Michael Woywode

On industry life-cycles: delay, entry, and shakeout in beer brewing

Abstract This paper proposes a new explanation for industry ‘shakeout’, an event evident in the life-cycle of many industries in which the number of firms drops significantly in a short interval of time. Based on an in-depth analysis of the shakeout in the United States beer brewing industry between 1880 and 1890, we propose that industry shakeouts naturally follow periods of mass-entry by firms. Similar patterns are evident in two other industries we briefly examine: the US automobile and tire industries. While entry rates fluctuate broadly in all these industries, we find that the timing of exit for a given cohort of entrants is remarkably similar over time: the exit hazard rate is peaked in the first two years of every cohort’s life and drops dramatically to low and stable levels for subsequent ages. In this sense, mass-exit follows mass-entry and does not require a deep explanation. It is the mass-entry evident in the data for these industries that requires an explanation. We propose a theoretical model of information accumulation to explain entry into an industry. Entrepreneurs are uncertain about the profitability of the industry and this uncertainty is resolved through sufficient accumulation of information regarding the fortunes of incumbent firms. Delay in entry occurs solely due to the fact that it takes time to accumulate sufficient information to support more entry. The resulting entry pattern from simulations of the model looks much like that observed in the industries we study.

From Red Vienna to the Anschluss: Ideological Competition among Viennese Newspapers during the Rise of National Socialism

This article proposes that competition among ideologies can be understood and modeled as an ecology of organizations. It presents a theory of ideological competition among organizations that predicts that competition is strongest among ideologically adjacent organizations—those too different ideologically to enjoy esprit de corps but similar enough to vie for the same base of support. Such competition, the article argues, involves contention over identity, favoring organizations that maintain a distinct ideological position. These ideas are investigated by reference to qualitative and quantitative data from Viennese newspapers over the period 1918 to 1938, a period of considerable social and political change in Vienna. The quantitative evidence is obtained by estimating ecological models of organizational failure and growth. There is also qualitative evidence that actors from various ideological perspectives engaged in strategic framing activity.

High technology start-up innovation and the role of guanxi: an explorative study in China from an institutional perspective

This study explores the influences of institutions on high technology start-up innovation in China by taking into account both formal and informal institutions. Our research settings are two high technology parks in Wuxi and Shanghai, respectively. Drawing upon the theoretical lenses of North’s institutional framework and the guanxi literature, we propose an integrative framework to help understand the factors influencing high technology start-up innovation in China. By contrasting different formal institutional settings in Wuxi and Shanghai (in particular, local government interventions), our study shows the positive effect played by local government on innovation and the overarching influence of guanxi. Based on a qualitative research method, nine in-depth semi-structured interviews with the CEOs of high technology start-ups were conducted between August 2009 and September 2010. Additional interviews with government officials and managers of government-owned venture capital funds were performed. We offer evidence to support the dual influence of formal and informal institutions (guanxi). International guanxi triggers government intervention, which in turn facilitates the acquisition of local guanxi. As a multidimensional construct, guanxi has a positive influence on high technology start-up innovation. We contribute to the understanding of the effect of institutions on high technology start-up innovation by disentangling formal and informal institutions. Furthermore, government intervention may have a positive impact on high technology start-up innovation in China, which might shed some light on development in other emerging economies.

Entrepreneurs and the Choice of Limited Liability

We investigate factors influencing the choice of liability status by the owners of start-up firms. We propose a theoretical model that encompasses risk aversion, as well as differentials across liability states in the cost of capital and tax rates, as reasons why entrepreneurs choose one liability status over another. The likelihood of observing limited liability is predicted to be concave in the project size and the financial wealth of the entrepreneur. We use a recently collected data set on German start-up firms to test the model and find strong support for the models predictions.

Chinese M&A in Germany

China’s outward foreign direct investment (OFDI) has become a popular area of research as its impact has widened. Buckley and colleagues (2007) investigate the determinants of Chinese OFDI and suggest that capital market imperfections, special ownership advantages, and institutional factors are potential arguments to be nested in the general theory of FDI. From the political economy point of view, institutional escapism and governmental promotion are logically complementary to each other to offset the disadvantages of emerging market enterprises in global competition (Luo et al., 2010). A recent empirical study shows that the entry mode choice of Chinese firms for OFDI depends largely on a firm’s strategic fit and its strategic intent (Cui & Jiang, 2009). Cross-border merger and acquisition (M&A) has become the primary mode of entry for Chinese firms (Alon & McIntyre, 2008).

