Comparing Innovation Capability of Small and Medium‐Sized Enterprises: Examining the Effects of Organizational Culture and Empowerment

This study analyzes the impact of organizational culture and empowerment on innovation capability, and examines the peculiarities of these effects. The study's hypotheses are tested by applying both individual and firm‐level analyses to survey data collected from 743 employees from 93 small and medium‐sized firms located in Turkey. For medium‐sized enterprises on both the individual and firm level of analysis, results suggest that collectivism and uncertainty avoidance are positively associated with empowerment, whereas power distance is negatively related to empowerment. Assertiveness focus has no relations with empowerment and innovation capability, yet among cultural dimensions, only uncertainty avoidance is related to innovation capability. For small‐sized enterprises, findings suggest that both power distance and uncertainty avoidance are linked to both empowerment and innovation capability on the individual level, whereas two new paths between collectivism and innovation capability and between assertiveness focus and empowerment are found on the firm level. Also, empowerment is found to be positively related to innovation capability for both small and medium‐sized enterprises (SMEs) on both the individual and firm level. In terms of managerial practice, our study helps clarify the key role played by cultural dimensions in the process of shaping an empowering and innovative work environment. Findings also reveal that managers should focus on participative managerial practices (e.g., empowerment) to promote innovation capability of SMEs.     

The liability of foreignness reconsidered: New insights from the alternative research context of transforming economies

Institutional theory has been increasingly used to decipher implications of the liability of being a foreign firm. Earlier studies have argued that multinational corporations bear social costs arising from lack of legitimacy and thus need to engage in isomorphism to increase their likelihood of survival. Drawing on insights gained from transforming economies, this study reconsiders the espoused relationships among legitimacy, local isomorphism, and overcoming the liability of foreignness. We argue that idiosyncrasies of transforming economies could engender (1) varying levels of need for gaining legitimacy of local constituents and (2) alternative ways other than local isomorphism for gaining legitimacy from local institutional actors.     

The Effect of Marriage on Education of Immigrants: Evidence from a Policy Reform Restricting Marriage Migration*

We investigate the effect of immigrants’ marriage behavior on dropout from education. To identify the causal effect, we exploit a recent Danish policy reform that generated exogenous variation in marriage behavior by a complete abolishment of marriage migration for immigrants below 24 years. The reform influenced immigrants from countries with a high historical rate of marriage migration more than immigrants from country groups with a low rate. We find that the dropout rate for males increases by 25 percentage points as a consequence of marriage to a marriage migrant, whereas the effect for females is small and mostly insignificant.     

Dividend policy,creditor rights,and the agency costs of debt

We show that country-level creditor rights influence dividend policies around the world by establishing the balance of power between debt and equity claimants. Creditors demand and managers consent to a more restrictive payout policy as a substitute for weak creditor rights in an effort to minimize the firm's agency costs of debt. Using a sample of 120,507 firm-years from 52 countries, we find that both the probability and amount of dividend payouts are significantly lower in countries with poor creditor rights. A reduction in the creditor rights index from its highest value to its lowest value implies a 41% reduction in the probability of paying a dividend, and a 60% reduction in dividend payout ratios. These results are robust to numerous control variables, sample variations, model specifications, and alternative hypotheses. We also show that the agency costs of debt play a more decisive role in determining dividend policies than the previously documented agency costs of equity. Overall, our findings contribute to the growing literature arguing that creditors exert significant influence over corporate decision-making outside of bankruptcy.     

The impacts of student and life satisfaction on tourism students’ perceived sense of belonging

This study explores how tourism students’ satisfaction with their lives and academics affect their sense of belonging within their school communities. The primary supporting research was conducted using a questionnaire, which 285 students in Akdeniz University’s Faculty of Tourism answered. The mean scores of the two scales (life satisfaction and sense of belonging) and the dimensions of student satisfaction were used to conduct multiple regression analysis. The results suggest that two aspects of student life (teaching staff and school management vs. student support and counseling) and life satisfaction had a direct correlation with students’ sense of belonging.     

Business Cycle Synchronization of Turkey with the Eurozone and the United States: What Has Changed Since 2001?

