r d investments under endogenous cluster formation abstract we provide an innovative theory based explanation for the positive relationship between firms r d intensity and their degree of r d cooperation we show that when oligopolistic firms decide on long term r d investment before forming research clusters among competitors investment incentives are increased by the desire to become a member of an attractive cluster this can result in over investment compared to the welfare optimum and compared to a scenario where research clusters are ex ante fixed thereby as a theoretical contribution we fully characterize the equilibria of the unanimity game on cluster formation with heterogeneous firms

analysts incentives and street earnings we examine whether analysts incentives are associated with street earnings because prior research argues that analysts incentives to promote stocks increase in the extent to which the stock exhibits glamour characteristics we predict that analysts are more likely to make income increasing adjustments in determining street earnings for glamour stocks than for value stocks we find that analysts are more likely to exclude expense items from street earnings for glamour stocks than for value stocks and that excluded expense items help predict future earnings for glamour stocks but not for value stocks overall our results suggest that analysts self interest influences street earnings and this self interest leads to street earnings that are less useful in predicting future earnings for glamour stocks

towards an attention based view of the firm the central argument is that firm behavior is the result of how firms channel and distribute the attention of their decision makers what decision makers do depends on what issues and answers they focus their attention on what issues and answers they focus on depends on the specific situation and on how the firm s rules resources and relationships distribute various issues answers and decision makers into specific communications and procedures the paper develops these theoretical principles into a model of firm behavior and presents its implications for explaining firm behavior and adaptation 1997 by john wiley sons ltd

divergent reactions to convergent strategies investor beliefs and analyst reactions during technological change an important outcome of technological change is industry convergence as a new technology spurs competition between established firms from different industries we study the reactions of securities analysts as important sources of institutional pressures for firms to the similar product market strategies undertaken by firms from different prior industries responding to industry convergence our empirical setting is the convergence between the wireline telecommunications and cable television industries in the period following the advent of voice over internet protocol technology controlling for firm financial performance and capabilities we find that analysts were consistently more positive toward the cable firms than toward the wireline telecom firms our findings further show that this divergence in reactions arises from differences in existing investor expectations and preferences concerning how firms create value stocks owned by investors with a greater preference for growth receive more positive reactions than those owned by investors with a greater preference for margins however this divergence in reactions shrinks over time as convergence unfolds and as investors shift their shareholdings in response to misalignment between their preferences and firms strategic changes reactions from analysts reflecting inertial expectations of investors may persist for a time despite changes to firms strategies thus creating challenges for some firms in responding to technological change and industry convergence while legitimating and enabling similar responses from their competitors

interbank networks in prewar japan structure and implications forthcoming as interbank networks in prewar japan structure and implications with michiru sawada industrial and corporate change 2011

interorganizational determinants of promotion client leadership and the attainment of women attorneys explanations of gender inequality typically emphasize individual characteristics the structure of internal labor markets or pressures from the institutional environment extending the structuralist and institutional perspectives this article argues that the demographic composition of an organization s exchange partners can influence the demographic composition of the focal organization when the focal organization is dependent upon its partners specifically law firms with women led corporate clients increase the number of partners who are women attorneys data on elite law firms and their publicly traded clients support a bargaining power hypothesis whereby law firms promote women attorneys when their corporate clients have women in three key leadership positions general legal counsel chief executive officer and board director these effects are stronger when the law firm has few clients reinforcing the hypothesis that interorganizational influence is more vital when a focal organization is depe

exporting manufactures human resources natural resources and trade policy whether a country s exports consist mainly of manufactures or mainly of primary products depends fundamentally on the skills of its labour force relative to the extent of its natural resources this proposition derived from a modified version of heckscher ohlin theory is supported by a strong cross country correlation between the manufactured primary export ratio and the skill land ratio cross country variation in trade policies is now only a minor cause of variation in the manufactured primary export ratio

the two faces of governance responses to legal uncertainty in u s firms 1955 to 1985 recent neoinstitutional analyses have associated the rapid diffusion of due process governance mechanisms in the american workplace with government pressure for equal employment opportunity and affirmative action we carry the argument forward in three ways first we focus on grievance procedures and employment at will clauses to show that the legalization process produces both rights enhancing and rights negating rules second we focus on the private for profit economic sector to test more effectively the efficiency and labor control theories that have fared poorly in previous neoinstitutional studies third we explore the interactions among personnel professionals lawyers and the state in the adoption of legalistic governance mechanisms results sustain the neoinstitutional argument but also offer new support for efficiency and labor control hypotheses

