The purpose of this work is to study on compensation packages for top management teams. The analysis focuses on the annual pay plus change in equity portfolio value, how its level, pay-performance sensibility and structure vary across managerial categories, and the impact of these variations on corporate performance. Using a multilevel mixed-model approach on 589 companies from the S&P 1500 between 1998 and 2005, the evidence shows that CEO compensation packages are not isomorphic to those of non-CEO executives, while on average no significant differences are found between divisional and corporate executives. Despite this, the random effects show that differences between two categories vary across companies, with shareholder return been lower for companies where differences between corporate and divisional managers are greater

In this paper, we study organizations’ repeated engagement in exploration. Using an organizational learning perspective, we link repeated exploration to the existence and usage of exploration rules, and discuss two factors that affect exploration: the momentum of prior exploration(s) and the imprinting effect of early exploration(s). Our empirical work traces the investment decisions of US Venture Capital firms from 1962 to 2004, capturing the exploration of emerging, uncertain industries as they appear. We provide evidence that prior exploration increases the likelihood of future exploration, and that it decreases with the time elapsed since the last exploration. In addition, we find that VC firms that had explored early in their lives are more likely to do so again, and that this imprinting effect weakens as the number of prior explorations increases.

In this paper we study the capital structure determinants of Latin American firms using a comprehensive sample from 1996 to 2005 covering seven countries. We argue that ownership control is important for capital structure decisions in Latin America, where firms present a higher ownership concentration. We find a U-shape relation between ownership concentration and leverage. When ownership concentration is low its effect on leverage is negative, and when ownership concentration is high its effect on leverage is positive. This U-shape relation is consistent with the argument that ownership-concentrated firms avoid equity issuing because they do not want to share or to lose control, and this effect is contrary if the ownership structure has enough dispersion and losing control is not an issue. Consistent with the control argument, we also find that firms with more growth opportunities exhibit higher leverage. In addition, and consistent with previous literature on developed countries, we find that other factors that do not proxy for ownership control are important determinants of leverage. Firms that are larger, with more tangible assets, and that are less profitable are also more leveraged.

This study explores the firm-specific, industry and country effects for firms competing in an emerging market context. For the whole sample, we find that the firm-specific effect is the most important and relatively the same in magnitude than that of developed countries. However, when analyzing the sub-sample of abnormal performers, we found that the firm-specific effect decreases and context-specific effects (i.e., industry and country effects) significantly increase. In addition, permanent effects are greater in high performers than in average performers. We understand these results as evidence of the importance of selecting the adequate strategic group in the industry and of establishing the correct fit between capabilities and positioning.

This paper provides an overview of the entrepreneurial leadership taken by the government of India's Andhra Pradesh state in promoting the IT sector and using it to improve the status of the state's economic position in the early years of the third millennium. The objective of the paper is to examine the planning and development of a successful technology park in India. *** En química, un cluster es un conjunto de átomos, conectados entre sí y con una cercana interacción con cada uno. Localizados con gran proximidad, los átomos ganan sinergia y “bonding” de la influencia mutua. De la misma forma, un cluster de tecnología se refiere a una concentración significativa de empresas innovadoras, de alta tecnología unidas generalmente alrededor de una institución de investigación importante, tal como una universidad o un laboratorio líder de investigación. Las interacciones entre estas organizaciones son sinérgicas y mutuamente beneficiosas, generando clusters que pueden tener implicaciones positivas muy significativas en la economía local y regional. Hoy en día muchos países han incluido en sus planes estratégicos de desarrollo la creación de cluster tecnológicos. En esta ponencia se expondrán lecciones aprendidas de la experiencia en India así como también las oportunidades y riesgos que estas iniciativas representan para Latino América.

