Business-IT Alignment in PSS Value Networks: A Capability-Based Framework

Part 8: Business Strategies Alignment

Capital structure, risk and asymmetric information : theory and evidence

This paper proposes a principal-agent model between banks and firms with risk and asymmetric information. A mixed form of finance to firms is assumed. The capital structure of firms is a relevant cause for the final aggregate level of investment in the economy. In the model analyzed, there may be a separating equilibrium, which is not economically efficient, because aggregate investments fall short of the first-best level. Based on European firm-level data, an empirical model is presented which validates the result of the relevance of the capital structure of firms. The relative magnitude of equity in the capital structure makes a real difference to the profits obtained by firms in the economy.

Export and import market-specific characteristics. How they drive the decision to trade and how much

Using a rich firm-level dataset on the Italian manufacturing industry, this paper provides a comprehensive analysis of the role that firms and market characteristics play in shaping firms’ trade activities. We enhance the previous analyses by considering firms’ engagement in international transactions, by focusing on either exports or imports. We show that the determinants of a firm’s export participation and value across countries also drive import behavior. Our research is consistent with the presence of country-specific sunk costs and with a qualitatively similar role of gravity forces and other country attributes on both sides of trading activities. Our evidence, however, militates in favor of a framework where variations in market characteristics have a larger impact on imports than exports.

Firms’ knowledge search and local knowledge externalities in innovation performance

We use an augmented version of the UK Innovation Surveys 4–7 to explore firm-level and local area openness externalities on firms’ innovation performance. We find strong evidence of the value of external knowledge acquisition both through interactive collaboration and non-interactive contacts such as demonstration effects, copying or reverse engineering. Levels of knowledge search activity remain well below the private optimum, however, due perhaps to informational market failures. We also find strong positive externalities of openness resulting from the intensity of local interactive knowledge search—a knowledge diffusion effect. However, there are strong negative externalities resulting from the intensity of local non-interactive knowledge search—a competition effect. Our results provide support for local initiatives to support innovation partnering and counter illegal copying or counterfeiting. We find no significant relationship between either local labour quality or employment composition and innovative outputs.

The impact of culture and corporate governance in dividend policy: evidence from emerging and developed countries

The present research aims to analyse the impact of corporate governance and cultural dimensions in dividend policy. The corporate governance and dividend policy have a close relationship, in that both are evidenced in literature to mitigate agency problems. Cultural factors are also related to agency problems. The existence of agency problems and their solutions differs across countries and it is related to the implementation of the mechanisms of governance. So, cultural factors may have influence on corporate governance and dividend policy. Our sample consists in 1 232 companies belonging to the main indices of 38 countries classified as emerging or developed. To measure the quality of firm level corporate governance, we use the ASSET4 Corporate Governance Performance Index, developed by Thomson Reuters, and as proxy of culture we use three cultural dimensions developed by Geert Hofstede, namely uncertainty avoidance, masculinity and indulgence. We obtained significant empirical evidence that firms with high quality of corporate governance pay higher dividends. With regard to cultural factors, we confirm that in countries with high levels of masculinity and uncertainty avoidance, the dividend payout ratio is lower. On the other hand, countries with high level of indulgence have higher dividend payout ratio. However, we verify that the impact of cultural effects is minimized when the firms have a high quality level of corporate governance. Additionally, we found that the impact of corporate governance and cultural factors in dividend policy differs when dealing with emerging or developed countries.

Modelo de competencias en TIC para el personal de una organización del sector eléctrico

La presente investigación pretendió incorporar el uso intensivo de TIC en los procedimientos establecidos y necesarios en los procesos de generación, distribución y control de la energía, lo que se expresa en un manual para el sistema de gestión humana de la organización analizada. La investigación partió de un levantamiento de un estado del arte, continuó con la realización de un análisis de actitudes y aptitudes de los colaboradores, basado en propuestas teóricas y mejores prácticas existentes del medio, y, por último, concluyó con un manual de gestión humana en el que se indican las competencias en los diferentes perfiles de la organización para el uso de TIC y su aplicación, con el propósito de alinearse con las perspectivas y objetivos de la organización analizada al tener como base la perdurabilidad y la competitividad de la misma.

Joint value at risk: a new conditional risk measure

In this PhD thesis a new firm level conditional risk measure is developed. It is named Joint Value at Risk (JVaR) and is defined as a quantile of a conditional distribution of interest, where the conditioning event is a latent upper tail event. It addresses the problem of how risk changes under extreme volatility scenarios. The properties of JVaR are studied based on a stochastic volatility representation of the underlying process. We prove that JVaR is leverage consistent, i.e. it is an increasing function of the dependence parameter in the stochastic representation. A feasible class of nonparametric M-estimators is introduced by exploiting the elicitability of quantiles and the stochastic ordering theory. Consistency and asymptotic normality of the two stage M-estimator are derived, and a simulation study is reported to illustrate its finite-sample properties. Parametric estimation methods are also discussed. The relation with the VaR is exploited to introduce a volatility contribution measure, and a tail risk measure is also proposed. The analysis of the dynamic JVaR is presented based on asymmetric stochastic volatility models. Empirical results with S&P500 data show that accounting for extreme volatility levels is relevant to better characterize the evolution of risk. The work is complemented by a review of the literature, where we provide an overview on quantile risk measures, elicitable functionals and several stochastic orderings.

