Building entrepreneurial tie portfolios through strategic homophily: The role of narrative identity work in venture creation and early growth

In this article, we present the results of a case study of an entrepreneur who successfully founded and grew a venture underpinned by a portfolio of strongly homophilous, dyadic ties. Building on our case, we discuss how the entrepreneur strategically constructed these ties through a form of narrative identity work, explore the shared identity narratives that he used to do so, and highlight the heterogeneous nature of the resulting tie portfolio. We go on to explore the factors that motivated the entrepreneur to purposefully construct an entrepreneurial tie portfolio in this way. Building on our findings, we discuss the nature of narrative identity work and its role in creating homophilous ties, explore the connection between the resulting shared identity narratives and trust, and discuss the central role of values in strategic homophily.     

Cross-border Mergers and Acquisitions in China: An Industry Panel Study, 1991–2005

Employing a panel database, this article investigates empirically the behaviour, at an industry level, of cross-border mergers and acquisitions (M&As) in the People's Republic of China for the period 1991–2005. The study reports that many of the cross-border M&As over the past decades in China have been driven by broad fundamental factors, such as industry size and profitability. Moreover, technological intensity is significantly associated with the level of acquisition activity, indicating the tendency that intangible resources and intellectual capability favour more acquisition into China. It is found that deregulation, as a specific industry shock, affects acquisition activities significantly. The findings, it is concluded, have important managerial and policy implications.     

The Effect of Accounting Restatements on Earnings Revisions and the Estimated Cost of Capital

This paper examines the effect of accounting restatements on a firm's cost of equity capital. We show that, on average, accounting restatements lead to both decreases in expected future earnings and increases in the firm's cost of equity capital. Depending on the model used, relative percentage increases in the cost of equity capital average between 7 and 19% in the month immediately following a restatement. The relative increase in the cost of capital dissipates as time passes and after controlling for analyst forecast biases, but continues to average between 6 and 15% in the most conservative setting. We also show that restatements initiated by auditors are associated with the largest increase in the cost of capital, and that firms with greater leverage experience greater increases in their cost of capital. Overall, our evidence is consistent with accounting restatements lowering the perceived earnings quality of the firm and increasing investors' required rates of return.     

Macroeconomic Constraints, Social Learning and Pay Bargaining in Europe

This paper argues that European integration has constrained the discretion of industrial relations actors. The result has been not the widely predicted institutional fragmentation of collective bargaining, but a change in the functioning of these systems. At the same time, widespread 'social dumping' on the part of firms and member states has not materialized. The paper argues that the 'race to the bottom' thesis gives insufficient weight to the socialization mechanisms attached to the European integration process. Thus macroeconomic constraints and social learning processes are co-mingling with one another in European industrial relations.     

In the mirror of the market: The disciplinary effects of company/fund manager meetings

This paper draws upon empirical qualitative research with Finance Directors and Investor Relations managers to examine the disciplinary consequences of their meetings with institutional investors. These ‘private’ meetings have increased both in frequency and importance in the last decade, but, when compared to public disclosure, they are relatively under researched. Existing studies have focussed on the role that the meetings play either in the market for information, or as a mechanism for corporate governance. By contrast, in this paper we draw upon Foucault’s analysis of power/knowledge to explore how the meetings shape executive subjectivity. The meetings take place in the context of a proliferation of techniques through which corporate performance is disclosed, modelled, compared and ranked. Such visibility makes possible processes of executive subjection which the paper traces firstly in the anticipatory self-discipline of executive’s extensive rehearsals for the meetings, and secondly in the rituals of face-to-face scrutiny of the meetings themselves where the body of the executive is understood to represent the company. The paper then explores the ways in which subjection to investors enables executives to speak on behalf of the investor within the business and effect its restructuring in the name of shareholder value. We suggest that these neglected disciplinary effects of company/fund manager meetings have been all too potent in recent years.     

Shredded Reputation: The Cost of Audit Failure

In this article we investigate the impact of the Enron audit failure on auditor reputation. Specifically, we examine Arthur Andersen's clients' stock market impact surrounding various dates on which Andersen's audit procedures and independence were under severe scrutiny. On the three days following Andersen's admission that a significant number of documents had been shredded, we find that Andersen's other clients experienced a statistically negative market reaction, suggesting that investors downgraded the quality of the audits performed by Andersen. We also find that audits performed by Andersen's Houston office suffered a more severe decline in abnormal returns on this date. We are not able to show that Andersen's independence was questioned by the amount of non–audit fees charged to its clients.     

Do institutional shareholders police management?

Some have argued that legislation limits the ability of institutional shareholders to discipline shirking management teams. However the level of takeover activity in the 1980s suggests that the cost of using takeovers to discipline management has decreased. This may give institutional shareholders the ability to participate actively in corporate governance. This paper presents an empirical examination that is consistent with this hypothesis. First, institutional ownership concentration varies across firms according to the benefits of policing firms in 1988. The relationship is less pronounced in 1980. Second, firms characterized by concentrated institutional ownership are more likely to use takeovers as the disciplinary mechanism. © 1997 John Wiley & Sons, Ltd.     

The Developmental Impact of Asian Drivers on Kenya with Emphasis on Textiles and Clothing Manufacturing

(1251) Paul Kamau with Dorothy McCormick and Nicolas Pinaud Kenya has enjoyed a relatively diversified economy (at least by SSA standards), with light manufacturing industries in particular playing a significant growing role. The rise of Asian competition (locally, regionally and on third‐country markets), partly due to the erosion of trade preferences for clothing and footwear, has raised fresh policy challenges. The specific relevance of the clothing industry in the analysis of China’s and India’s impact on Africa is manifold: this is a low‐skilled labour‐intensive industry, and hence an avenue for African economies’ diversification; the competition from Asian producers vis‐à‐vis the SSA clothing industry is felt at the local, regional and global level (on third‐country markets): it is therefore direct and indirect; also, the Asian Drivers’ impact on African clothing industries has both a trade and investment dimension while being competitive and complementary.