The central thesis of this paper is that ends and practical reason are re-entering into Economics through the proposal of Amartya Sen of a capability approach (CA) to the analysis of poverty, equality and development. By focusing on capabilities, Sen reinserts the notion of ends into economics and economics into the practical area: capabilities are themselves ends. The CA has Aristotelian connections acknowledged by Sen. The paper maintains that these connections may be deepened and that this deepening helps to improve it and to overcome some problems and criticisms of it. One of these problems is incommensurability of ends. Sen points out the consequent limitations of standard economics to deal with ends, but he does not provide a specific answer to the problems that incommensurability raise. A concern among scholars has arisen about the operationality of Sen’s CA. This is one of the consequences of incommensurability and of applying practical reason in order to choose ends. Economists, however, are not used to practical reasoning. We should provide them with concrete indications. We need a determined definition of the specific goods that the government should provide to the citizens. It is a task that I develop highly relying on Aristotle’s ideas. In the paper, I first introduce the key concepts of the capability approach of Sen. Second, I present a balance of strengths and problems of it. Then I analyze the Aristotelian connections of the approach. Four, I deal with the problems and criticisms of the CA. I explain Sen’s answers and how the approach either would have to introduce changes or would provide answers to those problems and criticisms through a deeper Aristotelian perspective. Although practical science is inherently inexact, we could provide at least a set of principles that may orientate the policy work thus overcoming CA’s non operational character.

The present study tests the theoretical framework on how CEOs add value proposed by Carrera et al (2006). According to this model, CEOs must manage three main processes for accomplishing their mission of providing continuity to their organizations: Business, Management, and Institutional Configuration Processes. This study tests the model through a survey with 89 CEOs, from medium to large Argentine firms and multinational companies within Argentina. Research results backed up the theoretical framework. To a further extent the study evidences inconsistencies between CEOs perception of their main concerns and the actual allocation of time they do daily to their tasks. In addition, by sample segmentation (concerning age, experience, capital origin and type of organization analysed), some broad differences among CEOs arose.

There has been a sustained interest and a growing variety of approaches to the study of the phenomenon of diversified business groups in emerging markets. Ranging in theoretical undertakings from transaction cost theory, resource-based, relational and political economy perspectives, and agency theory, and in analytical treatment of horizontal and vertical connectedness of group members, the intention to date has been to identify ideal typical or generalizable behavior, structures or processes. The paper will present an in-depth discussion of author’s ongoing research project on diversified business groups in Russia. In the course of the presentation the intellectual motivations for undertaking the study and the key research questions will be posited alongside the theoretical framework which has been elaborated in the process of hypothesis formation. The research is mainly question, rather than theory, driven. However, in constructing our hypothesis we use an organization ecology framework underlain by new institutionalism, which simultaneously aggregates a dynamic capabilities perspective while using a social network analysis to investigate the processes of sociopolitical legitimation which form the cornerstone of the evolution of firm boundaries. The presentation will proceed in five sections. In the first section we introduce the issue by pointing to the stock of existing knowledge, outlining some of the main problems with the existing perspectives, highlighting our intellectual motivations and unpacking the key research questions that guide the project. In section two we provide an overview of relevant theories, extracting from these the relevant variables that have driven our hypothesis formation, as well as pointing to our hypotheses. Section three provides the historical context and institutional environment of Russia, highlighting four distinct periods of transition from state-socialism and the nature of the co-evolutionary dynamics this has entailed. Section four presents the sample and method – a longitudinal, population level study of group formation sequenced over the four periods, through the correlation of the variables of sociopolitical legitimation processes with network formation, network position, and network resources on the one hand and (firm and relational) capabilities on the other hand. We aim to show that the relative (and changing) diversification (measured by population of diversified business groups) is arrived at through the process of legitimation of key activities of the main organizations, which is prefaced by entry into networks, the establishment of specific network positions and the use of network resources as antecedents of boundary spanning firm, organizational and relational capabilities.

