Corporate aging and investment decisions

Paper I: Corporate aging and internal resource allocation Abstract Various observers argue that established firms are at a disadvantage in pursuing new growth opportunities. In this paper, we provide systematic evidence that established firms allocate fewer resources to high-growth lines of business. However, we find no evidence of inefficient resource allocation in established firms. Redirecting resources from high-growth to low-growth lines of business does not result in lower profitability. Also, resource allocation towards new growth opportunities does not increase when managers of established firms are exposed to takeover and product market threats. Rather, it seems that conservative resource allocation strategies are driven by pressures to meet investors’ expectations. Our empirical evidence, thus, favors the hypothesis that established firms wisely choose to allocate fewer resources to new growth opportunities as external pressures force them to focus on efficiency rather than novelty (Holmström 1989). Paper II: Corporate aging and asset sales Abstract This paper asks whether divestitures are motivated by strategic considerations about the scope of the firm’s activities. Limited managerial capacity implies that exploiting core competences becomes comparatively more attractive than exploring new growth opportunities as firms mature. Divestitures help stablished firms free management time and increase the focus on core competences. The testable implication of this attention hypothesis is that established firms are the main sellers of assets, that their divestiture activity increases when managerial capacity is scarcer, that they sell non-core activities, and that they return the divestiture proceeds to the providers of capital instead of reinvesting them in the firm. We find strong empirical support for these predictions. Paper III: Corporate aging and lobbying expenditures Abstract Creative destruction forces constantly challenge established firms, especially in competitive markets. This paper asks whether corporate lobbying is a competitive weapon of established firms to counteract the decline in rents over time. We find a statistically and economically significant positive relation between firm age and lobbying expenditures. Moreover, the documented age-effect is weaker when firms have unique products or operate in concentrated product markets. To address endogeneity, we use industry distress as an exogenous nonlegislative shock to future rents and show that established firms are relatively more likely to lobby when in distress. Finally, we provide empirical evidence that corporate lobbying efforts by established firms forestall the creative destruction process. In sum, our findings suggest that corporate lobbying is a competitive weapon of established firms to retain profitability in competitive environments.

Destruction of lymphoid organ architecture and hepatitis caused by CD4+ T cells

Immune responses have the important function of host defense and protection against pathogens. However, the immune response also causes inflammation and host tissue injury, termed immunopathology. For example, hepatitis B and C virus infection in humans cause immunopathological sequel with destruction of liver cells by the host's own immune response. Similarly, after infection with lymphocytic choriomeningitis virus (LCMV) in mice, the adaptive immune response causes liver cell damage, choriomeningitis and destruction of lymphoid organ architecture. The immunopathological sequel during LCMV infection has been attributed to cytotoxic CD8(+) T cells. However, we now show that during LCMV infection CD4(+) T cells selectively induced the destruction of splenic marginal zone and caused liver cell damage with elevated serum alanin-transferase (ALT) levels. The destruction of the splenic marginal zone by CD4(+) T cells included the reduction of marginal zone B cells, marginal zone macrophages and marginal zone metallophilic macrophages. Functionally, this resulted in an impaired production of neutralizing antibodies against LCMV. Furthermore, CD4(+) T cells reduced B cells with an IgM(high)IgD(low) phenotype (transitional stage 1 and 2, marginal zone B cells), whereas other B cell subtypes such as follicular type 1 and 2 and germinal center/memory B cells were not affected. Adoptive transfer of CD4(+) T cells lacking different important effector cytokines and cytolytic pathways such as IFNγ, TNFα, perforin and Fas-FasL interaction did reveal that these cytolytic pathways are redundant in the induction of immunopathological sequel in spleen. In conclusion, our results define an important role of CD4(+) T cells in the induction of immunopathology in liver and spleen. This includes the CD4(+) T cell mediated destruction of the splenic marginal zone with consecutively impaired protective neutralizing antibody responses.

Learning for sustainability - LforS: Simulation games - a creative tool for interactive learning

Description of simulation and training games as tool for awareness and capacity development in multi steakeholder processes

Book Review: M. Holoubek, D. Damjanovic, M. Trainer: Regulating Content. The European Regulatory Framework for the Media and Related Creative Sectors

Review of 'Regulating Content - The European Regulatory Framework for the Media and Related Creative Sectors', by M. Holoubek, D. Damjanovic, M. Trainer (Alphen aan den Rijn: Kluwer Law International, 2007), including some thoughts on contemporary media regulation.