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.

A Transatlantic Trade and Investment Partnership Agreement: Implications for Swiss Agriculture

To say that regionalism is gaining momentum has become an understatement. To mourn the lack of progress in multilateral trade rule-making is a commonplace in the discourse of politicians regretting the WTO negotiation standstill, and of “know-what-to-do” academics. The real problem is the uneven level-playing field resulting from increasing differences of rules and obligations. The Transatlantic Trade and Investment Partnership Agreement (TTIP) is a very ambitious project. WTI studies in 2014 have shown that the implications for Switzerland could be enormous. But even the combined market power of the two TTIP participants – the EU and the USA – will not level the playing field impairing the regulatory framework, and the market access barriers for trade in agriculture. Such differences will remain in three areas which, incidentally, are also vital for a global response to the food security challenge to feed 9 billion people before the year 2050: market access, non-tariff barriers, and trade-distorting domestic support programmes. This means that without multilateral progress the TTIP and other so-called mega-regionals, if successfully concluded, will exacerbate rather than lessen trade distortions. While this makes farmers in rich countries safer from competition, competitive production in all countries will be hampered. Consequently, and notwithstanding the many affirmations to the contrary, farm policies worldwide will continue to only address farmer security without increasing global food security. What are the implications of the TTIP for Swiss agriculture? This article, commissioned by Waseda University in Tokyo, finds that the failure to achieve further reforms – including a number of areas where earlier reforms have been reversed – is presenting Switzerland and Swiss agriculture with a terrible dilemma in the eventuality of a successful conclusion of the TTIP. If Swiss farm production is to survive for more than another generation, continuous reform efforts are required, and over-reliance on the traditional instruments of border protection and product support is to be avoided. Without a substantial TTIP obliging Switzerland to follow suit, autonomous reforms will remain extremely fragile.

A return-on-investment framework to identify conservation priorities in Africa

Environmental conservation activities must continue to become more efficient and effective, especially in Africa where development and population growth pressures continue to escalate. Recently, prioritization of conservation resources has focused on explicitly incorporating the economic costs of conservation along with better defining the outcomes of these expenditures. We demonstrate how new global and continental data that spans social, economic, and ecological sectors creates an opportunity to incorporate return-on-investment (ROI) principles into conservation priority setting for Africa. We suggest that combining conservation priorities that factor in biodiversity value, habitat quality, and conservation management investments across terrestrial, freshwater, and coastal marine environments provides a new lens for setting global conservation priorities. Using this approach we identified seven regions capturing interior and coastal resources that also have high ROI values that support further investment. We illustrate how spatially explicit, yet flexible ROI analysis can help to better address uncertainty, risk, and opportunities for conservation, while making values that guide prioritization more transparent. In one case the results of this prioritization process were used to support new conservation investments. Acknowledging a clear research need to improve cost information, we propose that adopting a flexible ROI framework to set conservation priorities in Africa has multiple potential benefits.

Trade, Foreign Investment and Myanmar's Economic Development during the Transition to an Open Economy

Throughout the 1990s and up to 2005, the adoption of an open-door policy substantially increased the volume of Myanmar's external trade. Imports grew more rapidly than exports in the 1990s owing to the release of pent-up consumer demand during the transition to a market economy. Accordingly, trade deficits expanded. Confronted by a shortage of foreign currency, the government after the late 1990s resorted to rigid controls over the private sector's trade activities. Despite this tightening of policy, Myanmar's external sector has improved since 2000 largely because of the emergence of new export commodities, namely garments and natural gas. Foreign direct investments in Myanmar significantly contributed to the exploration and development of new gas fields. As trade volume grew, Myanmar strengthened its trade relations with neighboring countries such as China, Thailand and India. Although the development of external trade and foreign investment inflows exerted a considerable impact on the Myanmar economy, the external sector has not yet begun to function as a vigorous engine for broad-based and sustainable development.

How does country risk matter for foreign direct investment?

In this paper, we aim to identify the political and financial risk components that matter most for the activities of multinational corporations. Our paper is the first paper to comprehensively examine the impact of various components of not only political risk but also financial risk on inward FDI, from both long-run and short-run perspectives. Using a sample of 93 countries (including 60 developing countries) for the period 1985-2007, we find that among the political risk components, government stability, socioeconomic conditions, investment profile, internal conflict, external conflict, corruption, religious tensions, democratic accountability, and ethnic tensions have a close association with FDI flows. In particular, socioeconomic conditions, investment profile, and external conflict appear to be the most influential components of political risk in attracting foreign investment. Among the financial risk components, only exchange rate stability yields statistically significant positive coefficients when estimated only for developing countries. In contrast, current account as a percentage of exports of goods and services, foreign debt as a percentage of GDP, net international liquidity as the number of months of import cover, and current account as a percentage of GDP yield negative coefficients in some specifications. Thus, multinationals do not seem to consider seriously the financial risk of the host country.

