Entrepreneurial actions and optimistic overconfidence: The role of motivated reasoning in new product introductions

Optimistic overconfidence (OO), that is, being certain of success only to end up disappointed, represents a potentially catastrophic error. However, few studies have identified which entrepreneurial actions are associated with it. To explore this issue, we examined 55 small companies and found that OO of product success was positively related to introducing products that required more resources and were more pioneering. Furthermore, satisfaction with company performance had a curvilinear (U-shaped) relationship with overconfidence. Both high and low levels of satisfaction were associated with greater OO in product introductions. In addition, the bias was positively correlated with entering hostile environments; that is, environments that are characterized by intense competition that threatens a firm and its introductions. Contrary to expectations, however, OO was negatively associated with environmental dynamism; defined as environments that embody frequent and large changes. The research also compared general knowledge overconfidence to OO, concluding that each represents a distinct bias with distinct effects.     

Trade Reform and Manufacturing Pricing Behavior in Four Archetype Asia‐Pacific Economies*

General equilibrium models are constructed of four Asia‐Pacific economies that differ according to their levels of development, the comparative sizes of their manufacturing sectors and their patterns of comparative advantage and trade protection. The countries chosen are Australia, an industrialized importer of manufactures; Japan, an industrialized exporter; the Philippines, a developing importer; and the Republic of Korea, a developing exporter. Manufacturing industries are characterized as comprising identical oligopolistic firms producing homogeneous goods that are differentiated from competing imports. Oligopoly behavior notwithstanding, trade reforms are found to yield conventional results in that net economic gains are small while implicit transfers are substantial. More competitive (non‐collusive) pricing by oligopolistic firms, which might be achieved through reform of competition law and trade practices surveillance, yields larger net gains and these gains tend to accrue to all domestic primary factors. Such reforms also yield substantial interaction between oligopoly behavior and economic and industrial structure.     

OPEN MARKET REPURCHASES: THE VALUE FROM BUYING SHARES AT A DISCOUNT

This article shows that share repurchase announcements create value for shareholders when the shares of the industrial firm sell at a discount from the value of the underlying assets, even when shareholders and managers share full information about the firm's prospects and the firm's operating performance is not expected to improve. The value created by capturing the discount on the repurchased shares is a function of only two variables: the percentage discount prior to the announcement and the proportion of shares to be repurchased.
For a sample of 100 companies selling below net asset value, the authors report that the excess stock returns surrounding their announcements of open market repurchases are (significantly) positively associated with the authors' estimates of the value captured from buying shares at a discount. Moreover, the stock market's response to repurchase announcements by companies that are selling at a discount is considerably more positive than to announcements by firms selling at a premium.     

Measuring marginal intra-industry trade

Measuring Marginal Intra-Industry Trade. — Trade liberalisation and adjustment: how important is intra-industry trade? This paper focuses on the appropriate measurement of intra-industry trade as indicator of structural adjustment costs. It is argued that existing dynamic versions of the Grubel-Lloyd index reflect horizontal trade only and classify vertical intra-industry trade with inter-industry trade. The paper proposes a method to distinguish between horizontal and vertical trade and applies these techniques to emerging trade between the EU and the economies of central and eastern Europe.     

The Impact of Housing Stressors on the Mental Health of a Low-Income African-American Population

