Should Firms Employ Personalized Pricing?

This paper theoretically considers a duopoly model in which all firms do not always employ personalized pricing. Our model incorporates the fact that firms engage in marginal cost‐reducing activities after they decide whether to employ personalized pricing. When the ex ante cost difference between the firms is large, the less‐efficient firm does not employ personalized pricing even when the fixed cost to do so is zero. This is because employing personalized pricing induces the rival firm to engage more in reducing its costs, which is more likely to harm the less‐efficient firm.     

Regulatory Reform and Bureaucratic Responsiveness to Firms: the Impact of User Fees in the FDA

This paper examines the impact of user fees on the speed of new-drug review and on the responsiveness of FDA reviewers to pharmaceutical firms. User fees are expected to alter FDA behavior and responsiveness to pharmaceutical firms because they give regulators a financial incentive to process more new-drug applications and because they convey information to regulators that may reduce type I error. The analysis examines the variation in FDA review times for new drugs approved between 1990 and 1995 as a function of differences that exist among firms and drugs. Specifically, it compares estimates of regulator responsiveness to several firm and drug characteristics before and after the introduction of user fees. The results show that user fees produced a significant change in FDA behavior. Regulators have become less responsive to the differences among firms since the introduction of user fees, which suggests that the reform has led to more equity in the new-drug review process. In addition, the FDA has expedited the review of new drugs, especially the most therapeutically novel drugs, which suggests that politicians have been fairly successful in designing a reform to realign regulatory incentives in the FDA.     

Activism for Corporate Responsibility: Conceptualizing Private Regulation Opportunity Structures

In this article, we examine how private regulatory initiatives (PRIs) – which define standards for corporate responsibility (CR) issues and sometimes monitor their application by firms – create opportunities and constraints for activist groups aiming to push firms towards more stringent CR activities. Drawing on social movement theory, we conceptualize how private regulation opportunity structures affect such CR‐based activist groups' targets and tactics at both the firm and field levels. At the field level, we argue that both radical and reformative activist groups direct most of their time and resources towards PRIs with comparatively more stringent standards. At the firm level, while radical activist groups are likely to target firms participating in more stringent PRIs, reformative activist groups target firms participating in less stringent PRIs, or those that do not participate in PRIs at all. When facing unfavourable opportunity structures, CR‐based activist groups tend either to advocate the creation of new PRIs or to shift their activities to pressure other focal points. This article contributes to moving beyond extant literature's emphasis of PRIs as settlements of contentious firm–activist interactions towards also viewing them as starting points for activist groups aiming to push firms towards a more substantive CR engagement.     

Environmental Policies and Firm Value

Many organizations are currently becoming more environmentally friendly. Eco‐efficiency maximizes the effectiveness of a business operation while reducing its impact on the environment; with the necessary skills, organizations can create more value while using less input. Prior empirical studies have suggested that firms engaging in eco‐efficient activities are better valued than those without such activities. Therefore, this will enhance business efficiency and excellence. This study investigates the link between eco‐efficiency, as environmental policy, and firm value in the United Kingdom (UK) for the period 1999 to 2008. We generate new insights into environmental–financial performance by using different definitions of the term ‘eco‐efficiency’. In the UK context our results support that eco‐efficient firms have higher market values than those lacking environmental strategies. Hence, we recommend that firms become involved in environmental polices since the adoption of these polices will have a positive impact on firm value. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

浅议商标权价值

商标在企业发展中发挥着越来越重要的作用,现在很多企业都开始重视商标权价值。本文从商标权价值的性质入手,指出商标权价值是一项权利,同时,商标权价值是一项无形资产,能给企业带来超额利润。本文还研究了商标权价值的市场现状,最后指出,中国的商标权市场需要改革,并提出了几点改进措施。     

审计师选择与业绩承诺精准达标——基于中国借壳上市公司的经验证据

在借壳交易中，对借壳方（非上市公司）财务报告执行审计的审计师可以是壳公司（上市公司）的现任审计师，也可以是新任审计师。以2011—2020年完成借壳上市并签订业绩补偿承诺的我国A股借壳交易案件为样本，检验借壳上市审计师选择对借壳公司业绩承诺实现情况的影响。研究发现，与保留壳公司现任审计师的借壳公司相比，借壳上市交易中选择新审计师的借壳公司更可能在业绩承诺期间精准实现业绩承诺，盈余管理是借壳交易中审计师选择影响借壳公司精准实现业绩承诺的作用渠道。此外，当业绩承诺补偿方式为股份补偿以及借壳交易双方为关联方时，借壳交易中选择新审计师的公司对业绩承诺精准达标的正向作用更加显著。进一步研究发现，借壳上市交易中选择新审计师的公司更可能在业绩承诺到期后经历业绩滑坡，且大股东更可能在锁定期结束后减持股票。结果表明，与保留壳公司现任审计师的借壳公司相比，借壳交易中选择新审计师的借壳公司的机会主义行为更严重。     

