Endowing university spin-offs pre-formation: Entrepreneurial capabilities for scientist-entrepreneurs

University spin-offs are important mechanisms for creating and capturing value from scientific inventions. Academic scientists are uniquely positioned to shape such opportunities long before the university spin-off is founded. To better understand how science-based university spin-offs can be endowed for success, the pre-formation stage of 30 ventures co-founded over a 40 year period by a star-scientist-entrepreneur is analysed by matching his 363 co-invented US patents granted to 1476 co-authored publications and these 30 ventures. Employing the extended case method, including the analysis of extensive archival data, iterative interviews, and this unique, longitudinal, multi-level dataset, existing dynamic capabilities theory is confronted and extended with evidence as to how a star-scientist-entrepreneur senses and shapes and seizes opportunities to endow university spin-offs pre-formation. A process model is developed depicting four pre-formation entrepreneurial capabilities with which these science-based university spin-offs are endowed for success. Recommendations are made for scientist-entrepreneurs, investors, university leadership, and for innovation policymakers.     

Dynamic assortment in the presence of brand heterogeneity

In this paper, we study the dynamic assortment planning problem in the presence of heterogeneous brands. Over a limited selling season, the retailer sells heterogeneous products from one store brand and one national brand. We use the nested multinomial logit (NMNL) framework to model consumer choice process, in which consumers choose first which brand to buy and then a product within that brand. We formulate this problem using the finite-horizon dynamic programming approach. Using available sales transaction data, we estimate the consumer choice behavior and empirically demonstrate existence of brand heterogeneity. Further, our results suggest that ignoring brand heterogeneity will make the retailer’s expected revenues significantly overestimated, and the potential revenue overestimation depends on initial inventories and prices of products of two brands. We finally show that the retailer will benefit from dynamic assortment optimization with the estimated consumer choice model.     

Growth in stress

We propose a new global risk index, Growth-in-Stress (GiS), that measures the expected fall in a country’s GDP as the global factors, which drive world growth, are subject to stressful conditions. Using the GDP growth rates of 87 countries, we find that, since the 2008 financial crisis, though mainly from 2011 on, the world overall has fallen in a state of complacency, with the cross-sectional average GiS falling quite dramatically; in 2015, the average worst outcome seems to be no growth at the 95% probability factor stress. However, the cross-sectional dispersion within groups is quite variable: it is the smallest among industrialized countries and the largest among emerging and developing countries. We also measure the factor stress on different quantiles of the GDP growth distribution of each country. We calculate an Armageddon-type event as we seek to find the GiS on the 5% quantile of growth under the extreme 95% probability events of the factors, and find that it can be as large as an annual 20% fall in GDP.     

Heterogeneous component multiplicative error models for forecasting trading volumes

We propose a novel approach to the modelling and forecasting of high-frequency trading volumes. The new model extends the component multiplicative error model of Brownlees et al. (2011) by introducing a more flexible specification of the long-run component. This uses an additive cascade of MIDAS polynomial filters, moving at different frequencies, to reproduce the changing long-run level and the persistent autocorrelation structure of high-frequency trading volumes. After investigating the statistical properties of the proposed approach, we illustrate its merits by means of an application to six stocks that are traded on the XETRA market in the German Stock Exchange.     

A dynamic policy license for flexible spectrum management

Electromagnetic spectrum for wireless communications is fully allocated by regulatory authorities, but this does not mean that it is fully utilized. Demand for greater capacity and new services requires new regulatory and technical models for spectrum sharing. This paper develops a regulatory model denoted the dynamic policy license. The dynamic policy license combines the assurances to licensees that come from holding a fixed license while maintaining regulatory flexibility. A dynamic policy license is similar to a traditional spectrum license that specifies a bandwidth, power, center frequency, location, and other parameters. However, one or more of these parameters is subject to change by the regulator over time. The allowed changes are restricted by the license to provide assurances and predictability to the licensee. The opportunities and challenges that this presents to both regulators and licensees is described. For instance, the dynamic policy license can be a regulatory tool for more aggressive spectrum sharing.     

