do non socially responsible companies achieve legitimacy through socially responsible actions the mediating effect of innovation this study investigates the effects on organization s financial performances of first the extent to which the organizations are involved in controversial business activities and second their level of social performance these companies can be considered non socially responsible given the harmful nature of the activities they are involved in managers of these companies may still have incentives to pursue socially responsible actions if they believe that engaging on those actions will help them to achieve legitimacy and improve investors perception about them we develop a comprehensive methodology to investigate these corporate social performance csp related effects in a complex but specific setting to this end we analyze a sample of 202 us firms for the period 2005 2008 using a novel method in this area partial least squares our results indicate that contrary to the general findings in prior literature companies involved in controversial business activities which engage in csp do not directly reduce the negative perception that stakeholders have about them instead we found evidence of a positive mediation effect of csp on financial market based performance through innovation

a micro analytic threshold model for the timing of first purchases of durable goods a micro analytic threshold model to describe the timing of household purchases of consumer durable goods is developed and tested the model incorporates unobserved heterogeneity via a generalized gamma distribution and accounts for time varying covariates further we employ estimation methods applicable or purchase data observed at periodic intervals of time the model outperforms other competing models for predicting the timing of purchase of durable goods in terms of fit and predictive ability in particular this model outperforms the logit model and the diffusion model the generalized gamma timing model predicts well the time to purchase the durable good we show how it can be employed for micro segmentation of households several research directions and applications are described

modelling the consumer s decision to replace durable goods a hazard function approach this article analysis the consumer s durable good replacement decision using hazard models in contrast to the typical limited dependent variable model often used in durable good demand studies hazard models allow for much richer replacement to illustrate the technique a recursive system consisting of a regression equation and a hazard model is used to examine home heating system replacement decisions by residencial customers of a major southeasten us electric utility the results indicate that overall system replacement rates decline over time and that the probability of replacement for specific households depends negatively on the age of the head of household abd the availability of natural gas and positively on system age and higher than expected household energy use

portfolio choice of government incentives the case of commercialization of a new coal based technology economic and financial incentives have become accepted tools for the implementation of government policies such as encouraging the widespread use of new technologies that offer significant economic and political benefits at the macroeconomic level but are not well perceived by managers at the micro level due to significant retrofitting costs this study using portfolio and real investment theories develops a quantitative methodology for selecting the optimal mix of incentives based on financial and operating factor sensitivities of the targeted firms in an uncertain environment the proposed methodology overcomes several shortcomings of previous studies the study applies the suggested method to a recent dod doe 1995 g project data that estimates the net benefits of a new coal based technology the results show that government policies based on a combination of incentives are more effective than individual incentive based policies the empirical analysis of firms which account for the 163 boiler sites in the sample reveals that the optimal incentive package is weighted about 2 1 in favor of tax incentives versus research and development subsidies

an investigation of real versus perceived csp in s p 500 firms firms are spending billions annually in the name of corporate social responsibility csr whilst markets are increasingly willing to reward good and responsible firms they lack the instruments to measure corporate social performance csp to convince investors and other stakeholders firms invest heavily in building a reputation for good corporate behaviour this article argues that reputations for csp are often unrepresentative of true csp and investigates how differences in perceived and actual as measured by the fortune and kld databases respectively can partly be explained by firm characteristics amongst other things it finds that overrated firms are more likely to be relatively big profitable operating in non polluting but competitive industries and with no history of wrong doings to their primary stakeholders they will also typically spend a lot of effort satisfying the claims of their secondary stakeholders above all the results emphasise the need for researchers to recognise that the databases measure different phenomenon and are not interchangeable

unobservable effects and business performance while unobservable factors such as corporate culture access to scarce resources management skill and luck can be postulated to be principal determinants of business success their effects are all but ignored in studies of business performance this study making use of the pims data base reports empirical evidence indicating that failure to control for unobservable factors influencing profitability both biases and exaggerates the effect of strategic factors indeed the influence of unobservable factors is so pervasive as to invalidate many of the conclusions drawn from studies failing to control for their effects

