Yardstick Competition to Elicit Private Information: An Empirical Analysis

The Japanese regulatory authority has introduced a new hybrid regulation that combines a fixed-price contract with ex ante yardstick inspection for local (public utility) gas distribution. The latter compares a firm??s reported costs with those of ??similar?? firms, and penalizes high-cost firms. We infer the effect of yardstick on information revelation by comparing the actual welfare level with the hypothetical full-information welfare level. Our results suggest that only the very first inspection was effective in reducing firms?? incentive to report higher costs.     

Speed-to-Market and New Product Performance Trade-offs

When pressed to accelerate a development effort, more than a few managers have responded in terms such as “Good, fast, cheap … Pick any two.” Time-to-market decisions clearly play an important role in determining the ultimate success or failure of a new product. Just as clearly, however, speed to market is not the sole determinant of success. The seemingly offhanded “Pick any two” response points to the tradeoffs that product development managers must make in their decisions about development time and costs. Barry Bayus discusses the relationship between product development time and costs, and he fomulates a mathematical model that simultaneously considers the decisions regarding time-to-market and product performance levels. He applies the model to two competitive scenarios, and he identifies the optimal entry timing and product performance decisions for various market, demand, and cost conditions. In the first scenario, a firm must decide whether to accelerate development efforts to catch a competitor that has just introduced a new product. Analysis of the tradeoffs among the various parameters in the model suggests that fast development of low-performance products is optimal under the following conditions: a relatively short window of market opportunity, a weak competitor, and relatively high development costs. For example, if the competitor is weak, high performance levels are not necessary and the firm can safely reduce time-to-market. Under the same scenario (that is, accelerating development to catch a competitor), the analysis suggests that fast development of products with high performance levels is optimal under conditions of relatively high sales and relatively flat development costs. In the second scenario, the firm must decide whether to speed development efforts to beat the competition to market. Analysis of the various tradeoffs for this scenario suggests that first-to-market status for a product with a high performnace level is optimal under the following conditions: a relatively long window of market opportunity, relatively high sales, and relatively flat development costs. With a long product lifecycle, stable margins, and high sales, the firm can generate sufficient revenue to offset the increased cost incurred in speeding a high-performance product to market. Beating a competitor to market with a low-performance product is never optimal for the cases considered here.     

国有控股、最高决策者激励与公司绩效

国内研究认为股权结构、董事会和高管激励对公司绩效有影响，而上市公司“国有一股独大”的国情使前两者不会有实质性作用；对于后者的研究则忽略了最高决策者在公司中的重要性。本文以1993—2002年数据为样本，研究国有股代理人(董事长和总经理)激励对公司绩效的影响。发现董事长是公司最高决策者，除政治激励能显著改善绩效外，最高决策者金钱激励、国有股权性质、两职合一、债权人治理等都和绩效没有显著关系；意味着只有将政治激励所附带的财富效用降低到一定程度，金钱激励才可能成为有效治理机制。     

基于超产权理论对公司管理层收购的思考

产权理论把产权归属作为企业效率的决定因素，无疑有失偏颇。超产权理论则认为：企业的效益主要是与市场竞争程度有关，利用利润激励去驱动经理人提高努力水平要以市场竞争为前提，市场竞争有放大利润激励的作用。基于超产权理论的思想，本文认为对产权拥有所形成的利润激励得以有效发挥的关键，在于经理人必须持有足够大比例的股权；大中型国有及国有控股企业和上市公司实施MBO后，由于经理人所购股权比例不大，使得产权激励不够大，而竞争激励又大幅下降，导致经理人的能力和努力水平下降，MBO将严重影响其业绩的提高。因而，MBO不是其改革的途径；小企业实施MBO是利大于弊，MBO不失为其改革的途径之一，但从长期发展的角度来看，MBO只不过是一个权宜之计。     

