http://repub.eur.nl/res/concept/jel-M/ Recent publications classified by JEL Code M en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/40359/ 2013-06-05T00:00:00Z The intersection of entrepreneurship research and institutional theory has begun to attract increasing scholarly attention. While much recent research has studied "institutional entrepreneurs" credited with creating new or transforming existing institutions to support their projects, less attention has been paid to the institutions that constitute the menus from which choices are made, and delineate resources for entrepreneurial or other agentic activities. While models of institutionalization frequently break down the process into different categorical stages, how an evolving context affords changing agentic latitude for actors merits more attention. We study the institutionalization of 'temporary work', a new employment practice led by temporary work organizations, a new organizational form in the Netherlands from the 1960s to 2008. Our account suggests an 'ecological' imagery of institutionalization; rather than entrepreneurs' with predetermined agendas shaping and reshaping institutions, we observed distributed institutional entrepreneurship – entrepreneurs seeking change in concert and in conflict with other interdependent actors simultaneously creating, disrupting and maintaining institutions. By examining how an evolving context influences the role of "actor configurations", whose actions, interactions and counteractions can collectively lead to change, but also unintended outcomes, we highlight the non-teleological nature of institutionalization. Finally, our findings suggest that while the legitimacy of a novel practice grows with increasing institutionalization, legitimacy contests may recur and that increasing institutionalization may provide the backdrop for novel practices to emerge. Koene, B.A.S. Ansari, S.M. http://repub.eur.nl/res/pub/40333/ 2013-06-04T00:00:00Z Early Modern Dutch corporate finance had two notable features, a remarkable ease of raising large amounts of capital and a flexible legal framework. Having pioneered new corporate forms with two intercontinental trading companies, Dutch business adopted such forms on a wider scale only during the 18th century, when economic concentration and consolidation led to the appearance of business units large enough to need them. The financial intermediation and legal institutions available also facilitated early industrialization during the 19th century, up to and including the railways. The large export of capital throughout the period under consideration failed to harm economic development at any point or in any way. Jong, A. de Jonker, J. Roëll, A. http://repub.eur.nl/res/pub/39958/ 2013-05-08T00:00:00Z In this paper we propose the use of preferred outcome distributions as a new method to elicit individuals’ value and probability weighting functions in decisions under risk. Extant approaches for the elicitation of these two key ingredients of individuals’ risk attitude typically rely on a long, chained sequence of lottery choices. In contrast, preferred outcome distributions can be elicited through an intuitive graphical interface, and, as we show, the information contained in two preferred outcome distributions is sufficient to identify non-parametrically both the value function and the probability weighting function in rank-dependent utility models. To illustrate our method and its advantages, we run an incentive-compatible lab study in which participants use a simple graphical interface – the Distribution Builder (Goldstein et al. 2008) – to construct their preferred outcome distributions, subject to a budget constraint. Results show that estimates of the value function are in line with previous research but that probability weighting biases are diminished, thus favoring our proposed approach based on preferred outcome distributions. Donkers, A.C.D. Lourenço, C.J.S. Dellaert, B.G.C. Goldstein, D.G. http://repub.eur.nl/res/pub/39630/ 2013-04-15T00:00:00Z Consumer embarrassment is an important concern for marketers. Yet, little is known about embarrassment in passive situations like advertising viewing. The authors investigate when and why consumers experience embarrassment as a result of exposure to socially sensitive advertisements. The theory distinguishes between viewing potentially embarrassing ads together with an audience that shares the social identity targeted by the message and viewing the same ads together with an audience that does not share the targeted social identity. Four studies provide support for the theory, demonstrating that advertising targeting and social context jointly determine feelings of embarrassment and advertising effectiveness. Puntoni, S. Hooge, I.E. de Verbeke, W.J.M.I. http://repub.eur.nl/res/pub/39515/ 2013-04-09T00:00:00Z We analyze the initial intellectual property (IP) right of 4,703 start-up entrants in the US, distinguishing between trademark and patent applications. The results show that start-ups are more likely to file for a trademark instead of a patent when entering into more competitive market structures. Further, we find that start-ups with a focus on distribution that serves end-consumers are more likely to file for a trademark and that start-ups that operate upstream and sell to other businesses are more likely to file for a patent. Lastly, the external influences on a start-up‟s management, such as the involvement of a venture capitalist (VC), affect IP applications. The increased incentive of VC-backed start-ups to become operational on the