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Publication Leveraging synergies versus resource redeployment: Sales growth and variance in product portfolios of diversified firms(Wiley, 2021-04-02) Pasquini, Martina; Giarratana, Marco; Santaló, Juan; State Research AgencyResearch Summary This article analyzes the relationship between sales growth and variance for diversified firms. Distinguishing product niches linked by scale free versus non-scale free resources, this study predicts that the more a firm diversifies leveraging on a non-scale free resource, the more likely its sales growth and variance are positively correlated. However, this relationship is negatively moderated by the presence of a scale-free resource such that the presence of scale-free resources of high value implies a negative correlation. These theoretical intuitions are consistent with data from 2008 to 2013, reflecting firm sales growth rates in five industries spanning 45 product niches in seven EU countries and the United Kingdom. These industries prioritize shelf space as a non-scale free resource, and brand as a scale free resource. Managerial Summary Diversifiers may base their value creation either in pursuing synergies or in exploiting the benefits derived by internal resource redeployment across products or across industries. Here, we highlight the different managerial implications on risk/performance structure derived from diversification based on resource redeployment compared to diversified companies exploiting synergies. Can the disparity of sales growth between products of the same firm's portfolio be good for the corporate performance? Here, we show that diversification based on resource redeployment goes hand in hand with a positive relation between overall firm growth and variance of results within the same firm. On the contrary, firm diversification based on synergies implies a negative relationship between within firm disparity and overall firm growth.Publication The Uncertain Future of Constitutional Democracy in the Era of Populism: Chile and Beyond(2023-01-25) Verdugo, Sergio; Issacharoff, SamuelLargely missing from the extensive discussions of populism and illiberal democracy is the emerging question of 21st century constitutionalism. Nowadays, it is hard to see relevant constitutional changes without a strong appeal to direct popular political participation. Institutional mechanisms such as referenda, citizens’ assemblies, and constitutional conventions emerge as near universal parts of the canon of every academic and political discussion on how constitutions should be enacted and amended. This article’s aim is to offer a cautionary approach to the way participatory mechanisms can work in constitution-making and to stress the difference between the power to ratify constitutional proposals and the forms of governance that must follow. Constitutions are necessarily the product of political and historical moments. Ours is a time of populist challenge to the restraining institutions of governance. We show how constitution-making processes taking place under existing political contexts can fail not simply despite the existence of participatory mechanisms but in large part because of them. We identify two types of failures. First, the authoritarian failure, which consists of constitution-making processes that lead to authoritarian outcomes or become part of democratic backsliding or abusive processes. Second, the activation failure, by which constitutions are not passed. This failure is likely to take place when reforms attempt to bypass established, functioning institutional actors, whatever their flaws. This article will turn to the recent failure of the Chilean constitutional effort (2022) to focus on the historic roles of non-state organizations, most notably political parties, in stabilizing and legitimizing successful democratic governance. The current trend in constitutional formation, reflecting the ascending populist ethos of our times, is to bypass the representative institutions that do exist in favor of a pact between the state and an ill-defined entity known as the people. The tendency of political power without structural checks and balances to lead to autocracy is reasonably well understood. But Chile, together with other recent examples of failed constitutional processes, highlights the risks of activation failure in democratic settings—i.e., contexts in which representative institutions exist and function, though flawed. We will argue that a relevant condition to prevent the activation failure is to use the constitution-making processes as an opportunity to strengthen the political party system by including the existing parties in the process. Success stories of constitution-making have widely shown the advantages that political compromises among rival actors bring in terms of procedural legitimacy—wide acceptance of the constitution’s content—and substantive legitimacy—the inclination of those processes in promoting politically liberal institutions but little has been said about activation failures lacking those features. This article seeks to fill this gap.Publication How do constitution-making processes fail? The case of Chile’s Constitutional Convention(Cambridge University Press, 2023-10-27) Verdugo, Sergio; García Huidobro, Luis Eugenio; https://ror.org/02jjdwm75This introduction to the symposium ‘How do Constitution-Making Processes Fail? The Case of Chile’s Constitutional Convention (2021–22)’ situates the project in the field of constitution-making, provides context regarding the Chilean case, summarizes some possible explanations for the failure, and describes how each article contributes to the symposium as a whole.Publication Can Brazil’s Democratic Institutions Be Rebounded from Bolsonaro’s Authoritarian Agenda?