A Model of Collaborative Entrepreneurship for a More Humanistic Management

Inter-organizational models are both a well-documented phenomena and a well-established domain in management and business ethics. Those models rest on collaborative capabilities. However, mainstream theories and practices aimed at developing these capabilities are based on a narrow set of assumptions and ethical principles about human nature and relationships, which constrain the very development of capabilities sought by them. This article presents an Aristotelic–Thomistic approach to collaborative entrepreneurship within and across communities of firms operating in complementary markets. Adopting a scholarship of integration approach and evaluating the six studies of communities of organizations, we contribute an inter-organizational network model based on the assumptions about human motives and choice offered by Aristotle. We argue that the sustainability of inter-organizational communities depends on how rich is the set of assumptions about human nature upon which they are based. In order to develop and sustain collaborative capabilities in inter-organizational communities, a set of assumptions that takes both self-regarding and others’-regarding preferences as ends is required to avoid any kind of instrumentalization of collaboration, which is an end in itself. Implications for theory and practice are discussed.     

The Aggregate Relation between Profits and Concentration is Consistent with Cournot Behavior

An important and controversial stylized fact inindustrial organization is the positive correlationbetween industry profit and concentration. Oneinterpretation of this finding is based on thetheories of Chamberlin and Stigler, which imply thatconcentrated industries facilitate collusion. Butnon-cooperative profit maximizing behavior can alsogenerate a positive correlation. This paperpresents an equilibrium model of oligopoly whichnests the behavioral assumptions of Bertrand,Cournot, and Chamberlin. Simulations of the modelunder the Cournot assumption yield regressioncoefficients for the profits-concentration relationthat are very close to the estimated coefficients inthe literature.     

An empirical study of voluntary transfer pricing disclosures in China

This paper empirically investigates the factors that affect the management’s voluntary disclosures of the transfer pricing details of related-party transactions. Using Chinese data from 2004 and 2005, we hypothesize and find that firms that make voluntary disclosures of the pricing methods of related-party transactions are negatively associated with (i) a higher level of earnings management (as captured by abnormal related-party transactions) and (ii) its underlying incentives (as captured by the management’s performance-linked bonuses and the firm’s incentives to achieve earnings targets); further, they are positively associated with (i) a higher percentage of independent directors and (ii) a higher percentage of government ownership. Overall, our findings suggest that earnings management and its incentives, board composition, and ownership structure significantly influence the voluntary disclosure decisions of managers.     

Capital tax competition and social security

The classic capital tax policy externality is studied in the presence of a social security program where both the benefits and taxes depend on wages in an overlapping generations economy with many countries and mobile capital. We study the response and welfare implications of a coordinated capital tax rate increase across countries competing for the mobile tax base on the initial generations, the transition, and the steady state. The tax increase is initially completely capitalized, but some of the burden is shifted to labor on the transition path and in the steady state. Several new welfare effects are uncovered including an effect involving the parameters of the social security program. Sufficient conditions are provided so that all current and future generations are better off from the reform. However, social security may reduce the gain to capital tax reform.     

Event Study Analysis in Cases with Multiple Brand-Generic Reverse-Payment Settlements

Abstract

Event studies of stock price movements have been used to assess the anticompetitive impact of ‘reverse-payment’ settlement of patent disputes in the drug industry. Evidence for an anticompetitive effect is found when financial markets reward a brand manufacturer with larger stock market capitalization – signaling the agreed upon generic entry date was more profitable (i.e. later) than investors’ expectations. In practice, reverse-payment cases can involve multiple generic competitors and settlements. This paper considers how event-study methodology applies in such cases, with a study of the stock price movements of Cephalon, manufacturer of the drug Provigil. Cephalon entered into four patent litigation settlements with potential generic competitors over a two-month period beginning in December 2005. Event study methods can readily be applied to such a case. Cephalon’s total increase in stock value across four narrow windows around each settlement totaled over $1.0 billion, indicating the agreements delayed generic entry beyond the market's expectation.     

AN ANALYTICAL MODEL OF THE RELATIONSHIP BETWEEN MATURITY AND BONDS RISK DIFFERENTIALS

This paper extends previous analyses of bond risk differentials by relaxing the key assumption of a constant probability of firm survival. Under the less restrictive assumption that firm income is stationary and independent over time, it is shown that risk differential clearly varies with maturity even with a flat term structure. Because the payoff possibilities of multi-period bonds are interdependent even though income in each period is independent, risk differentials must depend on maturity, even if term structure is flat. This conclusion is more compatible with empirical findings than were conclusions of previous analyses.     

The evolution of food aid : Towards a development first regime

The purpose of food aid has evolved over the past 30 years, shifting from surplus disposal to a ‘development first’ regime. This shift was accelerated by the World Food Conference, but even 10 years after the conference it is yet to be completed. There are inherent tensions between the older and new design principles. The author proposes a more coherent set of governing principles and norms.     

Employee ownership and internal governance

This paper is designed to counter Oliver Williamson's hypothetical ‘Peer Group’ model of organization with a discussion of three prosperous populations of employee-owned firms: worked-owned scavenger companies, taxi cooperatives, and professional partnerships such as the large law firm. It will be shown here that these firms are formed, endure and prevail over their competition for reasons that Williamson, more than anyone else, has taught us to appreciate. In particular, this paper will argue that the metering problems and human asset considerations that are so prominently featured in Williamson's work are crucial for understanding the success of these firms.