How do networks and learning drive M&As? An institutional comparison between China and the United States

What drives mergers and acquisitions (M&As) in different institutional environments? This article builds on the resource dependence perspective and argues that networks, learning, and institutions represent three building blocks that can enhance our understanding of the drivers behind M&As. Specifically, we consider firms as learning actors embedded in network relations and influenced by institutional development, and compare and contrast firms' acquisition activities across the United States and China. Our findings show that there are indeed important learning and network factors that lead to M&As. More interestingly, the impact of such learning and network factors varies sharply across countries with different market‐based institutions. Copyright © 2009 John Wiley & Sons, Ltd.     

Corporate entrepreneurs and privatized firms in russia, ukraine, and belarus

This paper provides a preliminary examination of the development of corporate entrepreneurship in privatized firms in Russia, Belarus, and Ukraine, three countries with a common background as part of the Soviet Union, but with different incentives and constraints on entrepreneurship since the beginning of transition. Using large-scale surveys of newly privatized companies, the paper shows that there are differences in the nature and extent of entrepreneurship in established businesses in the three countries. The paper utilizes representative samples of general directors in 105 privatized Russian enterprises, 100 privatized Ukranian enterprises, and 68 privatized enterprises in Belarus.Evidence is presented that suggests that Russian privatized firms have lower insider stakes, greater outside ownership, less employee voice, and greater managerial power within the firm than is the case in Belarus and Ukraine. The active monitoring of managers by outsiders may be an important aspect of the transformation of Russian firms to efficient, commercially viable entities. In Ukraine and Belarus a lack of outside involvement in corporate governance may lead to managerial opportunism and low incentives to attract outside strategic investors, including foreign partners. Russia appears to be building a stronger platform for the future development and effectiveness of entrepreneurship than is the case in Ukraine and Belarus. The findings provide evidence of the importance of direct involvement and the development of relationships to counteract the shortcomings of the legal infrastructure and financial reporting mechanisms.In general, the findings of the study for Russia show that in the current hostile and rapidly changing environment, entrepreneurial priorities and actions so far have primarily focused on controlling cash flow, seeking new markets, and redefining businesses through retrenchment and restructuring. Although it is, as yet, too early to examine the longer term effects of the changes in entrepreneurial conditions, the paper presents the first large-scale comparative evidence of the indications of a divergence in entrepreneurial development between the three countries. There was a greater incidence of turnover among the senior management team in Russia. Managers in Ukraine and Belarus had more diverse strategic objectives in contrast to those in Russia where managers have behaved in a more realistic fashion by focusing on retrenchment.For academics, the study's findings suggest further research is needed to examine the longer term nature and effects of corporate entrepreneurship, compare entrepreneurship in new start-ups in the three countries, and compare with corporate entrepreneurship elsewhere in emerging markets and the barriers to the development of corporate entrepreneurship. For practitioners and policy makers, the study highlights the need to develop and enforce an appropriate regulatory framework which strengthens the rules of the game under which corporate entrepreneurship operates.     

The determinants of corporate divestment in the UK

It has been widely suggested that since the early 1980s many diversified firms narrowed the scope of their activities by refocusing on their core businesses, primarily through divestment activity. This study examines the extent and determinants of divestment across a large sample of UK firms over the period 1985–1989. Divestment is analysed using both a proportions and count data (Poisson and negative binomial regressions) approach. The results confirm that corporate divestment is not merely a reflection of managerial idiosyncrasies or mean reversion behaviour in the activities undertaken, but is a purposeful response to exogenous change in a manner broadly consistent with both the agency theoretic and strategic views of the firm.     

Alternatives to traditional Medicare: Medicare Part C poised to prosper

Recent events indicate that Medicare Part C (Medicare Advantage) plans are poised to prosper. Yet many employers express hesitation to offer Medicare Advantage, formerly known as Medicare+Choice, plans to their retirees because they are concerned about the potential withdrawal of those plans if there is a reversal of federal funding rules. This article addresses those concerns. It provides a historical overview of Medicare Part C and describes the impact of the most recent agency guidance. The author cites plan trends, raises employer implications and concludes that Medicare Advantage plans will continue to expand, possibly facilitated by employers as they implement leading-edge retiree medical designs.     

Chinese Management Buyouts and Board Transformation

We assess the extent to which Chinese MBOs of listed corporations enable a balance to be achieved between facilitating growth and supporting the interests of minority shareholders other than the buyout organization. Using novel, hand-collected data from 19 MBOs of listed corporations in China, a matched sample of 19 non-MBOs and the population of listed corporations, we examine the extent to which boards of directors are changed to bring in executive and outside directors with the skills to grow as well as restructure a business. We also examine the extent to which outside directors become involved in actions to develop the business rather than actions related to fostering the interests of all shareholders. We find in fact little evidence that outside board members have the skills to add value to the MBO firms. Boards appear to focus mainly on related-party transactions with some more limited attention to growth strategies. Outside directors do not seem to openly disagree with incumbent managers on the disclosure of their actions but may express their views and exert pressure behind the scenes.     

The making of women trade union leaders

A trade union's constitution is intended to produce its leaders in a democratic and even-handed manner, but the reality for women is one of inequality. They remain almost invisible in senior positions in British unions. The social processes by which women do or do not progress in a union's career structure are investigated through a case study of SOGAT ‘82.     

BIAS IN JOURNAL RATINGS

The present study investigated the association between faculty publication records and their point-based evaluations of finance journals. No relationship was detected between the merit points assigned to finance journals and the journal-specific success of the faculty rendering the journal ratings. However, a negative relationship was found between general publication success of faculty and the merit points they assigned to lower-level journal publications. The association was particularly strong for faculty who had published in the top three finance journals.     

Shorter reviews

Crush, Jonathan and James Wilmot (eds.) Crossing boundaries: mine migrancy in a democratic South Africa Smith, Michael Peter (ed.) Marginal spaces: comparative urban and community research, volume 5 Harrington, J.W. and B. Wharf Industrial location: principles, practice and policy King, Desmond Separate and unequal. Black Americans and the US Federal government     

Transactions-Driven Commercial Real Estate Returns: The Panacea to Asset Allocation Models?

A transactions-driven commercial real estate return series is generated in this study to determine whether the reliance on appraised values in the estimation of real estate returns is the source of the reported underpricing of real estate relative to stocks, bonds, and bills when analyzed in a traditional mean-variance setting. The reported underpricing of commercial real estate would be rational if transactions-driven returns exhibit more variance than appraisal-driven returns. While we find that transactions-driven real estate returns have greater variance than appraisal-driven returns for individual properties, most of the individual property risk is idiosyncratic and diversified away at the portfolio level. Real estate continues to be a dominate asset class in mean-variance allocation models even when represented with transactions-driven indices.¹