equilibrium valuation of natural resources the purpose of this paper is to provide a theoretical investigation of equilibrium spot and futures price behavior in a nonrenewable commodity market the underlying commodity is nonrenewable in the sense that the reserve level of the commodity is expected to decline over time in the absence of successful discoveries of additional reserves i wish to understand how the nonrenewable nature of the commodity influences the intertemporal extraction of the commodity equilibrium spot price behavior and the prices of derivative assets traded on the nonrenewable commodity there is considerable disagreement among economists whether resources are exhaustible in the sense of resource constraints becoming binding on our society in the foreseeable future some economists have argued that natural resources are being depleted at

inventories stock outs and production smoothing if stock outs are ignored and if demand shocks are additive then optimal behaviour requires that the marginal cost of production mc be equated with the expected marginal revenue of increasing expected sales by one unit emr however with more general demand shocks and still ignoring stock outs the excess of mc over emr has the same sign as the covariance of the slope of the demand curve and the marginal valuation of inventory the equality of emr and mc is also broken by taking account of stock outs even if demand shocks are additive if there is a production lag then taking account of stock outs implies that optimal behaviour will be characterized by production smoothing even if the cost of production is linear two alternative definitions of production smoothing are presented and optimal behaviour in the presence of stock outs displays each type of smoothing it is a well known proposition that a firm producing a storable good under conditions of increasing marginal cost will tend to smooth the time profile of its production relative to the time profile of its sales the incentive to smooth production arises from the fact that the cost function is a convex function of the level of production for a given average level of production average costs can be reduced by reducing the variation in production of course if the cost function is linear in the level of production then this incentive to smooth production disappears however we will demonstrate in this paper that if the possibility of stock outs is explicitly incorporated into the firm s dynamic optimization problem i e if we impose a non negativity constraint on inventories and if there is a lag in production then optimal behaviour can be characterized by production smoothing even if the cost function is linear

production lags and price behaviour this paper explores the implications of the production lag for the firm s decisions the authors establish a significant relationship between price behavior and the length of the production lag they show that specific results in the literature are crucially dependent upon the assumption about the production lag by allowing the production time to exceed the decision period the basic framework of the earlier price inventory models is significantly extended the model thus incorporates finished goods inventories as well as goods in process inventories copyright 1992 by the london school of economics and political science

understanding the inventory cycle abstract careful examination of aggregate data from the u s and other oecd countries reveals that production and inventory behavior exhibit paradoxical features 1 inventory investment is strongly countercyclical at very high frequencies e g 2 3 quarters per cycle it is procyclical only at relatively low cyclical frequencies such as the business cycle frequencies e g 8 40 quarters per cycle 2 production is less volatile than sales around the high frequencies it is more volatile than sales only around business cycle or lower frequencies 3 unlike capital investment or gdp the bulk of the variance of inventory investment is concentrated around high frequencies rather than around business cycle frequencies these features of production and inventory behavior at the low and high frequencies provide a litmus test for inventory theories this paper shows that the stockout avoidance theory kahn j 1987 inventories and the volatility of production american economic review 77 667 679 has much better potential than other competing theories for explaining the seemingly paradoxical features of inventory fluctuations observed at different cyclical frequencies my analysis suggests that demand shocks are the main source of the business cycle

inventory and price behaviour the point of this paper is that inventory adjustment attenuates downward pressure on price when realized demand is low because firms accumulate inventory hold overs speculating that demand will be stronger in the succeeding period when realized demand is high the firm draws down its inventories until a stock out occurs and price rises to clear the market

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

interest rate demand and input price uncertainty and the value of firms abstract in an infinite horizon inventory model an increase in interest rate uncertainty increases the value of a firm which has positive value an increase in input price uncertainty increases the value of the firm if decisions are made before the realization of demand uncertainty increased uncertainty about an additive demand shock reduces the value of a price setting firm with a concave value function and leaves unchanged or increases the value of a quantity setting firm if decisions are made after the realization of demand uncertainty an increase in the uncertainty of an additive demand shock increases the value of the firm

gender differences in competitiveness and risk taking comparing children in colombia and sweden we explore gender differences in preferences for competition and risk among children aged 912 in colombia and sweden two countries differing in gender equality according to macro indices we include four types of tasks that vary in gender stereotyping when looking at competitiveness running skipping rope math and word search we find that boys and girls are equally competitive in all tasks and all measures in colombia unlike the consistent results in colombia the results in sweden are mixed with some indication of girls being more competitive than boys in some tasks in terms of performance change whereas boys are more likely to choose to compete in general boys in both countries are more risk taking than girls with a smaller gender gap in sweden

