an economic theory of self control the concept of self control is incorporated in a theory of individual intertemporal choice by modeling the individual as an organization the individual at a point in time is assumed to be both a farsighted planner and a myopic doer the resulting conflict is seen to be fundamentally similar to the agency conflict between the owners and managers of a firm both individuals and firms use the same techniques to mitigate the problems which the conflicts create this paper stresses the implications of this agency model and discusses as applications the effect of pensions on saving saving and the timing of income flows and individual discount rates

ownership concentration and firm performance in emerging markets a meta analysis the literature concerned with relations between ownership concentration and corporate performance in emerging markets presents conflicting theoretical predications and inconclusive empirical results we use meta analytical techniques to integrate the diverse empirical findings and investigate factors contribute to the inconsistencies in the empirical evidence using 419 correlations collected from 42 primary studies of listed corporations in 18 emerging markets heterogeneity tests show that only a small proportion of the variation in reported ownership concentration performance relations can be attributed to sampling error our meta regressions reveal how population differences researchers modeling choices and inadequate treatment of endogeneity explain a large portion of the true heterogeneity after adjusting for these effects we find ownership concentration has negative relation with firm performance across countries our results emphasize the importance of model specification and methods of addressing endogeneity and support further comparative study of the ownership concentration corporate performance relation between countries with seemingly similar corporate governance environments

does incrementalism stem from political consensus or from institutional gridlock theory wildavsky 1992 indicated that consensual politics lead to incremental budget results and that dissensual politics result in large and rapid budget changes yet it is also possible that dissensual politics could result in policy gridlock with budgets changing very little hypotheses by associating increased dissensus with divided governments and by measuring the long term trend in budget volatility we can test 1 whether the trend is toward more or less incremental budgeting 2 whether divided government increases or decreases budget volatility and thus infer 3 whether incremental budget results stem from political consensus or institutional gridlock methods we use ols regression to study the intersextile ranges of annual percentage changes in budget authority for the domestic subfunctions of the budget of the united states government from fiscal year 1947 through 1995 a model including the exponential decay of this robust measure of budget variability and a dummy variable for years of divided government is estimated we then add two additional measures of dissensus percentage of bills vetoed by the president and the polarization of the congressional parties based on the divergence in their respective ada scores a variety of alternative hypotheses are also tested results variability in relative changes in national government spending is trending downward and divided government increases budget volatility neither additional measure is independently related to volatility we infer that volatility thus indicates dissensus and that budgeting was more volatile and probably less consensual in the past than in the supposedly rancorous present

agent based computational transaction cost economics this article explores the use of agent based computational economics ace for modelling the development of transactions between firms transaction cost economics neglects learning and the development of trust ignores the complexity of multiple agents and assumes rather than investigates the efficiency of outcomes efficiency here refers to minimum cost or maximum profit we model how co operation and trust emerge and shift adaptively as relations evolve in a context of multiple interacting agents this may open up a new area of application for the ace methodology a simulation model is developed in which agents make and break transaction relations on the basis of preferences based on trust and potential profit profit is a function of product differentiation specificity of assets economy of scale and learning by doing in ongoing relations agents adapt their trust in a partner as a function of his loyalty exhibited by his continuation of a relation they also adapt the weight they attach to trust on the basis of realized profit the model enables an assessment of the efficiency of outcomes relative to the optimum as a function of trust and market conditions we conduct a few experiments to illustrate this application of ace

heuristic learning and the discovery of specialization and exchange abstract i develop and calibrate an agent based model of boundedly rational adaptive agents in a two good production and exchange economy to replicate human subject outcomes in the same eight person experimental economy to test agents ability to capture human behavior i extend the model and use its output to make predictions about a second experimental environment in which the group of eight agents is slowly constructed by merging smaller groups this environment improves human subject performance in the specialization and exchange task and commensurate improvement emerges for some parameterizations of the agent based model this iterative process yields incremental improvement of decision level theories about economic discovery

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

the carnegie conjecture some empirical evidence this paper examines tax return generated data on the labor force behavior of people before and after they receive inheritances the results are consistent with andrew carnegie s century old assertion that large inheritances decrease a person s labor force participation for example a single person who receives an inheritance of about 150 000 is roughly four times more likely to leave the labor force than a person with an inheritance below 25 000 additional albeit weaker evidence suggests that large inheritances depress labor supply even when participation is unaltered warren kendall heir to an insurance company fortune says he s worth about 5 million and has an income of about oh 300 and some thousand a year h e has never held a job or wanted to going down to sea in cruise ships is his full time pursuit he estimates that he has taken about 250 cruises over the past couple of decades spending at least 50 percent to 70 percent of the year afloat morgenthaler 1991 p al

agency relationships in family firms theory and evidence does owner management necessarily eliminate the agency costs of ownership drawing on agency literature and on the economic theory of the household we argue that private ownership and owner management expose privately held owner managed firms to agency threats ignored by jensen s and meckling s 1976 agency model private ownership and owner management not only reduce the effectiveness of external control mechanisms they also expose firms to a self control problem created by incentives that cause owners to take actions which harm themselves as well as those around them jensen 1994 p 43 thus shareholders have incentive to invest resources in curbing both managerialand owner opportunism we extend this thesis to the domain of the family firm after developing hypotheses which describe how family dynamics and specifically altruism exacerbate agency problems experienced by these privately held owner managed firms we use data obtained from a large scale survey of family businesses to field test our hypotheses and find evidence which suggests support for our proposed theory finally we discuss the implications of our theory for research on family and other types of privately held owner managed firms

