How do networks and learning drive M&As? An institutional comparison between China and the United States

What drives mergers and acquisitions (M&As) in different institutional environments? This article builds on the resource dependence perspective and argues that networks, learning, and institutions represent three building blocks that can enhance our understanding of the drivers behind M&As. Specifically, we consider firms as learning actors embedded in network relations and influenced by institutional development, and compare and contrast firms' acquisition activities across the United States and China. Our findings show that there are indeed important learning and network factors that lead to M&As. More interestingly, the impact of such learning and network factors varies sharply across countries with different market‐based institutions. Copyright © 2009 John Wiley & Sons, Ltd.     

The rise of corporate governance in corporate control research

This article has two related tasks. First, we review the articles published in this Special Issue on Corporate Control, Mergers, and Acquisitions. These articles provide new evidence on several aspects of corporate control and governance including the value and performance effects of various ownership groups, the impact of internal governance structures, the effects of regulatory changes on specific industries and evidence on bidding strategies in takeovers. This analysis leads us to our second task – to examine the evolution of corporate control research, broadly defined. Our analysis shows a movement in research from mergers and acquisitions to a broader analysis of corporate governance, especially internal governance features. We suggest that there is a trend toward an increase in the relative importance of internal governance compared to discipline from the market from corporate control. This trend reflects an important change over the past several decades in the means through which the market disciplines corporate behavior.     

Would Switching to Timely Reviews Delay Quarterly and Annual Earnings Releases?

The SEC recently issued a proposal to modernize and clarify the regulatory structure of securities offerings. The proposal would allow companies to access capital markets on an almost continuous basis but would require strengthening of the role of independent accountants and other gatekeepers in the registration process. The Commission is seeking comment on whether it should add to the proposed practices the fact than an independent accountant performed a timely review under SAS 71 of an issuer's quarterly financial information (SEC, 1998, p. 231). This is the most recent of several proposals, made by the SEC and others, that provides incentives for companies to purchase quarter-end (timely) reviews of their quarterly data. Some managers who currently have their quarterly earnings reviewed only at year-end (retrospective reviews) argue that having a timely review would delay interim earnings releases. Proponents of timely reviews deny that this would occur, and assert that shifting certain review procedures into interim periods would decrease the time needed to release annual earnings.We estimate the quarterly and annual reporting lags that would occur if companies currently selecting retrospective reviews switched to timely reviews. Our results indicate that quarterly earnings release lags would increase, as opponents of mandatory timely review have argued. Switching to timely review would reduce annual earnings release lags only when interim earnings contain unusual components.     

Venture Capital and Private Equity: A Review and Synthesis

This paper reviews the existing literature on venture capital and private equity. The paper emphasises the importance of examining venture capital in the light of recent developments in corporate finance and its distinctiveness from other forms of finance. In order to understand current developments, the paper adopts a framework which combines industry/market and firm levels of analysis. Existing literature is reviewed using this framework. Industry level issues relate to rivalry between firms, the power of suppliers and customers, and the threats from new entrants and substitutes. Firm level issues concern deal generation, initial and second screening, valuation and due diligence, deal approval and structuring, post-contractual monitoring, investment realisation, and entrepreneurs' exit and recontracting with venture capitalists. This is followed by a review of the evidence on the performance of venture capital firms. The paper suggests potentially fruitful areas for further research including the extension of analysis to cover all stages of venture capital investment, examination of the inter-linkages between industry and firm level issues and between stages in the venture capital process, as well as further analysis of deal structuring issues and investment realisation and recontracting.     

Tackling Social Exclusion in the European Union? The Limits to the New Orthodoxy of Local Partnership

This article is based on recent transnational research on partnership‐based initiatives to promote local development and regeneration and combat social exclusion in the EU. The increasing reliance on partnership as the basis for local policy initiatives is first situated in the context of contemporary debates about social exclusion. The main part of the article then draws on the literatures on local governance and urban regime theory to examine three issues critical to the impact of the ‘new orthodoxy’ of local partnership: the capacity of partnerships as interorganizational forms of local governance; their inclusiveness; and the extent of outcomes which can be attributed to partnership as a distinctive mode of local governance. On all three issues, the evidence points to the limited claims that can be made for most local partnerships as ‘inclusion coalitions’ capable of effectively tackling social exclusion, and suggests that structural features of the currently dominant version of partnership entrench a model of elite rather than inclusive governance. Local partnership is associated with weak rather than strong discourses of social exclusion and inclusion, and its significance lies as much as anything in the way in which the practice of partnership tends to foreclose the sphere of debate and action, excluding more radical options. Cet article se fonde sur une récente étude transnationale concernant l'UE et portant sur les initiatives de partenariat visant à promouvoir le développement et la régénération sur le plan local, tout en combattant l'exclusion sociale. Le recours croissant au partenariat comme base des initiatives de politique locale est d'abord resitué dans le cadre des débats contemporains sur l'exclusion sociale. L'article, qui s'inspire des travaux sur la gouvernance locale et les régimes urbains, examine trois points essentiels pour l'influence de la ‘nouvelle orthodoxie’ du partenariat local: la capacité des partenariats en tant que formes de gouvernance locale inter‐organismes, leur nature inclusive, ainsi que la part des résultats qui leur revient au titre de mode distincif de gouvernance locale. Sur ces trois aspects, les faits soulignent la portée limitée que peuvent revendiquer la plupart des partenariats locaux comme ‘coalitions d'inclusion’ capables de traiter efficacement l'exclusion sociale; les résultats suggèrent en outre que les caractéristiques structurelles du partenariat, dans sa version dominante actuelle, enracinent un modèle élitiste plutôt qu'une gouvernance inclusive. Le partenariat local est associéà des propos sur l'exclusion et l'inclusion sociale plus complaisants que percutants, et sa place tient tout autant à la manière dont son exercice tend à figer la sphère de débats et d'actions, excluant toute option plus radicale.     

A study of HRM and recruitment and selection policies and practices in Taiwan

In this paper, the authors present and discuss the findings of a survey of human resource management (HRM) and recruitment and selection policies and practices in a sample of manufacturing industry in Taiwan. The results indicate that there is a general desire among HR professionals in participant companies that HRM policies are integrated with corporate strategy and that HRM should be involved in decision making at board level. Evidence was also obtained that some HRM decisions are shared between line management and HR specialists and that line managers had a particularly influential role in decisions regarding recruitment and selection, training and development, and workforce expansion/reduction. There was also some evidence supporting an assertion that certain recruitment and selection practices were culturally sensitive and this was supported by evidence of association between recruitment and selection practices and country of ownership.