The compensation of top managers and the performance of Italian firms

This paper examines one of the most studied aspects regarding the compensation of top managers: the relationship between remuneration and corporate performance. The principle research objective is to find evidence of this correlation in Italian companies. Based on a sample of 145 Italian companies listed on the Milan Stock Exchange, as analysed during the period between 2004 and 2009, the research findings do not demonstrate a link between company performance and the pay of top managers. Another empirical result that should be highlighted is the presence of a greater correlation between rate of pay and company size, in terms of stock turnover, which demonstrates the likely presence, at least in certain situations, of a dimensional premium that is to the benefit of the managers of larger companies. This research project evidences empirical results in the Italian context that support the findings of the most important international literature on the subject, as regards the absence of a connection between the compensation of managers and the performance of their firms.     

External cooperation and entrepreneurial orientation in industrial clusters

ABSTRACT

The aim of this paper is to examine the relationship between external cooperation and entrepreneurial orientation (EO). This relationship is explored in cluster environment, wherein entrepreneurial organizations compete and cooperate simultaneously to pursue opportunities. The following hypothesis is tested: External cooperation is positively correlated with entrepreneurial orientation. The hypothesis is tested with a correlation analysis on a sample of 77 small-sized enterprises operating in the Malopolska region in Poland, wherein several clusters are active. Additionally, the regression analysis is conducted to examine the associations between inter-organizational cooperation and EO dimensions. The findings confirm that external cooperation is positively correlated with EO. This observation is confronted with a pro-competitive approach that is a constitutional element of the entrepreneurship concept. Moreover, the findings show that the correlation between external cooperation and a firm’s performance is stronger than between some other EO dimensions and performance. Additionally, the findings show the important role of relationships between organizations and their clients. In the paper, several remarks for development of the theory are discussed, including the need for incorporating inter-organizational cooperation into a set of entrepreneurial traits and reflecting it in entrepreneurial orientation scales. The findings confirm the importance of that direction of theory development that focuses on inter-organizational collaboration in the context of entrepreneurship.     

Can the Timing of Negotiations Impact the Consequences of Mergers?

This paper uses a theoretical model to examine whether variation in the timing of negotiations between buyers and sellers can alter the effects of mergers between sellers. The model shows that mergers between horizontally overlapping firms lead to price increases regardless of how negotiations take place. In contrast, mergers between firms in different markets can only lead to higher compensation for the combined firm when negotiations occur sequentially. However, any price effects from out‐of‐market mergers stem from a mechanical redistribution of existing market power and not from a loss in competition. Published 2014. This article is a U.S. Government work and is in the public domain in the USA.     

商业CRO与制药客户的权力动态与信任战略

CRO和制药客户之间的供应商-采购商关系是现在组织理论研究中需要给予解释的领域。本文以中国商业性CRO为研究对象,采用案例研究的方法对此做了理论探索的工作。研究发现CRO和制药客户之间的关系是一种介于战略联盟和市场化合约之间的伙伴关系,两者之间的权力动态促使对信任的追求,并引发了CRO信任战略的采用。     

Democratic transition and fiscal policy in the Arab world

This paper investigates the relationship between democracy and public debt in the Arab world over the period 2002–2013. The results show strong evidence of an inverted U-shaped relationship between democracy and public debt. This means that democratization is associated with lower debt only when a certain level of democracy is reached. In an attempt to explain these findings, we assume that the effect of democracy on public debt operates mainly through its impact on government spending and government revenue. Our results show that the inverted U-shaped relationship between democracy and public debt stems from the inverted U-shaped democracy-government spending path and the U-shaped democracy-government revenue pattern. This implies that, at the earlier stages of democratization, democracy is associated with an increase in government spending and a decrease in government revenue, which stimulates public debt. However, beyond a certain level of democracy, further democratization reduces government spending and enhances government revenue, leading to lower levels of public debt. Hence, achieving some level of democracy is a key prerequisite to improve the effectiveness of public spending, enhance tax compliance, and thereby control public debt.     