知识产权保护与“赶超陷阱”——基于GVC治理者控制的视角

本文将知识产权保护水平看成是价值链治理者的一个策略性变量。当全球链主通过一个激励性合同诱使本土企业放弃自建品牌的努力时,更高的知识产权保护水平会使本土企业陷入赶超陷阱。其内生性机理在于:一方面,强知识产权保护吸引了更多的全球链主将其订单和技术向发展中国家转移;另一方面,强知识产权保护降低了本土企业代工的机会成本,导致更多的本土企业加入代工行列。基于2006—2009年间29个行业的面板数据,结果显示链主对知识产权实施的控制造成了国有企业和非国有企业收益的显著下降,并导致国有企业同全球链主之间技术差距的拉大,从而为赶超陷阱提供了间接证据。     

The investment opportunity set and disclosure policy choice: Some Malaysian evidence

Recently researchers have shown that certain corporate and accounting policy decisions are related to the firm's portfolio of growth opportunities or its investment opportunity set (ios). This paper augments the research by examining whether the firm's ios is also predictably related to disclosure policy decisions made by the firm. We hypothesize that because agency costs between managers and shareholders are an increasing function of the firm's growth opportunities, managers in high growth firms will be motivated to disclose information about the firm's future prospects in order to commit themselves to particular courses of action and thereby limit their future managerial discretion. Our empirical results indicate that for a sample of 67 Malaysian firms, this is supported only amongst a sample of lower growth firms.The authors are Associate Professor and lecturer, respectively, at the Department of Accountancy, Massey University, Palmerston North, New Zealand. Correspondence should be addressed to S F Cahan at the above address, e-mail: S.F.Cahan@massey.ac.nz.     

Divisionalization and strategic managerial incentives in oligopoly under uncertainty

This paper argues that divisionalization and incentive contracting are complementary rent shifting tools in the presence of demand uncertainty. The role for divisionalization arises if managers know the state of demand prior to making output decisions and if incentive contracts are linear and non-state contingent. In this context incentive contracts achieve expected Stackelberg outcomes but have no impact on the firm's responsiveness to demand shocks. Divisionalization, on the other hand has the strategically beneficial effect of making the firm more responsive to demand shocks.     

Contributing beyond the call of duty: examining the role of culture in fostering citizenship behavior and success in project-based work

Shifting goals, priorities and evolving customer demands require an exceptional effort, beyond the call of duty, on the part of employees to increase the likelihood for successful implementation of technologically driven projects. Our model posits that citizenship behavior, which captures individuals' behavior that goes above and beyond prescribed roles, effects project success and is influenced by the culture that exists in the project. We provide support for the model utilizing 222 participants in 71 product development, IT implementation and engineering projects, originating in firms from various industries in the United States using structural equation modeling. Owing to the constraints typically facing project managers, in terms of personnel availability and control over rewards, our findings suggest that project culture can be used by managers as an alternative lever to trigger employees' citizenship behavior, which in turn drives success. We provide valuable implications for individuals assigned to lead projects, who are concerned with aligning project culture with citizenship behavior, as part of their planning activities.     

Managerial Incentives: Implications for the Financial Performance of Real Estate Investment Trusts

In the face of informational asymmetry, REIT equity investors may bear the costs of agency. Hence, it is in shareholders' interests to pay incentive fees to induce managers to utilize their superior information and to take suitable actions that reduce these costs. In this paper, the relation between financial performance and fees paid, and between fees paid and contractual incentives, are examined to determine whether equityholder interests are being served by the decisions of REIT managers. The data reveal that fees paid and financial performance are positively related, indicating that financial performance is at least partially endogenous with respect to managerial action. Moreover, the evidence also suggests that the industry fee structure has changed over the period in a manner that appears to have reduced the agency costs borne by equityholders, and by the end of the sample period the fees paid in general seem to reflect incentives that are consistent with the wealth maximization goal of equityholders.     