impact of ownership on the international involvement of smes this paper analyses the relationship between the internationalisation strategies of smes and types of ownership different types of ownership affect firms and this in turn will influence the internationalisation strategy adopted using a sample of spanish smes our results show that internationalisation is negatively related to family ownership and positively related to corporate ownership we have also observed that the presence of a corporate blockholder in family firms encourages internationalisation these results support the idea that ownership type influences the decision to internationalise

complexity and the character of stock returns empirical evidence and a model of asset prices based on complex investor learning empirical evidence on the distributional characteristics of common stock returns indicates 1 a power law tail index close to three describes the behavior of the positive tail of the survivor function of returns pr r x x a reflection of fat tails 2 general linear and nonlinear dependencies exist in the time series of returns 3 the time series return process is characterized by short run dependence short memory in both returns as well as their volatility the latter usually characterized in the form of autoregressive conditional heteroskedasticity and 4 the time series return process probably does not exhibit long memory but the squared returns process does exhibit long memory we propose a model of complex self referential learning and reasoning amongst economic agents that jointly produces security returns consistent with these general observed facts and which are supported here by empirical results presented for a benchmark sample of 50 stocks traded on the new york stock exchange the market we postulate is populated by traders who reason inductively while compressing information into a few fuzzy notions that they can in turn process and analyze with fuzzy logic we analyze the implications of such behavior for the returns on risky securities within the context of an artificial stock market model dynamic simulation experiments of the market are conducted from which market clearing prices emerge allowing us to then compute realized returns we test the effects of varying values of the parameters of the model on the character of the simulated returns the results indicate that the model proposed in this paper can jointly account for the presence of a power law characterization of the positive tail of the survivor function of returns with exponent on the order of three for autoregressive conditional heteroskedasticity for long memory in volatility and for general nonlinear dependencies in returns

willingness to pay for car safety evidence from sweden this study estimates a marginal willingness to pay wtp function for a road mortality risk reduction observed marginal wtp from the swedish car market is used and found to be positively correlated with the baseline risk of the cars no statistically significant relationships between examined owner attributes e g wealth and background risk and marginal wtp are found when comparing the estimated monetary value of a non marginal risk reduction derived from the integral of the marginal wtp function with an estimate based on marginal wtp we find in line with expectations that the difference between the estimates is negligible for smaller risk reductions and small 4 10 also for relatively large risk reductions

equilibrium and reinforcement learning in private information games an experimental study abstract this paper examines the abilities of standard game theoretic solution concepts static nash equilibrium and a simple model of individual learning to describe subject behavior in an experiment involving private information games with mixed strategy nash equilibrium outcomes the experimental data are compared in several ways with the predictions of static nash equilibrium and the quite different predictions of the learning model which is based on the models of roth and erev 1995 games and economic behavior special issue nobel symposium vol 8 pp 164 212 nash equilibrium does not adequately describe subject behavior whereas the learning model performs well in describing aspects of the evolution in behavior over time

the electoral budget cycle on municipal waste collection expenditure abstractthis article analyses the determinants of municipal waste collection expenditure specifically the effects of electoral cycles on municipal waste collection expenditure we use a database with information on spanish municipalities with more than 1000 inhabitants for the period 2002 2011 our results reveal that incumbents adopt an opportunistic behaviour increasing spending on waste in the preelection year and reducing it in the election and post election years therefore we confirm an electoral budget cycle on waste collection expenditures in spain additionally we find that the levels of income unemployment and upper level governments transfers have a positive impact on waste collection spending finally population density level of urbanization average age of the population of the municipality and less fragmented governments negatively influence waste collection spending

learning by imitation abstract this paper introduces a learning algorithm that allows for imitation in recursive dynamic games the kiyotaki wright model of money is a well known example of such decision environments in this context learning by experience has been studied before here we introduce imitation as an additional channel for learning in numerical simulations we observe that the presence of imitation either speeds up social convergence to the theoretical markov nash equilibrium or leads every agent of the same type to the same mode of suboptimal behavior we observe an increase in the probability of convergence to equilibrium as the incentives for optimal play become more pronounced

filling or abusing the institutional void ownership and management control of public family businesses in an emerging market despite increased attention given to family firms in the theory of organization and management the value of family governance in emerging markets is not clearly understood we draw insights from agency and institutional economics perspectives to address the debate on whether family governance fills or abuses the void left by weaker market and legal institutions we propose a dual focus on the pattern of family control and weak institutions to reconcile these opposed assessments we analyze how various combinations of family control over ownership strategy and operations yield different benefits and costs for the operational performance of firms in the absence of strong market and legal institutions the uneven development of market institutions across industries and the impact of independent directors reinforce the importance of separating different patterns of family control we find support for our hypotheses when tested on a data set consisting of all publicly listed firms in taiwan between 1996 and 2005 our study contributes to a deeper understanding of family businesses in emerging markets highlights the importance of weak institutions in shaping relative agency costs and illuminates the differential effects of independent directors