market makes them more likely to file initial IP in the form of a trademark rather than a patent. Among other factors, we control for R&D and advertising intensity in the industry and distinguish between more technical and more service-driven industries. De Vries, G.A. Pennings, H.P.G. Block, J.H. http://repub.eur.nl/res/pub/37266/ 2013-03-26T00:00:00Z The growing interest of the business world in the virtues of individ- uals with specific cognitive behavioral characteristics, such as lack of attention and hyperactivity, is not matched by scholarly work. Indi- viduals who experience the challenges associated with such character- istics are thought to thrive in work environments that embrace their talents. Given that entrepreneurship requires a distinctive mindset, we test the hypothesis that individuals who, more than others, expe- rience symptoms of attention deficit and hyperactivity (ADHD) favor entrepreneurship over wage-employment. Using data of nearly 13,000 university students, we show that symptoms of attention deficit and hyperactivity increase the likelihood of intending to startup a busi- ness directly after study. We find evidence for partial mediation of two work attributes; independence and risk tolerance. Students who experience ADHD symptoms prefer to work independently and do not shy away from working on high-risk projects, which partly explains their preference for an entrepreneurial career. Verheul, I. Block, J.H. Burmeister-Lamp, K. Thurik, A.R. Tiemeier, H. Turturea, R. http://repub.eur.nl/res/pub/39189/ 2013-03-04T00:00:00Z This paper reports the results from a controlled field experiment designed to investigate the causal effect of public recognition on employee performance. We hired more than 300 employees to work on a three-hour data-entry task. In a random sample of work groups, workers unexpectedly received recognition after two hours of work. We find that recognition increases subsequent performance substantially, and particularly so when recognition is exclusively provided to the best performers. Remarkably, workers who did not receive recognition are mainly responsible for this performance increase. This result is consistent with workers having a preference for conformity. Bradler, C. Dur, A.J. Neckermann, S. Non, J.A. http://repub.eur.nl/res/pub/38235/ 2013-01-08T00:00:00Z This research provides a new way to validate and compare buy-till-you-defect [BTYD] models. These models specify a customer’s transaction and defection processes in a non-contractual setting. They are typically used to identify active customers in a com- pany’s customer base and to predict the number of purchases. Surprisingly, the literature shows that models with quite different assumptions tend to have a similar predictive performance. We show that BTYD models can also be used to predict the timing of the next purchase. Such predictions are managerially relevant as they enable managers to choose appropriate promotion strategies to improve revenues. Moreover, the predictive performance on the purchase timing can be more informative on the relative quality of BTYD models. For each of the established models, we discuss the prediction of the purchase timing. Next, we compare these models across three datasets on the predictive performance on the purchase timing as well as purchase frequency. We show that while the Pareto/NBD and its Hierarchical Bayes extension [HB] models perform the best in predicting transaction frequency, the PDO and HB models predict transaction timing more accurately. Furthermore, we find that differences in a model’s predictive performance across datasets can be explained by the correlation between behavioral parameters and the proportion of customers without repeat purchases. Korkmaz, E. Kuik, R. Fok, D. http://repub.eur.nl/res/pub/38215/ 2012-12-06T00:00:00Z We examine differences in altruism and laziness between public sector employees and private sector employees. Our theoretical model predicts that the likelihood of public sector employment increases with a worker's altruism, and increases or decreases with a worker's laziness depending on his altruism. Using data from the German Socio-Economic Panel Study, we find that public sector employees are significantly more altruistic and lazy than observationally equivalent private sector employees. A series of robustness checks show that these patterns are stronger among higher educated workers; that the sorting of altruistic people to the public sector takes place only within the caring industries; and that the difference in altruism is already present at the start of people's career, while the difference in laziness is only present for employees with sufficiently long work experience. Dur, A.J. Zoutenbier, R. http://repub.eur.nl/res/pub/38004/ 2012-12-06T00:00:00Z Empirical studies have shown that entrepreneurs earn, on average, less than the market wage for employees with otherwise similar characteristics. We examine whether having previously been self-employed is in itself a negative signal on the job market. In a field experiment where two applications of otherwise equally qualified individuals were sent for the same vacancies, we find that entrepreneurs systematically receive fewer responses than non-entrepreneurs. Thus, it appears that the earnings differential is partially explained by the fact that entrepreneurs do not have access to the reference jobs in practice. We discuss what type of unfavorable information self-employment may carry. Koellinger, Ph.D. Mell, J. Pohl, I. Roessler, C. Treffers, T. http://repub.eur.nl/res/pub/38213/ 2012-11-30T00:00:00Z