Windfalls of Emperors’ Sojourns: Stock Market Reactions to Chinese Firms Hosting High Ranking Government Officials

Research summary: We contribute to the corporate political activity (CPA) literature by showing that investors value companies that host visits of high-ranking government officials (President and Premier). We argue that investors may value host official visits for two reasons: (1) the signal received about possibility of firm accessing government-controlled resources via promotion or protection; and (2) the certification effect from such high-powered visitors elevating the firm's reputation and legitimacy. Results from an event study analysis of 84 high-ranking government official visits in China from 2003 to 2011 indicate that investors responded positively to host firms as reflected by stock market performance. Furthermore, the greatest positive reactions accrued to firms experiencing weaker prior period financial performance and to firms that are privately compared to state-controlled. Managerial summary: Do visits by high-ranking government officials influence firm stock market performance? Studying a sample of Chinese public firms that hosted 84 visits by the Chinese President and the Premier from 2003 to 2011, we find that investors reacted positively to such visits compared with a group of non-host firms from the same industry and with similar financial performance and size. In addition, firms with weaker prior financial performance and private firms benefit the most from hosting such visits. Our findings imply that hosting visits of high-ranking government officials can signal future government-controlled resource inflows and boost host firms' reputation and legitimacy

Strategic Competitiveness in the 1990s: Challenges and Opportunities for U.S. Executives

U.S. firms face a major global competitiveness challenge. Although the problems relate, in part, to differences in the economic structure, history and cultural differences between the U.S. and foreign rivals, these factors may not explain as much of the variance in competitiveness as they did in the past. Competitiveness problems are also linked to a number of strategic factors under the control of managers. Among them are the absorption of managerial energy in mergers and acquisitions, increasing levels of debt, increasing firm size, greater firm diversification, lack of investment in human capital and inappropriate corporate culture. In response to these problems, many firms are restructuring. When executed properly, restructuring can help managers regain strategic control and improve the competitiveness of their companies. However, restructuring efforts must be accompanied by a renewed emphasis on competitive strengths, improvements in human resource development programs, a refocus on innovation and quality, promotion of an entrepreneurial culture and a global, long-term strategy

Walking the Talk: A Multistakeholder Exploration of Organizational Authenticity, Employee Productivity, and Post-Merger Performance

Does consistency between how a firm treats employees (what it does) and its espoused employee-oriented values (what it says) affect employee productivity? Furthermore, given that the stakeholder theory perspective holds that what happens to one stakeholder influences other stakeholders, does this sort of consistency vis-à-vis a firm’s customers also influence employee productivity? We empirically investigate the influence of organizational authenticity—defined as consistency between a firm’s espoused values and realized practices—in the context of a merger, and specifically during post-merger integration. Our findings show that a lack of organizational authenticity in terms of both under-promising and over-promising to both employees and customers is associated with lower productivity, which in turn is related to long-term merger performance, thus affecting outcomes for shareholders. These findings support the importance of authenticity and should therefore be of interest to executives responsible for ensuring the consistency between what a firm says and what it does, as well as those who participate in and study the merger integration process. In particular, we propose stakeholder theory as a helpful lens for examining the merger integration process as well as other joint actions such as strategic alliances

Are Acquisitions a Poison Pill for Innovation?

The recent wave of acquisition activity may be damaging the innovative capabilities of American firms, thus making them less competitive in the global marketplace. In fact, acquisitions often serve as a substitute for innovation, which may cause further neglect of internal research and development (R&D) programs. Additionally, acquisitions often lead to increases in leverage, diversification, and absorb significant amounts of executive time, which may lead to reduced managerial commitment to innovation. In this article, evidence is presented suggesting that acquisition activity may result in reductions in R&D inputs and outputs. On average, the 191 firms in the sample reduced their allocations to R&D relative to their competitors following acquisitions. Furthermore, the firms also experienced reductions in the number of patents. Implications from this evidence are offered for executives and acquisition strategies. Specifically, based on our results, we propose that firms can compensate for the negative effects of acquisitions. Moreover, acquisitions, when properly planned and targeted, may enhance or complement a firm\u27s innovation processes. Firms should search for acquisitions that complement R&D projects, facilitate product commercialization and/or enhance their core competences

