Jacques-Laurent Ravix

The governance of innovative firms: An evolutionary perspective

Corporate governance has been in the recent years one of the most debated issues in conventional economic approaches. Agency theory combined with financial indicators has particularly contributed to the development of shareholder value as a key concept in companies’ governance both at a theoretical and empirical level. We argue that an evolutionary perspective can be developed on the governance of innovative firms since (1) conventional economic approaches only consider a restricted part of this complex issue, and (2) this restricted vision applied in practice has driven the economic system into major coordination problems and turbulences. On the basis of empirical investigations into the telecommunications industry, and guided by a simple model of evolutionary game, we propose new principles of corporate governance centered upon managerial entrepreneurship and its role on innovation and industry dynamics. The outcome is a set of rules of conduct for the manager and the shareholder.

Corporate governance and the governance of knowledge: rethinking the relationship in terms of corporate coherence

Abstract Corporate governance and the governance of knowledge were for a long time distinct fields of analysis. Reasons for this incompatibility are linked to the restricted vision of corporate governance supported by shareholder value which essentially refers to information rather than knowledge. In this paper, we argue that other visions of corporate governance exist which are also closer to knowledge dynamics and knowledge governance problems. We elaborate thus on the possible reconciliation between corporate governance and the governance of knowledge. We sustain that each key actor (the manager and the investor) embodies a piece of diversified and localized knowledge related to his/her specific domain and field of experience, and these different modules of knowledge have to be recombined by an appropriate mode of corporate governance that stimulates corporate development. In this perspective, the reconciliation really appears essential since managers, by defining and selecting innovative processes, and investors, by determining the money that is invested to sustain these processes, both take part in the creation and governance of new knowledge by the firm. We show that this reconciliation can be based on the notion of corporate coherence of the cognitive firm that allows replacing the conventional conflicting vision of corporate governance by a new vision based on cooperation between managers and investors that collectively contribute to corporate development and coherence.

THE FIRM AND ITS GOVERNANCE OVER THE INDUSTRY LIFE-CYCLE

Uniformity in modes of governance of the firm is now widely debated. So far, the predominant thesis was that there should be a superior model promoting optimality by disclosure of information and transparency. But today this thesis is greatly contested, since the adoption of a unique and universal set of rules and arrangements neglects the diversity and heterogeneity of firms, industries, as well as institutional contexts (Becht et al., 2005). Moreover, evidence shows that this unique model of governance tends to generate major failures and turbulence, especially in innovative industries (Fransman, 2002; Lazonick and O’Sullivan, 2002; Krafft and Ravix, 2005). What emerges as a result is that different types of rules and norms should govern differently entrepreneurial as well as public firms, depending on the industry in which they operate and the stage of development of this industry.

The Governance of the Knowledge-Intensive Firm in an Industry Life Cycle Approach

Today, a growing literature develops on the idea that different types of rules and norms should govern differently entrepreneurial and public firms, depending on the industry in which they operate and the stage of development of the industry. This chapter contributes to this new literature by adding the empirical dimensions that are pointed out in the industry life cycle (ILC) literature. The purpose is to investigate what the governance of the knowledge-intensive firm may look like in an industry life cycle approach.

Corporate Governance, Industry Dynamics and Firms Performance: An Empirical Analysis of a Best Practice Model

Ce papier entend relier gouvernement d’entreprise, dynamique industrielle et performance des firmes. Dans cette perspective, nous nous focalisons sur l’impact que peut avoir l’application d’un modele normatif de gouvernement d’entreprise par la valeur actionnariale sur la dynamique industrielle et les performances des firmes mesurees en termes economiques mais aussi financiers. Au niveau theorique, ce papier propose un cadre d’analyse integre rassemblant les questions de gouvernement d’entreprise et de dynamique industrielle. Toutefois, le papier avance egalement que l’analyse combinee de ces questions requiert d’importantes investigations dans le domaine empirique. Dans une etude de cas, nous montrons que l’adoption du modele normatif de gouvernement d’entreprise dans l’industrie des equipements specialises de telecommunications a contribue a creer de larges perturbations dans la dynamique industrielle affectant les performances a la fois economiques et financieres des firmes.Dans une etude econometrique, en combinant deux bases de donnees (Corporate Governance Quotient et Datastream), nous montrons les differences d’impact de l’application du modele normatif de gouvernement d’entreprise sur la dynamique industrielle, et nous confirmons l’observation des amplifications a la hausse et a la baisse deja notee, au moins au niveau de la performance sur les marches boursiers.Classification JEL – G30, L20, L60, L80, L90.

The Austrian Theory of Institutions Applied to Science-Industry Relationships: The Relevance of Innovative Institutions

This contribution aims at using an Austrian approach of institutions to discuss specific institutional arrangements in the current working of science-industry relationships. By combining distinctive characteristics between Mengers and Hayeks research programs, we establish a typology of institutions that goes beyond the usual way to approach business institutions and allows us to identify transitory types of institutional arrangements called “innovative institutions”. We apply that Austrian approach of institutions and address its relevance to highlight some puzzling issues derived from empirical evidence. Then, innovative institutions reveal particularly suited to understand how public and private research work together in science-industry relationships.

Theories of the firm

Recent works on the theory of the firm have demonstrated how difficult it is to fully grasp and qualify this subject (L. Putterman, 1986; G.C. Archibald, 1987; B.R. Holsmtrom-J. Tirole, 1989). It is presented as a juxtaposition of different subjects since “obviously, no single model or theory will capture all elements of the puzzle” (B.R. Holmstrom — J. Tirole, 1989, p. 65). The suggested subjects are supposed to integrate the empirical aspects lacking in the abstract notion of the firm necessary to the coherence of the theory of value. Among the privileged subjects, emphasis is generally placed on the recent evolution of the theory of the firm towards the organizational nature of the phenomenon. The latter exhibits two main dimensions: the internal organization of the firm and the relationship of the firm with the market. The need to describe the nature and the boundaries of the firm is thus underlined by B.R. Holmstrom and J. Tirole (1989, pp. 65–66): “One needs to explain both why firms exist as well as why all transactions are not organized within a single firm”.

The governance and regulation of the firm

Uniformity in modes of regulation and governance is now widely debated. The predominant thesis is that there should be a superior model promoting optimality by disclosure of information and transparency. But today, this thesis is greatly contested, since the adoption of a unique and universal set of rules and arrangements neglects the diversity of national experiences and the heterogeneity of firms, institutions and social norms. Moreover, evidence shows that this unique model of regulation and governance tends to generate major failures and turbulences. What emerges as a result is that different types of rules and norms govern entrepreneurial as well as public firms in different industries and stages of their development. The special issue following this introduction aims at discussing this timely debate on uniformity versus variety of modes of regulation and governance, and especially privileges analytical and empirical contributions covering the following dimensions of the debate: new approaches on regulation and governance in the domain of economics of the firm, business strategy, law and economics; new evidence on the evolution of regulation and governance at the firm, industry, and national levels.

Nature and governance of the firm: in search of an integrated perspective

In this paper we argue that in order to analyse firm governance we need to reappraise the nature of the firm. Based on Austrian and Marshallian categories we consider the firm as a processor of production and knowledge, whose governance is implemented through the cooperative actions of stakeholders involved in a collective learning process. This interpretation conflicts with models of corporate governance based on shareholder‐value principles.