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It often becomes desirable to change the ownership of a policy from a company to a business owner. If the policy has cash value, the income tax impact can be significant. There are four potential approaches to the effect of the transfer that we will discuss in this column: 1) the value of the policy can be treated as compensation; 2) the policy can be sold for its fair market value; 3) the value of the policy can be treated as a dividend or shareholder distribution; or 4) the policy could be part of the proceeds for a sale of the owner's interest in the business. We will look at each of these options and examine it for all three major entity types: S corporations, C corporations, and partnerships. [ABSTRACT FROM AUTHOR]

The dynamic capabilities framework has had a significant impact on strategic management theory and practice, but the sizable literature on the topic has not always been unified. This paper begins with a restatement of the framework encompassing clarifications and extensions that have occurred since it was introduced. The paper highlights key elements that have been omitted or poorly integrated into the dynamic capabilities literature: the role of individual action by entrepreneurial managers, the role of resources, strategy, and the distinction between ordinary and dynamic capabilities. Dynamic capabilities is advanced as a multidisciplinary framework to explain long-run enterprise performance. Ambidexterity and other related frameworks are tailored versions of dynamic capabilities. Linkages between (strategic) management theory and (Austrian) economic theory are explored. The concepts of x-inefficiency and d-ineffectiveness are compared. [ABSTRACT FROM AUTHOR]

Using eight thousand public companies, we study the impact of the Sarbanes-Oxley Act (SOX) of 2002 and other contemporary reforms on directors and boards, guided by their impact on the supply and demand for directors. SOX increased directors' workload and risk (reducing the supply), and increased demand by mandating that firms have more outside directors. We find both broad-based changes and cross-sectional changes (by firm size). Board committees meet more often post-SOX and Director and Officer (D&O) insurance premiums have doubled. Directors post-SOX are more likely to be lawyers/consultants, financial experts, and retired executives, and less likely to be current executives. Post-SOX boards are larger and more independent. Finally, we find significant increases in director pay and overall director costs, particularly among smaller firms. [ABSTRACT FROM AUTHOR]

Using a novel information asymmetry index based on measures of adverse selection developed by the market microstructure literature, we test whether information asymmetry is an important determinant of capital structure decisions, as suggested by the pecking order theory. Our index relies exclusively on measures of the market's assessment of adverse selection risk rather than on ex ante firm characteristics. We find that information asymmetry does affect the capital structure decisions of U.S. firms over the sample period 1973-2002. Our findings are robust to controlling for conventional leverage factors (size, tangibility, Q ratio, profitability), the sources of firms' financing needs, and such firm attributes as stock return volatility, stock turnover, and intensity of insider trading. For example, we estimate that on average, for every dollar of financing deficit to cover, firms in the highest adverse selection decile issue 30 cents of debt more than firms in the lowest decile. Overall, this evidence explains why the pecking order theory is only partially successful in explaining all of firms' capital structure decisions. It also suggests that the theory finds support when its basic assumptions hold in the data, as should reasonably be expected of any theory. [ABSTRACT FROM AUTHOR]

The purpose of the current study was to examine the indirect effects of executives' stakeholder and economic values on firm performance through their followers' perceptions of leadership and followers' extra effort. Analyses of data collected from separate surveys of chief executive officers (CEOs) and two subsets of followers in 520 firms in 17 countries show that CEOs' emphasis on economic values is associated with followers' perceptions of autocratic leadership, whereas CEOs' emphasis on stakeholder values is associated with followers' perceptions of visionary leadership. Additionally, visionary leadership relates positively to employees' extra effort, which in turn relates to firm performance; however, no relationship is found for autocratic leadership. We discuss how predominant decision-making values that are oriented toward a range of stakeholders may yield more favorable outcomes for leaders than values that focus primarily on economic-based issues. [ABSTRACT FROM AUTHOR]

