Corporate Governance and Financial Constraints on Strategic Turnarounds*

abstract The paper extends the Robbins and Pearce (1992 ) two‐stage turnaround response model to include governance factors. In addition to retrenchment and recovery, the paper proposes the addition of a realignment stage, referring specifically to the realignment of expectations of principal and agent groups. The realignment stage imposes a threshold that must be crossed before the retrenchment and hence recovery stage can be entered. Crossing this threshold is problematic to the extent that the interests of governance‐stakeholder groups diverge in a crisis situation. The severity of the crisis impacts on the bases of strategy contingent asset valuation leading to the fragmentation of stakeholder interests. In some cases the consequence may be that management are prevented from carrying out turnarounds by governance constraints. The paper uses a case study to illustrate these dynamics, and like the Robbins and Pearce study, it focuses on the textile industry. A longitudinal approach is used to show the impact of the removal of governance constraints. The empirical evidence suggests that such financial constraints become less serious to the extent that there is a functioning market for corporate control. Building on governance research and turnaround literature, the paper also outlines the general case necessary and sufficient conditions for successful turnarounds.     

Soviet all-union enterprises as new multinationals of the CIS

This paper examines the restructuring of the former Soviet economy provoked by the break-up of the USSR and the creation of the Commonwealth of Independent States. Particular attention is devoted to the changes taking place in the former All-Union enterprises that have now essentially become new multinationals. The pressures influencing the two parallel developments of internalization and divestment are examined and illustrated using two case studies. © 1993 John Wiley & Sons, Inc.     

Corporate governance in family-controlled firms in Taiwan

This paper examines the effects of ownership structure and board characteristics on performance in publicly traded Taiwanese firms that are controlled by founding families. Results show that when shares are owned by institutional investors, particularly foreign financial institutions, firms perform better. However, where families are the major shareholders, this is not the case. In addition, boards that are independent of the financial interests of the founding family have a positive impact on performance, whether measured by accounting ratios, operating performance or the stock market. (JEL: P52, G32)     

Changes of control and business reengineering in Russian privatized companies

The success of societal transformation in Russia depends on the ingenuity of Russian managers to link the legacy of the communist regime and the national patterns of industrial organization with the prerequisites of a modern economy. This article reports on a study of management in organizational transformation for 20 privatized industrial companies in Russia and describes the changes in their control structures and strategies. Organizational and economic factors determining the establishing of specific control arrangements and their impact on business reengineering are analyzed by synthesis of surveys and case studies. Implications for western partners and suggestions for further research are drawn.     

Attitudes,norms and difficulties underlying road sharing intentions as drivers and cyclists: Evidence from the Czech Republic

Cycling-inclusive urban planning is attracting attention worldwide because of the environmental, health, economic, and transport benefits inherent to cycling from the individual and the societal perspectives. The Czech Republic is one of the emerging cycling countries that are trying to promote and support cycling, but cycling mode shares are low because of the poor quality of the scarce infrastructure and the psychological barrier of the perceived lack of safety when cycling in mixed traffic. This study takes a multimodal approach based on the Theory of Planned Behaviour and focuses on the factors underlying the willingness to share the road from the perspective of cyclists and drivers: positive attitudes toward cycling, positive attitudes toward cyclists’ behavior, social norms toward cycling and anxiety to share the road. A web-based questionnaire was tailor-designed and administered in the Czech Republic via social networks, web forums, and the Civinet network, and a hybrid bivariate-ordered model tested the behavioral framework. Results show that the willingness to share the road as a cyclist or as a driver relates positively to positive attitudes towards cycling and cyclists’ behavior, and negatively to the anxiety of sharing the road. Moreover, mediator effects are observed and a clear relation emerges between the experience on the road as both a cyclist and a driver on the willingness to share the road as a cyclist. Lastly, results show that the factors underlying road sharing intentions are related significantly to gender, travel habits, and perceived personal and infrastructure-related barriers to cycling.     

Analysis of Domestic Factors Affecting Outward Foreign Direct Investment in Brazil

Developing markets have increasingly gained prominence in the world economy, but the domestic factors behind this success are not well established. This uncertainty may interfere with multinational expansion plans. In this article, we examine several macroeconomic and institutional factors affecting Brazilian outward foreign direct investment in 17 destination countries. We applied a pooled ordinary least squares regression over the 2001–2014 period. The findings suggest that macroeconomic factors are still statistically significant to explain investment abroad, but several institutional factors such as corruption have emerged, having a negative effect and political violence having a positive effect on Brazilian outward foreign direct investment.     

Soviet society: Current trends and forecast scenarios

As perestroika drives the USSR towards free market socialism, the country's socioeconomic development depends on a number of factors that are only now taking shape. The transition is inconsistent and painful because there is no clear concept of the overall process. In order to overcome current difficulties the Soviet leadership must adopt a coherent transitional model. This article looks at the underlying trends of the current situation in the USSR and presents three scenarios for the development of Soviet society. Focusing on the dynamics of internal factors, the scenarios differ in terms of social orientation, degree of radicalism, approach to problems and proposed relationship between central power and the republics and regions. The extent of political support for each scenario is examined, and their potential for realization is assessed.     

Upward Movement in Energy Prices

Original Papers

Upward Movement in Energy Prices     

Venture Capitalists, Business Angels, and Performance of Entrepreneurial IPOs in the UK and France

Abstract:  Using a unique sample of 444 entrepreneurial IPOs in the UK and France, this paper analyses the investment patterns and the stock-market performance effects of two types of early stage investors: venture capitalists (VCs) and business angels (BAs). Extending existing research, we identify important endogeneity and institutional effects. Our findings indicate that UK IPOs have a higher retained ownership and lower participation ratio by BAs, but a lower retained ownership and participation ratio by VCs than in France. BA and VC investments are substitutes, and they are endogenously determined by a number of firm- and founder-related factors, such as founder ownership and external board 'interlocks', and underwriter reputation. UK VCs are effective third-party certifying agents who reduce underpricing in UK IPOs, whereas in French IPOs they increase it by appearing to engage in grandstanding. This certification effect is more significant in UK IPOs involving both high VC and BA ownership. Finally, underpricing increases with VC participation ratio, where the higher exit of VCs seems to increase the risk premium required by outside investors, in particular in the UK.