Institutions and equity structure of foreign affiliates

Question/Issue: We combine agency and institutional theory to explain the division of equity shares between the foreign (majority) and local (minority) partners within foreign affiliates. We posit that once the decision to invest is made, the ownership structure is arranged so as to generate appropriate incentives to local partners, taking into account both the institutional environment and the firm-specific difficulty in monitoring. Research Findings/Insights: Using a large firm-level dataset for the period 2003-2011 from 16 Central and Eastern European countries and applying selectivity corrected estimates, we find that both weaker host country institutions and higher share of intangible assets in total assets in the firm imply higher minority equity share of local partners. The findings hold when controlling for host country effects and when the attributes of the institutional environment are instrumented. Theoretical/Academic Implications: The classic view is that weak institutions lead to concentrated ownership, yet it leaves the level of minority equity shares unexplained. Our contribution uses a firm-level perspective combined with national-level variation in the institutional environment, and applies agency theory to explain the minority local partner share in foreign affiliates. In particular, we posit that the information asymmetry and monitoring problem in firms are exacerbated by weak host country institutions, but also by the higher share of intangible assets in total assets. Practitioner/Policy Implications: Assessing investment opportunities abroad, foreign firms need to pay attention not only to features directly related to corporate governance (e.g., bankruptcy codes) but also to the broad institutional environment. In weak institutional environments, foreign parent firms need to create strong incentives for local partners by offering them significant minority shares in equity. The same recommendation applies to firms with higher shares of intangible assets in total assets. © 2014 The Authors.

Structure-reactivity correlations in sulphated-zirconia catalysts for the isomerisation of α-pinene

A range of mesoporous sulphated zirconias with tuneable structural and catalytic properties have been prepared by direct impregnation. The surface sulphate coverage can be readily varied, achieving a maximum value of ∼0.2 monolayers. High-temperature calcination induces the crystallisation of tetragonal zirconia while suppressing the monoclinic phase and enhances surface acidity. Superacid sites only appear above a critical threshold SO4 coverage of 0.08 mL (corresponding to 0.44 wt% total S). Sulphated zirconias show good activity towards α-pinene isomerisation of under mild conditions. Conversion correlates with the number Brønsted acid sites, while the selectivity towards mono- versus polycyclic products depends on the corresponding acid site strength; superacidity promotes limonene formation over camphene.

Structure and reactivity of sol-gel sulphonic acid silicas

A range of mesoporous solid sulphonic acid catalysts have been prepared from a mercaptopropyl-trimethoxysilane (MPTS) precursor by sol-gel synthesis. The creation of surface sulphonic acid functionality via thiol oxidation has been followed by XPS and Raman spectroscopy. It is possible to continuously vary the sulphonic acid loading from 1 to 12wt.% while maintaining pore volume and mesostructure. The resulting materials exhibit high thermal stability and acid strength across the composition range and show good activity and selectivity in esterification and condensation reactions. © 2002 Elsevier Science B.V. All rights reserved.

Selectivity control in Pt-catalyzed cinnamaldehyde hydrogenation

Chemoselectivity is a cornerstone of catalysis, permitting the targeted modification of specific functional groups within complex starting materials. Here we elucidate key structural and electronic factors controlling the liquid phase hydrogenation of cinnamaldehyde and related benzylic aldehydes over Pt nanoparticles. Mechanistic insight from kinetic mapping reveals cinnamaldehyde hydrogenation is structure-insensitive over metallic platinum, proceeding with a common Turnover Frequency independent of precursor, particle size or support architecture. In contrast, selectivity to the desired cinnamyl alcohol product is highly structure sensitive, with large nanoparticles and high hydrogen pressures favoring C=O over C=C hydrogenation, attributed to molecular surface crowding and suppression of sterically-demanding adsorption modes. In situ vibrational spectroscopies highlight the role of support polarity in enhancing C=O hydrogenation (through cinnamaldehyde reorientation), a general phenomenon extending to alkyl-substituted benzaldehydes. Tuning nanoparticle size and support polarity affords a flexible means to control the chemoselective hydrogenation of aromatic aldehydes.