Managing software development information in global configuration management activities

Software Configuration Management (SCM) techniques have been considered the entry point to rigorous software engineering, where multiple organizations cooperate in a decentralized mode to save resources, ensure the quality of the diversity of software products, and manage corporate information to get a better return of investment. The incessant trend of Global Software Development (GSD) and the complexity of implementing a correct SCM solution grow not only because of the changing circumstances, but also because of the interactions and the forces related to GSD activities. This paper addresses the role SCM plays in the development of commercial products and systems, and introduces a SCM reference model to describe the relationships between the different technical, organizational, and product concerns any software development company should support in the global market.

Development in Rural Areas Through Capacity Building and Education for Business

This paper is based on a case study located in Avila, central Spain. Its main objectives are to implement an entrepreneurship program and design a plan of capacity building and education for business in order to promote the development of rural areas. The methodological approach of the program is based on the use of tools that permit involving the various actors of the area from the early planning stages. The university's group that is carrying out the field work has relied on these participatory tools in very different areas and contexts for over 25 years. This has allowed the development of an advanced planning model called ?Working With People? that connects expert and experience knowledge in the territories where it is applied. With this methodological approach, the diagnosis of the territory and the design of the program's strategy has been carried out. Once completed the first phase of the program and in order to ensure the sustainability and applicability of future entrepreneurial initiatives, it is necessary to support and strengthen potential entrepreneurs through training activities and capacity building. It relies on ?How to learn from people who live there? to promote investment projects and to teach them with adequate educational skills. In this context, this article aims to study the implementation strategy of these training and capacity building activities studied from an academic perspective, as well as analyzing the potential effects of these actions in promoting entrepreneurship in the territories

The Developmental Activities of Elite Ice Hockey Players

The purpose of this study was to analyze the development of four 20 year-old elite hockey players through an in-depth examination of their sporting activities. The theoretical frameworkof deliberate practice (Ericsson, Krampe, & Tesch-Romer, 1993) and the notion of deliberate play (Côté, 1999) served as the theoretical foundations. Interviews were conducted to providea longitudinal and detailed account of each participant.s involvement in various sporting activities. The interviewer asked questions about the conditions and sporting activities for eachyear of development. The data obtained were validated through independent interviews conducted with three parents of three different athletes. The results were consistent with Côté.s(1999) three stages of development in sport: the sampling (age 6.12), specializing (age 13. 15), and investment (age 16+) years

In sickness and in health: protecting and supporting public investment in Europe. Bruegel Policy Contribution 2014/02, February 2014

The long-term decline in gross public investment in European Union countries mirrors the trend in other advanced economies, but recent developments have been different: public investment has increased elsewhere, but in the EU it has declined and even collapsed in the most vulnerable countries, exaggerating the output fall. The provisions in the EU fiscal framework to support public investment are very weak.The recently inserted ‘investment clause’ is almost no help. In the short term, exclusion of national co-funding of EU-supported investments from the fiscal indicators considered in the Stability and Growth Pact would be sensible. In the medium term, the EU fiscal framework should be extended with an asymmetric ‘golden rule’ to further protect public investment in bad times, while limiting adverse incentives in good times. During a downturn, a European investment programme is needed and the European Semester should encourage greater investment by member states with healthy public finances and low public investment rates. Reform and harmonisation of budgeting, accounting, transparency and project assessment is also needed to improve the quality of public investment.

Gazprom’s expansion in the EU: co-operation or domination? OSW Report, October 2009. Second edition, revised

Introduction. The energy sector, especially with regard to the gas trade, is one of the key areas of co-operation between the EU and Russia. However, the form this co-operation has taken has been giving rise to some concern, both in Brussels and in the EU member states. Questions arise as to whether the EU has not become excessively dependent on Russia for energy, and whether the presence of the Russian gas monopoly in the EU does not enable Russian interference with the development of EU energy policy. The objective of this series of OSW reports (for the previous edition,see Gazprom’s expansion in the EU: co-operation or domination? April 2008 – pdf 1.2 MB) is to provide facts which will permit an accurat answer to these questions to be formulated. Over the course of last year, two new factors strongly affected Gazprom’s capability to operate on the EU market. One was the ongoing global economic crisis, which has depressed demand for gas both in Russia and in Europe. Gazprom has cut both its own production and the quantities of gas it purchases from the Central Asian states, and the decrease in export revenues has forced the company to modify some of its current investment plans. Less demand for gas and the need to reduce production are also having a positive impact – the Russian company is likely to avoid the difficulties in meeting all of its export commitments which, only a year or so ago, it was expected to experience. The other factor affecting Gazprom’s expansion in Europe is the observed radicalisation of the rhetoric and actions of both the company itself and of the Russian authorities with regard to the gas sector as broadly understood. The gas crisis between Russia and Ukraine in January 2009, which resulted in a two-week interruption of gas supplies from Russia to Europe via Ukraine, was the most prominent example of this radicalisation. The hardening of rhetoric in the ongoing energy talks with the EU and other actors, and increased political and business activities designed to promote Russian gas interests in Europe, in particular the lobbying for the Nord Stream and South Stream projects, are further signs of this shift in tone. These issues raise the question of whether, and to what extent, the current condition of Gazprom’s finance will permit the company to implement the infrastructural projects it has been endorsing and its other investment plans in Europe. Another important question is whether the currently observed changes in how Gazprom operates will take on a more permanent character, and what consequences this will have for the European Union. The first part of this report discusses Gazprom’s production and export potential. The second comprehensively presents the scope and nature of Gazprom’s economic presence in the EU member states. Finally, the third part presents the Russian company’s methods of operation on foreign markets. The data presented in the report come mainly from the statistics of the International Energy Agency, the European Commission and Gazprom, as well as the Central Bank of Russia and the Russian Statistical Office. The figures presented here also include proprietary calculations by the OSW based on figures disclosed by energy companies and reports by professional press and news agencies.

