The exact likelihood function for a space time model

Recently the space time autoregressive moving average models have become popular and this paper derives the exact likelihood function for this model.     

When are preferred shares preferred? Theory and empirical evidence

This paper demonstrates that preferred stock may arise as an optimal security in a tax-induced equilibrium. This result is driven by graduated tax schedules and by uncertainty. In a more general sense, our results can be interpreted as a template for including any security with a different tax treatment in a firm's capital structure. The first part of the paper demonstrates that the Miller equilibrium framework can accommodate more than two securities if different investor classes are taxed differently on each security and the tax schedule for each investor group is upward sloping. We then simplify the tax schedule, but introduce uncertainty, which implies the possibility of bankruptcy and the possible loss of tax shelters. The interaction of tax rates and seniority now affects the contribution of each security to after-tax firm value, as in some states the firm may not be able to pay either interest (or dividends) or even principal to its various claimholders. It is shown why and how these features, i.e. the various tax rates and seniority, determine the financing equilibrium, which is obtained by equating the expected marginal tax benefit of all securities. We demonstrate that non-profitable firms will tend to issue preferred shares whereas profitable firms will not find preferred stock advantageous in our framework. Comparative statics with respect to various tax rates are derived as well. These predictions are tested using a large sample of firms for the last 25 years. The empirical testing broadly confirms the theoretical predictions.     

Assessing Organizational Adoption of Information Systems Outsourcing

The information systems outsourcing (ISO) field continues to grow, as organizations consistently seek improvements in IT activities. The global scope of outsourcing participation and growth leads to gaps of knowledge related to the contextual factors that influence ISO adoption. Using the technology-organization-environment (TOE) framework, this study identifies and contextualizes the determinants of ISO adoption. Data collected from 261 firms suggest that relative advantage, firm size, top management support, and competitive pressure are the main determinants of ISO. This study highlights the importance of assessing ISO using the TOE theoretical lens, and offers replication of prior results, the lack of which is a growing concern in social science research.     

Sectoral employment effects of trade and productivity in Europe

The impact of trade and technology in the European case is assessed. A framework is developed which incorporates employment effects of (i) export expansion (ii) import competition and (iii) labour-saving productivity improvements. In this context, evidence is found for the hypothesis that international trade induces adjustments in technology.     

How CEOs and TMTs Build Adaptive Capacity in Small Entrepreneurial Firms

Research suggests that a CEO may have more influence in the context of small entrepreneurial firms, but it is still unclear how a company's chief executive facilitates strategic decision‐making. Little is known about the ways in which these individuals build strategic capabilities, such as the capacity to adapt to changing environments. This study addresses these issues and develops a model indicating that transformational leadership facilitates behavioural integration and comprehensiveness in the decision process among members of the top management team (TMT), which in turn enhances organizational capacity to adapt to environmental changes. Survey results shed light on the complex way in which CEOs facilitate processes within the TMT and enhance small entrepreneurial firms’ capacity to adapt, thereby increasing their viability. This study contributes to the literatures on Upper Echelon Theory, strategic decision‐making, and dynamic capabilities by shedding light on the ways in which transformational leaders influence behavioural and decision‐making processes.