corporate voluntary carbon information disclosure evidence from china s listed companies this article seeks to answer two questions i what factors drive firms to decide whether or not to disclose the information related to their greenhouse gas emissions also called carbon information ii what forces lead firms to disclose more carbon information using data hand collected from the annual corporate social responsibility reports of china s listed companies from 2008 to 2012 we find the following i firms that operate in sectors of high emission industries are more likely to make carbon information disclosure cid hereafter ii the more companies within one industry that make cid the more likely it is that a company in that industry will make cid iii companies having a higher sales rank within an industry are more likely to make cid

business groups and product variety in trade evidence from south korea taiwan and japan abstract we analyze the impact of market structure on the trade performance of south korea taiwan and japan south korea has many large vertically integrated business groups known as chaebol whereas business groups in taiwan are smaller and more specialized in the production of intermediate inputs we test the hypotheses that a greater presence of business groups leads to less product variety but higher product quality using data on exports from these countries to the united states we find that taiwan tends to export a greater variety of products to the us than korea and this holds particularly for final goods in addition taiwan exports higher quality intermediate inputs whereas korea exports higher quality final goods a comparison with japan is also presented which has greater product variety in its sales to the us than either taiwan or korea due to its larger size

the evolving impact of combinatorial opportunities and exhaustion on innovation by business groups as market development increases the case of taiwan business groups are key sources of innovation in emerging market economies but we understand little about why innovativeness differs across groups and over time variation in the density of intragroup buyer supplier ties which are common structural linkages among group affiliates can help explain both cross sectional and temporal heterogeneity of group innovativeness we argue that greater buyer supplier density within a group initially creates combinatorial opportunities that contribute to group innovativeness but ultimately generates combinatorial exhaustion that constrains innovation combinatorial exhaustion will set in at lower levels of density as the market environment becomes more developed because the opportunity costs of local search increase the research introduces a dynamic argument to studies of business group innovation this paper was accepted by bruno cassiman business strategy

institutional sources of boundary spanning structures the establishment of investor relations departments in the fortune 500 industrials the authors analyze the coercive and mimetic conditions leading to the establishment of investor relations departments among fortune 500 industrial firms during the 1984 1994 period the results show that antimanagement resolutions brought to a vote by social movement activists significantly contributed to the establishment of investor relations departments intense scrutiny by financial analysts also impelled firms to create such departments whereas social movement activists framed shareholder rights as a problem and compelled organizations to uphold them professional analysts subtly coerced organizations to signal their commitment to investor rights by creating boundary spanning structures that solution was transmitted through board interlocks to other organizations

asset stock accumulation and sustainability of competitive advantage given incomplete factor markets appropriate time paths of flow variables must be chosen to build required stocks of assets that is critical resources are accumulated rather than acquired in strategic factor markets barney barney j 1986 strategic factor markets expectations luck and business strategy management sci october 1231 1241 sustainability of a firm s asset position hinges on how easily assets can be substituted or imitated imitability is linked to the characteristics of the asset accumulation process time compression diseconomies asset mass efficiencies inter connectedness asset erosion and causal ambiguity

capital investment as investing in organizational capabilities an empirically grounded process model this article describes a field study in which insights from the resource based view of the firm were combined with models of capital investment decision making to investigate the decision processes

analyzing the analysts career concerns and biased earnings forecasts this paper examines the career concerns of security analysts we relate long histories of their earnings forecasts to job separations we find that relatively accurate past forecasts lead to favorable career outcomes such as remaining at or moving up to a high status large prestigious brokerage house controlling for accuracy optimistic forecasts relative to the consensus increase the chances of favorable job separations job separations depend much less on accuracy for analysts who cover stocks that are underwritten by their brokerage houses such analysts are also much more likely to be rewarded for optimistic forecasts than other analysts furthermore job separations were much less sensitive to accuracy and somewhat more sensitive to optimism during the stock market mania of the late 1990s these findings suggest that the well documented analyst forecast optimism bias is likely due to incentives to promote stocks

toward an economic model of the japanese firm i owe a great deal to professor moses abramovitz who suggested that i write this article i appreciate his constant encouragement and guidance which aided me throughout its preparation i am also indebted to three anonymous referees of the journal and to professors ryutaro komiya and michael riordan for their critical comments and helpful suggestions needless to say i am solely responsible for the views expressed in this paper

