The value of restructuring in emerging economies: the case of the Czech Republic

Although the value creating effect of firm restructuring which results in a reduction of internal markets (including spin‐offs, carve‐outs and other divestitures) is generally well accepted for U.S. firms, there is little evidence on the extent to which such arguments can be extended to firms in emerging economies. This study addresses this void in the literature by examining the issue of restructuring in the newly emerging economy of the Czech Republic. Several hypotheses relating to internal and external markets in emerging institutional environments are developed and tested using a large database of original and restructured Czech firms undergoing privatization. After controlling for factors such as size and performance, it is found that restructuring significantly reduced the value of firms, despite the general belief that Czech firms emerging from the communist era were highly overdiversified. This finding, while contradicting a majority of the work on restructured firms in the United States, nonetheless supports the notion that sizeable internal markets play an enhanced role in underdeveloped institutional environments. Copyright © 2004 John Wiley & Sons, Ltd.     

The Balassa-Samuelson Hypothesis and Oil Price Shocks in a Small Open Economy: Evidence from Cyprus

Focusing on a small open economy, this paper provides very supportive evidence for the Balassa-Samuelson productivity-bias proposition. Using a battery of tests we show that a positive and significant long run relationship exists between the relative price of nontraded goods and real income per capita. An implication of this result is that the prices of services in Cyprus will rise, if EU membership leads to income convergence with the rest of the EU. We have, furthermore, demonstrated that Rogoff's hypothesis, that real oil price changes negatively affect the price of nontradables, is supported by the empirical results.     

Flexibility in internationalization: is it valuable during an economic crisis?

This study investigates the value of the strategic flexibility provided by firms' international investments during an economic crisis, defined here as an unanticipated significant downturn in the economy. To avoid below‐par performance, firms need to adapt quickly to this significant change in their environment, making real options very valuable to them. Although firms' international investments can potentially provide such flexibility, this issue has not been empirically examined in a context of such dramatic negative change. We consider two types of international investments by firms in this regard, foreign direct investments and export‐related international investments, developing two measures that directly assess the flexibility derived from each that are new to the literature. Based on these measures, we find evidence that both types of international investments provided valuable flexibility for Korean firms during the economic crisis conditions. This study contributes to the literature by showing that firms with real options investments in place have a greater ability to flexibly adapt their overall operations in line with unforeseen negative environmental change, in contrast to firms without such investments. Copyright © 2009 John Wiley & Sons, Ltd.     

Unlikely allies: Bureaucracy as a cultural trope in a grassroots volunteer organization

This article investigates the role of bureaucratic organizing in a grassroots volunteer organization, which emerged during the so-called refugee crisis in an emergency refugee shelter in Germany. Most research agrees that this type of organization is by definition counter-bureaucratic. In the organization I studied, however, volunteers adopted, accepted and acclaimed bureaucratic organizing as the only, natural and self-evident way of making the grassroots work. Drawing on ethnographic research, my analysis unravels how bureaucracy became a common frame of reference that allowed the volunteers to self-organize despite their different motivations, attitudes and social backgrounds. To theorize these findings, the paper draws on the concept of a cultural trope. In so doing, it offers a more nuanced understanding of bureaucracy in grassroots volunteer organizations that might stimulate scholars to rethink its role in other fluid, dynamic and value-driven organizations.     

Flood Insurance and Risk Reduction: Market Penetration,Coverage, and Mitigation in Coastal North Carolina

This article provides an overview of flood risk management in the United States, focusing on the National Flood Insurance Program and the Community Ratings System (CRS), which is designed to promote flood hazard mitigation. We review the empirical literature that examines market penetration and demand for flood insurance, as well as factors that influence community participation in CRS. Combining data from separate (but similar) surveys conducted in Dare County, North Carolina in 1998 and 2008, we examine trends in flood insurance holdings and explore the extensive (binary participation) and intensive (coverage level) margins using regression analysis. We explore trends in CRS mitigation activities in Dare County and discuss potential difficulties in analyzing these data. Finally, we highlight avenues for future research.     

Segmentation by Travel Related Risks: An Integrated Approach

This study took an integrated approach toward traveler risk segmentation by including psychological and behavioral variables together in the one study. This is an important first step to develop interventions targeting risk segments. A total of 864 respondents were surveyed in an Australian airport departure lounge. The results showed travel behavior and risk reduction strategies as the most significant model predictors. Three segments were identified including a higher-risk segment was found to comprise mostly older, visiting friends and relatives (VFR) travelers on repeat visits. Implications for developing more effective communication interventions are provided and future research directions are proposed.     

The influence of competition from informal firms on new product development

Research summary : Existing research describes a broad range of determinants of new product development (NPD), a fundamental competitive activity of firms. A considerable share of this work has occurred in the context of developed economies, raising a concern that some important determinants may remain unexamined. We suggest that one such determinant is competition from informal (unregistered) firms. Drawing from the attention‐based view, we investigate the effects of informal competition on NPD in a large sample of firms located across Eastern Europe and Central Asia. We examine not only the direct effect but also how this effect is moderated by characteristics of the competitive and institutional context. Managerial summary : The purpose of this research is to examine the relationship between competition from informal (unregistered) firms and new product development (NPD) by formal firms. We argue that NPD is an effective response to differentiate from informal firms, and our analyses of over 9,000 firms located in emerging economies across Eastern Europe and Central Asia indicate that NPD activities are more likely in formal firms who rate informal competition as a greater obstacle. The strength of this direct relationship depends on aspects of the competitive and institutional environment: it is weakened when levels of competition from other formal firms are higher, when alternative responses such as corruption are more available, and when managers are more optimistic about the regulatory environment. Copyright © 2016 John Wiley & Sons, Ltd.