制度视角下中国OFDI区位选择的路径研究 ——基于模糊集的定性比较分析(FsQCA)

以2015年为基期,将54个国家的中国对外直接投资(OFDI)存量作为样本,利用模糊集定性比较分析法(FsQCA),从东道国制度环境、东道国与中国之间的制度距离以及双边投资协定(BIT)三个方面考察了制度视角下中国OFDI区位选择的路径。选择了5个指标作为前因变量——母国与东道国文化距离、经济制度距离、政治制度距离、双边投资协定以及东道国制度环境,分析前因变量之间的何种组态可以最终导致结果变量——中国对东道国高OFDI投资规模的产生。研究结果表明:中国与东道国之间的文化距离小是中国对其进行OFDI投资的必要条件;东道国与中国之间签订的双边投资协定与两国之间较小的正式制度距离,包括政治制度距离和经济制度距离存在替代性;良好的东道国制度环境会对中国对其OFDI规模产生正向的影响。     

Implementing business unit strategies: the role of management control systems

This study examines in detail how the toolmakers, Sandvik Bahco have designed and used their management control system to implement their chosen differentiation strategy. Unlike most other studies in this area we have chosen to describe and analyse the control system at the management and the operational levels. The study shows that changes in the learning process at the operational level elicit a need for more, and more comprehensive, information. This means that the borderline between the control systems at the two organisational levels is beginning to dissolve. However, it becomes no less necessary that a control system should be highly adaptable. Rather, it is a question of using a frame of reference that is partially common to the two organisational levels in order to create a meaningful dialogue between them. In this way it is possible to facilitate the choice of strategic orientation as well as its implementation.     

Weber and Baqir as‐Sadr: The Paradox of Economic Development in Islamic Societies

This article attempts to reconsider the controversial relationship between Islam and economic development. It does so by deeply engaging the views of Weber and Baqir as‐Sadr. According to Sadr, the development of capitalism in Europe is a consequence of the moral practice of Western societies, which is fundamentally different from that of Islamic societies. This divergence in moral practices translates into a divergence in economic doctrine, resulting in an incompatibility between the capitalist method and the moral practice of Islamic societies.     

The determinants of board composition: An agency theory perspective

This study examines the interrelation between board composition and variables that capture various agency and financial dimensions of the firm. The agency literature suggests that outside directors on the board provide important monitoring functions in an attempt to resolve, or at least mitigate, agency conflicts between management and shareholders. The agency literature indicates that other mechanisms such as managerial equity ownership, dividend payments, and debt leverage also serve as important devices in reducing agency conflicts in firms. This study argues and documents that an inverse relationship exists between the proportion of external members on the board and managerial stock ownership, dividend payout, and debt leverage. This is consistent with the hypothesis that individual firms choose an optimal board composition depending upon alternative mechanisms employed by the firm to control agency conflicts. Board composition is also found to be systematically related to a number of other variables including institutional holdings, growth, volatility, and CEO tenure.     

Corporate debt,corporate taxes and leasing

This paper utilizes recent developments in capital lease modeling to develop a new specification of the relationship between the expected returns to debt, levered equity and unlevered equity for firms that lease a portion of their assets. Accounting explicitly for leases is shown to be important when the difference between equity and debt risk is large, when the risk of leased assets differs from the firm's other assets and when salvage value is a significant portion of the capitalized value of the firm's lease obligations. This new specification yields improved estimates of firms' unlevered cost of capital, thereby facilitating improved capital budgeting decisions in those that lease a significant portion of their assets.     

Backward Integration by a Dominant Firm

This paper studies the welfare consequences of a vertical merger that raises rivals' costs when downstream competition is a la Cournot between firms with constant asymmetric marginal costs. The main result is that such a vertical merger can nevertheless improve welfare if it involves a downstream firm whose cost is low enough. This is because by raising the input price paid by the nonmerging firms the merger shifts production away from those relatively inefficient producers in favor of the more efficient firm. Yet, there is a trade-off between the gain in productive efficiency and the loss in consumers' surplus caused by the higher downstream price that follows a higher input price. It is also shown, through an example, that this result extends to price competition with differentiated products.     

Psychological profiles for predicting leader performance

This study deals with the search for psychological profile(s) that can differentiate levels of leader performance. Although many have rejected the traditional trait theory approach to leadership, others continue to search for meaningful relationships between leader characteristics and leader behavior/effectiveness. Recent promising research focuses on profiles as opposed to individual traits as indicators of leader effectiveness. It is clearly the interaction of certain individual characteristics and situational variables that ultimately predict leader behavior. This requires continued search for person variables that may be relevant to this equation. Work with the 16 Personality Factor scale suggests some promising results. Research in this article focuses on the generation of specification equations that differentiate between high and low performers. The assumption is that there exist unique combinations (profiles) of characteristics that can aid in the prediction of leader performance. This research is an attempt to explore such profiles. Results show that a multitrait profile with weighted scale scores can predict performance. Significant correlations were obtained between 16PF profile scores and overall performance.     

