The Development of Organizational Social Capital: Attributes of Family Firms*

abstract We develop and extend social capital theory by exploring the creation of organizational social capital within a highly pervasive, yet often overlooked organizational form: family firms. We argue that family firms are unique in that, although they work as a single entity, at least two forms of social capital coexist: the family's and the firm's. We investigate mechanisms that link a family's social capital to the creation of the family firm's social capital and examine how factors underlying the family's social capital affect this creation. Moreover, we identify contingency dimensions that affect these relationships and the potential risks associated with family social capital. Finally, we suggest these insights are generalizable to several other types of organizations with similar characteristics.     

The role of shareholder proposals in corporate governance

This paper examines the corporate governance role of shareholder-initiated proxy proposals. We find that target firms tend to underperform and have generally poor governance structures, with little indication of systematic agenda-seeking by the proposal sponsors. Governance quality also affects the voting outcomes and the announcement period stock price effects, with the latter strongest for first-time submissions and during stock market peaks. Proposal implementation is largely a function of voting success but is affected by managerial entrenchment and rent-seeking. The results imply that shareholder proposals are a useful device of external control, countering arguments that they should be restricted rather than facilitated under the SEC's current regulatory agenda.     

Defining viable recovery paths toward sustainable fisheries

This paper develops a formal analysis of the recovery process for a fishery, from crisis situations to desired levels of sustainable exploitation, using the theoretical framework of viable control. We define sustainability as a combination of biological, economic and social constraints which need to be met for a viable fishery to exist. Biological constraints are based on the definition of a minimum resource stock to be preserved. Economic constraints relate to the existence of a guaranteed profit per vessel. Social constraints refer to the maintenance of a minimum size of the fleet, and to the maximum speed at which fleet adjustment can take place. Using fleet size adjustment and fishing effort per vessel as control variables, we first identify the states of this bioeconomic system for which sustainable exploitation is possible, i.e. for which all constraints can be dynamically met. Such favorable states are called viable states. We then examine possible transition phases, from non-viable to viable states. We characterize recovery paths with respect to the time of crisis of the trajectory, which is the number of periods during which the constraints are not respected. The approach is applied to the single stock of the bay of Biscay Nephrops fishery. The transition path identified through the viability approach is compared to the historical recovery process, and to both open-access and optimal harvesting scenarios.     

Rawlsian equity and generalised utilitarianism with an infinite population

Summary This note provides axiomatizations of the discounting utilitarian rule and the Rawlsian infimum rule for an infinite setting. Contrary to the finite case, an objective function cannot at the same time satisfy anonymity and the strong Pareto principle. The Rawlsian rule is based on anonymity, and the discounting rule on the strong Pareto axiom. Furthermore, the infimum rule is compatible with an infinite version of ordinal level comparability, and the discounting rule with cardinal unit comparability.This text presents research results of the Belgian Programme of Interuniversity Poles of attraction initiated under the Science Policy Programmes of the Prime Minister's Office, Belgium. The scientific responsibility is assumed by its authors.I would like to thank two referees for their most helpful comments. I am grateful to Bart Capéau, Erik Schokkaert, John Sweeney, Dirk Van de gaer, and Luc Van Liedekerke for their remarks.     

THE EUROPEAN PERSPECTIVE ON THE COMPOSITION AND VARIABILITY OF THE ECU

In 1979 the Ecu was established as a currency basket including the currencies of the nine EC-member countries at that time. Its composition was modified in 1984 and again in 1989 by increasing the number of currencies in the basket to 10 and 12 respectively. The results of our analysis show that the Ecu has become consistently less variable with each change in its composition, when expressed in terms of the Greek drachma, Italian lira, Portuguese escudo, Spanish peseta, and to a lesser extent the British pound. However, the Ecu has become consistently less stable with respect to the German mark and the Dutch guilder. The results were mixed for the Belgian/Luxembourg franc, French franc, Irish punt and Danish krone.     

Shareholder Wealth Effects of European Domestic and Cross‐border Takeover Bids

This paper analyses the short‐term wealth effects of large intra‐European takeover bids. We find announcement effects of 9% for the target firms compared to a statistically significant announcement effect of only 0.7% for the bidders. The type of takeover bid has a large impact on the short‐term wealth effects with hostile takeovers triggering substantially larger price reactions than friendly operations. When a UK firm is involved, the abnormal returns are higher than those of bids involving both a Continental European target and bidder. There is strong evidence that the means of payment in an offer has an impact on the share price. A high market‐to‐book ratio of the target leads to a higher bid premium, but triggers a negative price reaction for the bidding firm. We also investigate whether the predominant reason for takeovers is synergies, agency problems or managerial hubris. Our results suggest that synergies are the prime motivation for bids and that targets and bidders share the wealth gains.     

A longitudinal study on the relationship between financial bootstrapping and new venture growth

While bootstrap finance is widely used in entrepreneurial ventures, both scholars and practitioners have presented conflicting views on the relation between financial bootstrapping and venture growth. This article empirically investigates the association between bootstrap strategies used at startup and subsequent venture growth. For this purpose, we use a longitudinal database comprising data from both questionnaires and financial accounts of 214 new ventures. Findings demonstrate that the association between financial bootstrapping and venture growth is either nonexistent or positive. More specifically, new ventures that use more owner funds, employ more interim personnel, encourage customers to pay more quickly, and apply for more subsidy programs exhibit higher growth over time. We discuss the managerial and policy implications of these results and suggest avenues for future research.     

Bounding preference parameters under different assumptions about beliefs: a partial identification approach

We show how bounds around preferences parameters can be estimated under various levels of assumptions concerning the beliefs of senders in the investment game. We contrast these bounds with point estimates of the preference parameters obtained using non-incentivized subjective belief data. Our point estimates suggest that expected responses and social preferences both play a significant role in determining investment in the game. Moreover, these point estimates fall within our most reasonable bounds. This suggests that credible inferences can be obtained using non-incentivized beliefs.