Recruiting outside board members in the small family business: an ideological challenge

The focus of this paper is to explore how contrasting ideologies influence the selection process of outside directors in the small family business. Small family businesses donot just represent smallscale economic activity but they are the outcome of entrepreneurial ambition and family involvement. This means that willpower and emotional commitment blend with calculative considerations. As emotional as well as cognitive constructs the family, management and entrepreneurship each represent an ideology: paternalism, managerialism and entrepreneurialism. The proposed ideological framework is positioned against alternative approaches to the study of board selection processes. Two sets of data are presented. A piloting survey of 12 family businesses is used to substantiate the theoretical assumption that entrepreneurial firms avoid having outside directors and managerial firms welcome outside directors, leaving paternalistically-run family businesses ambivalent. Repeated in-depth interviews in two family businesses, one founder-managed and entrepreneurial, the other established and traditional, reveal how the professionalization of the board enforces managerialism, challenging thus far dominating ideologies, entrepreneurialism and paternalism. The outcome of this ideological contest, if properly orchestrated, is an energized and more competitive family business.     

Board composition in small enterprises

This paper reports the results of three empirical studies of boards of directors in small enterprises in Norway. Most studies of boards of directors are concerned with the situation in large corporations. This article provides insights into board attributes and board functions in small firms. The Studies reported found that board composition is an important factor in describing and analyzing directorates. They also found that the composition of the board of directors is a function of company size and ownership structure, and that board composition varies with industry. The studies found differences in the board's strategy involvement between industries.     

International Procurement as a Signal of Export Quality

In 1996, the British Government was accused of a protectionist 'buy British' campaign when it awarded a contract for army ambulances to Land Rover. We present a model where the procurement decision of the government affects the perception of consumers in the rest of the world about the quality of the domestic firm's product relative to that of a foreign rival's product. The model compares the outcome when the government's only concern is value for money with the outcome when the government takes account of the effect of its decision on export sales of the domestic firm.     

GIFFEN'S PARADOX REVISITED

The main argument of this paper is that the theoretical definition of Giffen's paradox is ambiguous to the extent that it ignores the initial endowments of the consumer. A Slutsky equation incorporating positive initial endowments is used to discuss the Irish demand for potatoes in 1845-49, and some conditions to test whether or not the Irish potato was a Giffen good are deduced.     

The role of implied volatility in forecasting future realized volatility and jumps in foreign exchange,stock, and bond markets

We study the forecasting of future realized volatility in the foreign exchange, stock, and bond markets from variables in our information set, including implied volatility backed out from option prices. Realized volatility is separated into its continuous and jump components, and the heterogeneous autoregressive (HAR) model is applied with implied volatility as an additional forecasting variable. A vector HAR (VecHAR) model for the resulting simultaneous system is introduced, controlling for possible endogeneity issues. We find that implied volatility contains incremental information about future volatility in all three markets, relative to past continuous and jump components, and it is an unbiased forecast in the foreign exchange and stock markets. Out-of-sample forecasting experiments confirm that implied volatility is important in forecasting future realized volatility components in all three markets. Perhaps surprisingly, the jump component is, to some extent, predictable, and options appear calibrated to incorporate information about future jumps in all three markets.     

NUMERICAL DISTRIBUTION FUNCTIONS OF FRACTIONAL UNIT ROOT AND COINTEGRATION TESTS

We calculate, by simulations, numerical asymptotic distribution functions of likelihood ratio tests for fractional unit roots and cointegration rank. Because these distributions depend on a real‐valued parameter b which must be estimated, simple tabulation is not feasible. Partly owing to the presence of this parameter, the choice of model specification for the response surface regressions used to obtain the numerical distribution functions is more involved than is usually the case. We deal with model uncertainty by model averaging rather than by model selection. We make available a computer program which, given the dimension of the problem, q, and a value of b, provides either a set of critical values or the asymptotic P‐value for any value of the likelihood ratio statistic. Copyright © 2012 John Wiley & Sons, Ltd.     

Markov switching causality and the money–output relationship

The causal link between monetary variables and output is one of the most studied issues in macroeconomics. One puzzle from this literature is that the results of causality tests appear to be sensitive with respect to the sample period that one considers. As a way of overcoming this difficulty, we propose a method for analysing Granger causality which is based on a vector autoregressive model with time‐varying parameters. We model parameter time‐variation so as to reflect changes in Granger causality, and assume that these changes are stochastic and governed by an unobservable Markov chain. When applied to US data, our methodology allows us to reconcile previous puzzling differences in the outcome of conventional tests for money–output causality. Copyright © 2005 John Wiley & Sons, Ltd.