Managerial ownership and corporate diversification: a longitudinal view

Strategy and finance research suggests that managerial ownership results in increased incentive alignment and therefore is negatively related to corporate diversification. Using a longitudinal approach, we develop arguments to examine whether managerial ownership is associated with subsequent changes in diversification and/or if diversification is associated with subsequent changes in ownership. The results indicate that levels of managerial ownership in one time period are not associated with subsequent changes in corporate diversification, which raises incentive alignment questions. We also find that higher levels of corporate diversification are associated with changes in managerial ownership, which suggests support for the employment risk‐reduction perspective. This study provides important reasons to reassess the longitudinal implications of the managerial ownership‐corporate diversification link from both theoretical and managerial perspectives. Copyright © 2007 John Wiley & Sons, Ltd.     

I know something you don't know!: The role of linking pin directors in monitoring and incentive alignment

Increasing regulatory pressures have created specialization within boards, with more requirements and responsibilities being refocused to the committee level. Using data from S&P 1,500 firms, we find that board committee overlap associated with linking pin directors (i.e., those serving simultaneously on the audit and compensation committees) is an important conduit for knowledge transfer between boards' monitoring and incentive alignment functions. These directors are associated with lower executive compensation and influence pay mix. In studying the dynamics behind this process, we find that newly created linking pins improve monitoring effectiveness whereas recently dissolved linking pins decrease it. We also find that linking pins are all the more important when managers make less conservative accounting choices. Copyright © 2014 John Wiley & Sons, Ltd.     

Defining airline compatible luggage

The airline and luggage industries hold widely different views about which party should bear responsibility for checked luggage (baggage) damaged during transport. The problem is compounded by the fact that there currently is no uniformly accepted definition of or standards for airline compatible luggage. While much attention has been given to the carry-on baggage issue, many feel that the problems surrounding checked baggage are at the heart of the matter. This case study outlines the attempts of both industries to address the issue of performance standards for airline compatible luggage.     

This is your brain on neuromarketing: reflections on a decade of research

ABSTRACT

In this commentary, we reflect on the last decade of research in the field of neuromarketing and present a schematic illustration of the basic process of a typical neuromarketing study. We then identify three critical points of interest in this illustration that have not received enough discussion in neuromarketing-relevant literature, and which we consider to be somewhat problematic. These are the dominance of event-based designs in neuromarketing, the potential of alternative modalities in neuromarketing and the current focus on reverse inference in neuromarketing. We argue that, taken together, these points have substantive implications for the development of a more reflective neuromarketing, which in turn has greater potential to make a positive impact on marketing knowledge, marketing practice and public perceptions of marketing activity in general.     

Die Perspektive der Gesetzlichen Krankenversicherung in der gesundheitsökonomischen Evaluation

The economic evaluation of health technologies from the perspective of the Statutory Health Insurance (SHI) gains increasing importance. But so far there is no systematic presentation of this perspective in the literature. The article at first develops the sickness funds perspective from the target system of SHI, which is distinguished into (1) a normative level, (2) a positive target system of each single sickness fund and (3) a positive target system of the collective SHI-system, in which the normative level is used as gauge. Subsequently the cost valuation of the main healthcare services from the viewpoint of sickness funds are derived from the target systems: (1) physician care, (2) pharmaceuticals, (3) medical remedies and ancillary equipment, (4) in-patient care, (5) rehabilitation care and (6) sick pay. Additionally alternative calculation schemes of healthcare costs from the perspective of the sickness funds are developed which account for different data access in health economic evaluation projects. Finally the SHI-perspective is compared to the societal perspective.     

Time is of the Essence!: Retired Independent Directors’ Contributions to Board Effectiveness

Journal of Business Ethics - Institutional investors, policy makers, and researchers have advocated for greater director independence in hopes of improving corporate governance and discouraging...     

To Thine Shareholders Be True? Linking Large Corporate Ownership to Firms’ Use of Commitment Human Resource Practices

Human resource practitioners and academics have increasingly realized the importance of corporate governance for firm human resource activities. This study investigates how one important form of corporate governance, namely, ownership within large, publicly traded firms, is associated with a firm's use of commitment human resource practices (CHRPs), specifically, the use of incentive compensation, profit sharing, and participative decision making. Our findings indicate that the types of large investor, namely, family and institutional, are differentially associated with the likelihood of the firm using these CHRPs. Specifically, family owners with their long‐term investment horizon, as well as their stakeholder orientation, increase the likelihood of the firm using these practices. In contrast, large institutional owners with their shorter‐term investment horizon, as well as their investor orientation, decrease the likelihood of the firm using these practices. Furthermore, among institutional investors, transient institutional investors are negatively associated with these practices, while dedicated institutional investors are not associated with these practices. Taken together, our results regarding the positive association of family ownership and this subset of CHRPs and the negative association of transient institutional investors and this set of practices, have important implications for human resource professionals who not only need to understand how ownership affects HR practices but also how to articulate the value of these investments in order to attract investors. © 2015 Wiley Periodicals, Inc.     

Owners on both sides of the deal: mergers and acquisitions and overlapping institutional ownership

Using a corporate governance lens, this study considers owners with a stake in both the acquiring and the target firms in the context of mergers and acquisitions. A possible agency problem arises with regard to monitoring implications as managers may be able to take advantage of compromised monitoring because overlapping owners may focus on the aggregate value for both the acquiring and the target firms and nonoverlapping owners may be interested only in the acquirer's side of the deal. The results suggest that when more owners overlap in their ownership of both the acquiring and target firms, the acquiring firms are more likely to experience decreased shareholder value through merger and acquisition deals. This effect, however, can be constrained by stronger board control. Copyright © 2010 John Wiley & Sons, Ltd.     

Death-related publicity as informational advertising: evidence from the music industry

The sales of books, DVDs, and music albums frequently increase substantially after the death of an artist. Yet, the mechanism behind this stylized fact remains unclear. In this paper, we examine whether after-death sales increases reflect primarily an affective reaction of existing customers or informative advertising for previously uninformed new customers. In our main study, we use weekly sales data for 446 music albums of 77 artists who died between 1992 and 2010. We show that album sales increase on average by 54.1 % after death and that the relative increase in sales is higher for the artist’s better albums. This suggests that death-related publicity serves primarily as informational advertising that attracts new customers who buy the artist’s best albums after death. Complementary evidence from a survey study with more than 2,000 participants confirms this interpretation and shows that information-based motives are relatively more important for after-death consumption than affect-based motives.     

IMF’s assistance: Devil’s kiss or guardian angel?

This paper contributes to the debate on the efficacy of IMF’s catalytic finance in preventing financial crises. Extending Morris and Shin (J Int Econ 70: 161–177, 2006), we consider that the IMF’s intervention policy usually exerts a signaling effect on private creditors and that several interventions in sequence may be necessary to avert an impending crisis. Without the IMF’s signaling ability, our results state that repeated intervention is required to bail out a country, whereby additional assistance may induce moral hazard on the debtor side. Contrarily, if the IMF exerts a strong signaling effect, one single intervention suffices to avoid liquidity crises.