(2023) Verdugo, Sergio; https://ror.org/02jjdwm75-Publication Auditor Ethics: Do Experience and Gender Influence Auditors’ Moral Awareness?(2020-12-16) Carrera, Nieves; Van der Kolk, Berend; https://ror.org/02jjdwm75Purpose – The purpose of this paper is to examine how experience and gender relate to the auditors’ moral awareness. Design/methodology/approach– Hypotheses are informed by a neurocognitive approach of ethical decision-making and tested using survey data from 191 auditors of a Big Four audit firm in The Netherlands. Findings – The main findings indicate that more experienced auditors (i.e., those with more years of work experience, a higher rank, and older) show higher levels of moral awareness. This positive relationship is stronger for morally questionable situations related to accounting and auditing, compared to general business moral dilemmas. In addition, the results support the expectation that on average, female auditors have higher moral awareness than their male counterparts. Originality/value – To our knowledge, this is the first study that considers a neurocognitive approach to inform hypotheses about the antecedents of auditors’ moral awareness. The findings suggest that the involvement of experienced auditors in ethical decision-making processes may be beneficial given their enhanced ability to identify ethically disputable situations as such. Furthermore, increasing the number of females in senior positions may positively affect ethical decision-making in audit firms. Lastly, this paper presents directions for future research.Publication Institutional Logics and Risk Management Practices in Government Entities: Evidence from Saudi Arabia(Emerald Publishing Limited, 2022-09-13) Carrera, Nieves; Murr, Peter; https://ror.org/02jjdwm75Purpose This study aims to understand how institutional logics influence the adoption and implementation of risk management (RM) practices by government entities in a non-western, developing country. Design/methodology/approach This study draws on the institutional logics perspective (ILP) to analyze a case study of a government entity in Saudi Arabia. Data were obtained from semi-structured interviews, observations and documentary evidence. Findings Findings suggest that the adoption and implementation of RM projects by Saudi governmental agencies was rooted in a traditional logic, even though the catalyst of the government for adopting a RM culture across government agencies was framed within a reform program inspired by a modernization logic. In the entity under investigation, the RM project led to an unstable situation where actors were confronted with these two competing logics. Although the project used manifestations of a modernization logic, the actions of individuals within the organization were embedded in a traditional logic. Research limitations/implications The study is based on a single case study in a specific country, limiting the generalizability of the findings. Originality/value This study provides novel evidence of the adoption and implementation of RM in governmental entities in a developing, non-western, country using ILP. Doing so enhances our knowledge about how managers struggle with competing institutional logics in an underexplored setting and enriches current accounts of key drivers and barriers of RM. It also addresses calls for a deeper understanding of the logics and managerial practices interplay in the public sector.Publication Accounting and Finance Literacy and Entrepreneurship: an Exploratory Study(Elsevier, 2023) Trombetta, Marco; https://ror.org/02jjdwm75The aim of this study is to investigate whether the level of financial literacy differs significantly among entrepreneurs in three European countries: Italy, Spain, and the UK. Moreover, I analyze whether financial literacy fosters or hinders entrepreneurial resilience and success. I find that the level of basic financial literacy is significantly lower among entrepreneurs in the UK. I provide an explanation based on job opportunities arguing that basic financial literacy increases the chances of survival of a business, whereas advanced financial literacy decreases it. I propose a taxonomy linking levels of financial literacy with different approaches to financial management. I conclude that a “conservative” approach to financial management (cash based, debt-averse and diversified) is more likely to guarantee survival even if it is not necessarily the best way to maximize firm value.Publication How do impact investors leverage non-financial strategies to create value? An impact-oriented value framework(Elsevier, 2024-06) Justo, Rachida; Nachyła, Pola; https://ror.org/02jjdwm75One of the ways to understand the success of impact investing firms is to examine how they add value to the social enterprises they invest. Did their investment boost social and/or environmental change? And what type of support, beyond financial capital, can they provide to enhance impact? Drawing on a design-based methodology, we seek to address some of these questions by developing a tool called the Impact Oriented Value Framework. Putting impact at the centre of the funds' purpose, the framework provides