Topics in entrepreneurship and family business management

Chapter 1: Nepotism - CEO Succession, Ownership and Enterprise Performance By JAN-PHILIPP AHRENS, SANDRA GOTTSCHALK AND MICHAEL WOYWODE We consider the effects of CEO successions on enterprise performance in medium-sized enterprises with strong ownership concentration (family firms). By evaluating an unique data set we show that firms which install relatives or heirs as CEO successors perform worse as compared to firms which install external CEO successors. Furthermore we identify the driving forces behind this inferior performance as lower human capital and a lower propensity to implement organizational changes, which is presumably caused by limited selectivity of CEO succession contests due to concentrated ownership structures. Interestingly, no performance gap is observable for well-chosen high human capital family successors. (JEL: E32, G30, J24, L25, M51) Keywords: CEO succession, ownership structure, nepotism, agency costs, firm performance. Chapter 2: Inside CEO Successions in Family Firms: Should Predecessors Stay Active or Cultivate Roses? By JAN-PHILIPP AHRENS, MICHAEL WOYWODE, AND JAN ZYBURA Employing an unique data set on CEO successions, we analyze the circumstances under which departing CEOs stay active within their enterprise subsequent to a CEO succession and highlight enterprise performance implications. We find that the likelihood of predecessor activity is increased by family succession, nepotism and tacit knowledge, but reduced by the successor’s human capital, successor’s ownership and corporate age. The performance impact of prolonged predecessor activity is positive for successors with low human capital, but turns negative with increased successor human capital, while this negative impact is amplified by the degree of influence of the preceding CEO. (JEL: G32, G34, L25, M1, M51) Keywords: CEO succession, firm performance, family owned business, human capital, leadership transition Chapter 3: Gender Preferences in CEO Successions in Family Firms: Family Characteristics and Human Capital of the Successor By JAN-PHILIPP AHRENS, ANDREAS LANDMANN, AND MICHAEL WOYWODE We investigate labor market constraints in CEO succession contests devising an unique data set on CEO successions in enterprises with concentrated ownership and control. We find that a preference for male family heirs limits labor market selectivity: Family successions are significantly more likely to occur when a son is among the predecessor’s children as compared to daughters. Sons among the children increase the likelihood of nepotistic successions, while in turn female family successors are equipped with higher human capital due to tougher selectivity criteria. Furthermore, the regional industry supply of CEO resources influences the observed human capital of installed successors. (JEL: G30, J13, J24, L26, M51) Keywords: CEO succession, family firms, family characteristics, human capital, promotion decisions. Chapter 4: Restructuring, Human Capital, and Enterprise Performance in CEO Successions in Family Firms By JAN-PHILIPP AHRENS AND MICHAEL WOYWODE Devising an unique data set we analyze managerial actions and their performance impact during CEO successions in family firms. We find that corporate change unleashes additional performance due to accumulated improvement potentials from the pre-succession period. High human capital successors implement more changes and perform significantly better when compared to low human capital successors. Furthermore, the amount of observed changes is subject to the economic contingency and is highest in CEO successions in turnaround situations. In particular reviews of the supplier relations, the product portfolio, and the compensation scheme were found to significantly enhance performance. (JEL: G30, G34, L25, M10, M51) Keywords: CEO succession, family firms, organizational restructuring, turnaround management, human capital, firm performance. Chapter 5: Entrepreneurship under Imperfect Institutions By JAN-PHILIPP AHRENS AND MICHAEL WOYWODE We consider the effects of imperfect institutions on entrepreneurial activity. Employing a microeconomic model, we argue abnormal uncertainty and transactions costs reduce profitability and volume of entrepreneurial activity while companies complying with good practices enjoy rewards in the optimal contracts. However, applied to an international context, counterintuitive niche cases where imperfect institutions enhance the wealth of nations occur, mirroring seemingly contrary findings in the development literature. Policies and business strategies to escape imperfect institutions are discussed, casting light on medieval merchant guilds or township and village enterprises and arguing for a holistic approach when introducing policies for institutional change. (JEL: D02, D21, D82, D86, F23, L26, O34, O43, R00) Keywords: Entrepreneurship, Principal-Agent Model, Institutions, Institutional Change, Development Economic

Stau Search in IceCube

The tau lepton’s supersymmetric partner, the stau, appears in some models as the next-to-lightest supersymmetric particle. Their deacy process into the lightest superpartner is usually suppressed by supersymmetry breaking, which makes it a long-lived particle. In this scenario, its signature is a long, minimally ionizing track when traveling through the IceCube detector. Independent of their primary energy, the stau tracks appear like low-energy muons in the detector. A potential signal of staus would thus be an excess over muon tracks induced by atmospheric muon neutrinos. Our analysis focuses on the region around the horizon as here the ratio between stau signal and atmospheric background is largest. We will present the first sensitivity to constrain the stau mass using IceCube and demonstrate the potential of this analysis with future improvements

Measuring the Neutrino Cross Section Using 8 years of Upgoing Muon Neutrinos Observed with IceCube

The IceCube Neutrino Observatory detects neutrinos at energies orders of magnitude higher than those available to current accelerators. Above 40 TeV, neutrinos traveling through the Earth will be absorbed as they interact via charged current interactions with nuclei, creating a deficit of Earth-crossing neutrinos detected at IceCube. The previous published results showed the cross section to be consistent with Standard Model predictions for 1 year of IceCube data. We present a new analysis that uses 8 years of IceCube data to fit the ν$_{μ}$ absorption in the Earth, with statistics an order of magnitude better than previous analyses, and with an improved treatment of systematic uncertainties. It will measure the cross section in three energy bins that span the range 1 TeV to 100 PeV. We will present Monte Carlo studies that demonstrate its sensitivity