Eurasian Business Review最新文献

This paper investigates the relationship between CEO age and firm innovation measured as innovation productivity (i.e., the number of patent applications) and innovation scope (i.e., technological proximity). Using a sample of 8589 firm-years that eliminate differences in characteristics between firms with young CEOs versus old CEOs, listed in the Korean stock markets for the sample period of 2002–2016, we document that a firm’s innovation productivity or innovation scope decreases in CEO age. We also report that younger CEOs in IT firms are more likely to participate in firm innovation than those in non-IT firms. Our main results are robust in Tobit, Poisson, and negative binomial regressions and in specification of CEO-fixed effect models. We also find same results in further analyses considering CEO tenure, firm age, and CEO overconfidence. Taken together, younger CEOs in IT firms may be more motivated to signal their innovativeness to the CEO market to be regarded as outstanding innovators or adventurous innovators, which supports managerial signaling hypothesis for young CEOs.

Abstract

This study investigates the influence of family ownership and family control on firm performance while considering the moderating effect of gender diversity. Utilising a dataset of 226 nonfinancial firms listed on Pakistan Stock Exchange spanning from 2008 to 2019, the paper employs the Generalized Method of Moments (GMM) estimation to test the proposed hypotheses. Additionally, the paper uses ordinary least squares regression (OLS) analysis, industry-adjusted measures of firm performance, difference-in-difference (DID) estimation, and Blau and Shannon index to confirm the results. The findings indicate that family ownership and control positively affect firm performance. This relationship is further enhanced by the presence of female directors on the board. Using the agency theory and stewardship theory frameworks, the paper delves into the dynamics of agency conflict and family owner behavior within family firms, highlighting the role of gender-diverse boards. Overall, the analysis reveals that family owners, motivated by a strong attachment to their businesses and a desire to preserve socio-emotional wealth, tend to adopt a stewardship role, thereby mitigating principal-principal conflicts within our sample firms. The study contributes to the literature on family businesses by elucidating the behavior of such firms within an emerging economy context and revealing the role of gender diversity in the presence of family ownership. The findings suggest useful implications for investors regarding the positive influence of family owners on firm performance and underscore the importance for policymakers to prioritize female career development and professional growth. This, in turn, can yield economic benefits through the integration of female directors in boardrooms, thereby reducing agency costs and enhancing overall governance structures within firms.

In the financial system, the customers’ willingness to share their data is pivotal, because otherwise, banks and insurance companies are powerless to build on customer data. The key step now is to understand whether there is such willingness and what form it takes. In this study, we investigate how willing customers are to share various kinds of data (on physical health, home, driving style, travel, family, social networks) with their insurance company, in return for different rewards (customised products and services, reduced insurance claims risk and insurance premiums adjusted to personal habits and behaviour). Applying the privacy calculus framework to 1501 responses in a web-based survey, we found that rewards, especially when financial, such as insurance premium benefits, play a pivotal role in driving customer decisions about sharing data. Furthermore, customers associate the data they are asked to share with different levels of privacy, influencing their willingness to share. We also found that, when customers are asked to share various kinds of data in return for different rewards, their own personal innovativeness comes into play. Our findings suggest that, in the data-driven insurance business, different rewards offered in return for specific types of data could help companies minimise the “data acquisition cost” and maximise the data collected. In the era of open data, insurers can explore the many opportunities for segmentation, but new kinds of financial exclusion could emerge, resulting in potential biases and thus misinterpretations should analytics and artificial intelligence models be built upon these premises.

Even the most rudimentary training from Economics 101 starts with demand curves going down and supply curves going up. They are so ‘natural’ that they sound even more obvious than the Euclidian postulates in mathematics. But are they? What do they actually mean? Start with “demand curves”. Are they hypothetical ‘psychological constructs’ on individual preferences? Propositions on aggregation over them? Reduced forms of actual dynamic proposition of time profiles of prices and demanded quantities? Similar considerations apply to “supply curves” The point here, drawing upon the chapter by Kirman and Dosi, in Dosi (Dosi, Foundations of Complex Evolving Economies Innovation, Organization and Industrial Dynamics, Oxford University Press, 2023), is that the forest of demand and supply curves is basically there to populate the analysis with double axiomatic notions of equilibria, both ‘in the head’ of individual agents, and in environments in which they operate. Supply and demand “curves”, I am arguing, are one of the three major methodological stumbling blocks on the way of progress in economics, the other related ones being ‘utility functions’ and ‘production functions’. There is an alternative: represent markets and industries how they actually works, and model them both via fully fledged Agent Based Models and via lower dimensional dynamical systems.

