Pioneering and first mover advantages: the importance of business models

Pioneering has both advantages and disadvantages. Which effect will predominate will depend to a large extent on: (i) the business model that the pioneer utilizes to exploit the first-mover advantages (FMAs) associated with early entry: (ii) the business models that late entrants adopt to attack the pioneers; and (iii) the business model that the pioneer uses to respond to these attacks. Studies that do not explicitly control for the business models being used by firms will provide biased estimates of the importance (or sustainability) of first-mover advantages

Pioneering and first mover advantages: the importance of business models

Pioneering has both advantages and disadvantages. Which effect will predominate will depend to a large extent on: (i) the business model that the pioneer utilizes to exploit the first-mover advantages (FMAs) associated with early entry: (ii) the business models that late entrants adopt to attack the pioneers; and (iii) the business model that the pioneer uses to respond to these attacks. Studies that do not explicitly control for the business models being used by firms will provide biased estimates of the importance (or sustainability) of first-mover advantages

International acquisitions:: Do they create value for shareholders?

This paper empirically tests whether international acquisitions -- in contrast to their domestic counterparts -- on average create value for the shareholders of acquiring firms. We find that whereas US international acquisitions in Britain and Canada create no value, US acquisitions in Continental Europe create significant value. We try to explain these results by examining: (1) the governance characteristics of the acquiring firms; (2) the competitiveness of the market for corporate control in the different countries; and (3) the characteristics of the acquisition and the acquiring firms. Our results suggest that in the main, investors do not consider international expansion through acquisitions as a worthwhile investment unless the acquiring firm has intangible assets to exploit abroad.

Corporate restructuring: A symptom of poor governance or a solution to past managerial mistakes?

If one was to examine the academic literature for an explanation of the restructuring that we have witnessed in the last decade, the most prominent explanation to emerge would be the agency explanation. According to this explanation, firms with poor internal governance devices fail to monitor their managers appropriately who, as a result, engage in self-serving activities such as excessive diversification and short-term investments. This, in turn, leads to poor performance which invites the attention of corporate raiders who force the management of the firm either to undertake painful restructuring or become a takeover target. In this article, Costantinos Markides and Harbir Singh challenge this explanation by arguing that restructuring may be brought about by honest managerial mistakes in the choice of organizational structure rather than managerial excesses allowed by poor corporate governance. They further argue that these managerial mistakes are not identified and corrected in time because restructuring firms lack the appropriate internal controls. In this article, they offer empirical evidence to support their arguments.