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

shrewd crude or simply deluded comovement and the internet stock phenomenon we show that i return comovement among internet stocks during the late 1990s and early 2000 was not exceedingly high ii there was substantial consistency in the manner by which investors distinguished among internet stocks and iii high comovement is most common during periods of price erosion these results cast doubt on the view that the extraordinary appreciation of internet stocks was due to the crude classification of all such stocks as members of a hot category

the role of financial analysts in the strategy formation process of business firms increasingly financial analysts are influencing the strategy formation process of corporations but so far little attention has been paid to the complex processes of interaction and the corresponding strategic outcomes this article discusses these influences through different theoretical lenses strategic management finance and accounting theory and economic sociology institutional and systems theory based on case study evidence from three companies we describe how the interactions between financial analysts and business firms take place and formulate several propositions on the relationship between financial analysts and business firms as well as on its influence on the strategic outcome of business firms the results suggest that the influence of financial analysts is indeed significant but depends on a number of contextual factors such as the financial situation of the company or the need for capital practicing managers can learn how to handle a turbulent environment such as the financial analyst community and how they can change their planning processes to absorb as much information as possible

japan s different trade regime an analysis with particular reference to keiretsu many claim that although formal trade barriers have been removed at the border japanese markets remain unusually closed because of non tariff barriers after describing japan s development strategy and the debate over the sources of japanese growth we consider current trade barriers recent research has made some headway investigating the impact of one of the alleged invisible barriers in particular efforts have been made to test if the behavior of japanese corporate groups known as keiretsu creates a barrier to trade finally we consider whether private sector trade restrictions warrant a public response what if anything should be done about keiretsu

ownership structure speculation and shareholder intervention an institution holding shares in a firm can use information about the firm both for trading speculation and for deciding whether to intervene to improve firm performance intervention increases the value of the institution s existing shareholdings but intervention only increases the institution s trading profits if it enhances the precision of the institution s information relative to that of uninformed traders thus the ability to speculate can increase or decrease institutional intervention we examine key factors that affect the intervention decision the usefulness of short swing provisions and restricted shares in encouraging institutional intervention and implications for ownership structure across different firms institutional investors hold an ever greater fraction of corporate america s equity traditionally these institutions were stock pickers who tried to beat the market through trading if a firm whose stock they held seemed headed for trouble these investors headed for the door the wall street rule more recently some of these institutions have been using the ownership rights attached to their shares to pressure firms to act in the shareholders interest some have even argued that there is a synergy between gathering information for use in trading shares speculation and intelligently pressuring firms to improve performance intervention we argue that these motives can also conflict analyzing these motives allows us to predict which firms are most likely to attract institutional intervention which in turn has crosssectional implications for firm ownership structure recent examples suggest that institutional investors with large stakes sometimes intervene and sometimes follow the wall street rule so that there is indeed a choice to be studied in the early 1990s there was a wave of activism by a variety of large institutional investors among them calpers the california public employees pension fund putnam management a mutual fund manager and j p morgan a bank holding company these institu

partial ownership arrangements and collusion in the automobile industry this paper develops a conjectural variation model that allows for partial ownership arrangements and foreign trade this model is applied to the japanese and us automobile industries although collusion is found to occur in the japanese automobile industry it is found to be more competitive than the us automobile industry the effect imports have on firms price cost margins in both countries is also found to be different

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

price flexibility in japan 1970 1992 a study of price formation abstract we estimate probability and size of price change conditional upon the deviation of a price from its target level for a large number of individual wholesale and consumer price indices in japan we find robust and strong asymmetry in price adjustments especially among cpis cross section variations in price responsiveness depend upon characteristics of distribution channels in particular efficiency and input measures of distributive services using a simulation model we also find that the macroscopic downward rigidity almost disappears if the size of the shock is small compared to the target inflation rate

investment and the behavioral theory of the firm evidence from shipbuilding investment in production assets is a strategic decision that results from organizational search and risk taking the behavioral theory of the firm predicts that performance below the aspiration level and slack resources initiate organizational search risk theory predicts that performance below the aspiration level increases risk tolerance this paper integrates these theories to form a theory of problem and slack driven strategic change and applies it to the growth of production assets the predictions are tested by analyzing the growth of production assets in the japanese shipbuilding industry yielding clear evidence that high performance causes low asset growth but no effect of slack copyright 2003 oxford university press

results oriented versus rules oriented trade policies a theoretical survey this paper surveys the recent literature on results oriented versus rules oriented trade policies after presenting a simple setting capturing the basics of results oriented markets access schemes we discuss extensions which have been or might be developed in this line of research in particular we investigate how the use of simple costly verification of information models might be fruitfully applied to analyze the incentives for countries to choose between results oriented and rules oriented trade policies