Modeling and Computing Transactions Costs for Purchasers of Housing Services

This paper models, as equilibrium behavior, buyers' behaviors under transactions costs and market failure constraints. It derives equilibrium conditions and it shows how they differ from unconstrained models. Standard utility and cost parameters are then used to estimate the economic costs of the constraints, which may be interpreted, at the margin, as the transactions costs of moving. If transactions costs are greater than the economic costs of the constraints, the household remains in a residence, even in response to changed price and income expectations. Changes in expected prices and incomes lead to changed housing demand even when the household cannot adjust housing consumption between periods. These findings have implications for empirical work with both cross-section and panel data sets.     

The averch and Johnson analysis of public utility regulation twenty years later

The Averch and Johnson model of a rate-of-return regulated firm seems to have captivated economists and focused their attention on modest technical inefficiency. Pricing distortions, which were revealed by Welliscz, and the incentive for more extreme technical distortions, which was described by Westfield, are not as widely considered or even understood twenty years after the articles appeared. Analysis using uncertainty and dynamic methods has also failed to treat the full range of rate-of-return implications. To do justice to these original contributions more effort is called for in designing new institutions of public utility regulation.     

The Kaldor–Hicks Potential Compensation Principle and the Constant Marginal Utility of Income

The Kaldor–Hicks potential compensation principle underlies partial equilibrium welfare analysis in imperfectly competitive markets. It depends on the assumptions that changes in consumer and producer surplus are weighted equally and that the marginal utility of income is constant. I show that if the first assumption is followed but there is decreasing marginal utility of income, the potential compensation principle does not give satisfactory indications of market performance.

     

The effects of perceived industry competitive intensity and marketing-related capabilities: Drivers of superior brand performance

Since the early 1990s the theoretical and practical issues associated with organizational capabilities have been a major research focus in marketing. However, there has been little focus simultaneously on industry environment and internal competitive capability development. A manager's perception of his/her industry environment has the potential to impact the firm's marketing-related capability development through their strategic responses to their perception of the environment. This paper advocates that managers (i.e., firms) perceiving their industry environment as turbulent will develop superior market learning and marketing capabilities. Market learning will assist in the process of building superior marketing capabilities. Both capabilities lead to higher brand performance. To explore these issues a study was designed to measure perceived industry competitive intensity, market learning and marketing capabilities. Data were gathered from senior managers of commercial firms and the results largely support the hypothesized theoretical relationship that industry competitive intensity influences market learning activity and marketing capability development. Interestingly, the study findings suggest that market learning impacts brand performance through marketing capability. The findings significantly contribute to the debate on the influence of the competitive environment on a firm's internal capability development which suggests the need for further research to examine the industry competitive intensity-internal capabilities-firm performance relationship.     

AUTHORITY,RISK, AND PERFORMANCE INCENTIVES: EVIDENCE FROM DIVISION MANAGER POSITIONS INSIDE FIRMS*

I show that performance incentives vary by decision‐making authority of division managers. For division managers with broader authority, i.e., those designated as corporate officers, both the sensitivity of pay to global performance measures and the relative importance of global to local measures are larger, relative to non‐officers. There is no difference in sensitivity of pay to local measures by officer status. These results support theories suggesting that authority over project selection combined with incentives designed to maximize firm performance, as well as induce effort for the division, are important in incentive design for division managers. Consistent with earlier findings, the evidence strongly supports one of the main predictions of the principal‐agent model, that is, a negative tradeoff between risk and incentives.     

Should Firms Consider Employee Input in Reward System Design? The Effect of Participation on Market Orientation and New Product Performance

