new venture survival ignorance external shocks and risk reduction strategies abstract although scholars have long recognized the increased mortality risk that new ventures face in terms of a liability of newness most of the discussion around this risk has been in terms of the contextual constraints that new ventures face and the difficulties that managers have in overcoming them this emphasis is in part a reflection of the perils of newness but also stems from the retrospective and aggregate perspective taken by researchers although the macro level perspective of new venture mortality has made a significant contribution to our knowledge of mortality risk patterns there has been little interest in identifying how venture managers can address the risks that all new organizations face we argue that in order to make progress in explaining new venture survival a theoretical model is required that uses a more micro level perspective to explain new venture failure and the flip side new venture survival in this paper we develop such a model we establish a definition of mortality risk and argue that the liability of newness is largely dependent on the degree of novelty ignorance associated with a new venture novelty is viewed in three different dimensions viz to the market to the technology of production and to management novelty to the market concerns the degree to which the customers are uncertain about the new venture novelty in production concerns the extent to which the production technology used by the new venture is similar to the technologies in which the production team has experience and knowledge novelty to management concerns the entrepreneurial team s lack of business skills industry specific information and start up experience we argue that mortality risk increases with the degree of novelty in each dimension and with the number of dimensions in which the new venture is novel we propose that the decline in mortality risk occurs as the venture s novelty in each of the three dimensions is eroded by information search and dissemination processes this allows the new firm to become an established business and explains what we term the evolutionary path of mortality novelty and risk decline monotonically after a period of adolescence as ignorance decays over time due to passive learning we also propose that there is a strategic mortality risk path that reflects the impact of positive and negative shocks shocks are exogenous events that alter the overall degree of novelty at a point in time positive shocks decrease overall novelty while negative shocks increase overall novelty and reversals endogenous actions that increase the overall novelty of the new venture at a point in time on the mortality risk of a new venture if the incidence and effects of these disruptions can be managed then venture managers may be able to mitigate the mortality risk for their venture we argue that risk reduction strategies can be employed most of which impact on one or more of the dimensions of mortality risk in order to increase the firm s chances of survival a series of risk reduction strategies are proposed and their impact on the determinants of mortality risk is considered

rival unionism and membership growth in the united states 1900 to 2005 a special case of inter organizational competition this article uses time series data from 1900 to 2005 to explore the effects of rivalry between labor unions as a special case of inter organizational competition holding constant economic and political factors that typically account for changes in union density we investigate how competition from rival labor federations and from independent unions affect both union density and a measure for the density of the dominant federation afl afl cio adjusted for membership changes from mergers and splits we measure competition by the number of unions and the size of rivals while much existing literature measures state regulation with categorical coding for specific periods we measure the effect of state enforcement directly with counts of pro labor and pro management unfair labor practice cases adjudicated by the national labor relations board we assess the effect of left wing political culture using the popular vote for socialist and communist candidates in presidential elections both the number of memb

does the energy efficiency paradox exist technological progress and uncertainty we explain why firms may choose not to undertake investments inenergy saving technologies that appear profitable from a net presentvalue perspective as future technological advances are inherentlyuncertain and investments in new technology are at least partly irreversible it may pay to postpone investments in energy savingand wait for the arrival of improved varieties this insight casts doubton the existence of so called low hanging fruits in energy saving although we do not wish to deny that organisational failures may alsobe important failure to appreciate the underlying stochasticity oftechnological progress may obscure the insight that there is value inwaiting and costs involved in terminating the option to invest theappetite for low hanging fruits will be less when these costs areincorporated in the analysis we demonstrate that the effect of thearrival rate of new technologies on the adoption lag for a rational firmis ambiguous the same holds for the effect of the expected jump inefficiency of new technologies government policies aimed at enhancingthe adoption of new technologies through stimulation of r d maytherefore be counterproductive