actionable solutions to infuse impact into investors’ non-financial support strategies and activities, enhancing their additionality to portfolio companies as well as their contribution to the impact ecosystem.Publication Getting Your Hopes Up but Not Seeing Them Through? Experiences as Determinants of Income Expectations and Persistence During the Venturing Process(Taylor & Francis, 2020-01-16) Lejarraga, José; Pindard, Lejarraga, Maud; Tietz, Matthias; https://ror.org/02jjdwm75In this study, we investigate the effects of industry and startup experiences on income expectations and persistence of nascent entrepreneurs. We posit that experience can have two interrelated effects: (1) it provides skills that may affect persistence, but also (2) affects performance expectations. We develop and test hypotheses about the impact of industry and startup experience on both expectations and persistence. Data of 808 nascent entrepreneurs from the Panel Study of Entrepreneurial Dynamics show that industry experience increases income expectations and persistence alike, whereas startup experience increases expectations without increasing persistence. We discuss implications for scholarship and practice.Publication Bounded rationality: Cognitive limitations or adaptation to the environment? The implications of ecological rationality for management learning(2020-10-26) Pindard, Lejarraga, Maud; Lejarraga, José; https://ror.org/02jjdwm75We examine why bounded rationality continues to be considered an inferior form of rationallity in the field of management and what this implies for business education and practice. We develop a critique of the dominant and widespread conceptualization of heuristics as flawed and error-prone and argue that this poses unnecessary constraints for the field of management. We discuss consequences of that interpretation of bounded rationality and propose ecological rationality as an alternative, positive interpretation. Ecological rationality considers a decision maker’s environment and aims to identify how and when heuristics generate good outcomes. Evidence suggests that heuristics perform best when problems are ill-defined, many information cues are available, but they are not equally valuable, and there are many possible courses of action, that is, in the uncertain environments that are characteristic of managerial decision making. We contribute by (1) highlighting the distinctiveness of the ecological rationality framework for management learning, (2) acknowledging how it can help rehabilitate bounded rationality in the field of management against its widespread characterization as an inferior form of rationality; and (3) by identifying how it can provide practicable recommendations for managerial learning and decision making.Publication Regulating Gender Stereotypes in Advertising: When Persuasion Reinforces Inequality(Latin american legal studies, 2019-08-11) Martinez, Maria Guadalupe; https://ror.org/02jjdwm75Advertising is information that aims to persuade. The phenomenon of advertising connects the professional supplier (creator) and the consumer (receiver) under particular market dynamics and within the framework of a specific social and cultural context that reveals the complexity and significance of the act of consumption. However, the regulation of advertising has been mostly focused on the professional supplier’s duty to inform, on the one hand, and on the consumer’s access to information. In this article, I argue that in order to assess the scope of the impact of the phenomenon of advertising in our society and, in particular, of advertising that conveys gender stereotypes, we must abandon the simplified construal of advertising as information, of the professional supplier as informant, and of the consumer as informed sovereign. Such representations that completely disregard context can hardly help in the tasks of rethinking regulation of current advertising and proposing legal responses that are more sensitive to advertising’s persuasive aspect and thus better suited to deal with the problem of stereotyped advertising in our society.Publication Earthquakes on the surface: earthquake location and area based on more than 14 500 ShakeMaps(European Geoscience Union, 2018-06-20) Lackner, Stephanie; https://ror.org/02jjdwm75Earthquake impact is an inherently interdisciplinary topic that receives attention from many disciplines. The natural hazard of strong ground motion is the reason why earthquakes are of interest to more than just seismologists. However, earthquake shaking data often receive too little attention by the general public and impact research in the social sciences. The vocabulary used to discuss earthquakes has mostly evolved within and for the discipline of seismology. Discussions on earthquakes outside of seismology thus often use suboptimal concepts that are not of primary concern. This study provides new theoretic concepts as well as novel quantitative data analysis based on shaking data. A dataset of relevant global earthquake ground shaking from 1960 to 2016 based on USGS ShakeMap data has been constructed and applied to the determination of past ground shaking worldwide. Two new definitions of earthquake location (the shaking center and the shaking centroid) based on ground motion parameters are introduced and compared to the epicenter. These definitions are intended to facilitate a translation of the concept of earthquake location from a seismology context to a geographic