Entrepreneurship and Firm Boundaries: The Theory of A Firm

abstract In this paper, we consider how a better understanding of entrepreneurial activities can help explain how firm and industry boundaries change over time and how a more comprehensive understanding of boundary setting can explain where entrepreneurial activities are directed. We start from the premise that while entrepreneurs believe themselves to have superior ideas in one or multiple parts of the value chain, they are characteristically short of cash, and of the ability to convince others to provide it. This premise motivates a simple model in which the entrepreneur has a value‐adding set of ideas for ‘upstream’ and ‘downstream’ parts of a value chain, as well as for the ways to make these two parts of the value chain work better when joined under unitary control. Assuming that the entrepreneur's objective is to maximize her wealth, we observe that even in the presence of transactional risks or other factors that might make integration preferable to specialization, initial scope depends also on relatively unexplored factors such as (a) how severe the entrepreneur's cash constraint is, and (b) how much value the entrepreneur's ideas add at each part of the value chain. Entrepreneurs will focus on the areas that provide the maximum profit yield per available cash – a criterion which implies that scope choices depend on cash availability and the depth of the demand for the new idea along the value chain. We also note that entrepreneurs make money not only from the operating profits of their firms, but also from the appreciation of the assets the firm has accumulated. This consideration can change the optimal choice of the firms’ boundaries, as entrepreneurs must be sensitive to choosing the segment that will enable them to benefit not only in terms of profit, but also in terms of asset appreciation. We propose that, in the entrepreneurial context especially, it is helpful to focus on the multiple considerations affecting the choice of boundaries for ‘a’ firm – the context faced by an individual entrepreneur – rather than on generic considerations affecting ‘the’ (representative) firm. Scope choices reflect the entrepreneur's own theory of ‘how to make money’.     

Firm Characteristics and the Speed of FDA Approval

This paper empirically examines the effect of firm-specific characteristics on the length of time required by the Food and Drug Administration (FDA) to review and approve new-drug applications between 1990 and 1992. The approach treats regulatory decisions as endogenous and explains the variation in regulatory behavior as a function of differences that exist between firms and drugs. Results show that, controlling for drug-specific characteristics, regulators respond to firm-specific characteristics when evaluating new drug applications. For instance, firms that are less diversified and more R&D-inten-sive receive shorter review times for their new-drug applications than more diversified and less R&D-intensive firms. The reason is that most firm characteristics signal information to reviewers about either firm reputation or application quality. This information reduces reviewers' uncertainty about approving a dangerous or ineffective drug and leads to faster review times. The results suggest that regulators respond to the heterogeneities among firms in the pharmaceutical market in systematic ways.     

Choosing the Quality of the Fit between Complementary Products

In this paper, I examine how firms should position their complementary products. I assume that there are two competing firms, each producing two complementary products. Each firm decides whether to employ strategies that enhance the quality of the fit (the degree of complementarity) between its pair of complementary products before competing in prices. The consumers have heterogeneous tastes for the four possible bundles. They are willing to pay a price premium in order to purchase a bundle from the same firm if this firm chose to make such bundle more attractive. I find that increasing the degree of complementarity between a firm's complementary products intensifies price competition and often leads to smaller profits. Only when complementarity‐enhancing strategies significantly increase the demand for a firm's matching bundle, does the firm benefit from employing them. The highest profits for both firms are obtained when both firms do not employ complementarity‐enhancing strategies. Deteriorating the quality of the fit between one's own and a rival's complementary products is never profitable.     

Are Scottish firms meeting the ICT challenge? Results from a National Survey of Enterprise

This paper examines the diffusion of Information Communication Technology (ICT) into firms in Scotland and northern England. Data concerning the adoption of micro-computers, e-mail, the Internet, ISDN, in-house website, and the automation of business functions is analysed by industry, firm size, firm age, rate of growth, export involvement, and innovation activity. The results from a sample of 1347 firms found an overall increase in the adoption of ICT in firms between 1998 and 2001. The increase is led by older and larger firms in comparison to younger and smaller firms. In addition, the diffusion of the automation of business functions was found to be sequential, from generic to specific applications. Further increases in the diffusion of ICT are likely to come from upgrading existing equipment and increases in the range of business functions that can be automated. Finally, although use of the Internet and web-based trading has increased in the sample firms, this has not replaced traditional marketing and sales. The results support the view that more firms are taking up the challenge of using ICT in-house, with older and larger firms leading the way ahead of younger and smaller firms.     

