Tourism trails as tools for cross-border integration: A best practice case study of the Vennbahn cycling route

This paper evaluates which processes determine the leverage of cycling tourism trails for mainstreaming cross-border contact and ‘soft’ region-building. Reflecting on the Vennbahn between Germany, Belgium and Luxemburg, the paper shows that the influence of routes on cross-border integration depends on the trail’s strength as a tourism product, its cross-border institutionalization, and the geography and scale of the trail and the involved destinations. Tourism trails could contribute to cross-border integration, vindicating the substantial money spent on such projects in INTERREG programmes. However, border-related barriers remain robust even for tourism projects that are best practices of cross-border cooperation. As such, there is an unfulfilled potential of tourism trails in their contribution to cross-border communication and social cohesion in many European borderlands.     

Does corporate diversification create value in emerging markets? New evidence from Chile

Using a sample of 85 Chilean firms listed in the Santiago Stock Exchange from 2005 to 2013, we analyze the impact of corporate diversification on firm value. We consider voting rights of the main shareholder and institutional investors’ influence on firm value. We report firm‐value destruction for diversified firms. Regarding ownership concentration, we report a negative relation between the largest shareholder ownership and firm value. Separation between voting rights and cash flows rights of this shareholder is negatively related to firm value. While Pension Fund Administrators (AFP) mitigate firm value destruction in diversified firms, other institutional investors do not play an active role in controlling value destruction. Finally, if the largest owner is a family, we report firm‐value creation in diversified firms. Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.     

Activist‐impelled divestitures and shareholder value

Research Summary : This study analyzes how the divestitures that are impelled by activist investors in their campaigns against public corporations affect shareholder value. Using hand‐collected data on the activist campaigns that were launched against and the divestitures that were undertaken by Fortune 500 companies between 2007 and 2015, we find that activist‐impelled divestitures are more positively associated with immediate and longer‐term measures of shareholder value than comparable manager‐led divestitures. These performance differences persist for nearly two years after the completion of these deals. Our results empirically test the idea that firms with agency problems unlock shareholder value when they divest, and support the notion that activist investors fulfill an important external governance function. Our work also opens new research opportunities and offers practical implications as well. Managerial Summary : This study investigates how divestitures that are undertaken at the behest of activist investors affect shareholder value. We find that divestitures that were undertaken under pressure from activist investors are associated with more positive shareholder returns than comparable divestitures that were undertaken voluntarily by managers. These performance differences persist for nearly two years after the completion of these deals, alleviating concerns about the purported short‐termism of activist investors. Our findings suggest that activist investors may fulfill an important governance function by inducing managers to undertake strategies that they might not otherwise pursue, thereby unlocking shareholder value.     

Institutional context as a moderator of the relationship between board structure and acquirer returns

The objective of this paper is to contribute to the understanding of the supervisory role of the board of directors in the context of mergers and acquisitions (M&As). We focus our study on the European case, for which there is no previous exhaustive evidence on this topic. Using information on 985 mergers and acquisitions carried out over the period 2003–2016 by companies in the major European countries, we analyze the influence of supervisory capacity of the board (small size, higher proportion of outsiders and separated Chairperson-CEO positions) on acquirer returns, differentiating between Anglo-Saxon and continental European contexts. Our results confirm that the effectiveness of corporate governance practices depends strongly on their fit with the broader institutional context. Specifically, we find that a smaller size of the board of directors and the separation of the positions of Chairperson and CEO lead to higher acquirer returns in European Anglo-Saxon countries. By contrast, we do not find evidence that any proxy of supervisory capacity of the board significantly improves acquirer returns in the rest of countries.     