the entrepreneur s search for capital abstract the popular media have been inundated with stories of the spectacular success of start up companies whose very existence let alone their meteoric growth would not have been possible without the infusion of venture capital by comparison there is a dearth of scientific research on the topic of venture capital in this article we take a systematic look at entrepreneurs in search of risk capital this inquiry is based upon five data bases including surveys of venture capitalists and entrepreneurs we have tracked 193 ventures which were denied venture capital surveyed 179 new high technology companies in northern california and reviewed the dun bradstreet credit reports of 145 new ventures in california in sic codes related to the high tech sector with follow up interviews of 86 of these 145 start ups

family firms and r d behavior new evidence from a large scale survey abstract this paper analyzes how founders and their families influence r d intensity information on r d comes from a large scale bi annual survey among listed german firms we find that r d intensity is higher in firms that are actively managed by the family the impact of family control via voting rights is negative but mostly not significant while this negative family control effect is in line with hitherto existing literature the positive impact of family management is surprising indeed this positive effect disappears if we follow previous research and use r d information from financial statements we show that this puzzling result is related to corporate opacity opaque family managed firms report too conservative r d expenditures especially if they face financial constraints this leads to an under estimation of r d intensity in these firms if accounting figures are used

divided government fiscal institutions and budget deficits evidence from the states does partisan control of american state government have systematic effects on state spending and taxing levels does divided control affect the government s ability to make hard decisions do institutional rules like legal deficit carryover restrictions matter using a formal model of fiscal policy to guide empirical analysis of data covering the american states from 1968 to 1987 we conclude that 1 aggregate state budget totals are driven by different factors under democrats and republicans the net result being that democrats target spending and taxes to higher shares of state level personal income 2 divided government is less able to react to revenue shocks that lead to budget deficits particularly where different parties control each chamber of the legislature and 3 unified party governments with restricted ability to carry deficits into the next fiscal year outside the south have sharper reactions to negative revenue shocks than those without restrictions

the role of family ownership in international entrepreneurship exploring nonlinear effects empirical research on international entrepreneurship is growing but results on the role of family ownership in this phenomenon are inconsistent we believe these inconsistencies owe to prior researchers having not yet investigated nonlinear relationships drawing on opposing perspectives of stewardship and stagnation we explore potential benefits and drawbacks of family ownership for international entrepreneurship and explore nonlinear relationships among these two variables using a sample of 1 035 us family businesses and applying ordinal regression analysis we find an inverted u shaped relationship between family ownership and international entrepreneurship international entrepreneurship is maximized when family ownership stands at moderate levels we discuss the implications of our findings for theory and practice and indicate avenues for future research

variants of agency contracts in family financed ventures as a continuum of familial altruistic and market rationalities abstract funding is a critical dimension of new creation although instances of family involvement in new venture financing are common ironically their role has been largely ignored in much of the mainstream business and economics literature when family members invest in the ventures of other family members they must make many choices either explicitly or implicitly about organizational form and governance consequently the governance of these exchange relationships tends to be highly variable this paper explores the primary rationalities governing the exchange relationships in family investment decisions during the early stages of new venture creation it presents activities as variants of agency contracts occurring within a continuum of familial altruistic and business market rationalities existing venture capital theory is extended through the introduction of rationalities and more comprehensive models of decision making

determinants of required return in venture capital investments a five country study abstract using two complementary theoretical perspectives we develop hypotheses regarding the determinants of the return required by venture capitalists and test them on a sample of over 200 venture capital companies vccs located in five countries consistent with resource based theory we find that early stage specialists require a significantly higher return than other vccs when investing in later stage ventures consistent with financial theory we find that acquisition buyout specialists require a significantly lower return than other vccs when investing in expansion companies furthermore in comparison to specialists highly stage diversified vccs require a significantly higher return for early stage investments independent vccs require a higher rate of return than captive or public vccs in general higher required returns are associated with vccs who provide more intensity of involvement have shorter expected holding period of the investment and being located in the us or uk in comparison to those in france belgium and the netherlands

power in a theory of the firm transactions take place in the firm rather than in the market because the firm offers power to agents who make specific investments past literature emphasizes the allocation of ownership as the primary mechanism by which the firm does this within the contractibility assumptions of this literature we identify a potentially superior mechanism the regulation of access to critical resources access can be better than ownership because i the power agents get from access is more contingent on their making the right investment and ii ownership has adverse effects on the incentive to specialize the theory explains the importance of internal organization and third party ownership

the influence of family ownership dispersion on debt level in privately held firms the aim of this article is to investigate the financing behavior of privately held firms along the dispersion of family ownership drawing on the socio emotional wealth perspective we argue that debt levels are contingent on the degree of ownership dispersion among family members based on a sample of 2451 observations in a 10 year time frame our results reveal the existence of an inverted u shaped relationship between debt level and intra family ownership dispersion we demonstrate that this relationship is moderated by the generational involvement that inverts it in later generations