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

when are forest visits valued the most an analysis of the seasonal demand for forest recreation in poland while the demand for forest recreation has been a topic covered in many studies little attention has been paid so far to seasonal demand in a forest context the seasonal analysis is particularly interesting because of inter temporal change in forest attributes throughout the year which can influence trip taking behavior in this paper the model of seasonal forest visitation is developed to provide a richer understanding of the role played by seasonal fluctuation on a distribution of forest social benefits the analysis is based on an on site survey conducted in four forests in poland results show that the most valuable forest trips are those taken in fall and that seasonal trips are separable

international search behavior of business group affiliated firms scope of institutional changes and intragroup heterogeneity this paper investigates whether and when affiliation to business groups enables or constrains firms international search behavior during institutional transitions we theorize that given the unique structure and complex form of business group organizations the search behavior of affiliated firms is influenced by the degree of misalignment in outlook at the group and affiliate levels of management we identify the scope of institutional changes business group attributes and affiliate characteristics as sources of such misalignment the results from panel data on 298 firms from the indian pharmaceutical industry for the 1992 2007 period show that the constraining effects of business group affiliation are observed only when institutional changes are specific to the affiliates industry and not when broad institutional changes affect the business group as a whole moreover we observe heterogeneity in the search behavior of group affiliated firms first the degree of misalignment is greater in the case of affiliates belonging to older business groups and those that are more distant in terms of age and industry since the group s founding second by contrast and suggesting an alignment in outlook we find that affiliated firms that occupy a prominent position within a group or industry are able to bargain for and receive attention and support from the business group to undertake international search our findings have implications for research on the role of business groups in a changing institutional context and for the strategic adaptation of firms embedded in complex organizational and institutional settings

an ecology of ideology theory and evidence from four populations this paper analyzes the founding rates of two types of jewish agricultural cooperatives the moshav and the kibbutz to show how political ideology intersects with resource requirements to produce competition and mutualism between organizations these two populations which share ideology and a resource base competed with each other they both enjoyed mutualism with the population of credit cooperatives which represented a kindred ideology but relied on different resources they both suffered competition from the population of corporations which represented a rival ideology capitalism copyright 2004 oxford university press

an optimization methodology for identifying robust process integration investments under uncertainty uncertainties in future energy prices and policies strongly affect decisions on investments in process integration measures in industry in this paper we present a five step methodology for the identification of robust investment alternatives incorporating explicitly such uncertainties in the optimization model methods for optimization under uncertainty or stochastic programming are thus combined with a deep understanding of process integration and process technology in order to achieve a framework for decision making concerning the investment planning of process integration measures under uncertainty the proposed methodology enables the optimization of investments in energy efficiency with respect to their net present value or an environmental objective in particular as a result of the optimization approach complex investment alternatives allowing for combinations of energy efficiency measures can be analyzed uncertainties as well as time dependent parameters such as energy prices and policies are modelled using a scenario based approach enabling the identification of robust investment solutions the methodology is primarily an aid for decision makers in industry but it will also provide insight for policy makers into how uncertainties regarding future price levels and policy instruments affect the decisions on investments in energy efficiency measures

an aggregate model of the credit union industry prior to 1971 credit unions cus were almost exclusively short term lenders with their deposit base consisting primarily of passbook share accounts radical institutional changes during the 1970 s have reshaped the industry and increased the competition between cus and other financial institutions the introduction of federal share insurance in 1971 coupled with the highest deposit ceiling allowed by regulators allowed cus to attract funds from other intermediaries while cus have a yield advantage they have been much slower to introduce day of deposit to day of withdrawal interest accumulation so that many cu deposits may be regarded more as short term certificate accounts rather than open passbooks thus as the federal reserve system and the federal home loan bank board have liberalized cu yields maturities and minimum denominations it has affected cus ability to attract share deposits substantial competition exists in loan markets as well banks finance companies and the credit acceptance subsidies of many manufacturing corporations also extend consumer credit while cus have entered mortgage markets in this study a six equation simultaneous model is developed to estimate three different aggregate flows within the industry new loan extensions net share flows and net change in financial investments two price variables the average cu loan rate and average dividend rate and the median maturity on newly extended loans to account for endogenous changes in non price terms which may affect both the supply and demand for loans this study is important to both researchers and policymakers despite the movement to make credit unions more like and more competitive with other financial institutions there remains a general perception that cus are different that they cannot be analyzed by applying well known economic theories and methods and that they remain insulated from both general economic conditions and competition the evidence from this study suggests that those perceptions are in error even though the industry remains small relative to other providers of consumer financial services because cus are no longer insulated it is important to know the impact of changing economic conditions on the industry department of economics john carroll university funding by the national credit union administration ncua is gratefully acknowledged participants in a seminar at ncua provided the author with seveal suggestions which were incorporated in the research special thanks are due to john wolken who spent countless hours in discussion with the author and catherine melfi and george kosicki who provided research assistance any remaining errors or omissions are the sole responsibility of the author

