Dynamic Capabilities and Organizational Performance: A Meta‐Analytic Evaluation and Extension

We move the dynamic capabilities view (DCV) forward in two important ways by meta‐analysing prior empirical studies. First, we evaluate the two core theoretical tenets of the DCV: (1) Dynamic capabilities are positively related to performance, and (2) this relationship is stronger in industries with higher levels of technological dynamism. We find support for the former (r_c = 0.296) but not for the latter, though results suggest the existence of moderators. Second, we theorize and demonstrate empirically that higher‐order dynamic capabilities are more strongly related to performance than lower‐order dynamic capabilities, lower‐order dynamic capabilities partially mediate the relationship between higher‐order dynamic capabilities and performance, and dynamic capabilities contribute more to performance in developing economies than in developed economies. These findings illustrate how the nature of the dynamic capability and the economic context in which it is utilized shape its value, thus offering a more nuanced conceptualization of the dynamic capabilities‐performance relationship.     

University–firm competition in basic research: Simultaneous versus sequential moves

This paper studies the endogenous timing of moves in a game with competition in basic research between a university and a commercial firm. It examines the conditions under which the two entities end up investing in innovation at equilibrium, both under simultaneous and sequential moves. It argues that when the innovation process is not too costly, under any timing, the firm conducts research despite the opportunities for complete free-riding. The two sequential move games with either player as leader emerge as equilibrium endogenous timings, with both entities realizing higher profits in either outcome than in a simultaneous move game. Each entity also profits more by following than by leading. Finally, as a proxy for a welfare analysis, we compare the propensities for innovation across the three scenarios and find that university leadership yields a superior performance. This may be used as a selection criterion to choose the latter scenario as the unique outcome of endogenous timing.     

The Meaning of Corporate Social Responsibility: The Vision of Four Nations

Corporate Social Responsibility (CSR) has existed in name for over 70 years. It is practiced in many countries and it is studied in academia around the world. However, CSR is not a universally adopted concept as it is understood differentially despite increasing pressures for its incorporation into business practices. This lack of a clear definition is complicated by the use of ambiguous terms in the proffered definitions and disputes as to where corporate governance is best addressed by many of the national bodies legislating, mandating, or recommending CSR. This article explores the definitions of CSR as published on the Internet by governments in four countries (United Kingdom (UK), France, the United States, and Canada). We look for a consensus of understanding in an attempt to propose a more universal framework to enhance international adoption and practice of CSR using the triple bottom line. Our results concur with the findings of both national and international bodies and suggest that both within and among the countries in our study there exists no clear definition of the concept of CSR. While there are some similarities, there are substantial differences that must be addressed. We present a number of proposals for a more universal framework to define CSR.     

Conditional versus unconditional persistence of RNOA components: implications for valuation

Financial analysis often involves decomposing variables into components, emphasizing the structured hierarchy among ratios. We distinguish between unconditional persistence (a variable’s autocorrelation coefficient), and conditional persistence (the power of a variable’s persistence to explain the persistence of a variable higher in the hierarchy). We argue that a variable’s conditional persistence determines the magnitude of its market reaction, allowing us to predict the relative magnitude of the market reaction to a ratio depending on its hierarchal level in the analysis. We examine the market reaction to the DuPont ratios and find that, while the unconditional persistence of asset turnover (ATO) is larger than that of operating profit margin (OPM), the conditional persistence of OPM is larger than that of ATO. Thus, we predict and find that the market’s reaction to OPM is stronger than that to ATO. We further decompose OPM and ATO into their second-order components and show that the market reaction depends on a component’s conditional persistence.     

A conceptual framework of adoption of an agricultural innovation

In this paper we present a conceptual framework of individual farmers' decisions on adoption of a new innovation, using the example of a new crop species. This framework overcomes the shortcomings of a number of previous studies. It represents the adoption of an innovation as a dynamic decision problem spanning at least several years. The model allows for generation of potentially valuable information from trialing the innovation. The value of such trials is due to development of skills (e.g. in agronomic management of a crop) as well as reduction in uncertainty about the innovation's long-term profitability. The framework also includes the farmer's personal perceptions, managerial abilities and risk preferences in order to properly represent the adoption decision process. The influences of socio-demographic factors within the framework are discussed.     

On the globalization of stock markets: An application of Vector Error Correction Model,Mutual Information and Singular Spectrum Analysis to the G7 countries

This paper analyzes stock market relationships among the G7 countries between 1973 and 2009 using three different approaches: (i) a linear approach based on cointegration, Vector Error Correction (VECM) and Granger Causality; (ii) a nonlinear approach based on Mutual Information and the Global Correlation Coefficient; and (iii) a nonlinear approach based on Singular Spectrum Analysis (SSA). While the cointegration tests are based on regression models and capture linearities in the data, Mutual Information and Singular Spectrum Analysis capture nonlinear relationships in a non-parametric way. The framework of this paper is based on the notion of market integration and uses stock market correlations and linkages both in price levels and returns. The main results show that significant co-movements occur among most of the G7 countries over the period analyzed and that Mutual Information and the Global Correlation Coefficient actually seem to provide more information about the market relationships than the Vector Error Correction Model and Granger Causality. However, unlike the latter, the direction of causality is difficult to distinguish in Mutual Information and the Global Correlation Coefficient. In this respect, the nonlinear Singular Spectrum Analysis technique displays several advantages, since it enabled us to capture nonlinear causality in both directions, while Granger Causality only captures causality in a linear way. The results also show that stock markets are closely linked both in terms of price levels and returns (as well as lagged returns) over the 36 years analyzed.     

Memory-Based Store Price Judgments: The Role of Knowledge and Shopping Experience

This paper investigates the processes underlying consumers’ memory-based store price judgments. The numerosity heuristic implies that the greater the number of relatively lower priced products at a store that consumers can recall, the lower will be their overall price image of the store. That is, people use the number of recalled low-price products to judge the overall store price image. We show that this expectation holds only for knowledgeable consumers. Instead, less knowledgeable consumers use the ease with which low-price products are recalled (i.e., the availability heuristic) as a cue to make store price judgments. Therefore, the fewer low-price products they recall, the easier their recall task, and the lower their price perceptions of the store.Field studies using different manipulations tested and confirmed these predictions. Managerial implications for retailers are offered. Theoretical implications for behavioral price perceptions, memory-based judgments, and the use of heuristic cues are also discussed.     

Embrace the debate: Goals,de-marketing overconsumption,and conflicting information

When faced with conflicting information, consumers often wonder what the “right” consumption level is. A highly relevant context that is often associated with such uncertainty is food consumption (e.g., of meat or dairy products), where consumers seek information to determine whether and how much to consume, and often a recommended goal from health experts is to reduce overconsumption. We apply the theory of goal settings as reflecting such information, focusing on specific goals (e.g., “eat meat twice a week”) versus general goals (“eat less meat”). Based on a series of three experiments in both online and field settings with 674 participants overall, we show that in food consumption contexts with conflicting information, general goals set by health experts are less effective than specific goals in battling overconsumption. Perceived value of information was identified as the underlying mechanism as it mediated the effect of conflicting information on reduced overconsumption. Prior work suggests conflicting information is typically disadvantageous for consumers. Our research demonstrates how consumers can benefit from communication emphasizing specific goals when information conflicts. It contributes to policymakers, health experts, and social marketers that search for effective marketing strategies to reduce overconsumption of items that may be associated with conflicting information.