An Empirical Examination of Institutional Investor Preferences for Corporate Social Performance

This study investigates the pattern of institutional shareholding in the U.K. and its relationship with socially responsible behavior by companies within a sample of over 500 UK companies. We estimate a set of ownership models that distinguish between long- and short-term investors and their largest components and which incorporate both aggregated and disaggregated measures of corporate social performance (CSP). The results suggest that long-term institutional investment is positively related to CSP providing further support for earlier studies by Johnson and Greening (1999, Academy of Management Journal 42, 564–576) and Graves and Waddock (1994, Academy of Management Journal 37, 1034–1046). Disaggregation of CSP into its constituent components suggests that the pattern of institutional investment is also related to the form which CSP takes. Investigation of the impact of investment screens on the selection of stocks suggests that long-term institutional investors select primarily through exclusion, rejecting those firms which have the worst CSP.     

Foreign direct investment,institutional quality,economic freedom and entrepreneurship in emerging markets

This study investigates the relationship between foreign direct investment, institutional quality, economic freedom, and entrepreneurship in emerging markets. The research compares the capacity and appetite for business creation among high-income, low-income and emerging countries. The results are based on a panel study of data, from 2004 to 2009 for 87 countries, using as its source “The World Bank Entrepreneurship Snapshots” to look at the connection between business creation, institutional quality, market freedom and foreign direct investment (FDI). The findings reveal a strong positive relationship between institutional quality and business generation in all three of the above categories. The freedom to create businesses and invest has an impact on business generation in emerging countries, while the influence of international trade appears more important as a spur to the genesis of business in low-income countries. Finally, there is a direct and significant relationship between FDI and business development in emerging countries. This result is consistent with “the spillover theory of entrepreneurship” (,  and ).     

Competition for FDI with vintage investment and agglomeration advantages

Countries compete for new FDI investment, whereas stocks of FDI generate agglomeration benefits and are potentially subject to extortionary taxation. We study the interaction between these aspects in a simple vintage capital framework with discrete time and an infinite horizon, focussing on Markov perfect equilibrium. We show that the equilibrium taxation destabilizes agglomeration advantages. The agglomeration advantage is valuable, but is exploited in the short run. The tax revenue in the equilibrium is substantial, and higher on “old” FDI than on “new” FDI, even though countries are not allowed to use discriminatory taxation. If countries can provide fiscal incentives for attracting new firms, this stabilizes existing agglomeration advantages, but may erode the fiscal revenue in the equilibrium.     

Impact of positioning strategies on service firm performance

This research examines the application of positioning strategies of retail service firms in Texas. Four in-depth qualitative case studies and covert observation methods provide candid subterranean insight into retail positioning in a dynamic marketplace. “Branding”, “service”, “value for money” and, to a lesser extent, “reliability” and “attractiveness” positioning strategies emerge as the most dominant positioning strategies, although emphasis placed on each varies from firm to firm. Furthermore, all of the firms achieve acceptable sales and favorable consumer perceptions when employing these positioning strategies. Desired profits, return on investment (ROI), and market share are associated with these positioning strategies although not as “sales” and favorable “consumers' perceptions”. The results further show that the pursuit of multiple positioning strategies relates to multiple performance indicators. The paper concludes by providing normative suggestions and discussing theoretical and managerial implications.     

The inception of internationalization of small and medium enterprises: The role of activeness and networks

This study analyzes how exporters begin their internationalization leveraging information collected through interviews with 109 Chinese textile manufacturers. It examines whether firms that found their first international clients through a “proactive” search are likely to export faster, more intensively, and to a larger number of markets. The findings illustrate that the proactiveness of the search for the first client in a foreign market is an important predictor of the intensity and geographic scope of the firm's internationalization path but not of its speed. They support the view of internationalization as an actively pursued entrepreneurial process, which may also be affected by serendipitous events. This study provides new evidence on the first international business discovery of Chinese exporters, contributing to the literature on international entrepreneurship, international new ventures and the network approach to internationalization.     

