Environmental Liability Law and Induced Technical Change – The Role of Discounting

We analyse the incentives of environmental liability law for inducing progress to emission abatement technology. We consider three liability rules: strict liability, a negligence rule with an emission norm as the due care standard, and a double negligence rule which combines the emission standard with an abatement technology norm. In the case of distortive discounting, i.e. where the private discount rate deviates from the social one, we show, how the level of distortion influences the ranking of liability rules, according to the criterion of generated social cost.     

Smoke and Mirrors? Disclosures in the Marijuana Industry in Canada

Licensed producers (LPs) of marijuana in Canada are embedded in a highly competitive industry where they raise funds from investors to finance their growth. They face substantial risks from the uncertain legal status of marijuana and from its unsettled health and safety consequences. We argue that this context stands to have implications for the disclosures of firms in the marijuana industry. We rely on a multicase study of three large Canadian LPs to explore their mandatory and voluntary disclosures during the third quarter of 2018. We find that their mandatory interim disclosures are largely consistent with disclosure rules that target marijuana operations. We also find that they make voluntary disclosures relevant for their context (e.g., about risks from legal, health, and safety consequences), and that there is variation in these disclosures. We use our findings as a springboard for discussing the antecedents of mandatory and voluntary disclosures in the marijuana industry (i.e., proprietary costs, investor interest, detection costs of selective disclosures), and their consequence (i.e., lack of comparability). We offer suggestions for future research.     

When goliaths win and davids lose: The moderating role of perceived risk in brand biography effects

Brand biographies trace a brand's evolution to position it as an underdog (i.e., passion and determination that lead to success despite limited resources) or a topdog (i.e., success based on abundance of resources) brand. This study examines how consumers’ risk perceptions associated with brand choice influence brand biography effects. It demonstrates that when perceived risk associated with brand choice is low, consumers process brand biographies narratively, experience greater narrative transportation into underdog (vs. topdog) brand biographies, and evaluate the underdog brand more favorably. When perceived risk associated with brand choice is high, consumers respond more positively to topdog (vs. underdog) brand biographies, due to topdog brands’ greater perceived ability to reduce risk. The topdog effect observed at higher levels of perceived risk reverses, however, when consumers have the opportunity to process the brand biography before receiving high risk information, as this allows for narrative transportation into the brand biography. This study contributes to research on moderators of brand biography effects and suggests that perceived risk should play a role in marketers’ decision to emphasize underdog or topdog characteristics in brand biographies.     

Innovation and skills from a sectoral perspective: a linked employer–employee analysis

Science and engineering skills as well as management and leadership skills are often referred to as sources of innovative activities within companies. Broken down into sectoral innovation patterns, this article examines the role of formal education, actual occupation and work experience in the innovation performance in manufacturing firms within a probit model. It uses unique micro data for Germany (LIAB) that contain information about corporate innovation activities and the qualification of employees in terms of formal education, actual professional status and work experience. We find clear differences in the human capital endowment between sectors according to the Pavitt classification. Sectors with a high share of highly skilled employees engage in above average product innovation (specialised suppliers and science-based industries). However, according to our estimation results, across as well as within these sectors a large share of highly skilled employees does not substantially increase the probability of a firm being innovative.     

Reputational risk as a factor in the offshore location choice

Drawing on extant literature and eight case firms, this paper explores reputational risk as an essential factor in selecting offshore locations. By categorizing and aggregating insights from the empirical data and the relevant literature, the paper identifies country reputational risk as a factor determining the firm's propensity to exclude specific offshore locations. However, its effect is contingent upon managers' interpretation of the critical elements of the business environment in a particular country. Thus, the study contributes by demystifying the role of ‘managerial inputs’, which are often neglected within international sourcing literature. Further, reputational risk is delineated as a higher-order construct comprised of three lower-order constructs: unethical practices, institutional weakness, and quality concerns. Our findings distinguish reputational risk from the CSR framework because the dimensions of reputational risk identified in this study transcend beyond the governance, ethics, environmental and social spheres of CSR. This way, the study contributes to a holistic representation of reputational risk that can allow researchers to match its broad predictors with broad outcomes.