A Forecast Support System (FSS), which generates sales forecasts, is a sophisticated business analytical tool that can help to improve targeted business decisions. Many companies use such a tool, although at the same time they may allow managers to quote their own forecasts. These sales forecasters (managers) can take the FSS output as their input, but they can also fully ignore the FSS out- comes. We propose a methodology that allows to evaluate the forecast accuracy of these managers, relative to the FSS, while taking aboard latent variation across managers' behavior. We show that the results, here for a large Germany-based pharmaceutical company, can in fact be used to manage the sales forecasters by giving clear-cut recommendations for improvement. Bruijn, B. de Franses, Ph.H.B.F. http://repub.eur.nl/res/pub/37879/ 2012-11-22T00:00:00Z A principal-agent model is formulated to capture the efficiency of cooperatives with a member CEO and cooperatives with an employed outsider as CEO. Results of the model show that the incentive strength regarding the member CEO is stronger compared to that of the outside CEO in order to shift some effort of the member CEO from individual farming into the task of adding value to the cooperative enterprise. A cooperative with a member CEO is uniquely efficient when upstream and downstream tasks are substitutes to a certain extent, or complements. When the tasks are substitutes, the efficient CEO identity depends on the strength of the substitution effect and the difference of the marginal productivities between the two tasks. The scope of cooperatives with a member CEO being efficient becomes smaller when the substitution effect is at an intermediate level or the productivity difference between the two tasks is limited. Liang, Q.X. Hendrikse, G.W.J. http://repub.eur.nl/res/pub/37373/ 2012-10-05T00:00:00Z Management accountants are choice architects: they provide information that is used in managerial decision making and they have considerable influence on the monetary and non-monetary incentives that drive managers’ decision-making processes. Over the past two decades, our know - ledge of how people make economic decisions has increased tremendously. However, this has had only very little impact on the design of management accounting and control systems in organizations. Consequently, management accounting is (again) at risk of becoming irrelevant. To secure its relevance, management accountants need to become aware of their role as choice architects and need to develop into professionals whose core competence is to provide insight into quantitative information as a product of human decision making and, vice versa, to explain and predict decision-making behavior as a response to quantitative information. Academic management accounting research should facilitate this development. How this can be done is illustrated using three examples of practically relevant research areas: subjective performance evaluation, internal transparency and the design of the control function in organizations. Maas, V.S. http://repub.eur.nl/res/pub/37192/ 2012-09-10T00:00:00Z This is the specification for the Power Trading Agent Competition for 2012 (Power TAC 2012). Power TAC is a competitive simulation that models a “liberalized” retail electrical energy market, where competing business entities or “brokers” offer energy services to customers through tariff contracts, and must then serve those customers by trading in a wholesale market. Brokers are challenged to maximize their profits by buying and selling energy in the wholesale and retail markets, subject to fixed costs and constraints. Costs include fees for publication and withdrawal of tariffs, and distribution fees for transporting energy to their contracted customers. Costs are also incurred whenever there is an imbalance between a broker’s total contracted energy supply and demand within a given time slot. The simulation environment models a wholesale market, a regulated distribution utility, and a population of energy customers, situated in a real location on Earth during a specific period for which weather data is available. The wholesale market is a relatively simple call market, similar to many existing wholesale electric power markets, such as Nord Pool in Scandinavia or FERC markets in North America, but unlike the FERC markets we are modeling a single region, and therefore we do not model location-marginal pricing. Customer models include households and a variety of commercial and industrial entities, many of which have production capacity (such as solar panels or wind turbines) as well as electric vehicles. All have “real-time” metering to support allocation of their hourly supply and demand to their subscribed brokers, and all are approximate utility maximizers with respect to tariff selection, although the factors making up their utility functions may include aversion to change and complexity that can retard uptake of marginally better tariff offers. The distribution utility models the regulated natural monopoly that owns the regional distribution network, and is responsible for maintenance of its infrastructure and for real-time balancing of supply and demand. The balancing process is a market-based mechanism that uses economic incentives to encourage brokers to achieve balance within their portfolios of tariff subscribers and wholesale market positions, in the face of stochastic customer behaviors and weather-dependent renewable energy sources. The broker with the highest bank balance at the end of the simulation wins. Ketter, W. Collins, J. Reddy, P. Weerdt, M.M. de