Inventory service-level optimization within distribution network design problem

We propose a sequential heuristic approach to optimize inventory service levels in a two-stage supply chain. The proposed approach deals with service level and inventory decisions, simultaneously with network design decisions, and incorporating unfulfilled demand costs in a previous inventory-location model. A two-step formulation is considered, where the first step optimizes service level and the second step addresses location and inventory decisions. Each algorithm iteration solves an inventory-location model for a fixed service level, and then the service level is updated in order to reach an equilibrium condition between operating system and unfulfilled demand costs. The algorithm converged in three iterations for a set of sample instances, obtaining the same outcome in comparison with a more intuitive, exact, but more time-consuming search procedure.     

Is Family Control Relevant for Corporate Cash Holding Policy?

This empirical research examines the effect of family control on firms’ cash holding policy. Using a sample of Western European firms, we confirm the precautionary motive for holding cash as family‐controlled firms’ desire to perpetuate the family legacy for future generations motivates them to accumulate more cash than their non‐family counterparts. We also show that, given family‐controlled firms’ long‐term perspective, they focus on cash flow volatility rather than cash flow level. Finally, the relation between financing constraints and cash holdings is not homogeneous: financially constrained family‐controlled firms hold higher levels of cash than financially constrained non‐family firms. Overall, these results suggest that family firms’ cash holding policy is the result not of a specific financial outcome but rather on the strategic objectives of the firm.     

Entry into Export Markets and Product Quality

Using a rich data set of Chilean exporters, we analyse several issues regarding the relationship between entry into export markets and product quality. We find that every year, a large number of new exporting relationships are initiated, but the survival rate of these entries is very low and declines over time. Using unit values as a proxy for product quality, our estimations show that entry is generally associated with higher product quality. This higher quality, however, tends to reduce over time and eventually disappears three years after entry. In addition, our evidence suggests that the positive relationship between entry and quality is more prevalent in new exporters. To better identify this effect, we explore whether there are systematic differences across sectors. As expected, for sectors in which quality differentiation may be important, our findings reveal that reference‐price and differentiated products show a higher price in the year of entry and a longer convergence to incumbent prices. These results hold after controlling for potential sample selection bias.     

ACCOUNTABILITY AND CORRUPTION: POLITICAL INSTITUTIONS MATTER

This study uses a cross-country panel to examine the determinants of corruption, paying particular attention to political institutions that increase accountability. Even though the theoretical literature has stressed the importance of political institutions in determining corruption, the empirical literature is relatively scarce. Our results confirm the role of political institutions in determining the prevalence of corruption. Democracies, parliamentary systems, political stability, and freedom of press are all associated with lower corruption. Additionally, common results of the previous empirical literature, related to openness and legal tradition, do not hold once political variables are taken into account.     

Determinants of early internationalization of new firms: the case of Chile

The aim of this article is to analyze the factors related to the early internationalization of new firms in Chile. We grouped the internationalization driver factors into three categories: individual, organizational, and firm-environmental factors. Using a sample of 374 entrepreneurs from Global Entrepreneurship Monitor data and performing a logistic regression model, we found that owner-manager’ high educational levels, opportunity-oriented motivation, new technology use, and activities related to extractive sectors (e.g., farming, forestry, fishing, and mining) contribute to a higher likelihood of early firm internationalizing. The implications for theory and practice are discussed.     

Well-connected short-sellers pay lower loan fees: A market-wide analysis

High loan fees generate short-selling constraints and, therefore, reduce price efficiency. Despite the importance of loan fees, empirical evidence on their determinants is scarce. Using a market-wide deal-by-deal data set on the Brazilian equity lending market which uniquely identifies borrowers, brokers, and lenders, we are able to construct a proxy of search costs at the borrower–stock–day level. We find that—for the same stock, on the same day—borrowers with higher search costs pay significantly higher loan fees. Our results suggest that regulators should encourage the use of a centralized lending platform to reduce search costs in the lending market.