Empirical Generalizations in Search Engine Advertising

This article compares prices per click and search engine advertising (SEA) effectiveness across six countries and 15 industries over four years. We find that prices per click are highest in the United States and United Kingdom, as well as in the financial and Internet services industries, but are lower in retail than in services industries. In highly competitive markets, increases in SEA expenditures may increase prices per click that do not necessarily lead to higher advertising effectiveness, here measured as a higher number of clicks. To analyze and compare advertising effectiveness across industries, we decompose the effect of increases in SEA expenditures on prices per click (price effect) and number of clicks (quantity effect). A cross-country, cross-industry study shows that 44 percent of the increase in SEA expenditures is associated with more clicks and 56 percent with higher prices.     

Managing in an economic crisis: The role of market orientation in an international law firm

This research paper contributes to the understanding of the relationship between market orientation and performance in the context of a law firm during a time of economic crisis. The contribution is twofold, adding to the fairly limited research on market orientation within law firms, and to the limited research on the role of market orientation in times of economic crisis. The findings, from the questionnaire survey and semi-structured interviews within practice groups of a large multinational law firm, conclude that market orientation is important during an economic crisis. Those practice groups with higher market orientation scores withstand the increased turbulence and outperform those practice groups with lower market orientation scores.     

New Insights into Ethical Leadership: A Qualitative Investigation of the Experiences of Executive Ethical Leaders

Ethical leadership has become a thriving research field. However, on reviewing previous research, we argue that several fundamental questions remain unclear and need further investigation. (1) Ethical leaders are defined as behaving ‘normatively appropriate[ly]’ (Brown et al., Organ Behav Hum Decis Process 97(2):117–134, 2005), but it remains unclear what this entails. What specific behaviours does an ethical leader show? (2) To date, ethical leadership has focused primarily on leader behaviour towards employees. Which stakeholders apart from employees are important to the ethical leader, and what kind of ethical behaviour does the ethical leader show towards them? (3) What are further antecedents and consequences of ethical leadership? We addressed these questions by qualitatively analysing interviews with 17, mostly Swiss, executive ethical leaders. The results indicate that executive ethical leaders care not only about employees but also about other stakeholders, such as customers, suppliers, owners of companies, the natural environment and society. Additionally, this study identified a broad range of executive ethical leaders’ behaviours towards these stakeholders, and, therefore, may function as a useful resource for future quantitative studies. Furthermore, we identified several antecedents of executive ethical leadership, for example ethical role models, business strategy and owner’s values, and consequences such as effects on other stakeholders than employees. Finally, our results shed more light on the processes of ethical guidance of employees. Managerial implications and avenues for further research are discussed.     

Does it really work? Re-assessing the impact of pre-departure cross-cultural training on expatriate adjustment

Cultural adjustment is considered to be a prerequisite for expatriate success abroad. One way to enhance adjustment is to provide employees with knowledge and awareness of appropriate norms and behaviours of the host country through cross-cultural training (CCT). This article analyses the impact of pre-departure CCT on expatriate adjustment and focuses on variations in participation, length and the comprehensiveness of training. Unlike previous research, the study focuses on the effectiveness of pre-departure CCT for non-US employees expatriated to a broad range of host country settings. Employing data from 339 expatriates from 20 German Multinational Corporations (MNCs) the study finds CCT has little if any effect on general, interactional or work-setting expatriate adjustment. However, a significant impact of foreign language competence was found for all three dimensions of expatriate adjustment. We used interviews with 20 expatriates to supplement our discussion and provide further implications for practice.     

Tariffs and income: a time series analysis for 24 countries

We argue for a new approach to examining the relationship between tariffs and growth. We demonstrate that more can be learned from time series analyses of the experience of individual countries rather than the usual panel data approach, which imposes a causal relation and presents an average coefficient for all countries. Tentative initial results using simple two-variable cointegrated VAR models suggest considerable heterogeneity in the experiences of the countries we look at. For most, however, there was a negative relationship between tariffs and levels of income for both the pre- and post-Second World War periods. However, in the second half of the twentieth century, the causality ran from income to tariffs: that is, countries simply liberalized as they got richer. Policy decisions based on the usual panel approach might thus be very inappropriate for individual countries.     