Abstract

In this paper we address the problem of survival models when high-dimensional panel data are available. We discuss two related issues: The first one concerns the issue of variable selection and the second one deals with the stability over time of such a selection, since presence of time dimension in survival data requires explicit treatment of evolving socio-economic context. We show how graphical models can serve two purposes. First they serve as the input for a first algorithm to to assess the temporal stability of the data: Secondly, allow the deployment of a second algorithm which partially automates the process of variable selection, while retaining the option to incorporate domain expertise in the process of empirical model-building. To put our proposed methodology to the test, we utilize a dataset comprising Italian firms funded in 2009 and we study the survival of these entities over the period of 10 years. In addition to revealing significant volatility in the set of variables explaining firm exit over the years, our novel methodology enables us to offer a more nuanced perspective than the conventional one regarding the critical roles played by traditional variables such as industrial sector, geographical location, and innovativeness in firm survival.

Twitter's massive data has been intensively explored in the stock market research in recent years as it allows researchers to relate investor sentiment and investor attention to stock performance. However, narrowing down to celebrity-like CEOs, followed by millions, allows more insight to Twitter's usefulness when these CEOs tweet about their company or its products. This study focuses on the effects of such company-oriented tweets on CEOs' companies' stock performance and trading volume. More than 27,000 account-specific tweets are retrieved for 8 CEOs spanning to around 12 years. Event study analysis is performed for stock returns and trading volume change, as it is the most appropriate method used by researchers in similar studies. In the event of an aforementioned tweet, higher stock return volatility is observed in comparison to average volatility. Statistical tests reveal that stock returns and volumes are relatively higher for companies the next day of the said tweet, depicting a relationship between CEO's tweet content and stock performance of companies.

We empirically examine the interaction between different types of diversification (stage, industry, geography) and portfolio size, i.e., number of investee companies, in explaining venture capital (VC) funds’ returns. We study a comprehensive dataset of 422 liquidated US VC funds to conduct multiple analyses in a large timeframe. The results show that large portfolio size and diversification in a limited number of industries contribute positively to fund performance, while stage and geographical diversification have no significant relationship with returns. Our findings can support both the practice of VC portfolio management in reaching better capital allocation efficiency and policymakers in providing guidance for VC fund development programmes backed by sovereign and international institutions.

The increasing availability of external data in the realm of big data significantly impacts the operations and performance of businesses. In this study, we focus on Earth Observation (EO) technology, which supplies an extensive range of data related to Earth's chemical, biological, physical, and societal aspects. Our primary goal is to understand how the utilisation of EO data affects companies operating in the downstream sector. These enterprises possess the expertise and capabilities to extract valuable insights and information from EO data. We use a rich and innovative dataset representing 74% of the Italian EO downstream sector. The results show that EO data have heterogeneous impacts across downstream firms. Economic performance and innovation are positively correlated only for a subset of firms, especially the ones in the northern regions. Firms in the centre of Italy exploit the spillover of being close to large space infrastructures, but their performance in economic and innovation terms is mixed. The sub-sample in the South of Italy innovates due to EO but performs poorly economically. We discuss the determinants of such discrepancies and suggest policy and managerial implications for the industry's future development.

In civil-law countries, employers must pay a value-based 'reasonable remuneration' to employee inventors. When dissatisfied with the amount of compensation, employee inventors can ask for a review by an independent board or directly in court and claim additional remuneration. The study explores the existence of ex-ante indicators that would help distinguish inventors entitled to higher/lower additional compensation. We build on the patent quality framework and test the explanatory power of the ex-ante patent value indicator, the patent family size, on the additional rewards awarded to employee inventors. A novel dataset of court cases heard between 1981 and 2017 in three civil-law countries (Germany, France, and Japan) is used. Our findings indicate a consistently positive effect of both simple and GDP-weighted patent family indicators on the additional remuneration granted. The main finding is as follows: if the court grants positive additional compensation, we observe an average 68% increase in compensation when the number of countries covered by the patent doubles; alternatively, if the total GDP of the countries covered by the patent doubles, the compensation increases by app. 59%. These findings, along with others from the study, can be beneficial for R&D managers, intellectual property managers, and other executives, as well as innovative employees, in estimating the remuneration amount for employee inventions.

The strategic role of environmental, social, and governance (ESG) activities in firm performance has recently drawn increasing attention. In particular, the dynamics of ESG management in family-owned firms have become a crucial factor in increasing firm value. Using novel data from Korea, a suitable context for our analysis, we focus on the interplay between ESG investment and family ownership. Our results reveal that ESG activities can mitigate the agency problems inherent in family ownership, but their careful management is essential for maximizing firm value. We introduce the concept of the marginal effect of ESG, decompose its factors, and identify a critical threshold of family ownership that is instrumental for increasing firm value through ESG activities. Depending on a firm’s position relative to this threshold, we recommend strategies to increase or reduce ESG investment, showing that the timing of such investment or disinvestment in ESG activities emerges as a key strategic consideration. Our findings provide practical insights for family-owned firms to make informed decisions on ESG investment, thereby contributing not only to their own sustainability but also the long-term vitality of ESG activities.