Establishment modes and network relationships of foreign subsidiaries

This research examines the effects of the establishment mode of foreign subsidiaries (greenfield vs acquisition) on the type of network relationships (social vs business) they develop in local markets. The authors use the network approach to better understand the role played by local subsidiaries for the development of networks in multinational enterprises. The empirical study is based on a dataset covering 120 foreign-owned subsidiaries in Italy. The findings show that acquired subsidiaries are more directly involved in business relationships, whereas greenfield subsidiaries pay more attention to social relationships before building business networks. The establishment mode thus affects the type of network relationships developed by local subsidiaries, which can help them to overcome the liabilities of foreignness and outsidership.     

View from Practice: Managing Effectively in Collectivist Societies: Lessons from Samba Schools and Dabbawalas

This article reviews the organizational values, recruitment, and reward policies of Brazilian samba schools and Indian dabbawalas to illustrate how their fit to local cultures results in greater productivity, engagement, and low turnover. American‐style management has spread worldwide, yet in emerging market countries such as India and Brazil, multinationals often struggle to motivate and engage their employees. The companies’ top ranks in these countries are usually dominated by English‐speaking, university‐educated elites who are comfortable with Western management techniques. But these managers can be, as the Comprador class was in seventeenth‐century China, strangers in their own land, implementing management techniques that feel foreign and inappropriate to their employees. The result is often low productivity, absenteeism, and unhappiness. However, there are organizations in both India and Brazil that achieve staggeringly high productivity and consistently strong engagement though unaware of mainstream management techniques. The samba schools of Brazil and the dabbawala lunch‐delivery system of Mumbai do this by working within local cultural norms rather than trying to impose foreign ideas about efficient management. © 2016 Wiley Periodicals, Inc.     

Team Management： A Reflection on Leadership to Achieve Success

This study aims at rethinking the posture and attitude of professionals in, managerial and leadership positions, regarding the organizational management, showing that it is possible to motivate a team, valuing the human and maintaining a good working environment, with respect and collective participation towards a common good by focusing on problem solving regardless the resources that the company can offer to encourage and satisfy its employees. In order to prepare this study, survey was conducted from empirical studies, literature surveys, and qualitative and quantitative approaches were used in a company linked to the tobacco sector. The results show that companies are still adapting to new paradigms of the market and seek to achieve greater productivity with the accomplishment of teamwork, considering aspects such as leadership, motivation, and interpersonal relationships.     

Investment Decisions, Liquidity, and Institutional Activism: An International Study

The activism of institutional investors tends more and more toward the supervision and control of the behavior of the managers of big companies. In this article, we present a model based on the creation of an activism index that lets us evaluate such activism’s effect on the sensitivity of the investment policies of a company in the face of financial variables (such as cash flow and liquidity ratio) and market variables (ownership concentration and value creation index). To test our assertions, we analyze firm-level data for United Kingdom (U.K.), Germany, France, Denmark, and Spain during the period 1995–2004. Our results point to a significant reduction in the sensitivity of company investment decisions in the face of these variables, especially relative to intangible capital, as a result of the neutralizing effect of activism on the high agency costs of free cash flow and on the information asymmetries of the market.     

Are women expected to be more generous?

This paper analyzes if men and women are expected to behave differently regarding altruism. Since the dictator game provides the most suitable design for studying altruism and generosity in the lab setting, we use a modified version to study the beliefs involved in the game. Our results are substantial: men and women are expected to behave differently. Moreover, while women believe that women are more generous, men consider that women are as generous as men.

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Electronic Supplementary Material  The online version of this article () contains supplementary material, which is available to authorized users. We appreciate comments from Josemari Aizpurua, Shoshana Neuman and participants in seminars at Bar-Ilan University, Max Planck Institute of Economics, Univ. Publica Navarra. Tim Cason and one anonymous referee made substantial comments on the previous draft. Financial support from CICYT (SEJ2007-62081/ECON and SEJ2006-00959/SOCI) and FCEA (SOC2.05/43) is gratefully acknowledge. Martha Gaustad revised the English grammar.     

Not all family firms are equal: The moderating effect of family involvement on the political risk exposure of the foreign direct investment portfolio. Preliminary evidence from Spanish multinational enterprises

We investigate the effect of political risk (PR) exposure and family control on the internationalization strategy of multinational enterprises (MNEs) using social capital theory. Our results from a negative binomial cross‐sectional analysis in 2007 of Spanish MNEs show family ownership or the limited presence of family members on the board has no effect on internationalization. However, when the conceptualization of family firms (FFs) includes majority ownership and board presence, we find a direct negative effect on their internationalization scope but a positive moderating effect on the relationship between the exposure to PR and internationalization scope. FFs have some specific advantages suitable to be employed in their corporate political activity allowing them to develop long‐lasting relationships with relevant political actors. By disentangling the effects of family control on internationalization and PR, this article explains how FFs can be simultaneously risk‐willing and risk‐averse.     

Ruin Probabilities And Capital Requirement for Open Automobile Portfolios With a Bonus-Malus System Based on Claim Counts

For a large motor insurance portfolio, on an open environment, we study the impact of experience rating in finite and continuous time ruin probabilities. We consider a model for calculating ruin probabilities applicable to large portfolios with a Markovian Bonus-Malus System (BMS), based on claim counts, for an automobile portfolio using the classical risk framework model. New challenges are brought when an open portfolio scenario is introduced. When compared with a classical BMS approach ruin probabilities may change significantly. By using a BMS of a Portuguese insurer, we illustrate and discuss the impact of the proposed formulation on the initial surplus required to target a given ruin probability. Under an open portfolio setup, we show that we may have a significant impact on capital requirements when compared with the classical BMS, by having a significant reduction on the initial surplus needed to maintain a fixed level of the ruin probability.     

The optimal method for pricing Bermudan options by simulation

Least‐squares methods enable us to price Bermudan‐style options by Monte Carlo simulation. They are based on estimating the option continuation value by least‐squares. We show that the Bermudan price is maximized when this continuation value is estimated near the exercise boundary, which is equivalent to implicitly estimating the optimal exercise boundary by using the value‐matching condition. Localization is the key difference with respect to global regression methods, but is fundamental for optimal exercise decisions and requires estimation of the continuation value by iterating local least‐squares (because we estimate and localize the exercise boundary at the same time). In the numerical example, in agreement with this optimality, the new prices or lower bounds (i) improve upon the prices reported by other methods and (ii) are very close to the associated dual upper bounds. We also study the method's convergence.