Should System Firms Develop Complementary Products? A Dynamic Model and an Empirical Test

While Nintendo develops many video games internally, Apple is only marginally involved in the development of iPhone applications. This paper addresses the question: to what extent and how should system firms be involved in the development of complementary products for their “core products”? These core products may include video consoles, electronic book readers, etc. This is a highly relevant question, because the success of core products depends strongly on their complementary products, e.g., video games and electronic books. This study proposes a dynamic model for the degree that system firms should be involved in complementary product development by considering, as contingency factors, the novelty of the core, and the novelty of the complementary products. Both novelties influence the degree to which system firms should be involved in the development of complementary products. In terms of a system firm's involvement, this study makes a distinction between the degree of integration and the degree of ownership. The degree of integration reflects the extent to which the system firm is actively involved in the coordination of the complementary product, e.g., to ensure that the complementary product is optimally aligned with its core product and that the full potential of the core product is achieved. The degree of ownership reflects the extent to which the system firm finances the development of the complementary product and therefore, the degree of formal control authority over the complementary product. This model was tested using data from a survey of 99 development projects for mobile telecommunications applications. The results reveal that integration by the system firm contributes to the performance of complementary products for new core products but has a negative effect if a new complement is developed for a mature core product. In addition, ownership contributes to performance if both the core and complementary products are new. In other circumstances, a clear effect of ownership by the system firm on performance is not found. The implications of our findings are that system firms should be strongly involved in complementary product development when they introduce a new core product, and even more so if the complementary products are new. However, they should decrease their degree of involvement over time as the core product matures and, again, even more so if the complementary product is new. The paper concludes by providing practical implications for system firms in the mobile telecommunications industry and beyond.     

Following the Crowd—Does Crowdfunding Affect Venture Capitalists’ Selection of Entrepreneurial Ventures?

Given the increasing popularity of crowdfunding as a new means to finance entrepreneurial ventures, we assess whether and how crowdfunding campaign‐specific signals that affect campaign success influence venture capitalists’ selection decisions in ventures’ follow‐up funding process. Our study relies on cross‐referencing a proprietary data set of 56,000 crowdfunding campaigns that ran on Kickstarter between 2009 and 2016 with 100,000 investments in the same period from the Crunchbase data set. Drawing on signaling theory and the microfinance literature, our empirical findings reveal that a successful crowdfunding campaign leads to a higher likelihood to receive follow‐up venture capital (VC) financing, and that there exists an inverted U‐shaped relationship between the funding‐ratio and the probability to receive VC funding. Further, we find statistical evidence that an endorsement by the platform provider has a likewise positive impact on the receipt of VC. Contrary to our expectations, word‐of‐mouth volume seems to be a negligible factor when it comes to follow‐up VC financing. Our results support the view that crowdfunding signals are factored into the VC’s funding decision in order to evaluate the potential of entrepreneurial ventures.     

Aufschwung in Deutschland festigt sich trotz weltwirtschaftlicher Risiken

The German economy is already in the fifth year of a moderate upturn, which will continue in 2018. Global economic activity is also expanding rapidly. The increase in economic policy uncertainty seems to have few adverse effects on the world economy. The economic policy agenda of the new US government carries both risks and opportunities for the economic outlook for the US and the world. The Joint Economic Forecast predicts consumer prices in advanced economies to increase by 1.9% in 2018 and expects a change in the ECB’s policy.     

The impact of integrated aquaculture–agriculture on small-scale farms in Southern Malawi

Sustainable agricultural intensification is an urgent challenge for Sub-Saharan Africa. One potential solution is to rely on local farmers' knowledge for improved management of diverse on-farm resources and integration among various farm enterprises. In this article, we analyze the farm-level impact of one recent example, namely the integrated aquaculture–agriculture (IAA) technologies that have been developed and disseminated in a participatory manner in Malawi. Based on a 2004 survey of 315 respondents (166 adopters and 149 nonadopters), we test the hypothesis that adoption of IAA is associated with improved farm productivity and more efficient use of resources. Estimating a technical inefficiency function shows that IAA farms were significantly more efficient compared to nonadopters. IAA farms also had higher total factor productivity, higher farm income per hectare, and higher returns to family labor.     

Ownership concentration,foreign shareholding,audit quality,and stock price synchronicity: Evidence from China

This paper investigates the effects of largest-shareholder ownership concentration, foreign ownership, and audit quality on the amount of firm-specific information incorporated into share prices, as measured by stock price synchronicity, of Chinese-listed firms over the 1996–2003 period. We show that synchronicity is a concave function of ownership by the largest shareholder with its maximum at an approximate 50% level. Further, we find that synchronicity is higher when the largest shareholder is government related. We also find that foreign ownership and auditor quality are inversely associated with synchronicity. Finally, we show that the amount of earnings information reflected in stock returns is lower for firms with high synchronicity.     

Es gibt weiterhin ökonomische Argumente für einen öffentlichen Rundfunk

Recent economic literature criticises the size and mandate of public broadcasting in Germany. Technological progress has changed the methods of producing and distributing broadcasting content. Traditional broadcasting and print media have converged in a digital environment. Some of the classical arguments for publicly funded broadcasting have become invalid. This article argues that the converging media markets are nonetheless characterised by ongoing market failures, mostly because of positive external effects created by public value content. Markets will underprovide such content, which is why they should be publicly funded. We discuss the scope and form of public broadcasting and conclude that there are still economic reasons for dedicated public service broadcasters to exist.     

Family control, board independence and earnings management: Evidence based on Hong Kong firms

In this study, we document that independent corporate boards of Hong Kong firms provide effective monitoring of earnings management, which suggests that despite differences in institutional environments, corporate board independence is important to ensure high-quality financial reporting. The findings also show that the monitoring effectiveness of corporate boards is moderated in family-controlled firms, either through ownership concentration or the presence of family members on corporate boards. The results based on firms reporting small earnings increases provide additional support for our finding that the monitoring effectiveness of independent corporate boards is moderated in family-controlled firms.     

The organizational form of vertical relationships: Dimensions of integration

In this paper we argue that the organizational form of a buying firm's vertical relationship with a supplier can be defined as a configuration of four distinct, but related dimensions of integration. These dimensions pertain to ownership integration (the extent that the firm owns the upstream component supplier), coordination integration (the intensity of information exchange to align the two stages of production), task integration (the extent that the buying firm performs upstream tasks), and knowledge integration (the extent that the buying firm possesses knowledge about the upstream component). Ranging from fully integrated to fully disintegrated, these dimensions can be combined to form various organizational configurations that better reflect the true nature of organizational forms than one-dimensional conceptualizations. Drawing on distinct fields of research (e.g. transaction costs economics, information-processing theory, and learning) the goal of this paper is to improve our understanding of the four dimensions of integration and their interrelationships. This is an important step for future processes of configurational theory building and normative testing.