http://repub.eur.nl/res/pub/34712/ 2012-07-20T00:00:00Z We study career choice when competition for promotion is a contest. A more meritocratic profession always succeeds in attracting the highest ability types, whereas a profession with superior promotion benefits attracts high types only if the hazard rate of the noise in performance evaluation is strictly increasing. Raising promotion opportunities produces no systematic effect on the talent distribution, while a higher base wage attracts talent only if total promotion opportunities are sufficiently plentiful Morgan, J. Sisak, D. Vardy, F. http://repub.eur.nl/res/pub/34710/ 2012-07-11T00:00:00Z Earnings forecasts can be useful for investment decisions. Research on earnings forecasts has focused on forecast performance in relation to firm characteristics, on categorizing the analysts into groups with similar behaviour and on the effect of an earnings announcement by thefirm on future earnings forecasts. In this paper we investigate the factors that determine the value of the forecast and also investigate to what extent the timing of the forecast can be modeled. We propose a novel methodology that allows for such an investigation. As an illustration we analyze within-year earnings forecasts for AMD in the period 1997 to 2011, where the data are obtained from the I/B/E/S database. Our empirical findings suggest clear drivers of the value and the timing of the earnings forecast. We thus show that not only the forecasts themselves are predictable, but that also the timing of the quotes is predictable to some extent. Bruijn, B. de Franses, Ph.H.B.F. http://repub.eur.nl/res/pub/37375/ 2012-06-29T00:00:00Z Is Financial Accounting too practical for research? I was recently asked this question during an interview, and it surprised me. Why would it be too practical for research? Can we only conduct research on topics that are not related to practice? Or is it not clear what Financial Accounting is really about, and that it is more than bookkeeping? Using examples of recent research, I show why Financial Accounting is certainly not too practical for theory. The question whether Financial Accounting research is too theoretical for practice is a more challenging question. Can we do quality research within the field of financial reporting and is this research relevant to business? Does our research have any societal relevance in the current dynamic environment? I conclude that Financial Accounting research is certainly relevant, but that the accounting professional active in the business community only benefits to a very limited extent. In addition, I discuss two initiatives, namely the Ernst & Young Academic Network and the Erasmus Marketing & Accounting Research Center that will prevent us from conducting research that is too theoretical for practice. Pronk, M. http://repub.eur.nl/res/pub/26036/ 2012-06-01T00:00:00Z Small- and medium-sized enterprises (SMEs) are informationally opaque and bank dependent. In SME lending, banks largely rely on soft information, because the scale and scope of hard information are limited. We analyze whether and how hard and soft information affects the borrower's bargaining power vis-à-vis its bank. We use the fact that, for a given credit rating, certain borrowers obtain better loan terms than others to define measures of relative bargaining power. Using SME loan data from the USA and Germany, we find that more favorable soft information (management skills and character) increases borrower bargaining power. We also show that more favorable soft than hard information improves borrower bargaining power. The results are not driven by manipulation or statistical limitations of the credit ratings. Our study suggests that soft information represents an important and direct determinant of borrower bargaining power, affecting the outcomes of the loan contracting process. Grunert, J. Norden, L. http://repub.eur.nl/res/pub/31986/ 2012-06-01T00:00:00Z This paper examines the effect of Sarbanes-Oxley provisions on 10-K filing delays. We find that tightened filing deadlines for accelerated and large accelerated filers are not associated with changes in the incidence of late filing. While Section 404 compliance does not affect filing timeliness for firms with effective internal controls, we find that about half the firms disclosing internal control weaknesses are late filers. As a consequence, many Section 404 material weakness firms experience negative abnormal returns around late filing notifications before filing the 10-K. Lastly, we find that market reactions to late filing notifications are more negative when management provides no meaningful explanation for the delay, consistent with managers' incentives to withhold bad news. Impink, J. Lubberink, M. Praag, B. van Veenman, D. http://repub.eur.nl/res/pub/32667/ 2012-05-16T00:00:00Z This paper studies how social relationships between managers and employees affect relational incentive contracts. To this end we develop a simple dynamic principal-agent model where both players may have feelings of altruism or spite toward each other. The contract may contain two types of incentives for the agent to work hard: a bonus and a threat of dismissal. We find that good social relationships undermine the credibility of a threat of dismissal but strengthen the credibility of a bonus. Among others, these two mechanisms imply that better social relationships sometimes lead to higher bonuses, while worse social relationships may increase productivity and players' utility in equilibrium. Dur, A.J. Tichem, J.