The Effects of Supplier Involvement and Knowledge Protection on Product Innovation in Customer–Supplier Relationships: A Study of Global Automotive Suppliers in China

Globalization drives firms to develop product innovation through their global supply chains. While innovations generated by supply channel members, as opposed to individual partners, are playing an increasingly important role in the success of all supply chain partners, there has been limited research on how supply chain relationships cultivate the process of such innovation generation, particularly in emerging markets. Correspondingly, this study explores how multinational suppliers can develop adaptive product innovation to create competitive advantage in emerging markets. Drawing on the knowledge‐based view and transaction cost economics, this study investigates the influence of supplier involvement and other factors on supplier innovation and performance. The results of a survey of 170 multinational automobile suppliers in China provide support for most of the hypotheses. Specifically, supplier involvement in codesign has an inverted U‐shaped relationship with product innovation. Furthermore, knowledge protection, trust, and technological uncertainty are all found to drive greater product innovation. In addition, the institutional environment moderates the effect of product innovation on performance. Overall, this study enhances our understanding of how MNEs can acquire local knowledge and develop adaptive products in emerging markets.     

CEO Overconfidence and Earnings Management During Shifting Regulatory Regimes

This study examines the relationship of CEO overconfidence with accrual‐based earnings management, real activities‐based earnings management, and targeting to meet or just beat analyst forecasts. Following, we measure “overconfidence” based on the CEO's tendency to hold in‐the‐money stock options, as rational expected utility maximizers should exercise early to avoid overexposure to company idiosyncratic risks. The results show that before the Sarbanes Oxley Act of 2002 (SOX), companies of overconfident CEOs were more likely than other CEOs to engage in managing earnings through accelerating the timing of cash flow from operations and achieving analyst forecast benchmarks. After SOX, we find that overconfident CEOs are more likely to have income‐increasing discretionary accruals. They remain more likely to engage in real activities management through abnormally high cash flows, and also have abnormally low discretionary expenses. These results are consistent with overconfident CEOs feeling less constrained by SOX, and suggest that this individual characteristic works against regulators’ attempts to constrain earnings management by corporate executives. In contrast, we find that the tendency of overconfident CEOs to manage to targets decreases after SOX, perhaps due to changes in investor behavior in the new regulatory environment.     

Remixing work,family and leisure: teleworkers' experiences of everyday life

This paper explores whether and in what ways telework is associated with a reconfiguration or remixing of daily work, family and leisure activities. Semi‐structured interviews were conducted with 51 teleworkers employed in a financial organisation in Canada. For some, telework was a condition of employment, while others negotiated part‐time telework arrangements with managers. Using interpretive thematic analysis techniques, intersections and inter‐relationships between experiences of work, family and leisure were identified. Three main themes emerged, including the need to not only protect, but also containing work time and space; the significance of family and being available for children; and, the relative devaluation of leisure. Although it was anticipated that differences between involuntary and voluntary teleworkers would be evident, gender and family stage were more influential in structuring daily life. The flexibility of telework was valued, but there was little evidence of a reconfiguration of life spheres except for women with children at home.     

How do politicians shape and use budgets to govern public sector organizations? A position-practice approach

This paper examines politicians’ influence on budgets in governing public sector organizations. Theoretical reasoning is based on the position-practice concept applied in structuration theory. Research took place in a hospital district in Finland from 2009 to 2015. The findings show that politicians set coercive budgetary policies, but there was no direct relationship between budgets and actual medical practices. As a result, the budget was simply a ‘ceremonial’ tool of political governance, as medical professionals concentrate on delivering healthcare services.     

Random encounters and information diffusion about product quality

This paper explores how social interactions among consumers shape markets. In a two-country model, consumers meet and exchange information about the quality of the goods. As information spreads, demand evolves, affecting the prices and quantities manufactured by profit-maximizing firms. We show that market prices with informational frictions reach the duopoly price with full information at the limit. However, this convergence can take different paths depending on the size asymmetry between countries. In particular, when the country producing the low-quality good is relatively large, the single market does not immediately turn into a duopoly and can be temporarily trapped in a situation of price instability where no Nash equilibrium in pure (but only in mixed) strategies exists and prices can fluctuate between their monopoly and duopoly levels. It follows that the classical price-reducing effects of international trade may take longer to appear. In view of an intense globalization process, understanding how social meetings affect market outcomes is critical for understanding the performance of international economic integration.     

How convergent are rice export prices in the international market?

This study revisits the issue of long-term price convergence of rice export prices for India, Pakistan, Thailand, Uruguay, the United States, and Vietnam using a two-stage pairwise unit root testing approach. To deduce evidence or lack of proof of convergence in price series, we also examine convergence using sigma and beta convergence specified in both unconditional and conditional frameworks. The methodology used is driven by the need to address three key concerns: (i) the likelihood of finding stationary price differentials, (ii) the magnitude of these differentials, and (iii) their speed of adjustment. To evaluate these concerns, we use monthly data for 18 price series drawn from these six countries from September 2011 to February 2021. The evidence points to a lack of international convergence. This gives rise to the possibility that a shield from a general downward export price trend is already in place for some exporters. Furthermore, we find that the likelihood of convergence is greater between pairs of price series that are characterized as high quality or having the same country of origin or having similar market share. Evidence also suggests that a converged pairing is more likely to have a smaller price differential if both price series are for low-quality rice.     

Responsible care

The following is excerpted from a speech given at the International Conference on Chemical Process Safety Management held in Toronto, Canada, May 15, through 18, 1990.     

Correction to: When are committees of Condorcet winners Condorcet winning committees?

Review of Economic Design -     

CEO mobility and corporate payouts

We examine how chief executive officer (CEO) mobility affects corporate payouts. We exploit US state courts’ staggered adoption of the inevitable disclosure doctrine (IDD) to obtain exogenous variation in mobility. We report several findings. First, we find that firms in IDD-adopting states increase dividend payouts, whereas the effect of IDD on share repurchases is insignificant relative to firms not in IDD-adopting states. Second, the increase in dividends is concentrated on firms run by CEOs having high ability. Third, CEOs increasing dividends are less likely to be forced to leave their jobs. Fourth, the increase in dividends is concentrated on firms run by early-career CEOs rather than retiring CEOs. Last, CEOs increasing dividends receive more favorable shareholders’ say on pay votes for higher pay. Our evidence supports the notion that restricted mobility induces CEOs to choose a dividend policy that enhances their positions with their shareholders.     

CEO cultural background and corporate cash holdings

This paper examines whether the cultural background of chief executive officers (CEOs) affects corporate cash holdings. Using UK data from 2000 to 2018, we find that CEOs with a cultural background that emphasises power distance and uncertainty avoidance are positively associated with corporate cash holdings, while CEOs with a cultural background that emphasises masculinity are negatively associated with corporate cash holdings. Our results are robust to various robustness tests. Further analyses show that the impact is more pronounced when power is concentrated among top executives, when the CEOs have a degree of discretion in pursuing their own goals, and when information asymmetry is high.