WORK‐RELATED ACCIDENTS AND THE LEVEL OF MARKET COMPETITION: AN ANALYSIS OF WORKER INJURY RATES AT U.S. STEEL CORPORATION, 1907–1939

We investigate the relationship between accident rates and industry structure for the United States’ steel industry during the first four decades of the 20th century. We develop a dominant firm theoretical model linking accident rates to number of competitors, showing a positive correlation between accident avoidance and the number of fringe competitors. We then test this theory empirically and, when controlling for other influences, find that reductions in the dominant firm’s market share reduce worker injury rates substantially. (JEL L13, L61, N62, N82)     

Competition between non-profits and for-profits: entry and growth

The non-profit sector in the United States relies on fee-paying individuals for a high proportion of its revenue. Given this fact, non-profits and forprofits coexist in the same industry when each type of firm can find a stable market niche that rewards its own special strengths: ideological commitment in the non-profit sector; access to capital and the profit motive in the for-profit. Coexistence is also possible when the non-profit form is superior but there is a shortage of non-profit entrepreneurs. The paper next considers the entry of non-profits into sectors dominated by for-profits. Here one must distinguish between purely commercial activities and those designed to further the charity's basic mission. In the former, non-profits should behave no differently than their for-profit competitors unless subsidies designed for mission-related activities are diverted to these activities. In the latter, the non-profits may have an advantage which reflects not unfair competition but a judgment that their activities are worthy of subsidy. In evaluating competition between non-profits and for-profits, one must separate the issue of the appropriateness of an organisation's tax-exempt status from the impact of its actions on for-profit firms.Prepared for the Research Conference on the Commercial Activities of Non-profits, New York University, November, 1988. I wish to thank Anne Buckholtz for helpful research assistance, and Woody Powell and Brad Gray for useful comments.     

The Texaco racial discrimination case and shareholder wealth

We analyze the wealth ejfects of the Texaco racial discrimination lawsuit both on the shareholders of Texaco and its major U.S. competitors. Employing a comprehensive data set which included every case docket entry and every Wall Street Journal article on the case as an experimental stimulus, our findings suggest that the overall cost of the case to Texaco shareholders exceeded $500 million, that Texaco's tribulations had little, if any, impact on the share prices of its major competitors, and that Wall Street Journal coverage of the case was highly correlated with significant changes in Texaco stock prices. This last finding provides significant support for Hite 's suppostion that newspaper editors “key ” on ex post stock price changes in selecting the events to be covered in the next day's edition. The authors are grateful to Kee Chung for helpful comments on earlier drafts and also acknowlege the help-ful assistance of the staff of the law library at the Cecil C. Humphreys School of Law at The University of Memphis.     

Questioning diaspora: mobility,mutation, and historiography of the Shaw Brothers film studio

This piece reviews the historical accounts of Shaw Brothers Studio, targeting its presentation as a diaspora company whose commercialism was enhanced by political pragmatism, frugality, and agility. The studio's activities were constrained by twentieth-century geopolitics, but its behavior was also shaped by its show business competitors, new technologies, and emergent popular forms. Existing historical accounts tend to overstate the studio's diasporic qualities, especially compared to other firms. This essay argues that there are limits to the diaspora model and proposes a more complex understanding of the firm. Alternative factors are considered in the company's colonial stratagems, in both its earlier and later phases, and in its dealings with Hong Kong's left-wing studios and subsequent business in Taiwan. Finally, Shaw Brothers Studio's appropriation of Japanese and other Asian talent is significant to the diaspora model of Shaw Brothers Studio.     

If you do not know who knows what: Advice seeking under changing conditions of uncertainty after an acquisition

In this study we develop a model to explain the dynamics of advice seeking after an acquisition. We build on a theory of advice seeking that draws from prospect theory and expectancy theory. We theorize that immediately after an acquisition there is uncertainty about who knows what, but over time individuals become more aware of the expertise within the organization and they change their advice networks based upon this increased awareness. Our model examines four micro-processes of advice seeking: reciprocity, preferential attachment, transitivity, and legacy-firm tie preferences. To test our hypotheses we use post-acquisition data over four time periods in a recruitment consulting firm. Our longitudinal analysis uses a stochastic actor-orientated model and our results indicate that immediately after the acquisition individuals have a tendency to seek advice based upon reciprocity and preferential attachment. However, over time these tendencies diminish. Surprisingly, transitivity does not play a significant role, which suggests that other micro-processes such as reciprocity are dominant. In addition, individuals in the acquired firm have a tendency to make more ties and there is a preference for same firm ties in both legacy firms, with the tendency being higher in the acquired firm. Our findings add to theories on the process of advice seeking under conditions of uncertainty, on knowledge transfer processes in mergers and acquisitions, and the knowledge based view of the firm.     

