Trevor Buck

Total board remuneration and company performance

Using a hitherto neglected source of data, this paper combines executive emoluments with executive options to construct a broader measure of executive pay than has been possible in earlier British studies. The result of including the long-term share option component of pay along with the more commonly utilized short-term component of emoluments is to reveal executive pay as being significantly more sensitive to company performance than has previously been thought to be the case. The paper questions the current policy stance of British institutional investors and of the Greenbury Committee with respect to executive share options. Copyright 1996 by Royal Economic Society.

Returnee Entrepreneurs, Science Park Location Choice and Performance: An Analysis of High-Technology SMEs in China

Building on an asset complementarity perspective, human capital and social capital measures are used to examine the science park location decisions of returnee entrepreneurs and the performance of their ventures. The study uses a unique, hand–collected data set of 349 SMEs from Zhongguancun Science Park in China, including 53 SMEs from locations administered by universities. The article considers the antecedents of university and nonuniversity science park location and firm growth with a view to drawing conclusions that go beyond the specific context of Beijing and China. Its findings include the tendency for returning entrepreneurs with academic knowledge in the form of patents transferred from abroad to locate in nonuniversity science parks, and for those with previous firm ownership abroad to choose university science parks. The firms of returnees with patents from abroad enjoyed stronger employment growth in nonuniversity science parks and those with commercial experience abroad with MNCs performed better in university science parks. This evidence is consistent with the view that returning entrepreneurs seek complementary (academic and commercial) assets in their location decisions, although some inconsistencies with this view are also discussed.

Corporate Restructuring In Russian Privatizations: Implications For U.S. Investors

In a short period of time, the privatization of Russian enterprises has been extensive. The process has been successful in meeting important political objectives to establish an irreversible base of individual share ownership through the rapid transfer of vast numbers of enterprises to the private sector. However, major questions remain with regard to the impact of privatization on efficiency and the successful transition to economically viable enterprises. This article investigates governance and managerial characteristics of 171 Russian buy-out firms both before and after the privatization program that occurred between 1992 and 1994. The program has resulted in significantly lower employment levels, increased training, little investment, but increased equity ownership. These changes may enable managers to effect some additional changes, but more recalcitrant organizations will have to await the development of more robust competition and improved systems of corporate governance.

Agents, Stakeholders and Corporate Governance in Russian Firms

This paper considers some developments within Russian privatized industrial firms 1992–94 through the lens of Stakeholder-Agency Theory (SAT). Although it has its own shortcomings and weaknesses, SAT, unlike the traditional financial version of Agency Theory, at least contemplates the possibility of a transitional period during which enterprise governance structures can evolve. It is by now widely recognised that in the middle of deep economic crisis, the Russian economy is too volatile for longitudinal studies of formally structured samples of firms over a period of time. In any case, SAT is at a stage of development that has not yet yielded detailed predictions for scientific testing. Yet surveys of recently privatized firms in Russia do provide empirical data away from the origins of SAT, and it is argued that this fresh data suggests new research propositions that can hopefully lead to more theoretical refinement and ultimately testing. At the very least, SAT can be used as a heuristic device, capable of providing a way of looking at complex Russian developments in a structured way. A process of Russian privatization through management–employee buy-outs involving giveaway distributions of shares has secured the compliance of the two main groups of enterprise stakeholders who could have prevented the withdrawal of the State from the governance of industrial enterprises, but has not yet produced a form of corporate governance structure that is likely to survive in the long term without State protection. In the longer term, international competitiveness can only be secured in Russia through investment in new products and processes, and the inadequacies of managers and other employees as sources of investable funds mean that incumbents must generate a more welcoming climate for outside investors. Even after such a short period since privatization and in the middle of a deep economic crisis, some enterprises are already favouring more efficient governance structures in a way consistent with SAT.

Geographical pathways for SME internationalization: insights from an Italian sample

Purpose – The purpose of this paper is to examine the determinants of two distinct geographic pathways to internationalization for small and medium‐sized enterprises (SMEs). Regional and global pathways are juxtaposed to study the influence on export performance of selected key intangible resources, namely, innovation, human resource management, networking and the firms experience.Design/methodology/approach – Building upon a resource‐based view of the firm, Tobit regression models are used to test the hypotheses on a sample of 2,657 Italian manufacturing firms.Findings – The paper provides empirical evidence that the determinants of SME export performance vary in line with the geographic scope of internationalization. While product innovation (innovation) positively impacts on SME export performance, irrespective of export destination, other factors do so selectively. For example, location in industrial districts (networking) and the deployment of external managers (human resource management) exclusivel...

