Are Returns to Schooling Concentrated Among the Most Able? A Semiparametric Analysis of the Ability–earnings Relationships1

In this paper I explore the relationship between ability and log waves using flexible estimation techniques. I find evidence of nonlinearities in these relationships that vary across levels of schooling, and argue that ability‐sorting into higher education creates problems for accurately identifying the return to schooling over the entire ability support. Over an ability support that is “common” to those with and without a college education, I find that the college log wage premium is incerasing for the more able, and this premium grew during the period 1984–1994 for individuals at all points in the ability distribution. The growth of this wage premium over time also appears to have followed a “smoother” linear path for high‐ability individuals than individuals of lower ability.     

Do Capital Structure Adjustments by Takeover Targets Influence Acquisition Gains?

We link debt issuances by target companies around takeover announcements to enhanced target bargaining power in negotiations with bidders over merger synergy gains in completed takeovers. Announcements of debt issuances by targets—especially new bank loans—are associated with more positive target equity returns relative to those made by nontargets, particularly for debt issuances immediately surrounding the takeover announcement. At least some of these gains to targets come at the expense of bidder shareholders, as bidder equity abnormal returns at target debt issuance are negative. We further show that targets issuing debt are primarily those with relatively low acquisition abnormal returns, consistent with initially poor target bargaining power. Subsequent debt issuances by targets increase the likelihood of positive adjustments to acquisition premiums offered by acquirers.     

Profit sharing in unique Nash equilibrium: Characterization in the two-agent case

Two agents jointly operate a decreasing marginal returns technology to produce a private good. We characterize the class of output-sharing rules for which the labor-supply game has a unique Nash equilibrium. It consists of two families: rules of the serial type which protect a small user from the negative externality imposed by a large user, and rules of the reverse serial type, where one agent effectively employs the other agent's labor. Exactly two rules satisfy symmetry; a result in sharp contrast with Moulin and Shenker's characterization of their serial mechanism as the unique cost-sharing rule satisfying the same incentives property [Moulin, H., Shenker, S., 1992. Serial cost sharing. Econometrica 60 (5), 1009–1037]. We also show that the familiar stand-alone test characterizes the class of fixed-path methods under our incentives criterion [Friedman, E.J., 2004. Strong monotonicity in surplus sharing. Econ. Theory 23, 643–658].     

Measuring sustainable development — Nation by nation

Sustainable development represents a commitment to advancing human well-being, with the added constraint that this development needs to take place within the ecological limits of the biosphere. Progress in both these dimensions of sustainable development can be assessed: we use the UN Human Development Index (HDI) as an indicator of development and the Ecological Footprint as an indicator of human demand on the biosphere. We argue that an HDI of no less than 0.8 and a per capita Ecological Footprint less than the globally available biocapacity per person represent minimum requirements for sustainable development that is globally replicable. Despite growing global adoption of sustainable development as an explicit policy goal, we find that in the year 2003 only one of the 93 countries surveyed met both of these minimum requirements. We also find an overall trend in high-income countries over the past twenty five years that improvements to HDI come with disproportionately larger increases in Ecological Footprint, showing a movement away from sustainability. Some lower-income countries, however, have achieved higher levels of development without a corresponding increase in per capita demand on ecosystem resources.     

Borders and Governance: An Analysis of Health Regulation and the Agri-food Trade

The contemporary dynamics of states, borders, and markets suggest the need for non-traditional methods of regulation and international cooperation in areas such as border inspections and management. The emerging literature on cross-border regions and multi-level governance suggests a framework to understand this development within the general transformation of states under globalisation. To explore these ideas, in this article we focus on the arena of health regulation and the international agricultural and food trade. Multilateral bodies such as the World Trade Organization (WTO), the World Organization for Animal Health (OIE), and the International Plant Protection Convention (IPPC) have endorsed the policy concept of “regionalisation” as a means by which states can preserve trade relations when sanitary (human or animal health) or phytosanitary (plant health) hazards threaten a country's trading status. In this paper, two cases – one historical and one contemporary – illustrate that regionalisation offers a largely functional application of multi-level governance to enhance regulatory and trade capacity. We conclude that governance changes indicated by regionalisation may provide further evidence for the transformation of borders, regions, and states in an era of globalisation.     