Effects of Acquisitions on R&D Inputs and Outputs

Making acquisitions, although a popular strategy, may not always lead to positive firm performance. Researchers have offered several explanations for this relationship. One is that acquisitions lead to lower investments in R&D and curtail the championing process whereby organization members internally promote new products and processes in firms. The current research found that acquisitions had negative effects on R&D intensity and patent intensity

Analysis of the Aspergillus fumigatus Proteome Reveals Metabolic Changes and the Activation of the Pseurotin A Biosynthesis Gene Cluster in Response to Hypoxia

The mold Aspergillus fumigatus is the most important airborne fungal pathogen. Adaptation to hypoxia represents an important virulence attribute for A. fumigatus. Therefore, we aimed at obtaining a comprehensive overview about this process on the proteome level. To ensure highly reproducible growth conditions, an oxygen-controlled, glucose-limited chemostat cultivation was established. Two-dimensional gel electrophoresis analysis of mycelial and mitochondrial proteins as well as two-dimensional Blue Native/SDS-gel separation of mitochondrial membrane proteins led to the identification of 117 proteins with an altered abundance under hypoxic in comparison to normoxic conditions. Hypoxia induced an increased activity of glycolysis, the TCA-cycle, respiration, and amino acid metabolism. Consistently, the cellular contents in heme, iron, copper, and zinc increased. Furthermore, hypoxia induced biosynthesis of the secondary metabolite pseurotin A as demonstrated at proteomic, transcriptional, and metabolite levels. The observed and so far not reported stimulation of the biosynthesis of a secondary metabolite by oxygen depletion may also affect the survival of A. fumigatus in hypoxic niches of the human host. Among the proteins so far not implicated in hypoxia adaptation, an NO-detoxifying flavohemoprotein was one of the most highly up-regulated proteins which indicates a link between hypoxia and the generation of nitrosative stress in A. fumigatus

Theory and research in strategic management: Swings of a pendulum

The development of the field of strategic management within the last two decades has been dramatic. While its roots have been in a more applied area, often referred to as business policy, the current field of strategic management is strongly theory based, with substantial empirical research, and is eclectic in nature. This review of the development of the field and its current position examines the field’s early development and the primary theoretical and methodological bases through its history. Early developments include Chandler’s (1962) Strategy and Structure and Ansoff’s (1965) Corporate Strategy. These early works took on a contingency perspective (fit between strategy and structure) and a resource-based framework emphasizing internal strengths and weaknesses. Perhaps, one of the more significant contributions to the development of strategic management came from industrial organization (IO) economics, specifically the work of Michael Porter. The structure-conduct-performance framework and the notion of strategic groups, as well as providing a foundation for research on competitive dynamics, are flourishing currently. The IO paradigm also brought econometric tools to the research on strategic management. Building on the IO economics framework, the organizational economics perspective contributed transaction costs economics and agency theory to strategic management. More recent theoretical contributions focus on the resource-based view of the firm. While it has its roots in Edith Penrose’s work in the late 1950s, the resource-based view was largely introduced to the field of strategic management in the 1980s and became a dominant framework in the 1990s. Based on the resource-based view or developing concurrently were research on strategic leadership, strategic decision theory (process research) and knowledge-based view of the firm. The research methodologies are becoming increasingly sophisticated and now frequently combine both quantitative and qualitative approaches and unique and new statistical tools. Finally, this review examines the future directions, both in terms of theory and methodologies, as the study of strategic management evolves.Yeshttps://us.sagepub.com/en-us/nam/manuscript-submission-guideline

What Drives the Productive Efficiency of a Firm? The Importance of Industry, Location, R&D, and Size

This paper investigates the factors that explain the level and dynamics of manufacturing firm productive efficiency. In our empirical analysis, we use a unique sample of about 39,000 firms in 256 industries from the German Cost Structure Census over the years 1992-2005. We estimate the efficiencies of the firms and relate them to firm-specific and environmental factors. We find that (1) about half the model's explanatory power is due to industry effects, (2) firm size accounts for another 20 percent, and (3) location of headquarters explains approximately 15 percent. Interestingly, most other firm characteristics, such as R&D intensity, outsourcing activities, or the number of owners, have extremely little explanatory power. Surprisingly, our findings suggest that higher R&D intensity is associated with being less efficient, though higher R&D spending increases a firm's efficiency over time