Size and diversity in VC syndicates and their impact on IPO performance

This paper investigates the impact of venture capital (VC) syndicate size and composition on the IPO and post-IPO performances of investee companies in an attempt to shed some light on the extent to which larger and more diverse syndicates are more likely to suffer from internal agency problems which might hinder the decision-making process and lead to less value added for their portfolio companies. The question is of great relevance because, while the vast majority of the empirical literature compares VC backed IPOs with non-VC backed ones, most VC funding is provided by syndicates of two or more financiers. We construct alternative measures of size as well as diversity based on several VC characteristics such as age, geographic location, type and affiliation of VC firms and find that larger and more diverse syndicates are associated with higher underpricing and lower valuation at the IPO date. Furthermore, we provide evidence that that diversity and size are negatively correlated to the long-term performance of the IPO firms and this finding is robust to several alternative measures of long-term performance.     

Learning through creating robotic models of biological systems

This paper considers an approach to studying issues in technology and science, which integrates design and inquiry activities towards creating and exploring technological models of scientific phenomena. We implemented this approach in a context where the learner inquires into a biological phenomenon and develops its representation in the form of a robotic model. Our multi-case study involved middle school students and prospective teachers. We considered learning processes, in which the learners used PicoCricket robot construction kits to create a variety of bio-inspired robotic models. We present two such models and the teaching strategy which organizes modeling activities into five learning stages. Based on analysis of learning activities and their outcomes along with the studied cases, we explored characteristics of the learning environment and of the proposed integrative teaching approach. The findings indicate the potential of modeling as a thread, tying together engineering design and scientific inquiry into an integrative learning activity.     

Fair value and audit fees

This paper investigates the effect of fair value reporting and its attributes on audit fees. We use as our primary sample the European real estate industry around mandatory IFRS adoption (under which reporting of property fair values becomes compulsory), due to its unique operating and reporting characteristics. We document lower audit fees for firms reporting property assets at fair value relative to those employing depreciated cost—a difference that appears driven, in part, by impairment tests that occur only under depreciated cost. We further find that audit fees are decreasing in firms’ exposure to fair value and increasing both in the complexity of the fair value estimation and for recognition (versus only disclosure) of fair values. We corroborate our findings in two alternative settings: contrasting UK and US real estate firms and using UK investment trusts. Overall, the results suggest that fair values can lead to lower monitoring costs; however, any reductions in audit fees will vary with salient characteristics of the fair value reporting, including the difficulty to measure and the treatment within the financial statements.     

Productivity growth and inter-sector spill-over in Dutch horticulture, 1976–1995

This article calculates nonparametric measures of total factor productivity growth on Dutch horticultural firms in the period 1976–1995. Individual components of total factor productivity growth, i.e., efficiency change and technical change are regressed on socioeconomic factors reflecting the effects of the world oil crises, household and demographic characteristics, location, and investment in physical capital. Also, the article investigates the presence of inter‐sector spill‐overs between groups of firms with different specializations in Dutch horticulture.     

Variable neighborhood search heuristic for nonconvex portfolio optimization

Abstract

In this article we consider a portfolio optimization problem under multiple real-world constraints, such as: cardinality constraints, tracking error, active share, and turnover. We propose a heuristic based on variable neighborhood search (VNS) that effectively addresses additional constraints that introduce non-convexities. In the VNS-based heuristic, several neighborhood structures are introduced and fast local search is implemented. We develop a VNS portfolio rebalancing framework (VNS-PRF) with two rebalance strategies. Data sets provided by a financial investment firm are used to evaluate the validity and reliability of the proposed VNS-PRF. Computational experiments and different portfolio performance measures indicate that our approach is able to obtain solutions with competitive quality and can be applied on large-scale data sets.     

Strategic issue management

The paper presents a systematic approach for early identification and fast response to important trends and events which impact on the firm. Two versions of such an approach are described: a strong signal and a weak signal strategic issue management system. Strategic issue management, which responds to signals in “real time”, is compared to periodic strategic planning, and criteria for choice among the three are proposed.     

Privatization, insider control and managerial entrenchment in Russia

This paper provides new survey evidence on managerial entrenchment and the role of outsiders in the post-privatization restructuring of Russian enterprises. The major findings are that managers are hostile towards outside ownership, and they effectively collude with other employees to preserve insider control. The paper also provides empirical evidence that the gradual accumulation of shares by managers is not based only on a profit motive, but is also driven by their efforts to preserve insider control. The issues raised have relevance to other transition economies where the privatization process has encouraged insider control, such as Ukraine and Belarus.     

A new parametric model for converting excess mortality from clinical studies to insured population

We propose a new parametric model – the generalized excess mortality (GEM) model – for converting excess mortality from clinical to insured population. The GEM model has been formulated as a generalization of the excess death rate (EDR) model in terms of a single adjustment parameter (m) that accounts for a partial elimination of a clinical study’s EDR due to the underwriting selection process. The suggested value of the parameter m depends only on the ratio of the impairment’s prevalence rate in the insured population to that in the clinical population. The model’s development has been implemented in two phases: the design phase and the validation phase. In the design phase, the data from the National Health and Nutrition Examination Survey I pertaining to three broad impairments (diabetes, coronary artery disease, and asthma) have been used. As a result, the following equation for the parameter m has been proposed: m_k?=?(P_i,k/P_c,k)ⁿ, where P_i,k, P_c,k are the prevalence rates of impairment k under study in the insured and the clinical populations, respectively, and n a single universal parameter with its value best approximated as n?=?0.5 (95% confidence interval 0.5–0.6). In the validation phase, several independent clinical studies of three other impairments (Crohn’s disease, epilepsy, and chronic obstructive pulmonary disease) were used. As it has been demonstrated in the validation phase, for a number of impairments, the GEM model can provide a better fit for observed insured population mortality than either one of the conventional EDR or mortality ratio models.     

Age and gender differences between pupils’ preferences in teaching general and compulsory technology education in Croatia

International Journal of Technology and Design Education - Today’s dynamic change of the pupils’ technological environment certainly affects their preferences towards technology, which...     

Asymmetric trading by insiders – comparing abnormal returns and earnings prediction in Spain and Australia

This paper examines whether the ‘external governance’ imposed by comparative financial accounting standards reduces the trading advantage of insiders. We do this by directly comparing insider trading returns and insider’s ability to predict future earnings from accruals in Spain and Australia. Results show higher excess returns and greater prediction of future earnings from conditioned insider trading in Australia that is then utilized by financial analysts to lower forecast errors – particularly in contrarian‐based accruals trading. Possible explanations include: (i) a high asymmetric quality for market‐based accruals, (ii) information transfer from informed insiders to uninformed insiders and financial analysts and (iii) a more timely dissemination of financial information in Spain through different ownership and governance structures.