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)].

Cognitive Cities: An Application for Nairobi. Text Message Participation of Slum Inhabitants to Improve Sanitary Facilities

Population growth is always increasing, and thus the concept of smart and cognitive cities is becoming more important. Developed countries are aware of and working towards needed changes in city management. However, emerging countries require the optimization of their own city management. This chapter illustrates, based on a use case, how a city in an emerging country can quickly progress using the concept of smart and cognitive cities. Nairobi, the capital of Kenya, is chosen for the test case. More than half of the population of Nairobi lives in slums with poor sanitation, and many slum inhabitants often share a single toilet, so the proper functioning and reliable maintenance of toilets are crucial. For this purpose, an approach for processing text messages based on cognitive computing (using soft computing methods) is introduced. Slum inhabitants can inform the responsible center via text messages in cases when toilets are not functioning properly. Through cognitive computer systems, the responsible center can fix the problem in a quick and efficient way by sending repair workers to the area. Focusing on the slum of Kibera, an easy-to-handle approach for slum inhabitants is presented, which can make the city more efficient, sustainable and resilient (i.e., cognitive).

Digital goes politics: Einblick in die Schweizer ICT-Verbands und Politiklandschaft

Die Schweizer ICT-Verbands- und Politiklandschaft ist verworren. Der folgende Ueberblick ueber ICT-Verbaende, Lobbying-Organisationen, Politiker und ICT-Themen soll etwas Licht ins Dickicht bringen. Der Artikel hat weder Anspruch auf Vollstaendigkeit noch auf Neutralitaet, versucht aber dennoch einen moeglichst ausgeglichenen Einblick zu schaffen.

Characteristics of Digital Sustainability

The concept of digital sustainability is mentioned in research on digital preservation as well as on openness topics. Both streams of literature point out the necessary discussion how to create, use, and regulate digital resources in order to maximize their value for our society today and in the future. This paper therefore reviews current work on digital sustainability, presents a list of six charac-teristics how to define digitally sustainable goods, and draws the link to aspects of e-government.

Mitschreiben an der digitalen Welt

Wer Computerprogramme schreiben kann, gestaltet die digitale Welt mit – alle anderen sind abhaengige Konsumenten. Deshalb sollten am besten schon Kinder die Kulturtechnik des Programmierens lernen. Entscheidend ist ausserdem, dass wir ueberhaupt mitschreiben duerfen – dafuer setzen sich die verschiedenen «Open»-Bewegungen ein.

Measuring the promise of open data: Development of the Impact Monitoring Framework

It is a challenge to measure the impact of releasing data to the public since the effects may not be directly linked to particular open data activities or substantial impact may only occur several years after publishing the data. This paper proposes a framework to assess the impact of releasing open data by applying the Social Return on Investment (SROI) approach. SROI was developed for organizations intended to generate social and environmental benefits thus fitting the purpose of most open data initiatives. We link the four steps of SROI (input, output, outcome, impact) with the 14 high-value data categories of the G8 Open Data Charter to create a matrix of open data examples, activities, and impacts in each of the data categories. This Impact Monitoring Framework helps data providers to navigate the impact space of open data laying out the conceptual basis for further research.

Functional and discrete digital sustainability within the sustainable development goals

The Sustainable Development Goals (SDGs) present the new global agenda by the United Nations for the next 15 years from 2016 to 2030. In this research paper we examine how digital resources may contribute to the achievement of the SDGs. Based on a broad literature review we argue functional digital sustainability supports the SDGs while discrete digital sustainability is required to create and progress knowledge necessary to advance the SDGs. First we explain the perspectives of functional and discrete sustainability; secondly we map the two perspectives onto the 17 SDGs with examples incorporating both perspectives of digital sustainability. We conclude that digital sustainability should encompass both perspectives in order to exploit the full potential of information systems in regard to sustainability transformations.

Langfristig sinnvoll: Digitale Nachhaltigkeit fuer die vierte industrielle Revolution

Ende des 18. Jahrhunderts veraenderte die Dampfmaschine den Transportsektor, die Produktion und viele andere Bereiche der Wirtschaft grundlegend. Aufgrund der Erfindung der Spinnmaschinen konnte die Garnproduktion um ein Vielfaches erhoeht werden, mit Wasser und Dampf konnten Webmaschinen betrieben werden, der Wohlstand der Bevoelkerung wuchs. Gleichzeitig verloren viele Arbeiter ihre Jobs als Spinner, Weber oder Faerber, es gab Proteste und Aufstaende. Nach dieser ersten industriellen Revolution folgte mit der Elektrifizierung Ende 19. Jahrhundert die zweite Revolution. Wieder gewann die Gesellschaft als Ganzes an Wohlstand, aber viele Menschen verloren ihr Einkommen. Die dritte industrielle Revolution folgte Ende des 20. Jahrhunderts mit den Informationstechnologien. Und nur wenig spaeter befinden wir uns bereits an der Schwelle zur vierten industriellen Revolution, der Vernetzung physischer und digitaler Systeme.

Mehr Transparenz und Mitwirkung bei oeffentlichen Finanzen: Open Finance Apps in der Schweiz und im Ausland

Die Finanzfluesse in oeffentlichen Haushalten sind heute hochkomplexe Gebilde. Mit interaktiven Visualisierungen können oeffentliche Finanzen transparenter und verstaendlicher werden. Diese sogenannten Open Finance Apps helfen mit, dass sich Bevoelkerung und Politik rasch ein objektives Bild der relevanten Finanzen verschaffen und vertiefte Informationen abrufen koennen. Immer haeufiger werden Open Finance Apps auch für partizipative und kollaborative Projekte eingesetzt.

Nachhaltig in die digitale Zukunft

Kurzfristiges Denken und schaedliche Abhaengigkeiten dominieren nicht nur die physische, sondern auch die digitale Welt. Die Prinzipien der Nachhaltigkeit muessen deshalb auch hier umgesetzt werden, fordert Matthias Stuermer – und zeigt, wie das geht.

Extending private-collective innovation: a case study

The private-collective innovation model proposes incentives for individuals and firms to privately invest resources to create public goods innovations. Such innovations are characterized by non-rivalry and non-exclusivity in consumption. Examples include open source software, user-generated media products, drug formulas, and sport equipment designs. There is still limited empirical research on private-collective innovation. We present a case study to (1) provide empirical evidence of a case of private-collective innovation, showing specific benefits, and (2) to extend the private-collective innovation model by analyzing the hidden costs for the company involved. We examine the development of the Nokia Internet Tablet, which builds on both proprietary and open source software development, and that involves both Nokia developers and volunteers who are not employed by the company. Seven benefits for Nokia are identified, as are five hidden costs: difficulty to differentiate, guarding business secrets, reducing community entry barriers, giving up control, and organizational inertia. We examine the actions taken by the management to mitigate these costs throughout the development period.