Endogenous screening, credit crunches, and competition in laxity

A simple model of lending with endogenous screening predicts that risk-neutral banks tend to adopt tighter lending standards under several conditions commonly seen in recessions: lower interest rates (or spreads), higher default rates, or a smaller fraction of good borrowers. Historical data support these predictions. In addition, better information about borrower types encourages tighter lending standards, and competition in laxity can arise with multiple banks. Within the class of symmetric screening decisions, endogenizing the interest rates disrupts the existence of equilibrium in pure strategies, just as when screening decisions are assumed to be exogenous.     

Defining the Relationship among Founding Resources,Strategies, and Performance in Technology-Intensive New Ventures: Evidence from the Semiconductor Silicon Industry*

The degree to which a firm's performance is dependent on its resources and strategies is widely debated in the literature. We examine this issue by analyzing historical data on the entire population of new independent firms started worldwide in the semiconductor silicon industry for the first 50 years of its existence. We measure resources (managerial capabilities and technological competencies) and strategies (emphasis on demand pull or technology push) at the time of founding and test their relationship with each other as well as with multiple measures of performance (lifespan and best year's sales). We find that firms founded on managerial capabilities emphasize demand-pull strategies at founding, whereas firms founded upon technological competencies emphasize technology-push strategies at founding. We also find that firms emphasizing technology-push strategies perform better than firms emphasizing demand-pull strategies. Lastly, we find that though managerial capabilities are related to a firm's best year's sales, this relationship is mediated by the firm's founding strategy.     

The rate and potential of capability development trajectories

This paper examines differences in the rate and potential of firms' capability development trajectories. Capability development trajectories are the paths over which firms' capabilities change with experience and other activities. While prior research focused on factors affecting capability development rate (the fraction of the gap between a firm's current and potential capability eliminated with each unit of activity), we argue that capability development trajectories also differ in potential (the maximum capability level a firm could achieve through repeating a given set of activities over time). We develop and estimate a formal model of capability development, showing that larger underwriting projects lead to a lower rate of improvement toward higher potential capabilities, and derive implications for research on industry dynamics and the nature of competitive advantage. Copyright © 2013 John Wiley & Sons, Ltd.     

The Regressive Recovery: Distribution,Inequality and State Power in Britain's Post-Crisis Political Economy

This article interrogates the underlying mechanisms at the heart of Britain's post-crisis political economy. We argue that the contemporary economic recovery has been characterised by a dynamic of ‘regressive redistribution’: a socially regressive dynamic of state-led economic restructuring that has worked through two axes at the centre of the recovery. The first axis, a monetary policy framework centred upon Quantitative Easing, has driven asset-price inflation to the benefit of the wealthiest asset holders. The second axis centres upon the politics of regressive labour market restructuring which has provoked widespread wage deflation. In combination, these two axes have been central to defining the contours of the Britain's post-crisis political economy paradigm: characterised by rising asset wealth for the few, and falling living standards alongside increasing economic insecurity for wage earners. The opportunity to change path from the trends of deepening inequality that defined the pre-crisis era has not been taken. Instead, the prevailing policy paradigm of the post-crisis period – discursively unified and sustained by David Cameron's government – has intensified the regressively redistributive dynamics at the core of the neo-liberal project. Ultimately, this is likely to further entrench structural weaknesses in Britain's economy in the years ahead.     

Failures to Deliver,Short Sale Constraints,and Stock Overvaluation

Studying a large sample of publicly available data on failures to deliver, we find that stocks reaching threshold levels of failures become significantly overvalued. Where short sale constraints are especially binding, we report extreme overpricing and subsequent reversals. These findings support the overvaluation hypothesis, although the mispricing is likely to be difficult to arbitrage because of extreme shorting costs. In addition, threshold stocks with low short interest become more overvalued than threshold stocks with high short interest. This suggests that the level of short interest reflects supply‐side effects when the examination conditions on the difficulty of borrowing shares.     

‘Consumer Ethics: The Role of Acculturation in U.S. Immigrant Populations’

This study examines the role of acculturation in shaping consumers’ views of ethics. Specifically, it examines the relationships between the desire to keep one’s original culture, the desire to adopt the host culture, and the four dimensions of the Muncy and Vitell (Journal of Business Research Ethics 24(4), 297, 1992) consumer ethics scale. Using two separate immigrant populations – one of former Middle-Eastern residents now living in the U.S. and the other of Asian immigrants in the U.S. – results indicate that those who want to keep their original culture are less tolerant of unethical consumer activities, while those who are more willing to adopt the host culture are more tolerant of these same consumer activities. Furthermore, the immigrants in both studies who are more tolerant of unethical consumer activities are those who are generally somewhat younger and with less formal education. The relationship between gender and consumer ethics was not significant.     

The power of business models

Over the past few years, “business models” have surged into the management vocabulary. But, while it has become quite fashionable to discuss business models, there is still much confusion about what business models are and how they can be used. In fact, business models can serve a positive and powerful role in corporate management. While other authors have recently offered definitions of “business model,” none appear to be generally accepted. This lack of consensus may in part be attributed to interest in the concept from a wide range of disciplines, all of which have found a connection to the term. To help managers better understand business models, this paper reviews the extant literature and identifies and classifies the components of business models cited therein. Components were classified into four primary categories: strategic choices, the value network, creating value, and capturing value. To address the absence of a generally accepted definition of a business model, a new definition that integrates and synthesizes the earlier work is offered. Based on the proposed definition, business models are then contrasted with strategy. Four problems associated with business models are also discussed.     

Attitudes of Business and Non-business Students Toward Corporate Actions

This study examined differences in the attitudes of business and non-business students toward economic, legal, ethical, and discretionary corporate actions. The results from a sample of two hundred and forty-two (242) university students indicated differences across three background variables (college major, gender, and race).