A Technological and Organisational Explanation for the Size Distribution of Firms

This paper combines insights from the literature on the economics of organisation with traditional models of market structure to construct a theory of equilibrium firm size heterogeneity under the assumption of a homogenous product industry. It is possible that configurations consisting entirely of small firms (run by entrepreneurs with limited attention) and with larger firms (using managerial techniques to substitute away these limits to allow increasing returns technologies to become profitable) can arise in equilibrium. However, there also exist equilibrium configurations with the co-existence of large and small firms. The efficiency properties of these respective equilibria are discussed. Finally, the implications of an expanding market size are considered.     

Doing Unto Others: The Reciprocity of Helping Behavior in Organizations

Reciprocity is a fundamental aspect of social life, and a phenomenon studied from a wide variety of philosophical, theological, and social scientific perspectives. In this study, we use social exchange theory to investigate why employees help other employees. We hypothesize, based on the norm of reciprocity (Gouldner, 1960), that a significant cause of an employee's helping behavior is how much organizational citizenship behavior (OCB) the employee has received from coworkers. To provide evidence of the discriminant validity of OCB received as an antecedent of helping behavior, we also assess its effects on another form of extra-role behavior, voice, as well as in-role performance. We found, in a sample of 157 employee-supervisor dyads, that OCB received was related to helping behavior after controlling for several antecedents of helping behavior identified in past research, and was less related to voice and in-role behavior, as hypothesized. Implications for theory and practice are presented.     

Board Members in the Service Industry: An Empirical Examination of the Relationship Between Corporate Social Responsibility Orientation and Directorial Type

One area of business performance of particular interest to both scholars and practitioners is corporate social responsibility. The notion that organizations should be attentive to the needs of constituents other than shareholders has been investigated and vigorously debated for over two decades. This has provoked an especially rich and diverse literature investigating the relationship between business and society. As a result, researchers have urged the study of the profiles and backgrounds of corporate upper echelons in order to better understand this relationship.There is ample evidence that corporations have in recent years increased the proportion of outside directors on their boards. This has been partly in reaction to increased interest in the corporate social responsiveness of business organizations and suggestions that the board of directors could play a unique role in this area. The expectation on the part of practitioners, researchers, and governmental regulators is that outside directors will advocate greater corporate responsiveness to society's needs by playing a more active role in overseeing managerial decisions.The purpose of this study is to partially fill a void in the literature by determining whether or not these expectations are justified, particularly in the service industry. Data were collected as part of a larger cross-national study of corporate social responsibility. A multivariate analysis of variance (MANOVA) of the results of a survey of 307 board members (198 outside and 109 inside directors) indicates that outside directors exhibit greater concern about the discretionary component of corporate responsibility and a weaker orientation toward economic performance. No significant differences between the two groups were observed with respect to the legal and ethical dimensions of corporate social responsibility. Some explanations as well as limited generalizations and implications are developed.     

Adjusting for risk in comparing the performances of male- and female-controlled SMEs

Small and medium enterprise (SME) research has typically found that female-owned SMEs underperform male-owned SMEs. Further, this underperformance usually persists after controlling for variables such as industry, age of business, and size of business. However, previous studies have normally limited their assessment of performance to sales or profit (or growth in sales or profit) without controlling for differences in risk. Our results indicate that although profits are significantly higher for male-controlled SMEs, so is the variation in profits (risk). After adjusting for risk, we find no significant difference between the performances of male- and female-controlled SMEs.     

The relationship between ethics and firm practices in Russia and the United States

One of the fundamental objectives of corporate governance is to promote a climate that fosters ethical decision-making. As transitioning economies move toward more transparent and democratic systems the existence of policies, such as codes of ethics, that attempt to monitor and control moral behavior will become increasingly important. The establishment of ethical standards not only encourages trust with potential trade partners but also is likely to cultivate foreign direct investment. In this study, data collected from 112 U.S. and 74 Russian respondents reveal some intriguing patterns across these two diverse economies. Managerial implications and future research directions are also discussed.     

A Micromodel of New Product Adoption with Heterogeneous and Forward-Looking Consumers: Application to the Digital Camera Category

We develop an empirical model for the adoption process of a new durable product that accounts for consumer heterogeneity as well as consumers forward-looking behavior. Accounting for heterogeneity is important for two reasons. As the mix of consumers with different preferences and price sensitivities could change over time, firms need to update their marketing strategies. Further, it allows for a variety of shapes for the aggregate adoption process over time. As prices for durable and technology products fall over time with firms continually introducing enhanced products, consumers may anticipate these prices and improvements and delay their purchases in the product category. Forward-looking consumers optimize purchase timing by trading off their utilities from buying the product and their expectations on future prices, quality levels, and brand availability. Such forward-looking behavior will result in price dynamics in the marketplace as price changes today influence future purchases. And it results in different shapes of the new product sales pattern over time by influencing the time to take-off. We show how the parameters of our model can be estimated using aggregate data on the sales, prices, and attributes of brands in a product category. We apply our model to market data from the digital camera category. Our data are consistent with the presence of both heterogeneity and forward looking behavior among consumers. At the product category level, we are able to decompose the effects of the entry of Sony into primary demand expansion and switching from other brands. At the brand level, we find that there exist several segments in the market with different preferences for the brands and different price sensitivities leading to differences in adoption timing and brand choice across segments. For a given brand, we show how the changing customer mix over time has implications for that brands pricing strategies. We characterize how price effects vary across brands and over time and how price changes in a given time period influence sales in subsequent periods. Model comparison and validation results are also provided.     

Failure Rates for Female‐Controlled Businesses: Are They Any Different?

Previous research has found that female-owned businesses generally underperform male-owned businesses on a variety of measures such as revenue, profit, growth, and discontinuance (failure) rates. It has been suggested that this finding might be the result of systematic differences between male- and female-owned businesses, particularly industry differences. This paper analyzes data from a representative sample of 8,375 small and medium-sized Australian enterprises that originally were surveyed in 1994–95, with follow-up surveys in each of the subsequent three years for a subsample of businesses. The aim was to determine whether female-owned businesses exhibit higher failure rates than male-owned businesses and, if so, whether this finding persists after controlling for industry differences. The results suggest that while female-owned businesses do have higher failure rates compared to male-owned businesses, the difference is not significant after controlling for the effects of industry.     

Financial development and top income shares in OECD countries

We examine the causal impact of financial development (FD) on top income shares for a panel of 14 OECD countries—five Anglo‐Saxon countries, eight continental European countries, and Japan—over a 110‐year period. In our main General Method of Moments estimates, we find that a 1‐percentage‐point change in FD increases the top 1% income share by 0.2%. In distribution terms, a 1‐SD incr=ease in FD increases the top 1% income share by around 0.4 of an SD. The effects are robust to various measures of top income shares and FD and alternative estimation techniques, including nonparametric estimation. FD is typically viewed in positive terms in that it makes it easier to access credit and facilitates economic growth. Our results are important because they contribute to understanding of the potential negative effects of FD.