Alliance portfolio diversity,radical and incremental innovation: The moderating role of technology management

In this paper we test whether the use of a set of technology management tools (TM-tools), a specification of alliance portfolio capability, influences the relationship between alliance portfolio diversity and a firm's innovation outcomes. With this model, we add to the theoretical literature on the performance effects of alliance portfolio diversity and specific contingencies allowing to appropriate benefits from this diversity. Based on a sample of South African firms, we first confirm the inverted U-shaped relation between alliance portfolio diversity and a firm's innovation outcomes found by earlier research. We also show that the shape of this inverted-U differs for incremental and radical innovation outcomes. Subsequently, we test the moderating effect of the use of TM-tools on this relationship, for which find a strong positive moderating effect. In particular, for firms intensively using TM-tools, the negative effect of high levels of alliance portfolio diversity on innovation outcomes turns into a positive effect. This suggests that the use of formal technology management practices is beneficial to manage highly diverse alliance portfolios.     

Existence of financial equilibria in continuous time with potentially complete markets

We prove that in smooth Markovian continuous-time economies with potentially complete asset markets, Radner equilibria with endogenously complete markets exist.     

First steps towards an equilibrium theory for Lévy financial markets

For a continuous-time financial market with a single agent, we establish equilibrium pricing formulae under the assumption that the dividends follow an exponential Lévy process. The agent is allowed to consume a lump at the terminal date; before that, only flow consumption is allowed. The agent’s utility function is assumed to be additive, defined via strictly increasing, strictly concave smooth felicity functions which are bounded below (thus, many CRRA and CARA utility functions are included). For technical reasons we require for our equilibrium existence result that only pathwise continuous trading strategies are permitted in the demand set. The resulting equilibrium asset price processes depend on the agent’s risk aversion (through the felicity functions). Even in our simple, straightforward economy, the equilibrium asset price processes will essentially only be (stochastic) exponential Lévy processes when they are already geometric Brownian motions. Our equilibrium asset pricing formulae can also be modified to obtain explicit equilibrium derivative pricing formulae.     

Demand Uncertainty,Development Timing and Leasehold Land Valuation: Empirical Testing of Real Options in Residential Real Estate Development

This article develops and tests a long‐dated American call option pricing model for valuing development land under leasehold. We analyze and test option values in ten detailed Hong Kong cases involving purchase, holding, converting and developing land. We also test for optimal exercise of long‐dated American calls using processes based on the optimal trigger ratio feature of the perpetual American call option model. Generally, the empirical results confirm presence of a positive and nontrivial option premium (mean +5.274%) in the cases, and that developers appear to delay exercise to the point predicted by the real options model.     

A Maturity Model for Management Control Systems

Corporate management in today’s international companies has become increasingly complex. To cope with the growing challenges, information technology (IT)-based management control systems (MCSs) covering reporting, planning, and consolidation have been deployed. Despite their tradition in management research, the ‘right’ setup of MCSs is still challenging. Maturity models (MMs) are an established instrument to identify strengths and weaknesses of certain domains. As existing MMs rather focus on single MCS domains, neglect an IT perspective and miss a sound methodical foundation, this paper outlines an empirically and algorithmically constructed MCS MM. The model consists of three partial MMs for reporting, planning, and consolidation, which are integrated into one holistic MCS MM. The five levels of the MCS MM guide MCS evolution from a basic, mandatory/external-driven MCS (level 1) to a balanced MCS (level 2), and a comprehensive MCS (level 3). Ultimately, MCSs show a strong strategic focus (level 4) and leverage the potentials of modern IT (level 5).     

A SYMMETRIC INPUT–OUTPUT TABLE FOR EU27: LATEST PROGRESS

The European Commission is currently establishing an Environmentally Extended Input–Output (EE-IO) Database for the EU27 developed by the Joint Research Centre at the Institute for Prospective Technological Studies (IPTS). This project attempts to generate an analytical dataset comprising all EU countries and yearly time series for the period 1995–2005. Since, for the time being, IO and environmental accounts data are only available with significant gaps part of the dataset will require estimates based on best available proxy data and reasonable assumptions. This paper is focused on the IO database shaped around Eurostat supply and use tables and symmetric IO tables consistent with the NACE classification. The paper describes the procedure by which the latest preliminary results have been obtained for an aggregate EU27 symmetric input–output table for the year 2000.     

History of industrial decentralization in South Africa (part II)∗: Historical development and impact of the policy

This research deals broadly with the history and development of industrial decentralization in South Africa. It provides a basic analysis of a number of inseparable historic, political and economic issues, and is presented in two parts. The first part firstly traced the economic forces that generated current concentrated patterns of economic activity in South Africa, and secondly, reviewed the origins of the industrial decentralization policy. It concluded that despite a relatively rigid natural regional economic structure that developed historically, and despite the continued presence of the economic forces that brought this structure about, the government began with a policy of industrial decentralization in 1960. The second part of the research, published here, firstly assesses the development of the policy in an attempt to indicate reasons for major changes, and secondly discusses the impact of the policy with reference to current evidence. It concludes that the industrial decentralization policy may have had serious economic consequences to date, but may nevertheless have a continued role in the ongoing political development of the country. The approach throughout has been to provide a relatively compact'chronology of the policy and its antecedents.     

Accountability in an agency model: Project selection,effort incentives,and contract design*

We analyze an agency model of project choice and implementation where the agent is held accountable for his performance. We show that implementation of the ex ante efficient project may be impossible, irrespective of how the principal sets fixed wage and bonus rate. If it is possible, the principal may be forced to increase the bonus rate above the optimal project‐specific rate. The higher profit share compensates the agent for pressure he faces when he has to justify/explain his performance.     

Analyst Behavior: The Geography of Social Interaction

In this paper, I provide empirical evidence that an analyst working in Germany is more likely to publish a high (low) price target regarding a DAX30 stock when other Germany based analysts are also optimistic (pessimistic) about the same stock. This effect of geographical proximity is not biased by the fact that DAX30 companies are headquartered in Germany. Shedding light on how influence takes place, I show that influence through communication and the exchange of opinion within small groups of analysts plays a vital role. This mainly applies during a bullish market environment. When markets are bearish, analysts' incentives induce them not to deviate too much from the overall average, such that then observational learning has a greater impact.