Long waves,inventions, and innovations

It is argued that aggregate R and D and patenting activity, while generally less volatile than short term economic activity, is more closely related to the latter in the longer term. Second, ‘fundamental’ or ‘basic’ inventions exhibit a clustering behaviour, although there appears to be no clear-cut relationship with the overall level of economic activity. Third, we find no support for Mensch's argument that lead times between invention and innovation contracted in the 1930s. Fourth, we find some evidence for a bunching of innovations in the 1930s, but this does not appear due to depression-induced acceleration. Fifth, in the particular case of plastics, where the 1930s clustering is particularly clear, the forces at work were primarily related to ‘science push’ and the particular requirements of the German economy.     

International diffusion of technology,industrial development and technological leapfrogging

This paper anlyzes how the international diffusion of technology fits historically within the overall process of ‘spurts’ of industrialization and what lessons can be learned by the present industrializing countries in the context of the microelectronics revolution. A review of some of the most important contributions to the technology diffusion literature and their relevance to structural theories of industrial development of economic growth is presented in the first part of the paper. A discussion of international diffusion, especially historical changes in technological leaderships, follows. The paper concludes with a consideration of the implications of diffusion analysis for industrializing countries and argues that the developing countries' potential for technological ‘leapfrogging’ into microelectronics has never been higher.     

International portfolio diversification benefits: Cross-country evidence from a local perspective

We investigate how the benefits of international portfolio diversification differ across countries from the perspective of a local investor. We find that the benefits of investing abroad are largest for investors in developing countries, including when controlling for currency effects. Most of the benefits are obtained from investing outside the region of the home country. These global diversification benefits remain large when controlling for short-sales constraints in developing stock markets. The gains from international portfolio diversification appear to be largest for countries with high country risk. In addition to this cross-sectional evidence, we also provide evidence that diversification benefits vary over time as country risk changes. We find that diversification benefits have decreased for most countries in our sample over the past two decades.     

Career anchors: A comparison between organization‐assigned and self‐initiated expatriates

In the present study, based on the theory of fit, we have tested hypotheses on a sample of 303 French expatriates, comparing career anchors between assigned and self‐initiated expatriates. We found that lifestyle and internationalism are both very important anchors for assigned as well as self‐initiated expatriates, although most anchors differ among these groups. Furthermore, we have introduced a measure of the internationalism career anchor that presents promising psychometric characteristics. Our results provide important theoretical and practical implications. In particular, they show that both assigned expatriates and self‐initiated expatriates can be engaged in a boundaryless career. © 2010 Wiley Periodicals, Inc.     

Ownership, managerial control and the governance of companies listed on the Brussels stock exchange

This paper examines how corporate control is exerted in companies listed on the Brussels Stock Exchange. There are several alternative corporate governance mechanisms which may play a role in disciplining poorly performing management: blockholders (holding companies, industrial companies, families and institutions), the market for partial control, debt policy, and board composition. Even if there is redundancy of substitute forms of discipline, some mechanisms may dominate. We find that top managerial turnover is strongly related to poor performance measured by stock returns, accounting earnings in relation to industry peers and dividend cuts and omissions. Tobit models reveal that there is little relation between ownership and managerial replacement, although industrial companies resort to disciplinary actions when performance is poor. When industrial companies increase their share stake or acquire a new stake in a poorly performing company, there is evidence of an increase in executive board turnover, which suggests a partial market for control. There is little relation between changes in ownership concentration held by institutions and holding companies, and disciplining. Still, high leverage and decreasing solvency and liquidity variables are also followed by increased disciplining, as are a high proportion of non-executive directors and the separation of the functions of CEO and chairman.     

The role of shareholder proposals in corporate governance

This paper examines the corporate governance role of shareholder-initiated proxy proposals. We find that target firms tend to underperform and have generally poor governance structures, with little indication of systematic agenda-seeking by the proposal sponsors. Governance quality also affects the voting outcomes and the announcement period stock price effects, with the latter strongest for first-time submissions and during stock market peaks. Proposal implementation is largely a function of voting success but is affected by managerial entrenchment and rent-seeking. The results imply that shareholder proposals are a useful device of external control, countering arguments that they should be restricted rather than facilitated under the SEC's current regulatory agenda.     

Extreme Value Analysis of Mortality at the Oldest Ages: A Case Study Based on Individual Ages at Death

In this article, the force of mortality at the oldest ages is studied using the statistical tools from extreme value theory. A unique data basis recording all individual ages at death above 95 for extinct cohorts born in Belgium between 1886 and 1904 is used to illustrate the relevance of the proposed approach. No leveling off in the force of mortality at the oldest ages is found, and the analysis supports the existence of an upper limit to human lifetime for these cohorts. Therefore, assuming that the force of mortality becomes ultimately constant, that is, that the remaining lifetime tends to the Negative Exponential distribution as the attained age grows is a conservative strategy for managing life annuities.     

Corporate governance quality: Trends and real effects

This paper constructs a composite index of corporate governance quality, documents its evolution during the 1994–2003 period in selected emerging and developed economies, and assesses its impact on growth and productivity of the economy and its corporate sector. Our investigation yields three main findings. First, corporate governance quality in most countries has overall improved, although in varying degrees and with a few notable exceptions. Second, the data exhibit cross-country convergence in corporate governance quality with countries that score poorly initially catching up with countries with high corporate governance scores. Third, the impact of improvements in corporate governance quality on traditional measures of real economic activity—GDP growth, productivity growth, and the ratio of investment to GDP—is positive, significant and quantitatively relevant, and the growth effect is particularly pronounced for industries that are most dependent on external finance.     

Spillover of corporate governance standards in cross-border mergers and acquisitions

In cross-border acquisitions, the differences between the bidder and target corporate governance (measured by newly constructed indices capturing shareholder, minority shareholder, and creditor protection) have an important impact on the takeover returns. Our country-level corporate governance indices capture the changes in the quality of the national corporate governance regulations over the past 15 years. When the bidder is from a country with a strong shareholder orientation (relative to the target), part of the total synergy value of the takeover may result from the improvement in the governance of the target assets. In full takeovers, the corporate governance regulation of the bidder is imposed on the target (the positive spillover by law hypothesis). In partial takeovers, the improvement in the target corporate governance may occur on voluntary basis (the spillover by control hypothesis). Our empirical analysis corroborates both spillover effects. In contrast, when the bidder is from a country with poorer shareholder protection, the negative spillover by law hypothesis states that the anticipated takeover gains will be lower as the poorer corporate governance regime of the bidder will be imposed on the target. The alternative bootstrapping hypothesis argues that poor-governance bidders voluntarily bootstrap to the better-governance regime of the target. We do find support for the bootstrapping effect.     

The Effect of Business and Financial Market Cycles on Credit Ratings: Evidence from the Last Two Decades

We analyze the effect of business and financial market cycles on credit ratings using a sample of firms from the Russell 3000 index that are rated by Standard and Poor's over the period 1986–2012. We also examine investor reaction to credit rating actions in different stages of business and financial market cycles. We document that credit rating agencies are influenced by business and financial market cycles; they assign lower credit ratings during downturns of business and financial market cycles and higher ratings during upturns. Our study is the first to find strong evidence of pro‐cyclicality in credit ratings using a long window. We also document stronger investor reaction to negative credit rating actions during downturns. Our results confirm theoretical predictions and inform regulators.