R. Brent Ross

Economic Returns to Entrepreneurial Behavior

Highly turbulent environments require firms to act entrepreneurially. The returns to entrepreneurial activities are known as entrepreneurial rents. Following the payments perspective, these rents are allocated to the entrepreneurial resources of the firm as factor payments. However, unlike other factor payments, little is known about how to value these types of rents. An analysis of the economics and management literature reveals that entrepreneurial rents are a return to alertness, subjective judgment, asset control, and uncertainty bearing. Furthermore, entrepreneurial rents are noncontractible and temporary. This paper introduces two complementary valuation models that capture these characteristics and that explicitly impute value to various entrepreneurial activities.

Distribution channel choices of wineries in emerging cool climate regions

The number of wineries in nontraditional cool climate regions of the United States has increased dramatically in the last decade. We examine factors influencing distribution channel choices by these wineries, including winery characteristics, marketing strategies, and the extent of vertical and horizontal integration. Using a survey of winery operators in Michigan, Missouri, and New York, we developed fractional logit models to test hypotheses regarding their distribution channel choices. We find that the share of wine sold through intermediated channels increases with winery size, years of operation, increased vertical and horizontal integration, and greater promotional intensity and levels of self-reported marketing challenges.

Historical analysis of institutions and organizations: the case of the Brazilian electricity sector

Scholars have argued that the New Institutional Economics (NIE) has not yet provided causal explanations on how long institutions persist or why and how they suffer dramatic changes. Others have stated that evidence is still inconclusive to define a theoretical justification on how changes and development occur. In light of these claimed criticisms, this paper focuses on the institutions of the electricity sector in Brazil, aiming to heighten the body of empirical research in NIE and produce satisfactory explanations that motivate theory refinement. Based on a qualitative approach, we find that the drivers of the first institutional change in Brazil’s electricity sector were related to initiatives of market protection and domestic industrial support. For the second institutional change, economic recession (country at stage of bankruptcy, debt crisis, and high inflation rates) and reliability of utility services were the driving factors. We hope this study consistently systematizes historical facts and helps create grounds for our understanding of institutional evolution and economic growth.

Assessing transaction efficiency for biomass: a case study of the Upper Peninsula of Michigan

In concordance to the renewable portfolio standard program, the state of Michigan promotes generation of renewable electricity through the renewable energy plan. Despite policy efforts, performance figures reveal an industry that has not gained the momentum one would expect. This article focuses on five biomass-related transactions aiming to diagnose whether input transactions have performed as transaction cost economics (TCE) would predict. Based on qualitative analyses, results show that the coordination mechanism adopted by logging firms and biomass processors have led parties to experience hold-up problems. The paper concludes with an alternative strategy to alleviate hold-ups and devise an efficient market for biomass.