Purpose; The objective of the CMP Research Program is to develop an understanding of how firms relate to their markets in a manner that integrates both traditional and more modern views of marketing, and incorporates an understanding of both the antecedents and consequences of different practices. Findings; Now a decade old, the Contemporary Marketing Practices (CMP) Research Program has undertaken research in over fifteen countries. It has made a unique contribution to marketing knowledge by bridging the gap between theory and practice. Originality/value of paper; By adopting a multi-paradigm philosophy and a multi-method approach, a broad perspective has been achieved that integrates the traditional managerial view of marketing with relational and process arguments. Viewpoint; In this article, we review the history of CMP research and its outcomes. Our assessment concludes with a discussion of the program’s contribution to marketing knowledge and some issues and challenges for future research.

Do consumers bolster products’ attributes evaluations to justify their choices? Study 1 shows that choosing a product may alter people’s products’ attribute preferences to make them consistent with prior choices. Study 2 shows that consumers tend to increase or decrease the importance of positive and negative features in a choice-supportive fashion based on their attributions regarding the features’ source (i.e., the chosen or the forgone option). These choice-supportive distortions only held when people were highly confident on their attributions about the features’ source. Study 3 suggests that these effects may happen only when consumers cannot find an external justification for not choosing properly.

Interlocking directorates is a widely studied, applied measure of governance practice. Most of the research has been limited to data from developed countries and studies interlocking as an independent variable explaining other governance constructs. This work studies interlocking as a rational decision of the owner of a company, as a dependent variable of board's design, and apply the concepts in an emerging market business environment. We found significant associations between interlocking and firm characteristics such as ownership structure, industry and regulation. We finally draw some conclusions on the direct application of corporate governance theories in developing countries.

Since Sandmo (1981), many articles have studied optimal tax-enforcement policies. Surprisingly, all assume that the enforcement costs are exogenously given. However, in practice, governments invest resources to modernize their tax administration and thus to reduce these costs. In a very simple model, we find an optimal fiscal policy that incorporates such investments. In order to completely characterize the optimal investment and to show how it interacts with the other components of the fiscal policy, we simulate the model.

This article uses a unique research design to statistically analyze how a firm’s “public-private” network can shape its upgrading capabilities.  Such a network includes a firm’s ties to other firms as well as to associations, cooperatives, schools, and publicly supported institutions that aim to help firms innovate.  We develop our argument through an examination of the transformation of the Argentine wine industry in two provinces that uses data from a unique field survey we designed and implemented in 2004-05 to statistically analyze the relative impact of firm-level factors, inter-firm networks, and ties to non-firm organizations and institutions.  While inter-firm networks are vital to upgrading, institutions bring value to firms in helping reconfigure socio-economic relationships.  First, they can help firms improve process and product upgrading capabilities and “graduate” them to more sophisticated inter-firm networks.  Second, linkages to institutions appear especially helpful to the extent they help the firm gain access to a variety of knowledge in different communities of producers.  Governments can aid upgrading and competitiveness, especially in emerging markets, by building public-private institutions that not only offer supply-side resources to firms but also act as bridges across regions.      

 This paper follows the Forum´s call for directly challenging “the great trade-off illusion” –that is, the belief that firms must sacrifice financial performance to meet societal obligations- by revisiting this paradigm from the standpoint of its assumptions in order to build alternative paradigms for a sustainable alignment between personal interests, firm goals, and societal needs. The basic argument is that making explicit the assumptions on human nature, human relationships, firm goals and societal needs of the dominant paradigm is the starting point for building models and making prescriptions for a sustainable alignment. After making explicit the assumptions of the dominant trade-off illusion dichotomy and their impact on practices and outcomes, this paper analyzes an alternative paradigm called “instrumental-alignment”. This paper concludes that neither of these paradigms allow a sustainable alignment given their restrictive assumptions. In particular, the latter paradigm is based on the assumptions of enlightened self-interest, profit maximization, societal material well-being, and a conflict between individual and collective rationalities, which create an inherent trade-off logic that make alignments not sustainable: they are just instrumental to personal, firm, or societal ends. In order to overcome the limitations of the instrumental-alignment logic, this paper proposes an “intrinsic alignment” paradigm based on the assumptions of excellence and practical or part-whole rationality. In this paradigm, both self-interest and others´ interests are taken into account as ends and therefore are not assumed to be object of trade-offs. Therefore, this paradigm allows a sustainable alignment between personal interests, firm goals, and societal needs because the alignment of interests has value in itself. This paper ends with implications for academics, managers, and policy makers at the level of assumptions, practices, and outcomes.