management control systems in family firms a review of the literature and directions for the future family firms play a significant role in the global economy although family firm literature has devoted much time and effort to investigating topics concerning corporate governance leadership ownership and succession accounting issues have received relatively scant attention in this paper we assemble and critically review extant literature on the choice of management controls this is an essential topic for firms as management control systems mcs are used to make sure subordinates behave in function of the goals of the firm family firms however have distinct features such as differences in governance structures and goals which can have a significant impact on whether and how mcs are used we conclude this review paper by providing avenues for future research that can advance our understanding of both the determinants and the outcomes of the choice of mcs

self efficacy beliefs and imitation a two armed bandit experiment abstract it is generally believed that individuals imitate others to gain status minimise regret or simply ameliorate their performance psychology provides a complementary explanation imitation becomes appealing when agents have little faith in their abilities we investigate the extent to which self efficacy beliefs affect agents propensities to imitate others we propose an experimental task which is a modified version of the two armed bandit we measure participants self assessed self efficacy then study individual learning subsequently we measure how individuals use the information they gather observing a randomly selected group leader we find that in stable environments a 1 increase in individual self efficacy reduces the propensity to imitate others by 3

a theory of rational addiction we develop a theory of rational addiction in which rationality means a consistent plan to maximize utility over time strong addiction to a good requires a big effect of past consumption of the good on current consumption such powerful complementarities cause some steady states to be unstable they are an important part of our analysis because even small deviations from the consumption at an unstable steady state can lead to large cumulative rises over time in addictive consumption or to rapid falls in consumption to abstention our theory also implies that cold turkey is used to end strong addictions that addicts often go on binges that addicts respond more to permanent than to temporary changes in prices of addictive goods and that anxiety and tensions can precipitate an addiction

ceo duality as a double edged sword how boards of directors balance entrenchment avoidance and unity of command when a firm s chief executive officer is also the chairperson of its board directors have opposing objectives according to organization theory such ceo duality establishes strong unambiguous le

family firm governance strategic conformity and performance institutional vs strategic perspectives a fundamental schism divides the family firm and strategy literatures on the one hand and the institutional literature on the other regarding both the situational prevalence and the utility of conforming behavior the first two schools respectively view strategic differentiation as especially common among family firms and an important source of competitive advantage by contrast the reasoning of institutionalists would suggest that family firms will be subject to unusually powerful motivations to conform in part because of their pursuit of socioemotional wealth objectives unfortunately the relationships between conformity and family firm governance and in fact governance in general have not been amply studied this analysis of fortune 1000 firms finds considerable support for the institutional perspective family involvement is related to greater not lesser conformity in many aspects of strategy although strategic conformity related to superior returns on assets it did not enhance firm market valuations

bric by bric the role of the family household in sustaining a venture in impoverished indian slums we advance understanding of the embedded role of the family household in governing firm performance in an impoverished setting drawing on bricolage theory which articulates how individuals make do with resources at hand we suggest that family household diversity facilitates creativity while family household shared business experience facilitates routinization while initially performance enhancing unfettered creativity and overroutinization have detrimental effects and thus expect the highest levels of performance to occur at moderate levels of family household diversity and shared business experience we find general support for our hypotheses using a large sample of firms and families in impoverished indian households

home region focus and performance of family firms the role of family vs non family leaders do family firms benefit more from a regional or a global geographic scope we suggest it depends on their family leadership type family vs non family leadership we offer a nuanced view of agency and stewardship theories to hypothesize that family leaders are most beneficial when pursuing a regional strategy i e high home region focus hrf whereas non family leaders are more advantageous when pursing a global strategy i e low hrf utilizing a sample of 202 western european firms from 1996 to 2006 we find support for this central hypothesis thus family leadership influences the degree to which family firms benefit from hrf

factors affecting success and failure of seed capital start up negotiations abstract start up companies present many uncertainties for both entrepreneurs and seed capital investors although both seek financial rewards they typically have different perceptions about what must be done to achieve them the strong vision of the entrepreneur is often based on a compelling fascination with a new product he knows that business issues are important but believes they can be dealt with routinely if the product is clearly superior venture capital investors encounter good ideas every day the business issues are the critical factors for them and they must be planned carefully if the promise of the entrepreneur s vision is to be realized these different concepts for creating wealth come together in the negotiation process for seed capital investments in start up enterprises the author studied six factors that enter into these negotiations they are market product team risk time and deal he conducted a survey of venture capital organizations to assess the relative importance of these factors in determining the outcome of negotiations the survey sent questionnaires to 137 members of the western association of venture capitalists each respondent was asked to complete it for three negotiations that succeeded and three that failed eighty nine questionnaires were returned from 18 respondents reporting on 47 negotiations that succeeded and 42 that failed the results suggest that business factors are more important than product characteristics for successful negotiations among the business factors markets that offer unconstrained opportunities for rapid growth are significantly more important than the completeness of the team a credible business plan rapid return on investment or favorable terms the most important reason for failure of negotiations is a business plan in which too many things could go wrong even where there are strong market opportunities both entrepreneurs and investors should find these results useful entrepreneurs need not approach venture capitalists if they are not part of a rapidly growing market or cannot create a new one with no constraints on the growth of their companies given good market opportunities business plans must be readily believable to avoid failure of negotiations products need not promise major improvements over others in the market but they must have a competitive edge although the team must be highly qualified it does not necessarily need to be complete at the start up stage investors may be interested to know that successful negotiations typically do not depend on unusually rapid return on investment or particularly favorable investment equity ratios they can expect negotiations to fail if the business plan is very risky even where market opportunities are good