Corporate entrepreneurs and privatized firms in russia, ukraine, and belarus

Abstract This paper provides a preliminary examination of the development of corporate entrepreneurship in privatized firms in Russia, Belarus, and Ukraine, three countries with a common background as part of the Soviet Union, but with different incentives and constraints on entrepreneurship since the beginning of transition. Using large-scale surveys of newly privatized companies, the paper shows that there are differences in the nature and extent of entrepreneurship in established businesses in the three countries. The paper utilizes representative samples of general directors in 105 privatized Russian enterprises, 100 privatized Ukranian enterprises, and 68 privatized enterprises in Belarus. Evidence is presented that suggests that Russian privatized firms have lower insider stakes, greater outside ownership, less employee voice, and greater managerial power within the firm than is the case in Belarus and Ukraine. The active monitoring of managers by outsiders may be an important aspect of the transformation of Russian firms to efficient, commercially viable entities. In Ukraine and Belarus a lack of outside involvement in corporate governance may lead to managerial opportunism and low incentives to attract outside strategic investors, including foreign partners. Russia appears to be building a stronger platform for the future development and effectiveness of entrepreneurship than is the case in Ukraine and Belarus. The findings provide evidence of the importance of direct involvement and the development of relationships to counteract the shortcomings of the legal infrastructure and financial reporting mechanisms. In general, the findings of the study for Russia show that in the current hostile and rapidly changing environment, entrepreneurial priorities and actions so far have primarily focused on controlling cash flow, seeking new markets, and redefining businesses through retrenchment and restructuring. Although it is, as yet, too early to examine the longer term effects of the changes in entrepreneurial conditions, the paper presents the first large-scale comparative evidence of the indications of a divergence in entrepreneurial development between the three countries. There was a greater incidence of turnover among the senior management team in Russia. Managers in Ukraine and Belarus had more diverse strategic objectives in contrast to those in Russia where managers have behaved in a more realistic fashion by focusing on retrenchment. For academics, the studys findings suggest further research is needed to examine the longer term nature and effects of corporate entrepreneurship, compare entrepreneurship in new start-ups in the three countries, and compare with corporate entrepreneurship elsewhere in emerging markets and the barriers to the development of corporate entrepreneurship. For practitioners and policy makers, the study highlights the need to develop and enforce an appropriate regulatory framework which strengthens the rules of the game under which corporate entrepreneurship operates.

Constraints on the Adoption of the Marketing Concept: The Case of the Former Soviet Union

Suggests that the process of transition and the hardening of the budget constraint in the former centrally‐planned economies of Eastern Europe recreates the link between an effective exchange process and business performance. Points out that this in itself creates the potential for marketing to play a significant role in business activity. Reports on a case study of the Russian experience which shows that there are still considerable barriers to the development of a marketing‐oriented approach to business. In addition to the obvious institution and infrastructure problems, there is still considerable progress to be made in relation to managerial attitudes and experience.

Privatisation and buy‐outs in the USSR

THE NEED FOR FUNDAMENTAL REFORM in the countries of Central and Eastern Europe is well recognised; so too are the problems of transition to a market economy.1 Nowhere is this more evident than in the USSR, which is under pressure from Western governments and lenders to harden and accelerate economic reforms. Great problems exist in respect of a need for major capital investment, the development of managerial and entrepreneurial skills, the extent and nature of acceptable foreign ownership and the form that privatisation of state-owned assets is to take. Key roles are assigned to Western assistance, such as business-related training and various forms of direct financial investment.2 The applicability of privatisation experience in the West has also been addressed.3 In 1991 the privatisation of state enterprises in Central and Eastern Europe is underway and is spreading to include the USSR, although progress is being slowed by a variety of implementational and institutional problems. Commentators are also particularly divided on the issue of whether the process of privatisation should be gradual, to avoid social collapse, or rapid, to prevent the opponents of reform from gathering their powers of obstruction.4 An important form of privatisation in the West, especially for small and medium-sized enterprises, has been employee and management buy-outs. The definition of a buy-out (BO) is necessarily vague and subjective. A management buy-out (MBO) occurs when incumbent managers acquire a controlling interest in the firm that employed them, and an employee buy-out (EBO) exists when a controlling interest is acquired by employees outside the management. Unlike the labour co-operative, all BOs retain an element of vertical control by a management team.

The internationalisation strategies of Chinese firms: Lenovo and BOE

Theories of overseas investment and forms of internationalisation are reconsidered in the face of two exploratory, ‘critical instance’ case studies collected in China from Lenovo and BOE. The two cases tentatively suggest refinements to conventional OFDI theories that see internationalisation in two important MNEs from China as being driven by factors such as ownership advantages and low labour costs at overseas locations. In terms of entry modes, it would appear that latecomer multinationals from emerging economies may aim to build global strategic linkages, seek new markets and obtain advanced technology, through foreign ventures that are accelerated quickly through entry modes towards acquisitions.

Capital subsidies and unemployed labour, a regional production function approach

Buck T. W. and Atkins M. H. (1976) Capital subsidies and unemployed labour, a regional production function approach, Reg, Studies 10, 215–222. Capital subsidies are employed by all developed economies to alleviate regional unemployment and other disparities, but one of their effects may be to induce capital intensity through a substitution effect against labour. Estimates of the elasticity of substitution and other evidence suggests that this has indeed been the case in British development areas as a consequence of regional subsidies with a capital bias. A subsidy on additional employment creation is proposed as an alternative to investment subsidies which offers the same benefits but avoids substitution effects against labour. The administrative implications of such a scheme are considered.