This study examines the behavior of firms’ above industry average returns establishing and empirically testing opposing predictions from different strategic management theories and concepts about the existence of sustainable abnormal returns for the case of emerging economies. On one side, exogenous shocks, which are frequent and most times unpredictable in terms of course and intensity in emerging economies, generate sudden changes in the business environment that negatively impact abnormal returns and dramatically erode sustainability of advantages, complementing the predictions of the Austrian School and the Hypercompetitive Model. On the other side, certain non-market practices common in lightly regulated economies, such as entrenchment, might support sustainability of certain advantages. Empirical results taking Latin America as a single unit of analysis indicate that sustainability is possible. Further analysis, isolating industries in certain countries, indicates that these results change substantially depending on the industry and the country.

Widespread breakdowns of contractual arrangements are the characteristic feature of some macroeconomic crises. Economies and political systems generate and must process the consequences of large-scale “broken promises” (Leijonhufvud, 2003). This paper discusses such phenomena, in the specific context of the fluctuations of the Argentine economy. That experience highlights themes which have been prominent in Leijonhufvud’s work, like the problems of intertemporal coordination, the potentially deviation-amplifying behavior of credit markets in the event of large disturbances, the relevance of the sequential decision-making of agents and the interrelated dynamics of policies, institutions and economic performance.

I estimate upper and lower bounds of the effect that a Lender of Last Resort has on banks’ liquidity demand. In December 1996 Argentina’s Central Bank signed with a group of international banks a contingent credit line agreement that enhanced its ability to act as a LLR. I run difference-in-difference regressions of the effect of the announcement of the insurance contract on banks’ liquidity holdings, using ownership status and size to identify the groups of treatment and control banks. Finally I find evidence of asymmetric responses in the interbank market participation of control and treatment banks. Both findings lead to an estimated range for the effect of a LLR on banks’ liquidity holdings of between 4.7 and 6.7 percentage points.

We build an alternative explanation of the book building process under the assumption that the issuer has a more precise estimate of the stock value than any outside investor. This asymmetrical information leads to adverse selection when the IPO game is played as a one-shot game using competitive auctioning. If the game is played repeatedly, repeated investors offer a truth-telling mechanism to an underwriter such that the underwriter certifies the firm value, which overcomes the adverse selection problem. The mechanism replaces competitive auctioning with an allocation procedure similar to the book building process. The underwriter gives allocation priority to the repeated (institutional) investors in order to expose herself to the mechanism incentives and thus gain credibility: This explains the documented discrimination among investors. The game’s continuation value for the underwriter is derived endogenously and the strategic relationship between the underwriter and repeated investors is fully characterized. When cash transfers are allowed, the model explains why the underwriter finds optimal to stabilize the secondary market at her cost. Optimally, the underwriter chooses to restrict the market stabilization benefits to repeated investors.

This paper develops a model that integrates the different phenomena implicit in previous theoretical and empirical work on clusters. It aims at reducing the gap between the increasing academic and policy interest in clusters and the conceptual and theoretical grounds upon which cluster research and policies are grounded. Its basic premise is that one of the obstacles for understanding the cluster phenomenon is the lack of integration of different assumptions, units and levels of analysis that are implicit in different conceptualizations that underlie current theoretical perspectives, empirical work, and public policies on clusters. The model makes explicit the different phenomena implicit in previous work and identifies the essential and contingent dimensions of clusters. This paper contributes a scholarship of integration approach for a better understanding of clusters, a new organizational context that is becoming an important line of research in management studies.