of age sex and money insights from corporate officer compensation on the wage inequality between genders this paper shows that the gender and age of the wage setter are crucial determinants of the disparity in wages between sexes we document our findings using a data set on compensation of corporate officers that is uniquely suited for this analysis because officer wages are set by chief executive officers ceos we show that ceos pay officers of the opposite gender less than officers of their own gender even when controlling for job characteristics older and male ceos exhibit the greatest propensity to differentiate on the basis of sex female officers receive smaller raises if the firm is headed by a man our results suggest that ceo gender and age are economically more important determinants of officer compensation than are firm stock performance stock volatility or return on assets this paper was accepted by uri gneezy behavioral economics

do women shy away from competition do men compete too much we examine whether men and women of the same ability differ in their selection into a competitive environment participants in a laboratory experiment solve a real task first under a noncompetitive piece rate and then a competitive tournament incentive scheme although there are no gender differences in performance men select the tournament twice as much as women when choosing their compensation scheme for the next performance while 73 percent of the men select the tournament only 35 percent of the women make this choice this gender gap in tournament entry is not explained by performance and factors such as risk and feedback aversion only playa negligible role instead the tournament entry gap is driven by men being more overconfident and by gender differences in preferences for performing in a competition the result is that women shy away from competition and men embrace it

the cyclical behavior of strategic inventories this paper presents a model in which inventories are used by a duopoly to deter deviations from an implicitly collusive arrangement higher inventories allow firms to punish cheaters more strongly and can thus help to maintain collusion we show that when demand is high the incentive to deviate increases so that increases in inventories may be optimal for the duopoly this rationalizes the observed positive correlation between inventories and sales in our empirical section we show that as our model predicts this correlation is more important in concentrated industries we also provide several examples where inventories have been a factor in cartel behavior

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

exploration for petroleum and the inventory of proven reserves abstract this paper addresses the following question does the number of proven petroleum reserves on the norwegian continental shelf justify the current level of exploratory effort the paper argues that this effort should be curtailed for some time to come it also provides a framework within which the recurrent problem of selecting an appropriate level of exploratory effort can be analysed

gender differences in motivational crowding out of work performance this paper shows that prior financial incentives induce a crowding out effect when incentives are discontinued in our real effort experiment workers receive a piece rate before monetary incentives are substituted by a one time payment in this case workers performance significantly drops when receiving the one time payment the effect is driven by a fraction of men who reduce effort substantially whereas women constantly perform well we find that this motivational crowding out effect disappears when men do not have prior experience of a piece rate in a series of control treatments we discard several alternative explanations besides motivational crowding out jel c91 j16 m54

inventories and sticky prices note in a recent contribution to this review alan blinder provides an interesting analysis of the relationship between optimal inventory decisions and the process of price adjustment arguing that inventory permits separation of production and sale decisions and allows the firm greater flexibility in responding to anticipated demand disturbances blinder shows that the responsiveness of relative prices depends critically upon the cost of storage and the temporal structure of the demand shocks few economists would fault the intuitive substance of blinder s basic proposition and the proposition is justified with characteristic precision the analysis however is considerably less general than blinder maintains the formal argument of his paper relies upon a simple model of a monopolist capable of backlogging orders and storing unsold goods as the model is constructed order backlogs assume a role of fundamental importance in any stationary equilibrium this feature of the model vitiates blinder s extension of his result to situations in which order backlogs are prohibited the basic monopoly model developed in sections i and ii of blinder s paper places no restriction upon the sign of inventory negative inventory is interpreted as net unfilled orders while no distinction is drawn between reductions in gross inventory and additions to the order backlog as a result the cost of holding inventory is symmetric around an arbitrary minimum point the only role of inventory is to permit the time paths of production and sales to differ gross inventory allows production to antedate sales while order backlogs generate revenue before production costs are borne under these circumstances if future costs and revenues are discounted it is natural to expect any stationary equilibrium level of net inventory to be negative this can be shown to be true of blinder s model it is useful to distinguish in general between the nonstochastic stationary level of inventory n and the stochastic stationary level n the former is realized when the current expected demand disturbance eo is zero and production equals sales the latter which differs from customary usage represents the level of inventory expected to prevail when adjustment to the current nonzero expected demand disturbance is complete if the demand disturbance is not a random walk so that p 1 in blinder s 5 the two equilibria coincide relatively little attention is devoted to either stationary solution because blinder s main interest is in the optimal current solution level n1 the stochastic stationary level is crucially important however since it represents the goal toward which the current choice must provide an optimal first step to verify that both nand n are negative whenever production is strictly positive note that blinder s necessary condition 7 with the coefficient cl set equal to zero together with the definition of xa as the deviation of the shadow value of inventory q from its nonstochastic stationary value q implies

