Toward high growth enterprise

The disproportional impact of high growth firms on economies around the world has made them a natural focus of policy attention in New Zealand. That is what is behind New Zealand's ICT taskforce recommendations in 2003 to grow 100 ICT companies each doing over US$ 100 million sales per year by 2012 (a huge accomplishment for a small economy). Those companies could help New Zealand's foreign exchange earnings and jobs, not to mention improved health care, better resourced schools and tertiary institutions, debt reduction and increased savings, and improved standard of living (ICT Taskforce, 2003).

Encouraging high expectation entrepreneurship : the implications of Australian policy practices

Recent studies have shown the important roles that new high growth firms can play in job creation and economic development. This paper reviews the positioning of present Australian government policies and programs that intend to be supportive of the development of more high growth businesses; that is those that employ greater than twenty persons. The research explores the environments of a group of new high growth Australian firms and the roles that the various identified government support initiatives have played in their development. The paper also draws on recent research on survival and growth patterns of spin-off companies generated by publicly funded research agencies to map the government support initiatives with the different stages of the high growth business life cycle. The paper reviews issues in the Australian business environment that may have affected the rate of generation of new high growth firms. Of particular relevance has been the progressive freeing up of the Australian labour market and a greater resource allocation to research commercialisation by publicly funded research providers. The analysis has finally separately considered how to produce and support more founders of such high growth firms, their future chief executive officers, the specialist consultants and other professional support people and issues related to access to finance that such firms will need. The research findings draw attention to the important role of government financial support for industry research, particularly at the point where the first product is in the market and resources are scarce. At this point support is vital both to increase the market penetration of the core product and for R&D for product customisation and increasing the product range.

Predators select against high growth rates and risk-taking behaviour in domestic trout populations

Domesticated (farm) salmonid fishes display an increased willingness to accept risk while foraging, and achieve high growth rates not observed in nature. Theory predicts that elevated growth rates in domestic salmonids will result in greater risk–taking to access abundant food, but low survival in the presence of predators. In replicated whole–lake experiments, we observed that domestic trout (selected for high growth rates) took greater risks while foraging and grew faster than a wild strain. However, survival consequences for greater growth rates depended upon the predation environment. Domestic trout experienced greater survival when risk was low, but lower survival when risk was high. This suggests that animals with high intrinsic growth rates are selected against in populations with abundant predators, explaining the absence of such phenotypes in nature. This is, to our knowledge, the first large–scale field experiment to directly test this theory and simultaneously quantify the initial invasibility of domestic salmonid strains that escape into the wild from aquaculture operations, and the ecological conditions affecting their survival.

Exploring the moderating role of growth options on the relation between board characteristics and management earnings forecasts

Manuscript Type
Empirical
Research Question/Issue
This study examines whether director independence, reputation, and financial expertise are related to management earnings forecast (MEF) activity. In particular, we examine whether such a relationship is moderated by firms’ growth options.
Research Findings/Insights
Using Australian archival data for 1,928 firm-years between 1999 and 2006, we find several board characteristics have a significant positive relationship with: (1) the likelihood of firms issuing MEFs; (2) their specificity; (3) their accuracy; and (4) a negative relationship with their bias. For (1), (2), and (3) we show that these relationships are accentuated for firms with high growth options.
Theoretical/Academic Implications
While the theory of voluntary disclosure suggests firms will disclose information that is favorable to them or their managers, well-governed firms issue informative MEFs that potentially reduce information asymmetries in capital markets. We extend the prior literature by showing that such a relation is enhanced in the presence of information asymmetry and moral hazard associated with growth options.
Practitioner/Policy Implications
Our results have strategic implications for nomination committees by showing that independent directors and those with strong reputations and financial expertise enhance the governance of high growth firms. We also inform the regulatory debate by showing that good corporate governance enhancing disclosure quality is context-specific – it is not a case of “one size fits all”.

