Nonfinancial Considerations in Eco-Innovation Decisions: The Role of Family Ownership and Reputation Concerns

Societal pressures for greater sustainability can encourage firms to target part of their innovation activities at ecological initiatives (i.e., eco-innovation). Yet, depending on their value function, firms can respond differently to such pressures and exhibit variance in their eco-innovation activities. In this paper, we investigate the idea that a firm’s ownership structure may play a significant role in determining its engagement in eco-innovation. Specifically, we propose that ownership by family blockholders increases the value attached to the company’s reputation and that this, in turn, stimulates higher levels of eco-innovation. In other words, we model the company reputation motive as a key mediator in the relationship between family ownership and firm-level eco-innovation. To account for family firm heterogeneity, we also model the moderating role of owners’ intention to pass the business on to the next family generation (transgenerational intentions) and of the extent to which these owners reside in the firm’s local community (local embeddedness). As theoretical backdrop, our study builds on institutional theory and the mixed gamble logic. To test our hypotheses, we use a large sample of German firms and nonlinear moderated mediation regression analysis. Results reveal that family ownership is positively related to the introduction of eco-innovations by firms, in part because of the stronger emphasis being placed on the company’s reputation. We find that this effect is strongest when the owning-family has transgenerational intentions. As such, this study advances our understanding of firm-level drivers of eco-innovation. In view of the prevalence of family-owned firms and the mounting importance of ecological sustainability, it is valuable to extend knowledge on the contingent and indirect effect of family ownership on eco-innovation.     

The replicator dynamics does not lead to correlated equilibria

It is shown that, under the replicator dynamics, all strategies played in correlated equilibrium may be eliminated, so that only strategies with zero marginal probability in all correlated equilibria survive. This occurs in particular in a family of 4×4 games built by adding a strategy to a Rock-Paper-Scissors game.     

Employment Protection and SME Capital Structure Decisions

This study examines the effect of employment protection (EP) on the capital structure of SMEs. We argue that EP is linked to both the level of leverage and leverage adjustments because of its impact on financial distress costs and a firm's operational leverage. Data on employment contract types allow us to compose company specific measures of exposure to EP using a panel data set of 14,858 Belgian SMEs between 2000 and 2012. Our results show that the leverage ratio of firms is higher and that firms are more likely to adjust leverage levels when they are subject to fewer EP obligations.     

The Impact of In‐Store Greenery on Customers

The incorporation of greenery in retail areas has scarcely been explored in environmental psychology studies. In a 2 × 2 experimental design, the effect of in‐store vegetation on consumer emotions and responses toward the store was studied, considering the moderating role of the information rate of the retail setting. While introducing foliage in the store environment did not evoke feelings of excitement, it was found to elicit pleasure and to reduce stress in a “complex” store interior. Given the impact of pleasure and stress on consumers’ approach/avoidance responses, these findings support the potential of integrating greenery, particularly in “spatially dense” stores.     

Renminbi's misalignment: A meta-analysis

This paper presents the results of a meta-regression analysis of empirical estimates of renminbi misalignments. Seventeen articles and 130 observations dealing with empirical estimates of the misalignment of Chinese currency are collected. This meta-analysis shows that real exchange rate measures and econometric methodologies have a significant negative impact, whereas data characteristics, dissemination procedures and the underlying theoretical exchange rate models all have significant positive impacts on measures of the misalignment of the Chinese yuan. However, this research shows that empirical methodology induces larger values on the supposed misalignment of Chinese currency than the theoretical model of the real equilibrium exchange rate. Therefore, just one empirical estimate is not sufficient for a full understanding of the misalignment of the renminbi. Instead, a correct evaluation of renminbi misalignment should combine all the theoretical models of real equilibrium exchange rates with various econometric methods.     

Labour disputes,investment decisions and the judiciary

In this article, we show that the presence of the judiciary in the background of labour relationships is not neutral within these relations: its potential intervention in case of an ex-post layoff and conflict over the severance payment can promote ex-ante efficient specific investment decisions. This ability to promote efficiency depends on the judiciary's aptitude to balance out the parties' ex-post bargaining powers. Interestingly one of the results shows that, if workers' bargaining power in wage negotiations is low, which implies that they expect low returns from continuing the relationships, an increase in the exogenous layoff probability should lead judges to be less lenient towards them.     

Numerical pricing of American options under infinite activity Lévy processes

Under infinite activity Lévy models, American option prices can be obtained by solving a partial integro‐differential equation (PIDE), which has a singular kernel. With increasing degree of singularity, standard time‐stepping techniques may encounter difficulties. This study examines exponential time integration (ETI) for solving this problem and the performance of this scheme is compared with the Crank–Nicolson (CN) method and an implicit–explicit method in conjunction with an extrapolation (IMEX‐Extrap), in terms of computational speed and convergence orders. These findings indicate that ETI is faster and more accurate among PIDE‐based methods for solving the system of ordinary differential equations resulting from spatial discretization of the PIDE. For very singular problems, it is shown that the IMEX‐Extrap scheme becomes unfavorable compared with the other schemes as it is relatively more time consuming and the global convergence deteriorates from quadratic to linear, whereas the ETI scheme yields both point‐wise and global quadratic convergence. For illustration, under the infinite variation process, the IMEX‐Extrap achieves a precision of the order of 10^?4 in 663.016 s, whereas for the same set of parameters, the CN method and the ETI scheme reach an accuracy of the order of 10^?5 in 237.891 s and 22.772 s, respectively. © 2010 Wiley Periodicals, Inc. Jrl Fut Mark 31:809–829, 2011     

Boards of directors in family firms: a generational perspective

The purpose of this study is to advance the understanding of boards of directors in family firms. Building on generational changes in family attributes, we argue that firms in a different generational phase have different governance needs and characteristics. With regard to board task needs, the empirical results indicate a convex generational evolution in the need for board advice, and a rise over the generations in the need for board control. With regard to board composition, we find that the likelihood of having an outside director on the board has a convex generational trend. This relationship seems to be fully mediated by the firm’s board task needs. Furthermore, the number of family directors seems to increase over the generations. This study demonstrates that it is important to consider the generational phase of the family firm in order to understand its governance system.

The Effects of Reduced Social Security Contributions on Employment: An Evaluation of the 2003 French Reform*

In 2003, the French government decided to reform the system managing the different minimum wage regulations and the targeted reductions to employers' social security contributions. The main objective of the Fillon reform was to simplify the complex regulations that were created by the progressive introduction of the 35‐hour week. The reform incidentally created large variations in labour costs, depending on the type of firm and the wage level within the firm. This paper presents an evaluation of the impact of this reform on employment using a balanced panel of firms with more than five employees, drawn from a matching between several administrative data sources from 2000 to 2005.     

Does resorting to online dispute resolution promote agreements? Experimental evidence

This paper presents an experiment performed to test the properties of an innovative bargaining mechanism (called automated negotiation) used to resolve disputes arising from Internet-based transactions. The main result shows that the settlement rule tends to chill bargaining as it creates incentives for individuals to misrepresent their true valuations, which implies that automated negotiation is not able to promote agreements. However, this perverse effect depends strongly on the conflict situation. When the threat that a disagreement occurs is more credible, the strategic effect is reduced since defendants are more interested in maximizing the efficiency of a settlement than their own expected profit. The implications of these results are then used to discuss the potential role of public regulation and reputation mechanisms in Cyberspace.