the individual travel cost method with consumer specific values of travel time savings the treatment of the opportunity cost of travel time in travel cost models has been an area of research interest for many decades our analysis develops a methodology to combine the travel distance and travel time data with respondent specific estimates of the value of travel time savings vtts the individual vtts are elicited with the use of discrete choice stated preference methods the travel time valuation procedure is integrated into the travel cost valuation exercise to create a two equation structural model of site valuation since the travel time equation of the structural model incorporates individual preference heterogeneity the full structure model provides a travel cost site demand model based upon individualized values of time the methodology is illustrated in a study of recreational birdwatching more specifically visits to a stork village in poland we show that the usual practice of basing respondents vtts on 1 3 of their wage rate is largely unfounded and propose alternatives including a separate component of the travel cost survey aimed at valuation of respondents vtts or as a second best asking if they wish if their journey was shorter and for those who do use full hourly wage as an indicator of their vtts

the direct employment effects of new businesses in germany revisited an empirical investigation for 1976 2004 based on an improved and extended database the establishment history panel we extend the analysis of fritsch and weyh small business economics 27 2 245 260 2006 by investigating the development of employment in german start up cohorts for the period 1976 to 2004 we confirm the typical pattern found in start up cohorts an initial increasing number of employees that is soon followed by a decreasing number we also provide some of the first evidence for the liability of aging phenomena in germany older firms face a relatively high risk of exit we find that most entries with relatively large initial employment grow substantially in the first two decades however these businesses suffer from a considerable employment decline after 25 years

energy conservation investment do consumers discount the future correctly we argue that the apparently high discount rates attributed to investors making energy conservation investments are not irrational or the result of some market failure rather they may result from an investor recognizing that many conservation investments entail substantial sunk costs in the presence of these costs and uncertainty over future conservation savings consumers should use a higher hurdle rate for investment than if there were no uncertainty simulations suggest that the hurdle rate should be about four times greater than the standard rate an implication of our model is that tax subsidies for the purchase of conservation capital are likely to be ineffective we discuss alternative policy approaches which are more likely to increase energy efficient investment namely mandatory efficiency standards and energy taxes

on the relationship between firm size and export intensity export marketing literature supports the view that firm size is positively related to export intensity although the empirical findings have been mixed a number of theoretical arguments are used to support this proposition i e international marketing economies of scale limited managerial and financial resources of small firms decisionmaker s risk perception based on a large survey of the italian manufacturing industry the article falsifies the proposition and challenges some widely held assumptions in export marketing literature

residential energy efficiency and distributed generation natural partners or competition abstract residential energy efficiency and distributed generation seem to be natural partners in our journey towards a more sustainable energy future a growing range of energy efficient consumer technologies and extraordinary declines in photovoltaics system prices has seen household electricity demand fall whilst a growing proportion of the remaining load is provided by household self generation australia is a particularly interesting example of these developments with around 15 of households now possessing a pv system while per capita household demand has also fallen markedly however existing retail electricity tariffs and regulatory arrangements can create mixed incentives for households contemplating both pv and energy efficiency options and for their network service providers this is certainly the case in australia with net metering arrangements that value self consumption of pv far more than pv exports to the grid there are also complex benefits for the electricity network created by these household energy resources that can be significant in this paper we use real household load and pv data from sydney households to model the potential implications of existing electricity tariff arrangements on the financial attractiveness of pv and energy efficiency we model these options separately and in combination for both households implementing these options and their network service providers our results highlight how inappropriate tariffs may well adversely impact on the value that the combination of energy efficiency and pv offers not only to households but also to their network service providers and suggest ways that such impacts might be ameliorated by acknowledging the benefits that these resources can offer to the electricity network

