Dynamic capabilities and firm performance in a financial crisis

In this study, an organization means an active actor that can, at least to some extent, adapt to the environment, mainly within the limits of its resources and capabilities. The article enhances understanding of and explains organizational adaptive behavior in weathering the storm in the business environment resulting from the global financial crisis of 2008. The literature on dynamic capabilities, organizational change, and innovation in the context of organizational performance and survival captures this kind of adaptive behavior. The empirical study builds on a quantitative survey and a qualitative case study covering the food processing, maritime, and media industries. Structural equation modeling, group analysis, and qualitative case comparisons shed light on the connection between the constructs in question. Implications for theory and practice culminate in suggestions for future research.     

Changing investment styles: style creep and style gaming in the hedge fund industry

Notwithstanding their common features, hedge funds remain an extremely diverse asset class. Information on fund styles is important for numerous purposes, such as portfolio construction, performance attribution and risk management. With fund self‐declaration being prone to (strategic) misclassification, return‐based taxonomies grouping funds along similarities in realized returns provide a useful alternative. We provide a consistent classification system of homogeneous groups of hedge funds based on self‐organizing maps. Whereas some fund categories such as managed futures are largely consistent in their self‐declared strategies, others, especially so‐called ‘equity hedge’ funds, display no or very limited return similarities. Furthermore, we also find evidence of fund managers performing undisclosed changes of their trading style over time. Those funds that misclassified themselves once are particularly likely to change their trading style again. Although style self‐declaration can, therefore, be quite misleading, our results indicate that hedge funds do not misdeclare their style strategically to improve their relative performance. Copyright © 2006 John Wiley & Sons, Ltd.     

Holocaust concentration camp memorial sites: an exploratory study into expected emotional response

This study explored Dutch people's expected intensity of emotional responses of a potential visit to a concentration camp memorial site in the Netherlands. A total of 1050 online panel members participated in a questionnaire that contained a 33-item emotion scale. Results reveal that individuals with a closeness to the Holocaust expect to feel most emotions more intensely, specifically emotions that are traditionally considered ‘positive’, such as pride, love, joy, inspiration, excitement and affection. Overall, respondents expect to feel disgust, shock, compassion and sadness the strongest. Those who look from the viewpoint of the offenders mainly expect to feel emotions that are traditionally considered ‘negative’, whereas those who took the point of view of the victims also expect a more ‘positive’ emotional reaction to the visit. Managerial implications address aspects of education, storytelling and authenticity.     

Suppliers' roles in category management: A study of supplier–retailer relationships in Finland and Sweden

The purpose of this paper is to analyze suppliers' roles in category management (CM) in the context of Finnish and Swedish supplier–retailer relationships. Using data from a survey of a sample of Finnish and Swedish suppliers, the study shows that the concept of CM is well known among both Finnish and Swedish suppliers, and that most of them have experience of CM as a key operational business process. The study also shows that, in general, larger suppliers in both Finland and Sweden have a relatively strong role in CM collaboration, whereas smaller suppliers (especially in Finland) are more likely to have a lesser role in CM collaboration. Suppliers with a strong role in CM collaboration are generally more capable of influencing individual CM tactics than suppliers with an equal role to competitors or those with no role (both in Finland and in Sweden). The study also finds that the effects of CM are perceived more positively among suppliers who have influence in decision-making regarding CM collaboration than among those who have no role in such decision-making. However, the opinions of suppliers who have no role in CM collaboration are neutral, rather than being especially negative. Qualitative studies, including face-to-face discussions with managers representing manufacturers who are more or less excluded from CM collaboration, might provide a more thorough understanding of CM from their perspective.     

Strategic Investigations of Water Conflicts in the Middle East

Comprehensive strategic analyses are carried out for three connected water conflicts that occurred along the Euphrates River in 1975, 1990, and 1998. The objective is to gain insight into the causes and resolutions of these disputes, and to learn how similar situations can be effectively managed in the future. All three conflicts involve Turkey, the upstream country of both the Euphrates and Tigris Rivers, and one or both of Syria and Iraq, which lie downstream. The analysis will demonstrate the importance to conflict resolution of coalitions and of third-Party interventions.     

The Impact of Liquidity on Debt Maturity After a Financial Crisis: Evidence from the Gulf Cooperation Council Region

This article contributes to the existent literature on corporate debt maturity by studying a new channel through which firms may mitigate the effects of a major economic downturn such as the 2008 global financial crisis. More specifically, using a sample of 208 listed firms in the Gulf Cooperation Council (GCC) region, we find that an increase in firms’ current ratios after the crisis is associated with an increase in long-term financing. We also find that a financially constrained firm can still access long-term financing if its current ratio after the crisis is beyond a specific threshold. Additionally, we highlight the differences in the typical drivers of debt structure between GCC countries and industries.     

Stock market bubble effects on mergers and acquisitions

We investigate if and how mergers and acquisitions are affected by trends in the capital market, and particularly by a stock market bubble. Our main findings indicate that while the prevalence of M&A increased during the technology bubble, the pricing of M&A did not change. Moreover, the bursting of the bubble seems to have led to further cautiousness by investors, which extended throughout the years subsequent to the bursting of the bubble, even when prices on the exchange had rebounded. While we do not find robust evidence for changes in price multiples outside the exchange in concomitance with the changes on the exchange, we document changes in the information used by investors to value their targets. It seems that investors experienced a learning process in terms of the type of variables preferred, appearing to be more cautious since the bubble burst. This learning process investors undergo in concomitance to processes in the market seems to result in their being less affected by periodical or cyclical sentiments of euphoria and depression in the capital market.     

Experimenting and learning with localized direct communication

We report an experiment in which subjects may learn from each other. Specifically, a “queue” of players who are identically informed ex ante make decisions in sequence over two lotteries. Every player except the first in the queue observes (only) his immediate predecessor’s choice and payoff before making his own decision. In equilibrium decisions are identical from the first or second player onwards in all experimental conditions. However, complete adherence to equilibrium play is seldom observed in our experiment. We further analyze our data using a quantal response equilibrium approach and test for behavioral regularities related to base rate fallacy/conservatism bias, social conformity/rebelliousness, and preference for experimentation (preferring the lottery with potentially more information spillover value). Our estimations reveal a consistent preference for experimentation across conditions, and further analysis offers some support to our surmise that this behavioral regularity is due, in part, to an attempt to influence others behind in the queue.