Using wavelet methodology, we make a detailed spectral analysis of the business cycle synchronization of the Turkish economy with the eurozone and the United States. We take into account the dramatic change in the main economic indicators in the Turkish economy after the 2001 financial crisis. We find that the correlation of Turkish cycles with the cycles of the eurozone and the United States increased substantially after 2001. Moreover, the correlation of the Turkish cycles with the U.S. cycles is not lower than that with the euro cycles after 2001. Accordingly, analyzing the effect of international developments should not be confined to the trade channel. We submit that capital flows offer a reasonable explanation for the high correlation with the United States.     

A Clustering Approach to Some Monetary Facts: A Long-Run Analysis of Cross-Country Data

Long-run dependencies among inflation, growth rates of money, real output and real output per capita are analysed. For a cross-section of 119 countries, clusters are obtained, and correlations among these variables within each cluster are calculated. Unlike the correlations obtained using data from the full sample, correlations of growth rates of real output and real output per capita with money growth and inflation are dissimilar across clusters. In particular, for some clusters of countries positive long-run relationships of money growth and inflation with growth rates of real output are observed.
JEL Classification Numbers: E5, F01, C69.     

Freeport-McMoRan Copper &; Gold,Inc.: An Innovative Voluntary Code of Conduct to Protect Human Rights,Create Employment Opportunities,and Economic Development of the Indigenous People

Environmental degradation and extractive industry are inextricably linked, and the industry’s adverse impact on air, water, and ground resources has been exacerbated with increased demand for raw materials and their location in some of the more environmentally fragile areas of the world. Historically, companies have managed to control calls for regulation and improved, i.e., more expensive, mining technologies by (a) their importance in economic growth and job creation or (b) through adroit use of their economic power and bargaining leverage against weak national governments, regional and international regulatory bodies. More recently, the industry has had to contend with another set of challenges that involved treatment of indigenous people and their traditional land rights, fair treatment of workers, human rights abuses, and bribery and corruption involving local officials and political leaders. These challenges currently fall outside the traditional areas of regulation and control. Nevertheless, they pose serious threat to the industry’s business practices because of their global scope, threat to company’s reputation, and long-term risks of political instability leading to increasing cost of capital. Industry has responded to these challenges by creating voluntary codes of conduct that would signify their intent to comply with higher standards of conduct, and assuage public opinion that no further action is called for. These codes, however, lack any monitoring mechanism and reporting integrity to assure the public that the industry members are indeed meeting their commitments. Consequently, pressure on the industry continues unabated and with ever increasing calls for mandatory regulation and oversight. This article examines the activities of one mining company, Freeport-McMoRan Copper & Gold, Inc., which has taken a radically different approach in responding to these challenges at its mining operations in West Papua, Indonesia. While cooperating with industry-based efforts of voluntary codes of conduct, Freeport also initiated a radically different response through its own voluntary code that would directly focus on issues of human rights, treatment of indigenous people on whose traditional land its mine was located; economic development and job creation and, improvements in health, education, and housing facilities, to name a few. Additionally, the company earmarked large sums of money and involved representatives of the indigenous people in their management and disbursement. The company took an even more radical action when it committed itself to independent external audits of the company’s compliance with the code, and that these findings and company’s responses would be made public without prior censorship by the company. We analyze the nature of corporate culture, vision and risk-taking propensities of its management that would impel the company to embark on a high risk strategy whose outcomes could not be predicted with any degree of certainty before the fact. The parent company also had to confront discontent among the management ranks at the mine site because of cultural differences and management styles of expatriates and local (Indonesian) managers. Finally, we discuss in some detail the extensive and intensive character of a two phase audit conducted by the outside monitors, their findings, and the process by which they were implemented and reported to general public. We also evaluate the strengths and challenges posed by such audits, their importance to the company’s future, and how such projects might be undertaken by other companies.     

THE EFFECTS OF ECONOMIC REGULATION IN THE ISTANBUL TAXICAB MARKET

This paper discusses the regulation of the Istanbul taxicab market and its consequences. While price and entry regulations are common to many taxi markets, there are significant differences in their institutional frameworks. We examine the problems of the Istanbul market and offer recommendations to improve its efficiency.