Diaspora entrepreneurs as institutional change agents: The case of Thamel.com

Diasporans are migrants and their descendants who maintain a relationship to their country of origin (Safran, 1991). Diasporans who establish new ventures in their countries of origin comprise a special case of international ethnic entrepreneurship.In countries of settlement, diasporans confront institutional environments that often are quite different than those that exist in their countries of origin. We refer to the exposure to and adoption of institutional roles and relationships associated with a new cultural setting as “institutional acculturation.”Most extant work in management and marketing focuses on how a migrant's acculturation affects his/her behavior in the new country of residence. We shift the analytical lens to the country of origin. Utilizing a case study from Nepal, we demonstrate how institutional acculturation can inspire a diaspora entrepreneur to transform institutional arrangements in his/her country of origin and generate dramatic change in society's role expectations of the government, suppliers, and buyers.     

Fallback Bargaining

Under fallback bargaining, bargainers begin by indicating their preference rankings over alternatives. They then fall back, in lockstep, to less and less preferred alternatives – starting with first choices, then adding second choices, and so on – until an alternative is found on which all bargainers agree. This common agreement, which becomes the outcome of the procedure, may be different if a decision rule other than unanimity is used. The outcome is always Pareto-optimal but need not be unique; if unanimity is used, it is at least middling in everybody's ranking. Fallback bargaining may not select a Condorcet alternative, or even the first choice of a majority of bargainers. However, it does maximize bargainers' minimum satisfaction. When bargainers are allowed to indicate impasse in their rankings – below which they would not descend because they prefer no agreement to any lower-level alternative – then impasse itself may become the outcome, foreclosing any agreement. The vulnerability of fallback bargaining to manipulation is analyzed in terms of both best responses and Nash equilibria. Although a bargainer can sometimes achieve a preferred outcome through an untruthful announcement, the risk of a mutually worst outcome in a Chicken-type game may well deter the bargainers from attempting to be exploitative, especially when information is incomplete. Fallback bargaining seems useful as a practicable procedure if a set of reasonable alternatives can be generated. It leapfrogs the give-and-take of conventional bargaining, which often bogs down in details, by finding a suitable settlement through the simultaneous consideration of all alternatives.     

Why do venture capital firms exist? theory and canadian evidence

This paper investigates the role of venture capitalists. We view their “raison d’être” as their ability to reduce the cost of informational asymmetries. Our theoretical framework focuses on two major forms of asymmetric information: “hidden information” (leading to adverse selection) and “hidden action” (leading to moral hazard). Our theoretical analysis suggests four empirical predictions.1. Venture capitalists operate in environments where their relative efficiency in selecting and monitoring investments gives them a comparative advantage over other investors. This suggests strong industry effects in venture capital investments. Venture capitalists should be prominent in industries where informational concerns are important, such as biotechnology, computer software, etc., rather than in “routine” start-ups such as restaurants, retail outlets, etc. The latter are risky, in that returns show high variance, but they are relatively easy to monitor by conventional financial intermediaries.2. Within the class of projects where venture capitalists have an advantage, they will still prefer projects where monitoring and selection costs are relatively low or where the costs of informational asymmetry are less severe. Thus, within a given industry where venture capitalists would be expected to focus, we would also expect venture capitalists to favor firms with some track records over pure start-ups. To clarify the distinction between point 1 and point 2, note that point 1 states that if we look across investors, we will see that venture capitalists will be more concentrated in areas characterized by significant informational asymmetry. Point 2 says that if we look across investment opportunities, venture capitalists will still favor those situations which provide better information (as will all other investors). Thus venture capitalists perceive informational asymmetries as costly, but they perceive them as less costly than do other investors.3. If informational asymmetries are important, then the ability of the venture capitalist to “exit” may be significantly affected. Ideally, venture capitalists will sell off their share in the venture after it “goes public” on a stock exchange. If, however, venture investments are made in situations where informational asymmetries are important, it may be difficult to sell shares in a public market where most investors are relatively uninformed. This concern invokes two natural reactions. One is that many “exits” would take place through sales to informed investors, such as to other firms in the same industry or to the venture’s own management or owners. A second reaction is that venture capitalists might try to acquire reputations for presenting good quality ventures in public offerings. Therefore, we might expect that the exits that occur in initial public offerings would be drawn from the better-performing ventures.4. Finally, informational asymmetries suggest that owner-managers will perform best when they have a large stake in the venture. Therefore, we can expect entrepreneurial firms in which venture capitalists own a large share to perform less well than other ventures. This is moral hazard problem, as higher values of a venture capitalist’s share reduce the incentives of the entrepreneur to provide effort. Nevertheless, it might still be best in a given situation for the venture capitalist to take on a high ownership share, since this might be the only way of getting sufficient financial capital into the firm. However, we would still expect a negative correlation between the venture capital ownership share and firm performance.Our empirical examination of Canadian venture capital shows that these predictions are consistent with the data. In particular, there are significant industry effects in the data, with venture capitalists having disproportionate representation in industries that are thought to have high levels of informational asymmetry. Secondly, venture capitalists favor later stage investment to start-up investment. Third, most exit is through “insider” sales, particularly management buyouts, acquisitions by third parties, rather than IPOs. However, IPOs have higher returns than other forms of exit. In addition, the data exhibit the negative relationship between the extent of venture capital ownership and firm performance predicted by our analysis.     