context. Furthermore, the first global quantitative analysis on the size of the area that is on average exposed to strong ground motion – measured by peak ground acceleration (PGA) – is provided.Publication Management and Innovation in Latin America: introduction(2019-05-27) Ogliastri, Enrique; Batista Pamplona, João; Gómez Villegas, Mauricio; https://ror.org/02jjdwm75In this introduction to the special issue of Gestão & Regionalidade entitled “Management and Innovation in Latin America,” we first review the published literature about the region, then introduce the ten new articles appearing in this issue, and finally reflect briefly on the current and future state of studies on innovation management and economics in the region. Latin America’s innovation performance remains far short of its economic relevance, despite increasing academic research on the issue. Future research should highlight interactive ways to promote innovation, social innova-tions, public innovation, innovations for sustainability, technological innovations associated with the fourth industrial revolution, and the very specific nature of Latin American entrepreneurship.Publication Municipal Bond Markets(Anual Reviews, 2019-12) Cestau, Dario; Hollifield, Burton; Li, Dan; Schürhoff, Norman; https://ror.org/02jjdwm75The effective functioning of the municipal bond market is crucial for the provision of public services, as it is the largest capital market for state and municipal issuers. Prior research has documented tax, credit, liquidity, and segmentation effects in municipal bonds. Recent regulatory initiatives to improve transparency have made granular trade data available to researchers, rendering the municipal bond market a natural laboratory for the study of financial intermediation, asset pricing in decentralized markets, and local public finance. Trade-by-trade studies have found large trading costs, contemporaneous price dispersion, and other deviations from the law of one price. More research is required to understand optimal market design and the impact of post-crisis regulation, sustainability, and financial technologyPublication Insider Trading and Networked Directors(Elsevier, 2019-06) Goergen, Marc; Renneboog, Luc; Zhao, Yang; https://ror.org/02jjdwm75We analyze the relation between insider trading and the networks of executive and non-executive directors in UK listed companies. While most existing studies focus on firm-specific private information, we find that non-firm-specific information – such as information on other companies and information on industry and market trends – plays an important role in insider trading behavior and performance. Well-connected directors trade shares less frequently and for smaller values. However, their transactions are more profitable, especially when they make consecutive opportunistic purchases in the multiple companies on whose boards they sit. Taken together, well-connected directors are likely to outperform their peers with inferior connections.Publication Dispersed ownership and asset pricing: An unpriced premium associated with free float(Elsevier, 2022-05-09) Hearn, Bruce; Filatotchev, Igor; Goergen, Marc; https://ror.org/02jjdwm75We explore differences in the levels of dispersed ownership that lead to a returns-based free float hedging factor in addition to size, which augments the capital asset pricing model (CAPM) in explaining the cross-section of stock returns. Using the S&P 1500 stocks in the US between 1985 and 2023, the results support the advantages of free float within a three-factor CAPM including size over alternative models based on liquidity, book-to-market value, and momentum. We argue that this yields a useful means for hedging effectively against the risks associated with the fundamental underlying likelihood of expropriation in a specific firm based on its ownership structure.Publication Institutions and Entrepreneurial Activity: The Interactive Influence of Misaligned Formal and Informal Institutions(Informs, 2018-06-15) Skousen, Bradley; Cheng, Joseph; Eberhart, Robert; Eesley, Charles; https://ror.org/02jjdwm75We contribute to the institutions and entrepreneurship literature by examiningthe interactive influence of formal and informal institutions on new business creation,survival, and growth. Prior literature demonstrates how formal and informal institutionsshape the level of entrepreneurship. This paper extends this to examine the cases whenformal and informal institutions conflict with one another to cast an analytic eye on whycountries differ in the type of entrepreneurial activity in terms of entry, survival, andgrowth. We argue that national and regional differences can be better explained by theinteractive influence of formal and informal institutions. Moreover, we argue that infor-mal institutions dominate formal institutions due to the former’s characteristics of deepembeddedness and resistance to change over time. These ideas are presented and summa-rized into a typology of institutional effects on entrepreneurship activity depending on thecombination of formal and informal institutions. The paper concludes with implicationsfor future theory and research on the joint influence of different institutional effects andparticularly on the intersection between institutions and entrepreneurship.Publication The Significance of Whistleblowing as an Anti-Fraud Measure(2018) Skousen, Bradley; Albrecht, Chad; Holland, Daniel; Skousen, Christopher; https://ror.org/02jjdwm75-Publication Do different uses of performance measurement systems in hospitals yield different outcomes?