downstream employment based affiliations and suggest that these different types of upper echelon affiliations allay different types of endorser concerns regarding firm legitimacy affecting the endorsement process further we theorize that the relationships between upper echelon experience and investment bank prestige will be moderated by technological uncertainty we test our assertions on a comprehensive sample of public and private biotechnology firms that were founded between 1961 and 1994 and that went public between 1979 and 1996 analyses of the five year career histories of the over 3 200 executives and directors that make up the upper echelons of these firms show that firms with upper echelons with affiliations with prominent downstream organizations i e pharmaceutical and or healthcare companies and with prominent horizontal organizations i e biotechnology companies are more likely to attract the endorsement of a prestigious investment bank we also find that the greater the range of upper echelon affiliations across the categories of upstream horizontal and downstream affiliations the more prestigious the firm s lead underwriter we also find that these latter results are moderated by technological uncertainty the present research has implications for the study of organizational legitimacy interorganizational endorsements and entrepreneurship

home country networks and foreign expansion evidence from the venture capital industry we propose that home country network advantages shape firms foreign expansion we argue that a social status advantage is transferable from one market to another as a signal of quality but that a

the conditional nature of embeddedness a study of borrowing by large u s firms 1973 1994 economic and organizational sociologists have increasingly demonstrated that the actions of individuals and firms are affected by the social networks within which they are embedded in recent years scholars have begun to recognize that the effects of these social networks may vary across populations or types of relations this article examines the extent to which the effects of interfirm networks on the behavior of firms are historically contingent focusing on the level of debt financing among approximately 140 large u s corporations over a 22 year period the authors show that the extent to which the firms use of debt was influenced by those with which they were tied through director interlocks declined over time the authors argue that this decline in the network effect reflected a shift in the institutional environment within which the firms operated and that it was driven by three processes the professionalization of the finance function within the firm the internalization of financial decision

preentry contacts and the generation of nascent networks in organizations this paper investigates the impact of individuals social ties at organizational entry on the formation of intraorganizational networks when individuals enter organizations with one or more preentry relationships in place i argue they form more extensive networks post entry than their untied counterparts however it is also suggested that under some conditions i e when quality is more certain the relationship between pre and postentry social structure is contingent on individuals quality attributes i test and find support for these hypotheses in a study of new business and law professionals the results indicate that individuals with an initial advantage in social ties form more extensive networks post entry than those without such an advantage and that when certainty about quality is high this effect depends on the quality attributes of the new entrants implications of this study for research on social networks resource accumulation and inequality are discussed

domestic alliance network to attract foreign partners evidence from international joint ventures in china partner selection is a critical issue in building international joint ventures ijvs we argue that foreign firms are more likely to select local firms with unique network structural advantages within a local alliance network we frame structural advantages as two network position traits centrality and brokerage specifically network centrality acts as a stronger network trait than brokerage in attracting foreign ijv partners however such a relationship may be moderated by foreign firms local experience and perceived capabilities we contend that when foreign firms have a high level of local market experience and perceived capabilities they may prefer a local broker over a centrally located local firm data on the domestic alliance network in china s electronics and information technology it industries largely support our hypotheses we conclude that as foreign investors become strategic insiders they may not only seek a local partner s capability attributes but also more critically pay attention to a local partner s domestic network

unbundling the structure of inertia resource versus routine rigidity i work to unbundle the structure of inertia into two distinct categories resource rigidity failure to change resource investment patterns and routine rigidity failure to change organizational p

dynamic inducements in r d investment market signals and network locations this research shows that alliance networks shape how firms respond to uncertainty reducing information generated outside a network product awards signal the potential commercial success of the awa

who pays the price of brokerage transferring constraint through price setting in the staffing sector this article analyzes how a broker s ability to affect prices and extract superior value from its position has economic consequences for the actors tied to it i argue that intermediaries may exercise partial control in price setting by transferring the price constraints imposed on them by the actors on one side of the market to those on the other side in so doing they generate unequal returns for the brokered parties who then receive different prices due to the nature of the tie between the broker and its other exchange partners i investigate this argument using a novel mix of quantitative and qualitative data gathered from an intermediary in the staffing sector the results show that the broker is able to transfer discounts offered to valued buyers clients on to the sellers workers matched with them instead of reducing its own margins as a result actors with the same resource endowments receive different prices depending on the relationships among other exchange partners in a given triadic ne