The association between the investment opportunity set and corporate financing and dividend decisions: some Australian evidence

Summarizes previous research on the investment opportunity set (IOS) using price-based and investment-based proxies and variance measures; and develops hypotheses on the relationship between IOS, debt/equity ratios and dividend policies. Tests them on 1990-1998 data from listed Australian companies and explains the methodology, which builds on Gover and Gover (1993) by including more recent proxy variables. Finds no significant results from low growth firms, although some high growth firms show lower debt/equity ratios and dividends. Questions the robustness of existing IOS proxies in the Australian context and calls for further research.

Investment opportunities and leverage: some Australian evidence on the role of board monitoring and director equity ownership

This paper tests the hypothesis that the negative relationship between investment opportunity set (IOS) and debt is moderated by board monitoring and director equity ownership. According to contracting theory, firms with high growth opportunities (high IOS) are associated with lower levels of debt as a result of the asset substitution and the under-investment problem. However, our hypotheses test the conjecture that the negative debt / IOS relationship will be moderated by the proportion of non-executive directors (NEDs) on the board and director equity ownership. NEDs provide higher monitoring which reduces management discretion while director equity ownership provides incentives for managers to maximize the value of the firm. More specifically, we expect that high growth firms with a higher proportion of non-executive directors and director equity ownership are less likely to be associated with asset substitution and under investment. Thus, the negative investment opportunity set / debt relationship will be weaker for firms with higher levels of non-executive directors and high director equity ownership. Data collected from Australian companies support both these two hypotheses. Results have significant implications for corporate finance theory.

Explaining the levels of innovation and R&D in New Zealand's small and medium-sized enterprises : too many small firms?

This paper is concerned with explaining the levels of innovative activity in New Zealand's SMEs. It is arguable that New Zealand provides a special case where innovation and R&D levels are comparatively low in SMEs, yet, paradoxically, it is also a nation of high rates of entrepreneurial activity. This paper seeks to examine the factors that affect innovation levels in New Zealand SMEs from an analysis of panel data set of 1500 SMEs. We test research propositions based on existing theory and literature on innovation levels in SMEs and discuss our findings. Firm size is found to be significant; we argue that New Zealand has too few growth firms rather than too many small firms and we suggest that barriers to innovation, such as access to finance, remain an issue which should be a focus for government support.

Economic growth and sustainability - an empirical study of the Thai development experience

Increasing economic growth has long been the dominant position within the public policies of all South East Asian countries. More recently, a new issue, sustainability, has emerged within development economic literature, which has significant implications for the continual pursuit of economic growth. Sustainability is concerned with ensuring the current generation meets their present needs without threatening future generations' ability to do likewise. This ability is dependent on a healthy and functioning socio-economic environmental (SEE) system. Economic growth can damage the SEE-system, though, through resource degradation, over-harvesting and pollution. Therefore, achieving economic growth and sustainability simultaneously may not be possible. This paper discusses these tensions between economic growth and sustainability by undertaking a number of SEE-based adjustments to GDP in order to measure sustainability. Thailand is used as a case study for a 25 year period, 1975-1999. The adjustments include the environmental costs caused by economic growth such as noise pollution, water pollution, the depletion of non-renewable resources, and deforestation. The results show a stark difference in terms of GDP per capita and the SEE-adjusted GDP per capita figure. The paper concludes that with increasing environmental costs of economic growth, pursuing high growth objectives without considerations to the environment threatens sustainability

Nutrition, growth and production of Cherax Destructor Clark, 1936 (Decapoda, Parastacidae)