investing in capabilities the dynamics of resource allocation in this research we examine the dynamic capability of resource allocation to invest in operational capabilities using a computer simulation we model a process of firms competing in factor markets for opportunities to invest in existing capabilities and acquire new ones based on the simulation results we derive a set of propositions about the conditions under which there are and are not performance benefits from possessing a superior ability to search for new capabilities because the definition of what constitutes a new capability is based on a firm s preexisting capabilities we also incorporate differences in initial endowments into the analysis we find that endowment and search ability both matter and that in many circumstances the effects of possessing a superior endowment dominate the effects of superior search ability

vertical restraints and producers competition this paper examines the rationale for vertical restraints it shows that there are important circumstances under which these restrictions have significant anti competitive effects the paper focuses on the consequences of exclusive territorial arrangements among the retailers of two products which are imperfect substitutes such arrangements are shown to increase consumer prices under plausible conditions the increase in consumer prices is sufficiently large to more than offset the deleterious effects from double marginalization resulting from reduced competition among retailers the imposition of exclusivity provisions is may be part of a nash equilibrium among producers these results hold whether there are or are not franchise fees this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item

know how and asset complementarity and dynamic capability accumulation the case of r d dynamic capabilities enable firms to create new products and processes and respond to changing market conditions this empirical investigation of dynamic r d capabilities deals with the role of complementary know how and other assets in the context of changing conditions in the u s petroleum industry during the 1970s and early 1980s the analysis suggests that in response to rising oil prices firms with larger amounts of complementary technological knowledge and physical assets also undertook larger amounts of r d on coal conversion a synthetic fuels process 1997 by john wiley sons ltd

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

theorising from case studies towards a pluralist future for international business research the literature on case studies both in the field of international business ib and in the social sciences more generally has tended to focus on the methods of data production and analysis suited to this research strategy in contrast in this paper we investigate methods of theorising from case studies we seek to understand how case researchers theorise and how future ib research might utilise case studies for theorising by means of a qualitative content analysis of case studies published in journal of international business studies academy of management journal and journal of management studies we construct a typology of theorising from case studies two dimensions of the case study namely causal explanation and contextualisation form the basis for our typology we distinguish four methods of theorising inductive theory building interpretive sensemaking natural experiment and contextualised explanation only the first of which has been widely used in jibs in the period that we investigate on the basis of our own qualitative analysis we show the limitations of inductive theory building and argue that greater utilisation of the other methods of theorising would enhance the case study s explanatory power and potential for contextualisation we argue for a more pluralist future for ib research

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

dominance by birthright entry of prior radio producers and competitive ramifications in the u s television receiver industry the u s television receiver industry evolved to be an oligopoly dominated by firms that produced radios prior to tvs data on the experience of all u s radio manufacturers and on the length of survival and rate of innovation of all u s tv entrants are collected to analyze how radio experience influenced entry firm performance and the evolution of market structure in the tv industry consistent with a model of the evolution of an oligopolistic industry more experienced radio firms were more likely to enter tv manufacturing had higher innovation rates and in turn had greater market shares and longer survival suggesting that firm capabilities and the evolution of the tv industry s market structure were critically shaped by firms experience prior to entry copyright 2000 john wiley sons ltd

what does japanese trade structure tell us about japanese trade policy some argue foreign access to japanese markets remains tightly controlled and that if japan is to be a member in good standing of the international economic system japan must do more than just adhere to the formal rules of the gatt japan must show by the results of its international economic transactions that foreign access to its market is not tightly controlled as this point of view is increasingly dominating american economic diplomacy with japan it is particularly important that its premise be examined first i examine japan s growth record and trade record to the extent that japan s trade performance is different i explore whether the difference can legitimately be attributed to japanese policies this paper finds that neither the price behavior of japanese firms nor the pattern and volume of what japan imports or exports suggests that japan s trade regime is different some of japan s economic institutions may be distinctive but there is little evidence they produce outcomes which distort the international economic system what remains to be explained is the conviction of so many that japan is more a parasite than a pillar of the international economic system the record of economic research directly and indirectly bearing on this issue does not support such a conclusion at all

organizational susceptibility to institutional complexity critical events driving the adoption and implementation of the ethics and compliance officer position the institutional environment is complex this complexity is characterized by forces that ebb and flow in wavelike patterns as societal expectations evolve with attention coalescing around specific events and then dissipating some of these critical events are broad and affect many firms whereas others are narrow and affect individual firms in either case when they occur these events elevate organizational susceptibility to societal demands but encourage different kinds of behavior in response this study seeks to model this complexity in an area of growing interest for organization scholars business ethics in particular i examine how firms respond to shifting societal pressures for greater ethical behavior by adopting and implementing the ethics and compliance officer position from 1990 to 2008 results demonstrate that although firms decide when to adopt in response to broad fieldwide critical events it is narrower firm specific critical events that determine resource commitments in implementation