THE RESPONSE OF FIRMS' LEVERAGE TO RISK: EVIDENCE FROM UK PUBLIC VERSUS NONPUBLIC MANUFACTURING FIRMS

This article empirically investigates the effects of macroeconomic and firm‐specific risk on firms' leverage. The analysis is carried out for a large panel of public and nonpublic UK manufacturing firms over the period 1999–2008. Our investigation provides evidence that UK manufacturing firms use less short‐term debt during periods of high risk. However, the leverage of nonpublic manufacturing firms is more sensitive to firm‐specific risk in comparison to their public counterparts while macroeconomic risk affects both types of firms similarly. Our investigation also shows that firms with high liquid assets reduce their leverage more (less) during periods of heightened firm‐specific (macroeconomic) risk. (JEL C23, G32)     

Relational collaboration among spatial multipoint competitors

The presence of network ties between multipoint competitors is frequently assumed but rarely examined directly. The outcomes of multipoint competition, therefore, are better understood than their underlying relational mechanisms. Using original fieldwork and data that we have collected on an interorganizational network of patient transfer relations within a regional community of hospitals, we report and interpret estimates of Exponential Random Graph Models (ERGM) that specify the probability of observing network ties between organizations as a function of the degree of their spatial multipoint contact. We find that hospitals competing more intensely for patients across multiple geographical segments of their market (spatial multipoint competitors) are significantly more likely to collaborate. This conclusion is robust to alternative explanations for the formation of network ties based on organizational size differences, resource complementarities, performance differentials, and capacity constraints. We show that interorganizational networks between spatial multipoint competitors are characterized by clear tendencies toward clustering and a global core-periphery structure arising as consequences of multiple mechanisms of triadic closure operating simultaneously. We conclude that the effects of competition on the structure of interorganizational fields depends on how markets as physical and social settings are connected by cross-cutting network ties between competitors.     

Innovation capability: A sociometric approach

To remain competitive worldwide, firms need to focus on their knowledge-based activities and possess specific abilities that allow them to unravel their potential to innovate. This need has led to an increasing interest in understanding the factors that allow a firm to develop its innovation capability. However, given the complexity of the phenomenon, there is no consensus on the nature and definition of innovation capability. Moreover, most existent studies have focused on studying innovation as a psychometric phenomenon; however, this approach neglects the social dimension of the construct. Thus, an exploratory study is conducted to examine a firm’s capability to innovate from a sociometric perspective. To achieve this objective, 61 surveys were distributed in the biotechnology area of a Mexican university. In addition, informal relations and knowledge sharing are analyzed as determinants of innovation capability. Since, the multiple regression quadratic assignment procedure (MRQAP) is applied.The results reveal that friendship relations become the base for knowledge sharing and, at the same time, this factor positively impacts a firm’s innovation capability.     

Corporate sustainability as a hegemonic discourse of globalization: The discourse-historical approach as a critical issues and stakeholder analysis tool

Corporate social responsibility, and its other conceptual variants such as corporate sustainability, encourages businesses to act on a range of issues outside what the law and shareholders require. But what are the limits of the concept and its discursive practices in a globalizing world marked by accentuated asymmetrical power relations between businesses, and the communities they operate in and serve (especially corporations working in less powerful global peripheries), and the regulators who are expected to police them? This study uses the discourse-historical approach (DHA) and corporate sustainability framework (CSF) to analyze a British independent oil production firm’s—Tullow—communication. It illustrates the utility of the DHA and the CSF for doing critical stakeholder and issues analysis from corporate communication texts. Second, it argues that corporate sustainability illustrates the power asymmetry between the global and local, corporations and community. Specifically, we observe how a petroleum firm uses sustainability discourse, as a form of hegemonic globalization, to perpetuate dominant tropes and conceptions about African local communities as homogeneous and lacking agency, commodifying the lived experiences of the locals in the process while entrenching the superiority of the firm’s own position as a ‘benevolent dictator.’ We also illustrate how particular mitigation and intensification discourse techniques are employed to uphold Tullow as a ‘do-good’ actor. The corporation’s discursive strategies have a cumulative effect of cementing the power asymmetry that already exists between the firm as an agent of a dominant center of global power and Ghanaian communities as less powerful interests in the globalization process. Suggestions for disrupting the hegemony are provided.     

