Public entrants,public equity finance and creative destruction

We explore the importance of new public firms and public equity finance for R&D and creative destruction in the US high-tech sector. Over 1900 new public firms enter high-tech manufacturing between 1970 and 2004; they are increasingly R&D intensive and rely extensively on public equity finance in the 1980s and 1990s. We estimate dynamic R&D models and find a strong link between public equity finance and R&D for new entrants, but not established entrants or incumbents. Further, recent cohorts of public entrants have a substantial economic impact: by 2000, recent public entrants account for almost half of high-tech sales and more than half of R&D. Variation in the availability of public equity finance has a marked impact on entrant R&D and the rate at which entrants take market share from incumbents. Our findings identify a key channel through which public equity markets facilitate the process of creative destruction.     

Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches

In corporate finance and asset pricing empirical work, researchersare often confronted with panel data. In these data sets, theresiduals may be correlated across firms or across time, andOLS standard errors can be biased. Historically, researchersin the two literatures have used different solutions to thisproblem. This paper examines the different methods used in theliterature and explains when the different methods yield thesame (and correct) standard errors and when they diverge. Theintent is to provide intuition as to why the different approachessometimes give different answers and give researchers guidancefor their use.     

Auctions as a Means of Creating a Market for Public Goods from Agriculture

The paper looks at the possibility of creating a market for environmental goods and services in the countryside by awarding conservation contracts to farmers on the basis of competitive bidding. Auctions have several theoretical advantages over alternative allocation mechanisms (such as standard-rate payments) because they allow the participants to deal with informational asymmetries and the uncertainty about the value of the (non-market) goods being traded. A formal model of bidding behaviour in ‘green auctions’ shows that bidding strategies are determined by the individual farmers' costs of implementing the conservation contracts and their beliefs about the maximum acceptable payment level, making the auction an imperfect cost revelation mechanism. Auctions can reduce the information rents accruing to farmers and can increase the cost-effectiveness of public goods provision. Strategic bidding behaviour in multiple-signup auctions as well as high transaction costs are potential sources of reduced efficiency.     

The environment as a challenge for governmental responsibility — The case of the European Water Framework Directive

The European Water Framework Directive is shaping a new conception of integrative water protection. In this article, the consequences of the Water Framework Directive in respect to national environmental policy will be discussed in referring to the notion of responsibility which is a central concept of political philosophy and theory. It will be shown that the new conception of integrative water protection entails a fundamental change in European water protection policy and also environmental policy at all. It implies that environmental policy has not only to prevent environmental damage but in particular has to warrant a good status of the environment, such that it must maintain a good status of water or even achieve it if this status does not exist. Achieving and maintaining a good status of the environment is, however, an encompassing task. Thereby, state power will eventually be overexerted. The threat of such overexertion has to be kept in mind in discussing the perspective of the so called New Environmental Governance. It will be pointed out that the New Environmental Governance is not primarily a form of some sort of democratic participation but rather designed to improve state power in environmental politics.     

The Effect of Auditor Style on Reporting Quality: Evidence from Germany

This paper examines whether the ‘style’ of individual auditors influences financial reporting quality in Germany. Audit quality in Germany should be uniformly high, because of strong reputational needs, strict controls on operating procedures, and quality enforcement mechanisms. An audit partner's style should not affect this quality level. However, our results do not support this expectation. Exploiting a unique dataset comprising the names of the audit engagement and review partners of listed German companies, we find that audit engagement partners in Germany have a significant influence on audit quality, beyond firm‐ and office‐level factors. In contrast, audit review partners do not have a consistent significant influence on audit quality. We measure audit quality by the level of a firm's abnormal accruals and its propensity to meet or beat an earnings target. We also find that the 2005 adoption of a new audit quality enforcement system that includes ‘naming and shaming’ does not reduce the influence of audit partner style on financial reporting quality.     

