Uncertainty avoidance,risk tolerance and corporate takeover decisions

In this paper, we examine the role of national culture in corporate takeover decisions, by arguing that managerial risk tolerance (a combination of risk aversion and risk perception), at the national level, is a cultural trait and affects the expected net synergies CEOs require. We propose a theoretical framework that links CEO risk tolerance to the expected net synergies. We empirically show that CEOs of firms located in countries with lower levels of risk tolerance, measured by Hofstede’s (1980, 2001) uncertainty avoidance score, require higher premiums on takeovers, and show that uncertainty avoidance plays a greater role in relatively large takeovers. Additional testing reveals that CEOs from high uncertainty avoiding nations engage less in cross-border/cross-industry takeovers, suggesting that uncertainty avoidance captures more the CEO’s risk perception than his/her risk aversion.     

Formation and evolution of buyer-supplier relationships: Conceiving dynamism in actor composition of business networks

This study investigates the tenability of the position that business networks are relatively stable, based on long-lasting inter-firm relationships with limited substitutions of incumbent actors. This is done via a longitudinal analysis on the actor composition evolution with regard to the supplier networks around two car assembly plants. Based on the overall empirical findings, the study concludes that the phenomenon of supplier substitution may be a more widespread reality. Consequently, the article finishes with a series of business implications and recommendations on how to investigate and conceive this matter more thoroughly.     

How and when is dual trading irrelevant?

Within a general model of speculative trade, we derive the aggregate consequences of dual traders who process retail liquidity trades and trade on their own account. We prove that dual trading reduces total expected speculator profits unless speculators process all liquidity trade and trade with the same intensity on liquidity trade. In contrast, dual trading does not affect the information content of prices. We show how results generalize when we endogenize (a) speculator information via costly information acquisition about fundamentals or costly processing of liquidity trade, and (b) liquidity trader motives and welfare via endowment shocks.     

Site competence dynamics in international manufacturing networks: instrument development and a test in Eastern European factories

The objective of this paper is to introduce an instrument that enables the measurement of dynamics in the roles of factories in international networks. Starting from Ferdows’ framework on strategic factory roles, a clear definition and more precise operationalization of ‘site competence’ is provided. Our proposed instrument is tested in a context, being the Eastern European factories of Dutch multinationals, where it is plausible to expect changes in the strategic factory roles over time. This test comprises four exploratory case studies that provide the basis for future, more extensive empirical work. At the same time, they contribute to the under-researched area of company and industry case studies with respect to the international context of operations management.     

Measuring the New Economy: An International Comparative Perspective

The advances made in the production and use of information and communication technology (ICT) during the past decades may have potentially large effects for long term economic growth. Indeed the substantial acceleration in real GDP growth in many OECD countries, but in particular in the United States, during the second half of the 1990s has led to suggestions that a "new economy" has emerged. In this new economy the old economic rules were supposed to have become invalid. For example, traditional concerns about the limits of maximum production capacity might disappear as the marginal costs of producing ICT goods and services are virtually nil. Moreover, the trade-off between inflation and unemployment could be reduced due to a more efficient inventory management.     

A flexible adaptation of the WIOD database in a virtual laboratory

ABSTRACT

The World Input-Output Database provides a time series of world input–output tables (WIOTs) that have been used for example to understand the manifold effects of the increased integration of markets through international trade. In order to enhance the flexibility of research on global trade issues using WIOD, we implement the WIOT workflow in a collaborative, cloud-based virtual laboratory environment. We demonstrate that a lab-based adaptation of WIOD is able (a) to continuously create and update versions of the WIOTs in a timely, consistent, and cost-effective way, (b) to enhance original information with accompanying information on standard deviations, and (c) to enable flexible re-casting of the entire WIOT time series into user-specific geographical and sectoral classifications.     

R&D spillovers and productivity: Evidence from U.S. manufacturing microdata

This paper deals with the estimation of the impact of technology spillovers on productivity at the firm level. Panel data for American manufacturing firms on sales, physical capital inputs, employment and R&D investments are linked to R&D data by industry. The latter data are used to construct four different sets of `indirect' R&D stocks, representing technology obtained through spillovers. The differences between two distinct kinds of spillovers are stressed. Cointegration analysis is introduced into production function estimation. Spillovers are found to have significant positive effects on productivity, although their magnitudes differ between high-tech, medium-tech and low-tech firms. First version received: April 1997/final version received: April 1999     

Bargaining power in stationary parallelogram games

A stationary variant of the repeated prisoners dilemma in which the game frontier is a parallelogram is analyzed. By using the probabilistic cheap talk concept of [3], the discount factor becomes fungible, and for a critical value of the discount factor a unique Pareto-optimal and Pareto-dominant solution can be found. The relative bargaining power of the players can be quantified in terms of the shape of the parallelogram. If the parallelogram is asymmetric, the solution results in an asymmetric allocation of payoffs. Players with more bargaining power receive a greater share of the allocation. The solution satisfies some standard bargaining axioms within the class of parallelogram games. A characterization is provided in terms of these axioms and one new axiom, weak-monotonicity, which is in the spirit of, but different from, the Kalai-Smorodinsky restricted-monotonicity axiom.Received: 15 January 2001, Accepted: 4 December 2003, We thank Wayne Shafer for interlocution and helpful comments.     

How Applicable is the Dominant Firm Model of Price Leadership?

In this paper, we examine the usefulness of the dominant firm model of price leadership to serve as a benchmark for organizing behavior in laboratory markets. This well established model, whose origins can be traced back over a hundred years, has been recently applied to such landmark antitrust cases as Standard Oil and Alcoa and more recently to the analysis of deregulated markets for electric power. Our results indicate that in posted offer markets the dominant firm quite often produces more than the model's benchmark and sometimes at much greater prices. With sealed offer auction rules and a low elasticity of fringe supply, the dominant firm produces the theoretical output at a price greater than the prediction. However, with a high elasticity of fringe supply, the dominant firm produces more output over a wide range of prices that includes the predicted price.     

«Flexiseguridad» en Bélgica. Una propuesta de reforma basada en principios económicos

El régimen de seguro de desempleo y la legislación protectora del empleo de Bélgica se establecieron con el telón de fondo de una relación clásica, de carácter estable y duradero, entre trabajadores y empresas. Sin embargo, la globalización de la economía y la rápida evolución de las tecnologías y los sistemas de organización exigen hoy en día más flexibilidad tanto a unos como a otras. De ahí que las instituciones del mercado laboral hayan de reformarse de manera urgente para conciliar esta mayor flexibilidad con una seguridad suficiente para los trabajadores. Aunque la idea de la «flexiseguridad» no es nueva, hay opiniones distintas sobre cuál es el modelo institucional que debe traer consigo. Los autores proponen una reforma guiada expresamente por los principios económicos.