Risk bias and the link between motivation and new venture post-entry international growth

We link research in international entrepreneurship and on behavioral decision making with the international business literature on firm degree of internationalization to advance an integrative model of new venture post-entry international growth. We test this model on a sample of 286 new ventures. Results demonstrate that the extent to which entrepreneurs perceive internationalization choices more or less risky than an objective standard (i.e. internationalization risk bias) leads to variations in international growth rates, in particular international scope. Further, we show that the decision-maker's motivation leads to differences in both internationalization risk bias and international scope.     

AN EMPIRICAL EXAMINATION OF RELATIONSHIP MAGNITUDE

Based upon a review of the extant literature, it is proposed that the structure of an interorganizational relationship is composed of relationship type and the under‐researched construct of relationship magnitude. Specifically, it is hypothesized that relationship magnitude, a second order construct composed of trust, commitment, and dependence, affects relationship type, which affects the perception of value of the relationship. The results of a survey analyzed through structural equation modeling support these hypotheses.     

RELATIONSHIP MAGNITUDE AND ITS ROLE IN INTERORGANIZATIONAL RELATIONSHIP STRUCTURE

Close relationships between and among supply chain members are becoming more prevalent. However, there is lack of agreement in the literature and in practice concerning the characteristics of different interorganizational relationships. The resultant confusion is an obstacle to the progression of research and could cause problems among firms in a supply chain. Based on previous research and an exploratory study conducted with company executives responsible for supply chain management activities, this article seeks to introduce the concept of relationship magnitude (i.e., the extent or degree of closeness or strength of the relationship) and differentiate it from relationship type (i.e., classes of relationships that share common traits). Implications for managers and opportunities for future research are provided.     

Does Allowing the Bells to Offer InterLATA Long-Distance Service Affect Entry into Local Telephony?

Following the 1984 divestiture of AT&T, local telephone service was provided by several Regional Bell Operating Companies (RBOCs). The RBOCs served as monopoly providers of local telephone service in their respective territories but were prohibited from offering long-distance service to their in-region subscribers. Section 271 of the landmark Telecommunications Act of 1996 allows an RBOC to offer in-region long-distance service if it demonstrates that the local telephone exchange market is open to competitive entry. This study empirically evaluates the efficacy of this policy by considering the impact of RBOC entry into long-distance on the development of competitive entry into local telephony. The results suggest that section 271 has been successful in promoting entry into local telephony. However, aggregate price data suggest that this entry has not been realized with lower rates for residential telephone subscribers.     

The economic and strategic motives for antidumping filings

The Economic and Strategic Motives for Antidumping Filings. — This paper looks at worldwide antidumping activity during the last two decades. We examine the motives for AD filings by countries in an attempt to identify whether economic or strategic concerns are driving the recent upsurge in AD use. We begin by providing a comprehensive overview of the data on cases initiated in the 1980–1998 period. We then use nonparametric methods to identify motivations for the use of antidumping and find considerable support for strategic motivations. This suggests that the rise in AD activity cannot be solely explained by an increase in unfair trading practices.     

Assessing professional ethics in tax: A case on uncertain tax positions

We develop and present an ethics case dealing with an uncertain tax position. The case can be used to assess professional ethics as part of an assurance-of-learning (AOL) plan as well as a component of a course grade. We present data on student performance on this case over a 5-year period. Students consider existing ethical frameworks to identify and frame the potential ethical “dilemmas” they might face in addressing whether to countenance a client’s suggested treatment and disclosure of an uncertain tax position. In addition, students evaluate the AICPA guidance and U.S. Treasury standards on taking and reporting uncertain tax positions in the tax return and the FASB and PCAOB standards on reporting and auditing uncertain tax positions in the financial statements. The case allows faculty to assess students’ ability to frame potential ethical dilemmas when clients engage in aggressive tax behavior, to recognize with whom and with what professional reference documents they should consult when an uncertain tax position arises, and to choose among alternative actions when faced with client/preparer conflicts.     

Anticipating independence,no premonition of partition. The lessons of bank branch expansion on the Indian subcontinent, 1939 to 1946

We examine investment in bank branches on the Indian subcontinent in 1939 and 1946. In 1947, the states of India and Pakistan were created from the erstwhile colony of British India. Partition was destabilizing to both economies. We use branch expansion as a proxy for entrepreneur's pre‐partition predictions of the future of these regions. Our results indicate there were no premonitions of economic dislocation. Banks tended to deepen their presence in regions which were already developed. But controlling for the level of 1931 development, branch placement was highest in exactly those regions, Bengal and the Punjab, which were to experience the greatest negative consequences from political division. After 1947, multiple banks failed; most failing banks were registered in the Punjab or Bengal region. In United India, businessmen saw as much promise in regions which were to become Pakistan as in regions which were to become India. After partition, the Pakistan regions were immediately more economically fragile. This event provides a general lesson. Economic integration had intensified over the years of British rule. The abrupt stop to integration harmed especially the smaller, less diversified region. Politicians should be wary of politically dividing regions which have evolved to function as integrated economic units.     

Conditional beta pricing models: A nonparametric approach

We propose a two-stage procedure to estimate conditional beta pricing models that allows for flexibility in the dynamics of asset betas and market prices of risk (MPR). First, conditional betas are estimated nonparametrically for each asset and period using the time-series of previous data. Then, time-varying MPR are estimated from the cross-section of returns and betas. We prove the consistency and asymptotic normality of the estimators. We also perform Monte Carlo simulations for the conditional version of the three-factor model of Fama and French (1993) and show that nonparametrically estimated betas outperform rolling betas under different specifications of beta dynamics. Using return data on the 25 size and book-to-market sorted portfolios, we find that the nonparametric procedure produces a better fit of the three-factor model to the data, less biased estimates of MPR and lower pricing errors than the Fama–MacBeth procedure with betas estimated under several alternative parametric specifications.