The Hazard Rate of Foreign Direct Investment: A Structural Estimation of a Real‐option Model*

The hazard rate of investment is derived within a real‐option model, and its properties are analysed so as to directly study the relation between uncertainty and investment. Maximum likelihood estimates of the hazard are calculated using a sample of multinational enterprises (MNEs) that invested in Central and Eastern Europe over the period 1990–98. Employing a standard, non‐parametric specification of the hazard, our measure of uncertainty has a negative effect on investment, but the reduced‐form model is unable to control for nonlinearities in the relationship. The structural estimation of the option‐based hazard is instead able to account for the nonlinearities and exhibits a significant value of waiting, although the latter is independent of our measure of uncertainty. This finding supports the existence of alternative channels through which uncertainty can affect investment.     

Multilateral Comparison of Cost Structures in the Input–Output Tables of Japan,the US and West Germany

This paper presents a multilateral comparison of relative levels and structures of costs of production in Japan, the US and West Germany. The analysis is carried out by using harmonized input–output tables, which are converted at US prices by using adjusted sectoral purchasing power parities. A new accounting methodology is derived from recent developments of index number theory, whereas the chosen multilateral comparison procedure gives results that are invariant with respect to the order of the pairs of countries examined.     

Evolution of trade patterns in the new EU member states

The paper analyses the evolution of the trade specialization pattern in the new EU member states. Relying on the empirical approach of the Markov transition matrices it analyses both the changes in the external shape of the distribution of comparative advantages and the intra‐distribution dynamics. The new members show a dynamic trade pattern: they gained comparative advantages relatively fast in sectors in which they were lagging behind at the beginning of the transition, notably in some ‘high tech’ products. In addition, many specialization improvements occurred in those items for which world demand expanded at the fastest rate over the nineties.     

Dynamic managerial capabilities: Configuration and orchestration of top executives' capabilities and the firm's dominant logic

This paper contributes to the understanding of the executive team dynamic managerial capabilities by developing theory about the interplay between the firm's dominant logic and dynamic managerial capabilities (including managerial human capital, social capital, and cognition). We underscore the criticality of the two key CEO‐level functions: configuration and orchestration of senior executive team dynamic capabilities. We develop theory on how these functions create and sculpt the management team's absorptive capacity, which in turn shapes the team's adaptive capacity. We present theory about the distributed nature of efforts for organizational renewal where CEO's dynamic managerial capabilities in concerto with senior executive managerial capabilities will drive top management's ability to revitalize the firm's dominant logic and to achieve evolutionary fit. Copyright © 2012 John Wiley & Sons, Ltd.     

An empirical analysis of the relationship between university investments in Technology Transfer Offices and academic spin‐offs

The aim of this paper is to analyze the role of university Technology Transfer Offices (TTOs) in contributing to the creation and the performance of academic spin‐offs (ASOs). More specifically, it investigates the relationship between resources invested in TTOs in term of employees and the creation and growth of ASOs. The empirical analysis refers to Italy, where since 1999 academicians have been allowed to be actively involved in setting up companies for the ‘industrial use of research’. We used data on ASOs and resources invested by Italian universities in TTOs during the 2002–2011 period to investigate if and to what extent such investments contributed to the birth and growth of ASOs. We also controlled the results using information on university and on local context, in which university is located. The results of the empirical analysis show that in a first phase academicians reacted more promptly than universities to the opportunities offered by the new legislation, which may in part be due to the organizational rigidity that characterizes Public Administration in Italy. However, the empirical analysis also shows that after this initial phase the size of the TTOs (in terms of employees) has had a positive influence on the number of new ASOs (i.e. birth), but not on the performance of ASOs (i.e. growth), which is influenced by both long‐term investments in research (i.e. the quality of research results) and other variables linked to the regional and national contexts, such as the presence of incubators or the level of economic development. Our results regard a widely studied topic and should provide incremental findings for the community of entrepreneurship scholars and relevant implications for policy makers and TTO managers.     

Orchestrating corporate social responsibility in the multinational enterprise

Research Summary: Multinational enterprises (MNEs) invest significant resources in corporate social responsibility (CSR), but their attempts to build a global “social brand” may clash with the execution of operational strategies at a subsidiary level. Using a game-theoretic model, this research addresses the complex interplay of different contingencies that shape the coordination and control challenges facing MNEs when they implement global CSR strategies, including brand spillovers, the risk of public scandals caused by irresponsible behavior, the size of the MNE network, as well as the roles played by nongovernmental organizations and altruistic managers. Challenging the view of CSR as insurance against lapses of responsible conduct, our model shows that investment in social brands helps avoid irresponsible practices across the MNE network, thereby inducing subsidiaries to “walk the talk.” Managerial Summary: Global social brands are increasingly valuable to multinational enterprises (MNEs), which makes the control and coordination of responsible behavior across their network of foreign subsidiaries a relevant managerial challenge. Indeed, lapses of responsible conduct at the subsidiary level often generate reputational damage at the multinational level. This research explores several mechanisms that help MNEs manage this coordination and control challenge. First, it shows under what conditions MNEs can leverage their investments in social brands to induce responsible practices across their global network. Second, it illustrates how MNEs can exploit collaborations with nongovernmental organizations to reduce the costs of coordinating and controlling their subsidiaries. Finally, it identifies conditions under which MNEs benefit from hiring altruistic managers to run their subsidiaries.     

A Holy Alliance: Collusion in the Renaissance Europe Alum Market

On June 11, 1470, representatives of Pope Paul II and Ferdinand, King of Naples concluded a cartel agreement to restrict competition in the sale of alum. The agreement was one element of a broader plan to monopolize the sale of alum throughout Christendom. We discuss the background of the cartel agreement and analyze its terms (which include arrangements to facilitate detection of and reduce the profitability of defection) and the constraints that limited, but did not eliminate, Rome’s ability to extract economic profit from the European alum market.     

Measuring the Impact of Longevity Risk on Pension Systems: The Case of Italy

This article estimates the impact of longevity risk on pension systems by combining the prediction based on a Lee-Carter mortality model with the projected pension payments for different cohorts of retirees. We measure longevity risk by the difference between the upper bound of the total old-age pension expense and its mean estimate. This difference is as high as 4% of annual GDP over the period 2040–2050. The impact of longevity risk is sizeably reduced, but not fully eliminated, by the introduction of indexation of retirement age to expected life at retirement. Our evidence speaks in favor of a market for longevity risk and calls for a closer scrutiny of the potential redistributive effects of longevity risk.