In this study the nutrition, growth and production of C. destructor was examined. Selected nutritional requirements of juvenile animals were determined under controlled conditions with the aim of developing a pelleted diet for use in hatcheries, nurseries and growout situations. The best developed diet was assessed for its potential as a supplementary feed for animals cultured in earthen environments. The protein requirements were first determined simultaneously with an evaluation of the effect of replacing animal protein (fishmeal) by soybean meal. Juveniles were reared communally for 59 d on isoenergetic diets containing 15-30% protein and graded levels of soybean meal (0-60%, of protein). When soybean meal was included at a level of 40-60%, growth was reduced relative to that achieved with control diets containing 15% and 20% protein, but this was not the case at a 20% soybean meal substitution level. A two-way interaction occurred between dietary protein and soybean meal content. Higher protein feeds enabled higher soybean meal inclusion levels without significantly affecting growth. Protein increases of 5% produced better growth at the 40% and 60% soybean meal substitution levels. This effect was less pronounced in the control and the 20% soybean meal diets. Carcass %protein increased and %lipid decreased as dietary protein increased. A similar effect occurred by increasing the soybean meal level to 60%. No obvious trend in carcass moisture, energy, and ash occurred. A protein requirement of 30% was apparent when fish meal and soybean meal were included in diets at levels of 20% and 24% (dry matter) respectively. Alternative protein sources to soybean meal were subsequently identified. Juveniles were maintained for 12 weeks on isoenergetic diets containing 30% protein and differing in the primary source of protein used, with meat, snail, soybean, yabby, and zooplankton meals comprising the major protein ingredient. No significant difference occurred in mean weight (MW), percentage weight gain (%WG), SGR or survival among diets. Food conversion ratios (FCR) were low, with a minimum value of 0.95 for the snail-based diet. The apparent net protein utilisation (ANPU) varied from 29.6% (zooplankton-based diet) to 41.2% (snail-based diet). Carcass composition varied with diet, with the greatest difference occurring in carapace colour. Animals fed the zooplankton-based diet developed the strongest, most natural pigmentation. A new combination of previously used protein-based ingredients was subsequently tested with reference to two yabby species, Cherax albidus and Cherax destructor, that were grown simultaneously in identical conditions. Juvenile male animals were reared individually for 20 weeks on isoenergetic diets containing 15% or 30% protein with fish meal, soybean meal, yabby meal and wheat products forming the basis of the diets. C albidus grew the fastest and utilised the food the most effectively. Carcass composition was influenced by diet with the 30% protein diet resulting in an increase in carcass protein and ash and a decrease in carcass lipid and energy relative to the low protein diet. Carcass moisture and calcium were not affected by diet. The intermoult period (IP) was highly dependent on the premoult weight (W) but the mean moult increment (WI, as weight) was independent of the PM. The orbital carapace length (OCL) and the abdominal length (ABL) %moult increments generally declined with an increase in PM whereas the propus length (PL) %moult increment generally increased. The IP, WI, %OCL, %ABL, and %PL moult increments varied according to diet and to species. Elevated dietary protein caused a reduction to the IP (for similar sized animals) by 11 d and 7 d and an increase to the WI by 85% and 81% in C. albidus and C destructor respectively. Dietary induced morphological changes also occurred. Animals of a standard OCL (both species) had significantly larger abdomens when fed the higher protein diet. Growth on the best developed diet was compared to the growth obtained on a natural diet of freshwater zooplankton. Juveniles were reared individually for 12 weeks on the two diets. The MW, %WG and SGR were higher for the zooplankton diet. Carcass composition was influenced by diet and the zooplankton fed animals had a higher carcass %protein, %lipid, %ash and %fibre content and were more richly pigmented than animals fed pellets. The IP and the WI were highly dependent on the PM and varied according to diet; feeding with zooplankton reduced the IP by 1.2 days and increased the WI by 13.7% compared to pellets. Nutrient digestibility was determined for the pelleted diets evaluated in the growth trials. Protein digestibility (PD) and dry matter digestibility (DMD), using chromic oxide (Cr2O3) as an exogenous marker, were high for all diets, at around 93% and 83% respectively. Ash digestibility varied considerably from 17% to 73% for the snail and yabby meal diets respectively. Crude fibre digestibility was around 50% and probably indicates cellulase activity. Alternative markers to Cr2O3 were evaluated. Ash was considered to be the most suitable alternative to Cr2O3, providing a reasonable, albeit lower, estimate of nutrient digestibility. Cr2O3 and ash were preferentially excreted whereas fibre was retained in the digestive system for a longer period, consequently, the collection of a particular fraction of the deposited faeces (late or early) substantially affected the digestibility coefficients. In earthen-based environments, animals fed the best developed diet were compared to animals cultured using a forage crop of clover (Trifolium repens). Three supplementary feeding strategies representing varying levels of management intensity were evaluated in a series of trials conducted in ponds and pond microcosms. Growth on pellets consistently exceeded that obtained with the forage crop, with final MW being 67-159% higher than that using clover and appeared to be the result of direct pellet consumption and from a pellet fertiliser effect (on the sediment). Within-pond DMD and PD were high and similar for each treatment (DMD = 51-58%; PD = 89-92%). In the control pond, DMD and PD