(Lippincott, 2019) Van der Kolk, Berend; Van Elten, Hilco; Sülz, Sandra; https://ror.org/02jjdwm75Background: Inspired by the new public management movement, many public sector organizations have implemented business-like performance measurement systems (PMSs) in an effort to improve organizational efficiency and effectiveness. However, a large stream of the accounting literature has remained critical of the use of performance measures in the public sector because of the inherent difficulty in measuring output and the potential adverse effects of performance measurement. Although we acknowledge that PMSs may indeed sometimes yield adverse effects, we highlight in this study that the effects of PMSs depend on the way in which they are used. Purpose: The aim of this study was to investigate various uses of PMSs among hospital managers and their effects on hospital outcomes, including process quality, degree of patient-oriented care, operational performance, and work culture. Methodology: We use a survey sent to 432 Dutch hospital managers (19.2% response rate, 83 usable responses). For our main variables, we rely on previously validated constructs where possible, and we conduct ordinary least squares regressions to explore the relation between PMS use and hospital outcomes. Results: We find that the way in which PMSs are used is associated with hospital outcomes. An exploratory use of PMS has a positive association with patient-oriented care and collective work culture. Furthermore, the operational use of PMSs is positively related to operational performance but negatively related to patient-oriented care. There is no single best PMS use that positively affects all performance dimensions. Practice Implications: The way in which managers use PMSs is related to hospital outcomes. Therefore, hospital managers should critically reflect on how they use PMSs and whether their type of use is in line with the desired hospital outcomesPublication A Public Service Role For Digital Libraries: The Unequal Battle Against (Online) Misinformation Through Copyright Law Reform And The Emergency Electronic Access To Library Material(SSRN, 2021-03-26) Panezi, ArgyriThis article analyzes the role of copyright doctrine and case law in preserving the institutional function of libraries—both on- and offline—as trusted and, in principle, neutral hubs equalizing access to credible information and knowledge in societies with structural inequalities. In doing so it examines the ongoing Hachette v. Internet Archive litigation before the US District Court of the Southern District of New York in the context of earlier copyright cases, finding that there is a persistent need for electronic access to library material online. Libraries have traditionally served an important role as reserved spaces for legally permissible distribution of books outside of markets. Copyright law, however, has the potential to hinder the fuction of libraries and other cultural heritage institutions particularly in equalizing access to knowledge. While there exist some exceptions and limitations that partially alleviate this, their applicability in the digital environment is still contested. Two novel challenges are interfering: first, an unmet and contentious need for emergency access to electronic library material to be granted online, and second, the need to counteract historical biases and misinformation, both of which multiply when spread within a hyper-connected and digitized society. In order to ensure electronic access to credible information and knowledge, policymakers must address these challenges strategically and reassess the needs of subjects and institutions that are currently subject to copyright exceptions. Hachette v. Internet Archive follows a string of copyright cases that involved challenges to digitization without permission and to providing electronic access to digitized library material. The plaintiffs in Hachette v. Internet Archive, four publishers, brought copyright claims against the Internet Archive for the latter’s operation of a “National Emergency Library” within the context of the COVID-19 pandemic. The case introduces a new dimension to existing debates around electronic access to library material, particularly around e-lending, raising the question: Can emergencies justify additional exceptions to copyright laws covering electronic access to library material, and if so, under what circumstances? After analyzing the relevant settled case law and the ongoing litigation against the Internet Archive and then looking back into the history of and rationale for copyright laws, the article advances a normative claim—that copyright should provide better support to libraries and digital libraries in particular (broadly defined) as the institutional safeguards of our literary treasures. Libraries have a public service mandate to preserve, curate, and provide access to a plurality of original and authoritative sources, and thus ultimately aspire not to compete in the marketplace but to become trusted hubs that equalize access to knowledge. In the context of a society currently struggling to fight historical biases and (online) misinformation, providing libraries with the legal support needed to fulfill this mandate will enable them to more effectively safeguard and provide equal access to (at least relatively) credible information and knowledge, including in the digital environment.