capital constraints and the performance of entrepreneurial firms in vietnam entrepreneurship has been among the key driving forces of the emergence of a dynamic private sector during the recent decades in vietnam this article addresses for vietnam the questions how capital constraints affect the performance of family firms and how entrepreneurs human and social capital interact with capital constraints to leverage entrepreneurial income a panel of 1721 firms in 4 years is used results are consistent with the resource dependency approach indicating an adverse effect of capital constraints on firm performance firms suffering capital constraints perform substantially better suggesting that they need more capital simply to finance newly recognized profit opportunities human capital plays a vital role in relaxing capital constraints and improves the entrepreneurial performance whereas the effect of social capital stemming from strong ties and weak ties is limited strong ties bring emotional support and weak ties give nonfinancial benefits from regular and useful business contacts advanced econometric analysis tools to take into account the endogeneity of capital constraints are used to establish relationships among relevant variables

genetic algorithm learning and the cobweb model this paper presents the cobweb model in which competitive firms in a market for a single good use a genetic algorithm to update their decision rules about next period production and sales the results of simulations show that the genetic algorithm converges to the rational expectations equilibrium for a wider range of parameter values than other algorithms frequently studied within the context of the cobweb model price and quantity patterns generated by the genetic algorithm are also compared to the data of experimental cobweb economies it is shown that the algorithm can capture several features of the experimental behavior of human subjects better than three other learning algorithms that are considered

are family firms good employers family firms employ about 60 percent of the global workforce while it is widely assumed that they are good employers data about their conduct is mixed in this study we extend stewardship and agency theories to test competing propositions about the impact of family on employment practices using data from 14 961 private belgian firms over a 19 year period higher investments lower dividend payout and higher risk tolerance indicate that family firms are better financial stewards of their companies than nonfamily firms however family firms are worse organizational stewards than nonfamily firms they offer lower compensation invest less in employee training and exhibit higher voluntary turnover and lower labor productivity further and contrary to earlier research we find that financial practices in private family firms do not change over time and that the deleterious influence of family on employment practices rises with both firm age and with heightened family involvement together our findings suggest that a more nuanced understanding of stewardship and agency theory is needed to understand the impact of family on the governance of private firms

a natural experiment approach to contingent valuation of private and public uv health risk reduction strategies in low and high risk countries we present the results of a natural experiment to test how variations in exogenous risk levels affect resultant willingness to pay wtp for risk reduction the case study presented considers wtp for reductions in the skin cancer risks associated with exposure to solar uv radiation a common design contingent valuation survey is conducted in four countries across which variation in geographical latitude and genetic mix mean that exogenous risks differ substantially survey respondents were presented with both a private and public good route for affecting risk reduction in both cases results confirm that once adjustment had been made for expected relationships with other covariates such as income and risk averting behaviour valuation responses for both goods conformed to expectations with the ordering of values across countries reflecting the ordering of scientifically established health risks this suggests that links between values and objective health risks may be observed within such situations and provides a justification for continuing research into more natural representations of risk and risk reductions in order to yield consistent and robust measures of associated values

commentary on toward a theory of agency and altruism in family firms agency theory would predict a low incidence of agency costs within family firms because of the fusion of ownership and control the concept of altruism challenges this oversimplification however the interesting findings by schulze et al rely upon two assumptions that should be examined in future research

does family employment enhance mses performance integrating socioemotional wealth and family embeddedness perspectives abstract this paper analyzes the effect of family employment on performance in micro and small enterprises mses by combining two research perspectives that until now have been conducted separately the family embeddedness perspective of entrepreneurship aldrich and cliff 2003 and the socioemotional wealth sew approach to family business gomez mejia et al 2007 our integrated perspective allows us to highlight how the nature of the employment relationships in mses enhances the benefits derived from the socioemotional endowment associated with family labor and reduces the opportunity costs of employing relatives moreover we assert that this relationship is moderated by specific family characteristics that determine the firm s ability to preserve the sew while at the same time pursuing financial goals our results provide partial support to the enhancing role of family labour on mses performance employing family members increases sales but decreases profitability as measured by roa this effect also results in improved performance for women led firms and for firms that have received family funding but impairs mses performance when the business is the main source of the owner s household income

political economy based institutional industry complex and sustainable development the case of the salt chemical industry in huai an china abstract this article explains how the salt chemical industry may evolve over time from a high energy consumption based industry complex in the local community to a consolidated pro growth pluralist regime at the urban scale the salt chemical industry is resisting to restructure to a sustainable environmental friendly economic system by spilling over in the form of pro growth political economic coalition in local society theories of the logan and molotch s growth machine stone s urban regime together with the extension of unruh s thesis concerning the characteristics of lock in in the technological or institutional economics approach were used to propose an enlarged lock in political economic framework and pro growth institutional industry complex iic it is further used to explain the consensus building of the pro growth governance a study of the salt chemical and new material industry park in the huai an metropolitan area china serves as an illustrative case the article also suggests that the path dependence followed in constructing a pro growth coalition could serve as a program to unlock the pro growth institutional industry complex of salt chemical industry and foster the anti coalition needed