Nostalgic emotion,experiential value,brand image,and consumption intentions of customers of nostalgic-themed restaurants

During the last few years, nostalgia has become a fashion in Taiwan. “Nostalgic” restaurants are becoming common in Taiwan. A nostalgic restaurant can be a hot pot restaurant decorated with furnishing relating to the origin or earlier use of the “hot pot” in Taiwan. The study here uses SEM to test the hypotheses relating to nostalgia affecting consumption. The results indicate that (1) nostalgia has both direct and indirect impacts on consumption intention; (2) consumption affected by nostalgia varies depending on the individual; and (3) younger customers' predisposition to want cheap prices is an important consideration in marketing nostalgia to younger customers.     

Teaching notes for FINCA Costa Rica

These teaching notes accompany the case entitled “Village Banking Development Model: FINCA Costa Rica.” They provide a guided outline on the case and begin with key words and the context. The notes then include a list of learning objectives and a guideline on the case analysis. This analysis has four sections including: Challenges for FINCA Costa Rica, FINCA Costa Rica as a microfinance provider, CCE model advantages and disadvantages and EDESA's financial results. Trainers may emphasize one or all of the analytical points depending on the specific class objectives.     

Contextualized representations of brand extensions: Are feature lists or frames the basic components of consumer cognition?

According to the common view in consumer behavior, consumers represent brands and product categories mentally as lists of independent product features and engage in feature matching when they evaluate brand-product category compounds such as brand extensions. However, we demonstrate that brand extension concepts are subject to context effects and largely contextually organized — empirical evidence which suggests that they are represented by more flexible mental structures than independent feature lists. As an alternative, brand extensions (e.g., McDonald's Theme Park) may be viewed as conceptual combinations in which the original brand or company name (e.g., McDonald's) acts on the head concept of the extension category (e.g., theme parks) as a modifier. Moreover, we suggest that the contextual and relational structure of brand extensions may be explained more adequately by mental frames than feature list representations.     

“价值投资型”股票估价方法研究

随着近两年证券市场结构性大调整 ,价值投资组合已成为机构投资者的主导策略 ,而证券估价是价值投资和证券筛选型投资组合的核心技术。我国证券市场历史较短 ,针对其衍变特征和估价现状 ,研究较为适合我国证券市场的“价值投资型”股票的估价方法大有俾益。     

Underdog consumption: An exploration into meanings and motives

Marketers frequently position business concerns - whether brands, teams, or stores - as the non market-dominant entity (or the “underdog”). This article examines the motives for underdog support through in-depth interviews and a focus group. Findings suggest that underdog consumers support underdogs out of empathy, as a way to ensure the maintenance of equal opportunity in competition, and as a way to provide personal inspiration. Some motives for underdog support can be interpreted to be anti-consumption (or, at least, anti-corporate) in nature. On the other hand, many underdog consumers support and identify with underdogs not necessarily as a way to keep the top dog down, but as a means to keep the little guy competing. Rather than solely “vote-against” behavior, “vote-for” behavior is very evident as well.     