Will increasing employee participation in reward decisions increase new product performance by first increasing a firm's level of market orientation? Literature offers limited insight to the effects of listening to employees regarding reward system design and whether this may influence market orientation implementation and new product performance. This paper provides research to fill the gap by examining the relationship between participation‐based reward systems, market orientation, and new product performance. Based on expectancy theory, a conceptual model was developed suggesting that participation‐based rewards will increase market orientation by considering employees' desires regarding performance rewards. To test the model, a mixed method was used to collect data. First, in‐depth interviews were conducted with managers from 11 different firms to verify the proposed model. Then a multi‐industry sample of managers from 290 firms was surveyed to maximize generalizability of the results. Data were analyzed using structural equation modeling techniques to simultaneously fit the measurement and structural models. The findings show that market orientation significantly impacts objective new product performance and mediates the relationship between participation‐based rewards and objective new product performance. Participation‐based rewards positively affect market orientation but surprisingly affect new product performance negatively, while positively moderating the relationship between market orientation and new product performance. The results suggest that managers should include employee input in designing reward systems. However, managers should also be careful of how much input they allow employees in determining their rewards and goals as more input will improve market orientation or responding to information collected by, and disseminated throughout the firm, and that, in turn, will improve some types of new product performance. However, the direct effect of employee input can decrease new product performance suggesting that there may be a trade‐off between various success measures of new products developed and introduced by the firm.     

Motivating with simple contracts

In practice, incentive schemes are rarely tailored to the specific characteristics of contracting parties. However, according to economic theory, optimal contracts should be highly dependent on individual conditions. We reconcile these observations in the context of a principal-agent model with both moral hazard and adverse selection. Motivating an agent could be increasingly costly to the principal because a more productive agent could also be more able to manipulate the terms of the contract. As a result, the principal may optimally pool some types by offering a contract with constant transfer and bonus. We also explore parameterizations where the optimal contract is fully separating but simple contracts attain a significant portion of the optimal welfare.     

Managerial compensation and corporate spinoffs

Research summary : This article investigates how corporate spinoffs affect managerial compensation. These deals are found to improve the alignment of spinoff firm managers' incentive compensation with stock market performance, especially among spinoff firm managers that used to be divisional managers of the spun‐off subsidiary, and particularly when the spun‐off subsidiary performs better than or is unrelated to its parent firm's remaining businesses. By contrast, incentive alignment does not improve for the parent firm managers running the divesting companies. This finding appears to be driven by a significant post‐spinoff increase in these managers' incentive compensation, the magnitude of which is inversely related to governance quality in their firms. Together, these results elucidate how spinoffs influence managerial compensation in diversified firms and the companies they divest. Managerial summary : This article explores how spinoffs affect incentive alignment: the correlation between incentive compensation and stock market performance. The incentive alignment of spinoff firm managers improves following these deals. These gains are the largest when spinoff firm managers used to be divisional managers of the spun‐off subsidiary and when the spun‐off subsidiary performs better than or is unrelated to the other businesses in the parent firm. By contrast, incentive alignment does not improve for parent firm managers. Instead, the level of these managers' incentive compensation rises significantly post‐spinoff, and the magnitude of this increase is inversely related to governance quality in these firms. Together, these results shed light on the ways in which spinoffs influence managerial compensation in diversified firms and in the companies they divest. Copyright © 2015 John Wiley & Sons, Ltd.     

Regulatory bias in the price structure of local telephone service

This article combines a discrete choice model of demand for residential local telephone access and an optimal price regulation model to estimate the welfare weights that state regulators implicitly place on consumers with different incomes and locations. I find no evidence of a bias towards rural consumers on average, but the relative weight on low income consumers in a geographic area can vary as a function of the proportions of rural and poor population and the political characteristics of the regulator. I also measure the welfare consequences of deviating from total consumer surplus maximization and disconnecting prices from costs.     

纵向一体化与联合所有权——通用一费希尔公司收购案例研究

纵向一体化可以很好地解决物质资本的专用性问题,然而对人力资本专用性造成的“套牢”无能为力。通过降低交易双方对一般性投资的激励,从而提高专用性投资的激励,联合所有权使得“套牢”的收益最小而成本最高。因此,联合所有权不仅可以解决物质资本专用性问题,也是解决人力资本套牢问题的有效途经。     

公益组织绩效评价的问题与对策

基于公益组织绩效评价的客观必要性和特征,从评价观念与意识制度、评价体系等方面,分析了当前中国公益组织绩效评价存在的问题,提出了相应的措施：提高对公益组织绩效评价的认识、构建适应于公益组织的评价指标、建立公益组织绩效评价的信息系统等。