getting known by the company you keep publicizing the qualifications and former associations of skilled employees when product quality cannot be ascertained in advance of purchase producers must convince relevant audiences that they are worthy of consideration as quality players we propose that quality oriented producers will selectively publicize information about their skilled employees in anticipation of signaling benefits which include the accrual of visibility and the projection of quality based identities we validate our perspective on publicizing affiliation information by analyzing how a sample of australian wine producers publicized specific career information about their skilled employees i e their winemakers including the names of certain former employers of these individuals copyright 2009 oxford university press

toward an aspiration level theory of open innovation although open innovation has become increasingly established in the management literature comprehensive theoretical explanations of what drives firms to be open are sparse taking the perspective of the behavioral theory of the firm we conceive of open innovation as a form of nonlocal search arguing that firms will turn to open innovation when substantially under or over performing relative to their aspirations we further enquire how this relationship is moderated by firm specific innovation related resources human capital research and development investment and patents employing a representative survey of uk firms we find some evidence of moderation allowing us to present explanations of search through open innovation and contribute to the behavioral theory of the firm itself

charting the territory recombination as a source of uncertainty for potential entrants in this paper we conceptualize categories as regions of a cognitive map that structure the market and guide the investment decisions of potential entrants i e of new and established organizations we advance that as a category appears altered via incumbents acts of recombination potential entrants face market specific uncertainty and are discouraged to invest in that category these negative effects of recombination on market entries are however mitigated at increasing values of category status we test our arguments in the market for electronic music the analyses of product and organizational entries in music styles between 1978 and 2011 lend support to our arguments

the dynamics of organizational status this paper examines the growth and decline of organizational status it is argued that an organization s status is determined by two factors past performance outcomes and the status of the organization s affiliates the better the past performance outcomes and the higher the status of the affiliates the greater the organization s growth in status this basic proposition is tested in an examination of status changes among investment banks in the non investment grade market between 1981 and 1987 implications and extensions are discussed in the conclusion copyright 1996 by oxford university press

magnification and correction of the acolyte effect initial benefits and ex post settling up in nfl coaching careers what are the long term consequences of initially beneficial high reputation workplace ties under uncertainty acolytes i e subordinates with work connections to high reputation industry leaders

network composition collaborative ties and upgrading in emerging market firms lessons from the argentine autoparts sector what types of relational and institutional mechanisms shape knowledge flows and the upgrading capabilities of emerging market firms in the face of economic liberalization we analyze the argentine autoparts sector to distinguish the relative impact of different types of network relationships on a firm s process and product upgrading a few social ties to international assemblers appear to be most beneficial for local suppliers although they may be insufficient to compensate fully for the negative effect of being located in a lower tier supplier customer relationships that are part of regular disciplined discussions for product and process improvements appear to be especially beneficial for upgrading

the decline of social entrenchment social network cohesion and board responsiveness to shareholder activism shareholder activism through corporate governance proposals is a prominent avenue for investors to voice their concerns in corporate governance matters however shareholder proposals have an uneven effect on corporate governance this paper contributes to research on shareholder activism by joining social movement approaches to activism with network theoretic approaches to corporate governance the paper examines how firms position within cohesive sections of the board interlock network termed social entrenchment predicts 1 the likelihood of being targeted by activist investors and 2 firms responsiveness to proposal demands first a firm s position in the board network serves as a salient network prism attracting activists attention this is especially true for activist investors who lack other backchannel avenues for engagement or seek to use public reputational penalties as part of their activism strategy second the board network traditionally served as an important collective infrastruc

long lived private information and imperfect competition we develop a multi period auction model in which multiple privately informed agents strategically exploit their long lived information we show that such traders compete aggressively and cause most of their common private information to be revealed very rapidly in the limit as the interval between auctions approaches zero market depth becomes infinite and all private information is revealed immediately these results are in contrast to those of kyle 1985 in which the monopolistic informed trader causes his information to be incorporated into prices gradually and when the interval between auctions is vanishingly small market depth is constant over time fama 1970 defines a strong form efficient market as one in which security prices fully reflect all available information including both publicly and privately held information in a pioneering and influential article kyle 1985 develops a model in which a single privately informed trader with long lived information optimally exploits his monopoly power over time kyle s 1985 main results are i the informed trader trades in a gradual manner so that his information is incorporated into prices at a slow almost linear rate and ii when auctions are held continuously the depth of the market is constant over time however kyle s 1985 assumption of a single informed trader is strong in the sense that in actual financial markets it is reasonable to expect that at least a few players will have access to private information and will trade in the knowledge that they will face competition with other informed agents in the market 1 we develop a multi period auction model in which multiple strategic informed traders optimally exploit their long lived informational advantage we thus explore the restrictiveness of kyle s assumption of a single informed trader and also examine