can gender parity break the glass ceiling evidence from a repeated randomized experiment this paper studies whether the gender composition of recruiting committees matters we make use of the unique evidence provided by spanish public examinations where the allocation of candidates to evaluating committees is random we analyse how the chances of success of 150 000 female and male candidates for positions in the four main corps of the spanish judiciary from 1987 to 2007 were affected by the gender composition of their evaluation committee we find that a female male candidate is significantly less likely to be hired whenever she he is randomly assigned to a committee where the share of female male evaluators is relatively greater evidence from multiple choice tests suggests that this is due to the fact that female majority committees overestimate the quality of male candidates

the effect of organizational context on entrepreneurial strategies in franchising abstract franchising systems play a vital role in the creation of new jobs and economic development although the role of the franchisor as entrepreneur is generally assumed there has been limited research on the conduct of entrepreneurial activities in the franchising system as a whole in particular researchers and practitioners need to better understand the influences of organizational context on entrepreneurial activities system wide the research reported in this article examines the influences of the organizational context of the franchisor on the entrepreneurial strategies of franchisors their innovation efforts and franchisor support of entrepreneurial activities by franchisees specifically this study examines how the organizational context variables of size age of the franchise its growth rate both absolute and relative and time in franchising affect franchisee perceptions of entrepreneurial strategies of their parent franchisor their innovation efforts and franchisor managerial support for entrepreneurial activity and innovation by the franchisee franchisee perceptions of their parent franchisors entrepreneurial strategies were assessed with respect to four dimensions identified in previous research as central to an entrepreneurial orientation low concern for stability willingness to take risks aggressiveness in competition and proactiveness in seeking new opportunities innovation by franchisors was measured with respect to introduction of new products and techniques drawing on research that emphasizes the importance of instituting special organizational devices and rewards and recognition systems for promoting entrepreneurial activity franchisor support for franchisee entrepreneurial activity and innovation e g the development of new products and services new techniques to improve customer service was measured by the importance franchisees assigned to the use of a franchise council the recognition of new ideas at the annual meeting of the franchise system and the presence at franchisor headquarters of a champion for innovation consistent with other studies examining the influence of organizational context it was hypothesized that organizational size and age would be negatively related to franchisee assessments of entrepreneurial strategies the introduction of new products and techniques and franchisor managerial support for franchisee entrepreneurial activity and innovation in contrast rapid growth was hypothesized to be positively associated with entrepreneurial strategies and support for franchisee innovation no hypotheses were proposed with respect to time in franchising results of the study showed as hypothesized that franchisor size was associated with a concern for stability and strategies that were risk averse cooperative and reactive rather than proactive however size was positively associated with the frequent introduction of new products and also positively related to franchisor support for franchisee innovation contrary to expectations age was positively associated with entrepreneurial strategies including a low concern for stability and an aggressive style of competition in addition age was positively associated with the introduction of both new products and new techniques relative growth rather than an absolute rate of growth was associated with all of the entrepreneurial strategies except risk taking as well as with the frequent introduction of new products although no hypotheses were proposed for time in franchising the findings show that it is associated with a greater concern for stability as well as the infrequent introduction of new products and techniques the findings from this study suggest that franchisors need to institute measures to counteract the potentially deleterious influences of franchise system size on the entrepreneurial orientation within their franchising systems it also suggests the resources of a large organization need to be combined with the flexibility of smaller units for competitive advantage entrepreneurial activity by franchisors and franchisees implies a partnership in adapting to the environment and can provide a competitive advantage the challenge for franchisors will be managing new ideas from the field and adapting to a competitive environment while at the same time preserving the integrity of the franchising system