Steuerflucht und Steueroasen

The current debate on tax planning has to distinguish between tax evasion and aggressive tax planning. While tax evasion is illegal and requires the enhanced exchange of information, measures against aggressive tax planning seem to be very complex and complicated. Tax havens’ benefits from tax haven activities are inversely related to the intensity of competition among tax havens. Once the set of tax havens narrows, each havens’ share of the business increases and its margins go up. This competition aspect makes initial successes easy but final success very difficult. Nevertheless, some authors argue that action against tax flight is inevitable. As tax flight is a multilateral phenomenon, coordinated initiatives by country groups appear particularly promising. Here the EU should be in the vanguard. Only automatic information exchange generates the transparency and leeway needed to eliminate income tax evasion and to permit countries to devise tax codes at their own discretion. Despite the European trend towards lower corporate taxes, an empirical analysis shows that German multinationals have increased their tax haven activities. Recent research suggests that this development might be explained by the increased usage of anti-tax avoidance measures by high-tax countries. The substitutive nature of different tax-avoidance schemes indicates that only a coordinated closing of loopholes for profit shifting would reduce the demand for tax-haven operations significantly.     

Populist Syndrome and Nonmarket Strategy

Although recognized as a defining feature of the current political era, populism and its implications for non-market strategy remain undertheorized. We offer a framework that (a) conceptualizes populism and its progression over time; (b) outlines the risks populism generates for firms; and (c) theorizes effective nonmarket strategies under populism. Our framework anchors the political risk profile of populism in three interdependent elements: anti-establishment ideology, de-institutionalization, and short-term policy bias. These elements jointly shape the policymaking dynamics and institutional risks for firms under populism. Our analysis shows how firms can calibrate two nonmarket strategies – political ties and corporate social responsibility – to mitigate populism-related risks. We specify how particular configurations of political ties and CSR activities, aimed at the populist leadership, bureaucrats, political opposition, and societal stakeholders, minimize risk under populism. Further, we theorize how the effectiveness of specific attributes of political ties and CSR – namely their relative covertness (more vs. less concealed) and their relative focus (narrowly vs. widely targeted) – varies as a function of firm type (insiders vs. outsiders) and the probability of populist regime collapse. Finally, we address how motivated reasoning may bias firms' assessments of regime fragility and resulting strategy choices.     

Investor reactions to corporate environmental saints and sinners: an experimental analysis

Following Dierkes and Antal's (1985) model, this study examines the decision usefulness of narrative disclosures on firms' environmental performance by focusing on how investors allocate their investment funds. Using an experimental design, the study examines investors' reactions to two states of corporate environmental performance: one in which the company discloses it is performing badly with respect to the environment, and another in which the company discloses it is a leader in environmental management. The results indicate that investors, as expected, react strongly and negatively to the poor environmental performer, while somewhat less expected, there is no significant reaction to the better environmental performer. Sub-analyses, however, reveal ‘environmental clientele’ effects. For the poor environmental performer, investors who specifically mention environmental performance react even more strongly and negatively than those who make no mention of environmental performance. In the case of the better environmental performer, the reactions are more complex. For those investors who specifically mention the firm's environmental performance, two opposite reactions result. While one group positively invests in the company for its environmental leadership, the other group avoids investing in the company for what it appears to consider excessive and unnecessary expenditure. The results from this study are consistent with the widespread observation that firms will rarely disclose poor environmental performance unless required to do so. Moreover, the mixed reactions to the better environmental performer could also partly explain why firms appear willing to report their positive environmental achievements in only vague and general terms.     

Seasonality and the valuation of commodity options

Price movements in many commodity markets exhibit significant seasonal patterns. However, given an observed futures price, a deterministic seasonal component at the price level is not relevant for the pricing of commodity options. In contrast, this is not true for the seasonal pattern observed in the volatility of the commodity price. Analyzing an extensive sample of soybean, corn, heating oil and natural gas options, we find that seasonality in volatility is an important aspect to consider when valuing these contracts. The inclusion of an appropriate seasonality adjustment significantly reduces pricing errors in these markets and yields more improvement in valuation accuracy than increasing the number of stochastic factors.