acquisition of costly information an experimental study abstract i study decision making in a situation where subjects can buy information in order to uncover the initially unknown deterministic structure the majority of subjects fail to find the most economical way of choosing between two possible prospects many subjects underestimate the value of information and as a result make avoidable forecasting errors other subjects learn correctly which action is most successful under any given condition but fail to implement this knowledge efficiently they either accept errors for the sake of economizing on small amounts of information costs or they invest in redundant information the measured losses are substantial however in certain settings the fact that half of the economist subjects and one fourth of non economist subjects learn to behave optimally may be sufficient for efficient market functioning the present findings thus help to explain the near competitive outcomes observed in many experimental and actual markets

local environmental non profit organizations and the green investment strategies of family firms we add to the debate on the determinants of firms green investment strategies gis by looking at societal stakeholders and explicitly testing the role of local environmental non profit organizations enpos in gis engagement by family and non family firms we argue that enpos favor gis engagement only by family firms which due to their resource constraints risk aversion and local embeddedness are more sensitive to enpos normative pressure we also suggest that the role of enpos is especially important for family firms gis in those sectors with less stringent regulations where enpos may act as a substitute for the coercive pressure of regulation and promote firms self regulatory behaviors we test and find support for our arguments on a sample of about 2000 italian manufacturing firms over the period 2001 2003 our results are robust to the control of observable omitted variables reverse causality and to alternative model specifications

how can responsible family ownership be sustained across generations a family social capital approach responsible family ownership rfo is a combination of the family s commitment to the family firm s ff s stakeholders in the long term and the explicit behaviour of the family members associated with the firm however families are not individuals but rather a system of relationships among family members in such a context misunderstandings in communication anachronistic mentalities and different value systems can block the intergenerational transmission of rfo consequently the responsibility of the family towards the ff s stakeholders may be damaged and the firm s socially responsible behaviour hindered this paper aims to identify how rfo is transferred across generations and to ascertain the role that family social capital fsc plays in preserving the transmission of rfo from generation to generation our research is based on three in depth case studies of mexican family owned small and medium sized enterprises first the paper identifies and contrasts a set of fsc specific factors and problems which play a relevant role in the transmission of rfo while recognizing the influence of the mutually reinforcing dynamics of fsc dimensions secondly the family s honourableness a lander in j bus ethics 116 4 751 767 2013 is identified as a key driver for sustaining the transmission of rfo finally the paper identifies rfo institutionalization required to face the intrinsic problems of transmitting rfo in growing families

stability and competition in budgetary theory this article argues that the differences in the findings of the incrementalist budgetary theory of davis dempster and wildavsky and the competition theory of natchez and bupp have been wrongly attributed to the different units of analysis program or organization used in these studies competition as measured by natchez and bupp and incremental change as defined by davis dempster and wildavsky can both be found among either programs or organizations the differences in the findings of these theorists depend instead on the particular theoretical construction of budgetary behavior and the budget measures chosen the same data will support either theory of budgeting if one adopts the theoretical constructs and budget measures peculiar to each theory thus the theories are not really in competition with each other

competitive behavior and nonfinancial objectives entry exit and pricing decisions in closely held firms because of the predominance of the assumption of profit maximization as the goal of the firm and its decision makers especially in the competitive strategy literature research has yet to investigate how differences in objectives might influence competitive actions such as entry exit and pricing decisions this represents an important gap in the literature given the fundamental role of objectives in decision making and widespread evidence that many firms especially those that are closely held are motivated by nonfinancial objectives in addition to an interest in financial returns to further our understanding of firms competitive strategy decisions we discuss how the presence of nonfinancial objectives in closely held firms leads to a weakening of the relationship between economic indications of profitability and competitive behaviors using a unique data set of nearly 4 000 closely held and non closely held establishments engaged in local competition in the texas hotel industry we find that the e

the salesperson as outside agent or employee a transaction cost analysis this descriptive study explores the reasons for integration of the personal selling function i e the use of employee direct salespeople rather than manufacturers representatives reps a hypothesized model is developed based on both transaction cost analysis and the sales force management literature data from 13 electronic component manufacturers covering 159 u s sales districts are used to estimate a logistic model of the probability of going direct in a given district results are shown to be stable across specification and estimation methods and to fit the data well the transaction cost model is generally supported the principal finding is that the greater the difficulty of evaluating a salesperson s performance the more likely the firm to substitute surveillance for commission as a control mechanism i e to use a direct sales force among other findings direct sales forces are also associated with complex hard to learn product lines and with districts that demand considerable nonselling activities several factors prove unrelated including company size the amount of travel a district requires and the importance of key accounts this article was originally published in marketing science volume 4 issue 3 pages 234 254 in 1985

private equity investment decisions in family firms the role of human resources and agency costs abstract this study examines decision making criteria that are employed by private equity pe investors selecting family firms hypotheses test the likelihood of investment based on family firm characteristics findings show that pe professionals take into account family specific criteria including human resources and opportunities to reduce agency costs furthermore pe professionals prefer family firms that are already professionalized this research contributes to the family firm literature on both a theoretical and a methodological level exploring nonfamily succession routes and employing techniques conjoint analysis for data collection and multilevel models for data analysis that have seldom been used in this context

