Testing for Distortions in Performance Measures: An Application to Residual Income‐Based Measures like Economic Value Added

Distorted performance measures in compensation contracts elicit suboptimal behavioral responses that may even prove to be dysfunctional (gaming). This paper applies the empirical test developed by Courty and Marschke (Review of Economics and Statistics, 90, 428–441) to detect whether the widely used class of residual income‐based performance measures—such as economic value added (EVA)—is distorted, leading to unintended agent behavior. The paper uses a difference‐in‐differences approach to account for changes in economic circumstances and the self‐selection of firms using EVA. Our findings indicate that EVA is a distorted performance measure that elicits the gaming response.     

An analysis of factors affecting access to credit in Lesotho's smallholder agricultural sector

The agricultural sector in Lesotho is underperforming mainly due to the inability of smallholders to move from traditional agriculture to a more scientific and technology-based one. Among the challenges inhibiting the ability of smallholders to make the step up is access to financial services, especially credit. The purpose of this study was to examine the factors that may influence the ability of smallholders to access finance by making use of a logistic regression model within the principle component regression framework. The results revealed that the ability of smallholders to access finance, and the potential to make the transition towards a more scientific and technology-based agriculture sector, is influenced by the level of farm and non-farm income, remittances and pension, farm size, availability of family labour, land ownership, savings and repayment ability. The results present important information in terms of guiding institutional arrangements needed to improve credit availability in Lesotho.     

Monetary and fiscal policy transmission in the Euro-area: evidence from a structural VAR analysis

This paper studies the transmission of monetary and fiscal policy in the Euro-area. To do so, structural VAR models are estimated. First, the EMU countries are considered as an aggregate entity and the estimation results are compared with those for the US and Japan. Attention is also paid to interaction of macroeconomic policies and the effects of shocks in financial markets. As a next step, SVARs are estimated for the individual EMU countries to analyze cross-country differences. It turns out that, compared to the EMU aggregate, individual EU countries react rather differently to monetary and fiscal policy shocks.     

Satisfaction with Online Commercial Group Chat: The Influence of Perceived Technology Attributes, Chat Group Characteristics, and Advisor Communication Style

This study examines online commercial group chat from a structuration theory perspective. The findings support the influence of perceived technology attributes (control, enjoyment, reliability, speed, and ease of use) and chat group characteristics (group involvement, similarity, and receptivity) on customer satisfaction and the moderating role of advisor communication style on these influences. Furthermore, our results show that chat group characteristics influence customer satisfaction directly as well as indirectly via perceived technology attributes. Online chat satisfaction in turn influences behavioral intentions. Finally, group-level perceptions are found to add considerably to perceptions at the individual level. Our study illustrates that structuration theory provides a sound foundation for theoretical development and empirical investigation of online group chat. Also it shows that retailers need to carefully manage the intricate interplay between technology, chat groups, and online advisors to foster a satisfying experience for customers.     

Success and Risk Factors in the Pre-Startup Phase

Why does one person actually succeed in starting a business, while a second person gives up? In order to answer this question, a sample of 517 nascent entrepreneurs (people in the process of setting up a business) was followed over a three-year period. After this period, it was established that 195 efforts were successful and that 115 startup efforts were abandoned. Our research focuses on estimating the relative importance of a variety of approaches and variables in explaining pre-startup success. These influences are organized in terms of Gartner’s (Academy of Management Review 10(4), 696–706 [1985]) framework of new venture creation. This framework suggests that start-up efforts differ in terms of the characteristics of the individual(s) who start the venture, the organization that they create, the environment surrounding the new venture, and the process by which the new venture is started. Logistic regression analyses are run for the sample as a whole as well as for subgroups within the sample, namely for those with high ambition vs. low ambition and for those with substantial vs. limited experience. The results point to the importance of perceived risk of the market as a predictor of getting started vs. abandoning the startup effort.     

Industry Specific Sustainability Benchmarks: An ECSF Pilot Bridging Corporate Sustainability with Social Responsible Investments

This paper investigates the state of the art with respect to sustainability reporting, its linkages with the corporations, internal measurement and monitoring systems and their combined impact on the quality of contemporary sustainability benchmarks, developed by SRI analysts and so-called rating and screening agencies. This research originated from the EU-funded research initiative to create a new generation management framework for corporate sustainability and responsibility (CS-R). The aim of it is to develop a coherent set of assessment –, measurement – and monitoring tools. The sustainability benchmark tool should align the interests of corporations implementing CS-R and various organizations supporting SRI, such as fund managers, analysts and screening agencies. This paper show the essentials features of an actual sustainability benchmark which is currently under construction. This approach will have significance impact on the further development of SRI and CS-R practices, as well as support the development of sustainability reporting standards.     

The impact of new firm formation on regional development in the Netherlands

This paper examines the relationship between new firm formation and regional employment change in The Netherlands. Using a new regional data base for the period 1988–2002, we examine the time lags involved in the relationship. We also investigate whether the relationship differs by sector and by degree of urbanization. We find that the maximum effect of new businesses on regional development is reached after about 6 years. Our results also suggest that the overall employment impact of new-firm start-ups is positive but that the immediate employment effects may be small in The Netherlands. Furthermore, we find that the employment impact of new firms is strongest in manufacturing industries and that the employment impact of new firms is stronger in areas with a higher degree of urbanization.

Learning Opportunities and Learning Behaviours of Small Business Starters: Relations with Goal Achievement,Skill Development and Satisfaction

Learning is a vital issue for small business starters, contributing to short- and long-term business performance, as well as to personal development. This study investigates when and how small business starters learn. It specifies the situations that offer learning opportunities, as well as the learning behaviours that small business starters can employ in order to learn from these opportunities. In a cross-sectional, quantitative study of recently started small business founders, learning opportunities and learning behaviours are related to three outcome measures: a performance outcome (goal achievement), a personal growth outcome (skill development), and an affective evaluation outcome (satisfaction). The results show the importance of learning opportunities and learning behaviours in influencing these outcome variables, albeit not always in the directions we hypothesized.     

Making Sense of Corporate Social Responsibility

This paper provides preliminary insights into the process of sense-making and developing meaning with regard to corporate social responsibility (CSR) within 18 Dutch companies. It is based upon a research project carried out within the framework of the Dutch National Research Programme on CSR. The paper questions how change agents promoting CSR within these companies made sense of the meaning of CSR. How did they use language (and other instruments) to stimulate and underpin the contextual essence of CSR? Why did they do that in this particular way? What were the consequences of this approach for shaping the process of CSR in their company? Did their efforts contribute to a new way of thinking and acting or was it merely putting old wine in new barrels? A preliminary conclusion is that change agents use above all linguistic artefacts (words and notions) and carry out practical projects while constructing meaning. Still, the meaning of meaning itself remains highly intangible, situational and personality related.     

Knowledge spillovers and new ventures’ export orientation

We draw on the knowledge spillover literature to suggest that a country’s proportion of export-oriented new ventures represents an outcome of knowledge spillovers that stem from foreign direct investment (FDI) and international trade (export spillovers) as well as a source of knowledge spillovers (entrepreneurship spillovers). To test the hypotheses, we use macrolevel data from 34 countries during the period 2002–2005. We find that the relationship between FDI and international trade on the one hand and a country’s proportion of export-oriented new ventures on the other differs for higher- and lower-income countries. In addition, a country’s proportion of export-oriented new ventures affects the subsequent emergence of new businesses.