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

do cognitive test scores explain higher u s wage inequality using microdata from the 1994 1998 international adult literacy survey for nine countries we examine the role of cognitive skills in explaining higher wage inequality in the united states we find that while the greater dispersion of cognitive test scores in the united states plays a part in explaining higher u s wage inequality higher labor market prices i e higher returns to measured human capital and cognitive performance and greater residual inequality still play important roles and are on average quantitatively considerably more important than differences in the distribution of test scores in explaining higher u s wage inequality

competitive strategies for two firms with asymmetric production cost structures we model joint production marketing strategies for two firms with asymmetric production cost structures in competition the first firm called the production smoother faces a convex production cost and a linear inventory holding cost the second firm called the order taker faces a linear production cost and holds no inventory each firm is assumed to vary continuously over time both its production rate and its price in view of an unstable surge pattern of demand the underlying theoretical motivation is to investigate the temporal nature of the equilibrium policies of two competing firms one operating at or near capacity the production smoother and one operating significantly below capacity the order taker we characterize and compare the equilibrium strategies of the two competing firms among our results we show that if the duopolistic production smoother finds it optimal to hold inventory then he will begin the season by building up inventory continue by drawing down inventory until i

economics and identity this paper considers how identity a person s sense of self affects economic outcomes we incorporate the psychology and sociology of identity into an economic model of behavior in the utility function we propose identity is associated with different social categories and how people in these categories should behave we then construct a simple game theoretic model showing how identity can affect individual interactions the paper adapts these models to gender discrimination in the workplace the economics of poverty and social exclusion and the household division of labor in each case the inclusion of identity substantively changes conclusions of previous economic analysis

ceo compensation in financially distressed firms an empirical analysis this paper studies senior management compensation policy in 77 publicly traded firms that filed for bankruptcy or privately restructured their debt during 1981 to 1987 almost one third of all ceos are replaced and those who keep their jobs often experience large salary and bonus reductions newly appointed ceos with ties to previous management are typically paid 35 less than the ceos they replace in contrast outside replacement ceos are typically paid 36 more than their predecessors and are often compensated with stock options on average ceo wealth is significantly related to shareholder wealth after firms renegotiate their debt contracts however managers compensation is sometimes explicitly tied to the value of creditors claims

gender differences in experimental wage negotiations i introduction gender wage gaps have been the subject of extensive research in labor economics although this gap has narrowed in the last decades blau and kahn 2003 report that women still receive lower wages than men in many countries traditionally differences in the accumulation of human capital and discrimination are seen as the main factors responsible for this wage gap bertrand 2011 however even after controlling for various measures of human capital the wages of men and women differ significantly and this wage gap persists over time recently alternative explanations have been analyzed more closely such as gender differences in preferences croson and gneezy 2009 risk attitudes eckel and grossman 2008 and responses to competitive situations gneezy leonard and list 2009 in many labor relationships wages are determined by bilateral bargaining hence another source of the persistent gender wage gap could be differences in bargaining behavior between women and men babcock and laschever 2003 find that 57 of male graduate business students bargain over their starting salaries while only 7 of women do so consequently male starting salaries are 7 6 higher than those obtained by women investigating the salary negotiating behaviors and starting salary outcomes of graduating master of business administration mba students gerhart and rynes 1991 find that women obtain lower salary increments when negotiating than men wood et al 1993 report significant male female pay differences of law school graduates both 1 year and 15 years after graduation apart from wages team production hiring and promotion decisions are further domains where significant gender differences emerge sutter et al 2009 at least some of these differences might also be related to differences in the bargaining behavior of men and women this paper studies whether men and women behave differently in wage negotiations 1 the analysis is based on a laboratory experiment with face to face alternating offers wage bargaining allowing experimental subjects to see each other in face to face negotiations and thus to easily identify their bargaining partner s gender allows us to analyze gender differences our results suggest that gender and gender pairing play an important role in bargaining processes in our experimental wage negotiations male employees are able to negotiate higher wages than female employees moreover male employers pay lower wages to female employees than female employers pay to male employees we find that men acting as employees achieve more favorable outcomes than female employees because they already demand a larger share for themselves when making their first offers when acting as employers we do not find behavioral differences between men and women overall these results provide further evidence that part of the gender wage gap can be attributed to behavioral differences in wage negotiations the paper is organized as follows section ii provides a brief review of the literature on gender differences in bargaining experiments in section iii we present our experimental design section iv discusses the effects of gender and gender pairing in the bargaining process section v concludes ii gender differences and bargaining a number of studies have examined differences in the behavior of women and men in bargaining situations in a controlled field study ayres and siegelman 1995 analyze the bargaining outcomes of men and women negotiating the price of a new car they report that car sellers offer male buyers lower prices than female buyers ayres 1991 finds that women obtain worse bargaining outcomes than men negotiating with a female seller save soderbergh 2009 finds that female university graduates propose lower wage bids than male university graduates and also receive lower wage offers than male students conducting field experiments in lima peru castillo et al