Health and disease reflect broad social conditions including economic, environmental, and cultural components. The impact of challenging housing conditions experienced by low-income African American households on their mental health is an example of this principle. Do physical housing conditions, the presence of roaches and rodents, plumbing defects, and heating/cooling problems contribute to mental health dysfunction such as being depressed, feeling worried, feeling sad, feeling helpless, and feeling emotionally upset? To address this research question, a sample of 128 households that originally lived in public housing in Washington, D.C. were surveyed. These households had been relocated to other low-income housing during the demolition and reconstruction phase of a HOPE VI project, some to alternative public housing developments and others to private units based on vouchers. The survey included self-reports by heads of household on their housing conditions and mental health status using Likert scales. The survey also asked participants for demographic, socio-economic, and physical health data and for information on neighborhood characteristics. Correlation and regression analyses were used to estimate the impact of building structure, building systems, neighborhood characteristics, physical health, and socio-economic/demographic variables on mental health stresses. Specific housing issues included the number of bedrooms, plumbing, heating, cooling, rodents, roaches, and building security (the independent variables). Mental health stresses (the dependent variables) included feeling depressed, nervous, anxious, sad, helpless, and having trouble concentrating. Several alternative specifications and models were used and estimated. They generally demonstrated strong overall explanatory value. The findings from these models suggested that challenging housing conditions significantly contributed to many mental health disorders. For example, in the 2SLS model of “problem being depressed”, the condition of the apartment (β?=?0.278, t?=?2.022) and plumbing (β?=?0.182, t?=?2.145) were significant and the model’s explanatory power was reasonable with an adjusted R²?=?0.221. Many non-housing control variables were also significantly associated with mental health challenges.     

European and North American Sports Differences(?)

Past comparative work argues that the differences between European and North American sports dramatically outweigh any similarities. This paper explores the arguments that fans, sports organizations, and team objectives are different in the two regions and offers a set of questions that must be answered if, indeed, the opposite is not true. In addition, insights gained from the overriding similarities are offered concerning competitive balance, life after the Bosman decision, broadcasting, and league structure in Europe. European sports are far from any tragic end, but directors of sports organizations have seen the handwriting on the wall, economically speaking. They are about to live in lively times.     

Ethics and the Ivory Tower: The Case of Academic Departments of Finance

This study reports the results from a survey of 1,000 finance faculty members within schools of business across the U.S. concerning their knowledge of ethical transgressions as well as their attitudes towards ethics training in the curriculum. Ethical breaches appear most frequently with the unauthorized duplication of licensed software and the misuse of university resources for private consulting activity. Yet knowledge of ethical misconduct is highly segmented, with significant differences in reporting frequency between groups based upon citizenship, academic rank and school size. Contrary to the implications of Hawley (1991), we find there is a widely held belief by finance educators that business ethics has a legitimate role in business curriculums and should be included in finance course work. Further, our respondents strongly reject the notions that ethical practices are inconsistent with the principle of shareholder wealth maximization or that finance is more susceptible to ethical transgressions than other functional areas of business. We conclude that finance faculty are able to serve as legitimate ethical mentors for students and by implication may positively influence future corporate ethical behavior.     

Proof of concept processes in UK university technology transfer: an absorptive capacity perspective

Successful research commercialisation within the university domain is predicated upon basic research being developed into technology that will attract funding, ultimately resulting in entities such as University spin-out companies or licensing arrangements. This development process involves considerable risk and uncertainty and may require substantial resources to fund early stage operations while returns are uncertain. Hence there is a need to explore risk-minimisation approaches relating to proving the potential for development while concurrently allocating resources in an incremental manner. This paper focuses on the development of the Northern Ireland Proof of Concept (PoC) process within a University Science Park Incubator (USI) as a particular approach to addressing these challenges inherent in the United Kingdom University technology transfer. Furthermore, Absorptive Capacity has emerged in the literature as an appropriate theoretical framework or lens for exploring the development and application of new technology. Therefore, the aim of this paper is to explore the PoC process within a USI as a means for improving the commercialisation of University technology transfer using an Absorptive Capacity perspective. A multiple case analysis of PoC applications within a UK university is described. From the findings it emerges that Absorptive Capacity influencing factors such as levels of R&D investment, prior knowledge base and integration of stakeholder and technology planning all impact on PoC outcomes. In addition a number of process improvement areas for PoC are identified in relation to the influencing factors within the Absorptive Capacity framework.     

The Choice Between Spin-offs and Sell-offs

Spin-offs and sell-offs are alternative methods for divesting assets, but the effects on the parent firm differ substantially. We examine firms' characteristics that may influence the asset divestiture choice between a spin-off and sell-off. Results of the analysis indicate that the primary factors influencing the choice of divestiture type are financial distress, number of directors on the board, whether the CEO is also the Board Chair, and the size of the unit divested.