Cross-country evidence on the link between the level of infrastructure and capital inflows

The relationship between public infrastructure and international capital flows is empirically investigated. Out of a sample of 30 countries a cross-sectional econometric model is constructed to estimate the effects. Different components of infrastructure variables are tested in relation to their impact on different kinds of external capital liabilities. The results suggest a positive relationship between the level of infrastructure and capital inflows. However, statistical significance cannot be established for all variables in question.     

The role of the entrepreneurial team and the board of directors in the internationalization of academic spin-offs

This study addresses the roles of the entrepreneurial team and the board of directors in the internationalization of academic spin-off companies. The study is based on a quantitative analysis of 109 spin-offs from Norwegian academic institutions. The findings suggest that academic spin-offs are more likely to achieve both international strategic alliances and international sales with entrepreneurial teams having industrial experience that is both highly homogeneous (where each member has work experience in the same industry) and highly diverse (where each member has work experience in different industries) and board members that have diverse functional backgrounds. Firms that are less dependent on networking by board members to increase legitimacy and build relationships with potential foreign customers are more likely to achieve international sales.     

Ist die Katharsis-Theorie zu retten?

Catharsis theory is regarded as refuted. This widespread belief can be questioned for two reasons. First, most test films used in experimental studies do not meet the requirements of catharsis theory; second the social consequences of catharsis were not measured. Two films were produced for our experiment, one which meets the requirements of catharsis theory and should reduce aggressiveness and one which, according to alternative theories, should increase aggressiveness. A control group saw a neutral film. As dependent variables (a) level of general aggression, (b) aggressive inclinations in social situations, and (c) willingness to use aggressive stereotypes were measured. The film that was assumed to reduce aggressiveness increased aggressiveness even more than the film that was assumed to increase it. This surprising finding and its consequences are discussed.     

The relationship between private investors and small firms: an agency theory approach

Many small firms in Sweden are characterized by a lack of equity capital. For several years measures to increase the equity capital have been discussed. In this discussion the private investors' market has received virtually no attention. This study presents some preliminary results of the private investors in Sweden.

The research in small firms financing is characterized by a lack of theoretical framework. One basic assumption in the study is that agency theory can provide an essential framework to explain the interaction between the private investor and entrepreneur. Twenty-five hypotheses generated from agency theory are formulated and tested on 62 small unlisted firms in Sweden. Multiple regression analysis is used for the causal analyses.

The empirical results in the study show inter alia that the geographic distance and the private investor's knowledge about the portfolio firm's transformation process seem to be the most influential factors for determining the private investor's involvement in the portfolio firms. It is also interesting to notice that none of the variables, frequency of contacts and the private investor's operational work in the portfolio firm affect the performance of the firm. Contrary to conventional wisdom, private investors do not add value to their portfolio firms through their interaction with the entrepreneurs.

The theoretical conclusion is that agency theory does not provide any satisfactory framework to explain the private investor - entrepreneur relationship. Some of the basic assumptions in agency theory seem to be invalid. A model for the relationship between private investors and entrepreneurs is developed in which four interaction strategies are identified. The model gives implications on two levels: the portfolio level and the individual case level.     

Assessing social support networks in cross-national comparative surveys: Measurement issues

In recent years many cross-national comparative surveys, such as Gender and Generation Programme, International Social Survey Programme, European Quality of Life Survey, or General Social Survey, have included assessment of social support networks. Generally, two approaches were used; the name generator approach and the role relation approach. As more cross-country surveys are conducted every year, it may seem reasonable to use such data sets, since they provide high quality comparisons across countries. However, one should pay close attention to the measurement instruments, as these may cause unintentional but systematic variability in the observed data. While the data from each survey can be of high quality ??per se??, we claim that results from these surveys are not comparable, owing to their different measurement approaches and survey instruments. In this paper we present data from several experiments which show that scientific findings from these surveys depend significantly on questionnaire design.     

Job Loss and Entrepreneurship

We examine the impact of job loss on entrepreneurship behaviour. Our identification strategy relies on the use of mass layoffs caused by bankruptcies as indicators of exogenous displacement. Building on Norwegian register data, we find that working in a company which is going to close down due to bankruptcy in the near future raises the subsequent entrepreneur propensity by 155% for men and 180% for women, compared to working in a stable firm. These estimates are much larger than previously reported in the literature. Taking into account that many workers lose their jobs in the comparison group of stable firms also, we suggest that the full effects of displacement are even larger.     

Learning to trust strangers: an evolutionary perspective

What if living in a relatively trustworthy society was sufficient to blindly trust strangers? In this paper we interpret generalized trust as a learning process and analyse the trust game paradox in light of the replicator dynamics. Given that trust inevitably implies doubts about others, we assume incomplete information and study the dynamics of trust in buyer-supplier purchase transactions. Considering a world made of ??good?? and ??bad?? suppliers, we show that the trust game admits a unique evolutionarily stable strategy: buyers may trust strangers if it is not too risky to do so. Examining the situation where some players may play either as trustor or as trustee we show that this result is robust.     

PIGS or Lambs? The European Sovereign Debt Crisis and the Role of Rating Agencies

This paper asks whether rating agencies played a passive role or were an active driving force during Europe??s sovereign debt crisis. We address this by estimating relationships between sovereign debt ratings and macroeconomic and structural variables. We then use these equations to decompose actual ratings into systematic and arbitrary components that are not explained by previously observed procedures of rating agencies. Finally, we check whether systematic, as well as arbitrary, parts of credit ratings affect credit spreads. We find that both do affect credit spreads, which opens the possibility that arbitrary rating downgrades trigger processes of self-fulfilling prophecies that may drive even relatively healthy countries towards default.     

BOOK REVIEWS

Purpose: Companies engage in business relationships for a variety of reasons, including specialization, product development, and building competitive networks. Research has demonstrated that mergers and acquisitions (M&As) may challenge ongoing business relationships. The purpose of this article is to investigate whether and how competition authorities consider business relationships when evaluating M&As.

Methodology: The article uses the documentation from 450 M&As reported to the Swedish competition authority to capture the way in which an authority evaluates M&As. The Swedish competition authority evaluation corresponds to other national and international evaluation procedures.

Findings: The findings indicate that the competition authorities neglect an important aspect of business life, namely companies forming business relationships. The competition authorities evaluate M&As on the basis of risk for price increases, and consequently disregard such issues as heterogeneity in demand and offerings, and values built into existing business relationships.

Originality/Value/Contribution: The article contributes to research on business relationships through exploring how a public authority deals with such relationships. It also contributes to research on mergers and acquisitions through examining how these activities are evaluated by competition authorities. Furthermore, the article contributes to competition research by reflecting on competition law concerning M&A regulations in relation to business relationships.     

Exploring preconditions for open innovation: Value networks in industrial firms

The open innovation model embraces the purposive flow of internal and external ideas as a foundation for innovation and network formation. While the open innovation paradigm has been successfully applied in high-tech settings, there is a lack of research on adopters of open innovation in other settings. We describe a case study conducted in a process industry setting, focusing on the LKAB mineral group as it makes a transition from a closed to a more open innovation context by adopting remote diagnostics technology. This process has resulted in the creation of new value networks. By tracing the reasoning behind the organizational transformation and studying the technology used to carry it through, we seek to explore the preconditions for open innovation and provide insight into the role of IT in the process. Our findings show that adoption of the open innovation model is grounded in developing organizational environments that are conducive to innovation, including expertise in creating a culture for knowledge sharing, building a trustful environment, and a resourceful use of IT.