Determinants of early internationalization of new firms: the case of Chile

The aim of this article is to analyze the factors related to the early internationalization of new firms in Chile. We grouped the internationalization driver factors into three categories: individual, organizational, and firm-environmental factors. Using a sample of 374 entrepreneurs from Global Entrepreneurship Monitor data and performing a logistic regression model, we found that owner-manager’ high educational levels, opportunity-oriented motivation, new technology use, and activities related to extractive sectors (e.g., farming, forestry, fishing, and mining) contribute to a higher likelihood of early firm internationalizing. The implications for theory and practice are discussed.     

The Financialization of A Social Housing Provider

Why does a social housing provider bet on interest rate fluctuations? This article presents a case study of the financialization of both housing and the state. Social housing in the Netherlands is provided by non‐profit housing associations that have since 1989 been set apart from the state. Many associations started developing housing for profit, borrowing on global capital markets or buying derivatives. Whereas other semi‐public institutions moved into the world of finance due to financial constraints, housing associations did so to capitalize on the possibilities offered by their asset‐rich portfolios. Vestia, the largest of them all, is an extreme––but not exceptional––case of what can happen when public goals are left to be realized by inadequately supervised and poorly managed private organizations. As a result of gambling on derivatives, Vestia had to be bailed out to the tune of over 2 billion euros. To recoup the losses, housing was sold off and rents were raised. Almost half of Dutch housing associations used derivatives, although most refrained from using them purely speculatively. The changes in the housing sector that led to its financialization cannot be separated from the wider financialization of the state.     

Is Family Control Relevant for Corporate Cash Holding Policy?

This empirical research examines the effect of family control on firms’ cash holding policy. Using a sample of Western European firms, we confirm the precautionary motive for holding cash as family‐controlled firms’ desire to perpetuate the family legacy for future generations motivates them to accumulate more cash than their non‐family counterparts. We also show that, given family‐controlled firms’ long‐term perspective, they focus on cash flow volatility rather than cash flow level. Finally, the relation between financing constraints and cash holdings is not homogeneous: financially constrained family‐controlled firms hold higher levels of cash than financially constrained non‐family firms. Overall, these results suggest that family firms’ cash holding policy is the result not of a specific financial outcome but rather on the strategic objectives of the firm.     

The Reaction of Coffee Futures Price Volatility to Crop Reports

Analysis of prices and volatility plays an important role in coffee market, especially for developing countries, whose small producers and economies rely heavily on income generated by coffee trade. This study explores the impact of coffee crop reports on price volatility for coffee futures contracts during 2004–2014. Overall, results indicate that crop reports generally affect price volatility. The impact is particularly stronger when they provide information following the flowering periods in Colombia, Brazil, and Vietnam, world’s major producers.     

Technological variables and absorptive capacity's influence on performance through corporate entrepreneurship

Technology and corporate entrepreneurship constitute an important source of competitive advantage for organizations, as they enable the development and exploitation of new opportunities. This study proposes a model to analyze the effects of top management support for technology on the promotion of technological skills, absorptive capacity, and technological distinctive competencies. The research also considers the impact of technological skills and absorptive capacity on the development of technological distinctive competencies, analyzing the influence of these variables on organizational performance through corporate entrepreneurship. The study tests these relationships empirically using 160 European technology firms. The paper ends with discussion of the findings and provides several theoretical and practical implications for future research.     

A duality theory of payment systems

We model the Central Bank’s management of intraday liquidity in modern real-time gross settlement systems as a linear programming problem parameterized by different intraday monetary policies, such as reserve requirements, net debit caps and Lombard loans. We then use duality theory to determine the shadow-prices of constraints of each bank. These shadow-prices can be used by the Central Bank to set personalized intraday monetary policies in order to reduce idleness of money and to give a microfoundation of the too-big-to-fail policy.     

ACCOUNTABILITY AND CORRUPTION: POLITICAL INSTITUTIONS MATTER

This study uses a cross-country panel to examine the determinants of corruption, paying particular attention to political institutions that increase accountability. Even though the theoretical literature has stressed the importance of political institutions in determining corruption, the empirical literature is relatively scarce. Our results confirm the role of political institutions in determining the prevalence of corruption. Democracies, parliamentary systems, political stability, and freedom of press are all associated with lower corruption. Additionally, common results of the previous empirical literature, related to openness and legal tradition, do not hold once political variables are taken into account.     

An alternative approach to the calibration of the Vasicek and CIR interest rate models via generating functions

We propose a new method to calibrate the Vasicek and Cox--Ingersoll--Ross interest rate models from bond prices. We define an appropriate generating function and derive recursive relations between the derivatives of the generating function and the bond prices. The parameters of the Vasicek and CIR models are then obtained by solving a system of linearly independent equations arising from the recursive relations. We include numerical results that show the method’s accuracy when bond prices generated from the exact formulas are used.     

Stability and equilibrium selection in a link formation game

In this paper we study a static link formation game under consent that has multiple Nash equilibria. In the literature, the use of coalitional refinements has been the standard approach to select among equilibria. Alternatively, based on the Global Games theory, a non cooperative equilibrium selection approach is proposed, so as to select those Nash equilibria that are robust to the introduction of incomplete information. Interestingly, the equilibrium selected is unique and it is in conflict with those predicted by the commonly used coalitional refinements. Furthermore, a conflict is found between stability and efficiency even when no such conflict exists with the coalitional refinements. We are especially grateful to Deborah Minehart, Roger Lagunoff, Daniel Vincent, Peter Cramton, Luca Anderlini, Axel Anderson, Felipe Zurita, Francis Bloch, Colin Stewart, the editor and three anonymous referees for their valuable comments that contributed to improve the paper. We also thank participants at the EEA-ESEM, Stockholm 2003, the IUSC conference, Columbia University 2003, and the Workshop on Global Games, SUNY, Stony Brook, 2007.