Professional influence: the effects of investment banks on clients' acquisition financing and performance

This study examines the conditions in which professional firms use client engagements to get clients to subsequently hire them. The central thesis is that professional firms derive power from their specialized expertise and lead clients towards complex problems that apply the expertise. In particular, relative to cash‐financed acquisitions, stock‐financed acquisitions more intensively apply investment banks' expertise. Consistent with expectations, results from a sample of 404 acquisitions show that firms are more likely to hire banks on stock‐financed acquisitions when they have previously used banks. Evidence also suggests that clients that hire banks on such acquisitions are prone to adverse performance from them. Overall, these results suggest that professional firms lead clients to complex solutions with problematic outcomes. Copyright © 2003 John Wiley & Sons, Ltd.     

WHEN‐ISSUED SHARES,SMALL TRADES,AND THE VARIANCE OF RETURNS AROUND STOCK SPLITS

The increases in volatility after stock splits have long puzzled researchers. The usual suspects of discreteness and bid‐ask spread do not provide a complete explanation. We provide new clues to solve this mystery by examining the trading of when‐issued shares that are available before the split. When‐issued trading permits noise traders to compete with a more homogenous set of traders, decreasing the volatility of the stock before the split. Following the split, these noise traders reunite in one market and volatility increases. Thus, the higher volatility after the ex date of a stock split is a function of the introduction of when‐issued trading, the new lower price level after the split date, and the increased activity of small‐volume traders around a stock split.     

Explaining the entrepreneurial orientation–performance relationship in emerging economies: The intermediate roles of absorptive capacity and improvisation

Research has established the relevance of entrepreneurial orientation (EO) to firm performance but skepticism remains because of the ambiguity surrounding how EO might improve firm performance. We examine the key concepts of absorptive capacity and improvisation as two alternative learning modes serving as intermediate steps between EO and firm performance. Locating our study within manufacturing SMEs in Malaysia, we find that absorptive capacity enhances the EO–performance relationship, both as a moderator and a mediator. In contrast to expectations, however, improvisation showed no such effects but conferred its own separate benefits instead. We further discuss the different effects of these learning modes on high performance and low performance groups.     

Developing relationships in innovation clusters

ABSTRACT

This study assesses the composition of micro-level behaviours embedded within innovation clusters. Drawing on network theory of innovation, we examine the relational complexities of a specific university-business form of clustered exchange to characterise the actor level behaviours that influence the breadth and spread of network involvement. Whilst some current research posits behavioural attributes of clustered networks, there have been few studies that have focused on the extent of influence that individuals have on the development of value creating relationships, the roles individuals play and the various factors that have the potential to impact their effectiveness. This conceptual development study provides insights into the actor-level behavioural features that play a central role in promoting the innovation effectiveness of these regions. The findings of this three year long ethnographic study suggest that in the face of resource constraints individuals act as agents in creating and sourcing external input for the benefit of their projects. This has implications for policy-makers as well, as our findings suggests that policies should be shaped to provide enabling factors for boundary-spanning, thus allowing relationships to be equipped with the ability to manage complex partner contexts to access the benefits of diversity.     

Green growth versus economic growth: Do sustainable technology transfer and innovations lead to an imperfect choice?

A concern with the mitigation of climate change cuts a transversal line across economic agents, epitomized by two contradictory viewpoints. Some defend that green growth can be achieved without harming economic growth; others argue that it is not possible to respect sustainability if intensive consumption of goods continues to foster economic growth. Our research aims to analyze the role that sustainable technology transfer and sustainable innovations play in green growth and ascertain the impact of green growth on economic growth. We use aggregated country-level data provided by the OECD, including national accounts, population, and environment statistics (including patents) between 1990 and 2013 for 32 countries, corresponding to an unbalanced panel of 591 observations. We estimate econometric models based on dynamic panel methodologies to capture differences that exist over time. The results show that sustainable technology transfer and sustainable innovation promote green growth, which in turn positively impacts economic growth. We contribute new insight to the green growth versus economic growth debate and provide several political and management implications.     

Conflict and Confluence: The Multidimensionality of Opportunism in Principal–Agent Relationships

This comparative study explores 499 corporate social responsibility (CSR) initiatives implemented by 178 corporations in five distinct, institutionally consistent European clusters. This study provides an empirically grounded response to calls to develop comprehensive, nuanced pictures of CSR in the composite European business environment. In so doing, the article stresses three distinct, non-exclusive approaches that characterize the embedding of CSR considerations in corporations’ strategies across Europe and the CSR challenges for corporations operating in different socio-political contexts. Furthermore, the study reaffirms the CSR notion as a contextualized concept, shaped by socio-political drivers, and contributes by bridging macro-level, socio-political facets of CSR with its meso-level, organizational implications.     

Shrinkage estimation of Kelly portfolios

Although the Kelly portfolio is theoretically optimal in maximizing the long-term log-growth rate, in practice this is not always so. In this paper, we first show that the sample plug-in estimator of the Kelly portfolio weights is actually biased, and we then propose an unbiased estimator as an alternative. We further derive a shrinkage estimator under the objective of minimizing the expected growth loss of the actual growth relative to the true growth. An explicit formula for the shrinkage coefficient is established. Statistical properties for the shrinkage coefficient are studied through extensive Monte Carlo simulations, and conditions for obtaining accurate estimates for the shrinkage coefficient are also discussed. The effectiveness of the proposed unbiased and shrinkage Kelly portfolios in reducing the expected growth loss are validated by various simulation studies. It is found that our proposed shrinkage Kelly portfolio has superior performances in growth loss reduction, followed by the unbiased Kelly portfolio, and the sample plug-in Kelly portfolio. The advantages of our proposed unbiased and shrinkage Kelly portfolios for long-term investments are additionally confirmed by stock investment in the U.S. market.     

Cross‐modal Interactions between Color and Texture of Food

Color has a profound influence on human perception. Not only does it cause changes in physiological or emotional states, it can shape what is perceived in other sensory modalities. However, the body of research on these “cross‐modal” experiences has predominantly examined color's influence on taste and smell. As such, the aim of this study was to identify the cross‐modal influence of color on the sense of touch. In four experiments involving food products, the cross‐modal interaction between color and texture was found to be automatic, unlearned, and a moderating effect on perceived texture. Furthermore, results indicate a person's haptic predisposition, or “need for touch,” influences their sensitivity to these cross‐modal effects. This research builds on current theory involving color, presents a number of areas for future research, and discusses managerial implications of color–texture cross‐modal interactions.     

Priming skepticism: Unintended consequences of one-sided persuasion knowledge access

Scholars have historically assumed that consumers' persuasion knowledge is invariably linked to skepticism about advertising and marketing. As a result, studies have often used skepticism-focused stimuli to prompt persuasion knowledge access. However, as originally conceptualized, persuasion knowledge also includes an understanding of persuasion tactics that are trusted and believed, which suggests that accessing persuasion knowledge does not necessarily make consumers more skeptical. In this paper, we propose that, for at least some persuasion knowledge research questions, skepticism-focused interventions may be too “one-sided” because they bias participants to consider only the skeptical side of persuasion knowledge. The purpose of the present research is to test whether the “one-sided” persuasion knowledge interventions that are used in persuasion knowledge research encourage skepticism more than balanced interventions that focus consumers on the negative and positive motives that may underlie persuasive communication. Across three experiments with three distinct subject pools and over 2,500 participants, we demonstrate that one-sided versus balanced manipulations of persuasion knowledge can have differential effects on consumer skepticism. This is an important finding because skepticism-focused operationalizations are frequently employed in persuasion knowledge research.