a learning to forecast experiment on the foreign exchange market with a classifier system abstract this paper reports on an experiment of learning and forecasting on the foreign exchange market by means of an artificial intelligence methodology a classifier system which simulates learning and adaptation in complex and changing environments the experiment has been run for two different exchange rates the us dollar d mark rate and the us dollar yen rate representative of two possibly different market environments a fictitious artificial agent is first trained on a monthly data base from 1973 to 1990 and then tested out of sample from 1990 to 1992 its forecasting performance is then compared with the performance of decision rules which follow the prescription of various economic theories on exchange rate behaviour and the performance of forecasts given by var estimations of the exchange rate s determinants

a fresh look at the rotten kid theorem and other household mysteries gary becker s rotten kid theorem asserts that if all family members receive gifts of money income from a benevolent household member then even if the household head does not precommit to an incentive plan for family members it will be in the interest of selfish family members to maximize total family income i show by examples that the rotten kid theorem is not true without assuming transferable utility i find a simple condition on utility functions that is necessary and sufficient for there to be the kind of transferable utility needed for a rotten kid theorem while restrictive these conditions still allow one to apply the strong conclusions of the rotten kid theorem in an interesting class of examples

family ownership altruism and agency costs in australian small and medium sized enterprises given the continuing uncertainty about whether family firms enjoy lower agency costs this article hypothesizes that a combination of the effects of family ownership altruism and self control is instead at play to begin with family ownership can indeed reduce agency costs through better aligning the interests of owners and managers this is a determining effect in that it independently mitigates one source of agency problems however altruism combined with self control problems arising from the highly concentrated ownership often found in family firms can also increase agency costs this is an embedding effect as it is rooted in the personal relationships within the family firm using the business longitudinal database compiled by the australian bureau of statistics on small and medium sized enterprises smes we find that for larger smes those with 20 200 employees the gains in lower agency costs arising from family ownership are almost completely offset by the losses from altruism and the l

how vulnerable is the emissions market to transaction costs an abms approach abstract the impact of transaction costs on the early emissions trading market is examined by applying an agent based model and simulation abms approach for a realistic model set up bounded rationality stochastic characteristics and learning by doing are considered in our search processes marginal abatement cost parameters are obtained from yoo et al 2010 which is an experimental study on the emissions trading in the korean power sector sensitivity analyses are performed on market performance indices with regard to transaction cost parameters which represent scales and the learning elasticities of transaction costs a total of 960 simulations were run in this sensitivity analysis sensitivity analysis results consistently show that higher transaction costs worsen market performance the most remarkable finding in these results is that welfare performance of all the transactions decreases by up to 50 as the scale parameters of transaction costs increase implying that welfare gain from introducing emissions trading disappears significantly however with learning curve effect welfare performance could be regained by up to 26 in sum although transaction costs significantly encroach upon trade gains at the early stage based on our simulation results the welfare loss by way of transaction costs is lessened as the knowledge of market participants progresses

the entrepreneurial orientation performance relationship in private family firms the moderating role of socioemotional wealth drawing on socioemotional wealth sew literature this paper revisits the established entrepreneurial orientation eo performance relationship in a family business context the main idea in entrepreneurship literature is that eo leads to increased firm performance we question this logic in a family business context because family related non financial goals like sew may prevent the firm to reap the fruits of their entrepreneurial efforts specifically we argue that sew engenders inefficiencies that place constraints on the realization of the benefits of entrepreneurship therefore we propose that a high level of sew preservation hinders the transmission of the family firm s eo into positive performance effects to test this hypothesis an empirical study was developed using a sample of 232 belgian private family firms robust linear regression analysis reveals that the positive effect of eo on financial performance decreases as the level of sew preservation increases

the salience of culture s consequences the effects of cultural values on top executive commitment to the status quo while top executives are argued to play a central role in strategic adaptation evidence suggests that they are not equally open to organizational change this study extends earlier investigation of the determinants of top executive commitment to the status quo csq to the international arena examining the influence of cultural values on executive open mindedness toward change using data from a survey of top managers in 20 countries analyses reveal that values of individualism uncertainty avoidance power distance and long term orientation are significantly related to executives adherence to existing strategy and leadership profiles further while confirming earlier findings that industry tenure is positively related to strategy csq results show that tenure does not significantly affect leadership csq once cultural values are controlled in summary the findings reveal that culture has an important impact on executive mindsets as demonstrated by the fact that executives of differing cultural background are not equally open to change in organizational strategy and leadership profiles second the findings suggest that executives views of appropriate leadership profiles reflect the imprint of cultural socialization moreso than professional experience finally and more broadly the study offers empirical support for the view that values figure prominently in shaping executives strategic and leadership orientations 1997 by john wiley sons ltd

fuzzy inductive reasoning expectation formation and the behavior of security prices abstract this paper extends the santa fe artificial stock market model sfasm studied by lebaron arthur and palmer 1999 journal of economic dynamics and control 23 1487 1516 in two important directions first some might question whether it is reasonable to assume that traders are capable of handling a large number of rules each with numerous conditions as is assumed in the sfasm we demonstrate that similar results can be obtained even after severely limiting the reasoning process we show this by allowing agents the ability to compress information into a few fuzzy notions which they can in turn process and analyze with fuzzy logic second lebaron et al have reported that the kurtosis of their simulated stock returns is too small as compared to real data we demonstrate that with a minor modification to how traders go about deciding which of their prediction rules to rely on when making demand decisions the model can in fact produce return kurtosis that is comparable to that of actual returns data