For firms seeking to strategically combine their resources with those of other firms, two popular alternative governance structures emerge: alliance or acquisition. In this paper, we propose a dyadic perspective to examine how and why configurations of two firms' resources and capabilities affect the costs and benefits associated with each governance structure. More specifically, we posit that factors such as (1) the resource similarity and complementarity between a pair of firms, (2) the combined relational capabilities of a pair of firms, and (3) the partner-specific knowledge between a pair of firms will affect the likelihood of observing that pair of firms forming an alliance vs. engaging in an acquisition. We test and find support for our hypotheses using extensive longitudinal data from a sample of the largest firms in the United States from 1991 to 2000. Copyright © 2007 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Financial benefits from quality may be derived from revenue expansion, cost reduction, or both simultaneously. The literature on both market orientation and customer satisfaction provides considerable support for the effectiveness of the revenue expansion perspective, whereas the literature on both quality and operations provides equally impressive support for the effectiveness of the cost reduction perspective. There is, however, little evidence for the effectiveness of attempting both revenue expansion and cost reduction simultaneously, and some of what little empirical and theoretical literature is available suggests that emphasizing both simultaneously may not work. In a study of managers in firms seeking to obtain a financial return from quality improvements, the authors address the issue of which quality profitability emphasis (revenue expansion, cost reduction, or both) is most effective. The authors examine firm performance using managers' reports of firm performance and longitudinal secondary data on firm profitability and stock returns. Although it is clear that no company can neglect either revenue expansion or cost reduction, the empirical results suggest that firms that adopt primarily a revenue expansion emphasis perform better than firms that try to emphasize cost reduction and better than firms that try to emphasize both revenue expansion and cost reduction simultaneously. The results have implications with respect to how both theory and practice view organizational efforts to achieve financial returns from quality improvements. [ABSTRACT FROM AUTHOR]

This study examined the economic performance of the firms associated with Korean business groups by explicitly addressing groupwide resource sharing and internal business transactions. The results show that group-affiliated firms benefit from group membership through sharing intangible and financial resources with other member firms. Further, this study shows that various forms of internal business transactions, such as debt guarantee, equity investment, and internal trade, are extensively used for the purpose of cross-subsidization. [ABSTRACT FROM AUTHOR]

We define public-sector entrepreneurship as having three distinct components: actions that are innovative, that transform a status quo social and economic environment, and that are characterized by uncertainty. While the literature on public-sector entrepreneurship dates to the mid-1960s, the scholarly foundations on which public-sector entrepreneurship is based date to the writings of Cantillon and Baudeau in the mid- and late-1700s and to Schumpeter in the late-1930s and early-1940s. After summarizing the academic and policy literatures on public-sector entrepreneurship, we illustrate the concept using examples of public-sector initiatives. We conclude the paper with an emphasis on the dynamic nature of public-sector entrepreneurship, and we offer insight into additional areas to which the concept applies as well as policy suggestions for incentivizing further public-sector entrepreneurial actions. [ABSTRACT FROM AUTHOR]

The article focuses on American corporations' recent experience and future plans for conducting business in the former Soviet Union. A brief historical overview of American businesses' experiences in the former Soviet Union is presented. Recent economic reforms in the former Soviet Union under General Secretary Mikhail Gorbachev's policy of Perestroika are discussed. The results of a general assessment of business in the former Soviet Union and the inherent riskiness of American corporations conducting business operations in the former Soviet Union are presented.

This study examined economic and psychological factors that may influence the setting of CEO compensation levels and tested both a tournament model and a social comparison model. Using data from 105 Fortune 500 firms, conventional economic determinants such as size and profitability were found to be only weakly related to CEO compensation. A test of a tournament model examined the difference in compensation between the top executive and those in the next hierarchical level. Controlling for other potential economic determinants, no support was found for this theory. Consistent with social comparison theory, however, strong associations were found between CEO compensation and the compensation level of outside members of the board of directors, especially those who serve on the compensation committee. [ABSTRACT FROM AUTHOR]

This study investigated the relationships of Porter's business strategies to the structures and environments of undiversified firms. It was shown that strategies must be matched with complementary environments and structures to promote success. The strategy of innovative differentiation is most likely to be pursued in uncertain environments and correlates with the use of technocrats and liaison devices. The strategy of cost leadership is associated with stable and predictable environments and correlates with the use of controls. Unfocused strategies make much use of liaison devices. These relationships were more likely to be significant in groups of high-performing firms than in groups of poor performers. [ABSTRACT FROM AUTHOR]

The article presents information on a study which used both strategic management and financial theory to explore the relationship between corporate diversification strategy and systematic or market risk. A discussion is presented about the measures selected for market power, capital intensity and financial leverage. Details related to sources of data used in the study and various risks associated with diversification in industry are presented. An overview of previous research on diversification risk is presented.

