Voluntary agreements for environmental performance improvement: perspectives on the chemical industry's responsible care programme

Responsible Care is perhaps the best known voluntary agreement programme world-wide. It is an initiative of the chemical industry. Under it, participating companies publicly commit themselves to seek continuous improvement in their performance in all aspects of safety, health, protection of the environment, product safety, distribution, emergency response and relations with the public. Under the initiative, company commitments are generally made by Chief Executive Officers (CEOs), who then are responsible for ensuring actions by their company under the initiative, and for reporting back to on progress to the national and/or regional chemical industry association running Responsible Care programmes. © 1997 John Wiley & Sons, Ltd and ERP Environment.     

Institutional industry herding

We examine whether institutional investors follow each other into and out of the same industries. Our empirical results reveal strong evidence of institutional industry herding. The cross-sectional correlation between the fraction of institutional traders buying an industry this quarter and the fraction buying last quarter, for example, averages 40%. Additional tests suggest that correlated signals primarily drive institutional industry herding. Our results also provide empirical support for “style investing” models.     

From Member of the Company to Registered Auditor: The Role of the External Auditor in Corporate Governance

Corporate governance has often been defined in a narrow way as comprising 'the range of control mechanisms that protect and enhance the interests of shareholders of business enterprises' ( Fama and Jensen 1983 ). In the corporate governance literature there has also been a general focus on the structure and functioning of boards of directors and the responsibilities of audit committees in relation to external auditing ( Rosenstein and Wyatt 1990 ; Shleifer and Vishny 1997 ). This article looks at the evolution of the role of external auditing in corporate governance. The role of the external auditor has changed through time, and consequently it should not be assumed that the role of external auditing is fixed or that it cannot be changed to meet societal needs and expectations. This observation leads to the primary argument of our article, which is that the role of the external auditor in corporate governance ought to be expanded in order to enhance the effectiveness of corporate governance for the benefit of a wider spectrum of stakeholders and society generally.     

Benefits and Costs of International Financial Integration: Theory and Facts

This paper provides a selective review of the recent analytical and empirical literature on the benefits and costs of international financial integration. It discusses the impact of financial openness and capital flows on consumption, investment and growth, as well as the impact of foreign bank entry on the domestic financial system. It argues that, for small open developing countries, the benefits of financial integration are mostly long term in nature, whereas risks can be significant in the short run. Careful preparation and management are therefore essential to ensure that short‐run costs do not lead to policy reversals. It also stresses that the empirical evidence on the impact of foreign direct investment on domestic capital formation and growth, as well as on the effects of foreign bank entry, should be viewed with caution. In particular, the possibility that foreign bank penetration may lead to adverse changes in the allocation of credit cannot be dismissed on the basis of the existing evidence.     

Setting Efficient Incentives for Agricultural Research: Lessons from Principal-Agent Theory

A conceptual analysis of important issues in the organization and management of academic research is presented. Principal-agent theory is applied to derive optimal compensation schemes for scientists when they differ in ability, risk aversion, cost of effort, and reservation utility, and to show the optimal trade-off between institutional risk and scientists' abilities. Implications for an efficient organization of research are derived, including how scientists' incentives should be structured to elicit optimal research efforts and direction, whether research direction should be centralized or decentralized, and whether the organization of research should be through external competitive grants or program and institutional funding.     

Emergence of entrepreneurs following exogenous technological change

This paper explains how, after an exogenous technological change occurs, entrepreneurs displace incumbents who were ex ante capable of exploiting any innovations that resulted from the change. The model initially considers classical economic assumptions in the context of process innovations, and then its robustness to uncertainty, bounded rationality, firm asymmetry, and product innovations are discussed. The model is preliminarily tested against industry trends, using both results from an analysis of the information technology sector and from the literature. The paper does not suffer from the inconsistency of explaining how capable incumbents are displaced by resorting to characterizations of incumbents as incapable due to some inefficiency; the paper models incumbents as efficient yet rationally choosing, in some instances, to be displaced. Copyright © 1999 John Wiley & Sons, Ltd.     

