Law of the jungle: firm survival and price dynamics in evolutionary markets

In this paper I develop a simple, and general model of supply and demand within which almost any theory of consumer and producer behaviour may be integrated by varying parameters. I then investigate the dynamics of this model and its implications for the theory of market evolution, and show that it unifies a number of insights from evolutionary economics. I extend upon these evolutionary theories and also characterise the distribution of prices across the market and investigate its evolution over time.     

Goods Inflation,Asset Inflation,and the Greatest Peacetime Inflation in the US

In every episode of global monetary inflation originating in the Federal Reserve, we find both asset price inflation and goods inflation. The interrelationship between these two types of inflation depends both on cycle-specific factors and more general factors which transcend the cycle and stem from essential aspects of monetary disorder. The purpose of this article is to analyse the nature of this interrelationship and elaborate on the concepts of monetary disorder, goods inflation, and asset inflation. In today’s world of monetary systems where there is no stable demand for high-powered money (which itself is no longer a highly distinct asset) monetary disorder can be hard to recognize until quite late in the inflationary process. Asset price inflation now has a popular meaning quite different from the original found in Austrian business cycle theory. Two decades of widespread inflation targeting at around 2% per annum have encouraged us to ignore an old lesson. In a well-functioning capitalist economy under a sound money order, prices would fluctuate considerably upwards and downwards with a tendency to revert to the mean over the very long run. Finally the principles and hypotheses developed here are analysed in the laboratory of history, specifically for the greatest peacetime inflation in the U.S. (1963–80).     

Integrating crop modelling and production economics to investigate multiple nutrient deficiencies and yield gaps

A method is described for integrating crop modelling and production economics to quantify optimum applications of multiple nutrients and yield gaps. The method is demonstrated for crop production in the high‐rainfall zone of southern Australia. Data from a biophysical crop model were used to overcome the persistent problem of inadequate experimental data. The Mitscherlich function was expanded to accommodate four variable inputs – nitrogen, phosphorus, potassium and sulphur – and the expansion path was used to determine the economic optimum application of all four nutrients. Modelling revealed the state‐contingent yield potential and the extent to which unrealised yield could be explained by profit‐maximising behaviour and risk‐aversion by growers. If growers and their advisors were guided by the methods described, they would be better equipped to assess crop nutrient demands and limitations, predict yield potential, additional profit and the risks associated with high input systems in a variable climate. If scientists were more aware of the extra profits and the risks involved (as well as the quantitative relationships between inputs and outputs) when thinking about what to produce and how to do so, they would be more circumspect about the net benefits to be obtained from closing yield gaps.     

What farmer types are most likely to adopt joint venture farm business structures?

Joint venture (JV) farm structures have the potential to increase the productivity and profitability of traditional family farms. However, such structures are not widely adopted within the farm business community. Furthermore, knowledge on the relative attractiveness of different JV models to farmers is limited. We use a choice experiment to explore what JV structures are preferred by Australian farmers, and how farmers’ socio‐demographic and attitudinal characteristics influence the type of JV structure preferred. A latent class analysis revealed significant unobserved preference heterogeneity amongst the population. We identify four latent classes that differ in their preferences regarding the number of JV partners, access to new machinery, and/or the opportunity for additional annual leave. All classes of farmers displayed positive preferences for operational decision‐making with other JV partners, although they varied in their preferences towards final operational responsibility. The diversity in preferences shows that there is no ‘one size fits all’ JV design, leaving opportunities for a range of JV decision models. Such flexibility in JV design is likely to have advantages when seeking JV partners, with a significant proportion of the sampled population open to collaborative decision‐making models.     

Disentangling Sentiment from Cyclicality in Firm Capital Structure

This study examines the relationship between capital structure choices and investor and managerial sentiment, finding that periods of positive sentiment are associated with reduced leverage within firms. We focus on the cyclicality of leverage using non-orthogonalized sentiment indices and find a strong negative relationship. Leverage, therefore, appears countercyclical, implying that the decision to take on debt is a consequence of either Admati et al.'s (2018) ratchet effect or a managerial attempt to time the market. Our findings lead us to question some fundamental capital structure theories, namely, trade-off (Kraus and Litzenberger, 1973), and Hackbarth's (2008) managerial traits theory. Instead, we favour the idea that leverage is a consequence of countercyclical market timing behaviour.     

