Firm versus Sector Effects on Profitability and Growth: The Importance of Size and Interaction

In this study we contribute to the long‐standing debate on the impact of firm versus industry effects on firm performance in three distinct ways; firstly by testing the firm, industry and their interaction effects on performance, secondly by examining the impact of each effect for different size groups, and lastly by measuring performance in terms of sales growth in addition to profitability. We use data of 71,750 UK firms, between 2002 and 2004, and employ moderated regression analysis for three sub‐samples namely micro, SMEs and large firms. With regards to profitability, we find the interaction effect to be significant in all sub‐samples for broad level of industrial aggregation (SIC4). For narrow industrial aggregation (SIC2), the interaction effect is only significant for micro firms. Neither of the above effects is significant for sales growth.     

Organizational slack as an enabler of internationalization: The case of large Brazilian firms

In this paper, we address an empirical puzzle. We note that a deliberate and serious drive to internationalize has occurred rather late in the evolution of large Brazilian firms. Meanwhile, and despite their late internationalization, these Brazilian firms expanded rapidly and intently. Despite the rich literature on Emerging Market Multinational Enterprises (EMNEs), there is still much contention on what drives rapid EMNE internationalization, particularly for the less explored firms from Latin America. Using an inductive case study of five leading Brazilian MNEs, we bring new insights on this neglected question. We unveil that the existence of organizational slack (of operational, managerial, and financial nature) can indeed facilitate rapid internationalization, particularly when triggered by unique home country conditions (e.g., regulation; rising cost of doing business at home; exhaustion of profitable growth opportunities in the domestic market).     

Financial service call centres: Problems encountered by the grey market

Technological advances have resulted in financial service companies being able to make use of alternative channels such as call centres and the Internet to deliver their services to their customers. At the same time, there has been a major growth throughout Europe in the grey market consisting of people who grew up in an age of face-to-face contact with service suppliers. This paper reports on a programme of qualitative research looking at the grey market's perceptions of the call centre delivery channel. It discusses the difficulties encountered by this market and the negative views that are held. It also highlights the need for further research into this area if financial service organisations are going to address the issues raised and effectively satisfy the needs of this growing market segment.     

Food allergic consumers' preferences for labelling practices: a qualitative study in a real shopping environment

Food allergy is a chronic disease that can only be managed through avoidance of problematic proteins in the diet. Inappropriate communication about food allergens can cause stress and insecurity, which may have a negative impact on quality of life. The aim was to investigate whether information provided through current labelling practices meets the need of food allergic consumers. A total of 40 participants (20 adult food allergy suffers and 20 parents of food allergic children) were recruited from two different European countries (Greece and The Netherlands), and interviewed while shopping in a supermarket. Participants were asked to purchase 15 potentially problematic food items as if for their own household. Their information search behaviour was observed, and participants were questioned about their preferences for food allergen information provision. Participants reported experiencing problems associated with current food allergy information provision. It was reported that inappropriate use of fonts, colours and languages, application of precautionary labelling and lack of harmonization in labelling practices across countries can cause (un)necessary dietary restrictions for food allergic consumers. Research is needed to investigate the feasibility and implementation possibilities for new information delivery strategies and amendments to existing European labelling policy.     

Consumers’ intention to buy protected designation of origin and protected geographical indication foodstuffs: the case of Greece

There is evidence that consumers tend to highly regard the quality, authenticity, ethical standards, country of origin and sustainable production of foodstuffs; hence, the growing number of studies on products of Protected Designation of Origin (PDO) and Protected Geographical Indication (PGI). PDO and PGI labelling is associated with the preservation of local plant varieties, the financial reward of local people and the sustainable development of rural areas. This study was set out to investigate the factors associated with Greek consumers’ intention to buy PDO/PGI food products. A total of 615 consumers took part in the study from the municipality of Attica, Greece. The survey was conducted during the period of March 2011 to April 2013. Results indicated that approximately 50% of respondents were willing to buy PDO/PGI products whereas the willingness to buy these products constituted an important factor in purchasing them. More specifically, according to the regression analysis, factors that are significantly associated with respondents’ willingness to buy PDOs/PGIs were as follows: origin, health claims and label of a product, as well as sustainable consumer behaviour. Understanding the main factors relating to consumers’ purchasing intent towards PDO/PGI products is an important step towards promoting special labelled agri‐foodstuffs and hence contributes to the local sustainable development.     

