Corporate taxation and the quality of research and development

This paper examines the impact of tax incentives on corporate research and development (R&D) activity. R&D tax incentives are commonly provided as special tax allowances or tax credits. In recent years, several countries also reduced their income tax rates on R&D output with the purpose to foster R&D activity. Previous papers have shown that all three tax instruments are effective in raising the quantity of R&D related activity. We in turn assess the impact of corporate tax incentives on the quality of R&D projects, i.e., their innovativeness and earnings potential. Using rich data on corporate patent applications to the European patent office, we find that a low tax rate on patent income raises the average profitability and innovation level of the projects undertaken in a country. The effect is statistically significant and economically relevant and prevails in a number of sensitivity checks. Generous R&D tax credits and tax allowances are in contrast found to exert a negative impact on project quality.     

New telecommunications services in Austria : A technology assessment

Public fears have grown up surrounding the uncertain potential benefit or harm of recent rapid technological advances in Austrian telecommunications. A technology assessment was called for, to proffer comprehensive and balanced information on the current state of, and future developments in, Austrian telecommunications. This paper explains the organization of the Austrian PTT, discusses successful new services, considers their relationship to the law and the economy, and analyses their social impact.     

How Preussag Became TUI: A Clinical Study of Institutional Blockholders and Restructuring in Europe

Between 1997 and 2004, Preussag, a diversified German conglomerate of "old economy" businesses, transformed itself into TUI, a company focused almost entirely on tourism and logistics. We analyze how Preussag executed this change, and how the change contributed to Preussag's underperformance in the stock market. We find that only the divestitures created value, that the strategy to invest in tourism destroyed value, and that the acquisition premiums Preussag paid were mostly unjustified. The case shows how divestiture programs increase the liquid resources available to management and casts doubt on the positive governance role of institutional blockholders.     

Resources access needs and capabilities as mediators of the relationship between VC firm size and syndication

Drawing from the resource-based view and transaction costs economics, we develop a theoretical framework to explain why small and large firms face different levels of resource access needs and resource access capabilities, which mediate the relationship between firm size and hybrid governance. Employing a sample of 317 venture capital firms, drawn across six European countries, we empirically assess our framework in the context of venture capital syndication. We estimate a path model using structural equation modeling and find, consistent with our theoretical framework, mediating effects of different types of resource access needs and resource access capabilities between VC firm size and syndication frequency. These findings advance the small business literature by highlighting the trade-offs that size imposes on firms that seek to manage their access to external resources through hybrid governance strategies.     

Organizational capital,production factor resources,and relative firm size in strategic equity alliances

Access to complementary resources through strategic equity alliance networks is an important activity for both smaller and larger firms. In the literature, there is an intensive debate on the impact of alliance resources for smaller firms. We submit that the effect of alliance resources on the smaller firm financial performance depends on the attributes of these resources. Specifically, we argue that the attributes of partner organizational capital are negatively related and the attributes of partner production factor resources are positively related to the smaller firm financial performance. We test our theoretical framework by applying a longitudinal analysis to a dataset of 1730 firm-year observations of strategic equity alliances in the software industry in 25 countries over an 11-year period. We find support for our hypotheses, highlighting the critical importance of resource attributes for smaller firms in strategic equity alliance networks.     

Monopsony in the Labor Market,Minimum Wages and the Time Horizon: Some Unresolved Issues

This article discusses development of optimal solutions for monopsony in the labour market for the long run (when labour and capital are both flexible). It is shown that binding minimum wages up to a certain degree pushes the monopsonists to choose a high capital intensity of production, just as high as or even higher than that chosen when there is no regulation for minimum wages. Thereby, we demonstrate the existence of re-switching effects in the tradition of Piero Sraffa. The second part of the paper recalculates and analyzes earlier results by making use of the rather general constant elasticity of substitution production function. Based on a numerical solution for optimal monopsony under different regimes (no minimum wage, minimum wages of different values, etc.), we formulate a two-period game between the government and the monopsonistic firm (‘minimum wage game’). Finally, we analyze the relationship between the elasticity of substitution on the one hand and likely levels of employment on the other hand, after introduction of minimum wages.     

Rating Expatriate Leader Effectiveness in Multisource Feedback Systems: Cultural Distance and Hierarchical Effects

A critical challenge for global firms is to implement assessment tools to develop expatriate leaders who can effectively manage role relationships across different directions (upward, laterally, downward) in cross‐national contexts. Drawing on social categorization and relational demography theories and a data set of 360‐degree ratings of expatriates from 36 countries, we use multilevel modeling to investigate relationships between cultural distance and ratings of leadership effectiveness in task and contextual performance by colleagues with different hierarchical vantage points (subordinates, supervisors, peers). Cultural distance refers to the overall degree of difference in key cultural values identified in the GLOBE study between an expatriate's and coworkers’ countries of origin. Unlike supervisors as a rating group, results show that peer and subordinate raters as a group may be more likely to have their ratings negatively influenced by cultural distance, an effect that may be exacerbated for peer ratings from countries higher in power distance and lower in humane orientation. This study contributes to the understanding of multisource feedback systems to assess expatriate leadership effectiveness by identifying likely group ratings tendencies linked to cultural distance and hierarchical perspectives. Organizations should develop strategies to mitigate possible effects of cultural distance on subordinate and peer ratings of expatriates. © 2015 Wiley Periodicals, Inc.     

Bayesian smooth-and-match inference for ordinary differential equations models linear in the parameters

Dynamic processes are crucial in many empirical fields, such as in oceanography, climate science, and engineering. Processes that evolve through time are often well described by systems of ordinary differential equations (ODEs). Fitting ODEs to data has long been a bottleneck because the analytical solution of general systems of ODEs is often not explicitly available. We focus on a class of inference techniques that uses smoothing to avoid direct integration. In particular, we develop a Bayesian smooth-and-match strategy that approximates the ODE solution while performing Bayesian inference on the model parameters. We incorporate in the strategy two main sources of uncertainty: the noise level of the measured observations and the model approximation error. We assess the performance of the proposed approach in an extensive simulation study and on a canonical data set of neuronal electrical activity.     

Introducing a general class of species diversification models for phylogenetic trees

Phylogenetic trees are types of networks that describe the temporal relationship between individuals, species, or other units that are subject to evolutionary diversification. Many phylogenetic trees are constructed from molecular data that is often only available for extant species, and hence they lack all or some of the branches that did not make it into the present. This feature makes inference on the diversification process challenging. For relatively simple diversification models, analytical or numerical methods to compute the likelihood exist, but these do not work for more realistic models in which the likelihood depends on properties of the missing lineages. In this article, we study a general class of species diversification models, and we provide an expectation-maximization framework in combination with a uniform sampling scheme to perform maximum likelihood estimation of the parameters of the diversification process.