Less is more, or not? On the interplay between bundles of Slack Resources, Firm Performance and Firm Survival

This is the author accepted manuscript. The final version is available from the publisher via the DOI in this recordAlthough a significant body of research has investigated the independent effects of distinct types of slack resources, current theoretical and empirical work does not sufficiently clarify how bundles of slack resources affect firm outcomes. Drawing on the resource constraints literature and the slack literature, we investigate how distinct bundles of financial and human resource slack influence firm performance and survival. Using a sample of 4715 European information and communication technology firms, we show that neither parallel resource abundance (having slack in financial and human resources) nor parallel resource constraints (lacking slack in financial and human resources) are optimal for firm performance and survival. However, firms with selective constraints that combine slack in financial resources with constraints in human resources exhibit superior performance without decreased survival prospects. Taken together, this study extends current research by providing a more nuanced view of the relationships between slack resources, firm performance, and firm survival.Hercules FoundationThe Research Foundation - Flander

Untangling the multiple effects of slack resources on firms’ exporting behavior

This is the author accepted manuscript. The final version is available from Elsevier via the DOI in this record.Drawing on a behavioral theory perspective, we investigate how distinct types of slack resources affect distinct aspects of firms’ exporting behavior. Using longitudinal data of Belgian manufacturing firms, we find that financial and human resource (HR) slack affect the probability of exporting positively at a diminishing rate. Controlling for the export decision, we find that HR slack affects export intensity negatively, while financial and HR slack affect export diversity positively at a diminishing rate. Findings are economically meaningful, especially for new exporters. Taken together, our study adds new insights at the nexus of the international business and slack literatures.Research Foundation - Flander

The consequences of financial leverage: Certified B Corporations’ advantages compared to common commercial firms

This is the final version. Available on open access from Springer via the DOI in this recordFirms usually need to attract debt to form and grow, but increasing financial leverage also entails increased risks and costs for stakeholders, such as customers and employees. Accordingly, past research suggests that for common commercial firms (CCFs), which prioritize profits, higher leverage leads to lower sales growth and higher employment costs. However, Certified B Corporations (CBCs) distinguish themselves by having a credible prosocial mission and, therefore, might be better insulated against the adverse effects of higher leverage. Using a European multi-country matched sample of 136 CBCs and 136 CCFs, we find that the negative relationship between leverage and sales growth and the positive relationship between leverage and employment costs are weaker for CBCs than CCFs. Taken together, due to their certified pro-social mission, CBCs enjoy an advantage in debt financing compared to CCFs.Antwerp University Research Fund (BOF)Research Foundation Flanders (FWO

Should we be conservative or aggressive? SME managers’ responses in a crisis and long-term firm survival

This is the author accepted manuscriptPast research shows that during a crisis, managers of publicly-held firms often adopt a “conservative” approach focused on protecting the existing core of their firms by decreasing investments and hoarding precautionary cash. By doing so, managers decrease firms’ short-term failure rates. However, the literature says little about how managers of private, Small and Medium-sized Enterprises (SMEs) (should) act during a crisis. To address this question, we draw on the Conservation of Resources (COR) theory. Empirically, we use longitudinal data from 38,885 Belgian SMEs’ responses to the 2008-09 financial crisis. Consistent with our expectations, we find that an “aggressive” approach focused on resource investment during the crisis decreases SMEs’ failure rates for up to a decade after the crisis. Further, younger SMEs, and especially those in industries with more growth opportunities, adopt aggressive approaches. Overall, the results show that SMEs need to be aggressive during the crisis to ensure their longterm survival. Moreover, contrary to current depictions of younger SMEs as being vulnerable, and especially so in crises, our evidence highlights that they are surprisingly aggressive when being confronted with a crisis, relative to their older peers.Antwerp University Research Fund (BOF)Research Foundation Flanders (FWO)Hercules Foundatio

Equity crowdfunding, market timing, and firm capital structure

This is the author accepted manuscript. The final version is available from Springer via the DOI in this recordFinance studies on the impact of market timing (or “windows of opportunity”) have almost exclusively focused on publicly traded firms and initial public offering (IPO) firms. We provide first-time evidence on the impact of market timing on the capital structure of private firms that raise initial equity crowdfunding (ECF). We capture market timing by differentiating between ECF campaigns launched in hot markets, characterized by high ECF volumes, versus cold markets. Our sample includes firms financed via either Crowdcube or Seedrs, the two largest UK ECF platforms. Consistent with the idea of hot markets serving as windows of opportunity, we find that in hot markets, ECF firms set higher targets, collect more overfunding, and thus raise more equity capital than ECF firms in cold markets. Surprisingly, however, and inconsistent with a market timing theory of capital structure, we fail to find differences between the leverage ratios of hot and cold market firms from the year of the ECF campaign. This finding is explained by hot market ECF firms contemporaneously rebalancing their capital structure by attracting more debt, especially financial debt. We discuss the theoretical and practical implications of these findings.Research Foundation – FlandersRoyal Flemish Academy of Belgium for Science and the Art

CROSS-BORDER VENTURE CAPITAL AND THE DEVELOPMENT OF PORTFOLIO COMPANIES

This paper studies how cross-border venture capital investors as opposed to domestic venture capital investors influence the development of their portfolio companies. For this purpose, we use a longitudinal research design and track sales from the year of initial venture capital investment up to seven years after this investment in 692 European technology-based companies. Findings demonstrate how companies backed by cross-border venture capital investors initially exhibit lower sales growth compared to companies backed by domestic investors. After a couple of years, however, companies backed by cross-border investors exhibit higher sales growth compared to companies backed by domestic investors. Finally, companies that raise finance from a syndicate comprising both domestic and cross-border investors develop into the biggest sales generators. Overall, this study provides a more textured understanding of the role played by venture capital investors as their portfolio companies develop and thereby require different resources or capabilities over time.venture capital, cross-border, international, portfolio company development

New Frontiers in Entrepreneurial Finance Research

This book provides an updated view of new trends in entrepreneurial finance, with the aim of guiding academics and non-academics alike that want to gain a deeper understanding of this field. It collects recent contributions from scholars from all over the world. Each chapter provides new empirical or theoretical evidence on fundamental issues related to entrepreneurial finance, including business angels, crowdfunding, Initial Coin Offerings, Mini bonds, public support and more. Besides reviewing the recent trends in the field, the book also highlights new avenues for research, and implications for practitioners

Cross-protection or enhanced symptom display in greenhouse tomato co-infected with different Pepino mosaic virus isolates

The potential of three mild Pepino mosaic virus (PepMV) isolates, belonging to the CH2, EU and LP genotypes, to protect a tomato (Solanum lycopersicum) crop against an aggressive challenge isolate of the CH2 genotype was assessed in greenhouse trials and PepMV symptoms were rated at regular time points. After challenge infection, enhanced symptom display was recorded in plants that were pre-inoculated with a protector isolate belonging to a different genotype (EU, LP) from the challenge isolate. A quantitative genotype-specific TaqMan assay revealed that in these plants, the accumulation of the challenge isolate only temporarily slowed down. By contrast, efficient cross-protection was obtained using the mild isolate of the CH2 genotype, and in this case the challenge isolate was barely detectable in the pre-inoculated plants. These results suggest that the interaction between PepMV isolates largely depends on RNA sequence homology and that post-transcriptional gene silencing plays an important role in cross-protectio