Financial Returnees as New Agents in East Asia: The Case of Korean Private Equity Funds

Although the standing of Anglo-American capitalism has been badly damaged by the global economic crisis, the return of the state in emerging markets is by no means assured. Over the past decade, financial processes originating in Anglo-American markets, such as derivatives, hedge funds and mergers and acquisitions (M&A), have made quiet headway in emerging markets. One of the transmission channels is financial returnees, defined as elites returning to domestic finance from either global finance abroad or from foreign financial institutions in their home countries. Many financial returnees pursue business agendas that parallel the Anglo-American model, while portraying themselves as local for domestic constituencies. These actions are now especially visible in the rise of private equity funds in emerging markets. This article defines the concept of a financial returnee and charts the impact of these individuals in importing the Anglo-American private equity model to Asia with Korea as the primary case study. Once foreign-controlled, the private equity industry in Korea is now domestically-run and financial returnees have been integral in this sector's short but important history.     

The impact of economic downturns on marketing

The Great Recession of 2008–2010 affected the global and U.S. economies and its companies more universally than any economic downturn since the Great Depression. This study explores how the Great Recession influenced the marketing decisions of firms and the resulting long-term effects on marketing within business-to-business companies. Empirical evidence from previous recessions suggests that companies should focus on their customers and increase their marketing efforts during a recession. However, many companies typically slash their marketing budgets during economic downturns. Authors found that during the Great Recession, companies reacted differently than in previous recessions with their marketing responses. Authors conclude their analysis by proposing that the Great Recession will have three long-term effects on marketing in business-to-business companies.     

The Deal Structuring Stage of the Venture Capitalist Decision‐Making Process: Exploring Confidence and Control*

This exploratory study examines the deal structuring stage of the venture capitalist decision‐making process. Here, the primary issues of concern are investor confidence and potential control of a venture in relation to the level of financing the investor provides and the structure with which the funding is delivered. Confidence comes in support of the entrepreneur, the venture itself, or a combination of the two, prior to capital transfer, but after the initial “invest or not invest” decision has already occurred. Findings support a multicriteria perspective of the pre‐investment decision‐making process and a distinct difference between entrepreneur confidence and venture confidence in the deal structuring stage.     

Crossing the great divide of strategic entrepreneurship: Transitioning between exploration and exploitation

Managing uncertainty effectively is perhaps one of the most significant challenges a firm's decision makers face today. Strategic entrepreneurship—defined as exploration for future sources of competitive advantage, combined with exploitation of current sources of competitive advantage—has been proposed as a means via which decision makers can manage uncertainty. In this article, we discuss the transition between exploration and exploitation activities within organizations as a vital part of strategic entrepreneurship; this transition process can involve various types of internal firm challenges. Additionally, we highlight various sources for these internal challenges and mechanisms through which firms can overcome them.     

Offshoring and firm innovation: The moderating role of top management team attributes

This study attempts to increase the understanding of how offshoring influences the introduction of new products and services. Focusing on the offshoring of those business functions that provide direct knowledge inputs for innovation (i.e., production, R&D, and engineering), we propose that offshoring has an inverted U‐shaped influence on firm innovativeness. Additionally, we provide an upper echelon contingency perspective by considering the moderating role of two top management team (TMT) attributes (i.e., informational diversity and shared vision). Using a cross‐industry sample with lagged data, we find that offshoring has an inverted U‐shaped influence on firm innovativeness and that this relationship is steeper in firms with high TMT informational diversity and in firms with low TMT shared vision. Copyright © 2012 John Wiley & Sons, Ltd.