Credit risk of subsidiaries of foreign banks in CEE countries: Impacts of the parent bank and home country economic environment

In this study, using dynamic panel data, we investigated the influences of the home country economic environment and parent bank condition on the credit risk of foreign banks in Central and Eastern European (CEE) countries. We concentrated on the international transmission of credit risk through the internal capital market of multinational banks. Our theoretical assumptions follow studies that document how the parent bank condition and home country macroeconomic environment affect lending in subsidiaries in CEE countries. However, our results go one step further. We provide evidence that these relationships are reflected in subsidiaries’ credit risk in CEE countries. Our results suggest that the size and profitability of the parent bank have negative influences, while the liquidity and credit risk of the parent bank have positive influences on the subsidiaries’ credit risk. Moreover, the GDP growth in the parent bank’s country has a negative effect on the credit risk of the subsidiary, while the lending rate and liquidity in the parent bank country cause growth in the credit risk. These results indicate a new channel of international risk transfer from parent bank countries to host countries through foreign-owned banks.     

Building dynamic capabilities through knowledge resources

Recent literature has highlighted the role of dynamic capabilities as determinants of sustainable competitive advantages, although few investigative works have studied the organizational variables that encourage and support these capabilities in the tourism industry. This study addresses this gap and investigates the possible antecedents of dynamic capabilities in the hotel industry. The analyses provide empirical evidence of the role of knowledge in achieving dynamic capabilities in this sector. The results show that prior knowledge and skills at the individual and collective level form the basis for developing dynamic capabilities in firms in the hotel sector.     

Dynamic quality policies with reference quality effects

Dynamic pricing policies with reference-price demand have been intensely analysed. Less studied are dynamic quality policies with reference-quality demand. This article studies the dynamic quality policy of a firm whose consumers use a reference point in their decision-making, in line with the principles of behavioural economics. More specifically, I consider reference quality formation in an optimal control setting. By solving on the basis of Pontryagin’s maximum principle, I obtain analytical solutions to the optimal quality policy. The managerial implications of quality reference for dynamic quality policy are discussed.     

What are the sources of regional airport economic effectiveness? The dynamic capabilities perspective with evidence from Poland

The aim of this paper is to examine the sources of regional airport economic effectiveness from the perspective of the Dynamic Capabilities View, a much debated theoretical construct of organization and management discourse in recent years. The category of dynamic capabilities embraces those organizational competencies which enable organizations to modify their routines, operational capabilities and resources with the aiming of adapting to business environmental changes. The research results, conducted on a full sample of Polish regional airports, suggest that there is a difference among regional airports in perceiving the role of particular dynamic capabilities in achieving economic effectiveness. Some dynamic capabilities are more important for small regional airports in comparison with their larger rivals. Research conducted on similar groups suggests that heterogeneity in shaping dynamic capabilities exists within organizations operating in the same sector.     

The impact of credit supply shocks and a new Financial Conditions Index based on a FAVAR approach

This paper investigates the impact of credit supply shocks on the macroeconomy and estimates a new financial conditions index. We calculated two credit supply factors using a time-varying parameter FAVAR model. The first factor is identified as the willingness to lend, while the second factor is the lending capacity. The impact of these two types of shocks and their changes over time is examined using Hungarian data. The two types of lending shocks affect macro variables rather differently: a positive lending capacity shock (in a banking system mostly owned by non-residents) influences GDP through a decrease in country risk and the easing of monetary policy, while willingness to lend primarily increases lending activity. The two financial shocks also differ in terms of their evolution over time: deviations from the average in the impact of a willingness to lend shock usually occur for short periods of time and are of a small degree between the various quarters. However, in the case of lending capacity, certain trends can be observed: before the crisis, the stability of the banking system played an increasing role in country risk, whereas after 2008 it appears that monetary policy paid increasing attention to financial stability. Finally, a new type of financial conditions index is quantified based on our estimates, which measures the impact of the banking system’s lending activity on GDP growth.