multimarket contact and collusive behavior traditional analyses of industrial behavior typically link the exercise of market power in an industry to internalfeatures such as demand conditions concentration and barriers to entry nevertheless some economists have remained concerned that external factors such as contact across markets may also play a significant role in determining the level of competitiveness in any particular industry in this article we examine the effect of multimarket contact on the degree of cooperation that firms can sustain in settings of repeated competition we isolate conditions under which multimarket contact facilitates collusion and show that these collusive gains are achieved through modes of behavior that have been identified in previous empirical studies of multimarketfirms

the trade creating effects of business and social networks evidence from france using theory grounded estimations of trade flow equations this paper investigates the role that business and social networks play in shaping trade between french regions the bilateral intensity of networks is quantified using the financial structure and location of french firms and bilateral stocks of migrants compared to a situation without networks migrants are shown to double bilateral trade flows while networks of firms multiply trade flows by as much as four in some specifications finally taking network effects into account divides the estimation of the impact of transport costs and of the effect of administrative borders by around three

financial market reactions following technological discontinuities a non event study in two industries a large body of literature has explored the challenges of technological change for established firms much of this work has focused on factors internal to firms such as inertial routines or managers cognitive limitations that constrain incumbents development of new capabilities and response to new technologies but institutional pressures arising from financial markets and the securities analysts who mediate such markets likely also play a role in whether and how incumbent firms respond to technological change we know little about how financial markets and securities analysts react as an incumbent firm is faced with a radical technological discontinuity that threatens to substitute for the existing technology understanding such reactions is critical as they further influence whether and how incumbents respond to technological discontinuities in this article i explore securities analysts reactions to incumbent firms faced with technological discontinuities in two industries digital technology in photography and voice over internet protocol voip technology in wireline telecommunications i find that these discontinuities go largely unmentioned in analysts reports and appear to have little influence on analysts recommendations or stock prices even for several years the findings suggest further that analysts and investors continue to reward incumbents for cash flows arising from focusing on the existing business and technology despite the increasing certainty of technological obsolescence copyright 2008 oxford university press

predation reputation and entry deterrence abstract economists often argue that predatory practices are irrational since there exist cheaper or more certain means to gain or maintain a monopoly our gametheoretic equilibrium analysis suggests that if a firm is threatened by several potential entrants then predation may be rational against early entrants even if it is costly when viewed in isolation because it yields a reputation which deters other entrants asymmetric information plays a crucial role in our analysis since it provides the rationale for entrants to base their expectations of the firm s future behavior on its past actions the analysis also suggests methods to treat general reputational phenomena

public policy private preferences and the japanese trade pattern as nontariff forms of trade protection proliferate it has become more difficult to analyze the impact of trade policy on trade flows in a number of well known papers researchers have attempted to infer the impact of trade policy indirectly by ascribing to trade policy the differences between actual and predicted trade flows much of the work has been applied to analysis of japanese trade policy and the conclusions of these studies have differed widely some previous research has also ascribed a role to the keiretsu or networks of affiliated firms in explaining japan s apparently distinctive trade performance this paper presents a model that integrates data on factor endowments observable protection in traditional and nontraditional forms and the keiretsu it extends existing research in two principal ways first alternative cross national models of comparative advantage are nested to permit the identification of critical modeling assumptions underlying the divergent conclusions of the previous stu

an institution based view of executive compensation a multilevel meta analytic test we offer a multilevel meta analytic study of the firm performance executive compensation relationship comprising prior tests derived from 332 primary studies nested in 29 countries although our work modestly supports the optimal contracting theory based expectation that compensation is positively associated with performance it also reveals considerable cross country variability in this relationship we trace this variance to differences in the level of development of the formal and informal institutions protecting investors against managerial overcompensation and underperformance in terms of intentionally devised and enforced formal institutions we find significant positive moderating effects on the focal relationship of the rule of law and strength of investor protection variables for self enforcing informal institutions we find similar effects for concentrated ownership and compensation related entries in codes of good corporate governance we also find that formal and informal institutions function in a complementary manner in shaping the performance sensitivity of executive compensation the focal relationship becomes stronger when concentrated owners have access to well functioning courts and when informal norms of good governance are supported by shareholder protection laws our study thus suggests that optimal contracting theory must be supplemented with an institution based view to account for the conditioning effects of institutions on national contracting environments

