The Effects of Succession Choice Surrounding CEO Turnover Announcements: Evidence from Marathon Successions

This study examines marathon successions, which I define as top executive searches that are extended past the formal departure notice of the incumbent chief executive officer (CEO). Marathons should be used when search costs are high and when little time passes from when the incumbent steps down to when they leave the firm. Consistent with these predictions, marathons primarily follow surprise departures and forced turnovers. Marathons are also likely for firms operating in heterogeneous industries that face early tenure incumbent departures. These findings shed light on an increasingly prevalent form of succession and provide insight into the rationale and implications behind the announcement.     

Strategic Choices,Environmental Uncertainty and SBU Performance: A Note on the Intervening Role of Management Accounting Systems

This paper examines the role of management accounting systems (MAS) design on the relationship between: (1) strategic business unit (SBU) strategy and SBU performance and (2) perceived environmental uncertainty (PEU) on SBU performance. MAS design was defined in terms of the extent to which managers use broad scope MAS information for managerial decision making. The responses of 62 SBU managers, drawn from a cross-section of manufacturing companies in Western Australia, to a questionnaire survey were analysed by using a path analysis. The results suggest that SBU strategy and PEU are important antecedents of MAS design, and that broad scope MAS information is an important antecedent of SBU performance.     

Paternalistic Capitalism

Brazil’s political-economic structure has rapidly evolved over the past decade, shedding its shallow policy alignment with neoliberalism of the 1990s. Brazil’s large, diversified industrial base was painfully constructed over the course of the twentieth century. A major and sustained political realignment, which began in 2003, has resulted in two essential thrusts in development policy: (i) a “growth with equity” strategy that has dramatically reduced poverty and inequality; and (ii) a state-led “industrial policy” designed to upgrade manufacturing and direct the accumulation process toward specific sectors, highlighting and consolidating the National Innovation System (NIS). Nonetheless, as a result of the commodity boom that swept through Latin America, Brazil’s natural resource sector achieved outsized growth from 2002 to 2012. One result has been a shift toward resource intensive activities and a broad opening to low-cost Chinese manufactures. Utilizing an institutionalist framework and method, this article analyzes the cohesion of the NIS and the emergence of the “deindustrialization” debate. Also, it assesses the instrumental nature of the “growth with equity” strategy. The article hypothesizes the viability of an endogenous “neo-developmentalist” strategy, while acknowledging the emergence of fundamental exogenous forces and structural ceremonial/institutional factors that have impeded the consolidation of a Brazilian social structure of accumulation.     

A coalitional theory of unemployment insurance and employment protection

This paper examines the role of coalition formation in the empirically observed negative correlation between employment protection and unemployment benefit. We study an economy composed of four groups of agents (capitalists, unemployed people, low- and high-skilled workers), each one represented by a politician. Politicians first form political parties and then compete in a winner-takes-all election by simultaneously proposing policy bundles composed of an employment protection level and an unemployment benefit. We first show that, in the absence of parties (i.e., in a citizen-candidate model), low-skilled workers are decisive and support a maximum employment protection level together with some unemployment benefit. We then obtain that, under some conditions, allowing for party formation results in all policy equilibria belonging to the Pareto set of the coalition formed by high-skilled workers together with unemployed people. Policies in this Pareto set exhibit a negative correlation between employment protection and unemployment benefit.     

Delegation of Decision Rights and Misreporting: The Roles of Incentive-based Compensation Schemes and Responsibility Rationalization

Our paper examines when and how the delegation of decision rights and incentive-based compensation schemes (two organizational-design choices) and responsibility rationalization affect managers’ misreporting behavior. One hundred and twenty-nine managers from manufacturing firms in the US completed an online survey. Our results suggest that managers’ responsibility rationalization moderates the relationships between the delegation of decision rights and misreporting, and incentive-based compensation schemes and misreporting. Despite our results providing no evidence of a simple mediating role of incentive-based compensation schemes on the relationship between the delegation of decision rights and misreporting, we find support for a moderated-mediation effect. Specifically, our results demonstrate that the indirect effect of the delegation of decision rights on misreporting via incentive-based compensation schemes is conditional on managers’ responsibility rationalization. The theoretical and practical implications of our findings are discussed.     

Manufacturing and Distribution Strategies,Distribution Channels,and Transaction Costs: The Case of Parallel Imported Automobiles

We examine how constraints on transnational corporations' official distribution channels, asset specificity, and bounded rationality of franchise dealers and parallel traders contribute to the sustainability of the parallel importation of automobiles. The manufacturing and distribution strategies employed by transnational corporations considerably add to the regional differences in the pricing and availability of specific models, as well as vehicle specifications. These necessary conditions enable opportunistic parallel traders to engage in arbitrage. The asset specificity of franchise dealers, bounded rationality, and opportunism of dealers and arbitrageurs sustain the parallel importation of automobiles. Copyright © 2012 John Wiley & Sons, Ltd.     

Demand for dairy products in the EU

In the EU dairy sector, given the remaining high protective tariffs and the quota system, the main factor that drives dairy product market prices is the demand. This paper evaluates the development of demand in the EU and presents estimates of consumption trends and forecasts for the future as well as estimates of elasticity with respect to prices and income in two major EU consumer countries: France and Italy. We use two methods to estimate the development of demand for dairy products, one based on a multi-stage demand system and another based on a single trend equation. The two methods generally lead to the same qualitative results but trend projections are larger using the demand system approach which is based on a shorter data period. This difference is thus partly explained by the fact that high trend projections are not sustainable over a long period. The results show a decreasing consumption of butter and fluid milk and an overall growth in protein and fat consumption. Nevertheless, the increase in fat consumption should be more moderate than the consumption of protein. The results also show that the demand for dairy products is relatively price inelastic but is more sensitive to changes in income (especially for butter and cheese categories). As shown by the use of a partial equilibrium model of dairy markets, the likely impact of the CAP reform strongly depends on the development of demand for dairy products in the EU. More research effort on demand analysis is therefore crucial in order to assess the impact of reforms or trade negotiations more accurately and effectively.     

A Model of Competing Jurisdictions with Locally Polluting Environments and Mobile Populations

In this model we consider a federation consisting oftwo geographically separated Regional states withlocal taxing authority. The residents of thefederation are identical in preferences and haveexplicit tolerance to pollution. Pollution is local innature and is a by-product of production implying amore highly populated region would generate morepollution. Local authorities in the regions can andwill (in the interest of local residents) engage ingame theoretical taxation strategies. The model isused to illustrate that Nash Equilibrium can resultwherein the two regions have different levels ofenvironmental quality. The resulting Nash conditionsimply for instance that residents of the ``cleanregion' will subsidize those in the other region tostay in the more polluted environment (in order foreach to accomplish their preferred consumption andenvironmental quality pair).