La presentación se basa en dos trabajos. En ambos se plantean juegos de competencia en precios bajo información incompleta y se comparan los equilibrios que ocurren en dos circunstancias: cuando ambos jugadores eligen simultáneamente y cuando uno de ellos cuenta con la prerrogativa de mover conociendo la decisión de su rival. El trabajo “The Effect of Corruption on Bidding Behavior in First-Price Auctions” se ocupa del caso en el que la competencia en precios toma la forma de una subasta, e interpreta a la capacidad de mover en segundo término como una ventaja derivada de un acuerdo corrupto entre el subastador y uno de los oferentes. El trabajo “Second-Mover Advantages in Bertrand Competition under Incomplete Information” (en elaboración) toma la competencia en un mercado oligopólico. En los dos casos se examinan fenómenos similares. Quien mueve primero, anticipando su desventaja, puede adoptar un comportamiento más o menos agresivo que en el caso de decisiones simultáneas, y se proveen condiciones suficientes para que cada una de estas posibilidades ocurra. Se evalúan, además, las consecuencias de pasar de un juego simultáneo a uno secuencial sobre el bienestar de los participantes y la eficiencia en el mercado

We carried out an empirical study of a salary negotiation involving the two major telecommunication companies in Argentina and a union by means of a detailed analysis of a number of time-sensitive dimensions. Drawing on Barbara Adam’s timescapes, an in-depth exploration of interweaved time-dimensions surrounding this negotiation was performed to further contribute to the understanding of time in conflict management literature. The timescape perspective acknowledges both the dynamics and the interplay of complex – and often colliding – time-dimensions which seem to be neglected or, at least, underestimated in popular conflict management forums. Implications for managers and negotiators stem from the analysis of this empirical study.

In this paper the analytical framework outlined by James Buchanan and Yong J. Yoon (2000) to explore the symmetric “tragedies of the commons and the anti-commons” is generalized to deal with the study of the relationship between institutions and corruption. A simple game theory model is built to show that corruption produces a “tragedy of the anticommons” and that it can be discouraged by the introduction of competition among corrupt agents to turn it into a “tragedy of the commons”. It is also shown that coordinated corruption or “maffia” behavior produces a better allocation of resources than uncoordinated corruption and that punishment of corruption based on earnings collected from bribes produces a better allocation of resources than sanctions based on the number of corrupt acts committed.

There is a suspicious scarcity of insider trading prosecutions in Latin America. When illegal insider trading goes unpunished, controlling groups can periodically confiscate minority shareholders in a politically low-cost way by using their privileged access to information to trade on it. In this paper, a simple theoretical model rationalizes the relationship between corporate governance and insider trading decisions through reputational arguments. We compute probabilities of private information-based trading (PIN) for the universe of liquid stocks from Mexico, Brazil, Chile, Argentina, Venezuela, Peru, and Colombia, trading both at home and as ADRs. We next apply these to address corporate governance questions. We find substantial heterogeneity of PIN within a given institutional environment. Nevertheless, we can identify significant differences in mean PIN across volume ranges, countries, and security types. PIN has an intuitively appealing correlation with some (but not all) of the country-wide investor protection variables used in the literature. Importantly, the stocks of firms with ADR programs have less PIN than those without, and countries with better information-related investor protection legal variables tend to have lower PIN. Panel regression analysis indicates that PIN is priced in the market: companies with higher PINs fetch lower Tobin.s qs. To check the robustness of PIN as a measure of private information trading, we analyze whether it peaks just before material corporate announcements are disclosed to the market. We find that this is true in general, although the magnitude and the lead of the anticipation seem higher for acquisition and divestiture announcements than for earnings and cash-dividend announcements. We conclude that the private information-based trading probability proxies for unobservable corporate governance quality as the heterogeneity of firm behavior seem to be recognized by the market and priced accordingly.

