Logics,Leaders, Lab Coats: A Multi‐Level Study on How Institutional Logics are Linked to Entrepreneurial Intentions in Academia

Situated in the context of academia, this study integrates ideas from institutional theory, person‐environment fit theory and leadership research to conceptualize and examine the cross‐level link between the organizational‐level institutional logic of research commercialization and the entrepreneurial intentions of researchers. Multi‐level analyses based on a sample of 254 researchers working for 85 research group leaders in 49 German research institutes reveal that two distinct attributes of research group leaders – that is, their track records of entrepreneurial behaviour and their entrepreneurial intentions – play a significant role in transmitting the organizational‐level logic to the individual level. We also observe a complementary interaction between organizational‐level commercialization logic and the entrepreneurial track records of leaders. We discuss how these findings advance our understanding of science commercialization through academic entrepreneurship and how they inform institutional theory and theory development in other domains of entrepreneurship research.     

Avoiding the loss of a gain: Retaining top managers in an acquisition

The turnover of management following a merger or acquisition is a significant, yet understudied, human resource issue. We propose that the relevant HR question is not merely how to retain top managers, but of equal importance, whether or not top management retention should be an objective. We present a model that integrates the retention process with the overall integration strategy being pursued by the acquiring firm. The model prompts a discussion of those factors that influence the decision as to whether the top management of the acquired firm should be retained. We conclude by identifying appropriate HR tactics for managing the retention process.     

Auditing private companies: what do we know?

The purpose of this article is to provide an overview of the literature on what we currently know about the costs and benefits of auditing private company accounts. Our main conclusions are the following. First, there is much heterogeneity in factors driving audit demand in private companies and the value derived from the audit. Second, research provides support for improved financial reporting quality due to, and real economic benefits from, private company audits. Third, the cost–benefit analysis for private company audits is firm-specific and mandating the audit does not seem to be cost-effective and thus economically optimal for all private companies. Alternative services may better meet the needs of especially smaller private companies. Furthermore, mandating the audit is not necessarily an optimal solution since private companies with low demand for a high-quality audit are able to find an auditor that meets their requirements even under a mandatory regime. Hence, having a mandatory audit in place is no guarantee for universally high-quality audits and this seems most salient for private companies where auditors may be more prone to independence issues. We conclude by providing a number of directions for future research.     

Sooner or Later? – Paradoxical Investment Effects of Capital Gains Taxation under Simultaneous Investment and Abandonment Flexibility

This paper analyzes the impact of capital gains taxation on investment timing decisions for risky investment projects with entry and exit flexibility under differential tax rates for ordinary income and capital gains. We investigate whether capital gains taxation influences immediate and delayed investments asymmetrically, given the optimal abandonment decision. If capital gains taxation induces a lock-in effect, this effect is anticipated in the investment timing decision. In contrast to prior research, our numerical simulations show that this lock-in effect of capital gains taxation can induce normal as well as paradoxical effects on investment timing under simultaneous entry and exit flexibility. A paradoxical timing effect, i.e., investment accelerated by capital gains taxation, especially emerges for high liquidation proceeds or, more conservative tax accounting, low interest rates, and low volatilities. In these cases, capital gains taxation reduces the value of the option to invest and hereby increases the propensity to invest immediately. As a second paradoxical tax effect, capital gains taxation may favor delayed real investment over financial investment. Facing these results, tax legislators should not use capital gains taxation as a short-term tax policy instrument to influence investors' timing decisions.     

Partially Irreversible Investment Decisions and Taxation under Uncertainty: A Real Option Approach

The paper applies contingent claims analysis in a real option investment model in order to investigate taxation's influence on investor's decisions under uncertainty. The results show the distortion from realistic-type tax systems, allow to identify a tax-induced paradox in option valuation for specific settings and acknowledge the property of investment neutrality of well-known 'ideal' tax systems in the context of different degrees of irreversibility. Furthermore, it is clarified that the idea of risk-neutral valuation cannot be adopted by the real option approach in general.     

An examination of the relation between market structure and the profitability of audit engagements

Due to increasing supplier concentration, there is growing concern regarding the lack of competition in the audit market. Theory based on Cournot oligopoly predicts that increasing concentration will facilitate monopolistic behaviour. Conversely, if the market for audit services has more in common with a Bertrand oligopoly, concentration may not lead to higher fees. We evaluate whether increased audit supplier concentration leads to economic rents by investigating audit profitability. Using proprietary data from a (then) Big 6 audit firm, we find that local market structure has a significant and positive association with audit profitability, but not auditor effort for large clients.     

Engagement with disability: analysis of annual reports of Indian organizations

Anchored in institutional theory, our aim in the present study was to understand how large and economically successful organizations in India engage with the issue of disability within and outside of their organizational boundaries, and communicate such engagements through their annual reports. Based on a qualitative content analysis of the organizations' annual reports for the year 2009–2010, we examined if these organizations spoke about recruitment and other organizational treatment of people with disabilities (internal focus), and if they engaged with issues related to disability in the realm of corporate social responsibility (external focus). We found that, despite no institutional pressures, organizations engaged with disability-specific issues both internally and externally. While we found differences with respect to organizational age and sector (public and private sector), we did not find any differences in the engagement and communication of activities based on organizational industry type and global presence. We discuss implications for research and practice.