Going “purple”: Can military jointness principles provide a key to more successful integration at the marketing-manufacturing interface?

When the colors of all the U.S. armed services’ uniforms are combined, the color purple appears; therefore, military insiders refer to inter-service operations as “purple” operations. Now a core concept, the “jointness” of U.S. military strategic response to a critical operational failure encapsulates principles and processes through which two or more armed services are best able to integrate strategies, strengths, and capabilities in ways that yield genuine synergies, despite the differences in mission and culture that naturally separate the services. The now ingrained ability of military services to “go purple” quickly has materially contributed to strategic and operational successes during the last 20 years. The internal circumstances as well as global environmental challenges faced by domestic firms, particularly at the marketing-manufacturing (M-M) interface, resonate with those faced by the U.S. military. Firms may benefit from evaluating the prospect of “going purple” at this crucial point of interface. This article integrates military-like jointness principles into an organizational framework that functions as a guide to pursuing cross-functional M-M integration more successfully. The framework also provides a methodology through which managers can determine whether and how much purple ought to be pursued.     

The influence of online product recommendations on consumers’ online choices

This study investigates consumers’ usage of online recommendation sources and their influence on online product choices. A 3 (websites) × 4 (recommendation sources) × 2 (products) online experiment was conducted with 487 subjects. Results indicate that subjects who consulted product recommendations selected recommended products twice as often as subjects who did not consult recommendations. The online recommendation source labeled “recommender system,” typical of the personalization possibilities offered by online retailing, was more influential than more traditional recommendation sources such as “human experts” and “other consumers”. The type of product also had a significant influence on the propensity to follow product recommendations. Theoretical and managerial implications of these findings are provided.     

Small firm mutual funds: Additional evidence on the small firm effect

Returns generated with small firm mutual fund data are used to examine the extent to which identification of a small firm effect is due to the difficulty in measuring the direct and indirect transaction costs involved in investing in the common shares of small capitalization stocks. Little if any evidence of the excess risk-adjusted returns is obtained for either of the period 1978–1983, when the small firm effect was observed, or the period 1984–1989, when it was not. The small firm effect may therefore be attributed to (1) higher direct transaction costs including bid-ask spread and broker fees and (2) higher indirect transaction costs including portfolio management expenses and market impact costs.The authors thank an anonymous referee for helpful comments on an earlier version of this paper, and Brett Salazar for valuable assistance in data collection. Errors remain our own.     

Serving unfair customers

Companies commonly adopt “the customer is always right” maxim as a basic premise for delivering quality service. A close examination of customer behavior, however, reveals that customers can be not only wrong but also blatantly unjust. Unfair customers take advantage of being “always right” by demanding unwarranted privileges and compensation, adversely affecting companies and, in some cases, employees and other customers. Companies can actually strengthen their ability to deliver quality service by dealing effectively with unfair customers.     

Willingness-to-engage in technology transfer in industry-university collaborations

Formal collaboration between universities and industries is a recent phenomenon. Currently the role of an industry-university collaboration (IUC) is to close the gap between industry and academia. This study aims to analyze the willingness to engage in technology transfer (TT) in IUCs from the three vantage points of the technology transferor (university), the technology transferee (industry), and the TT intermediary institute. This study mainly observes the pairwise relationships between influencing variables and sub-variables and willingness to participate in TT in an IUC. From the vantage point of universities, this study shows that the “transferor's incentive” and “capability of transferor” variables positively influence willingness to participate in TT in an IUC. From the vantage point of industry, the results indicate that “capability of transferee” and “incentive for establishing technological resources” have major influences on willingness to participate in TT in an IUC. From the vantage point of TT intermediary institutes, the results show that “intermediary's fundamental resources” and “intermediary's transferring process” have a positive impact on willingness to participate in TT in an IUC.