Who Appoints Them,What Do They Do? Evidence on Outside Directors from Japan

Although reformers often claim Japanese firms appoint inefficiently few outside directors, the logic of market competition suggests otherwise. Given the competitive product, service, and capital markets in Japan, the firms that survive should disproportionately be firms that tend to appoint boards approaching their firm‐specifically optimal structure. The resulting debate thus suggests a test: do firms with more outsiders do better? If Japanese firms do maintain suboptimal numbers of outsiders, then those with more outsiders should outperform those with fewer; if market constraints instead drive them toward their firm‐specific optimum, then firm characteristics may determine board structure, but firm performance should show no observable relation to that structure. We explore the issue with data on the 1000 largest exchange‐listed Japanese firms from 1986 to 1994. We first ask which firms tend to appoint which outsiders to their boards. We find the appointments decidedly nonrandom. Firms appoint directors from the banking industry when they borrow heavily, when they have fewer mortgageable assets, or when they are themselves in the service and finance industry. They appoint retired government bureaucrats when they are in construction and sell a large fraction of their output to government agencies, and they appoint other retired business executives when they have a dominant parent corporation or when they are in the construction industry and sell heavily to the private sector. Coupling OLS regressions with two‐stage estimates on a subset of the data, we then ask whether the firms with more outside directors outperform those with fewer, and find that they do not. Instead, the regressions suggest—exactly as the logic of market competition predicts—that firms choose boards appropriate to them.     

Consumer Information and Pharmaceutical Prices: Theory and Evidence*

The impact of a reform that increased consumer information on brand name and generic pharmaceutical prices is analysed both theoretically and empirically. The theoretical results show that an increase in information likely reduces the price of brand name pharmaceuticals, while the results regarding generics are less clear. In the empirical part of the article, the introduction of the substitution reform in the Swedish pharmaceuticals market in October 2002 is used as a natural experiment regarding the effects of increased consumer information. The results clearly show that the reform has lowered the price of both brand name and generic pharmaceuticals.     

Externalizing the core: Firms' use of employment intermediaries in the information and communication technology industries

Recent research suggests that nonstandard employment relations may be a source of innovation for the firm. In this article, we analyze firms' strategic correlates and perceived benefits from using two types of employment in‐termediaries—consulting firms and temporary help agencies—in their core activities. Organizations with an innovation strategy are more likely to use consulting firms in their core activities, while organizations that compete on the basis of low cost are more apt to use temporary help agencies. Moreover, managers say that consulting firms are more likely than temporary help agencies to provide them with special competencies in their core activities. © 2007 Wiley Periodicals, Inc.     

How does a firm’s management of greenhouse gas emissions influence its economic performance? Analyzing effects through demand and productivity in Japanese manufacturing firms

This paper analyzes how a firm’s management of greenhouse gas (GHG) emissions affects its economic performance. The theoretical model we derive from Cobb–Douglas production and inverse demand functions predict that in conducting GHG emissions management, a firm will enhance its economic performance because it promotes an increase in demand for its output and improves its productivity. The estimation results, using panel data on Japanese manufacturing firms during the period 2007–2008, support the view that a firm’s GHG emissions management enhances a firm’s economic performance through an increase in demand and improvement in productivity. However, the latter effect is conditional. Although a firm’s efforts to maintain lower GHG emissions improves productivity, efforts to reduce GHG emissions further does not always improve it, especially for energy-intensive firms. Because firms attempting to maintain lower GHG emissions are more likely to improve their productivity, there is a possibility that firms with high GHG emissions can also enhance economic performance by reducing their emissions in the long term, even if additional costs are incurred. In addition, better GHG emissions management increases the demand of environmentally conscious customers because a product’s life cycle GHG emissions in the upper stream of the supply chain influence those in the lower stream, and customers evaluate the suppliers’ GHG emissions management in terms of green supply-chain management.     