A considerable proportion of the authors engaged in the field of philosophy of economics and in economic theory has been explicitly or implicitly claiming for a reconsideration of ends within the subject-matter of economics. This line of inquiry suggests a considerable challenge to economic science. The logical structure of the rationality of ends differs from the one of means. This paper intends to explain the differences between both rationalities and some of the consequences of incorporating this new emphasis on ends. Is this reconsideration of ends legitimate? Is it positive? Is it necessary? Is it possible? Does it affect the use of maximization and optimization in economics? In this paper Sen’s ideas will be considered in this regard.

As a result of the enhanced competitiveness that characterizes the global market, multinational corporations have been forced to develop international purchasing strategies to purchase from foreign suppliers, that involve price reductions, increased access to technologies, better quality controls, and the introduction of competition at the domestic supply base. As a result, companies have been forced to pursue internationalization strategies for their purchase management in order to effectively support their globalization process through supplies. According to companies’ evolution in their globalization processes, literature studies reveal a strong link between the two key dimensions of international purchasing strategy: supply source –i.e., the level of supply globalization as related to MNC’ s worldwide operating needs- and purchase location – i.e., the level of centralization in relevant purchasing decisions. Our research, based on the study of a sample of seven Italian MNC’ s that have expanded their operations to the MERCOSUR (Southern Common Market) area, explores the process of purchasing strategy definition and development, focusing on the relationship between the two key dimensions and identifying key drivers, as well as their impact on decision-making processes.

We revisit the self-interest view on human behaviour and its critique, and propose a framework, called self-love view, that integrates self-interest and unselfishness and provides different explanations of the relationship between preferences, behaviour, and outcomes. Proponents of self-interest as the only valid behavioural assumption argue for simplified assumptions and clear models in order to propose precise prescriptions, while critics to this self-interest view argue for realistic assumptions and rich descriptions in order to reach better explanations. This debate inhibits theoretical development because it faces the problem of incommensurability of standards for choosing among paradigms. We propose the concept of self-love, or the inclination of human beings to strive for their own good and perfection, to remove the assumption self-interest vs. unselfishness. Self-love distinguishes between the object and the subject of motivation and therefore creates a bi-dimensional motivational space. This framework replaces the one-dimensional continuum self-interest - unselfishness, specifies eight interrelated motives, and provides different expected relationships between preferences, behavior, and outcomes. We show that a better understanding of motivational assumptions, their embodiment in theories, and their influence on the very behaviors these theories assume provides managers and policymakers more alternatives for the designing of motivational contexts than in the case of assuming either self-interest or a permanent conflict between self-interest and unselfishness.

What happens to the Spence signaling model under two dimensional asymmetric information? With two types of productivity and noise, the equilibrium remains separating if an extended single-crossing condition is satisfied; if not, there are partially pooling equilibria. In the partially pooling equilibria only extreme types can be distinguished, and supplementary information is needed to sort intermediate types. Over time, on-the-job interaction gives employers private information on productivity. Sticky wages force, through dismissals, public revelation of this private information. However, flexible wages do not, allowing employers to do cream skimming. Beyond the 2x2 case, employment relationships never lead to full revelation of productivity. Consequently, education is valuable as a life-time job market signal for high-productivity workers.

This paper examines the diffusion of a DIY chain store firm in Argentina. Its objective is to explore the growth of this new retail format from its inception in 1993 until 2000 when it first faced competition from a direct competitor. To that aim it uses survival analysis techniques to examine the factors that explain the duration of time before which the firm opens a store in a particular market. The results indicate that the hazard of entry is positively influenced by population size and the number of rudimentary dwellings while negatively related to the distance from the firm’s headquarters and the level of income. The findings suggest that there remain potential attractive markets for first entry strategies

El trabajo analiza la evolución de los retornos a la educación en Argentina durante el período 1974 – 2002 y cómo éstos se vieron afectados por el desempleo. Al evaluar los retornos a la educación no se debería considerar como beneficio simplemente el diferencial de ingresos sino también la mayor probabilidad de tener un trabajo, ya que los retornos son mayores si se los corrige teniendo en cuenta el desempleo por edad y por nivel educativo. Este análisis es particularmente relevante en Argentina, que pasó de tener tasas de desempleo cercanas a 5% durante la década del ochenta a tener tasas de desempleo de dos dígitos a fines del siglo XX y comienzos del siglo XXI.