corporate social performance and innovation with high social benefits a quantitative analysis this article analyses the link between innovation with high social benefits and corporate social performance csp and the role that family firms play in this this theme is particularly relevant given the large number of firms that are family owned also the implicit potential of innovation to reconcile corporate sustainability aspects with profitability justifies an extended analysis of this link governments often support socially beneficial innovation with various policy instruments with the intention of increasing international competitiveness and simultaneously supporting sustainable development in parallel firms pursue corporate social responsibility csr and environmental management activities partly in the hope that this will foster such innovation in their organisation alongside their main aim of improving csp hence the main research question of this article is about the association of csp with innovation with high social benefits and the determinants of the potential moderation of this association based on panel data the article analyses the link between csp and innovation and the effect of being a family firm using panel estimation techniques the results point to a moderating role of family firms on the link between innovation with high social benefits and csp the article concludes by assessing the policy implications of this insight

constructive consumer choice processes consumer decision making has been a focal interest in consumer research and consideration of current marketplace trends e g technological change an information explosion indicates that this topic will continue to be critically important we argue that consumer choice is inherently constructive due to limited processing capacity consumers often do not have well defined existing preferences but construct them using a variety of strategies contingent on task demands after describing constructive choice consumer decision tasks and decision strategies we provide an integrative framework for understanding constructive choice review evidence for constructive consumer choice in light of that framework and identify knowledge gaps that suggest opportunities for additional research

the corporate social performance content of innovation in the u k this article investigates the influence of innovation on the relationship between corporate strategy and social issues specifically we employ firm level data for a large sample of u k companies drawn from a diverse range of industrial sectors to investigate given innovation the determinants of both the probability that the innovation brings reduced environmental impacts and or improved health and safety and the strength of this effect in this connection we find evidence of a dichotomy between product and process innovations and roles for firm size industrial sector a foreign market presence access to various information sources e g universities and government research organisations and the extent to which activities are constrained by regulation furthermore we find a tendency for the influences of many of these factors to vary between older and newer firms

doing well while doing bad csr in controversial industry sectors in this article we examine the empirical association between firm value and csr engagement for firms in sinful industries such as tobacco gambling and alcohol as well as industries involved with emerging environmental social or ethical issues i e weapon oil cement and biotech we develop and test three hypotheses the window dressing hypothesis the value enhancement hypothesis and the value irrelevance hypothesis using an extensive us sample from 1995 to 2009 we find that csr engagement of firms in controversial industries positively affects firm value after controlling for various firm characteristics to address the potential endogeneity problem we further estimate a system of equations and change regression and continue to find a positive relation between csr engagement and firm value our findings support the value enhancement hypothesis and are consistent with the premise that the top management of us firms in controversial industries in general considers social responsibility important even though their products are harmful to human being society or environment

the timing of repeat purchases of consumer durable goods the role of functional bases of consumer attitudes abstract in an attempt to bring consumer psychology theories into research on the timing of repurchase of consumer durables the authors suggest that attitude functions knowledge value expressive social adjustive and utilitarian can help explain and predict interpurchase intervals adopting an interactionist perspective the authors propose that the effect of the attitude functions is contingent on contextual factors which they theorize as the nature of the product along public private and luxury necessity dimensions and the nature of the decision forced or unforced purchase decision hypothesis testing is facilitated by survey data on actual purchase decisions and hazard models that incorporate individual heterogeneity the results support the suggested role of attitude functions in explaining and predicting interpurchase intervals and suggest means by which managers can position their products to shorten interpurchase intervals

finessing the unintended outcomes of price cap adjustments an electric utility multi product perspective performance based regulation for electric utilities is now a foreseeable future reality in the united states and in many cases some form of a price cap is likely to be its modus operandi viewing electricity in a multi product context a utility that is constrained by a price cap will likely see either its exogenous sales mix change over time within any customer class or different rates of sales growth among its customer classes in either event the unintended and adverse effect may be a change in the utility s average rate level that results in a price cap violation starting from a base year average rate and moving on to the future the traditional rpi x price cap percentage adjustment provides the utility with a new and violation prone price cap we show that the addition of a specific monetary value to that percentage adjustment will negate any possibility of an unintended price cap violation and thus help the utility stay financially sound we also show how to compute that value from data that are readily available to the utility we do this in the spirit of helping regulators worldwide to restructure energy markets along competitive lines so as to enhance consumer welfare in a wider context this price cap formulation is potentially applicable to price cap regulation in other types of industries that have a multi product and or a multiple customer class context