From original equipment manufacturing to branding: entrepreneurship,strategic leadership,and Taiwan’s firm transformation

This paper investigates firm transformation from original equipment manufacturing (OEM) to original brand manufacturing (OBM) based on variant experiences of Taiwan’s top global brands. Taking the competitive advantage of practicing OEM for multinational corporations (MNCs), latecomer firms can generate capital and accumulate capabilities by engaging with the global production network. Rarely does every firm transform into a global enterprise. We propose that only entrepreneurs with strategic leadership competence, which serves to manage a delicate balance between stability and change in a firm, are capable to facilitate firm transformation from OEM to a global enterprise practicing OBM. We provide an analytical framework that combines the research fields of entrepreneurship, strategic management, and leadership to analyze firm growth and firm transformation of Taiwanese firms. In light of possible branding dilemma when straddling dual-track businesses, successful transforming firms can alleviate this problem either by separating their OBM units from their OEM units or by creating a symbiotic relationship with their MNC customers. How Taiwanese firms first took advantage of initiating OEM to create capital and capabilities and later transformed into OBM provide useful experiences for other latecomer firms.     

Friend or foe? Employee ownership and CEO dismissal

This paper examines 2 research questions. First, does the level of employee stock ownership impact the likelihood of dismissing poorly performing chief executive officers (CEOs)? Second, does the level of employee stock ownership affect the likelihood of appointing an outsider or an insider after the dismissal of an incumbent CEO? We suggest that employee stock ownership reinforces the firm performance—CEO dismissal link because employee shareholders' welfare consisting of fixed claims (wages, bonuses, etc.), residual claims (dividends, increase in stock value, etc.), and human capital (generic and idiosyncratic) are highly linked to their firm performance. Moreover, under conditions of poor performance, employee shareholders are likely to favor an outsider CEO because he or she is more likely to initiate and implement drastic changes to the strategy of the firm, and therefore, he or she is more likely to improve firm performance. Drawing on a longitudinal sample of French firms, we find that employee stock ownership strengthens the negative relationship between firm performance and CEO dismissal likelihood. We find also that the higher employee ownership, the more likely that the underperforming CEO is replaced by an outsider. In contrast, employee ownership has no moderating impact on the likelihood of insider CEO appointment.     

Large shareholders and firm value: Are high-tech firms different?

This paper explores the relationship between ownership structure and firm value in firms listed on the Warsaw Stock Exchange. The results of the estimations, taking into account simultaneity and reverse causality, show that the relationship between ownership concentration and firm value differs across firms belonging to the sector of innovative technologies and more ‘mature’ firms. The results give support to the hypothesis that ‘mature’ firms with higher ownership concentration are likely to perform better than firms with more dispersed ownership. In contrast, in high-tech companies, with large share of knowledge related activities, higher ownership concentration is associated with lower firm value. This effect is robust to various alternative specifications.     

The Interaction of Top Management Group,Stakeholder, and Situational Factors on Certain Corporate Reputation Management Activities*

abstract This study examines when a firm's members are most likely to promote and defend its reputation. Building on past research in impression management theory and the upper‐echelons perspective, I argue that firms facing increased visibility among different stakeholder groups will increase corporate reputation management activities towards those groups and decrease activities towards other groups. I further argue that top management group characteristics will moderate these relationships, suggesting that certain top management groups are more attuned to the situational needs of reputation management. A set of hypotheses are tested using pooled cross‐sectional time‐series data on a set of Fortune 500 companies. Results indicate that firms generally directed reputation management activities towards their more visible stakeholders. However, the type and extent of reputation management behaviour varied. Specifically, for firms whose top management groups were more highly educated or output oriented, highly visible situations with the media were more likely to be associated with a higher use of press releases. Moreover, those same firms devoted more resources to mass media advertising under situations of high consumer visibility compared to firms whose top management groups were less educated or throughput oriented.     

Tapping Deep Pockets: The Role of Resources and Social Capital on Financial Capital Acquisition by Biotechnology Firms in Biotech–Pharma Alliances

Strategic alliances with pharmaceutical firms allow small biotechnology firms to acquire needed financial capital in exchange for sharing new, cutting‐edge technologies. This study draws from aspects of resource‐based view and social capital theory to examine the factors that influence the extent of financial capital biotech firms acquire when forming an alliance with pharmaceutical firms. Using a sample of 184 alliances from the period 1995–2000, we found that alliances where the pharmaceutical firm has greater management control are associated with greater acquisition of financial capital by the biotech firm. We also found that the credibility of the pharmaceutical firm is positively associated with the extent of financial capital acquired by the biotechnology firm and that the number of patents that the biotech firm has is negatively associated to the financial capital the biotech firm receives. We discuss the implications of our findings for theory, research, and management practice.