managerial attributes and executive compensation we study the role of firm and manager specific heterogeneities in executive compensation we decompose the variation in executive compensation and find that time invariant firm and especially manager fixed effects explain a majority of the variation in executive pay we then show that in many settings it is important to include fixed effects to mitigate potential omitted variable bias furthermore we find that compensation fixed effects are significantly correlated with management styles i e manager fixed effects in corporate policies finally the method used in the article has a number of potential applications in financial economics the author 2011 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

optimal pricing use and exploration of uncertain natural resource stocks abstract units of natural resources to be called mines are assumed distributed over an unexplored territory according to a poisson process in space at any moment total reserves and unexplored land are given society can determine the rate of consumption and the rate of exploration reserves are drawn down by consumption and increased by discoveries made during exploration the amount of unexplored land is decreased by exploration at any moment the payoff of society is a concave function of consumption less a linear function of exploration with future payoffs discounted optimal policies are considered and in particular it is shown for a large amount of unexplored land the shadow prices of reserves and of unexplored land move in random cycles but show only a slight upward tread thereby casting some light on the failure of mineral prices to rise at the market rate of interest

corporate venturing obstacles sources and solutions abstract there is a fundamental conflict between new venture and mature company management requirements as an enterprise evolves the focus for success shifts from sensing and seizing opportunity to protecting and utilizing the resources that have been acquired in surviving companies management practices change to accommodate this changing need the conflict arises when the mature company attempts to initiate internal new venture activities application of mature company practices to management of new corporate ventures is not only inappropriate but breeds failure to succeed with new ventures top corporate management must first understand the inherent differences in management needs for new ventures versus the mature organization and must then adapt a pluralistic management style that accommodates both needs this paper examines the rationale for ten establishment practices and the adverse effects they can have on new ventures from this analysis alternative entrepreneurial management practices are recommended the ten management practices examined are 1 enforce procedures to avoid mistakes 2 manage resources for efficiency and roi 3 control against plan 4 plan long term 5 manage functionally 6 avoid moves that risk the base business 7 protect the base business at all costs 8 judge new steps from prior experience 9 compensate uniformly and 10 promote compatible individuals some of the adverse effects of these practices include blockage of innovative solutions loss of competitive lead time entrepreneur failures high venture failure costs missed opportunities fluctuating venture strategies misread markets reduced motivation to take risks and loss of innovative employees recommended entrepreneurial management practices include restricting standard procedures to those appropriate for the venture controlling ventures by milestone planning rather than calendar budgets being more responsive to market feedback in adjusting plans focusing on critical issues for early determination of venture viability assessing and choosing affordable risks and making venturing a mainstream function of the business

personal values as a catalyst for corporate social entrepreneurship the literature acknowledges a distinction between immoral amoral and moral management this paper makes a case for the employee at any level as a moral agent even though the paper begins by highlighting a body of evidence which suggests that individual moral agency is sacrificed at work and is compromised in deference to other pressures this leads to a discussion about the notion of discretion and an examination of a separate contrary body of literature which indicates that some individuals in corporations may use their discretion to behave in a socially entrepreneurial manner my underlying assumption is that csr isn t solely driven by economics and that it may also be championed as a result of a personal morality inspired by employees own socially oriented personal values a conceptual framework is put forward and it is suggested that individuals may be categorized as active or frustrated corporate social entrepreneurs conformists or apathetics distinguished by their individualistic or collectivist personal values in a discussion of the nature of values this paper highlights how values may act as drivers of our behavior and pays particular attention to the values of the entrepreneur thereby linking the existing debate on moral agency with the field of corporate social responsibility

