Entrepreneurial orientation in family firms: the moderating role of technological intensity and performance

This paper examines how socio-emotional factors can influence family firms’ commitment to entrepreneurially- oriented activities, and how their level of commitment is moderated by the technological intensity of the sector and firm performance. We find that, while family firms are less entrepreneurially-oriented than non-family firms, this gap closes with increasing technological intensity of the sector. We find no evidence, however, to suggest any change in entrepreneurial orientation in family firms resulting from a drop in firm performance.     

Managerial compensation

We review the existing literature on managerial compensation, with particular reference to the two contrasting views about its main driver. On the one hand, managerial compensation is seen to be the result of a market-based mechanism which ensures that managers have adequate incentives to maximize shareholder value. On the other hand, it is regarded to be a means whereby self-serving executives skim corporate profits and expropriate shareholders. We find that most of the existing literature supports the latter view as executives tend to benefit from windfall earnings and are able to extract rents in the presence of weak corporate governance.     

The Performance of the European Market for Corporate Control: Evidence from the Fifth Takeover Wave

This paper presents an in‐depth analysis of the performance of large, medium‐sized, and small corporate takeovers involving Continental European and UK firms during the fifth takeover wave. We find that takeovers are expected to create takeover synergies as their announcements trigger statistically significant abnormal returns of 9.13% for the target and of 0.53% for bidding firms. The characteristics of the target and bidding firms and of the bid itself are able to explain a significant part of these returns: (i) deal hostility increases the target's but decreases bidder's returns; (ii) the private status of the target is associated with higher bidder's returns; and (iii) an equity payment leads to a decrease in both bidder's and target's returns. The takeover wealth effect is however not limited to the bid announcement day but is also visible prior and subsequent to the bid. The analysis of pre‐announcement returns reveals that hostile takeovers are largely anticipated and associated with a significant increase in the bidder's and target's share prices. Bidders that accumulate a toehold stake in the target experience higher post‐announcement returns. A comparison of the UK and Continental European M&A markets reveals that: (i) the takeover returns of UK targets substantially exceed those of Continental European firms. (ii) The presence of a large shareholder in the bidding firm has a significantly positive effect on takeover returns in the UK and a negative one in Continental Europe. (iii) Weak investor protection and low disclosure in Continental Europe allow bidding firms to adopt takeover strategies enabling them to act opportunistically towards the target's incumbent shareholders.     

Consumption risk, technology adoption and poverty traps: Evidence from Ethiopia

Much has been written on the determinants of technology adoption in agriculture, with issues such as input availability, knowledge and education, risk preferences, profitability, and credit constraints receiving much attention. This paper focuses on a factor that has been less well documented: the differential ability of households to take on risky production technologies for fear of the welfare consequences if shocks result in poor harvests. Building on an explicit model, this is explored in panel data from Ethiopia. Historical rainfall distributions are used to identify consumption risk. Controlling for unobserved household and time-varying village characteristics, it emerges that not just ex ante credit constraints, but also the possibly low consumption outcomes when harvests fail, discourage the application of fertilizer. The lack of insurance or alternative means of keeping consumption smooth leaves some trapped in low return, lower risk agriculture, one of the mechanisms through which poverty perpetuates itself in agrarian settings.     

Does a Terroir Product Tell the Same Story to Tourists,Day‐trippers and Local Consumers? The Moderating Role of Variety‐seeking Tendency and Perceived Authenticity

The issue of segmentation of the culinary tourism market is central for local economic actors because many products and activities address several marketing targets, including tourists and residents. This research shows that the assessment of the attributes of a terroir cheese is not altered by the consumer's tourist status. In contrast, taking into account the underlying motivations behind culinary tourism, an individual variable (the variety‐seeking tendency) and a variable related to the product (its perceived authenticity) appear as relevant segmentation criteria for such a culinary tourism product. Copyright © 2015 John Wiley & Sons, Ltd.     

