The relationship between top management team innovation orientation and firm growth: The mediating role of firm innovativeness

Upper echelon theory and research on innovation have considered top management teams and their behaviour and characteristics as important factors that positively influence innovativeness and organizational outcomes. Yet, innovation research has mostly focused on individual new product projects, and their performance and impact on firm performance. Recent research has started to apply a more holistic view in terms of innovation, by considering firm-wide innovation instead of single new products. Upper echelon research has concentrated on direct relationships between top management team characteristics and organizational outcomes. But recent research calls for mediating effects of the relationship between top management team characteristics and organizational outcomes. Hence, this study introduces firm innovativeness as a mediator between top management team innovation orientation and firm growth. Focusing on small and medium-sized firms, which often represent highly innovative firms, results show that firm innovativeness fully mediates the relationship between top management team innovation orientation and firm growth. Implications and future research are discussed.

Adapting public agricultural extension services to climate change: Insights from Kenya

This paper analyses the adaptiveness of the Public Agricultural Extension Services (PAES) to climate change. Existing literature, interviews and group discussions among PAES actors in larger Makueni district, Kenya, provided the data for the analyses. The findings show that the PAES already have various elements of adaptiveness in its policies, approaches and methods of extension provision. However, the hierarchical structure of the PAES does not augur well for self-organisation at local levels of extension provision, especially under conditions of abrupt change which climate change might trigger. Most importantly, adpativeness presupposes adaptive capacity but the lack of resources in terms of funding for extension, limited mobility of extension officers, the low extension staff/farmer ratio, the aging of extension staff and significant dependence on donor funding limits the adaptiveness of the PAES. Accordingly criteria and indicators were identified in literature with which an initial assessement of the adaptiiveneess of PAES was conducted. However this assessment framework needs to be improved and future steps will integrate more specific inputs from actors in PAES in order to make the framework operational.

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)].

Longitudinal extension of myelomalacia by intramedullary and subdural hemorrhage in a canine model of spinal cord injury

BACKGROUND CONTEXT In canine intervertebral disc (IVD) extrusion, a spontaneous animal model of spinal cord injury, hemorrhage is a consistent finding. In rodent models, hemorrhage might be involved in secondary tissue destruction by biochemical mechanisms. PURPOSE This study aimed to investigate a causal association between the extents of intramedullary, subdural and epidural hemorrhage and the severity of spinal cord damage following IVD extrusion in dogs. STUDY DESIGN/SETTING A retrospective study using histologic spinal cord sections from 83 dogs euthanized following IVD extrusion was carried out. METHODS The degree of hemorrhage (intramedullary, subdural, epidural), the degree of spinal cord damage in the epicenter (white and gray matter), and the longitudinal extent of myelomalacia were graded. Associations between the extent of hemorrhage and the degree of spinal cord damage were evaluated statistically. RESULTS Intramedullary and subdural hemorrhages were significantly associated with the degree of white (p<.001/ p=.004) and gray (both p<.001) matter damage, and with the longitudinal extension of myelomalacia (p<.001/p=.005). Intriguingly, accumulation of hemorrhagic cord debris inside or dorsal to a distended and ruptured central canal in segments distant to the epicenter of the lesion was observed exhibiting a wave-like pattern on longitudinal assessment. The occurrence of this debris accumulation was associated with high degrees of tissue destruction (all p<.001). CONCLUSIONS Tissue liquefaction and increased intramedullary pressure associated with hemorrhage are involved in the progression of spinal cord destruction in a canine model of spinal cord injury and ascending or descending myelomalacia. Functional and dynamic studies are needed to investigate this concept further.

Further reductions in nonvertebral fracture rate with long-term denosumab treatment in the FREEDOM open-label extension and influence of hip bone mineral density after 3 years

Limited data exist on the efficacy of long-term therapies for osteoporosis. In osteoporotic postmenopausal women receiving denosumab for 7 years, nonvertebral fracture rates significantly decreased in years 4-7 versus years 1-3. This is the first demonstration of a further benefit on fracture outcomes with long-term therapy for osteoporosis. INTRODUCTION This study aimed to evaluate whether denosumab treatment continued beyond 3 years is associated with a further reduction in nonvertebral fracture rates. METHODS Participants who completed the 3-year placebo-controlled Fracture REduction Evaluation of Denosumab in Osteoporosis every 6 Months (FREEDOM) study were invited to participate in an open-label extension. The present analysis includes 4,074 postmenopausal women with osteoporosis (n = 2,343 long-term; n = 1,731 cross-over) who enrolled in the extension, missed ≤1 dose during their first 3 years of denosumab treatment, and continued into the fourth year of treatment. Comparison of nonvertebral fracture rates during years 1-3 of denosumab with that of the fourth year and with the rate during years 4-7 was evaluated. RESULTS For the combined group, the nonvertebral fracture rate per 100 participant-years was 2.15 for the first 3 years of denosumab treatment (referent) and 1.36 in the fourth year (rate ratio [RR] = 0.64; 95 % confidence interval (CI) = 0.48 to 0.85, p = 0.003). Comparable findings were observed in the groups separately and when nonvertebral fracture rates during years 1-3 were compared to years 4-7 in the long-term group (RR = 0.79; 95 % CI = 0.62 to 1.00, p = 0.046). Fracture rate reductions in year 4 were most prominent in subjects with persisting low hip bone mineral density (BMD). CONCLUSIONS Denosumab treatment beyond 3 years was associated with a further reduction in nonvertebral fracture rate that persisted through 7 years of continuous denosumab administration. The degree to which denosumab further reduces nonvertebral fracture risk appears influenced by the hip bone density achieved with initial therapy.

The effect of 8 or 5 years of denosumab treatment in postmenopausal women with osteoporosis: results from the FREEDOM Extension study

UNLABELLED The FREEDOM study and its Extension provide long-term information about the effects of denosumab for the treatment of postmenopausal osteoporosis. Treatment for up to 8 years was associated with persistent reduction of bone turnover, continued increases in bone mineral density, low fracture incidence, and a favorable benefit/risk profile. INTRODUCTION This study aims to report the results through year 5 of the FREEDOM Extension study, representing up to 8 years of continued denosumab treatment in postmenopausal women with osteoporosis. METHODS Women who completed the 3-year FREEDOM study were eligible to enter the 7-year open-label FREEDOM Extension in which all participants are scheduled to receive denosumab, since placebo assignment was discontinued for ethical reasons. A total of 4550 women enrolled in the Extension (2343 long-term; 2207 cross-over). In this analysis, women in the long-term and cross-over groups received denosumab for up to 8 and 5 years, respectively. RESULTS Throughout the Extension, sustained reduction of bone turnover markers (BTMs) was observed in both groups. In the long-term group, mean bone mineral density (BMD) continued to increase significantly at each time point measured, for cumulative 8-year gains of 18.4 and 8.3 % at the lumbar spine and total hip, respectively. In the cross-over group, mean BMD increased significantly from the Extension baseline for 5-year cumulative gains of 13.1 and 6.2 % at the lumbar spine and total hip, respectively. The yearly incidence of new vertebral and nonvertebral fractures remained low in both groups. The incidence of adverse and serious adverse events did not increase over time. Through Extension year 5, eight events of osteonecrosis of the jaw and two events of atypical femoral fracture were confirmed. CONCLUSIONS Denosumab treatment for up to 8 years was associated with persistent reductions of BTMs, continued BMD gains, low fracture incidence, and a consistent safety profile.

How specific is apprenticeship training? Evidence from inter-firm and occupational mobility after graduation

Do apprenticeships convey mainly general or also firm- and occupation-specific human capital? Specific human capital may allow for specialization gains, but may also lead to allocative inefficiency due to mobility barriers. We analyse the case of Switzerland, which combines a comprehensive, high-quality apprenticeship system with a lightly regulated labour market. To assess human capital transferability after standardized firm-based apprenticeship training, we analyse inter-firm and occupational mobility and their effects on post-training wages. Using a longitudinal data set based on the PISA 2000 survey, we find high inter-firm and low occupational mobility within one year after graduation. Accounting for endogenous changes, we find a negative effect of occupation changes on wages, but no significant wage effect for firm changes. This indicates that occupation-specific human capital is an important component of apprenticeship training and that skills are highly transferable within an occupational field.

The Entrepreneurial Theory of the Firm and the Theory of the Entrepreneurial Firm

The entrepreneurial theory of the firm argues that entrepreneurship, properly understood, is a crucial but neglected element in explaining the nature and boundaries of the firm. By contrast, the theory of the entrepreneurial firm presumably seeks not to understand the nature and boundaries of "the firm" in general but rather to understand a particular type of firm: one that is entrepreneurial. This paper is an attempt to reconcile the two. After briefly delving for the concept of entrepreneurship in the work of Schumpeter, Kirzner, and (especially) Knight, the paper makes the case for the entrepreneurial theory of the firm. In such a theory, the firm exists as the solution to a coordination problem in a world of change and uncertainty, including Knightian or structural uncertainty. Taking a historical or developmental perspective, the paper then examines the changing nature of the entrepreneurial coordination problem over the life-cycle. In this formulation, "the entrepreneurial firm" is a nascent firm or proto-firm facing a problem of coordinating systemic change in economic capabilities. Lacking (by definition) adequate guidance from existing systems of rules of conduct embedded in markets or organizations, the entrepreneurial firm typically relies on a form of organization Max Weber called charismatic authority. In the end, although there is no such thing as a non-entrepreneurial firm, firms that must solve coordination problems in a world of novelty and systemic change ("entrepreneurial firms") are perhaps the purest case of the entrepreneurial theory of the firm.

Technical Efficiency in the Indian Textiles Industry: A Nonparametric Analysis of Firm-Level Data

The Indian textiles industry is now at the crossroads with the phasing out of quota regime that prevailed under the Multi-Fiber Agreement (MFA) until the end of 2004. In the face of a full integration of the textiles sector in the WTO, maintaining and enhancing productive efficiency is a precondition for competitiveness of the Indian firms in the new liberalized world market. In this paper we use data obtained from the Annual Survey of Industries for a number of years to measure the levels of technical efficiency in the Indian textiles industry at the firm level. We use both a grand frontier applicable to all firms and a group frontier specific to firms from any individual state, ownership, or organization type in order to evaluate their efficiencies. This permits us to separately identify how locational, proprietary, and organizational characteristics of a firm affect its performance.

The impact of Medicare, Medicaid and Schip Extension Act of 2007 (MMSEA) on the long term acute care hospitals

The Long Term Acute Care Hospitals (LTACH), which serve medically complex patients, have grown tremendously in recent years, by expanding the number of Medicare patient admissions and thus increasing Medicare expenditures (Stark 2004). In an attempt to mitigate the rapid growth of the LTACHs and reduce related Medicare expenditures, Congress enacted Section 114 of P.L. 110-173 (§114) of the Medicare, Medicaid and SCHIP Extension Act (MMSEA) in December 29, 2007 to regulate the LTCAHs industry. MMSEA increased the medical necessity reviews for Medicare admissions, imposed a moratorium on new LTCAHs, and allowed the Centers for Medicare and Medicaid Services (CMS) to recoup Medicare overpayments for unnecessary admissions. ^ This study examines whether MMSEA impacted LTACH admissions, operating margins and efficiency. These objectives were analyzed by comparing LTACH data for 2008 (post MMSEA) and data for 2006-2007 (pre-MMSEA). Secondary data were utilized from the American Hospital Association (AHA) database and the American Hospital Directory (AHD).^ This is a longitudinal retrospective study with a total sample of 55 LTACHs, selected from 396 LTACHs facilities that were fully operational during the study period of 2006-2008. The results of the research found no statistically significant change in total Medicare admissions; instead there was a small but not statistically significant reduction of 5% in Medicare admissions for 2008 in comparison to those for 2006. A statistically significant decrease in mean operating margins was confirmed between the years 2006 and 2008. The LTACHs' Technical Efficiency (TE), as computed by Data Envelopment Analysis (DEA), showed significant decrease in efficiency over the same period. Thirteen of the 55 LTACHs in the sample (24%) in 2006 were calculated as “efficient” utilizing the DEA analysis. This dropped to 13% (7/55) in 2008. Longitudinally, the decrease in efficiency using the DEA extension technique (Malmquist Index or MI) indicated a deterioration of 10% in efficiency over the same period. Interestingly, however, when the sample was stratified into high efficient versus low efficient subgroups (approximately 25% in each group), a comparison of the MIs suggested a significant improvement in Efficiency Change (EC) for the least efficient (MI 0.92022) and reduction in efficiency for the most efficient LTACHs (MI = 1.38761) over same period. While a reduction in efficiency for the most efficient is unexpected, it is not particularly surprising, since efficiency measure can vary over time. An improvement in efficiency, however, for the least efficient should be expected as those LTACHs begin to manage expenses (and controllable resources) more carefully to offset the payment/reimbursement pressures on their margins from MMSEA.^