uncertain health and survival effects on end of life consumption this article analyzes the impact of health and survival uncertainty on the saving and consumption decisions of retirees a dynamic programming approach is used to model the household s planning problem the utility parameters are estimated using panel data we find that a fall into poor health raises the marginal utility from consumption simulations are used to indicate the effects of falling into poor health and loss of spouse they reveal a large transfer from the healthy to the sick partner and a strong dependence of saving on the survivor benefits suggesting that concern about the surviving spouse is an important motive for saving

genetic algorithms and inflationary economies abstract this paper studies overlapping generations economies in which agents use genetic algorithms to learn correct decision rules the results of computer simulations show that a genetic algorithm converges to the unique monetary steady state in case of a constant money supply policy and to the low inflation stationary equilibrium in case of a constant real deficit financed through seignorage features of the genetic algorithm adaptation are compared to the performance of other learning algorithms and to the behavior observed in experiments with human subjects in the same olg environments

the structure of ownership and the theory of the firm the separation of ownership from control produces a condition where the interests of owner and of ultimate manager may and often do diverge and where many of the checks which formerly operated to limit the use of power disappear in creating these new relationships the quasi public corporation may fairly be said to work a revolution it has divided ownership into nominal ownership and the power formerly joined to it thereby the corporation has changed the nature of profit seeking enterprise 1

information sharing price negotiation and management buy outs of private family owned firms perspectives relating to agency theory information asymmetries and game theory were utilized to explore two outcomes associated with the management buy out mbo or management buy in mbi of former private firms whether information was shared equally between vendors i e family firm owners and purchasers i e mbo i management teams and whether a mutually agreed price was achieved with reference to the themes of company ownership structure governance structure and company objectives several hypotheses were derived survey evidence was gathered from the managers of 114 former private family owned firms located across europe that recently reported an mbo i multiple logistic regression analysis detected that respondents in founded first generation family firms and those reporting a high focus on the strategic importance of the market value increment were more likely to report that information was shared equally between vendors and purchasers respondents reporting no suitable family successor had been identified a high focus on the strategic importance of the market value increment and the involvement of venture capitalists in succession planning were more likely to report that a mutually agreed sale price had been achieved implications for practitioners and researchers are discussed

filling the institutional void the social behavior and performance of family vs non family technology firms in emerging markets family businesses fbs are said to treat their employees with unusual consideration to form a cohesive internal community they are also claimed to develop deeper more extensive connections or relationships with outside stakeholders both behaviors may increase the viability of a business intended to support an owning family and its later generations such social linkages we believe may compensate for the lack of capital product and labor institutional infrastructures in dynamic emerging economies this survey study of a most challenging emerging market sector namely korean hightechnology businesses argues three major points 1 relationships of community and connection will be more common in fbs than in non fbs 2 these relationships will enhance performance in emerging market hightechnology sectors which because of their competitive complex and everchanging nature rely on significant expert knowledge and social capital within and outside the organizational community 3 the performance of fbs will benefit more from these community and connection relationships than the performance of non fbs because in these personally intimate settings employees and external partners will be especially likely to return the generosity of a visibly active owning family or to penalize its selfishness significant empirical support was found for most of these hypotheses

multi agent simulations to explore rules for rural credit in a highland farming community of northern thailand thanks to recent advances in the field of distributed artificial intelligence agentbased models abm can now be used to run simulations of social phenomena based on their computerized representations and to apply experimental methods in social sciences axelrod 1997 gilbert and troitzsch 1999 jager 2000 in the field of renewable resource management and environmental sciences several abm simulation platforms offer the possibility to explore interactions between social and ecological dynamics costanza and ruth 1998 bousquet et al 1998 lansing 2002 in these complex systems the social and economic dynamics can be viewed as a set of interactions among heterogeneous agents generating aggregate phenomena that are different from the behaviour of groups of average individuals considered in classical economic thinking rouchier and bousquet 1998 such a view was adopted in the research presented here

crises and confidence systemic banking crises and depositor behavior abstract we show that individuals who have experienced a systemic banking crisis are 11 percentage points less likely to use banks in the u s than otherwise similar individuals who emigrated from the same country but did not live through a crisis this finding is robust to controlling for exposure to other macroeconomic events and to various methods for addressing potential bias due to migrant self selection consistent with the view that personal experience plays an important role in decision making the effects are larger for individuals who were older and more likely to have had wealth entrusted to the banking system at the time of the crisis and for people who experienced crises in countries without deposit insurance

are company founders underpaid this article examines the relation between founder status and ceo compensation in publicly listed us firms the results suggest that ceo founders receive lower cash pay and total compensation compared to professional managers in contrast ceos who are relatives of the founders receive similar cash pay and total compensation to that of professional managers different compensation levels also emerge in terms of stock option awards the findings underline the importance of distinguishing among these three ceo types when examining the determinants of executive compensation