This paper examines the effect of control changes on efficiency and productivity in the banking industry of Argentina. This industry represents an interesting case study as banks underwent corporate changes of different types including privatization, foreign acquisition of domestic banks and mergers and acquisitions among local institutions. Bank productivity is measured and decomposed into the effects due to returns to scale, technical progress and efficiency, while bank efficiency is related to a set of variables controlling for changes in bank ownership. The evidence suggests that control changes due to privatization had a positive short-term effect on productivity as a result of efficiency gains, which were the effect of returns to scale and that mergers and acquisitions had a positive impact on productivity mostly as a result of long-term efficiency effects.

This study explores a motivational justification to stakeholder theory. This methodological perspective is different and complementary of previous ones that impose normative considerations for stakeholder theory. Focusing on the entrepreneurial process, it analyzes the mechanisms that explain stakeholders’ actions and stakeholders’ alignment. The main argument is that stakeholders’ act motivated by both, the external output of their actions and the realization of the process. The process by itself, as a central motivation, provides individual and collective identity, what ultimately explains stakeholders’ alignment. This argumentation has managerial and normative implications.

How organizations create, transfer, and retain knowledge has been the focus of intensive investigation by management researchers. However, one aspect of the dynamics of knowledge—organizational forgetting— has received comparatively little attention. In this paper, we draw on an exploratory, multiple-case study of learning in international strategic alliances to explore how and why organizations forget. Based on our case study, we develop a theory of organizational forgetting, discuss the role of forgetting in the dynamics of organizacional knowledge, and present a typology of types of organizational forgetting.

This paper explores the determinants of privatisation revenues of generation and distribution assets in the electricity sector of 14 Latin American and Caribbean countries between 1992 and 2002. Three individual regressions reveal that government commitment to reforms and the choice of regulatory policy influence the valuation of assets. In the region, investors favour gradual entries into new markets. The auction process within countries is found to exhibit statistically significant dynamics of momentum and informational cascades. Apart from domestic factors, levels of regional stock market indices and US stock market volatility have an impact on the investors’ bids, too. The paper suggests that investors use international capital markets as an authoritative reference for the valuation of acquisitions, and concludes that during the decade of the 1990s Latin America has become part of a wider movement of the globalisation of power markets and the transformation of the electricity supply from a strategic, domestic infrastructure service into an internationally traded commodity.

This paper seeks to expand on two topical strands in Government Finance and Political Science literature, rent-seeking and the soft-budget constraint, so as to bring forth a strong linkage between them in corporate governance environments. It hopes to accomplish this target by setting up a distinctive framework of analysis that hinges on incremental cash flows. Firstly, it claims that both rent-seeking behavior and the soft-budget constraint are worthy of being applied to corporate governance learning and practice. Secondly, the paper contributes to focus on cash-flows reliability and managers’ accountability. Thirdly, it is shown how conflicts of interest underlie rent-seeking behavior, and how the latter relates to the soft-budget constraint.

Secure property rights are considered a key determinant of economic development. The evaluation of the causal effects of land titling, however, is a difficult task as the allocation of property rights is typically endogenous. We exploit a natural experiment in the allocation of land titles to overcome this identification problem. More than twenty years ago, a group of squatters occupied a piece of land in a poor suburban area of Buenos Aires. When the Congress passed a law expropriating the land from the former owners with the purpose of entitling it to the occupants, some of the original owners accepted the government compensation, while others are still disputing the compensation payment in the slow Argentine courts. These different decisions by the former owners generated an allocation of property rights that is exogenous in equations describing the behavior of the squatters. We find that entitled families increased housing investment, reduced household size, and improved the education of their children relative to the control group. However, effects on credit access are modest and there are no effects on labor income.