Seeking legitimacy for new assurance forms: The case of assurance on sustainability reporting

Based on the development of a more refined conception of legitimacy than has been used in prior audit/assurance and sustainability accounting research, this paper analyses how the legitimation processes adopted by sustainability assurance practitioners in a large professional services firm have co-evolved with and impacted upon their attempts to develop this form of assurance practice - particularly the construction of assurance statements. The analysis reveals a complex and interdependent interplay between attempts at securing pragmatic, moral and cognitive legitimacy with three key constituencies - clients who commission the sustainability assurance services; (socially constructed) non-client users of the assurance statements; and the firm’s internal Risk Department that approves the wording of assurance statements. Securing these types of legitimacy is shown to require the adoption and alignment of varying legitimation strategies according to the constituency practitioners seek to influence. Developing pragmatic legitimacy with clients depends on establishing moral legitimacy with non-client users of assurance statements while securing moral legitimacy with non-client users is contingent on acquiring pragmatic legitimacy with the firm’s internal Risk Department. The practitioners’ legitimation strategies are underpinned by a commitment to opening up dialogue within the assurance process which is evident in their engagement with potential users of assurance and their efforts to expand assurance statement content and encourage user influence over what is assured. This provides a counterpoint to Power’s (1994, 1999) concerns about the tendency for new assurance forms to restrict debate and dialogue and reveals a rare empirical domain where Power’s (2003b) call for more customised and informative narratives in assurance reporting is being heeded.     

Feeling the Effects of a Competitor’s Product Recall: Lessons Learned by Quebec SMEs in the Cheese Sector

This article explores learning opportunities and portrays the product recall as a crisis situation from which small and medium-sized enterprises (SMEs) indirectly impacted by the event can and must learn. It describes the raw milk cheese recall in Quebec. A semistructured interview guide was used. The population studied comprises 12 cheese makers specializing in processing partly or totally raw milk and presents the results of interviews with managers of companies that survived the ordeal. Excerpts from interviews show that cheese makers took advantage of this crisis to improve their capacity to manage product recalls. The comments by the producers interviewed indicate that the crisis had a marked influence on knowledge creation related to prevention and preparedness for product recalls.     

Send More Tourists! Stakeholder Perceptions of a Tourism Industry in Late Stage Decline: the Case of the Isle of Man

Qualitative interviews, conducted in the Isle of Man, investigate local perceptions of a tourism industry in late stage decline. Social impacts of decline, including facilities loss, cultural changes and a heightening of perceived peripherality, which together undermine local identity, are pronounced despite successful economic diversification. Tourists are welcomed as they help to affirm the pride residents have in their island, create a more active atmosphere, provide social interaction opportunities and combat negative stereotyping. Overall, findings emphasise the diverse, unique and persistent benefits of tourism in the Isle of Man, despite decline. Copyright © 2011 John Wiley & Sons, Ltd.     

User needs in sustainability reporting: Perspectives of stakeholders in Ireland

Abstract

By means of a questionnaire survey, this paper ascertains and analyses the views of a number of Irish stakeholders regarding the adequacy and potential of corporate sustainability reporting to meet their information needs and help them hold corporations to account. The study focuses on ascertaining the views of a sample of Irish social and environmental non-governmental organisations (NGOs), who we argue constitute an important group of non-financial stakeholders. This emphasis on examining NGO perceptions represents an attempt to fill a gap in the academic sustainability reporting research literature whereby the views of non-managerial stakeholders are largely absent. The paper represents the second phase of a determined effort to examine the adequacy of sustainability reporting from the perspective of less economically powerful stakeholders in Ireland and responds specifically to O'Dwyer's (2002) call for research to examine the nature of stakeholder demand for sustainability reporting in Ireland in order to inform the future development of Irish sustainability reporting practices. The results present evidence of a widespread demand for mandated, externally verified sustainability reporting in either the annual report or a separate stand-alone report. This demand is primarily driven by a desire to gain knowledge of companies' commitment to responsible business practices but is also, albeit to a lesser extent, influenced by the perceived ability of sustainability reporting to facilitate increased NGO pressure on companies. Current sustainability reporting practice is viewed negatively with regard to its credibility and sufficiency, as well as the opportunities it provides for engagement with companies, particularly among environmental NGO respondents. While respondents tended to be suspicious of corporate motives for sustainability reporting, many were optimistic about the potential for NGO engagement with companies aimed at tackling social and environmental issues and improving current sustainability reporting practice. Drawing on the survey results, the paper makes some recommendations for future research aimed at improving sustainability reporting practices in Ireland and more broadly.     

Defining and improving technology transfer business and management processes in university innovation centres

The complex and dynamic behaviour associated with technology transfer business processes combined with the technological risk involved in the participating small firms, has led to a lack of business process definition and improvement in this area. Furthermore, the embryonic firms are highly individualistic with differing needs for assistance and development. There may also be a tendency to provide infrastructure and basic services with an avoidance of business process definition and hence, improvement.The aim of this paper is to investigate how potential business and management inputs can be used to define and to suggest improvements for two key technology transfer business processes, namely the technology licensing process and the business building process.A stratified pathway process mapping approach is used. This research approach includes semi-structured interviews with University Innovation Centre small firms, focus groups with Innovation Centre stakeholders and best practice benchmarking.The findings indicate that a modified processual approach can be adopted to define key business processes within technology transfer. Using this approach it is possible to show where business and management interventions can most effectively be deployed in each process.