modeling recreation demand in a poisson system of equations an analysis of the impact of international exchange rates we extend count data travel cost modeling by developing a utility theoretic system of semilogarithmic recreation demand equations the restrictions required to make the system utility theoretic are applied during estimation the model is applied to individual wilderness recreation trips in a system of four canadian wilderness parks the resulting demand system is used to examine the impacts of changing u s canadian currency exchange rates on participation and welfare of u s recreationists

investment in technological innovations an option pricing approach abstract this paper develops a model of the optimal investment strategy for a firm confronted with a sequence of technological innovations we incorporate many of the most important characteristics of real world technology markets for example we permit innovations to be stochastic in their arrival times and their profitability we also incorporate learning so that firms adopting current innovations become better able to benefit from future innovations the model yields four distinct investment strategies the model is then used to predict actual firm policy these implications are discussed and compared with observed firm behavior

the efficiency paradox bureaucratic and organizational barriers to profitable energy saving investments abstract the paradox of why profitable energy saving investments are not undertaken continues to provoke debate the underlying phenomenon might be called the efficiency paradox because it represents a case in which business firms which are often presumed or taken axiomatically to be economically efficient make decisions that do not maximize profits new data from one of the us environmental protection agency s voluntary pollution prevention programs enables this paradox to be explored statistically the data show that both the level and variation in returns to lighting upgrade investments cannot be explained by standard economic models substantial gains in energy efficiency can be achieved without sacrificing profitability both economic and organizational factors account for some of the variation in observed returns to these investments but the results suggest a need for improved and more comprehensive theories of the investment behavior of firms and other organizations

the relationship between firm growth size and age estimates for 100 manufacturing industries this study uses a sample of all firms operating in 100 manufacturing industries to examine some aspects of firm dynamics it finds that firm growth the variability of firm growth and the probability that a firm will fail decrease with firm age it also finds that firm growth decreases at a diminishing rate with firm size even after controlling for the exit of slow growing firms from the sample gibrat s law therefore fails although the severity of the failure decreases with firm size copyright 1987 by blackwell publishing ltd

social networking websites who survives abstractthis article studies the relationship between the characteristics of social networking sites snss and their probability of survival the data sample includes 224 snss launched throughout the world from 1995 to 2015 and that can be described by focus strategy business financing methods and interactions with external companies such as partnerships mergers and acquisitions three factors are systematically associated with closure hazard rates first compared with snss that address a specialized audience generalist snss have a three times higher probability of closing second being the target of a merger or acquisition more than doubles the probability of closure third new entrants have higher probability to survive if compared with snss with experience in the industry

implied discount rate and payback threshold of energy efficiency investment in the industrial sector the industrial sector is responsible for about a third of the energy usage in the united states and there is significant energy saving potential from the industrial sector however the phenomenon of energy efficiency gap the scenario in which cost effective energy efficient technologies enjoy only limited market success appears frequently in the industrial sector this article tries to explain this efficiency gap in the industrial sector by empirically estimating the implied discount rates and payback thresholds industrial firms use to evaluate their energy efficiency investments using the industrial assessment centers iac database from 2002 to 2011 with more than 30 000 energy efficiency recommendations this article builds structural models of firms evaluation of an energy efficiency project the model results show that the implied discount rates of medium to small industrial firms range from 40 to 45 and the average payback threshold is about 9 months

measuring angling quality in count data models of recreational fishing a non nested test of three approaches this paper develops a methodology for investigating different specifications of angling quality in recreational demand models the methodology is used to compare three alternative specifications of the relationship between angling demand and site quality the site quality alternatives include chemical concentrations biological stress indices based on the chemicals and catch per unit effort the three alternatives are differentiated using a likelihood ratio non nested testing procedure

