Moving from Private to Public Ownership: Selling Out to Public Firms versus Initial Public Offerings

We study two alternative means to move assets from private to public ownership: through the acquisition of private companies by firms that are public (sellouts) or through initial public share offerings (IPOs). We consider firm-specific characteristics for 1,074 IPO and 735 sellout firms to identify differences in growth, capital constraints, and asymmetric information between the two types of transactions. Our results suggest that firms move to public ownership through an IPO when they have greater growth opportunities and face more capital constraints. We provide a better understanding of the firm-specific characteristics that lead firms to go public.     

Evidence of Stock Returns and Abnormal Trading Volume: A Threshold Quantile Regression Approach

This paper presents a capital asset pricing model‐based threshold quantile regression model with a generalized autoregressive conditional heteroscedastic specification to examine relations between excess stock returns and “abnormal trading volume”. We employ an adaptive Bayesian Markov chain Monte Carlo method with asymmetric Laplace distribution to study six daily Dow Jones Industrial stocks. The proposed model captures asymmetric risk through market beta and volume coefficients, which change discretely between regimes. Moreover, they are driven by market information and various quantile levels. This study finds that abnormal volume has significantly negative effects on excess stock returns under low quantile levels; however, there are significantly positive effects under high quantile levels. The evidence indicates that each market beta varies with different quantile levels, capturing different states of market conditions.     

Understanding the Social Role of Entrepreneurship

There is a need to rethink and redefine the social value added of entrepreneurial activities to society. In this paper we develop five pillars on which the evolving social role of entrepreneurship can rest and have its impact: (1) connecting entrepreneurial activities to other societal efforts aimed at improving the quality of life, achieving progress, and enriching human existence, (2) identifying ways to reduce the dysfunctional effects of entrepreneurial activities on stakeholders, (3) redefining the scope of entrepreneurial activities as a scholarly arena, (4) recognizing entrepreneurship's social multiplier, and (5) pursuing blended value at the organizational level, centring on balancing the creation of financial, social and environmental wealth. In a final section we discuss implications for practices and for further research.     

Insider-controlled Firms in Russia

Privatisation Vouchers in Russia were heavily invested in the holders' own firms. Using data from a recent survey, we show that insider control in firms privatised in 1992-4 through the voucher process (as distinct from the earlier leased buy-out method) is insecure and dependent on managers' support. For employees, investment in insider control appears to have been motivated by employment income insurance rather than expected excess returns on the equity. Managers are predominantly the same individuals as before privatisation and display considerable hostility to outside investors, probably because they fear dismissal should outsiders gain control. Despite insider control, firms are shedding labour quite rapidly through voluntary resignations. Employment dynamics appear to be unrelated to insider equity ownership. This revised version was published online in July 2006 with corrections to the Cover Date.     

The relationship between ownership and possession: observations from the context of digital virtual goods

This theoretical article highlights limitations in the current trend towards dichotomising full ownership and access-based consumption by recognising a broader, more complex array of ‘fragmented’ ownership configurations in the context of digital virtual goods (DVGs). In challenging this dichotomy, we recognise that the relationship between ownership and possession becomes particularly significant. We therefore consider how prominent DVG ownership configurations may shape the way in which possession is assembled, potentially reducing consumers’ scope of action relative to DVGs and leaving possession susceptible to disruption. Conversely, we acknowledge ways in which consumers’ continued attempts at possession may impinge upon the agency of ownership mechanisms within the market. Our analysis ultimately builds upon existing understandings of both ownership and possession, theorising their often overlooked relation in consumption.     

Managing knowledge in foreign entry strategies: a resource‐based analysis

International strategies vary in their potential to exploit and augment a firm's resources, especially its knowledge base. Resource‐based analysis suggests clustering the diverse entry modes in terms of their exploitation and augmentation characteristics. We thus introduce a new categorization of entry modes based on their potential to augment the resources of an entrant. We then explore the antecedents of these modes, and advance testable propositions delimiting for which firms and in which circumstances each mode maximizes long‐term value creation. Finally, we outline how our resource‐based framework complements transaction‐cost‐based frameworks. Copyright © 2009 John Wiley & Sons, Ltd.     

How do internal capabilities and external partnerships affect innovativeness?

How do a firm’s internal capabilities and external partnerships contribute to its product and process innovativeness? How do their impacts differ? Based on the theoretical framework of exploitation and exploration, we develop an integrative model linking the impact of both internal capabilities and external partnerships on product and process innovativeness. Survey responses from Taiwanese biotechnology firms indicate that research and development (R&;D), marketing, and manufacturing capabilities have different effects on product and process innovativeness. Of the four types of external partnerships, only partnerships with universities and research institutes seem to add value, whereas partnerships with suppliers, customers, and competitors do not contribute to innovativeness. Moreover, marketing capability and customer partnerships have a positive interaction effect on product innovativeness, while manufacturing capability and supplier partnerships have a positive interaction effect on process innovativeness.     

Applying the Randomized Response Technique in Business Ethics Research: The Misuse of Information Systems Resources in the Workplace

Mitigating response distortion in answers to sensitive questions is an important issue for business ethics researchers. Sensitive questions may be asked in surveys related to business ethics, and respondents may intend to avoid exposing sensitive aspects of their character by answering such questions dishonestly, resulting in response distortion. Previous studies have provided evidence that a surveying procedure called the randomized response technique (RRT) is useful for mitigating such distortion. However, previous studies have mainly applied the RRT to individual dichotomous questions (e.g., yes/no questions) in face-to-face survey settings. In this study, we focus on behavioral research examining the relationships between latent variables, which are unobserved variables measured by multiple items on Likert or bipolar scales. To demonstrate how the RRT can be applied to obtain valid answers from respondents answering a self-administered online questionnaire with Likert and bipolar scales, we build a behavioral model to study the effect of punishment severity on employees’ attitudes toward misuse of information systems resources in the workplace, which in turn influence misuse behavior. The survey findings meet our expectations. The respondents are generally more willing to disclose sensitive data about their attitudes and actual behavior related to misuse when the RRT is implemented. The RRT’s implications for causal modeling and the advantages and challenges of its use in online environments are also discussed.     

Foreign direct investment in OECD countries: a special focus in the case of Greece

Foreign Direct Investment (FDI) is considered as an important instrument for economic development all over the world. The aim of this paper is to examine the FDI inflows determinants for 24 OECD countries. To this end we employ annual data from 1980 to 2012 for a series of potential FDI determinants that have been identified as the most important by the relevant literature. Our empirical strategy employs both the standard fixed effects panel as well as a dynamic panel approach. The empirical findings highlight the importance of market size, trade openness, unit labor cost, schooling, taxation, gross capital formation, institutional variables, and ROA/ROE as significant FDI determinants. In the case of the dynamic panel model those FDI inflows determinants are not uniform for all country groups. Additionally, the results indicate that corporate tax rates clearly affect FDI attractiveness. This finding is robust when testing different countries subgroups. The present study has important policy implications indicating the factors that host economies should place emphasis on in order to attract FDI inflows. Policy makers should not only pay attention to the corporate tax rate level but they should also design a simple, stable and transparent taxation system that minimizes the relevant business risk.