increased with each successive flood. The faecal egestion rate (PER) decreased with each successive flood in all ponds, and is negatively related to animal weight and to foregut fullness (FF) according to power curves. FF was consistently lowest in the control pond. Mean FF was 48.5%, 62.3%, and 26.7% for the pellet, crop and control ponds respectively. FF increased to the third flood in each pond. The foregut protein content was high in all samples and the mean values were 33.9%, 32.7% and 35.6% for the pellet, crop and control ponds respectively. Foregut ash was highly variable within each pond and is inversely related to the foregut protein content. In the control and pellet ponds the highest foregut ash content occurred during flood 1. The culture system (aquaria or pond) strongly influenced the composition of the foregut content. The foregut of animals fed the manufactured diet (B2) in ponds contained approximately 176% more ash and 5% more protein than the foregut of animals fed in bare-bottom tanks. The FF of the tank fed animals was approximately 45% higher than the FF of pond fed animals after a similar feeding period. Base-line yields for extensive production systems appeared to be around 400kg ha-1. The supplementary addition of T. repens produced yields of approximately 635kg ha-1 (in ponds) to around 1086kg ha-1 (in tanks). The sequential addition of cut-clover to tanks stimulated growth to levels approaching those achieved on pellets. Yabbies stocked into ponds at 15-20 m-2 with a mean weight of 2.67g and fed a 30% protein pelleted diet for 100 d, resulted in a yield of approximately 1117kg ha-1, but only 2% of the population were above a marketable size of 50g. The feed utilisation indices were better for animals reared on pellets in bare-bottom tanks than in earthen environments, indicating some degree of pellet wastage when natural feeds are simultaneously present. High apparent food conversion ratios and low protein efficiency ratios occurred when the forage crop was provided. A considerable quantity of the dry matter and protein content of the forage crop was either inefficiently utilised or directed into other production pathways. Sowing a forage crop into pond microcosms to which a pelleted diet was also provided, did not enhance growth performance. Pelleted feed inputs at a rate of approximately 129g m-2 to 198g m-2 (dry matter) and 38g -2 to 64g m-2 (protein) over 70-100 d resulted in acceptable growth and feed utilisation indices for animals reared in ponds and pond microcosms. Forage crop inputs of approximately 533g m-2 to 680g m-2 (as dry matter) or 84g m-2 to 177g m-2 (as protein) over a 70-100 d period produced reasonable growth rates but poor feed utilisation indices. Low inputs of dry matter (from 113-296g m-2) and protein (from 24-54g m-2) from clover were sufficient to maintain high growth rates in pond microcosms for around 28 d. In ponds, a very low level of 21g m-2 (dry matter) and 4.3g m-2 (protein) was sufficient for around 3 weeks. Forage depletion appeared to occur beyond week 3-4 and was probably a major growth limiting factor. The mean hepatosomatic index (HSI) was 9.44, 7.68, and 6.79 for the pellet, crop, and control ponds respectively. The relationship between hepatopancreas weight and overall animal weight was significantly different between treatments. The hepatopancreas of pellet-fed animals had the highest %lipid and lowest %ash, %protein, %carbohydrate and %moisture content. In terms of absolute quantities, the only major difference in hepatopancreas composition between treatments occurred for lipid and dry matter content. The hepatopancreas of the pellet-fed animals was a cream/cream-yellow colour and was very fragile, whereas in the other ponds it was a more ‘natural’ bright yellow colour and was structurally more robust. C. destructor has a capacious foregut, being approximately 5 times the volume of similar sized Penaeids. The foregut volume (V, ml) of the yabby is related to animal weight (W, g) according to V = 0.048 W0.9543. Animals that were starved for 96 h and then fed diet B2 were almost completely foil after 30 min. The ‘apparent enzymatic response’ of animals fed various natural and artificial diets in tanks was evaluated. Nutrient processing time and the enzymatic response following ingestion appeared to be regulated by the chemical and physical properties of the diet. For the natural feeds, foregut protein was 1.2% higher (for zooplankton) and up to 300% higher (for detritus) than dietary protein, whereas ash was 7.5% higher (zooplankton) and 46-63% lower (detritus) than dietary ash. For animals fed diet B2 after 48 h without food, FF was approximately half that of 96 h starved animals after a similar feeding period but foregut protein and ash contents were similar. Finally, the physiological and morphological attributes elucidated in this study are discussed with reference to the ecology of the yabby. High growth rates, excellent feed utilisation indices and high digestibility coefficients for a wide range of diet-types illustrate nutritional flexibility. A capacious foregut, a large hepatopancreas with a high energy storage capacity, the ability to partition and preferentially excrete the low nutrient value inorganic component of the diet, the capacity to alter body form, nutrient processing time and enzymatic secretions in relation to diet-type, and modified behaviour according to feed availability also demonstrate plasticity/adaptability/flexibility. The combined effect of these important characteristics ensures survival in environments that may be adverse and highly variable in terms of nutrient availability. Collectively the morphological and digestive traits elucidated in this study reflect the generalist-type nature of C destructor and indicate that a polytrophic classification still seems appropriate. Several priority areas for further nutrition research are identified and recommendations are made regarding the best-practices to use in the commercial culture of the yabby. Of paramount importance is the further clarification of the nutritional requirements and feeding preferences of animals in various phases of development.