resolving the commitment versus flexibility trade off the role of resource accumulation lags we examine how time consuming resource accumulation influences the classic strategy trade off between commitment and flexibility in particular using 1975 95 data from the worldwide petrochemical

structure of agricultural protection in industrial countries abstract the nominal rates of agricultural protection in ten industrial countries from 1955 to 1980 are estimated with the same commodity coverage and data definitions a regression analysis is conducted to explain variations in the measured level of agricultural protection in terms of political as well as economic factors nearly 80 percent of the variations is accounted for by differences in agriculture s comparative advantage agriculture s share in total economy the international terms of trade between agricultural and manufactured commodities regionalism eec and food security consideration associated with non military alliance

business groups and social welfare in emerging markets existing evidence and unanswered questions abstract this paper reviews existing studies of the role of emerging market business groups a ubiquitous but poorly understood organizational form i first suggest that understanding the definition of business groups is itself an interesting albeit under studied research issue i then argue that the existing evidence suggests that the performance effects of group affiliation are large and generally positive there is substantial evidence that part of this is due to welfare enhancing functions originating in the idea that groups substitute for missing outside institutions but that part is also due to welfare reducing minority shareholder exploitation evidence is lacking on the extent to which groups facilitate rent seeking or the exercise of market power evidence is also lacking on the extent to which groups hamper the future development of markets the paper identifies areas where research is needed before current competition policy experiments in countries like china india and korea can be evaluated

effects of social capital and power on surviving transformational change the case of initial public offerings we examined how social capital and the power of venture capitalists and founderceos affect ipo firm survival using data from 218 u s initial public offerings conducted in 1992 we found that average management team tenure and an ipo deal s network embeddedness decreased the likelihood of failure during a firm s first five years as a public entity founder ceo presence at the time of an ipo interacted with ceo ownership to decrease the likelihood of failure and ceo ownership and venture capitalist ownership concentration also decreased that likelihood evolutionary perspectives on organizations are often accompanied by the presumption that organizations face an increased risk of failure early in their lives owing to liabilities of newness aldrich 1999 stinchcombe 1965 as organizational goals and patterns of activity become routinized over time increased reliability in performance and accountability for actions taken enhance a firm s survival chances hannan freeman 1984 this process however also generates strong inertial pressures that not only discourage organizational change but also because of the potential for disruption to existing internal and external routines make change hazardous research findings suggest that even in older better established firms significant transformational events during their life cycles can effectively reset the clock and reintroduce risks associated with the liability of newness as firms struggle to adapt strategies internal operational and administrative processes and or external ties and relationships amburgey kelly barnett 1993 thus transformational change in organizational operations decreases efficiency and increases failure rates at least in the short term as resources and attention are diverted from normal routinized operating functions to processes involving adaptation and reorientation haveman 1992

morals or economics institutional investor preferences for corporate social responsibility this article presents the results of a study that analysed whether social responsibility had any bearing on the decision making of institutional investors being that institutional investors prefer socially aligned organizations this study explored to what extent the corporate actions and or social environmental investments influenced their decisions our results suggest that there are specific variables that affect the perceived value of the organization leading to decisions to not only invest but whether to hold or sell the shares and therefore having a consequential impact on the capital market s valuation

conflict of interest and the credibility of underwriter analyst recommendations brokerage analysts frequently comment on and sometimes recommend companies that their firms have recently taken public we show that stocks that underwriter analysts recommend perform more poorly than buy recommendations by unaffiliated brokers prior to at the time of and subsequent to the recommendation date we conclude that the recommendations by underwriter analysts show significant evidence of bias we show also that the market does not recognize the full extent of this bias the results suggest a potential conflict of interest inherent in the different functions that investment bankers perform

change in domestic network centrality uncertainty and the foreign divestment decisions of firms abstract we investigate the role of domestic interfirm networks for the foreign divestment decisions of firms we argue that firms foreign operations risk being divested when a firm becomes more central in its domestic network positive changes in firm centrality at home facilitate access to information about new business opportunities but they may also lead firms to consider reconfiguring their value chain activities and resources across locations the resulting opportunity costs of maintaining foreign operations could subsequently lead to their divestment moreover we argue that the positive association between an increase in firm centrality in the domestic network and foreign divestment is stronger under higher uncertainty as pursuing new business opportunities at home becomes more appealing we distinguish between firm specific uncertainty and domestic market uncertainty we test and get support for our hypotheses using foreign subsidiary data from u s firms in the ict industry

