LAND USE-- A PERSPECTIVE FROM SCOTLAND

Land Economics/Use,

Realities of long-term post investment performance for venture-backed enterprises

This paper constructs a model of long-run performance for SMEs that have received venture capital backing. The model explains performance by financial structure. FAME data are used for estimating performance equations over the period 1989 to 2004 for UK businesses in their post-investment period. The econometrics uses robust techniques, including least absolute error (LAE) and Tukey trimean estimation. It is shown that the key determinants of performance (measured by ROSF) are profit margins and risk, with lesser, but significant, roles played by liquidity and gearing. The sample is used to identify consistently high performers, and chronic low performers. From the latter group, two detailed case studies illustrate how chronic low performance can emerge, in each case caused by failure to achieve technological milestones, and thereby failing, ultimately, to convince investors of potential company worth

Practitioner views on financial reporting for smaller entities

This paper has four purposes. First, to establish the policy background leading to a special financial reporting standard for small firms (FRSSE), aimed at reducing compliance costs. An indirect policy implication of this was that small firms would be stimulated, for example, in terms of start-up rate, performance (including survival rate, and profitability, and growth), and contribution to employment and innovation within the economy. Second, to consider the implications for FRSSE itself on compliance costs, and to ask what forms they may take. Third, to analyse new evidence on adopters and non-adopters of the FRSSE. Fourth, to cast this new evidence into a cost effectiveness framework, to judge whether adopters who engage in upgrading of skills to implement the FRSSE had attained a net benefit as compared to non-adopters. The conclusion, based on this preliminary evidence, is that upgrading of skills to implement the FRSSE has indeed led to a significant net benefit

Co-evolution of Information Systems in Fast-Growing Small Firms

The paper examines the co-evolution of different dimensions of information systems for a sample of fast-growing small firms. The investigation uses primary source longitudinal empirical evidence. The data are taken from a large database on the lifecycle experience of one-hundred-and-fifty new business starts over a four-year period. They were collected by face to face interviews with owner-managers of small entrepreneurial firms. Interviews were conducted using an administered questionnaire that covered the agenda of markets, finance, costs, business strategy, the development of a management information system, human capital, organisation and technical change. This work uses primarily the data on management information systems. The basic approach used is to compare the attributes of the fastest and slowest paced firms, as identified by their growth rates. We then examine the evolution of these firms' management information systems. The measures used to identify changes in systems include: capital investment techniques, such as return on investment, residual income, net present value, internal rate of return and payback period; methods for managing costs, like just-in-time management, activity-based costing, quantitative risk analysis, value analysis, strategic pricing and transfer pricing; and using computer applications for storing information, project appraisal, financial modelling, forecasting and sensitivity analysis. 'Time lines' are graphed to show the points at which various features of information systems are introduced (e.g. data storage, forecasting, sensitivity analysis), and derived techniques (e.g. ROI, ABC) implemented. Firms are dichotomised into highgrowth and low-growth groups. Comparisons are made within firms and across firms in terms of the co-evolution of different aspects of their accounting information systems

Venture capital investor behaviour in the backing of UK high technology firms : financial reporting and the level of investment

This paper is an empirical investigation into the ways in which venture capitalists value (and invest in) high technology firms, focusing on financial reporting, risk disclosure and intangible assets. It is based on questionnaire returns from UK investors in diverse sectors, ranging from biotechnology, through software/ computer services, to communications and medical services. This evidence is used to examine: (a) the usefulness of financial accounts; (b) the implications of technopole investment; (c) the extent of investor control over the investee's AIS; and (d) the role of investor opinion (e.g. on disclosure, due diligence and risk reporting) in determining the level of equity provision

Venture capital and risk in high-technology enterprises

We find UK investors and entrepreneurs are significantly concordant in rankings of investments and key factors for risk but significantly discordant on risk classes. Investors emphasise agency risk (e.g., motivation, empowerment, alignment), and entrepreneurs emphasise business risk (e.g., market opportunities)

The origins of American resource abundance

American manufacturing exports became increasingly resource-intensive over the very period, roughly 1880-1920, during which the U.S. ascended to the position of world leadership in manufacturing. This paper challenges the simplistic view that the resource-intensity of manufacturing reflected the country''s abundant geological endowment of mineral deposits. Instead, it shows that in the century following 1850 the U.S. exploited its natural resource potentials to a far greater extent than other countries and did so across virtually the entire range of industrial minerals. It argues that "natural resource abundance" was an endogenous. "socially constructed" condition that was not geologically pre-ordained. It examines the complex legal, institutional, technological and organizational adaptations that shaped the U.S. supply-responses to the expanding domestic and international industrial demands for minerals and mineral-products. It suggests that the existence of strong "positive feedbacks"--even in the exploitation of depletable resources--was responsible for the explosive growth of the American minerals economy.economic development an growth ;

The Silurian Hypothesis: Would It Be Possible to Detect an Industrial Civilization in the Geological Record?

If an industrial civilization had existed on Earth many millions of years prior to ourown era, what traces would it have left and would they be detectable today? We summarize the likely geological fingerprint of the Anthropocene, and demonstrate that while clear, it will not differ greatly in many respects from other known events in the geological record. We then propose tests that could plausibly distinguish an industrial cause from an otherwise naturally occurring climate event

Early Twentieth Century Productivity Growth Dynamics: An Inquiry into the Economic History of “Our Ignorance”

A marked acceleration of total factor productivity (TFP) growth in U.S. manufacturing followed World War I. This development contributed substantially to the absolute and relative rise of the domestic economy's aggregate TFP residual, which is observed when the 'growth accounts' for the first quarter of the twentieth century are compared with those for the second half of the nineteenth century. Two visions of the dynamics of productivity growth are germane to an understanding of these developments. One emphasizes the role of forces affecting broad sections of the economy, through spillovers of knowledge and the diffusion of general purpose technologies (GPT's). The second view considers that possible sources of productivity increase are multiple and idiosyncratic. Setting aside possible measurement errors, the latter approach regards sectoral and economy-wide surges of the TFP growth to be simply the result of which carried more weight than others. Although there is room for both views in an analysis of the sources of the industrial TFP acceleration during the 1920's, we find the evidence more compelling in support of the first approach. The proximate source of the TFP surge lay in the switch from declining or stable capital productivity to a rising output-capital ratio, which occurred at this time in many branches of manufacturing, and which was not accompanied by slowed growth in labor productivity. The 1920's saw critical advances in the electrification industry, the diffusion of a GTP that brought significant fixed capital-savings. But the same era also witnessed profound transformations in the American industrial labor market, followed the stoppage of mass immigration from Europe; rising real wages provided strong impetus to changes in workforce recruitment and management practices that were underway in some branches of the economy before the War. The productivity surge reflected the confluence of these two forces. This historical study has direct relevance for policies intended to increase the rate of productivity growth. In many respects, the decade of the 1920's launched the US economy on a high-growth path that lasted until the 1970's. If we hope to return to the growth performance of that era, we would be well advised to understand how it began.