Recently, there has been a growing trend toward long-term relationships between manufacturers and their suppliers. Although much as been written about the benefits of this shift to manufacturers, little is known about the benefits to supplier firms. In this study, we empirically assess the impact of long-term relationships with specific customers on the performance of supplier firms using cross-sectional and longitudinal information available in the "Compustat" collection of data bases and the "Compact Disclosure" data base. Our results indicate that maintaining long-term relationships with select customers does not come at the expense of the rate of sales growth. Suppliers in long-term relationships are able to achieve the same level of growth as firms that employ a transactional approach to servicing their customers. These suppliers are able to reduce costs over time through better inventory utilization; however, this reduction in cost seems to be bargained away by their customers through lower prices over time. Finally, the supplier firms in long-term relationships achieve higher profitability by differentially reducing their discretionary expenses such as selling, general, and administrative overhead costs to a greater extent than their counterparts who use a transactional approach to servicing their customers. [ABSTRACT FROM AUTHOR]

We use cross-sectional regressions to study how a firm's value is related to dividends and debt. With a good control for profitability, the regressions can measure how the taxation of dividends and debt affects firm value. Simple tax hypotheses say that value is negatively related to dividends and positively related to debt. We find the opposite. We infer that dividends and debt convey information about profitability (expected net cash flows) missed by a wide range of control variables. This information about profitability obscures any tax effects of financing decisions. [ABSTRACT FROM AUTHOR]

The article focuses on debt capacity, diversification and conglomerate mergers. It is the aim of the article is to analyze the possible gains from mergers from the view point of the firm which buys a controlling majority in another firm, resulting in a conglomerate firm. The article explains that two of the main reasons for conglomerate mergers are synergism and diversification. The article's primary concern is with the financial rationale for conglomerate merger, which means that both diversification and the economies of scale effects will be discussed from a financial viewpoint.

The article reports on industrial development taking place in California. The author focuses on ways in which a state agency helped groups from local communities promote development projects. Rural and urban community groups worked to develop industries and businesses that would provide a significant and consistent tax base with which to fund local community programs and boots California's economy. The effectiveness of local and state development agencies is evaluated. The California State Chamber of Commerce is largely responsible for central state developmental agencies.

This paper provides an operational framework to understand autonomy by examining the relationship between the enterprise and its supporting environment. This relationship between the public enterprise and the enabling system is seen as one of power-dependency, by adopting the interorganizational analysis approach. [ABSTRACT FROM AUTHOR]

This paper aims at comprehending the new productive arrangements called social and collaborative business - drawing a parallel between them - and analyzing their potential for success in the market segment that has been called "Creative Economy". Upon the analysis of such economy, which is characterized for being intensive in immaterial goods (ubiquitous and non-rival), these new productive formats could take root, since, taking into account their propagated democratization ethics, self-management and sharing, their production factors should be, by excellence, not scarce and subject to continuous renewal. [ABSTRACT FROM AUTHOR]

Statistical business registers (SBR) play a central role in the production of economic statistics. Traditionally, the functions of an SBR have been to provide a population of statistical units from which frames and samples for economic surveys are drawn. Today, however, the SBR fulfils various other roles in relation to the changing environment in which economic statistics are produced. In the light of the growing demand for high quality and more internationally comparable economic statistics, the Bureau of the Conference of European Statisticians established in November 2011 a Task Force to produce a set of international guidelines and recommendations to assist countries in developing and maintaining their SBR. The guidelines were endorsed by the Conference of European Statisticians in April 2015 and published in September 2015 [1]. The paper provides an overview of the guidelines, which aim to provide practical guidance on establishing and maintaining an SBR and on register’s important role in the production of economic statistics more generally. The paper explains the background for developing the guidelines and the goals followed, i.e. that the guidelines should give recommendations for implementation of sound methods and good practices, provide examples of good practice from countries and, where suitable, build on existing international manuals and guidelines relevant for SBRs. [ABSTRACT FROM AUTHOR]

The main objectives of the Manual are: • To provide guidelines for implementation of the EU Regulation; • To support the harmonisation between the registers in the various Member States; • To explain the Regulation’s provisions. A recent survey has established that the statisticians in the European Statistical System dealing with the maintenance and development of national Statistical Business Registers find useful that they can find in the Manual the information necessary to allow the correct and consistent interpretation of the Regulation and recommendations on best practices of various countries in building and operating registers and in treatment of special cases. Users also appreciate that each chapter is capable of being read separately, whilst still forming part of a coherent set. The EU Regulation also legislates on the exchange of confidential data. This was the pillar on which was built the EuroGroups Register of multinational enterprise groups, managed by Eurostat with the participation of all European countries. A revision of the Manual will be necessary, in order to take on board the provisions of the upcoming new Regulation, as well as some new recommendations originated by the on-going Data Quality Programme for the Statistical Business Registers in the European Statistical System. [ABSTRACT FROM AUTHOR]

