Financial resource availability and corporate social responsibility expenditures in a sub‐Saharan economy: The institutional difference hypothesis

Studies done in developed economies have demonstrated a positive relationship between financial resource availability and CSR. Arguments that we term the Institutional Difference Hypothesis (IDH) drawn from the institutional literature, however, suggest that institutional differences between developed and developing economies are likely to result in different CSR implications. Integrating the logic of IDH with insights from slack resources theory, we argue that there exists a negative relationship between financial resource availability and CSR expenditures for firms in Ghana, a sub‐Saharan African emerging economy. We use lagged data from the Ghana Investment Promotion Centre and find that Return on Sales, Return on Equity, and Net Profitability were consistently associated with lower CSR expenditures. We highlight the implications of our findings for research and managers. Copyright © 2013 John Wiley & Sons, Ltd.     

Online RPM and MFN Under Antitrust Law and Economics

The legal framing of a firm’s pricing strategy can determine whether it constitutes online resale price maintenance (RPM) or online most favored nation (MFN). Together, cases that involve online RPM and MFN can be viewed as a natural experiment of how antitrust economics and law may adapt to an online world. Thus far, legal theories that have been inconsistent with economic theories have dictated enforcement across jurisdictions, which has led to confusion that thwarts potentially efficient business practices. This paper distinguishes issues of online RPM from traditional RPM and online RPM from online MFN. We apply the economics learning to RPM and analyze the antitrust cases of online RPM and MFN to date in the United States, Europe, and Australia. Finally, we offer policy recommendations that reduce the confusion in current legal doctrine.     

Predicting organizational identification at the CEO level

To develop further insight into antecedents of the CEO's psychological orientation toward the firm, we investigate what might lead CEOs to identify with their firms. Although research suggests that CEO organizational identification can be quite consequential for the firm, little research attention has been paid to its determinants. To predict how the special context of the CEO position might lead to identification, we consider a set of motives that members have for identifying with their organizations and consider how unique features of the CEO position might be relevant to those motives. Our theory and supportive findings help explain how the context of the CEO position, including variables often conceptualized as control mechanisms in agency theory research, can have important effects on subsequent CEO organizational identification. Copyright © 2014 John Wiley & Sons, Ltd.     

Business models and their relationship with marketing: A systematic literature review

The purpose of this paper is to identify the degree to which the marketing discipline has hitherto engaged with business model literature. The results of a systematic review of business model literature are presented and utilise both the citation counts and the h-index to objectively demonstrate the limited engagement that the marketing discipline has had with business model literature, and the limited degree that the discipline has influenced that literature. The key findings reveal a growing, but formative body of literature that, hitherto, has been dominated by non-marketing disciplines and which has only just begun to be addressed by present day marketing scholars. Using the most influential articles identified in the analysis, the paper concludes with a case for the empirical development of the business model concept with industrial marketing scholarship. Such development is argued to be grounded in the potential of open business models, co-created with multiple stakeholders in a supply chain and the end users of a value proposition.     

The Foreclosure–House Price Nexus: A Panel VAR Model for U.S. States, 1981–2009

Despite housing's economic importance, little has been written on how foreclosures and home prices interact in a framework that includes macroeconomic and housing variables such as employment, permits or sales. Panel VAR results for quarterly state‐level data indicate that price–foreclosure linkages run both ways. Foreclosures negatively impact home prices. The negative impact of prices on foreclosures, however, is much larger. These results suggest the low‐frequency association observed between foreclosures and prices is mostly driven by the endogenous adjustment of foreclosures to prices via the strategic choices of homeowners and lenders, rather than through the effects of foreclosures on home prices.     

The Impact of Second Loans on Subprime Mortgage Defaults

An estimated 12.6% of primary mortgage loans were simultaneously originated with a second loan from 2004 until 2008, although relatively little is known about how the presence of such subordinate loans affects the default decisions of borrowers. We use a novel data series of loan servicing records from 2002 until 2010 to identify such borrowers and find evidence that the default behavior of these borrowers significantly differs from borrowers without second loans. Estimating a discrete‐time proportional odds hazard model, we find borrowers with a second loan were 62.7% more likely to default each month on their primary loan when conditioning alone on the attributes of the primary loan. However, borrowers of second loans were 58.3% less likely to default on their primary loan as compared to single‐loan borrowers with equivalent current combined attributes (i.e., loan‐to‐value, balance and interest rate). We hypothesize and provide empirical evidence that this occurs because borrowers with second loans have the option to sequentially default on each loan since subordinate lenders will not pursue foreclosure if borrowers have insufficient equity. Lenders of defaulted subordinate debt may revisit their decision to foreclose in the future after housing markets start to recover, thus prompting a new round of foreclosures.     

Optimal Farm-to-Market Transportation and Storage of Certain Agriculture Commodities: Bogota,Colombia ∗

Decision rules for the make-buy decision most often assume the form of single-item, incremental cost rules which, for application, require decisions to be made for each item in isolation from all others. While it has been recognized that such decision rules may be non-optimal in situations where equipment capacity limits exist, the literature has not considered other cases where non-optimality arises. The purpose of this paper is to use linear programming as a framework for evaluating the optimality of single-item, incremental cost rules. The major conclusion of this paper is that the presence of any type of binding constraint in the planning problem, regardless of its origin, renders a single-item decision rule potentially non-optimal. A set of optimal screening decision rules is developed to be used in conjunction with a linear programming model for make-buy decisions in cases where such binding constraints exist.     

Private equity leveraged buyouts in European telecoms: The case of Eircom

Highly leveraged buyouts (LBOs) of former state owned telecoms operators by private equity groups have occurred in a number of countries in recent years. This paper examines the case of Eircom in Ireland which has experienced five changes in ownership since full privatisation in 1999, two of which were LBOs. Enormous increases in Eircom’s debt levels as a result of the LBOs resulted in the company’s bankruptcy in 2012. This paper argues that this outcome was largely attributable to the short-termist strategies adopted by the private equity groups that assumed ownership of the enterprise. These strategies included high leverage, cash extraction and underinvestment in the fixed-line network which contributed to the demise of the enterprise and had wider economic and social effects. The Eircom case demonstrates the risks attendant to ownership of important network infrastructure by private equity groups and the need for regulatory safeguards to protect the public interest.     

Reaffirming the CEO effect is significant and much larger than chance: A comment on Fitza (2014)

A recent study by Fitza argued that the prior estimates of the Chief Executive Officer (CEO) effect are conflated with events outside the CEO's control, are largely the result of random chance, and that the true CEO effect is smaller than has been previously estimated. We suggest that the empirical methodology employed by Fitza to support these claims substantially overstates the “random chance” element of the CEO effect. We replicate Fitza's findings, highlight methodological issues, offer alternative conclusions, and using multilevel modeling (MLM), suggest that his analyses mischaracterize the CEO effect. Copyright © 2016 John Wiley & Sons, Ltd.