How childhood ADHD-like symptoms predict selection into entrepreneurship and implications on entrepreneurial performance

This study advances research on mental health and entrepreneurship through the examination of Attention Deficit Hyperactivity Disorder (ADHD)-like symptoms, associated with hyperactivity/impulsivity and inattention. We examine the impact of these symptoms at age 10 on entrepreneurial performance as an adult. We find that while ADHD-like symptoms in childhood may have a positive impact on entrepreneurial selection, they negatively impact on survival and performance, with a variant effect by each symptom, predominantly among males. We find that high levels of inattention predict business failure and lower take-home income, while high levels of hyperactivity/impulsivity contribute to overall negative earnings' growth.     

Foreign vs domestic ownership on debt reduction: An investigation of acquisition targets in Italy and Spain

This paper examines the role of foreign versus domestic ownership in reducing the debt levels of acquired firms in Italy and Spain over the period 2002–2010. Acknowledging that lower debt levels can mitigate the risk of failure and thus enhance the chances for a positive post-acquisition performance and survival, we particularly examine the causal effect of foreign and domestic acquisitions on two firm-level debt measures: gearing and short-term leverage. To estimate causal relationships, we control for selection bias by applying propensity score matching techniques. Our results indicate that foreign acquisition leads to a significant and steady reduction in the debt ratios of the target companies. In contrast, the relationship between domestic acquisition and debt reduction appears to be smaller and statistically less robust.     

Cooperation and Competition in Climate Change Policies: Mitigation and Climate Engineering when Countries are Asymmetric

We study a dynamic game of climate policy design in terms of emissions and solar radiation management (SRM) involving two heterogeneous countries or group of countries. Countries emit greenhouse gasses (GHGs), and can block incoming radiation by unilateral SRM activities, thus reducing global temperature. Heterogeneity is modelled in terms of the social cost of SRM, the environmental damages due to global warming, the productivity of emissions in terms of generating private benefits, the rate of impatience, and the private cost of geoengineering. We determine the impact of asymmetry on mitigation and SRM activities, concentration of GHGs, and global temperature, and we examine whether a tradeoff actually emerges between mitigation and SRM. Our results could provide some insights into a currently emerging debate regarding mitigation and SRM methods to control climate change, especially since asymmetries seem to play an important role in affecting incentives for cooperation or unilateral actions.     

Revisiting the firm,industry, and country effects on profitability under recessionary and expansion periods: A multilevel analysis

Research summary: Despite voluminous past research, the relevance of firm, industry, and country effects on profitability, particularly under adverse contexts, is still unclear. We reconcile institutional theory with the resource‐based view and industrial organization economics to investigate the effects of economic adversity, such as the 2008 global economic crisis. Using a three‐level random coefficient model, we examine 15,008 firms across 10 emerging and 10 developed countries for the 2005–2011 period. We find that firm effects become stronger under adversity, whereas industry effects become weaker, as well as country main and interaction effects, particularly among the emerging economies. These findings confirm our assumptions that the firm's own fate is, to a great extent, self‐determined; a reality that is even more pronounced during periods of extreme economic hardship. Managerial summary: In this research, we examine how generalized economic adversity affects the balance across the firm‐, industry‐, and country‐specific factors determining firm profitability. We specifically examine 15,008 firms from 10 emerging and 10 developed countries during the 2005–2011 period to investigate the effects of the 2008 global economic crisis on firm performance. We find that in such adverse conditions, the role of the industry and the country are reduced and the firm's own resources and capabilities become more pertinent for firm performance. This phenomenon is more pronounced across emerging markets. We conclude that the firm's own fate is, to a great extent, self‐determined, a reality that is markedly more evident during periods of extreme economic hardship. Copyright © 2015 John Wiley & Sons, Ltd.