This paper describes the development and application of the African Development Bank (AfDB) Statistical Business Register (SBR) guidelines at Statistics Mauritius and the Central Statistics Agency of Ethiopia. A novel approach was implemented to induce the adoption of the guidelines by first operationalising it in the form of a generic SBR system designed to be readily adapted to the context and needs of African National Statistics Offices (NSO). This generic system was based on an earlier SBR system developed at Statistics Mauritius which was redesigned to increase its adaptability and conform to the guidelines. This redesigned system was then adapted to the specificities of Statistics Mauritius, during which it underwent further changes and is currently being adapted to Ethiopia and Swaziland. This approach was instrumental in the swift and successful adoption of the guidelines at Statistics Mauritius and in enticing other African NSOs into adoption and conformance. Several challenges encountered during the application of the guidelines through this approach required various enhancements to be made to the generic SBR system which could eventually be of value in informing the elaboration of the next version of the AfDB guidelines. [ABSTRACT FROM AUTHOR]

Aim. The aim of this article is to analyse legal and illegal trade between Afghanistan and Pakistan in the post 2010 era. According to the complex interdependence, the region is witnessing a regional security complex and the relationship between the actors is characterised by both cooperation and competition (Rana, 2015). In these circumstances, the national security deÞ nes in a narrower sense of protection of a nation from physical attack and safeguarding its economic activities from devastating outside threats (Gandhi, 2010). Both Pakistan and Afghanistan are pursuing their own national interests in the context of national security and sometimes, their national security interests compete with each other. Method. The qualitative method of research was employed to analyse the implications of legal and illegal trade between Afghanistan-Pakistan in post 2010 era. The data was collected from different sources including books, scientiÞ c journals, research articles, newspapers and websites. Results. By using various valuable references, it has been veriÞ ed that beside the political and geological factors, low prices of the smuggled items and corruption are also main reasons of exploitation of the Afghan's transit trade. It has created bad impact on Pakistan's economy and well as it is still threatening other national interests of the country. Conclusion. The study conÞ rms that the menace of smuggling can be decreased through durable policies and well-connected measures. A checks and balances system should be activated in the context in Pakistan and differences with Afghanistan's government should be decreased through a bilateral dialogue process. [ABSTRACT FROM AUTHOR]

Purpose The purpose of this paper is to analyze social profit institutions (SPIs) in the context of the social economy. By drawing on case studies of existing businesses, this paper attempts to situate these businesses more broadly within the social economy.Design/methodology/approach Various case studies are investigated to illustrate the innovative features of each model through a Lean Canvas tool.Findings The findings of the paper provide academics and social entrepreneurs alike more clarity on some of the evolving defining attributes and design features of each of the models SPIs employ.Research limitations/implications One of the future challenges is to devise a framework or categorization system that encompasses all of the new forms of businesses, and hybrids, in a way which reflects their uniqueness and individual design.Practical implications It allows for entrepreneurs in search of a sustainable business model to develop innovative business models and it provides better understanding on how to meet dual objectives.Originality/value The paper proposes a definition for SPIs and establishes the importance of classifying SPIs. [ABSTRACT FROM AUTHOR]

This paper presents a study on a sample of 31 Romanian companies listed on Bucharest Stock Exchange regarding the financial performance for a period of two years. They belong to different fileds of activity. The theme is in the interest of investors in the capital market, but also researchers in the economic field because it highlights the areas with a high market share, but also which company has a superior position in its sector of activity. I have come to the conclusion that the areas of interest to investors are the pharmaceutical, the petroleum and the energy industries. [ABSTRACT FROM AUTHOR]

Innovation driven entrepreneurial firms have an important role in contributing to job creation, generating technological innovation, and stimulating the United States economy. However, there is recently a notable decline in emerging growth entrepreneurial activity in the United States. The Coalition Model proposes ways to maximize opportunities for industry, academia, and government to collaborate and build sustainable relationships, to help convert the current challenges in the U.S. market into opportunities. Designing a new innovation strategy will lead the United States in generating innovation, technology, and economic growth, as well as help the federal government harness new approaches for institutional change. Adopting the Coalition Model (the Model) will not only bridge some of the financial inefficiencies and information gaps associated with investment in innovation driven enterprises, but, perhaps more importantly, will serve as a catalyst for encouraging and stimulating the development of new firms and technologies. The Model is built on the notion of taking a proactive approach to innovation. The model encourages government agencies to fund research and innovation, by identifying specific technological challenges, determining the course of the research that can benefit their needs, collaborating with audiences in the public sector, research institutions, and universities, and private corporations to act on these needs, and advancing commercialization efforts. There are several potential benefits to adopting such a proactive policy. First, it might encourage future engineers, scientists, and innovators to take a risk and become entrepreneurs. Second, it provides direct funding to research and development needs that might not otherwise be used. Third, it can signal that there are opportunities for private investors to invest in such ventures, and perhaps even serve as some sort of certification. Fourth, it will create a direct pathway for small firms to access government procurement. Fifth, it will encourage knowledge spillovers between professionals in government, industry, and academia. Finally, it will increase awareness and incentives for private industry and academia to collaborate with the government. The Model advocates for the Administration to adopt a targeted policy initiative (strategic development tool): the Matchmaker. The Matchmaker is a private-public equity investment fund that will invest in early-stage firms, while also addressing the commercial strategic development needs articulated by the public funding partners--a governmental agency. It will establish a channel for private firms to access government procurement and development. The initiative will function as an autonomous body, and be designed to prevent political capture. The adoption of the strategic Matchmaker fund will be to complement, and not to replace, the private market efforts in financing emerging growth firms. [ABSTRACT FROM AUTHOR]

