Residual income valuation and management remuneration under uncertainty: a note

The so-called Residual Income Valuation theorem states that the value of a project or a firm can be determined either on the basis of cash flows between the firm and its owners or by using residual incomes, provided that cash flows and residual incomes are derived from a set of accounting data that fulfills certain regularity conditions. Residual income is defined as accounting earnings reduced by a capital charge on book equity capital. In this paper it is shown that this theorem also applies when residual incomes and in particular the discount factors are uncertain. Risk-aversion of principals and agents is taken into account on the basis of properly defined risk-adjusted discount rates. This approach is preferred as it facilitates practical application. Implications are drawn with regards to valuation but also to the design of management remuneration systems. It is shown that the capital charge rate used to determine the performance-related compensation component should be reduced below the risk-adjusted rate, if the fixed component falls below a certain threshold. Absent agency cost or other externalities, the reduction of the capital charge rate is required to avoid underinvestment.     

Promotionscoaching. Von einer Privatangelegenheit zum institutionellen Support

The process of attaining a doctorate is influenced by paradoxes. Who ever gets involved in it must learn to manage this process independently and to overcome the arising crises and challenges. Coaching for doctoral students is the result of a didactical concept in higher education with the goal to professionalize consultation in the graduation phase and to establish an institutional support structure.     

A simple theory of ‘meso’. On the co-evolution of institutions and platform size—With an application to varieties of capitalism and ‘medium-sized’ countries

This paper deals with institutional emergence in the well-known ‘evolution of cooperation’ framework and focuses on its size dimension. It is argued that some ‘meso’ (rather than ‘macro’) level (to be numerically determined) is the proper level of cultural emergence, diffusion, and retention. Also Schumpeterian economists (K. Dopfer et al.) have discussed institutions as ‘meso’ phenomena, and Schelling, Axelrod, Arthur, Lindgren, and many others have dealt with ‘critical masses’ of coordinated agents, including related segregations of populations. However, the process and logic of emergent group size has rarely been explicitly explored so far. In this paper, ‘meso’ will be explained, in an evolutionary and game–theoretic frame and a population perspective, in terms of a cooperating group smaller than the whole population involved. Mechanisms such as memory, monitoring, reputation chains, and active partner selection will loosen the total connectivity of the deterministic ‘single-shot’ benchmark and thus allow for emergent ‘meso’-sized arenas, while expectations to meet a cooperative partner next round remain sufficiently high. Applications of ‘meso-nomia’ include the deep structure of ‘general trust’ and the surprisingly high macro-economic and macro-social performance in ‘small’ and ‘well-networked’ countries which helps to explain persistent ‘varieties of capitalism’. A strategy for empirical application of the theoretical approach and some first empirical indications of its relevance are presented.     

Cognitive and language skills of Turkish children in Germany: a comparison of the second and third generation and mixed generational groups

The paper compares several generational groups of Turkish children in Germany with respect to cognitive skills and German language skills at an early age. Empirically, children of inter-marriages outperform the other groups of Turkish children in both tests while children with a first generation mother and a second generation father score worse than all others. All group differences regarding children’s cognitive skills can be explained by the families’ socio-economic status and educational resources. In contrast, with respect to children’s language skills also parents’ endowment with receiving country specific resources (e.g., parental German language proficiency) needs to be taken into account.     

Leadership and individual differences: At the cusp of a renaissance

In this introductory editorial, we provide a brief overview of the history of individual difference research in leadership. We explain the major challenges that trait research faced, and why it was revived primarily because of methodological advancements. Next, we argue that leadership individual difference research is at a cusp of a renaissance. We explain why we are at this cusp and what researchers should do reify the renaissance in terms of theoretical extensions of trait models, the application of robust methodological advancements, and the development of process models linking distal (i.e., traits) predictors to proximal predictors (e.g., behaviors, skills, attitudes), and the latter to leader outcomes. We then summarize the papers we accepted for the special issue, and conclude with an optimistic note for leadership individual difference research.     

Tomorrow,things will be different Qiu Zhijie’s concept of keeping alive life through art

Abstract

The paper examines Qiu Zhijie’s multi-layered project A Suicidology of the Nanjing Yangtze River Bridge (since 2008) and asks what is at stake when art literally and metaphorically is assigned with life-saving functions. Based on the artist’s assumption that today’s social and political reality as well as its subjects are historically constructed the article conceives of the Nanjing Bridge as an embodiment of a historically constituted contemporary Chinese reality. Through close readings of the works as well as analyses of theoretical writings by Qiu Zhijie the article scrutinises the relationship Total Art assumes between the social and the aesthetic realm and examines the premises and strategies the artist adopts in order to produce socially and aesthetically effective art that keeps ‘alive’.     

Changing patterns of mobility,citizenship and conflict in Indonesia

ABSTRACT

Mobility and migration are inherent ingredients of Indonesian cultures. In an archipelago with thousands of islands of various size, character and nature, mobility is an important means to make a living and to survive by migration. The right to free movement in Indonesia is constitutionally granted. It can create mobility and give expression to equal citizenship rights at the same time as it can trigger the enforcement of borders among cultural groups and the ethnification of local and regional politics. Mobility thus always comes along with immobility. Physical mobility of one group of people might cause immobility of another group or it might create cultural and political immobility in the same group. In places such as Eastern Indonesia, people have developed reciprocal means to integrate newcomers. Whereas the immigrants are usually disadvantaged citizens with regards to land and customary rights, those living in the area for generations have nonetheless become integral parts of quite peaceful local settings, one way or the other. The advancement of decentralization, democratization and direct elections of political representatives can lead to political empowerment, the promotion of ethnicity as election capital and changing patterns of belonging. This paper illustrates these ambivalences by looking at mobility in Indonesia more generally and how changing national policies and laws lead to reinterpretations of mobility patterns and trigger changes in relations between local population groups and existing mechanisms of cultural and political inclusion and exclusion. Butonese migrants in Maluku will here serve as a case study.     

Management control in multinational companies: a systematic literature review

Review of Managerial Science - Executing management control across borders is crucial for multinational companies (MNCs). Various management control mechanisms serve to align foreign subsidiaries...     

Semiparametric lack-of-fit tests in an additive hazard regression model

In the semiparametric additive hazard regression model of McKeague and Sasieni (Biometrika 81: 501–514), the hazard contributions of some covariates are allowed to change over time, without parametric restrictions (Aalen model), while the contributions of other covariates are assumed to be constant. In this paper, we develop tests that help to decide which of the covariate contributions indeed change over time. The remaining covariates may be modelled with constant hazard coefficients, thus reducing the number of curves that have to be estimated nonparametrically. Several bootstrap tests are proposed. The behavior of the tests is investigated in a simulation study. In a practical example, the tests consistently identify covariates with constant and with changing hazard contributions.