Industrial use of public sector research in advanced technologies: a comparison of biotechnology and ceramics

Industrial use of public sector research (PSR) is characterised by considerable diversity: both the nature and extent of linkage varies according to, amongst other factors, firm size, industrial sector and research field. The study reported here aims to understand better some of this diversity by comparing two fields—biotechnology and advanced ceramics. It employs a methodology which focuses on the precise character of scientific and technological inputs (STI) which companies seek and obtain during new product development. The results reveal significant similarities between the technologies: the importance to innovation of a synthesis between formal knowledge and tacit firm-specific skills; and the reliance on PSR for both new knowledge and new research techniques and instruments. Variance in STI flows appears to be related to the particular character of new product development in the relevant industrial sectors; differences in the development and dynamism of the technologies; and in the availability of requisite expertise and knowledge in PSR.     

The impact of deregulation on employment discrimination in the trucking industry

Past studies of racial discrimination in the for-hire sector of the motor carrier industry find that deregulation is an effective tool for mitigating discrimination. These studies argue that regulation provides a refuge from competition that allows employers to discriminate and pass costs on to consumers. Thus, increased competition of deregulation allows less latitude to discriminate. This study reexamines the impact of deregulation on racial employment in the trucking industry. Specifically, micro-data are used to measure and decompose increased minority participation of for-hire drivers following deregulation. The findings of this paper concur that deregulation increased minority participation in the industry. However, the new findings suggest that only a fraction of this increase can be attributed to employers having less latitude to racially discriminate.     

Valuation of restricted shares by conflicting shareholders in the Split Share Structure Reform

The recent Split Share Structure Reform launched by the government in the Chinese stock market terminates trading constraints on restricted shares. In exchange for the consent of freely traded shareholders, restricted shareholders offer them consideration mainly in the form of restricted shares. We estimate the implied discount of restricted shares to be 38.22% on average, which is in line with the empirical and theoretical findings in the literature, suggesting that the consideration is not systematically underpaid and the reform is fair at the market level. At the firm level, however, freely traded shareholders receive less consideration when their bargaining power is weaker. The impact of state shareholders on the size of consideration has been found to be non-monotonic. Consistent with the literature that state shareholders exaggerate the agency problem, they tend to exploit freely traded shareholders by offering less consideration when the latter's bargaining power is weaker. Meanwhile, state shareholders are under political pressure to carry out the reform as quickly as possible and to set a good example for other firms. They therefore refrain from offering underpaid consideration when their freely traded counterparts have strong bargaining power and are more capable of rejecting unfair schemes and substantially delaying the progress of the reform.     

Preplanned exit strategies in venture capital

This paper empirically considers the role of preplanned exits (the investor's initial strategy to sell the investee firm via an acquisition or an initial public offering (IPO) at the time of initial contract with the entrepreneur), legal conditions and investor versus investee bargaining power in the allocation of cash flow and control rights in entrepreneurial finance. We introduce a sample of 223 entrepreneurial investee firms financed by 35 venture capital funds in 11 continental European countries, and these data indicate the following. First, preplanned acquisition exits are associated with stronger investor veto and control rights, a greater probability that convertible securities will be used, and a lower probability that common equity will be used; the converse is observed for preplanned IPOs. Second, investors take fewer control and veto rights and use common equity in countries of German legal origin, relative to Socialist, Scandinavian, and French legal origin. Third, more experienced entrepreneurs are more likely to get financed with common equity and less likely to be financed with convertible preferred equity, while more experienced investors are more likely to use convertible preferred equity and less likely to use common equity.     

Sources of the Persistent Gender Wage Gap along the Unconditional Earnings Distribution: Findings from Kenya

Past studies on gender wage inequality in Africa typically attribute the gender pay gap either to gender differences in characteristics or in the return to characteristics. The authors suggest, however, that this understanding of the two sources may be far too general and possibly overlook the underlying covariates that drive the gender wage gap. Moreover, past studies focus on the gender wage gap exclusively at the conditional mean. The authors go further to evaluate the partial contribution of each wage-determining covariate to the magnitude of the gender pay gap along the unconditional earnings distribution. The authors' data are from Kenya, and their empirical technique mirrors re-centered influence function regressions. The authors' results are novel and suggest that while gender differences in characteristics and the return to characteristics widen the gender pay gap at the lower end of the wage distributions, gender differences in characteristics widen the gender wage gap at the upper end of the wage distributions. Importantly, the authors find that the underlying covariates driving gender differences in characteristics and the return to characteristics are the industry, occupation, higher education and region covariates. In the middle of the distributions, however, the authors find that gender differences in the return to characteristics, fueled by education and experience covariates, exert the strongest influence on the magnitude of the gender pay gap.     

No Pain,No Gain: Rethinking the Telecoms Crash1

This paper reflects upon the boom and bust of the telecommunications industry from the late 1990s to the early 2000s. Unlike the conspicuous burst of the dotcom bubble, the telecoms crash came quietly, but turned out to be bigger and more catastrophic. This paper argues that bounded rationality, decision making under uncertainty and the focus on short-term individual interest all played a significant role in the telecoms crash. However, this painful crash also had its positive effects. Executives, specialists, regulators and government policy makers should pay more attention to the fundamentals and balance the need for both short-term and long-term interests in approaching the coming challenges in the fast-changing telecoms industry.     

Private equity benchmarks and portfolio optimization

Portfolio optimization using private equity is typically based on one of three indices: listed private equity, transaction-based private equity, or appraisal value-based private equity indices. However, we show that none of these indices is fully suitable for portfolio optimization. We introduce here a new benchmark index for venture capital and buyouts, which is updated monthly, adjusted for autocorrelation (de-smoothing), and available contemporaneously. We illustrate how our benchmark enables superior quantitative portfolio optimization.     

Technological competence and the influence of networks: a comparative analysis of new biotechnology firms in france and britain

The objective of this paper is to examine the role of external networks not only as a resource but also as a constraint for the evolution ofthe technological competence of twenty new biotechnology firms (NBFs) in France and Britain. The analysis is bared on extensive interviews conducted with the Chief Executive Officers (CEOs) of twenty NBFs, ten in France and ten in Britain. The paper identifies the network structures ofthe tweng NBFs and the impact of netmorks on the evolution of their technologial competence. The paper also attempts to identify the differences between NBFs in France and Britain in terms of the framework developed. It clearly illustrates that the capacity of NBFs to construct appropriate external linkages with other firms andfinanckrs is crucial to their success.     

Style Drift in Private Equity

Abstract:  We introduce the concept of style drift to private equity investment. We present theory and evidence pertaining to style drifts in terms of a fund manager's stated focus on particular stages of entrepreneurial development. We develop a model that derives conditions under which style drifts are less likely among younger fund managers. We also show ways in which changes in market conditions can affect style drifts, and differences for funds committed to early-stage investments compared to funds committed to late-stage investments. We find some evidence of a positive relation between style drifting and investment performance.