Some Ethical Considerations on the use of Criminal Records in the Labor Market: in Defense of a New Practice

Employers’ access to and use of criminal records as a selection mechanism in the labor market makes it far more difficult for ex-offenders to find jobs, especially regular, well-paid jobs, than those without criminal convictions. The paper asks whether there is anything morally problematic about this practice. The aims of the paper are twofold. First, arguments based on premises of wrongful discrimination against the current, commonest use of criminal records are critically discussed. It is argued that employers do not necessarily engage in morally wrongful discrimination against job applicants when they use criminal records in recruitment screening, but it is also argued that ex-offenders who apply for jobs are subject to what can be called “structural and morally wrongful discrimination” when laws allow employers to request (or directly access) a job applicant’s full criminal record. Second, preliminary proposals on how criminal records can be used by employers in a way that avoids wrongful structural discrimination of ex-offenders will be presented and critically assessed. I suggest that it should be lawful for an employer to access an applicant’s criminal records only where there is a relevant and special match or link between the crime on the records and the job being applied for and the crime is serious. This proposal is defended against two objections, one based on concerns about crime prevention and the other based on the employer’s interest in knowing whom not to hire.     

Handelssanktionen — Wirkungen und Nebenwirkungen

Wirtschaftsdienst - Länder setzen immer wieder Wirtschaftssanktionen gegen andere Nationen ein, um diese zu einem bestimmten Handeln zu bewegen. Ein verändertes Verhalten soll dadurch...     

Target and technical efficiency in DEA: controlling for environmental characteristics

In this paper we propose a target efficiency DEA model that allows for the inclusion of environmental variables in a one stage model while maintaining a high degree of discrimination power. The model estimates the impact of managerial and environmental factors on efficiency simultaneously. A decomposition of the overall technical efficiency into two components, target efficiency and environmental efficiency, is derived. Estimation of target efficiency scores requires the solution of a single large non-linear optimization problem and provides both a joint estimation of target efficiency scores from all DMUs and an estimation of a common scalar expressing the environmental impact on efficiency for each environmental factor. We argue that if the indices on environmental conditions are constructed as the percentage of output with certain attributes present, then it is reasonable to let all reference DMUs characterized by a composed fraction lower than the fraction of output possessing the attribute of the evaluated DMU enter as potential dominators. It is shown that this requirement transforms the cone-ratio constraints on intensity variables in the BM-model (Banker and Morey 1986) into endogenous handicap functions on outputs. Furthermore, a priori information or general agreements on allowable handicap values can be incorporated into the model along the same lines as specifications of assurance regions in standard DEA.

Supply Chain Management at the Crossroads: Divergent Views,Potential Impacts,and Suggested Paths Forward

The academic field of supply chain management (SCM) is comprised of scholars holding four different worldviews based on their academic heritages. This situation presents both threats and opportunities for SCM scholarship and practice. In this brief paper, we explain why we see this occurring, and actions that academics might take in order to form a more cohesive and effective SCM discipline.     

Supplier Role Conflict: An Investigation of Its Relational Implications and Impact on Supplier Accommodation

Existing research on supply chain relationships suggests that one of the underlying tensions between supply chain partners is that of opposing perspectives and goals in the customer?supplier relationship. In today's business world with requirements in constant flux, suppliers are often asked to accommodate “special” requests made by their customers, not part of the contractual agreement. Suppliers frequently fill requests to protect the relationship with the customer, even if they fall outside of what they consider their role as a supplier. Issues of supplier role conflict emerge when customers and suppliers have different views of what the supplier's role should entail. There is little research examining the potential for supplier role conflict in supply chains. Specifically, this research draws on literature from multiple disciplines to consider supplier role conflict that may stem from accommodation and the impact of this role conflict and supplier accommodation on the supply chain relationship and future accommodation behavior. Hypotheses are tested using two scenario‐based experiments. Results suggest that supplier adaptation and flexibility both have positive relational effects. If suppliers perceive accommodation requests as outside of their contracted role, supplier role conflict can have detrimental effects on the supplier's relationship perceptions and their willingness for future accommodation.