dared to care organizational vulnerability institutional logics and mncs social responsiveness in emerging markets a significant gap exists in our understanding of what explains the varying responses of multinational corporations mncs to social issues in emerging markets arguably in a setting where both market institutions and regulations and norms of corporate social responsibility are underdeveloped it is more difficult for corporations to take actions beyond those that serve their immediate economic interests proposing a social movement perspective on mncs responsiveness to social issues in emerging markets we identify the mechanisms by which online activists grab firms attention and force them to become more socially responsive a perception of organizational vulnerability and a home country institutional logic that is consistent with the demands of the online campaign provide political opportunity structures that hasten the corporate response but affect the magnitude of firm response differently we test our framework in the empirical context of corporate philanthropic action following the 2008 earthquake in sichuan province in china which triggered an online campaign that questioned mncs donations to the disaster relief effort our study contributes to the literature on heterogeneous organizational responses to social movements a better understanding of the antecedents for mncs social responsiveness in emerging markets and research on mncs

product demography of de novo and de alio firms in the optical disk drive industry 1983 1999 little theory and research addresses the ways organizational context affects the demography of products we examine this question here by focusing on an organization s mode of market entry specifically we explore differences between firms entering a market de novo start up and those entering de alio diversification from another market we analyze all products ever shipped in the worldwide optical disk drive odd industry 1983 1999 we find an almost paradoxical empirical pattern whereby de novo firms typically introduce products with widely agreed upon better that is universally more appealing technological characteristics yet these products generally stay on the market for a shorter time than those of de alio firms whose products generally display less appealing technological features

event studies in management research theoretical and empirical issues we examined the use of event studies in management research and found that there was inadequate attention paid to theoretical and research design issues this lack of attention may lead to false in

trade policy issues and empirical analysis interest in u s trade policy has been stimulated in recent years by the massive american trade deficit by the belief that intervention by foreign governments in international markets has given other countries a competitive edge over the united states and by concern about the increase in protectionism among industrial countries in turn major analytical developments in international economics have revolutionized trade theory broadening its scope both by introducing in a more formal manner such concepts as imperfect competition increasing returns product differentiation and learning effects and by including the study of political and economic factors that shape trade policy decisions this collection of papers the result of a conference held by the nber applies these new trade theories to existing world cases and also presents complementary empirical studies that are grounded in more traditional trade theories the volume is divided into four parts the papers in part 1 consider the problem of imperfect competition empirically assessing the economic effect of various trade policies introduced in industries in which the new trade theory seems to apply those in part 2 isolate the effects of protection from the influences of the many economic changes that accompany actual periods of protection and also examine how the effects from exogenous changes in economic conditions vary with the form of protection part 3 provides new empirical evidence on the effect of foreign production by a country s firms on the home country s exports finally in part 4 two key bilateral issues are analyzed recent u s japanese trade tensions and the incident involving the threat of the imposition of countervailing duties by the united states on canadian softwood lumber

security analysts career concerns and herding of earnings forecasts several theories of reputation and herding see e g scharfstein and stein 1990 suggest that herding among agents should vary with career concerns our goal in this paper is to document whether such a link exists in the labor market for security analysts specifically we look at the relationship between an analyst s job tenure a proxy for career concerns and various measures of stock earnings forecast performance we establish the following key results 1 older analysts are more likely to produce earnings forecasts of firms before younger ones 2 their forecasts also deviate more from the consensus forecast than their younger counterparts we argue that these results are consistent with some reputational models of herding we also establish a number of auxiliary findings regarding the relationship between forecast accuracy and frequency of forecast revisions with job tenure

securities analysts and incumbent response to radical technological change evidence from digital photography and internet telephony a large body of research has explored the factors that impede established firms responses to radical technological changes while it is widely acknowledged that managers face pressures from financial markets to choose strategies that maximize shareholder value little work in the technological change literature has considered the possible influences of public equity markets and the securities analysts who mediate them on incumbent firms challenged with technological change in this paper i begin to address the topic by empirically exploring how securities analysts react to the different strategies undertaken by incumbent firms faced with radical technological change i study the question in two settings the shift to digital technology in photography and the advent of voice over internet protocol voip technology in wireline telecommunications i find evidence that analysts are more attentive and positive toward incumbents strategies that extend and preserve the existing technology than toward strategies that respond directly to the new technology in these settings analysts largely ignore incumbents strategies that directly incorporate the new technology for several years following the discontinuity this study provides insights into the nature and direction of analysts reactions to firms strategies in the context of technological change and is a first step toward better understanding of the potential role of analysts and financial markets in incumbent adaptation