do investors value a firm s commitment to social activities previous empirical research has found mixed results for the impact of corporate social responsibility csr investments on corporate financial performance cfp this paper contributes to the literature by exploring in a two stage investor decision making model the relationship between a firm s innovation effort csr and financial performance we simultaneously examine the impact of csr on both accounting based financial health and market based tobin s q financial performance measures from a sample of top corporate citizens we find that 1 a firm s social responsibility commitment csr contributes to its financial performance 2 after controlling for investment in innovation activities csr continues to have a positive impact on a firm s financial performance 3 the customer dimension of csr has a positive effect on both cfp measures whereas the employee dimension indicates a significant impact only on financial heath and 4 the community relation dimension of csr only affects the market based cfp measure of firms with high innovation intensity

the construct validity of the kinder lydenberg domini social performance ratings data carroll 1991 encouraged researchers in social issues management sim to continue to measure corporate social performance csp from a variety of different perspectives utilizing a variety of different measures in addition wolfe and aupperle 1991 and others have asserted that there is no single best way to measure csp and that multiple measures and perspectives help develop the field however pfeffer 1993 suggest that a lack of consistent measurement has constrained organization studies and by implication the field of social issues management in its development as a field it may be in the best interest of social issues management researchers to try to development a common body of measures and data recently kinder lydenberg and domini co kld a social choice investment advisory firm has made available their social performance database the kld data have potential to become a widely accepted set of csp measures the purpose of this paper is to present a construct validity study comparing the kld data to other measures of csp

handle with care a primer on incentive regulation regulators increasingly rely upon incentive regulation as a substitute or refinement of traditional cost of service regulation focusing on incentive regulation in the us utility industry this article first identifies four desirable attributes for incentive mechanisms it develops a taxonomy of the types of mechanisms that are available identifies the issues that arise in the design and evaluation of these mechanisms and then closes with a discussion of the risks associated with various mechanisms

innovation ethics and entrepreneurship this paper is a response to ray s 2004 recent proposal that the intellectual property rights ipr attached to potentially life saving life sustaining innovations should become public goods in cases where markets are either unable or unwilling to pay for the creation of the intellectual property using a free market approach to innovation based on western moral philosophy we suggest that treating intellectually protected life saving life sustaining innovations as public goods will likely reduce social welfare over the long term

the cooperative venture formation process a latent variable structural modeling approach this article addresses management process issues for forming cooperative ventures with an increased likelihood of subsequent success based on roos 1989 the cooperative venture formation process is conceptualized in terms of three theoretical constructs the extent of sufficient internal push for the project the breadth and depth of analytical scope and the strength of key stakeholder support these constructs are related to subsequent perceived performance data from sixty seven firms were collected and analyzed via latent variable structural modeling a partial least square pls one key contribution of this article is the modeling approach to strategic formation process it contributes to an existing but not very well developed theory regarding strategy formation processes the pls method used in this study is quite unique within strategy research as such it contributes to methodology development in the strategy research field the main managerial implication is that the process by which a cooperative venture is formed should largely be seen as a step by step approach not a discrete decision if the three fundamentals discussed in the article are thoroughly addressed we can up the ante for success during implementation and therefore subsequent performance

relative valuation roles of equity book value and net income as a function of financial health abstract this study tests predictions that pricing multiples on and incremental explanatory power of equity book value net income increase decrease as financial health decreases tests using a sample of 396 bankrupt firms and tests using a larger pooled sample both yield inferences consistent with predictions findings are robust to inclusion of controls for industry size return on equity and volatility of equity returns equity book value and net income multiples and incremental explanatory power vary predictably across three illustrative industries selected based on the likely extent of unrecognized intangible assets

willingness to pay and compensation demanded experimental evidence of an unexpected disparity in measures of value aside from possible income effects measures of the maximum amounts people will pay to avoid a loss and the minimum compensation necessary for them to accept it are generally assumed to be equivalent unexpectedly wide variations between these sums however have been noted in survey responses to hypothetical options this paper reports the results of a series of experiments that confronted people with actual money payments and cash compensations the results indicate that the compensation measure of value seems to exceed significantly the willingness to pay measure which would appear to call into some question various rules of entitlement damage assessments and interpretations of indifference curves

the corporate social performance financial performance link strategic managers are consistently faced with the decision of how to allocate scarce corporate resources in an environment that is placing more and more pressures on them recent scholarship in strategic management suggests that many of these pressures come directly from sources associated with social issues in management rather than traditional arenas of strategic management using a greatly improved source of data on corporate social performance this paper reports the results of a rigorous study of the empirical linkages between financial and social performance corporate social performance csp is found to be positively associated with prior financial performance supporting the theory that slack resource availability and csp are positively related csp is also found to be positively associated with future financial performance supporting the theory that good management and csp are positively related 1997 by john wiley sons ltd