the curvilinear relationships between structural embeddedness and productive efficiency an exploratory study abstract existing network studies pay much attention to the benefits of structural embeddedness however uzzi 1996 points out the marginal benefits of structural embeddedness may follow a pattern of diminishing returns using major customer disclosure data from compustat this study investigates the curvilinear relationships between multiple aspects of structural embeddedness and productive efficiency applying both wang and ho 2010 and chen and lin 2009 stochastic frontier models we confirm the diminishing returns of eigenvector and betweenness centralities with a partial support for interconnectedness implications from our findings can help decision makers better understand the effects of structural embeddedness and help devise network structural change strategies for productive efficiency

r d subsidies external collaborative breadth differential gains and the role of collaboration experience abstract external collaboration breadth is important for firms to acquire the knowledge needed to innovate in this paper we combine cross sectional and longitudinal data from the spanish panel of technological innovation survey pitec to examine the indirect impact of r d subsidies on firm external collaboration breadth we contribute to understanding of the indirect impacts of r d subsidies by first providing strong evidence of an economically significant average positive impact of r d subsidies on firm external collaboration breadth second our results advance understanding of the differential impacts of r d subsidies by revealing the vast heterogeneity of the impact at the firm level where approximately only half of treated firms experience a positive collaboration impact from r d subsidies while the remainder experience no impact or a negative effect finally we advance understanding of the characteristics explaining the differential impact of r d subsidies on external collaboration breadth by utilising the organisational learning literature to demonstrate the important role of firm collaboration experience

partners forever an empirical study of relational ties in two small firm clusters many researchers take as axiomatic the proposition that economic action in clusters is embedded in dense durable and trust based social networks it is suggested here that the bias towards high trust enduring relations obscures the competitive dynamics of networks even where co operation can be identified drawing attention to the competitive motives underlying the construction of social networks an investigation is made into the duration and brokering of dyadic relations in business owners advice networks the analysis of 668 dyadic ties in a population of 113 small business owners in two textile and clothing clusters in germany reveals considerable variation in the duration of social relations and the likelihood that they were formed through third party brokers many of whom were direct competitors creating more ephemeral links the findings suggest that marketless conceptions of social networks in clusters need to be balanced with a stronger concern for the role of competition in the social embe

flexible production in the auto sector industrial reorganization at ford mexico abstract ford mexico is pursuing a single philosophy of flexible production in its mexican plants but with markedly different results an analysis of three plants one a new assembly plant in the north another an established manufacturing plant in central mexico and the third a labor intensive maquiladora plant in the northern border region shows how the factors of labor relations local labor markets complexity of production and whether the plants are new or established affect the implantation of flexible production the resulting systems implanted do not correspond to the ideal lean production model

venture capitalists and cooperative start up commercialization strategy this paper examines the possible impact of venture capital vc backing on the commercialization direction of technology based start ups by asking to what extent if at all do vc funded start ups engage in cooperative commercialization strategies strategic alliances or technology licensing or both relative to a comparable set of start ups and with what consequences to address these questions i assemble a novel data set that matches firms receiving a federal research and development subsidy through the u s small business innovative research program to vc funded firms by observable characteristics in five technology intensive industries these data allow decoupling of cooperative activity resulting from start up development via the passage of calendar time from that due to association with vcs an analysis of the 696 start ups in the sample split by an external funding source suggests substantial boosts in both cooperative activity associated with vc backed firms and in the likelihood of an initial public offering

understanding global flows of venture capital human networks as the carrier wave of globalization industry participants and observers view venture capital as fundamentally a local business however recent data show an increasing share of us venture capital investments flowing overseas we suggest that cross border venture capital flows are associated with the formation of transnational technical communities ttcs groups of immigrants active in both home and host country technical networks our results highlight the role of human networks as a mechanism of industry globalization and support the view that ttcs are emerging economic actors in their own right

networks as the pipes and prisms of the market1 this article draws an analytical distinction between two types of market uncertainty egocentric which refers to a focal actor s uncertainty regarding the best way to convert a set of inputs to an output desired by a potential exchange partner and altercentric which denotes the uncertainty confronted by a focal actor s exchange partners regarding the quality of the output that the focal actor brings to the market given this distinction the article considers how the value of structural holes and market status vary with these two types of uncertainty the article proposes that the value of structural holes increases with egocentric uncertainty but not with altercentric uncertainty in contrast the value of status increases with altercentric uncertainty but declines with egocentric uncertainty thus actors with networks rich in structural holes should sort into markets or market segments that are high in egocentric uncertainty high status actors should sort into markets that are low in egocentric