C. Timothy Koeller

Profitability, Uncertainty, and Firm Size

This paper examines the connections between variations in profit and loss rates among firms in small-firm and large-firm size classes as reflections of uncertainty. We find that, within industries, such variations are particularly great for firms in small-firm size classes, leading to operating policies for small firms best characterized as entrepreneurial. Large firms, in contrast, faced with less uncertainty in earning profit, appear to adopt policies that manifest an emphasis on strategic planning.

Structural Stability in Models of American Trade Union Growth

Recent interest in trade union activity has led to the development of econometric models of union membership growth. This paper examines the structural stability of two of the leading models—Ashenfelter-Pencavels and Bain-Elsheikhs—each of which claimed to have captured the primary determinants of union growth in the twentieth century. The models were reestimated using revised, corrected, and extended membership data, and a nonlinear, maximum-likelihood procedure was employed to estimate the shift-point for each model. Contrary to previous studies, we found evidence of a break in the structure of each model. And unlike earlier work that hypothesized a World War II break-point, our estimated point was 1937–1938, most likely reflecting the impact of the Wagner Act.

Union membership, market structure, and the innovation output of large and small firms

The determinants of the extent of union membership, industry concentration, and the innovation output of large firms and small firms are examined in a simultaneous-equations model. Data for 246 U.S. manufacturing industries are used to determine: (1) that there are significant interdependencies among these endogenous variables; (2) that contrary to recent findings, unionization is significantly lower in industries with high concentration and high innovation output; and (3) that although high unionization modestly reduces small-firm innovation output (as compared with large-firm innovation output), there is not a large difference in the effects of small-firm and large-firm innovation output on the extent of union membership across industries.

Employer unfair labor practices and union organizing activity: A simultaneous equation model

A model is estimated that simultaneously determines the extent of alleged employer unfair labor practices and the outcomes of union organizing activity using biennial, state-level data for 1968–1982. The results suggest that employers are unlikely to use ULPs as a union-avoidance strategy when unions are expected to win representation elections and that the extent of employer ULPs depends on legislative, industrial relations, and workplace characteristics within a state. ULPs also increase the likelihood that workers will choose union representation.

Union activity and the decline in American trade union membership

This paper extends recent research on the determinants of the decline in union membership in the United States. Using biennial state-level data for a set of years between 1958 and 1982, my model tests “union organizing,” “structural,” “management opposition,” and “public policy” hypotheses concerning union membership and suggests improved specifications of each of these hypotheses. The paper also examines the relative importance of each factor in explaining the decline in unionization. The results support each of the hypotheses and confirm previous findings that changes in the structure of the labor force are most important in explaining union membership decline.

Wages, trade union activity, and the political environment of unionism: A simultaneous equation model

This paper develops a simultaneous equation model examining interrelationships among measures of union activity, the political environment of unionism, and relative real earnings across the continental United States in 1970. Its findings generally confirm the model’s theoretical rationale, particularly the hypothesized influence of the political environment on union activity, a conclusion which reverses other research findings. Similar results were obtained for the influence of union activity on relative real earnings. The model was also estimated over the subsamples of right-to-work and non-right-to-work states, and the structural variations so estimated were generally significant.

Technical Human Capital Diversification, Innovation Output and Market Structure in U.S. Manufacturing Industries

This study examines the effects of a human capital-based measure of technology diversification on innovation output and market structure across 239 U.S. manufacturing industries. Technology diversification is measured using data on the occupational diversification of an industry’s engineering employment, unlike other studies that have used measures based on patent count data. Also in contrast to related studies, it incorporates a direct measure of innovation output. The study’s results suggest that, in industries with modest technological opportunity, greater technology diversification is associated with lower innovation output. Its findings also suggest that higher technology diversification may be associated with higher market power.

The Composition of Founder Team Human Capital and Economic Success in New Ventures

This study examines the human capital composition of the individual members of new venture founder teams and its importance for new venture performance. Using a model of team production we analyze key human capital elements of these individuals in measuring composition, as well as team monitoring efforts, in contrast to prior efforts measuring team-level heterogeneity as an enabler of organizational performance. Using a sample of 159 technology-driven, German founder teams, we show that under certain conditions team members’ prior human capital, and team monitoring efforts, are significantly related to new venture performance.

An Economic Analysis of New Venture Profit and Growth and Their Interrelations

This paper examines interrelationships between profit and growth, and their determinants for technology driven, independent new ventures. Studies of new venture performance have generally emphasized growth, with little treatment of its relationship to other performance measures. The study’s theoretical framework adopts aspects of Marris’ model. It also incorporates disequilibrium effects on venture performance. The framework is tested using data for over 100 German new ventures in their first six years of existence.The interrelations and determinants of profit and growth are empirically examined using causality and regression analyses. We find that profit exhibits a causal relationship to employment growth, but not to sales growth. New venture growth (sales and employment) does not exhibit significant effects on new venture profits. Finally we find both similarities and differences between the determinants of growth and profit. These results suggest that the specification of models of each of these two measures should be conducted independently, drawing upon the relevant theory related to each of these dependent variables, and recognizing the interrelationship between them.

IT Investments, Firm Performance and Tobin's Q: An Analytical Investigation

This paper attempts to analytically examine and address some of the limitations present in models examining the effects on firm performance of IT investment and to clarify the use of Tobin’s q as a potentially attractive measure of firm performance in empirically evaluating the effectiveness of IT investments. Using a set of analytical models it suggests possible improvements to the specification of empirical models examining the effect of firms’ IT investments on Tobin’s q, including the explicit incorporation of time-lag effects and market conditions.