Fact sheet : draft RCRA post-closure permit modification : Chevron-Texaco/Lockport Facility, Lockport, Illinois : ILD041518861 : State ID #1970500012 : post-closure permit log no. B-38RI-M-1.

"This fact sheet has been prepared pursuant to the requirements of Title 35 Illinois Administrative Code (35 IAC) Section 705.143. The fact sheet is intended to be a brief summary of the principal facts and significant factual, legal, methodological, and policy questions considered in preparing a draft Class 3 RCRA permit modification. This permit modification will allow the current permittee, Chevron Environmental Services Company (CESC), to establish an onsite Corrective Action Management Unit (CAMU) to manage remediation wastes generated during site remediation activities performed under the RCRA Corrective Action program and to establish a facility-wide Groundwater Management Zone (GMZ) for the duration of the corrective action work at the closed refinery. Pursuant to 35 IAC 705.143(a), this fact sheet is sent to the applicant, to the information repository and to any other person who requests it."

Predictors of young dating adults' inclination to engage in extradyadic sexual activities: A multi-perspective study

Using a multi-perspective vignette design, we explored predictors of young peoples' (N = 119) propensity to engage in unfaithful activities while dating. Demographic measures, a datding investment model, and measures of functional and dysfunctional impulsivity were used to predict inclination to engage in each of two extradyadic activities (kissing and sexual activity). The results of moderated multiple regression analyses revealed that a respondent's number of sexual partners, level of dysfunctional impulsivity, satisfaction with current relationship, and quality of relationship alternatives significantly predicted inclination to engage in both of the extradyadic activities. Consistent with previous findings, gender only showed significant predictive value in relation to extradyadic sex inclination. Moreover, the association between sex, love, and marriage interacted with gender in the prediction of both extradyadic activities and interacted with commitment in the prediction of extradyadic sex inclination. Suggestions for future research in this area are offered in light of these new findings.

The importance of clusters for spillovers from foreign direct investment and technology sourcing

This paper examines the link between cluster development and inward foreign direct investment. The conventional policy approach has been to assume that inward foreign direct investment (FDI) can stimulate significant clustering activity, thus generating significant spillovers. This paper, however, questions this and shows that, while clusters can generate significant productivity spillovers from FDI, this only occurs in pre-existing clusters. Further, the paper demonstrates that foreign-owned firms that enter clusters also appropriate spillovers when domestic firms undertake investment, raising the possibility that clusters are important locations for so called technology, or knowledge sourcing activities by MNEs. © 2006 Oxford University Press.

The impact of Foreign Direct Investment and trade openness on ICT expansion: A comparative analysis of Asia-Pacific and Middle Eastern countries

This study investigates the impact of foreign direct investment (FDI) inflow and trade openness on the expansion of information and communication technologies (ICTs) for the period of 1996 to 2005, in the Asia-Pacific and Middle East regions. The results of regression analyses conducted indicate that while dissimilarities exist among the countries included in this study in terms of their level of socio-economic and political development, factors such as trade openness, education and the growth of GDP had a positive impact on their ICT development. While FDI inflow had positive impact on the expansion of ICTs on Asia-Pacific countries its impact on Middle Eastern countries was not statistically significant. The study results also show that governmental intervention in economic activities has a negative impact on ICT expansion in both regions. In the Middle East, regional conflict imposes additional negative impact on FDI inflow and trade openness and consequently, ICT expansion. The regression results show that those countries that implemented liberalization of their ICT sector were able to not only reduce the digital divide with other developed countries, but also increase their operations in both local and global markets.

China's economic co-operation related investment:an investigation of its direction and some implications for outward investment

Chinese firms undertake large scale contracted projects in a number of countries under the auspices of economic cooperation. While there are suggestions that these activities are an extension of China's soft power aimed at facilitating Chinese foreign direct investment (FDI) in those countries, often for access to natural resources, there is no systematic analysis of this in the literature. In this paper, we examine China's economic cooperation related investment (ECI) over time. Our results suggest that the pattern of investment is indeed explained well by factors that are used in the stylised literature to explain directional patterns of outward FDI. They also demonstrate that the (positive) relationship between Chinese ECI and the recipient countries' natural resource richness is not economically meaningful. Finally, while there is some support for the popular wisdom that China is willing to do business with countries with weak political rights, the evidence suggests that, ceteris paribus, its ECI is more likely to flow to countries with low corruption levels and, by extension, better institutions.