Financial planning books and academic papers in the U.S. have since long analyzed the horizon e¤ects that arise in domestic investment. The common knowledge in the subject is that the longer the time period over which you can hold on to your investments, the greater should be the share of common stocks in your portfolio. This paper is an attempt to search for horizon e¤ects in international portfolio allocation. In the case of international investments, the pre- dictability of returns is given by the long-run mean reversion that real exchange rates show among developed countries. We estimate and introduce a long memory (fractionally integrated) real exchange rate process - accounting for slow mean reversion - into an optimal portfolio allocation model where a representative investor can access domestic and international stocks, considering both .buy and hold.and .dynamic rebalancing strategies. Preliminary results show that risk-averse investors should hold more international equities the longer the time period over which they can hold on to their investments. Results depend upon the value of the initial real exchange rate against its long run mean. We .nally argue that our results can shed some light into the home bias puzzle.

There are three main streams of literature on the impact of firms’ innovativeness on business performance, one regarded to market orientation, other focused on innovation, and the last one related to National Innovation Systems. All the perspectives agreed upon the importance of innovation to business performance and focus on how internal and external factors influence on business performance. In spite of this widespread interest, relationship between a company’s innovation capacity and both internal and external facilitating factors is found to be of limited study. Findings suggest that firms with higher research and development budget and/ or relationship with research institutes have a higher degree of innovation. Even more, the ones that do develop this relationship are technology driven companies. Although we find a low degree of implementation of best practices, those with a higher degree of implementation were more innovative. Finally, we found that more innovative firms have better performance in terms of sales growth. Our study focuses on Argentine small and medium sized companies from the following industries: Software, Home Appliances, Electronics, Metallurgist, Iron & Steel, Metal Mechanics, Machinery and Food & Beverages.

The aim of this paper is to explore how different underlying worldviews in marketing affect the perception of the environment and how these impact the choice between transactional or relational offerings. Furthermore, we aim to show that not only positivistic and interpretivist paradigms are present in all of the management disciplines, in strategy, in organizational theory, in marketing, etc, but also that managerial disciplines seem to be moving from the reign of the positivistic schools, towards the emergence of the interpretativist schools, and finally towards a pluralistic approach. The analysis of the underlying worldviews is important for relationship marketing in practice because it may provide another, deeper-level explanation for the choices that managers make regarding transactional, relational and pluralistic offerings. At the theoretical level, it may help explain how and why the new RM paradigm developed in the marketing discipline.

organizational performance with the aim of creating a general framework as a management tool; however, little has been done to show how HR professionals add value to the overall performance of their firms in different contexts. Ulrich, Brockbank, Yeung and Lake (1995), this dissertation extends empirical research on the impact of HR dimension on Business Unit Performance in different change contexts. The methodology applied consists on three basic steps. First, analysis of a unique sample of business units from the third edition of “Human Resource Competencies Study” (HRCS) – conducted by the University of Michigan Business School. Second, statistical testing to find significantly different HR dimensions between the four above-mentioned groups. Third, statistical confirmations of these differences by comparing each pair of groups. The main finding is that in high performing business units immersed in high change contexts, HR stands our in the delivery of certain HR dimensions. In such firms, the HR function is much focused on strategic issues and it plays an important role as Strategic Partner and Change Agent. Furthermore, HR professionals in these firms are seen as specialists in delivering staffing, organization design, setting the direction of change, managing organizational culture and understanding external issues. Therefore, in high performing firms in high change contexts, HR professionals keep track of market information while aligning the human organization to meet external requirements and improve business performance. What makes this finding more interesting is that these HR dimensions show no significant differences between HR departments and HR professionals of the other three groups-high performers in low change, low performers in high change and low performers in low change-.

This paper studies the trade receivables policy of distressed firms as the trade off between the firm’s willingness to gain sales by financing their clients’ purchases and the firm’s need for cash. We find that firms increase trade receivables when they have profitability problems prior entering financial distress, but reduce trade receivables when they have cash flow problems in financial distress. We also find that cuts in