Do Disruptive Visions Pay Off? The Impact of Disruptive Entrepreneurial Visions on Venture Funding

Entrepreneurs often articulate a vision for their venture that purports to fundamentally change, disturb, or re‐order the ways in which organizations, markets, and ecosystems operate. We call these visions disruptivevisions. Neglected in both the disruption and the impression management literature, disruptive visions are widespread in business practice. We integrate real options and impression management theories to hypothesize that articulating a disruptive vision increases the likelihood of the venture receiving funding but reduces the amount of funding obtained. A novel dataset of Israeli start‐ups shows that a standard deviation increase in disruptive vision communication increases the odds of receiving a first round of funding by 22 per cent, but reduces amounts of funds received by 24 per cent. A randomized online experiment corroborates these findings and further demonstrates that the expectation of extraordinary returns is the key mechanism driving investors’ sensemaking.     

Linear models, smooth transition autoregressions, and neural networks for forecasting macroeconomic time series: A re-examination

In this paper, we examine the forecast accuracy of linear autoregressive, smooth transition autoregressive (STAR), and neural network (NN) time series models for 47 monthly macroeconomic variables of the G7 economies. Unlike previous studies that typically consider multiple but fixed model specifications, we use a single but dynamic specification for each model class. The point forecast results indicate that the STAR model generally outperforms linear autoregressive models. It also improves upon several fixed STAR models, demonstrating that careful specification of nonlinear time series models is of crucial importance. The results for neural network models are mixed in the sense that at long forecast horizons, an NN model obtained using Bayesian regularization produces more accurate forecasts than a corresponding model specified using the specific-to-general approach. Reasons for this outcome are discussed.     

Aufschwung in Deutschland weiter kräftig — Anspannungen nehmen zu

The business cycle upswing in Germany has gained strength and breadth. In addition to private consumption, the expansion is now also supported by investment and foreign trade. The latter benefits from growing exports to the euro area, where the economy is gaining momentum. Since the euro area upswing rests on solid fundamentals, the ECB should be able to start tapering without putting the economy at risk.     

Can Social Media Campaigns Backfire? Exploring Consumers' Attitudes and Word-of-Mouth Toward Four Social Media Campaigns and Its Implications on Consumer-Campaign Identification

In response to the unprecedented growth of social media, companies are continuously creating unique social media campaigns encouraging customers to share their advertising messages. However, many of these social campaigns end up backfiring. The purpose of this study is to examine consumers' preferences toward 4 social media campaigns and to investigate the impact of positive and negative word-of-mouth and social value on consumer-campaign identification. Using a sample of 525 respondents in Australia, the results show social media campaigns that contain negative messages are more likely to receive negative word-of-mouth while partnering with non-profit organizations may help generate positive word-of-mouth. This study will assist marketing managers to better understand the consumers' perceptions on recent social media campaigns in Australia.     

„Ich glaube, die Deutschen hassen mich“

Based on attribution theory, we assume that readers’ opinion formation (perception of victim’s personality, causal attribution, attribution of responsibility, emotional reactions) in the case of abductions in foreign countries is influenced by newspapers’ presentations of the victim’s altruistic versus egoistic reasons for travelling. Moreover, we assume that reasons for travelling can be conveyed either by verbal or by visual information. To prove this, we conducted an experiment on a fictional abduction by adapting the case of Susanne Osthoff, a German archaeologist kidnapped in Iraq in 2005. The results, indeed, show that verbal media content heavily influences readers’ opinions: When a newspaper article suggested altruistic reasons for travelling, readers attributed more positive character traits to the victim, held the victim less responsible for being kidnapped and for paying ransom money, and felt less anger and more sadness. In contrast, visual information only shaped readers’ opinions when there was no verbal information about the victim’s reasons for travelling available in the text. The causes and consequences of these findings are discussed.     

Idiosyncratic and international transmission of shocks in the G7: Does EMU matter?

This paper analyzes the transmission of shocks across the Group of Seven industrialized countries (G7) before and after the introduction of the euro. We estimate global vector autoregressive (VAR) models for different periods to investigate changes in the domestic and international adjustment of macroeconomic variables following supply, demand, and nominal shocks. The shocks are identified with robust sign restrictions, which we derive from a small open economy dynamic stochastic general equilibrium (DSGE) model. Specifically, we analyze the adjustment of output, inflation, and the real effective exchange rate following those shocks. Our results indicate that changes in the adjustment are due to global convergence rather than to regional‐specific convergence.     

A CLOSER LOOK AT VALUE PREMIUM: LITERATURE REVIEW AND SYNTHESIS

This paper provides a systematic review of value premium literature that examines the performance difference between value and growth stocks and the possible reasons for it. We compare and synthesize the results from the different regional stock markets and different sample periods. The literature is categorized according to stock selection criteria that are based on either individual valuation ratios, such as E/P, B/P, D/P, S/P, CF/P, and enterprise value-based multiples, or composite value criteria that aim to capture more than one dimension of relative value simultaneously or combine them with other classification criteria. We also compare the efficacy of various selection criteria to each other and synthesize the literature on the explanations for the value anomalies. The overall evidence shows that the best criterion varies over time and across the markets. The relative efficacy of different valuation criteria also seems to depend on numerous methodological choices. Recent studies have given mild evidence that combining traditional valuation ratios either with each other or with some financial statement variables could at least in some cases enhance the value premium, although very few studies have provided transparent comparisons between the results based on individual valuation ratios and those based on composite value criteria.     

The Climate Policy Hold‐Up: Green Technologies,Intellectual Property Rights,and the Abatement Incentives of International Agreements

The success of global climate policies over the coming decades depends on the diffusion of “green” technologies. Using a simple model, we highlight a conflict between international environmental agreements (IEAs) on emissions reductions and international systems of intellectual property rights (IPRs) on abatement technologies. When IPRs are strong and global, IEA signatories anticipate rent extraction by innovators. This hold‐up effect reduces abatement, potentially to levels below those of non‐signatories, and it reduces the number of signatories to self‐enforcing IEAs. We explore policy options that respect existing property rights, but avoid the strategic interaction between signatories to an IEA and innovators.     

Organizational adaptation to disruptions in the natural environment: The case of climate change

Dynamic and intensified changes in the global ecosystem result in significant disruptions to the natural environment. One of the most prominent examples of this is climate change and the resulting natural disasters. As firms are embedded within the natural environment, they need to adapt to any environmental disruptions that transpire. Using Swiss and Austrian electric utilities as case studies, this paper empirically explores the underlying organizational capabilities necessary to enable adaptation to climate-related disruptions to a firm's resource supply, production processes, and product distribution. Through a case- and literature-based iterative process of analytical induction, three organizational capabilities are derived: climate knowledge absorption as an essential information generating and internalizing capability, climate-related operational flexibility as a short-term adjustment capability, and strategic climate integration as a long-term, innovation-focused capability.     

Yield spreads on EMU government bonds — How the financial crisis has helped investors to rediscover risk

This study analyses the determinants of EMU member states’ government bond yield spreads from January 2000 until September 2010. Using a dynamic panel regression approach, the authors show that before the outbreak of the financial crisis investors generally ignored fundamental sovereign bond risk factors. However, with the beginning of the financial crisis yield spreads for many member countries escalated. The results indicate not only that investors began to re-evaluate countries’ credit risks (measured by projections of debt-to-GDP ratios), but also that risk aversion in the markets, which increased significantly during the crisis, became a major determinant of sovereign bond spreads.