Adaptation and Performance in New Businesses: Understanding the Moderating Effects of Independence and Industry

New ventures as well as new business units experience significant difficulties in finding a viable business model. They often need to adapt their initial business model due to the presence of uncertainty and ambiguity. Technology-based companies are confronted with particularly high degrees of uncertainty and ambiguity. We hypothesize that adaptation is crucial for the performance (measured as survival) of these businesses, but that this effect is moderated by the (in)dependence of the new technology-based business and by the industry in which it is active. We test the adaptation-performance hypothesis through a survival analysis of a sample of 117 independent new ventures and business units. Our findings suggest that adaptation is beneficial in less mature, capital-intensive and high-velocity industries but not so in more mature, stable industries. Also, adaptation reduces failure rates in dependent business units as compared to independent ventures.     

Testing random assignment to peer groups

Identification of peer effects is complicated by the fact that the individuals under study may select their peers. Random assignment to peer groups has proven useful to sidestep such a concern. In the absence of a formal randomization mechanism, it needs to be argued that assignment is “as good as” random. This paper introduces a simple yet powerful test to do so. We provide theoretical results for this test. As a by-product, we equally obtain such results for an approach popularized by Guryan et al. (2009). These results help to explain why this approach suffers from low power, as has been observed elsewhere.     

The socio-economic impact of certification schemes in conflict-affected regions: The case of arabica coffee in the Eastern DRC

The paper investigates the benefits of certification of cooperatives in conflict-affected areas. We study whether and how certification may contribute to attenuate the impact of conflicts on the members of coffee cooperatives in the Eastern DRC. We use an inverse probability weighted difference-in-difference approach to study data collected between December 2017 and October 2019 from four NGO-supported cooperatives. Two of these cooperatives got organic certification in 2018, of which one got an additional Small Producers Symbol (SPP) certification in 2018. Certified cooperatives allow Arabica coffee producers to access markets and buffer against drops in market prices. Results indicate that certified cooperatives were better able to resist the international price drop than non-certified cooperatives and the alternative informal markets. The results also suggest that certified cooperative members increased their sales to the cooperative instead of turning to informal side-selling. We find a decrease in reported food deficits by the members of certified cooperatives and an increase in the importance of coffee in their household's income. We conclude that certification is an effective way forward for smallholder coffee producers and cooperatives in unstable regions.     

Innovation-Oriented Culture in the Public Sector: Do managerial autonomy and result control lead to innovation?

This article examines the effect of specific new public management (NPM)-related characteristics to explain innovation-oriented culture within public sector organizations. According to NPM doctrines, an enhanced managerial autonomy combined with result control will stimulate a more innovation-oriented culture in such organizations. Using multi-country survey data of over 200 public sector agencies, we test for the influence of organizational autonomy, result control and their interactions, on innovation-oriented culture. High levels of managerial autonomy and result control have independent and positive effects. However, the interaction between high personnel management autonomy and high result control has a negative effect.     

The challenge of using standard contracts in public–private partnerships

A call for an increased use of standard contracts in public–private partnerships (PPPs) for infrastructure development is noticeable in practice. These contracts are expected to simplify and improve procurement by creating opportunities for learning, lower transaction costs, and better competition. This paper delineates standard contracts in PPP as a new venue for research and unfolds their potential impact. Here lies an important challenge since the benefits of standardization are not as straightforward as they look at first sight, particularly when taking into account the tension between the powerful, control-oriented role of contracting authorities and the need for contingent, informal contracting.     

Elementary multivariate rearrangements and stochastic dominance on a Fréchet class

A Fréchet class collects all multivariate joint distribution functions that have the same marginals. Members of a Fréchet class only differ with respect to the interdependence between their marginals. In this paper, I study orders of interdependence on a Fréchet class using two multivariate generalizations of the bivariate rearrangement proposed by Epstein and Tanny (1980) [4] and Tchen (1980) [16]. I show how these multivariate rearrangements are underlying multivariate first order stochastic dominance in terms of the joint distribution function and the survival function. A combination of both rearrangements is shown to be equivalent to the concordance order proposed by Joe (1990) [9].     

Are Public and Private Social Expenditures Complementary?

Most analyses of social protection are focussed on public arrangements. However, social effort is not restricted to the public domain; all kinds of private arrangements can be substitutes to public programs. OECD data indicate that accounting for private social benefits has an equalising effect on levels of social effort across a number of countries. This suggests complementarity between public and private social expenditures. But their distributional effects differ. Using cross-country data, we find a negative relationship between net public social expenditures and income inequality, but a positive relationship between net private social expenditures and income inequality. We conclude that changes in the public/private mix in the provision of social protection may affect the redistributive impact of the welfare state.Part of Leiden Social Security Incidence Project. Revised version of a paper presented at the 57th International Atlantic Economic Conference, Lisbon, Portugal (March 10–14, 2004), and at the 60th Congress of the International Institute of Public Finance, Milan, Italy (August 23–26, 2004). The usual disclaimer applies.     

Dismantling the ivory tower: The influence of networks on innovative output in emerging technologies

In this article we examine how R&D networking affects an organization's innovative output. Using empirical data on 419 research organizations in transgene plant research over a 20-year period, we test several hypotheses relating their sociometric position in an R&D network to their innovative output. Attention is paid to the relative importance of in-house versus collaborative research. Least squares dummy variable models are used to analyze cross-sectional data across different time periods. The results show that (1) an organization's “network embeddedness” positively influences its innovative output; whereas (2) involvement in collaborative R&D has a curvilinear effect on innovative performance.