The complexity of economic life in terms of competition imposed by the market economy increases the role of information in decision making. Its quality depends on the quality of current future innovative decisions taken and thus results. Based on the literature review, various innovation activities can be analysed along three dimensions: targets (the focus areas of eco-innovation: products, processes, marketing methods, organizations and institutions); mechanisms (the ways in which changes are made in the targets: redesign, alternatives and creation); and impacts (effects of eco-innovation on the environment). This paper examines whether using eco-innovation is an opportunity to increase the competitiveness of SMEs at a European level in the following areas: agriculture, manufacturing, environmental industries and construction. The results show that eco-innovation is therefore a powerful instrument, combining reduced negative impact on the environment with a positive impact on the economy and society. [ABSTRACT FROM AUTHOR]

Because it extends the Single Market to the three EFTA States Iceland, Liechtenstein and Norway, the Agreement on the European Economic Area is not an EU external agreement comme les autres. This is particularly salient in the context of the UK withdrawal from the EU. The UK withdrawal will affect the three EFTA States' citizens, businesses and other stakeholders in a way that is comparable to how it will affect citizens, businesses and other stakeholders from the remaining EU Member States. It is thus critical that the two intertwined processes of leaving the EU ("Brexit") and consequently the EEA ("Br(EEA)xit") are closely coordinated if the integrity of the Single Market is to be preserved, in line with EEA rules. The need for coordination between the EU, the UK and the three EFTA States to address the consequences of Brexit for the EEA is a foretaste, albeit specific, of the complex external implications of the UK withdrawal from all other EU external agreements. [ABSTRACT FROM AUTHOR]

The subject of research of this paper is the clusters and their contribution to the development of the family businesses, which are identified as one of the basic pillars for rapid economic development of the contemporary national economies. The relevance of the research of clusters, as an instrument for the development of the family businesses in Republic of Macedonia, stems from the role of the clusters over the reconstruction of the Macedonian economy of one hand, as well as facilitating the private initiative, accelerating the economic growth and improving the employability as factors of the country's economic development, on the other hand. In conditions of globalization of world economy, raises the question of the development of the competitiveness of family businesses and their contribution to the Macedonian economy. Creation of conditions for private sector development by providing a favorable business environment and removing administrative and bureaucratic obstacles, will enable the development of competitiveness of the economy and build a competitive economy capable, which will respond to modern business conditions. The research, conducted over 103 companies, has affirmed the assumptions for the great significance and potential of the clusters for the family businesses in Republic of Macedonia. Through this research an effort has been made to highlight certain aspects of the relation of clusters and family businesses which can be of use for enriching the scientific literature of this area, while the results of the research can be used by the business sector. [ABSTRACT FROM AUTHOR]

Purpose The purpose of this paper is to study the effect of Malaysian Code on Corporate Governance (MCCG, 2007 and 2012) on the performance of the listed companies in Malaysia. The agency theory and resource dependency theories indicate that the firms with strong corporate governance outperform firms with weaker governance. This paper explores this relationship in a developing country like Malaysia having different institutional environment compared to western countries.Design/methodology/approach The study used a sample of 113 listed companies in Malaysia. The study incorporates the endogenous relationship between corporate governance, firm performance and leverage.Findings The study analyzes how the corporate governance framework affected firm performance in Malaysia with the help of self-developed corporate governance index (MCGI). The authors’ findings show that the performance of the firm is positively and significantly related with corporate governance measured by MCGI. Secondly, corporate governance of sample firms shows marked improvements after implementation of MCCG 2012 as compared to MCCG 2007.Originality/value The findings of this paper support the agency and the resource dependency theories. The study contributes to the understanding of the relationship between the corporate governance and firm performance in emerging economy and builds a case for enforcement of strong corporate governance code by government agencies. [ABSTRACT FROM AUTHOR]