Tax enforcement policies,tax evasion and time allocation

Several studies examine the effect of tax rates on households’ labor supply decisions in attempts to account for observed differences in work hours across countries. Interestingly, these studies fail to consider a fundamental action associated with taxation: tax evasion. This paper introduces, into a general equilibrium model of household labor supply, the possibility that households can evade labor income taxes. We show that the relationship between tax-enforcement policies, the elasticity of substitution between consumption and leisure and the elasticity of substitution between formal and informal work is key to explain formal labor supply in major OECD countries. In a model without informal work, there is a positive relationship between the elasticity of substitution and the tax rate on formal income and people tend to work more. This is the case for the United States, Greece, Finland and the United Kingdom. This relationship becomes negative once informal activities are introduced and the model can explain formal labor supply better in countries where agents work relative less, i.e., in Austria, Denmark, France, Germany, Spain, Norway and Sweden. We also obtain estimates of hours worked in the informal sector for these countries.     

A search interpretation of the family gap

This paper proposes a general equilibrium search model to investigate what is known as the family gap: wage differentials between mothers and non-mothers. In the human capital literature a substantial amount of the family gap is left unexplained after controlling for schooling and experience. This paper suggests that differences in labor market behavior between mothers and non-mothers are an important factor in explaining the family gap. For college graduates, estimation results show that employed mothers search 70% less than non-mothers and more than 50% of the family gap can be explained by the labor market behavior differences between mothers and non-mothers. Such differences, however, can not explain the family gap for high school graduates.     

Leadership styles, need satisfaction and the organizational commitment of Greek managers

This article presents the results of an empirical study of the relation between the leadership styles, need satisfaction and the organizational commitment of Greek managers. The findings show that there is a negative relationship between need satisfaction and organizational commitment. This relationship is stronger for the higher-order than for the lower-order needs. Furthermore, the results provide some empirical evidence regarding the relationship between the superior's leadership style and the subordinate's organizational commitment. The findings show that in most cases studied, the commitment of the Greek managers was higher when the superior adopted a consultative leadership style. This style was also the one preferred by the majority of our respondents.     

The more the merrier? Network portfolio size and innovation performance in Nigerian firms

A positive relationship between firms' networking activities and innovativeness has been consistently established in the literature on innovation. However, studies considering different innovation types, and on developing countries are scarce. This paper addresses questions concerning the relationship between networking strategies and innovativeness of firms, using innovation survey data on Nigerian firms. Quantile regression is applied to trace the link between portfolio size and innovation at different levels of innovative success. The results show a positive relationship between a firm's innovation performance and the size of its networking portfolio. This relationship varies across different innovation types and with increasing innovation performance. The findings suggest that the widely accepted portfolio approach to external search for knowledge is not necessarily always the best—its utility depends on the firm's current level of innovative success. This poses a challenge for open innovation.     

Simultaneous dependence between firm-level stock returns

We show that use of ordinary least-squares to explore relationships involving firm-level stock returns as the dependent variable in the face of structured dependence between individual firms leads to an endogeneity problem. This in turn leads to biased and inconsistent least-squares estimates. A maximum likelihood estimation procedure that will produce consistent estimates in these situations is illustrated. This is done using methods that have been developed to deal with spatial dependence between regional data observations, which can be applied to situations involving firm-level observations that exhibit a structure of dependence. In addition, we show how to correctly interpret maximum likelihood parameter estimates from these models in the context of firm-level dependence, and provide a Monte Carlo as well as applied illustration of the magnitude of bias that can arise.     

Human resource management and performance: still searching for some answers

Over the past 20 years, there has been a considerable expansion in theory and research about human resource management and performance. This paper reviews progress by identifying a series of phases in the development of relevant theory and research. It then sets out a number of challenges for the future on issues of theory, management processes and research methodology. The main conclusion from the review is that after over two decades of extensive research, we are still unable to answer core questions about the relationship between human resource management and performance. This is largely attributed to the limited amount of research that is longitudinal and has been able to address the linkages between HRM and performance and to study the management of HR implementation.