Signaling in science-based IPOs: The combined effect of affiliation with prestigious universities,underwriters, and venture capitalists

This paper studies the combined effect of affiliation with prestigious universities, underwriters, and venture capitalists on the valuation of biotech ventures at IPO and their post-IPO performance. We argue that affiliation to a prestigious university provides the affiliated firm with a quality signal in the scientific domain. The pure quality signaling effect of the affiliation is isolated from the substantive benefits it provides by performing a difference-in-difference approach based on the scientific reputation of scientists in firms' upper echelons. The signal is stronger the weaker is the scientific reputation of scientists of the focal IPO-firm and is additive to those provided by prestigious venture capitalists and underwriters. Results for a sample of 254 European biotech ventures that went through an IPO between 1990 and 2009 confirm our predictions.     

Unfolding China’s state-owned corporate empires and mitigating agency hazards: Effects of foreign investments and innovativeness

Integrating agency and institutional perspectives, we describe how China’s socio-political institutions create state-owned corporate empires with unique agency conflicts. We develop a framework demonstrating how economically unjustified firm expansion, i.e. empire building, mediates the relationship between state ownership and performance. We uncover the instrument in empire building and appropriate corporate governance and strategic management remedies. An empirical study on 29,638 Chinese firms evidences that (1) increased state ownership drives higher management expenses and lower firm profitability though empire building; (2) long-term debt is used to finance empire building; and (3) foreign capital investments and innovativeness can mitigate these agency conflicts.     

The new middle class in emerging markets: How values and demographics influence discretionary consumption

The rise of new middle‐class consumers in rapidly transforming emerging markets has attracted the attention of Western business executives. What they know about this growing segment of customers will determine whether they succeed or fail in these markets. The present study examines the factors that drive the discretionary consumption of this new middle class, including the effects of consumerist values, religious values, occupation, education levels, and ownership of fixed assets. The study draws its insights from data gathered from 391 new middle‐class consumers in Ankara, the second‐largest city in Turkey. The findings provide important implications for businesses, both indigenous and foreign. An overall implication is that managers ought to understand and qualify the new middle class in emerging markets not simply by their access to disposable income but by deeper attitudinal and behavioral characteristics.     

Me or information technology? Adoption of artificial intelligence in the delegation of personal strategic decisions

Artificial intelligence is revolutionizing the way we do business. Whereas both the adoption of technological innovations and strategic decision making have been subject to prior research, this experimental study is first to combine both. To understand the impact of choice complexity and cognitive perceptions on the willingness to delegate a strategic decision to an algorithm, we conducted an experiment with 310 participants. We find that although choice complexity has no effect, participants with low levels of situational awareness are more likely to delegate. The findings augment research on choice complexity in decision making by emphasizing the relevance of cognitive perceptions.     

Toward a Typology of Family Firm Corporate Entrepreneurship

Family involvement in business creates idiosyncrasies in firm behavior that promote long‐term, often transgenerational, strategic logics that ostensibly align with the motivations and outcomes of corporate entrepreneurship. Interestingly, extant research provides only minimal insight into the heterogeneous nature of corporate entrepreneurship orientations pursued by family firms. To better understand this heterogeneity, we develop a typology of corporate entrepreneurship in family firms providing a reconciliatory approach to this literary diversity and suggest that the varied corporate entrepreneurship orientations of family firms are impacted by the duality of a family's distinct intention to pursue transgenerational succession and capabilities to acquire external knowledge.     

Same Boundary Management Preference,Different Outcome: Toward a Gendered Perspective of Boundary Theory Among Entrepreneurs

Work‐family boundary research debates whether family demands should be integrated or separated from work demands. Our thesis is that the impact of boundary management preferences on business performance depends on the entrepreneur's gender. We also investigate how family‐to‐business support and business location alter the gender and boundary management preference interaction. Results show that an integration preference enhances business performance for men regardless of family‐to‐business support or business location. A segmentation preference aids women's business performance, especially among those with high family‐to‐business support and an independent business. An integration preference yields greater business performance for women with an at‐home business.     

The American Inventors Protection Act: A Natural Experiment on Innovation Disclosure and the Cost of Debt

We examine the impact of innovation disclosure through patenting on firms' cost of debt, focusing on the American Inventors Protection Act (AIPA) as an exogenous shock in innovation disclosure regulation. Post‐AIPA, firms have an incentive to apply for patents only if commercial success is likely. Accordingly, we expect post‐AIPA patents to be a better proxy for successful innovation activity, and thus to have a stronger effect on reducing the cost of debt than pre‐AIPA patents. Indeed, we find that pre‐AIPA patents reduce the cost of debt only for the most innovative firms, while post‐AIPA, this effect holds for all firms.     

Stadiums and Scheduling: Measuring Deadweight Losses in the Victorian Football League, 1920–70

Over a 50 year period, Australian Rules football's major league, the Victorian Football League, did not always use its largest and best-equipped stadium for regular season games between its most popular teams or schedule those teams to play twice in a regular season. We calculate deadweight losses from the use of capital goods (stadiums) and effects of match scheduling in this professional sports league. Such analysis has not been attempted previously because of the absence of a counterfactual. The welfare losses were significant but not sufficient to threaten the survival of a distance-protected cartel.     

Support for the underdog brand biography: Effects on consumer attitude and behavior

Conflict between favorites and underdogs is an everyday phenomenon. Research suggests that people support the underdog as they see a reflection of their own self in the person at a disadvantaged position. Two studies examine the effect of underdog brand biography in two different contexts. Study 1 provides support for the notion that underdog brand biographies for established brands elicit stronger consumer response than underdog brand biography for new brands. In study 2, a 2 × 2 between-subjects experimental design measured respondents’ reaction toward an underdog brand biography over a top dog brand biography under conditions of public versus private consumption. Results demonstrate that consumers exposed to underdog brand biographies in the private consumption condition will be more likely to respond favorably than when they are exposed to the public consumption condition. Based on the results it is suggested that advertisers make use of underdog brand biographies in case of established brands. Furthermore, choice of underdog brand narratives is likely to bring positive results under conditions of private consumption.