Behavioral agency and corporate entrepreneurship: CEO equity incentives & competitive behavior

Scholars have long studied drivers of entrepreneurial behavior among established firms. Yet little is known about how individual factors shape a firm’s choice to pursue entrepreneurship. We draw on behavioral agency theory to explore the role of equity incentives in driving corporate entrepreneurship. Our findings suggest CEOs avoid corporate entrepreneurial behaviors as their option wealth increases. However industry dynamics also prove to be an important contingency when predicting the effects of both restricted stock and stock options on the likelihood that the CEO engages in corporate entrepreneurship. Our findings provide a theoretical platform for predicting dimensions of entrepreneurial behavior and highlight effects of CEO equity ownership.

     

Automatic leading indicators versus macroeconometric structural models: A comparison of inflation and GDP growth forecasting

This paper compares the forecast performance of automatic leading indicators (ALIs) and macroeconometric structural models (MESMs) commonly used by non-academic macroeconomists. Inflation and GDP growth form the forecast objects for comparison, using data from China, Indonesia and the Philippines. ALIs are found to outperform MESMs for one-period-ahead forecasts, but this superiority disappears as the forecast horizon increases. It is also found that ALIs involve greater uncertainty in choosing indicators, mixing data frequencies and utilizing unrestricted VARs. Two ways of reducing the uncertainty are explored: (i) give theory priority in choosing indicators, and include theory-based disequilibrium shocks in the indicator sets; and (ii) reduce the VARs by means of the general-to-specific modeling procedure.     

Exploring the effectiveness of cigarette warning labels: findings from the United States and United Kingdom arms of the International Tobacco Control (ITC) Four Country Survey

• This paper explores the effectiveness of cigarette warning labels across two countries, one (the UK) with new and stricter legislation where text based labels have been made more prominent and one (the USA) with less stringent regulation, where labels are less visible. Using longitudinal data from the two countries, the research seeks to investigate the impact of the different types of warning labels on the information processing by consumers. This paper assesses the effectiveness of warning labels in terms of: consumer attention, elaboration, contemplation on quitting and behavioural compliance. This study provides a comprehensive examination of these key factors in a fixed causal sequence. Structural equation modelling was used to test this model based on longitudinal panel survey data from the International Tobacco Control (ITC) Four Country Survey. Analysis of a sample of 901 US smokers and 1459 UK smokers yielded results in full support of all hypothesised relationships in the model proposed for both countries. Findings suggest that the new European Union policy of more prominent warning labels has a direct effect on influencing behavioural compliance by smokers.

Copyright © 2007 John Wiley & Sons, Ltd.     

Partial Interests in Recreational Property

Changing demographics, growing real incomes, and friendly tax laws underlie the continuing growth in demand for recreational real estate in the US. The market for recreational property has undergone a major transformation over the past decades, with the refinement and deepening of markets for partial property ownership vehicles. This paper represents the first to analyze the factors underlying the demand for partial ownership interests. It develops a theory of partial ownership demand that focuses on the roles of familiarity and location-specific human capital in mediating the consumption uncertainty associated with particular recreation locations. Using private data from a survey of partial ownership participants, the empirical analysis yields results consistent with the theory: factors associated with greater site-specific recreation price, like distance between the primary residence and the recreation site and frequency of visits per week, reduce the share of ownership demanded, while factors associated with lower consumption risk tend to increase the share of ownership demanded.

Growing China’s renewables sector: a developmental state approach

Over the last decade China expanded its renewable energy sector with unprecedented speed. This success story presents a challenge to Western modes of environmental governance, where stakeholder participation is often deemed a necessary pre-condition for effective policy outcomes. Drawing on new research (including previously unpublished interview data), the article first discusses established modes of environmental governance before examining the growth of China’s renewables sector through the theoretical lens of the ‘developmental state’. The article then analyses renewable energy policy design and implementation in China, illustrating how top-down command and control strategies have successfully diffused renewable energy technology from a standing start. We argue that (1) China’s distinct approach to the sector differs from Western modes of environmental governance and (2) this has revealed a new path towards renewable energy diffusion that authoritarian states in particular might regard as an attractive alternative to participatory models.     

Evaluating ecotourism: The case of North Sulawesi, Indonesia

Ecotourism can contribute to both conservation and development and involves, as a minimum, positive synergistic relationships between tourism, biodiversity and local people, facilitated by appropriate management. This paper applies a framework for the development and evaluation of ecotourism to three protected areas in North Sulawesi. Due to its spectacular endemic biodiversity, the potential for providing quality nature experiences in North Sulawesi is high and tourism development is occurring rapidly. Site-level evaluations of ecotourism in three protected areas were performed to illustrate the application and the utility of the framework as a tool for evaluation and to assess the status of tourism in North Sulawesi. It is revealed that current relationships between people, resources and tourism in North Sulawesi have yet to provide the mutual benefits necessary for successful ecotourism. The approach and framework used to arrive at these conclusions have wide applicability for assessing the achievements of ecotourism at specific sites and for directing appropriate management strategies for ecotourism in protected areas.     

Dynamics of Beef Supply in the Presence of Cointegration: A New Test of the Backward-Bending Hypothesis

Following a general-to-specific strategy of model development, we develop error-correction equations for fed beef supply and feeder cattle demand. Starting with a theoretically acceptable set of variables, preliminary tests for unit roots and cointegrating vectors show stationary quantity variables and cointegrated prices. Simplification of the lag structure leads to equations with considerably richer dynamics than in previous studies. The final model passes several misspecification tests, is robust when estimated on subsamples of data, and makes more accurate out-of-sample forecasts than other models. In beef supply, the estimated error-correction model decomposes the backward-bending supply hypothesis into negative short-run and positive long-run supply elasticities at the monthly frequency.