learning from age difference interorganizational learning and survival in japanese foreign subsidiaries this paper extends research on experiential learning of foreign subsidiaries by exploring the temporal conditions under which a foreign subsidiary can benefit from the experience of its sister subsidiaries building upon organizational evolution and learning literature we propose that differences in entry timing among sister subsidiaries provide structural conditions that bound the opportunities for inter subsidiary learning we argue that different entry cohorts of sister subsidiaries are beneficial to a focal subsidiary as they provide non redundant complementary experience from their different operational stages and ignite the motivation to learn our empirical analysis of japanese foreign subsidiaries provides strong evidence that survival is enhanced by the experience of different entry cohorts of sister subsidiaries but not by that of similar cohorts qualitative evidence also shows that multiple channels of experience exchange across sister subsidiaries lead to actual learning we further show that the survival benefit derived from different cohorts is contingent on the level of environmental change as well as on the level of experience of the focal subsidiary and its parent firm our research highlights the importance of temporal heterogeneity in the internationalization process and offers implications for the temporal strategy of multinational companies

estimating social welfare using count data models an application to long run recreation demand under conditions of endogenous stratification and truncation this paper develops a negative binomial model of recreation demand that corrects for both truncation and endogenous stratification this approach recovers the demand associated with the general population not just the users of the site this model demonstrates the importance of the joint nature of the population s latent demand for trips and the consumer surplus associated with those trips the empirical results provide an estimate of the willingness to pay by washington state residents for hiking opportunities in the cascade mountain range these results are used to forecast total trips and willingness to pay over the next forty years copyright 1995 by mit press

acquisitions as exaptation the legacy of founding institutions in the u s commercial banking industry this study focuses on how founding institutions impact intraorganizational capabilities and how such imprints may have different external manifestations in subsequent historical eras we introduce the concept of exaptation to organizational theory identifying an important process whereby the historical origin of a capability differs from its current usefulness three founding conditions branching policy modernization and political culture influenced banks development of capabilities for managing dispersed branches and these capabilities subsequently led to variation in banks propensity to engage in acquisitions

a time to grow and a time to die growth and mortality of credit unions in new york city 1914 1990 one vision of organizational evolution suggests that old and large organizations become increasingly dominant over their environment a second suggests that as organizations age they become less able to respond to new challenges in this article the authors investigate which of these visions best characterizes the evolution of state chartered credit unions in new york city from 1914 through 1990 by analyzing the effects of organizational age size and population density on rates of organizational failure and growth the authors find evidence that old and small institutions are more likely to fail while young and small organizations have the highest growth rates

innovation and firm growth does firm age play a role this paper explores the relationship between innovation and firm growth for firms of different ages we hypothesize that young firms undertake riskier innovation activities which may have greater performance benefits if successful or greater losses if unsuccessful using an extensive spanish community innovation survey sample for the period 2004 2012 we apply panel quantile regressions to study the effect of r d activities on firm growth i e sales growth productivity growth and employment growth our results show that young firms face larger performance benefits from r d at the upper quantiles of the growth rate distribution but face larger decline at the lower quantiles r d investment by young firms therefore appears to significantly riskier than r d investment by more mature firms which suggests some policy implications

bigger may be better but is older wiser organizational age and size in the new york life insurance industry the author explores the effects of organizational size and age on failure rates among new york life insurance companies between 1813 and 1985 theorists tend to agree that organizational growth and aging processes increase organizational inertia but they disagree on the effect of that inertia on failure rates he finds that organizational size affects failure rates nonmonotonically but over the actual range of sizes large size almost always lowers failure rates he also finds a strong liability of aging this runs counter to ecological theories of liabilities of newness and adolescence an empirical test of the relative effects of age during periods of environmental turbulence and calm indicates that organizational inertia is especially problematic during turbulent times this suggests that the liability of aging occurs more through obsolescence than senescence at least in the population of insurance companies he investigate

the diffusion of clean technologies a review with suggestions for future diffusion analysis abstract this article gives an overview of the literature on clean technology diffusion followed by suggestions for future analysis findings from diffusion analysis are presented in the form of 10 stylised facts helping the reader to see the forest for the trees the overall conclusion is that the diffusion of clean technology same as the diffusion of normal innovations is governed by endogenous mechanism epidemic learning and learning economies and by exogenous mechanisms policy is important for clean technology diffusion but other factors are important too the characteristics of the clean technology absorptive capacities of potential adopters and the age structure of capital it is often overlooked that companies have a choice they can choose between an end of pipe solution a process change adaptation and a change of process substitution this means that the diffusion and evolution of one clean technology will be at the expense of the diffusion of another clean technology something overlooked in studies on clean technology diffusion further research is needed on the influence of public policy on clean technology choice expectations about learning economies and prices adjustment costs network externalities and complementary innovations on clean technology adoption choices

