Family Ownership and R&D Intensity in Small‐ and Medium‐Sized Firms

Research was largely consistent in predicting a negative relationship between family ownership and research and development (R&D) intensity until Chrisman and Patel, using a behavioral agency model (BAM), called this general assumption into question. They argued that publicly owned family firms typically invest less in R&D than nonfamily‐owned firms. This behavior may however be reversed if economic performance levels are below family aspirations or if family long‐term goals, such as pursuing strong transgenerational family control, are highly valued. While most researchers, like Chrisman and Patel, primarily focused on large listed firms, more research on the relationship between family ownership and R&D intensity in privately held small‐ and medium‐sized enterprises (SMEs) is required. This is because firm size can play an important role in understanding the innovation management behavior of firms. Building on the BAM perspective, in the present paper it is argued that Chrisman and Patel's results can be extended to the context of SMEs, albeit with one important specification: the relationship between family ownership and R&D intensity is likely to be contingent on the way the family has invested its wealth. Specifically, it is contended that in the context of SMEs, where goals are more fluid and mixed, when there is a high overlap between family wealth and firm equity (i.e., most of the family's wealth is invested in the firm) the relationship between family ownership and R&D intensity is negative because of the family owners' greater desire to protect their socioemotional wealth (SEW). However, if the overlap between the family's total wealth and single firm equity is low (i.e., firm equity is just a small part of the total family wealth), the relationship between family ownership and R&D intensity is positive as the low overlap between family wealth and firm equity reduces the family's loss aversion propensity. In such a situation, family ownership is likely to foster R&D intensity because of the long‐term orientation of family owners that increases the family firm's propensity to bear the risk of investing in R&D activities. The hypothesis is tested and confirmed in a study of 240 small‐ and medium‐sized firms based in Italy. The paper contributes to the literature in several ways. First, adding to the literature on innovation management and R&D intensity, it increases the understanding of what drives or inhibits R&D investments in SMEs when a family is involved in the ownership of the firm. This is particularly important because research on innovation management, as well as research on R&D intensity in family firms, is primarily focused on large firms and much less on SMEs. Second, the study complements arguments from prior research on the correlates of R&D intensity in large listed firms, showing that the BAM and SEW perspective offer a theoretical framework that is also able to illustrate the complex nature of innovation management in the context of SMEs. Third, the study contributes to research on the effects of family ownership on the general functioning of a firm. In particular, it provides new insights into how family ownership may affect R&D intensity.     

A simultaneous equations model of internal migration with dynamic policy simulations and forecasting: Italy, 1952-1976

The purpose of this study is to determine, with a dynamic simultaneous equations model, the relative importance of the most significant socioeconomic forces leading to the large-scale labor migration from the South to the North of Italy from 1952 to 1976, and to analyze its implications for the past and prospective development of the South. The model is estimated by Full Information Maximum Likelihood, validated by dynamic simulation, stressing dynamic policy simulations, and also presenting the results of some forecasting.     

欧元美元汇率挑战预期

本文通过对欧元创设以前以及成功实施以后来自大西洋两岸学者们的不同观点的回顾，指出欧元／美元汇率变动并非如人们所预料的那样。原因在于经济模型不可能穷尽所有的基本因素，在于媒体以及其他未曾预料的事件实际上不可能使模型正常运作。     

European Banking Union and bank risk disclosure: the effects of the Single Supervisory Mechanism

Review of Quantitative Finance and Accounting - This paper provides evidence on the impact of European Banking Union (BU) and the associated Single Supervisory Mechanism (SSM) on the risk...     

Upstream conduct and price authority with competing organizations

We characterize the degree of price authority that competing upstream principals award their downstream agents in a setting where these agents own private information about demand and incur nonverifiable distribution costs. Principals cannot internalize these costs through monetary incentives and design “permission sets” from which agents choose prices. The objective is to understand the forces shaping delegation and the constraints imposed on equilibrium prices. When principals behave noncooperatively, agents are biased toward excessively high prices because they pass on distribution costs to consumers. Hence, the permission set only features a price cap that is more likely to bind as products become closer substitutes, in sectors where distribution is sufficiently costly, and when demand is not too volatile. By contrast, when principals behave cooperatively, the optimal delegation scheme is richer and more complex. Because principals want to charge the monopoly price, the optimal permission set features a price floor when the distribution cost is sufficiently low, it features instead full discretion for moderate values of this cost, and only when it is high enough, a price cap is optimal. Surprisingly, while competition (as captured by stronger product substitutability) hinders delegation in the noncooperative regime, the opposite occurs when principals maximize industry profit.     

Criminal mobility,fugitives, and extradition rules

Two countries set their enforcement noncooperatively to deter native and foreign individuals from committing a crime in their territory. Crime is mobile, ex ante (migration) and ex post (fleeing), and criminals hiding abroad after committing a crime in a country must be extradited. When extradition is not too costly, countries overinvest in enforcement: insourcing foreign criminals is more costly than paying the extradition cost. When extradition is sufficiently costly, instead, significant enforcement may induce criminals to flee the country whose law they infringed on. The fear of paying the extradition cost enables the countries to coordinate on the efficient outcome.     

A cost-effectiveness modeling evaluation comparing a biosimilar follitropin alfa preparation with its reference product for live birth outcome in Germany,Italy and Spain

Abstract

Background/objective: Although biosimilar drugs may be cheaper to purchase than reference biological products, they may not be the most cost-effective treatment to achieve a desired outcome. The analysis reported here compared the overall costs to achieve live birth using the reference follitropin alfa (GONAL-f) or a biosimilar (Ovaleap) in Spain, Italy and Germany.

Methods: Patient and treatment data was obtained from published sources; assisted-reproductive technology, gonadotropin, follow-up and adverse-event-related costs were calculated from tariffs and reimbursement frameworks for each country. Incremental cost-effectiveness ratios (ICERs) were calculated from the difference in costs between reference and biosimilar in each country, divided by the difference in live-birth rates. Mean cost per live birth was calculated as total costs divided by the live-birth rate.

Results: The published live birth rates were 32.2% (reference) and 26.8% (biosimilar). Drug costs per patient were higher for the reference recombinant human follicle-stimulating hormone in all three countries, with larger cost differences in Germany (€157.38) and Italy (€141.50) than in Spain (€22.41). The ICER for the reference product compared with the biosimilar was €2917.47 in Germany, €415.43 in Spain and €2623.09 in Italy. However, the overall cost per live birth was higher for the biosimilar in all three countries (Germany €8135.04 vs. €9185.34; Italy €8545.22 vs. €9733.37; Spain €14,859.53 vs. €17,767.19). Uncertainty in efficacy, mean gonadotropin dose and costs did not have a strong effect on the ICERs.

Conclusions: When considering live birth outcomes, treatment with the reference follitropin alfa was more cost effective than treatment with the biosimilar follitropin alfa.     

A Comparison between Formal and Informal Mutual‐credit Arrangements

We analyze under what conditions a group of potential entrepreneurs prefer to form a Rotating Savings and Credit Association (ROSCA), or a mutual‐guarantee association, which we interpret in a rotating scheme and call Rotating Savings and Collateral Association (ROSCoA). We argue that: (1) ROSCAs (ROSCoAs) are likely to be more developed in countries with high (low) bank concentration; (2) the individual flow of savings required to participate in a ROSCoA is generally lower than that needed in a ROSCA; (3) under the assumption that members share their project income at the end of each period, ROSCAs and ROsCoAs are sustainable even without the use of sanctioning mechanisms.