Pro-market institutions and outward FDI of emerging market firms: An institutional arbitrage logic

We offer new theory and evidence regarding the effects of pro-market institutions on outward foreign direct investment (FDI) of emerging market firms (EMFs). Drawing on the logic of institutional arbitrage, we integrate the escapism and exploitation mechanisms of EMF internationalization into a unified theoretical context. We propose an inverted U-shaped relationship between host market-supporting institutions (MSI) and the investment scale of an EMF’s FDI project in the country, showing an escape-driven upward slope for low-to-medium MSI levels and an exploitation-driven downward slope for medium-to-high MSI levels. We supplement this main argument with two boundary conditions: the alleviating effect of home market liberalization (HML) and the strengthening effect of home government subsidies (HGS), demonstrating the coexistence and variation of pro- and anti- market institutions in an emerging market. Using information on 1,450 FDI projects conducted by 288 Chinese listed firms in 116 host countries, we obtain supportive evidence for the predicted relationships between the three institutional forces. This study enriches the literatures on institutional arbitrage and pro-market institutions with evidence from EMFs.     

Japan's FDI drivers in a time of financial uncertainty. New evidence based on Bayesian Model Averaging

In this paper we analyse the determinants of Japanese outward FDI stock for the period 1996–2017. This period is especially relevant as it covers a process of increasing economic globalization and two financial crises. To this aim, we consider a large set of candidate variables based on the theory as well as on previous empirical analysis. Our sample includes a total of 27 host countries. We select the covariates using a data-driven methodology, the Bayesian Model Averaging (BMA) analysis. Moreover, we also analyse whether these determinants change depending on the degree of development (emerging vs developed) or the geographical areas (EU vs East Asia) of the countries considered. We find that Japan's FDI can be explained by a wide variety of variables, that include not only the typical gravitational ones but also institutional and macroeconomic variables, including those that measure financial development. Moreover, Japanese FDI can be explained by both horizontal and vertical FDI motives in the groups of countries analysed. However, in developed, and more precisely, EU countries, horizontal FDI strategies are predominant, whereas for East Asian and emerging countries, there is more evidence in favour of vertical FDI.     

Owners’ rule-based decision-making in family firm strategic renewal

We explore the process and consequences of family firm owners applying informal rules to decision-making in the context of later-generation family firms attempting strategic renewal. Based on the case studies of two firms in a Nordic country where the owners serve as non-executive board members, and following institutional action theory, we propose that informal rules – based on historical precedents and cumulative experience – applied to a family firm’s decision-making play many roles. They sustain family traditions over time, transfer experience over generations and depersonalise family members’ use of power. In addition, the rules on governance structure, governance processes and the content of the strategies form a hierarchy and can both facilitate and hinder the renewal.     

A gramscian perspective on field dynamics. The case of the privatization of Italian steel industry

Institutional fields are not static, they undergo times of fragmentation and times of settlement. Neo-institutional research has long explained the settlement of fields as either the effect of political manoeuvring of actors, or of discursive activity influencing cultural codes, narratives and symbols. But can these processes really be considered in isolation? In this paper, we propose to adopt a comprehensive view on fields’ dynamics, one that embraces the interaction of political and discursive manoeuvring to explain how fragmented fields manage to settle. To do so, we build on the Gramscian concept of hegemonic practices as discursive and political processes that integrate cultural equivalence among actors with political alliances based on aligned interests. Hegemonic practices align actors in a new historical bloc (a new settlement). Through this lens, we interpret the case of the Italian State steel privatization (1984–1995) and propose a process model explaining what yields fields’ dynamics from fragmentation to settlement. The model highlights the action of diffused agency in field dynamics, thus overcoming the obsolete challenger/incumbent view, and the need of becoming a historical bloc for alliances to stabilize a field.     

Navigating Through the Spatial and Institutional Contradictions of Public Audit Oversight

Abstract

This study revisits the actions of the French audit regulator (H3C) and the French profession over the 2003–2013 period in response to the regulatory transformations that occurred both in the national and transnational space. Our analysis highlights how these actors have navigated through the spatial and institutional contradictions that characterize public audit oversight in order to manage variable and opposing interests from one space to another. In particular, we show how conflicting national and transnational conceptions of professionalism and commercialism have developed to support different regulatory agendas. Our analysis of the spatial dynamics of public audit oversight allows us to propose a much less confrontational representation of the relationships between public audit regulators and the audit profession. We maintain that more attention should be paid to the spatial variants of commercialism and professionalism to better understand the development of audit regulation.