establishment exits in germany the role of size and age using comprehensive data for west germany this paper investigates the determinants of establishment exit we find that between 1975 and 2006 the average exit rate has risen considerably in order to test various liabilities of establishment survival identified in the literature we analyzed the impact of establishment size and put a special focus on differences between young and mature establishments our empirical analysis shows that the mortality risk falls with establishment size which confirms the liability of smallness the probability of exit is substantially higher for young establishments which are not more than 5 years old thus confirming the liability of newness there also exists a liability of aging since exit rates first decline over time reaching a minimum at ages 15 18 and then rise again somewhat the determinants of exit differ substantially between young and mature establishments suggesting that young establishments are more vulnerable in a number of ways

density dependence versus population dynamics an ecological study of failings in the california wine industry in this ecological study we show that the particular curvilinear formulation of the relationship between density and the failing rate of organizations proposed by hannan and freeman does not hold for the california wine industry between 1940 and 1985 we demonstrate instead that an alternative model focusing on prior foundings and prior failings gives a superior account of the failing rate in this population we argue that hannan and freeman s density dependent model of organizational mortality systematically overstates the negative effects of illegitimacy on business organizations we argue further that their model underestimates business organizations ability to avoid elimination by migrating to neighboring niches and by enlarging their initial niche

technology adoption decisions under irreversibility and uncertainty an ex ante appproach empirical results demonstrate that uncertainty about costs and requirements for environmental compliance is an important determinant of dairy producers investment behavior ex ante forecasting of how uncertainty and irreversibility are likely to affect producers responsiveness to agricultural technologies has implications for the design of environmental policies simulation modeling methods are described the empirical analysis focuses on texas producers propensity to adopt free stall dairy housing free stall investments offer advantages for both productivity augmentation and pollution abatement yet uncertainty and irreversibility are obstacles to adoption implications of this ex ante paradigm for policy design and implementation are discussed

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

when is gibrat s law a law the purpose of this article is to investigate if the industry context matters for whether gibrat s law is rejected or not using a dataset that consists of all limited firms in five digit nace industries in sweden during 1998 2004 the results reject gibrat s law on an aggregate level since small firms grow faster than large firms however gibrat s law is confirmed about as often as it is rejected when industry specific regressions are estimated it is also found that the industry context e g minimum efficient scale market concentration rate and number of young firms in the industry matters for whether gibrat s law is rejected or not

how high are option values in energy efficiency investments high implicit discount rates in consumers energy efficiency investments have long been a source of controversy in several recent papers hassett and metcalf argue that the uncertainty and irreversibility attendant to such investments and the resulting option value account for this anomalously high implicit discounting using their model and data we show that to the contrary their analysis falls well short of providing an explanation of this pattern

entrepreneurial growth the role of international knowledge acquisition as moderated by firm age in line with repeated recent calls for research on specific forms of growth rather than on an undifferentiated notion of total growth our study contributes to the understanding of entrepreneurial growth by this we mean growth through expansion into new geographic markets and or via the introduction of new products or services building on penrose s theory of the growth of the firm and on the research streams she has in part inspired we investigate the impact of knowledge acquisition from international markets on entrepreneurial growth both at home and abroad we further suggest that the effects of international knowledge acquisition on entrepreneurial growth will vary with firm age utilizing longitudinal data on 138 small and medium sized enterprises smes we find that the acquisition of knowledge from international markets fuels growth through market development and that this effect is stronger for international expansion than domestic expansion our results also show that firm age negatively moderates the relationship between international knowledge acquisition and entrepreneurial growth via the introduction of new products or services specifically international knowledge acquisition has a positive effect on growth via new products services development in young firms but a negative effect in mature firms we assume this reflects changes over time in how international knowledge is managed