a system dynamics perspective of corporate entrepreneurship models of corporate entrepreneurship have continued to advance in their ability to delineate the elements and relationships that comprise entrepreneurial activities within existing organizations however prior research has been limited in introducing the complexity present in these activities in particular feedback from discontinued and implemented opportunities has rarely been included and or integrated with individual organizational and strategic variables in existing corporate entrepreneurship frameworks we propose a system dynamics perspective to explain how entrepreneurship occurs within organizations to accomplish this we employ a framework that includes the four main activities of opportunity recognition assessment legitimation and implementation feedback loops are used to show the connection to strategic assessment and entrepreneurial renewal that portray corporate entrepreneurship as an integration of entrepreneurial and strategic efforts this model integrates a variety of perspectives that have been utilized in the literature and allows for activation at any point in the system dynamics process in this paper we provide theoretical background for our model discuss our contributions to the literature and suggest how scholars may implement and enhance this framework in future research efforts

female hires and the success of start up firms in this paper we investigate the relationship between females among the first hires of start up companies and business success our results show that firms with female first hires have a higher share of female workers at the end of the first year after entry further we find that firms with female first hires are more successful and stay longer in the market we conclude that our results support the hypothesis that gender diversity in leading positions is an advantage for start up firms this abstract was borrowed from another version of this item

updating estimates of male female salary differentials in the academic labor market abstract i estimate the male female salary gap and salary discrimination for faculty between the years 1968 and 1989 estimates of both these quantities fell substantially in the 1970 s with no further improvement in 1984 and 1989

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

performance in competitive environments gender differences even though the provision of equal opportunities for men and women has been a priority in many countries large gender differences prevail in competitive high ranking positions suggested explanations include discrimination and differences in preferences and human capital in this paper we present experimental evidence in support of an additional factor women may be less effective than men in competitive environments even if they are able to perform similarly in non competitive environments in a laboratory experiment we observe as we increase the competitiveness of the environment a significant increase in performance for men but not for women this results in a significant gender gap in performance in tournaments while there is no gap when participants are paid according to piece rate this effect is stronger when women have to compete against men than in single sex competitive environments this suggests that women may be able to perform in competitive environments per se

the impact of gender composition on team performance and decision making evidence from the field we investigate whether the gender composition of teams affects their economic performance we study a large business game played in groups of three in which each group takes the role of a general manager there are two parallel competitions one involving undergraduates and the other involving mba students our analysis shows that teams formed by three women are significantly outperformed by all other gender combinations both at the undergraduate and mba levels looking across the performance distribution we find that for undergraduates three women teams are outperformed throughout but by as much as 0 47 of a standard deviation of the mean at the bottom and by only 0 09 at the top for mba students at the top the best performing group is two men and one woman the differences in performance are explained by differences in decision making we observe that three women teams are less aggressive in their pricing strategies invest less in research and development and invest more in social sustainability initiatives than does any other gender combination this paper was accepted by brad barber teck ho and terrance odean special issue editors

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

technology strategy governance structure and interdivisional coordination abstract this paper studies how various organizational forms compare in their capacities to solve coordination problems created by technological interdependence between firms divisions i contrast the organizational mechanisms used by two firms ibm and general motors to address these problems while it is widely recognized that centralization distorts incentives facing division managers this paper highlights its benefits when there are large potential gains from agreement on technological standards the examples show how a centralized governance structure supported by lower powered incentives facilitates interdivisional coordination this suggests a refinement of the theory of organizational form based on how firms resolve the tensions between strategic planning and the measurement of organizational units performances

the dynamics of convenience and the brazilian soybean boom u s and brazilian soybeans are harvested on an alternating semiannual cycle that generates predictable dynamic behavior in the soybean futures market because corn and soybeans are storage substitutes their physical storage costs move together and can be isolated separately from crop specific marginal convenience yields along the futures price profile the kaldor working convenience yield hypothesis is tested for the international soybean market and storage risk is measured

financing constraints and inventories abstract this paper investigates the impact of financing constraints on firms inventory and cash management in particular it examines the extent to which the presence of such constraints may account for certain empirical regularities these include e g the excess variance of production vis a vis that of sales as well as the counter cyclicality and persistence of the inventory sales ratio we model the intertemporal decision making on production cash retention and dividends of a firm that is exposed to stochastic demand shocks in every period and faces constrained access to external sources of finance it is found that the presence of financing constraints can explain the excess variance of production in a model which otherwise would not deliver this result moreover as long as demand is positively serially correlated they also contribute to the counter cyclicality and persistence of the inventory sales ratio the paper suggests that financing constraints should not be discarded as a factor driving the cyclical behaviour of inventories