Psychological contracts and independent sales contractors: an examination of the predictors of contractor-level outcomes

Over the past decade, the independent sales contractor (ISC) has emerged as both an important distribution channel and a management challenge. This study makes two contributions to this evolving field. First, it explores the interrelations of the psychological contract with sales performance, voluntary turnover and organisational advocacy of ISCs, which have hitherto been largely unexplored. Second, it examines differences between high- and low-performing sales contractors on these linkages, due to findings in the literature that a small number of sales contractors often achieve a majority of sales. Based on survey data as well as 7 years of contractor-level data related to sales performance and voluntary turnover (n = 189), results indicate that psychological contract fulfilment and perceived dependency are important determinants of subsequent sales performance, voluntary turnover and organisational advocacy, with significant differences reported between high- and low-performing ISCs. A notable finding pertinent for sales managers responsible for managing ISCs is that high-performing sales contractors are motivated by psychological contract fulfilment and a low perception of dependency, while low-performing sales contractors are more likely to act as advocates for the firm due to perceived dependency, but may concurrently engage in organisational advocacy as a means to leave the firm.

The relationship between the education level of successor's and the firm performance in German publicly listed family firms- an empirical analysis

The purpose of this thesis is to investigate how far the education level of the second or third generation of publicly traded German family firms affects the post-succession firm performance. By conducting a correlational and regression design, the aim is to examine how several variables influence the performance of family firms. Performance measures, for example ROA and Tobin’s q and variables, like Education level and succession periods, examine analytically that a positive succession trend will occur. However, with the used model, only a less rigid model shows empirical evidence.

Three Essays on Age and Firm Performance

Old captains at the helm: Chairman age and firm performance Urs Waelchli and Jonas Zeller December, 2012 This paper examines whether the chairmen of the board (COBs) impose their life-cycles on the firms over which they preside. Using a large sample of unlisted firms we find a robust negative relation between COB age and firm performance. COBs age much like ‘ordinary’ people. Their cognitive abilities deteriorate and they experience significant shifts in motivation. Deteriorating cognitive abilities are the main driver of the performance effect that we observe. The results imply that succession planning problems in unlisted firms are real. Mandatory retirement age clauses cannot solve these problems. Corporate Aging around the World Jonas Zeller January, 2014 This paper examines whether firms internationally age as US firms do (Loderer, Stulz, and Wälchli, 2013). Using a large panel, I find that Tobin’s Q monotonically falls with firm Age across all nineteen countries in the sample. The decrease varies across countries but is generally extremely robust and economically significant. ROA, sales growth, and market share decrease over a firm’s lifetime in most countries as well. Furthermore, older firms reduce their capital expenditures and R&D outlays. Instead, they distribute more cash to their shareholders. Overall, the results suggest that corporate aging is not confined to the US but is a genuine phenomenon that affects listed firms worldwide. This evidence supports the hypothesis that corporate aging is driven by managers who optimally focus on managing their assets in place and neglect the development of growth opportunities. I finally ask whether the managers’ choice and with it the magnitude of the decline in Tobin’s Q is a function of country-level institutional settings. I find that most notably firms age faster in countries where employees are relatively well protected by labor regulation. Is employment protection the fountain of corporate youth? Claudio Loderer, Urs Wälchli, Jonas Zeller* September 2014 Acharya, Baghai, and Subramanian (2012, 2013) find that employment protection legislation (EPL) encourages innovation. We argue that this effect should be particularly strong in mature firms. We would therefore also expect EPL to boost growth opportunities. Using the natural Experiment created by the staggered passage of changes in EPL across seventeen countries, we find evidence that employment protection legislation does indeed stimulate Innovation efforts, especially in mature firms. The effect is stronger in countries in which patents are owned by the firm and in the context of regular contracts. Consistent with that, EPL encourages risk taking. Overall, however, there is Little evidence that the effect of EPL on innovation effort translates into higher firm value, not even in mature firms. EPL does motivate employees in those firms to put in a greater effort, as evidenced by stronger sales growth. Yet it also increases costs, reduces profitability, and depresses Tobin’s Q ratios in all firms, especially the mature ones, possibly because of the rigidities that characterize these firms [Loderer, Stulz, and Waelchli (2014)].

A three company study of the intra-firm mobility of blue collar and lower level white collar workers : final report /

Photocopy of: 1972 ed. Evanston, Ill. : Northwestern University Graduate School of Management.

Pricing farm-level agricultural insurance: a Bayesian approach

This paper applies Hierarchical Bayesian Models to price farm-level yield insurance contracts. This methodology considers the temporal effect, the spatial dependence and spatio-temporal models. One of the major advantages of this framework is that an estimate of the premium rate is obtained directly from the posterior distribution. These methods were applied to a farm-level data set of soybean in the State of the Parana (Brazil), for the period between 1994 and 2003. The model selection was based on a posterior predictive criterion. This study improves considerably the estimation of the fair premium rates considering the small number of observations.

An optimal level of technology reliance on foreign partners in a global sourcing partnership: components procurement, technology management and market performance

Existing studies on global sourcing strategy have implicitly adopted a cJosed-systems perspective in which sourcing activities are managed within a multinational company across national boundaries. Produd and process innovations and components procurement that are jointly managed by a consortium of cooperating firms have not been examined. In this paper, we empiricallyexamine the issues concerning sourcing partnerships in an open-systems perspective. Findings suggest that even in a sourcing partnership arrangement with a foreign supplier, the principal firm's ability to procure and control the supply of major components has a positive bearing on its market performance.

The determinants of variation in firm leverage across European countries

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics