Enterprise policy and the metagovernance of firm capabilities

The underlying logic of enterprise policy is that there are impediments to change in economic systems that can be traced to the path-dependent behaviors of economic actors that prevent them from exploring new knowledge and new ways of doing things. Enterprise policy involves firm-level interventions delivered by distributed networks of business advisors coordinated by knowledge intermediaries. These metagovernance arrangements are able to disrupt the path-dependent behaviors of organizations. The logic and benefits of enterprise policy are explored through reference to public administration, strategic management and evolutionary theory, and three case studies.

Illustrating outcomes for Australian nascent and young firm entrepreneurial activity

This paper examines the outcomes of nascent and young entrepreneurial firms in Australia. Findings of interest in this paper include: • After three years similar proportions of nascent firms reach an operational state (31 per cent), i.e. sales regularly exceed costs, compared with those that have terminated (35 per cent), and those who are still trying to achieve venture creation (34 per cent). This outcome closely mirrors the outcomes in the US PSED study. • The young firm sample shows that these new ventures remain more robust to firm closure. The vast majority of young firms (78 per cent) continue to be active in the market the last time they participated in CAUSEE. • The annual termination rate for young firms is 9 per cent at most, and 14 per cent cumulatively, while cumulatively only 8 per cent of young firms experience a drop-off in activity to be considered as having uncertain status. • The average number of employees in Nascent Firms is one person, the average number of Young Firm employees increases from two at first sampling to three after three years. • While the founders of exiting Nascent Firms are more likely to return to their old job upon termination of their business, Young Firm founders move on to new jobs. Regardless the majority of exiting firm founders rate their experience as positive and are prepared to attempt business creation in the future.

Entrepreneurial growth : the role of international knowledge acquisition as moderated by firm age

In line with repeated recent calls for research on specific forms of growth rather than on an undifferentiated notion of “total growth,” our study contributes to the understanding of entrepreneurial growth. By this we mean growth through expansion into new geographic markets and/or via the introduction of new products or services. Building on Penrose's theory of the growth of the firm and on the research streams she has in part inspired, we investigate the impact of knowledge acquisition from international markets on entrepreneurial growth both at home and abroad. We further suggest that the effects of international knowledge acquisition on entrepreneurial growth will vary with firm age. Utilizing longitudinal data on 138 small and medium-sized enterprises (SMEs), we find that the acquisition of knowledge from international markets fuels growth through market development, and that this effect is stronger for international expansion than domestic expansion. Our results also show that firm age negatively moderates the relationship between international knowledge acquisition and entrepreneurial growth via the introduction of new products or services. Specifically, international knowledge acquisition has a positive effect on growth via new products/services development in young firms, but a negative effect in mature firms. We assume this reflects changes over time in how international knowledge is managed.

Alternative modes of entrepreneurial opportunity exploitation

While entrepreneurship research has taken firm formation to be the predominant mode of opportunity exploitation, entrepreneurship can take place through many other types of organizational arrangements. In the present article, we consider one such alternative arrangement, namely the formation of inter-organizational projects (IOPs). We propose a multi-level contingency model that suggests that uncertainty both at the level of the firm and at the level of the environment makes the exploitation of opportunities through IOPs more likely. The model is tested by telephone survey data collected amongst a panel of 1725 SMEs and longitudinal industry data. Our findings provide strong support for the industry-level part of the model, but interestingly, only partial support for the firm level part of the model. This indicates that the effects of uncertainty need to be dissected into different levels of analysis to understand the conditions under which alternative modes of opportunity exploitation can be a prominent entrepreneurial alternative to new firm formation.

Submission to expert panel on constitutional recognition of Indigenous people

Submission recommended addition of a new 'self-enacting' preamble and enacting words to the Commownealth Constitution, and replacement of the 'race power' by a series of more specific powers relating to the recognition of native title and laws of the indigenous people.

ACE research vignette 026 : Do Entrepreneurs’ Personal Networks Influence Small Firm Performance?

This series of research vignettes is aimed at sharing current and interesting research findings from our team of international Entrepreneurship researchers. This vignette, written by Dr. Rene Bakker, examines the evidence on the effects of a entrepreneurs’ personal networks on small firm performance, and the factors that moderate this relationship.

A high-throughput panel for identifying clinically relevant mutation profiles in melanoma

Success with molecular-based targeted drugs in the treatment of cancer has ignited extensive research efforts within the field of personalized therapeutics. However, successful application of such therapies is dependent on the presence or absence of mutations within the patient's tumor that can confer clinical efficacy or drug resistance. Building on these findings, we developed a high-throughput mutation panel for the identification of frequently occurring and clinically relevant mutations in melanoma. An extensive literature search and interrogation of the Catalogue of Somatic Mutations in Cancer database identified more than 1,000 melanoma mutations. Applying a filtering strategy to focus on mutations amenable to the development of targeted drugs, we initially screened 120 known mutations in 271 samples using the Sequenom MassARRAY system. A total of 252 mutations were detected in 17 genes, the highest frequency occurred in BRAF (n = 154, 57%), NRAS (n = 55, 20%), CDK4 (n = 8, 3%), PTK2B (n = 7, 2.5%), and ERBB4 (n = 5, 2%). Based on this initial discovery screen, a total of 46 assays interrogating 39 mutations in 20 genes were designed to develop a melanoma-specific panel. These assays were distributed in multiplexes over 8 wells using strict assay design parameters optimized for sensitive mutation detection. The final melanoma-specific mutation panel is a cost effective, sensitive, high-throughput approach for identifying mutations of clinical relevance to molecular-based therapeutics for the treatment of melanoma. When used in a clinical research setting, the panel may rapidly and accurately identify potentially effective treatment strategies using novel or existing molecularly targeted drugs

The valuation accuracy of multiples in mergers and acquisitions, and their association with firm misvaluation

This study explores the accuracy and valuation implications of the application of a comprehensive list of equity multiples in the takeover context. Motivating the study is the prevalent use of equity multiples in practice, the observed long-run underperformance of acquirers following takeovers, and the scarcity of multiplesbased research in the merger and acquisition setting. In exploring the application of equity multiples in this context three research questions are addressed: (1) how accurate are equity multiples (RQ1); which equity multiples are more accurate in valuing the firm (RQ2); and which equity multiples are associated with greater misvaluation of the firm (RQ3). Following a comprehensive review of the extant multiples-based literature it is hypothesised that the accuracy of multiples in estimating stock market prices in the takeover context will rank as follows (from best to worst): (1) forecasted earnings multiples, (2) multiples closer to bottom line earnings, (3) multiples based on Net Cash Flow from Operations (NCFO) and trading revenue. The relative inaccuracies in multiples are expected to flow through to equity misvaluation (as measured by the ratio of estimated market capitalisation to residual income value, or P/V). Accordingly, it is hypothesised that greater overvaluation will be exhibited for multiples based on Trading Revenue, NCFO, Book Value (BV) and earnings before interest, tax, depreciation and amortisation (EBITDA) versus multiples based on bottom line earnings; and that multiples based on Intrinsic Value will display the least overvaluation. The hypotheses are tested using a sample of 147 acquirers and 129 targets involved in Australian takeover transactions announced between 1990 and 2005. The results show that first, the majority of computed multiples examined exhibit valuation errors within 30 percent of stock market values. Second, and consistent with expectations, the results provide support for the superiority of multiples based on forecasted earnings in valuing targets and acquirers engaged in takeover transactions. Although a gradual improvement in estimating stock market values is not entirely evident when moving down the Income Statement, historical earnings multiples perform better than multiples based on Trading Revenue or NCFO. Third, while multiples based on forecasted earnings have the highest valuation accuracy they, along with Trading Revenue multiples for targets, produce the most overvalued valuations for acquirers and targets. Consistent with predictions, greater overvaluation is exhibited for multiples based on Trading Revenue for targets, and NCFO and EBITDA for both acquirers and targets. Finally, as expected, multiples based Intrinsic Value (along with BV) are associated with the least overvaluation. Given the widespread usage of valuation multiples in takeover contexts these findings offer a unique insight into their relative effectiveness. Importantly, the findings add to the growing body of valuation accuracy literature, especially within Australia, and should assist market participants to better understand the relative accuracy and misvaluation consequences of various equity multiples used in takeover documentation and assist them in subsequent investment decision making.

Expression and prognostic significance of a panel of tissue hypoxia markers in head-and-neck squamous cell carcinomas

Purpose: To investigate the expression pattern of hypoxia-induced proteins identified as being involved in malignant progression of head-and-neck squamous cell carcinoma (HNSCC) and to determine their relationship to tumor pO 2 and prognosis. Methods and Materials: We performed immunohistochemical staining of hypoxia-induced proteins (carbonic anhydrase IX [CA IX], BNIP3L, connective tissue growth factor, osteopontin, ephrin A1, hypoxia inducible gene-2, dihydrofolate reductase, galectin-1, IκB kinase β, and lysyl oxidase) on tumor tissue arrays of 101 HNSCC patients with pretreatment pO 2 measurements. Analysis of variance and Fisher's exact tests were used to evaluate the relationship between marker expression, tumor pO 2, and CA IX staining. Cox proportional hazard model and log-rank tests were used to determine the relationship between markers and prognosis. Results: Osteopontin expression correlated with tumor pO 2 (Eppendorf measurements) (p = 0.04). However, there was a strong correlation between lysyl oxidase, ephrin A1, and galectin-1 and CA IX staining. These markers also predicted for cancer-specific survival and overall survival on univariate analysis. A hypoxia score of 0-5 was assigned to each patient, on the basis of the presence of strong staining for these markers, whereby a higher score signifies increased marker expression. On multivariate analysis, increasing hypoxia score was an independent prognostic factor for cancer-specific survival (p = 0.015) and was borderline significant for overall survival (p = 0.057) when adjusted for other independent predictors of outcomes (hemoglobin and age). Conclusions: We identified a panel of hypoxia-related tissue markers that correlates with treatment outcomes in HNSCC. Validation of these markers will be needed to determine their utility in identifying patients for hypoxia-targeted therapy. © 2007 Elsevier Inc. All rights reserved.

Corporate ownership, corporate governance reform and timeliness of earnings : Malaysian evidence

This paper provides the first evidence showing that ownership concentration and the identity of the largest shareholder matter to the timeliness of corporate earnings, measured by a stock price-based timeliness metric and the reporting lag. Using panel data of 1276 Malaysian firms from 1996 to 2009, we find a non-linear relationship between concentrated ownership, measured by the largest shareholding in a firm, and the reporting lag but not the timeliness of price discovery. Although firms with government as the largest shareholder and political connections have a significantly shorter reporting lag, only the former are timelier in price discovery. Firms with family and foreigners as the largest shareholder however are less timely in price discovery. While the reporting lag is shorter in the period after the integration of the Malaysian Code of Corporate Governance (MCCG) into Bursa listing rules, its impact on the timeliness of price discovery is mostly immaterial.

Outsider board activity, ownership structure and firm value : evidence from Korea

Using a sample of publicly listed firm in Korea from 2002 to 2006, this article examines the impact of board monitoring on firm value and productivity. We use outsider's attendance of board meetings as a proxy for board monitoring. Consistent with the commitment hypothesis, we find that outsider's attendance rate increases firm value, suggesting that attending board meeting itself is a strong signal that reflects outsider's intention to monitor insiders. While ownership of controlling shareholders negatively affects firm value, this relationship is not moderated by increased monitoring by outsiders. Our findings provide further evidence that the outside director system is less effective in chaebol-affiliated firms. Results also indicate that the effect of outsider's board monitoring activity on investor's valuation of the firm is greater than on productivity improvement of the firm. Our conclusions are robust for possible endogeneity in the relationship between firm value and board attendance by outside directors.

How international entrepreneurship characteristics influence Internet capabilities for the international business processes of the firm

This research explores the relationship between international entrepreneurship characteristics and the use of Internet capabilities for the international business processes of the firm. It has been suggested, that the accumulation of a firms Internet capability can assist international operations, especially when operating in fast changing dynamic Internet environments. However, international entrepreneurship characteristics which are seen as a precursor to leveraging Internet capabilities are still vague. Given this finding, eight case studies of small and medium sized travel and tourism firms were selected to investigate the influence of international entrepreneurship characteristics, and Internet capabilities for international business processes. Based on the eight in-depth case studies, the results signify that successful international entrepreneurial firms which encompass high levels of international innovativeness and proactiveness behaviour integrate Internet capabilities to a greater degree. Our findings also indicate that the prior international business experience, international risk-taking propensity and international networking characteristics are not necessarily precursors to successful integration of Internet capabilities for international business processes. On the contrary, international business experience and international networks actually lead to a reliance on traditional mechanisms of internationalisation and can dilute the development of Internet capabilities for international business processes.

Market turbulence, temporal orientation and firm performance

This study investigates the role of environmental dynamics (i.e., market turbulence) as a factor influencing an organisation’s top management temporal orientation, and the impact of temporal orientation on innovative and financial performance. Results show that firm’s operating in highly turbulent markets exhibit higher degrees of future orientation, as opposed to present orientation. Future-oriented (rather than present-oriented) firms also experience higher levels of both incremental and radical innovations, which in turn generate financial performance. The study highlights the important role of shared strategic mindset (which is contextually influenced) as a driving factor behind the firm innovative and financial performance.

Fiction as a form of change : a paper overview of a literature panel discussion

It is well established that literary work can promote insights that result in future change, whether on a personal or an institutional level. As Umberto Eco (1989) notes, the act of reading does not stop with the artist but continues into the work of communities. The papers delivered in this panel consider the regenerative role of literature within culture, arguing that the special properties of literature can convey an important sense of nature (Bateson 1973, Zapf 2008). These concepts are discussed in relation to writing about Australian flora and fauna. Using an ecocritical focus based on ideas about the relationship between literature and the environment the paper considers Australian works and the way in which literature enlivens this complex intersection between humans, animals and the environment. This engagement is investigated through three modes: the philosophical, the literary, and the practical. The novels discussed include Alexis Wright’s Carpentaria, Richard Flanagan’s Wanting, and Sonya Hartnett’s Forest, as well as a range of fictional and non-fictional works that describe the Blue Mountains region in New South Wales. The paper closes with a discussion of the role of story-telling as a way of introducing the public to specific environmental locations and issues.