Corporate competition: A self-organized network

A substantial number of studies have extended the work on universal properties in physical systems to complex networks in social, biological, and technological systems. In this paper, we present a complex networks perspective on interfirm organizational networks by mapping, analyzing and modeling the spatial structure of a large interfirm competition network across a variety of sectors and industries within the United States. We propose two micro-dynamic models that are able to reproduce empirically observed characteristics of competition networks as a natural outcome of a minimal set of general mechanisms governing the formation of competition networks. Both models, which utilize different approaches yet apply common principles to network formation give comparable results. There is an asymmetry between companies that are considered competitors, and companies that consider others as their competitors. All companies only consider a small number of other companies as competitors; however, there are a few companies that are considered as competitors by many others. Geographically, the density of corporate headquarters strongly correlates with local population density, and the probability two firms are competitors declines with geographic distance. We construct these properties by growing a corporate network with competitive links using random incorporations modulated by population density and geographic distance. Our new analysis, methodology and empirical results are relevant to various phenomena of social and market behavior, and have implications to research fields such as economic geography, economic sociology, and regional economic development.     

Effects of competition on collective learning in advice networks

This paper looks at the effect of identifying alters as direct competitors on their selection as advisors. We differentiate between two kinds of competition: cut-throat vs friendly. We argue that, unlike cut-throat competition, friendly competition makes collective learning possible as a social process: when knowledge is built in interactions that are able to mitigate the negative effects of status competition and take place in homophilous social niches; and when the quality of this knowledge is guaranteed by members with epistemic status in these niches. Social niches and status facilitate advice seeking and collective learning because advice seeking between direct competitors is not obvious even when members have a common interest in sharing advice – a learning-related dilemma of collective action. We apply this reasoning to a network dataset combining identification of direct competitors and selection of advisors among the elite of cancer researchers in France. We use a procedure of multiplex stochastic block-modeling designed by Barbillon et al. (2015) to measure the effect of these identifications of direct competitors on the structure of the advice network. Results obtained with this dataset support our theory.     

News and corporate reputation: Empirical findings from the Netherlands

This article examines the influence of business news on corporate reputation. A panel survey was used to measure the reputations of six companies and two professional sectors. Media coverage was analyzed by focusing on the tone of two different types of news. News about the successes of the companies – such as higher profits – improved their reputations. In addition, some companies’ reputation improved the more they were criticized by their competitors in the news. It is argued on basis of these empirical findings that the reputation of the party attacking a company in the news is crucial in determining its influence on the reputation of the besieged company.     

Organizational innovations,human resources and firm performance: The Emilia-Romagna food sector

This paper studies the relationship between organizational innovation, industrial relations and economic performance at the firm level. It adopts an applied perspective by means of a comprehensive survey on a specific industrial sector, the food industry, with the aim of investigating: (i) the degree of organizational innovation and the diffusion of HRM practices; (ii) the relevance of the interaction between unions and top management in the process of decision-making at an operative, organizational and strategic level; (iii) the relations between the intensity of organizational innovation and the quality of industrial relations; (iv) the effects of organizational changes on firm performance.The focus is on firms with bargaining activity at establishment level where worker committees exist. The dataset is derived from a structured questionnaire submitted to union members concerning structural data on firms and local productive units, production flexibility, organizational models, compensation systems, industrial relations and firm performance.The quantitative analysis highlights the following critical elements.First, the firm governance seems characterized by a strong relevance of industrial relations, in terms of “good quality atmosphere” and “involvement of worker representatives and employees”: their action proves to be a stimulus to organizational changes. The set of industrial relations variables does emerge as a significant factor explaining firm innovation intensity.Second, although we cannot ascertain the causal link given the cross-sectional nature of data, firm performance and organizational innovations arise as two elements which are strictly and positively related to each other.Third, the evidence points out that good industrial relations are important as far as the firm performance is concerned; nevertheless their role is mediated by their effects on organizational changes rather than having a direct impact on performance.     

Uncertainty as a common ground for a dialogue between economics and sociology

The article focuses on inter-firm relations, primarily seen as protective devises crafted for keeping at an arm's length various kinds of uncertainties involved in boundary transactions. Taking a holistic view, it proposes the notion of relational habitat, which refers to the relatively durable constellation of relations that connect a given firm to its main business partners. Performing a double-edged protective function, this constellation both stabilizes and simplifies the immediate operational domain of the firm and, thereby, diminishes to manageable levels the complexity of the relevant parts of the environment. By expanding the control of the firm beyond its organizational borders, relational habitat reduces the constraining impact of boundary uncertainty and enhances the action capacity of the firm – facilitating the materialization of its chosen line of action and its desired objectives. The article specifies this notion in detail and highlights some of its implications, both for the theoretical development of economic sociology and for its relation to economics.     