Harvesting a 'lost' investment : case study of a financial innovation

In the field of Entrepreneurial research, financial innovations have been less studied and reported than product or process innovations. A case example is presented with implications for a large number of firms requiring financial restructuring as a precondition to attracting equity investmemnt. An insolvent asparagus exporter with high growth potential offered opportunity to test a model of financial restructuring and unlisted equity marketing, the ersatz venture capital (EVC) hypothesis. A business plan written in accordance with EVC prescriptions revealed the company's potential and attracted investors. It is argued that the approach may help solve two pressing problems of the Australian economy: re-vitalisation of businesses rendered insolvent by excessive debt and stimulation of a depressed venture capital market.

American technology policy: evolving strategic interests after the Cold War

Since the end of the Cold War, U.S. policymakers have faced the challenge of addressing the technological requirements of both economic competitiveness and national security. Promoting the technological objectives of competitiveness and security poses a daunting task, as these objectives can differ significantly in terms of autonomy, the private sector’s role, and the time frame involved. The difficulties inherent in meeting these competing needs for technological investment and resources are exacerbated by growing technological globalization. American Technology Policy analyzes the ongoing efforts of politicians, legislators, policymakers, and industry leaders to balance their often-conflicting technological requirements. J. D. Kenneth Boutin examines recent trends and developments in American technology policy as it strives to support high-technology firms without undermining national security. He then considers issues of autonomy, relations between the federal government and industry, and the time frame involved in formulating and implementing policy initiatives, all in the context of globalization. Though satisfying the ambitious American technological agenda is difficult, it is impossible for authorities to avoid making the effort, given the high stakes involved. Boutin’s analysis is intended to inform those who are charged with prioritizing and balancing the technological needs of national defense and economic growth. Although the post–Cold War technology policy of the United States has been characterized by efforts to achieve a balance between these two competing priorities, the dominant focus remains on national security. Boutin explains the ways in which American authorities seek to limit the extent of compromise necessary by working with local and foreign actors and by encouraging structural changes in the environment for technological development, application, and diffusion.