Life‐Cycle Patterns of Interest‐Rate Mark‐Ups in Small‐Firm Finance*

We derive empirical implications from a theoretical model of bank–borrower relationships. The interest‐rate mark‐ups of banks are predicted to follow a life‐cycle pattern over the age of the borrowing firms. Because of endogenous bank monitoring by competing banks, borrowing firms initially face a low mark‐up, and thereafter an increasing mark‐up as a result of informational lock‐in, until it falls for older firms when the lock‐in is resolved. By applying a large sample of predominantly small unlisted firms and a new measure of asymmetric information, we find that firms with significant asymmetric‐information problems have a more pronounced life‐cycle pattern of interest‐rate mark‐ups. Additionally, we examine the effects of concentrated banking markets on interest‐rate mark‐ups. The results indicate that the life cycle of mark‐ups is mainly driven by asymmetric‐information problems and not by concentration. However, we find evidence that bank market concentration matters for older firms ? 2 Correction added after online publication on 20^th February 2012; the original text read ‘However, we find evidence that bank market concentration for older firms’, omitting the word ‘matters’.
     

Action-oriented approaches to technology assessment and working life in scandinavia

Several approaches to action-oriented technology assessment of aspects of working life have been tried out in Scandinavia over the past 15-20 years. This article gives an overview of the experiences in Scandinavia, with emphasis on a Danish point of view. Five different approaches to action-oriented technology assessment are described, based on an analysis of the social actors involved, the target groups for the technology assessment and the associated social mechanisms. These techniques follow the collective resource approach, the cooperative strategies, expert strategies and alternative technology, legal reform strategies and governmental technology promotion policy. None of the approaches proved to be totally effective on its own. The conclusion is that a new combination of approaches to action-oriented technology assessment and the development of a theoretical basis are needed.     

Approaches to Ethics for Corporate Crisis Management

The ethics of corporate crisis management is a seriously underdeveloped field. Among recent proposals in the area, two contributions stand out: Seeger and Ulmer’s (2001) virtue ethics approach to crisis management ethics and Simola’s (2003) ethics of care. In the first part of the paper, I argue that both contributions are problematic: Seeger and Ulmer focus on top management and propose virtues that lack substance and are in need of further development. Simola’s proposal is also fraught with difficulty, since it seems to conceive of ethics of care as a course of action that can be chosen in a crisis, something which runs contrary to the idea of caring. In the second part of the paper, I argue that Simola and Seeger and Ulmer are nevertheless on the right track, and I propose some directions for further development of the ethics of corporate crisis management. I argue that the value of codes of conduct is limited. Furthermore, I propose a way of identifying relevant virtues for corporate crisis management and discuss a problem that is prevalent in crisis management ethics (the temptation of ad hoc utilitarianism).     

When do firms invest in offensive and/or defensive marketing?

Market conditions may lead firms to increase offensive marketing activities aimed at attracting new customers, and/or to enhance defensive relationship building intended to retain current customers. Characteristics of the marketing environment are examined, including firms' interest in technology adoption and perceived need to apply it to provide structure for the supply chain, product development, quality control, and social impact. Such indicators relate to the firm's perception of “competitive intensity” in the marketplace. Survey results from 196 manufacturing companies show that technology adoption propensity and competitive intensity are associated with greater investments in offensive marketing activities as well as customer and employee engagement.     

Budgetary Procedures and Deficits in Norwegian Local Governments

This paper provides an empirical analysis of the connection between budgetary procedures and deficits in Norwegian local governments. We argue that centralized budgetary procedures have an advantage in overcoming common-pool resource problems in the decision-making process and will lead to lower deficits. This hypothesis is tested on a panel data set of Norwegian local governments. The results add to the existing evidence of a negative connection between deficits and the degree of centralization of the budget process. Special emphasis is put on the problem with potential biased estimates resulting from endogeneity of the budgetary variables.     

Local Pollution in Federal Systems

It is widely accepted that decentralized control of local pollution is inefficient if the central and the local authorities are imperfectly informed. This paper shows how the central authority can introduce a flexible grant-in-aid system that induces the local authority to use a weighted combination of local and central information when the local authority suffers from confirmatory bias. If the central authority is highly uncertain about the environmental effects of a specific pollutant, the tax/subsidy scheme can be designed to allow local information to play an essential role in the environmental policy. If the central authority is certain that a pollutant must not exceed a specific limit, the tax/subsidy scheme can be designed to allow local information little influence on the environmental policy.     

Financial Contracting Theory Meets the Real World: An Empirical Analysis of Venture Capital Contracts

We compare the characteristics of real-world financial contracts to their counterparts in financial contracting theory. We do so by studying the actual contracts between venture capitalists (VCs) and entrepreneurs. The distinguishing characteristic of VC financings is that they allow VCs to separately allocate cash flow rights, board rights, voting rights, liquidation rights, and other control rights. We describe and measure these rights. We then interpret our results in relation to existing financial contracting theories. We also describe the interrelation and the evolution across financing rounds of the different rights.     

Contents Volume 15 2000

Volume Contents

Contents Volume 15 2000     

Influence of design on tourists’ recommendation intention: an exploratory study of fjord cruise boats

ABSTRACT

In this article we study the influences of esthetic, functional, and symbolic dimensions of design on attitude toward fjord cruise boats and intention to recommend using the product. Also, we argue for the importance of a product to blend in with the surroundings in which it is used – contextually congruent design. In two studies we find that aesthetic, functional and contextually congruent design has positive influences on attitude toward fjord cruise boats. Designers of fjord cruise boats should develop boats with designs that are congruent with the surroundings in which they will be used.     

The Political Economy of Trade Liberalization and Environmental Policy

A pressure group model where environmental and industry lobby groups offer political support in return for favorable pollution tax policies is used to explain and predict the equilibrium pollution tax in sectors protected by tariffs. The political economy effects of trade liberalization are investigated. The pollution tax is shown to decrease if the lobbying effort by the environmental lobby decreases more rapidly than by the industry lobby ceteris paribus. The level of political conflict falls with trade liberalization. Pollution may increase because of a reduction of the pollution tax, and tax revenues may fall simultaneously as pollution increases.