organizational considerations in the evaluation of capital assets toward a resource based view of strategic investment by firms during the last three decades sophisticated techniques for analysis of market investment have been developed by financial economists at the same time however concepts and methods for analysis of resource allocation within firms have lagged behind market theory the analysis of investment within firms has been based primarily on applications of economic theory that exhibit serious weaknesses the special problems associated with analysis of investment in firms have become an important concern of strategic management recent resource based approaches to strategy have developed valuable insights into the limitations of economic analysis of the firm although the resource based work has not yet provided formal methods comparable to the capital asset pricing model it has made important progress in building foundations for an alternative analysis of economic organization this paper explores weaknesses in the financial economic analysis of the firm and examines alternative perspectives in the work on resource based strategy the paper focuses on problems associated with use of market models such as the capm for capital allocation within firms working from basic premises of transaction cost economics the paper identifies important flaws in financial economic techniques for defining hurdle rates for capital projects the paper discusses underlying logical problems associated with the application of market theory to complex organizations and examines ways that alternative approaches to resource allocation have begun to evolve within the field of strategic management

competition in japan japan registered a remarkable 6 5 percent rate of economic growth from 1955 to 1990 catching up with high income western countries in its level of economic development during the 1950s 1960s 1970s and into the 1980s japan s share of world exports rose dramatically from 2 9 percent in 1960 to 6 1 percent in 1970 8 2 percent in 1980 and a peak of 9 8 percent in 1985 porter takeuchi and sakakibara 2000 japanese firms were increasingly successful internationally in large visible industries such as automobiles semiconductors and consumer electronics the striking economic success of japan was widely attributed to a set of economic institutions and policies that encouraged collaboration and limited competition the japanese case then called into question many of the bedrock assumptions of competition thinking it seemed to show that there was a different path to economic prosperity this article begins by examining competition in japan and the supporting policies and institutions during the twentieth century many factors seem to suggest that competition in japan has been less intense but there is an awkward complication the empirical evidence about the intensity of competition in japanese industry does not support the conclusion the story clearly is more complicated we seek to reconcile the apparent differences between policy and institutional circumstances and the empirical evidence by examining the types of competition that prevail across japanese industries and the underlying causes japan indeed pursued an array of policies that limited competition but these policies were not applied throughout the economy in fact those industries in which competition

supplier preferences and dumping an analysis of japanese corporate groups while the nature and intensity of issues confronting the international economy change over time the trade and investment tensions between the u s and japan have continued unabated for many years in part they find their origin in japan s overall and bilateral trade surpluses although these are generally recognized as macroeconomic phenomena apart from the trade imbalances bilateral disputes arise also from the perceived inability of american exporters and investors to penetrate the japanese market there is empirical evidence indicating that the japanese firms have a distinct preference to buy their needed machinery and other inputs from other japanese firms 5 6 7 it is the closed nature of japan s market that triggered the bilateral negotiations known as structural impediments initiative one reason for the difficulty faced by outsiders trying to sell in japan is the way in which japanese companies are organized keiretsu is a form of interlocking relationships among japanese firms and industry groups 2 that allegedly enjoys advantages such as risk sharing and stable inter firm relations which encourage efficient investment in relation specific assets and oligopolistic market power 1 it has been suggested as a possible reason for low sales by non japanese firms to japanese firms operating inside and outside of japan there is certainly a strong tendency for member companies of a keiretsu to source from within their own corporate group this paper explores an economic rationale for this behavior by examining the implications of cross ownership and implicit contracts long term reciprocity and shows that supplier preferences unambiguously increase the incidence of dumping in this fashion the paper provides a link between two sets of stylized facts supplier preferences by japanese firms and the numerous dumping complaints brought in the us against large japanese companies supplier preferences

testing a causal model of corporate risk taking and performance the determinants of organizational risk taking and its impact on economic performance are critical issues in strategic management using a model that included risk performance performance expecta

managerial commitments and technological change in the us tire industry this paper examines the response of the five largest american producers of automotive tires to a radical technological change the introduction of radial tires many theories attempt to explain firms response to radical technological change the effects of new technologies on economic incentives and on established firm capabilities are the factors highlighted in existing theory the tire producers invested heavily in radial technology despite the expected destruction of manufacturing competencies and the prospect of poor financial returns this paper suggests that an additional factor managerial commitments can also play an important role in shaping firms response to disruptive technology it argues that firms are more likely to adopt commitment enhancing than commitment destroying technologies and are likely to choose paths of implementation that are compatible with existing commitments copyright 1997 by oxford university press