emission permit banking pollution abatement and production inventory control of the firm abstract in this paper we present a dynamic model modified with emission permit banking and pollution abatement and investigate the effect of emission permit banking and pollution abatement on the production inventory strategy of the firm after introducing emission permit banking and pollution abatement the cost function consists of the inventory holding and production costs the cost of investment in abatement capital goods and the emission procurement selling cost furthermore the inventory holding costs are linear production costs are non decreasing and convex functions of the production level and the costs of investment in abatement capital goods are increasing and convex functions of the investment level we compare the optimal production inventory strategy before emission permit banking and pollution abatement and thereafter the mathematical investigation is based on the arrow karlin model

age order of entry strategic orientation and organizational performance abstract this paper proposes an empirical test of several hypotheses linking age order of entry and strategic orientations to a firm s performance three strategies are defined cost leadership strategy innovative differentiation and marketing differentiation the aim is to show that the impact on performance of both age and each of the three strategic orientations may differ according to a firm s order of entry into an industry following lieberman and montgomery s 1998 evaluation of their major contribution on first mover advantage we emphasize three points first we develop and test hypotheses related to early and late followers strategic orientations broadening the scope of traditional studies on pioneers second the model combines the dimensions of a firm s age order of entry and strategic orientations as well as industry conditions stage of the industry environmental unpredictability and technology diffusion to establish a contingent model of performance analysis finally the empirical study deals chiefly with organizational performance and not market share which is considered a typical advantage accruing to pioneers in addition the scope of the study 582 french manufacturing firms provides the means to fill a void in empirical studies because it is a broad cross sectional test on non u s data the firms are mainly private small to medium sized and single or dominant business firms therefore our assumptions must be understood as particularly applicable to this type of firm the results reveal important lessons for practitioners first we did not find a first mover advantage in terms of organizational performance in addition pioneers organizational performance is enhanced by the cost leader strategy contrary to our assumption emphasizing innovative differentiation for these firms second early followers performance benefits from innovative differentiation and marketing differentiation finally late entrants developing a cost leader strategy have a significantly higher performance all groups considered late followers are the firms most sensitive to environmental uncertainty and age effects our study clarifies the impact of a firm s age and strategic orientations on its performance depending on the firm s order of entry the implications of these results are particularly relevant for practitioners and entrepreneurs first a cost leadership strategy seems to be a guarantee for a pioneer to increase its organizational performance new ventures should therefore take into consideration the fact that newness and innovative differentiation might not be the best strategic orientations for high performance in the long run second as a second mover however developing a superior product and being able to market it efficiently appear to be the enhancing factors of firm performance third for both pioneers and early followers age does not significantly reduce their performance however the longer a firm waits before entering the greater is the negative effect of age on its performance this is due to the difficulty of resisting competitive erosion because pioneers and early followers drive the changes in the industry the identification of these effects should help managers and stakeholders to make more effective entry decisions to sustain a firm s advantage leading to better performance and higher probability of survival

uncertainty loss aversion and markets for energy efficiency increasing energy efficiency is critical to mitigating greenhouse gas emissions from fossil fuel combustion reducing oil dependence and achieving a sustainable global energy system the tendency of markets to neglect apparently cost effective energy efficiency options has been called the efficiency gap or energy paradox the market for energy efficiency in new energy using durable goods however appears to have a bias that leads to undervaluation of future energy savings relative to their expected value this paper argues that the bias is chiefly produced by the combination of substantial uncertainty about the net value of future fuel savings and the loss aversion of typical consumers this framework relies on the theory of context dependent preferences the uncertainty loss aversion bias against energy efficiency is quantifiable making it potentially correctible by policy measures the welfare economics of such policies remains unresolved data on the costs of increased fuel economy of new passenger cars taken from a national research council study illustrate how an apparently cost effective increase in energy efficiency would be uninteresting to loss averse consumers

