Entrepreneurship and innovation networks

In this paper, we give a general introduction to the notion of entrepreneurship and how it has many complex meanings. Entrepreneurs in new firms but also in incumbent firms have a key role in local, regional and national economic development by taking risks to get things done by developing new combinations of ideas and/or doing things differently. In view of this, two of the main questions that are dealt with are: (1) which features make structural differences in institutions and innovation networks remain invariant between decades, and (2) how knowledge about such features can be employed in policy at the national and the regional level. The research questions highlighted in this special issue relate to many pertinent national and regional policy issues. The most apparent concerns conditions conducive for entrepreneurship in the form of new firms and firm growth. In this paper, we also introduce the different contributors to this special issue.     

Shareholder wealth gains through better corporate governance—The case of European LBO-transactions

We examine shareholder wealth effects in a heterogeneous sample of 115 European leveraged going private transactions from 1997 to 2005. Average abnormal returns as reaction to the LBO announcement amount to 24.20%. In cross-sectional regressions, we find that these value gains can largely be attributed to differences in corporate governance: on a macro level, abnormal returns for pre-LBO shareholders are larger in countries with a poor protection of minority shareholders. On a firm level, companies with a high pre-LBO free float and comparatively weak monitoring by shareholders tend to show high abnormal returns. Furthermore, companies that are undervalued with respect to an industry peer-group exhibit higher announcement returns, indicating that agency conflicts and/or market inefficiencies can serve as an explanation.

Hearing the authentic voice of stakeholders? Implications for governance of tourism strategy-making

Exploring tourism strategy-making in the light of complexity theory, this research examines the interactions that take place between stakeholders as strategy is developed and codified. It focuses on York, a significant UK tourist destination. Taking a strategy-as-narrative approach, it seeks to identify the plurality of stakeholder voices as the embodiment of the authentic voice of strategy. Key research themes are identified concerning how discourses, as manifestations of socially embedded networks of power, surface in narrative within strategy-making; what power relations govern which come to the fore and which are silenced. A heuristic device explains the power relations at work as the interplay of performative, attributed, and contextual power. The study points to the need for further work to understand how all stakeholders might be enabled to contribute equally to strategy-making, addressing the power differentials between actors through the allocation of appropriate resources.     

Analyst forecast,accounting conservatism and the related valuation implications

This study investigates whether financial analysts incorporate accounting conservatism into their earnings forecasts and whether it is more difficult for them to forecast earnings for less conservative firms, and then examines the impact of the findings on the return predictability of the value‐to‐price (V/P) ratio. After controlling for the other factors affecting forecast accuracy, such as earnings predictability and information uncertainty, I find that analysts incorporate accounting conservatism into their earnings forecasts and that forecasting earnings is more difficult for less conservative firms. Consequently, the return predictability of the V/P ratio is stronger for more conservative firms, and previously reported return predictability of the V/P ratio is an average across firms with differing levels of conservatism.     

Trade in reed-based craft products in rural villages in the Eastern Cape,South Africa

Selling traditional craft products made from fibrous plants is an important source of income for economically vulnerable rural women. In the Eastern Cape Province of South Africa, Cyperus textilis and Juncus kraussii have been used for centuries to make products of functional and cultural importance, such as sleeping mats and baskets. In the former Transkei village clusters of Mpozolo and Ntubeni, female crafters harvest the raw material and make and sell the products in their communities and in nearby towns. Interviews with 40 of them revealed what the trade contributes to their livelihoods and what enhances or limits their success. The findings show that crafting contributes vital income to vulnerable households, on average 26 ± 4 per cent of annual household cash income, over 40 per cent for the poorest households and 5–15 per cent for wealthier households. Lack of access to non-traditional markets was identified as the main constraint on the trade.     

Corporate Governance and Information Efficiency in Security Markets

This paper investigates a neglected topic in corporate governance research; namely, do governance characteristics affect the market reaction to news? The topic is important given the emphasis by governance regulations and codes of best practice on the need for greater transparency of corporate activities. For the first time in the corporate governance literature, we show that corporate governance characteristics (particularly the presence of founding family directors and gender diverse boards) affect the market reaction to company specific news. The results of the paper point to the analysis of the impact of governance characteristics on the market reaction to news being a new and complementary research agenda within corporate governance.     

Insider Trading and the Bid-Ask Spread

This study examines the intertemporal and cross-sectional association between the bid-ask spread and insider trading. Empirical results from the cross-sectional regression analysis reveal that market makers establish larger spreads for stocks with a greater extent of insider trading. The time-series regression analysis, however, finds no evidence of spread changes on insider trading days. These results suggest that although market makers may not be able to detect insider trading when it occurs, they protect themselves by maintaining larger spreads for stocks with a greater tendency of insider trading. The results also reveal that market makers establish larger spreads when there are unusually large transactions. In addition, this study finds that spreads are positively associated with risk and negatively with trading volume, the number of exchange listings, share price, and firm size.