Technological Diffusion: Alternative Theories and Historical Evidence

This paper presents an interpretive survey of the neoclassical and evolutionary approaches to modeling the process of technological diffusion, with an orientation that is distinct in two important respects from existing surveys. First, the present survey is designed to provide a comparative overview of the alternative approaches within a unified framework of analysis. The objective is to bring out the areas of convergence as well as divergence between the approaches, and address the issue of whether the approaches could be considered as complementary rather than as alternatives. Second, the survey attempts to link the theoretical methodologies to the variety of empirical and historical evidence, and evaluate how the theories best fit the evidence on the dynamics of the technological diffusion process.     

Multiple board appointments and firm performance in emerging economies: Evidence from India

This paper extends the literature on multiple directorships, busy directors and firm performance by providing evidence from an emerging economy, India, where the incidence of multiple directorships is high. Using a sample of 500 large firms and a measure of “busyness” that is more general in its applicability, we find multiple directorships by independent directors to correlate positively with firm value. Independent directors with multiple positions are also found to attend more board meetings and are more likely to be present in a company's annual general meeting. These findings are largely in contrast to the existing evidence from the US studies and lend support to the “quality hypothesis” that busy outside directors are likely to be better directors, and the “resource dependency hypothesis” that multiple directors may be better networked thereby helping the company to establish more linkages with its external environment. Multiple directorships by inside directors are, however, negatively related to firm performance. Our results suggest that the institutional specificities of emerging economies like India could work in favor of sustaining high levels of multiple directorships for independent directors without necessarily impairing the quality of corporate governance.     

Debt and corporate governance in emerging economiesEvidence from India1

We analyze the role of debt in corporate governance with respect to a large emerging economy, India, where debt has been an important source of external finance. Using cross‐sectional data on listed manufacturing firms we estimate, simultaneously, the relation between Tobin's Q and leverage for three years, 1996, 2000 and 2003. Our analysis indicates that while in the early years of institutional change, debt did not have any disciplinary effect on either standalone or group affiliated firms, the disciplinary effect appeared in the later years as institutions became more market oriented. We also find limited evidence of debt being used as an expropriation mechanism in group firms that are more vulnerable to such expropriation. In general, our results highlight the role of ownership structures and institutions in debt governance.     

Diversification and tunneling: Evidence from Indian business groups

We provide evidence suggesting an important yet largely unexplored motive for the diversified structure of emerging economy business groups is to facilitate expropriation of minority shareholders by controlling insiders through tunneling. Using firm level panel data from India, and defining the core firm of a group as the one with the largest asset base, we find that the relatedness of the activity of a group affiliate to the activity of the core firm is correlated with the wedge between control and cash flow rights of insiders as well as with the opacity in insider ownership. Firms with ownership-control wedge lower and ownership opacity higher relative to a group’s core firm are more likely to be in activities unrelated to that of the core firm. Our findings are strengthened by evidence of tunneling in the same direction, from affiliates with wedge equal to or higher than that of the core firm to affiliates with wedge lower than that of the core firm. Taken together this suggests an expropriation motive for diversification: affiliate firms are located away from a business group’s core firm to serve as destination points for funds tunneled from the group’s core.     

Does Autonomy Matter in State Owned Enterprises? Evidence from Performance Contracts in India

Empirical evidence on the effect of managerial autonomy on the performance of state‐owned enterprises (SOE) is surprisingly scant despite autonomy being a preferred reform instrument over partial privatization in many countries. Using longitudinal data on performance contracts of state‐owned enterprises in India, this paper finds that managerial autonomy is associated with significant increases in enterprise profitability and efficiency. Further, using India's unique reform experience where both managerial autonomy and partial privatization were pursued side by side, the paper finds that while the positive effects of autonomy continue post‐partial privatization, the effects of partial privatization on performance are ambiguous. Specifically, once autonomy is controlled for, partial privatization has a positive effect on SOE profitability only after it crosses a critical level of government disinvestment. The findings suggest that organizational reforms such as granting managerial autonomy can be an important policy instrument in improving SOE performance particularly in cases where governments are unable to make substantial disinvestments.     

Why money meanings matter in decisions to donate time and money

Most charitable organizations cannot accomplish their missions without asking for money. This is paradoxical because recent research suggests that mentioning money primes a self-sufficient mindset, thus undermining the very behaviors these organizations desire to elicit. We offer an important qualification to this problematic effect. We find that priming cash concepts reduces willingness to help others, while activating credit card concepts reverses these effects. To explain our findings, in three studies we show that priming cash concepts makes costs associated with donating time or money more salient in the decision context, thereby reducing willingness to give help and to receive it. However, priming credit card concepts makes the benefits of donation more salient.     

Dichotomous Thinking and Ethical Consumerism: Overcoming the Negative Effects of Self-Interest Bias through Third-Person Narrative Persuasion

The authors examine consumer attitudes toward ethically labeled products and demonstrate that consumers who think dichotomously tend to favor their own self-interests over the social good by choosing mainstream noncertified products over products displaying ethical labels such as fair trade and Fair Wear. The authors further suggest that advertisers can use a third-person perspective to attenuate the negative effects of dichotomous thinking, increase purchase intentions, and encourage consumption of ethically certificated products. Findings from five studies on various ethically labeled products (such as food and clothing) with a diverse group of study participants (American consumers from a popular tourist spot, an online panel, and college students) provided convergent evidence supporting the hypotheses. Theoretical contributions and implications for marketers, policymakers, and consumers are addressed.