Navigating compromise: How founder authenticity affects venture identification amidst organizational hybridity

Founders of hybrid ventures encounter organizational tensions that can compel compromise in both their organizations' and their own personal values. Such compromises may, in turn, undermine founders' identification with their ventures. In a multi-case study analysis we examine why social entrepreneurs differ in their responses to organizational tensions, both at the firm- and individual-level, and how such differences relate to their venture identification. Specifically, our findings reveal that strategic decisions made in the context of values-based complexity are often accompanied by concerns regarding founder authenticity—that is, judgments about the alignment between founders' actions and the commitments or responsibilities associated with their identities as entrepreneurs. Yet, because founders differ in the basis from which they seek to maintain such alignment, these differences shape both hybridity management and subsequent venture identification. By unpacking such differences, our findings contribute new theory, bridging recent scholarship on founder authenticity with longstanding research on organizational identification and hybrid organizing.     

On Emissions Trading and Market Structure: Cap-and-Trade versus Intensity Standards

This paper examines the interdependence between imperfect competition and emissions trading. We particularly analyze the long run equilibrium in a two-sector (‘clean’ and ‘dirty’) model with Cournot competition among firms who face a fixed cost of production. The clean sector is defined as the sector with the highest long run cost margin on emissions. We compare the welfare implications of a cap-and-trade scheme with an emissions trading scheme based on relative intensity standards. It is shown that a firm’s long run equilibrium output in the clean or dirty sector does not depend on the emissions trading format, but only depends on the fixed cost of producing in the respective sector. Intensity standards can result in clean firms selling allowances to dirty firms, or dirty firms selling to clean firms. The former outcome yields higher welfare. It is demonstrated that cap-and-trade outperforms the intensity-based trading scheme in terms of long run welfare with free entry and exit. With intensity standards the size of the clean sector is too large.     

The political economy of decarbonisation: from green energy ‘race’ to green ‘division of labour’

This paper aims to provide an addendum to the rapidly growing concept of a global ‘green energy race’ between major states. It argues that although this framing has been useful in underscoring important dynamics in the process of decarbonisation, its narrow focus on installed capacity obscures a much broader and more complex process at play. In particular, it overlooks the critical role played by states aggressively investing in R&D and export manufacturing in the renewable energy sector. The paper thus supplements the concept of a green ‘energy race’ with that of a green ‘global division of labour’, which sees the process of decarbonisation not exclusively as an effort by individual states to install renewables domestically, but rather as a collective and interdependent process by dozens of states, all striving in different ways to promote capital accumulation on their soil. The paper provides an overview of data covering innovation, manufacturing and deployment in the clean energy sector, and offers a theoretical analysis of the trends observed.     

Your Governance or Mine?

In response to criticism directed at the resource sector's corporate governance, this paper examines the corporate governance and underlying firm characteristics of resource development stage entities (DSEs) relative to a size‐matched sample of non‐resource firms. We find that resource DSEs have different governance characteristics in the measures of board independence, chair/CEO duality and CEO cash bonuses. Furthermore, there are differences in the information environment measures of analyst following, debt levels, stock market return and stock turnover. Considering we document substantial differences in underlying firm characteristics, corporate governance differences are likely appropriate to the mining industry and should not be uniformly labelled as ‘bad’. Our results suggest that media rankings based on corporate governance scores may not accurately portray the resource sector. Overall, our results are of interest to Australian investors and regulators and contribute to a broader understanding of contextually contingent corporate governance.     

Why did the equity home bias fall during the financial panic of 2008?

Investors tend to put most of their wealth in local stocks; theories of portfolio choice and uncertainty aversion jointly predict that this home bias should increase during a financial crisis. Yet, using a sample of 45 countries, I document that the equity home bias fell during the financial panic of 2008. Exploiting bilateral stock holdings, I find that investors actively increased their home bias, but large valuation changes subsumed these trades. Across countries, the change in home bias is consistent with partial portfolio rebalancing and increased information asymmetries during the crisis.     

The effect of activity identity fusion on negative consumer behavior

Negative consumer behavior is an important research topic as it explores consumer behaviors that threaten a brand's image and financial stability. However, prior research offers conflicting findings on whether a strong consumer‐brand relationship hurts or protects a brand after a market disruption or a brand transgression. To provide clarity on this issue, this work argues that disrupting the consumer‐activity relationship motivates consumers to reaffirm and protect their identity, thereby leading to negative consumer behavior. The data reveal that, after a brand‐initiated market disruption, consumers with high activity identity fusion are more likely to spread negative word‐of‐mouth, boycott the brand, and avoid repurchasing the brand in the future. Moreover, the data suggest that high brand identity fusion protects the brand during market disruptions; therefore, prior conflicting results may be due to the fact that the consumer‐activity relationship was not accounted for. Theoretically, this work establishes that consumers' relationship with their consumption activities has significant impacts on consumer behavior. Brand managers and marketers are urged to develop strategies that focus on strengthening the consumer‐brand relationship and not the consumer‐activity relationship.     

Customer and Supplier Portfolios: Can Credit Risks be Managed Through Supply Chain Relationships?

While supply chain risk has been the subject of an ever‐increasing amount of research attention, the importance of credit risk has been less studied, at least by supply chain researchers. Yet, there may be risks inherent within a firm's portfolios of supply chain relationships that are manifested in the credit risk of a firm. Moreover, portfolio characteristics may serve as a signal to the external market regarding these risks. While customer and supplier portfolio characteristics may impact the firm's exposure to risks, the specific issue of how portfolio characteristics relate to credit risk has rarely been examined by supply chain scholars. This research bridges extant works in supply chain management and finance to relate supply chain characteristics to a critical reputational outcome, namely credit ratings. In this research, we utilize a sample of firms that recently underwent an initial public offering to empirically examine the theoretical predictions of Resource Dependence Theory regarding the relationships between different supply chain portfolio characteristics and credit risk.     

The Moral Disillusionment Model of Organizational Transgressions: Ethical Transgressions Trigger More Negative Reactions from Consumers When Committed by Nonprofits

Journal of Business Ethics - We tested whether the impact of an organizational transgression on consumer sentiment differs depending on whether the organization is a nonprofit. Competing hypotheses...     

Land price diffusion across borders – the case of Germany

ABSTRACT

Land market regulations are often justified by the assumption that activities of foreign and non-agricultural investors drive up prices in domestic land markets. However, empirical knowledge about the dynamics of agricultural land prices across borders is sparse. Using the German reunification as a natural experiment, we study the effect of the former inner German border on the dynamics of agricultural land prices in East and West Germany. We apply a land price diffusion model with an error correction specification to analyse spatial agricultural land markets. A novel feature of our model is its ability to distinguish price diffusion within states and across state borders. We provide evidence for a persistent border effect given that the fraction of spatially integrated counties is larger within states than across the former border. Moreover, we observe non-significant error correction terms for many counties along the former border. From a policy perspective, it is striking to realize that even 25 years after German reunification, pronounced land price differences persist. It is quite likely that price diffusion through existing borders within the EU would take even more time given language barriers, different institutional frameworks, and information asymmetries between domestic and foreign market participants.