SMEs' Radical Product Innovation: The Role of Internally and Externally Oriented Knowledge Capabilities

This study examines the role and contribution of specific internally (knowledge diversity and sharing capabilities) and externally oriented knowledge‐related capabilities (exploratory, transformative, and exploitative learning processes of absorptive capacity) to radical product innovation in small and medium‐sized enterprises (SMEs). It extends the current literature on the topic by considering both types of knowledge‐related capabilities and by hypothesizing and testing connections between both. Our path analysis results, based on a sample of 194 SMEs in dynamic environments, indicate that radical innovation is positively affected by exploitative learning and by the knowledge sharing capability. Implications and suggestions for future research are discussed.     

Grounding Positive Duties in Commercial Life

For years business ethics has limited the moral duties of (transnational) enterprises to negative duties. Over the last decade it has been argued that positive duties also befall commercial agents, at least when confronted with large scale public problems and when governments fail. The argument that enterprises have positive duties is often grounded in the political nature of commercial life. It is argued that agents must sometimes take over governmental responsibilities. The German republican tradition argues along these lines as does Nien-Hé Hsieh. Agents in commercial life are bound by positive duties because at some point they become citizens that must take on the responsibilities of the state. In this paper we leave undisputed the claim that corporations must acknowledge positive duties. However, we demonstrate that the political grounding fails, at least in the sense that this theory insufficiently acknowledges a long standing liberal tradition that vindicates apolitical markets and clear borderlines between politics and economics. We carve out an alternative route to the grounding of one specific positive duty—the duty to further justice. Our argument is based on the moral nature of commercial agents (including corporations) and tries to demonstrate that the duty to further justice ensues from liberalism. Taking a Kantian perspective, it conceptualizes the duty to further justice as a moral duty, orientated toward the political domain. It is grounded in the obligation to attain moral autonomy in the civil condition.     

How relative income affects work hours preferences

In this article, we look at explanations for why people want to change their working hours. We focus on the role of income and differentiate between the effect of household income, personal income and self-perceived relative income. Using Flemish data on 1435 workers, we perform binary logistic regressions in which we compare those who are over- or underemployed with those who are currently working their preferred number of hours. Our results show that the desire to work fewer hours is mostly related to a bad work–life balance, while the wish to increase working hours is associated with relative income rather than absolute income. Based on our findings we recommend governments to not only focus on increasing flexibility at the individual level but to also consider these positional effects by taking measures (e.g. decreasing the duration of the standard working week) at the population level.     

Why Are the Levels of Control (So) Different in German and U.K. Companies? Evidence from Initial Public Offerings

We analyze why the control of listed German and U.K. companiesis so different. As shareholders in Germany are less protectedand control is less expensive, German investors prefer controllingstakes. We also focus on economic factors such as profitability,risk, and growth to predict the probability of occurrence ofdifferent states of control six years after the flotation. LargeU.K. companies become widely held, whereas in large German firmsnew shareholders control significantly larger stakes. Wealthconstraints become binding for U.K. shareholders, whereas Germanshareholders can avoid this by using pyramids. We find substantialdifferences between a takeover by a concentrated shareholderand one by a widely held company. For the United Kingdom, theprobability of the former increases when the company is risky,small, and poorly performing. Conversely, the latter is morelikely when the target is large, fast growing, and profitable.Poor performance and high risk require control and monitoringby a concentrated shareholder. Conversely, high growth and profitabilityattract widely held companies. Founders are less inclined todilute their stake to retain private benefits of control. WhenGerman firms are profitable and risky, control is likely togo to a concentrated shareholder, but growth and low profitabilityincrease the probability of a control acquisition by a widelyheld firm.     

Institution building and growth in transition economies

Drawing on the recent literature on economic institutions and the origins of economic development, we offer a political economy explanation of why institution building has varied so much across transition economies. We identify dependence on natural resources and the historical experience of these countries during socialism as major determinants of institution building during transition. Using natural resource reliance and the years under socialism to extract the exogenous component of institution building, we also show the importance of institutions in explaining the variation in economic development and growth across transition economies during the first decade of transition.