profitability transactional alignment and organizational mortality in the u s trucking industry the winds of creative destruction rarely blow more fiercely than in a newly deregulated environment managers simultaneously face a novel focus on operating efficiency and an onslaught of new competitors what must managers do to enable their firms to survive in such an environment what factors bear on firms survival this paper presents an analysis of mortality of large motor carriers in the u s interstate for hire trucking industry after deregulation it examines this phenomenon through a multidisciplinary lens that encompasses organizational ecology neoclassical economics and transaction cost economics the paper posits that carrier mortality is a function of both firm level and industry level attributes which are drawn from both ecological and economic theories while each of these theories separately informs motor carrier mortality the inclusion of predictions derived from both disciplines in one model significantly increases explanatory power over either theory evaluated alone the empirical analysis is among the first to show increased mortality when firms do not adhere to operating policies consistent with transaction cost minimization principles in sum managers are well advised to adopt a multidisciplinary approach to strategy to ensure their firms survival 1997 by john wiley sons ltd

returns on investments in energy saving technologies under energy price uncertainty in dutch greenhouse horticulture conventional net presentvalue calculations evaluating the profitabilityof investments in energy saving technologies indutch horticultural outlays predict a muchhigher rate of adoption of these technologiesthan is actually observed this paper tries toexplain this gap by applying a real optionsframework hurdle rates for investments in twotypes of energy saving technology are estimatedusing simulated future revenue streams givenuncertainty regarding energy prices and energytax policies hurdle rates found in this wayare on average about 1 76 times the hurdlerates that result from net present valuecalculations furthermore this paper tests thepredictive value of the theory by estimating alogit model this model relates the incidenceof having invested in an energy savingtechnology to the difference between the returnon investment and the hurdle rate thepredictive power turns out to be encouraging as the statistical tests indicate that higherhurdle rates tend to reduce rates of technologyadoption

modeling recreation demand in the presence of unobservable travel costs toward a travel price model an important issue in the application of travel cost models is the construction of a travel cost variable this paper develops an econometric approach that views travel costs as an unobserved latent variable the latent variable approach utilizes indicators to capture the role of individual travel costs in recreational demand models the latent variables approach has at least two advantages over conventional approaches one the indicators can include both traditional components such as time and distance and non traditional components such as the scenic beauty second the estimation procedure results in each indicator being valued in dollar terms

valuing the recreational benefits from the creation of nature reserves in irish forests abstract data from a large scale contingent valuation study are used to investigate the effects of forest attributes on willingness to pay for forest recreation in ireland in particular the presence of a nature reserve in the forest is found to significantly increase the visitors willingness to pay a random utility model is used to estimate the welfare change associated with the creation of nature reserves in all the irish forests currently without one the yearly impact on visitors economic welfare of new nature reserves approaches half a million pounds per annum exclusive of non recreational values

explaining the energy efficiency gap expected utility theory versus cumulative prospect theory abstract energy efficiency is one of the key factors in mitigating the impact of climate change and preserving non renewable resources although environmental and economic justifications for energy efficiency investments are compelling there is a gap between the observable and some notion of optimized energy consumption the so called energy efficiency gap behavioral biases in individual decision making have been resonated by environmental research to explain this gap to analyze the influence of behavioral biases on decisions upon energy efficiency investments quantitatively we compare expected utility theory with cumulative prospect theory on basis of a real world example we illustrate how the extent of the gap is influenced by behavioral biases such as loss aversion probability weighting and framing our findings indicate that cumulative prospect theory offers possible explanations for many barriers discussed in literature for example the size of the gap rises with increased risk and investment costs because behavioral biases are systematic and pervasive our insights constitute a valuable quantitative basis for environmental policy measures such as customer focused and quantitatively backed public awareness campaigns financial incentives or energy savings insurances in this vein this paper may contribute to an accelerated adaption of energy efficiency measures by the broader public

death of the lethargic effects of expansion into new technical subfields on performance in a firm s base business this paper finds that industry incumbents that do not expand into new technical subfields tend to fare poorly in their established businesses even if the market for the established products continues to exist firms that expand from their established businesses survive longer and achieve greater subsequent market share than competitors that do not expand by some measures however a failed attempt to expand into a new subfield may be even more harmful to a base business than nonexpansion the study employs conventional and accelerated event time regression models to analyze market share and survival the sample which includes 371 incumbents in four base subfields of the medical diagnostic imaging industry between 1953 and 1989 examines performance following the emergence of five new technical subfields of the industry