Comparing Exit Decisions and Corporate Governance

This study examines how widespread the similarities between U.S. and Japanese corporate governance practices have become. Results suggest that, in spite of convergence in many areas of business practices, Japanese board structures and governance practices still differ greatly from those in the United States -- particularly in SEC-mandated reforms such as independent audit and compensation committees. Our results suggest that corporate governance differences between Japanese and U.S. firms may be driven, in part, by differences in directors' recognition of investors' performance expectations. In particular, results indicate that the exit barriers related to employment influence decision-making for Japanese directors more strongly than they affect U.S. directors' decisions. Board independence -- particularly with respect to audit and compensation committee membership -- reduces the height of perceived exit barriers. Results suggest that, in spite of convergence in many areas of business practices, Japanese board structures and governance practices still differ greatly from those in the United States although it does not conclude that the transition is necessarily desirable

Comparing Japanese Versus U.S. Decision Making in Corporate Governance

This study examines how widespread the similarities between U.S. and Japanese corporate governance practices have become. Results suggest that, in spite of convergence in many areas of business practices, Japanese board structures and governance practices still differ greatly from those in the United States -- particularly in SEC-mandated reforms such as independent audit and compensation committees. Our results suggest that findings concerning corporate governance differences between Japanese and U.S. firms may be driven, in part, by differences in directors' recognition of investors' performance expectations. In particular, our results indicate that the exit barriers related to employment impact decision-making for Japanese directors more strongly than they affect U.S. directors' decisions

Operating autonomy in Chinese-foreign joint ventures

With asymmetries in resource contributions and uncertainty regarding local operations, the degree of operating autonomy given to a venture is a frequent source of conflict between JV parents. To what extent can JV managers decide for themselves, and when do they need parental approval? We analyze this pivotal question drawing on the resource dependence theory to explain how much autonomy was provided to Chinese-foreign JVs. We find that resource dependence on foreign parents' contributions provided a stronger explanation to JV operating autonomy than that of Chinese parents' contributions – the local parent allowed a higher level of autonomy to its JV in comparison to the foreign parent

Multiplicative-innovation synergies: tests in technological acquisitions

Technological innovations enjoy synergies that vary in their speed and magnitude of impact, depending upon whether they are additive or multiplicative in nature. Additive-innovation synergies build incrementally on familiar technologies (as is reflected in the technologies built upon within their patents’ respective antecedents) and the duration of their effect is shorter-lived. Multiplicative-innovation synergies arise from combining greater proportions of diverse technologies and their effects have longer duration. The most-effective organizational-learning processes accompanying exposure to exotic technology streams via technological acquisition will occur if firms have properly invested in adaptive capacity to synthesize inventions using the unfamiliar knowledge. In the first tests of innovation synergies on firm performance, we find that technological novelty in patent content improves return on assets for firms that consistently invested in R&D. Using patent-content scores to characterize whether inventors have integrated greater proportions of exotic technological antecedents into their inventions (or not), we test the impact of innovation synergies on firms’ performance after technological acquisitions. Diversification posture (which could be an alternative explanation for performance differences) is negatively-correlated with innovation synergies in our results

Patent value and the Tobin’s q ratio in media services

Changes in a firm’s backward-dispersion patent-citation score are a useful, non-financial indicator of patent value that is positively-related to Tobin’s q. V-scores, which analyze content patterns between patents’ technological-class codes and those of their antecedents, provide contemporaneous information for investors to assess firms’ economic prospects that is more time-sensitive than forward-looking information such as forward citations. V-score analysis offers useful insights about the nature of post-acquisition learning within technologically-tumultuous industries like media-services