Open innovation practices in SMEs and large enterprises

Few studies on open innovation (OI) address OI practices in small and medium-sized enterprises (SMEs) and how their use of OI and the resulting benefits differ from those of large enterprises. The lack of resources in SMEs to engage in looking outward is said to be a barrier to OI, but at the same time this shortage is cited as a motive for looking beyond organisational boundaries for technological knowledge. We investigate how OI dimensions impact the innovative performance of SMEs in comparison to large companies. The key finding is that the effects of OI practices in SMEs often differ from those in large firms. SMEs are more effective in using different OI practices simultaneously when they introduce new products on the market, whereas this is less the case for large firms. Turnover from new products in SMEs is driven by intellectual property protection mechanisms, while large firms in this case benefit more from their search strategies.     

Teaching business ethics

Business ethics should be taught in business schools as an integrated part of core curricula in MBA programs with a dual focus on both analytical frameworks and their applications to the business disciplines. To overcome the reluctance of many faculty to handle ethical issues, a critical mass of faculty must develop suitable materials, educate their peers in its use, and take the lead by introducing it in their own courses and on senior management programs.Jeffrey Gandz is an Associate Professor in the School of Business Administration, The University of Western Ontario. Following ten years of management experience in Europe and North America, Professor Gandz completed his Ph.D. at York University. He is active as a mediator and arbitrator in labour disputes, teaches Organizational Behavior, Human Resource Management, and Labour Relations at Western, and has published widely in those fields.Nadine Hayes is a Ph.D. candidate at The University of Western Ontario and a graduate of Western's Honors Business Administration Program. She has written several case studies in the field of Business Ethics and has worked with Jeffrey Gandz in developing the School's approach to the teaching of business ethics.     

Shaping the landscape: Agricultural policies and local biodiversity schemes

This paper analyses the potential effect of local agro-environmental policies in promoting multifunctionality in a rural landscape, with a two-scale modelling framework: a regional scale for food demand and a local scale for the forces driving land use. The framework has been designed in four steps. First, the relative influence of the driving factors on the current land use pattern has been analysed. Two scenarios are designed that vary the external demand for the total land use, and alter more or less quickly the specific location factors that drive the landscape pattern. The first scenario considers trends in the external and internal driving forces. The second relies both on totally decoupled farm subsidies and unregulated housing growth. In both scenarios a local agro-environmental policy is introduced and we compare its consequences with the previous scenario's landscape pattern. The third step consists of a modelling exercise that analyses the likely outcome of each scenario on the development of land use patterns on a local scale. Last, these landscape patterns have been translated into ecological indexes that assess the effect of the policy options on the multifunctionality of the local landscape.     

International debt shifting and multinational firms in developing economies

We present empirical evidence suggesting that the effect of the host country corporate tax rate on the debt ratio of multinational affiliates in developing economies is positive and larger than the same effect for affiliates in developed economies.     

Cross-border tax effects on affiliate investment—Evidence from European multinationals

Recent studies suggest that multinational firm activities at home and abroad are positively correlated which may be due to the use of common inputs (like marketing, patents, etc.). Then, a cost shock at one location may lead to reduced activity in all other locations within the firm. In this paper, we theoretically and empirically analyze national corporate tax policy in such a setting. Our main hypothesis is that corporate taxation at the parent location not only reduces the parent's capital stock but also lowers capital stocks at affiliates abroad. Using micro data on European multinational firms, we confirm the hypothesis showing that a 10 percentage point increase in corporate tax rates is associated with a 5.6% decrease in the affiliate's capital stock. From a welfare point of view, this cross-border tax effect on the capital stock gives rise to a negative fiscal externality of corporate taxation which is empirically shown to compensate a substantial fraction of the well-known positive externality due to profit shifting.     

Ecosystems for smart cities: tracing the evolution of governance structures in a dutch smart city initiative

International Entrepreneurship and Management Journal - Smart cities use integrated information and communication technology in order to help their citizens and organizations deal with the...     

The influence of the CEO's value perception towards auditing on audit demand in private firms

Audit demand is generally considered to be a direct reflection of the level of agency conflicts. This study examines the CEO's value perception towards auditing as additional driver for both auditor reputation demand (appointing a Big 4 auditor or not) and audit effort demand in private firms. Examining the CEO's value perception in a multidimensional way, the regression results indicate that the CEO's functional value perception towards auditing positively affects the demand for audit effort, while the CEO's social value perception towards auditing negatively affects the demand for audit effort but positively affects the demand for auditor reputation.     

Risk and capital transfer in insurance groups

The aim of this paper is to analyze the effect of capital and risk transfer instruments (CRTIs) on a financial group's risk situation. In this respect, we extend previous literature by accounting for the conglomerate discount on firm value, which is a reduction in shareholder value due to diversification within the group. In general, CRTIs between parent and subsidiaries have a substantial effect on the diversification of risks, economic capital requirements, and default risk, which we study in detail for different types of CRTIs, including intra-group retrocession and guarantees. One main finding is that diversification effects within the group are much lower when taking into account conglomerate discount effects. We believe this aspect to be an important issue in the ongoing discussion on group solvency regulation and enterprise risk management.     

The future of mobility and its impact on the automobile insurance industry

Among the trends impacting most industries are new mobility concepts, digitalization, urbanization, rising environmental awareness, and demographic change. The automobile insurance industry, in particular, is strongly affected by new mobility concepts, including autonomous, shared, and electric vehicles, which are expected to increasingly impact the risk exposure and insurance demand in the future. Identifying and assessing the resulting risk and opportunity landscape from these trends thus becomes a major strategic challenge for insurers. The aim of this paper is to analyze the trends that impact the field of mobility and thus automobile insurers. Based on this, we derive a set of strategic response measures for insurers to enable them to be prepared for the future of mobility.     

On the risk situation of financial conglomerates: does diversification matter?

In general, conglomeration leads to diversification of risk (the diversification benefit) and a decrease in shareholder value (the conglomerate discount). Diversification benefits in financial conglomerates are typically derived without explicitly accounting for reduced shareholder value. However, a comprehensive analysis requires competitive conditions within the conglomerate, i.e., shareholders and debt holders should receive risk-adequate returns on their investment. In this paper, we contribute to the literature on this topic by comparing the diversification effect in conglomerates with and without accounting for altered shareholder value. We derive results for a holding company, a parent-subsidiary structure, and an integrated model. In addition, we consider different types of capital and risk transfer instruments in the parent-subsidiary model, including intragroup retrocession and guarantees. We conclude that under competitive conditions, diversification does not matter to the extent frequently emphasized in the literature. The analysis contributes to the ongoing discussion on group solvency regulation and enterprise risk management, which is of relevance to insurance groups and other financial conglomerates.