The year 2000: Looking back

In this article, the authors reflect on the development of the discipline of marketing. In the process, they point out the salient aspects of modern marketing and comment on the possible directions that it can take as it develops further. © 1999 John Wiley & Sons, Inc.     

Mapping the university technology transfer process

Transfer of technologies from the universities to the private sector is increasingly regarded as playing a significant role in new business starts, growth of existing businesses, and new job creation. Further, there are monerous models describing the process of technology transfer. Some of the existing models represent this process as a linear progression of steps: from idea generation and technology development at the university, to patenting the technology and then establishing a university-private firm link through a formal search process. The process culminates in patent rights transfer. Other models describe technology transfer in terms of networking arrangements and emphasize not so much formal search as the role of long-term relationships between the two parties. Still other studies indicate that it is possible to combine the two approaches—formal search and informal networking arrangements—to ensure successful transfer.Business firms involved in transfer also may be classified into several groups. Transfer could occur between the university and an established firm, between the university and a recently created new venture, or transfer could result in the creation of a new company. Technology, for example, could be transferred to a large company that uses the transferred technology as a basis for just one of many product lines, or to a small firm that makes the transferred technology a cornerstone of its product strategy.Are there any differences among the transfer processes used when large or small firms are involved, or when technology is transferred to an existing company, or results in the creation of a new firm? To address these questions, we mapped the technology transfer processes of 23 different technologies developed at the University of Minnesota from 1983 to 1993.More than half of the technologies studied went to large companies and were used either to upgrade existing products or to extend existing product lines. In eight cases technologies were transferred to small firms. In three cases technologies were transferred to venture capital firms or intermediaries and had not been commercialized at the time the study was completed. In the rest of the cases new firms were created by the inventors/university scientists themselves and served as vehicles for marketing their inventions. None of the firms of the latter group have grown beyond a part-time employment opportunity for the inventors, and only one firm provided evidence that additional hiring would be necessary in the near future.Only four cases involved transfers of technologies that have been developed and patented by the university to firms that did not have any relationships with the university prior to the transfer. In these four cases the firms used some form of search strategy to find a needed technology. However, there is no evidence that any of the firms had a well-developed formal search procedure. In the overwhelming majority of cases some form of relationship existed between the university (or individual inventors) and the private firm prior to the transfer. These relationships ranged from long-term friendships and/or cooperation to such less involved forms as interaction at research seminars and university-sponsored events. Further, in four cases, the technologies were initially developed by private companies, whereas the university's role was to assist in refinement or testing of the technology.The research yielded a number of additional findings that deserve further investigation and discussion. Specifically, the study did not provide any evidence that the successfully completed technology transfers made any substantial contribution to either new business creation or the generation of new jobs. This finding suggests that scholars and policy makers should proceed with caution before accepting a notion that new or high technology firms will have any direct economic impact.The study findings hold specific implications for entrepreneurial behavior and public policy. The “formal search and shopping” for a technology model suggests that both business and academic/government laboratories publicize, respectively, their requirements and offerings, and that opportunities for creative brokerage ought to exist. We found that in the majority of cases technology was transferred not through formal search, but through some prior relationships among individuals. This observation suggests that the ability to build extended networks of relationships not only within the business world but also with the university community is an important skill that owners and managers of the technology-based businesses need to possess. Entrepreneurs seeking to start businesses based on new technologies may need to reevaluate how much of their limited time to allocate to build and maintain networks and cooperative relationships, and how much time to shop for new technologies through formal channels. Further, public policy and the efforts of the university transfer agencies intended to facilitate transfer may need to shift their emphasis from facilitating “shopping” by organizing and/or paying for “publicity” (which is currently the major emphasis) to providing assistance in network building and relationship marketing efforts.