IMPACT OF CORRUPTION ON FIRM‐LEVEL EXPORT DECISIONS

This article examines the impact of corruption on the self‐selection of firms into domestic and export markets. A heterogeneous firm model predicts that corruption decreases the probability that a firm only sells domestically, increases the probability that a firm exports indirectly through an intermediary, and decreases the probability that a firm exports directly. The propositions of the model are tested using a comprehensive dataset of over 23,000 firms in 80 developing countries. The results confirm both the self‐selection of firms according to their productivity and the anticipated impact of corruption. This indicates that in developing countries where corruption is especially severe, intermediaries provide a crucial link to global markets. (JEL F1, O1)     

AN EXPERIMENTAL STUDY ON THE RELEVANCE AND SCOPE OF NATIONALITY AS A COORDINATION DEVICE

In a period marked by extensive cross‐national interactions, nationality may present an important focal point that individuals coordinate on. This study uses an experimental approach to study whether nationality serves as a coordination device. We let subjects from Japan, Korea, and China play coordination games in which we vary information about their partner. The results show that nationality serves as a coordination device if common nationality is the only piece of information available to the subjects. The strength of this device is nationality‐dependent and diminishes when participants are provided with additional information about their partner. We also find that subjects are likely to coordinate on the Pareto‐dominant equilibrium at about the same rate if the partner has a different nationality than if nationality is unknown. (JEL C91, C92, Z1, Z13)     

WORKFORCE COMPOSITION AND FIRM PRODUCTIVITY: EVIDENCE FROM TAIWAN

We study the relationship between workforce composition and firm productivity based on a new employee‐employer‐matched data set, using an array of workforce characteristics and three alternative measures of firm productivity. While firm age is not essential for the performance of firms, those of smaller size and those in the steel and transportation industries outperform others. Moreover, labor quality, particularly the middle‐aged with higher education, contributes significantly to firms' productivity. Furthermore, economic incentives and market competition both play important roles in the performance of firms. Finally, there is an employer‐size premium with larger firms paying higher wages and nonwage benefits. (JEL C33, D20, J30)     

Ethnic Mobilization in south Tyrol: A primordial identity in crisis

South Tyrol and the German minority are portrayed as one of the most successful forms of ethnic mobilization in Western Europe. Its distinct historic roots and the related symbolic codes of collective identity formation can be seen as a classical example for territorially‐based minority politics. On the basis of a constructivist approach the thesis is developed that the primordial collective identity, dominant in South Tyrol, has generated very particular patterns of ethnic mobilization and conflict. On the one hand, it has secured the intransigent protest of the German population fighting an enforced Italianization ‘ over decades. On the other hand, however, this firm of collective identity is simultaneously fostering the recent crisis of ethnic politics in South Tyrol. The more general argument is made that in highly modem, European‐oriented society a primordial understanding of ethnic loyalty is no longer able to provide stable patterns of social integration and political loyalty. In this respect, the South Tyrolean case is interpreted as an example of how primordial patterns of collective identity and related political mobilization tend to lose their firm base in highly modern society.     

THE DURATION OF FIRM‐DESTINATION EXPORT RELATIONSHIPS: EVIDENCE FROM SPAIN, 1997–2006

This article uses survival analysis to investigate the duration of Spanish firms' trade relationships by destination over 1997–2006. Whereas firm export status is highly persistent, firms' destination portfolio is very dynamic: a typical firm‐country exporting relationship has a median duration of 2 years. Yet, if a firm manages to export to a country beyond 2 years the risk of exiting that market sharply falls afterwards. The results indicate that not only firm heterogeneity but also destination heterogeneity are crucial to explain survival in export markets. In particular, country (political) risk heavily shapes the effect of firm, product, and other destination characteristics on the length of trade relationships. Whereas firm productivity, comparative advantage, partners' GDP, and proximity enhance duration of trade with low‐risk countries, they have no effect on trade survival with high‐risk countries. On the contrary, information spillovers are particularly relevant to enhance survival of trade relationships with high‐risk countries. (JEL C41, F10, F14)     

Economics of the firm and economic growth: a hybrid theoretical framework of analysis

Abstract

The main goal of this study is to achieve a critical discussion around the conceptualization of the firm and its role in the dynamic process of economic growth. By reviewing the theoretical matrix of the economics of the firm we go beyond the mainstream economics of the firm proposing a hybrid approach combining evolutionary and population ecology, which is likely to constitute a fruitful path for the conceptualization of the firm in the process of economic growth. Specifically, the analysis confronts the distinct theoretical perspectives around some imperative and controversial issues such as the nature of knowledge and learning and the cognitive capacities of economic agents within the firm. We argue that the economic understanding of growth and development of human societies will strongly benefit from a conceptualization of the firm capable of capturing the spirit of the Knightian firm. Overcoming the shortcomings of the mainstream growth models, which conceive firms as a black box, the proposed hybrid approach recalls the true nature of the firm as an organization. Issues related to the organizational arrangements that sustain the feasibility of productive activities and to the incentive contracts are also taken into account. Although acknowledging some recent important contributions within mainstream economic growth theory to adopt more realistic concepts of the firm, we believe that evolutionary and organizational population perspectives include crucial pointers in developing further research aimed at the construction of economic growth models based on a micro-economic perspective that is closer to the reality of firms.