Software Usability in Small and Medium Sized Enterprises in Germany: An Empirical Study

Usability has become a competitive factor in the software industry. Specifically, the software industry in the United States has recognized this important factor and successfully leverages it for achieving competitive advantage. Compared to this fast development in the US, it seems questionable whether this view is also widespread among small and medium sized software producing and client companies in Germany and whether they direct sufficient attention to usability. This article presents the results of an empirical study exploring the status quo of the importance, the knowledge and the actual use of usability concepts among small and medium sized enterprises (SMEs) in Germany. Following an organizational field perspective, we investigate how interactions between actors in the software field influence the usability awareness as well as the knowledge and actual use of usability concepts. Based on the results of our study, we provide recommendations on how to increase awareness and maturity of software usability in SMEs in Germany.

Female Migrant Entrepreneurship in Germany: Determinants and Recent Developments

Although female migrant entrepreneurship has gained some momentum during the last decade, research on it is limited, and empirical findings in the German context remain scarce. The entrepreneurial activities of female migrants have long been ascribed to certain industries. Their businesses often remain small with limited prospects for revenue. However, recent developments indicate some emerging changes in terms of female migrant entrepreneurship. Based on the empirical data of the German microcensus, we analyze structural characteristics of female migrant entrepreneurship and its development in Germany between 2005 and 2016. We further examine how selected determinants (qualification, occupational segregation, family responsibilities) can explain these developments, and how these determinants affect the propensity of female migrants to become self-employed. Our findings cast new light on country-specific aspects of female migrant entrepreneurship and the ongoing debate of whether female migrant entrepreneurs face a double barrier of being both women and migrants.

Rigging the Contest? CEO Succession in Family Firms: Contest and Agency Theory, & Evidence.

The empirical literature considering effects of CEO succession on post-succession performance in family firms highlights inferior performance of family successors. By viewing successions as ruled signaling contests, we argue a family succession is not detrimental per se. Instead, we theorize concentrated ownership structures induce cases where contest governing principals pursue private benefits by imposing contest constraining rules limiting the contests’ selectivity in family firms, which leads to lower human capital of selected successors. We empirically control for these underlying contest (selection stage) constraints, show their negative relation to performance, and empirically highlight advantageous aspects of well-chosen and capable family successors.

Corporate Governance in geschlossenen Gesellschaften – insbesondere in Familienunternehmen – unter besonderer Berücksichtigung von Aufsichtsgremien

DeutschObwohl in der aktuellen Forschung uber gute Corporate Governance die Publikumsgesellschaften dominieren, setzt sich in den Wirtschaftswissenschaften die Erkenntnis durch, dass es auch bei geschlossenen Gesellschaften – respektive bei Familienunternehmen – aus okonomischer Perspektive sinnvoll ist, die Corporate Governance-Thematik zu untersuchen. Im ersten Teil dieses Artikels werden zentrale inhaltliche Ansatzpunkte fur gute Corporate Governance in Familienunternehmen dargestellt. Im zweiten Teil des Artikels werden Ergebnisse einer aktuellen empirischen Studie zu mehr als 500 mittelstandischen Unternehmen in Deutschland vorgestellt, in der die Verbreitung, Zusammensetzung und funktionsbezogene Ausgestaltung von Aufsichtsgremien und Beiraten analysiert wird. Insbesondere wird untersucht, welche Rolle das Ausmas des Familieneinflusses im mittelstandischen Unternehmen auf die ausgeubten Funktionen von Aufsichtsgremien ausubt. EnglishThe current research on good corporate governance is dominated by public companies. However, there is a growing recognition in economics that, from an economic point of view, it makes sense to examine the issue of corporate governance also in private companies, or rather family businesses. The first part of this article describes some key approaches for good corporate governance in family businesses. In the second part of the article, the results of a recent empirical study on more than 500 SMEs in Germany are presented. The study analyzes the distribution, composition and function-related development of supervisory boards and family advisory boards. In particular, it examines the role that the extent of family influence in SMEs plays in terms of the functions performed by supervisory boards.

The Enrollment in an R&D Subsidy Program for SMEs: Evidence from Southwest Germany

The literature on R&D subsidy programs has mainly focused on final R&D outcomes and has largely ignored the processes that operate within subsidy programs. The implementation of programs and allocation of funds might have a profound impact on the final economic outcome though.