Toward a capability‐based conceptualization of business model innovation: insights from an explorative study

Although business model innovation (BMI) is more and more being acknowledged as key strategic task, current research is missing a conceptualization of core elements and relevant organizational capabilities. These research gaps impede a full theoretical understanding and a systematic and purposeful managerial application. By drawing on dynamic capability literature, this study addresses the question of how firms systematically and purposefully pursue BMI. Empirical analysis is based on six case studies in the specialized publishing industry, in which technological change has triggered numerous opportunities for new business models. The findings demonstrate that BMI can be conceptualized as a distinct dynamic capability. This capability can be disaggregated into a firm's capacity to sense business model opportunities, seize them through the development of valuable and unique business models, and reconfigure the firms' competences and resources accordingly. The present study outlines how distinct organizational routines and processes undergird these capacities. A conceptualization as dynamic capability contributes to a theoretical underpinning of BMI by integrating previously discussed dimensions of this phenomenon. Moreover, managers can gain concrete guidelines about how to systematically and purposefully approach BMI.     

Social Learning in Beauty‐Contest Games

We study the impact of social learning on the depth of reasoning in an experimental beauty‐contest game. Naive advice and observation of others' decisions as two forms of social learning trigger faster convergence to the equilibrium. We find that subjects who receive advice outperform uninformed subjects permanently, whereas subjects who observe others' past behavior before making their decision only have a temporary advantage over uninformed subjects. A series of control‐treatments and simulations indicate that the latter result is due to subjects failing to make the most out of observing others.     

Marcos M. López de Prado: Machine learning for asset managers

Financial Markets and Portfolio Management -     

Antecedents of M&A success: The role of strategic complementarity,cultural fit,and degree and speed of integration

In this paper, we develop a comprehensive model of M&A success. We integrate fundamental constructs of different schools and discuss their interdependencies with M&A success. Our theoretical framework was tested empirically across a sample of 106 SME transactions in the machinery, electronic, and logistic industries in the German‐speaking part of Central Europe. The results of our study support the demand for an integrative perspective and theory on M&A. M&A success is a function of strategic complementarity, cultural fit, and the degree of integration. Strategic complementarity also positively influences cultural fit and the degree of integration. Cultural fit positively influences M&A success, but surprisingly has a negative impact on the speed and degree of integration. The degree of integration is positively related to speed of integration. Copyright © 2013 John Wiley & Sons, Ltd.     

Towns (and villages): definitions and implications in a historical setting

The measurement of urbanization rates and other uses of statistical information, for example the use of historical town growth to measure long-term economic growth, are usually based on an ad hoc population threshold to define and practically classify settlements as towns. The method, however, trades off accuracy and precision for convenience and simplicity. This paper proposes a new threshold that uses the town size distribution together with agricultural data to derive an appropriate cutoff value. The relevance of agricultural income is integrated into the classification scheme through the differential effect of local agricultural endowments on settlement size. The threshold is chosen such that the size of towns above the cutoff is statistically not influenced by local agricultural endowments, while the size of villages, which is below the threshold, is indeed shaped by them. This new approach is practically demonstrated with an application to the urban system of the nineteenth century in the German region of Saxony. This setting is used to investigate the relevance of a different classification for the development of urbanization over time and Gibrat’s law. The results demonstrate that the underlying classification scheme matters strongly for the conclusions drawn from historical urban data. They also indicate that the use of a common population threshold for a comparative analysis or temporal comparisons in a historical context increases the misclassifications of settlements.     

Determinants of Current Account Imbalances in 16 OECD Countries: An Out-Of-Sample Perspective

We employ panel data as well as country-specific models to uncover empirically the determinants of current account imbalances. We find evidence of slope heterogeneity likely rendering the fixed-effect estimator inconsistent. Mean group estimation is followed to overcome the latter difficulty. Both estimation techniques are evaluated by means of in- and out-of-sample criteria. The mean group estimator outperforms the fixed-effect approach and, moreover, only three economic variables are found to impact on the current account balance significantly. These are the government budget balance, the domestic output gap and the changes of the terms of trade. We finally propose a parsimonious dynamic model of the current account, including only these variables and illustrate that it has similar predictive accuracy as country-specific benchmark models. JEL no. F32, C23, C53     

A Test of Strategic Trade Policy in the Semiconductor Industry: The Impact of Japanese Policy on U.S. Firms

This paper analyzes a multinational corporation that may use tax evasion and profit shifting as a means to minimize tax liabilities. Our main finding is that profit shifting may occur even when tax rates are the same across countries. This will be the case whenever there is a tax differential in effective tax rates resulting from differences in tax enforcement. In this context, profit shifting occurs to enable tax evasion in a country where tax enforcement is less harsh. Moreover, for a given differential in tax rates, differences in tax enforcement may either accentuate or dampen profit shifting. Importantly, the predictions regarding the direction of profit shifting that would result in our set-up may contrast sharply with those of the preceding literature.     

PIGS or Lambs? The European Sovereign Debt Crisis and the Role of Rating Agencies

This paper asks whether rating agencies played a passive role or were an active driving force during Europe??s sovereign debt crisis. We address this by estimating relationships between sovereign debt ratings and macroeconomic and structural variables. We then use these equations to decompose actual ratings into systematic and arbitrary components that are not explained by previously observed procedures of rating agencies. Finally, we check whether systematic, as well as arbitrary, parts of credit ratings affect credit spreads. We find that both do affect credit spreads, which opens the possibility that arbitrary rating downgrades trigger processes of self-fulfilling prophecies that may drive even relatively healthy countries towards default.     

Granularity of Services

Service-oriented architectures are widely discussed as a design principle for application and enterprise architectures. Nevertheless, an adequate granularity of services has not yet been researched sufficiently from an economic perspective. The finer the granularity to realize the functions of a process, the higher the number of services is, and the more effort has to be directed towards composing them. In contrast, very coarse-grained services bear the disadvantages of higher implementation costs and lower reuse potential (e.g., in different processes). The aim of the decision model proposed in this paper is to determine an adequate granularity of services from an economical perspective. Thus, degrees of freedom, which often exist for the choice of granularity after a domain analysis, can be leveraged to realize a cost-efficient solution. We illustrate the applicability and practical benefits of the decision model with an example from the context of a financial services provider.