Work in progress

Preference for Skew in Lotteries (with Thomas Astebro and Luís Santos Pinto)

Abstract:  Using a laboratory experiment we investigate how skew influences choices under risk. We find that subjects make significantly riskier choices when the distribution of payoffs is positively skewed, these choices being driven in part by the shape of the utility function but also by subjective distortion of probabilities. A utility model with probability distortion calibrated on laboratory data is able to explain why most gamblers in public lotteries buy only a small number of tickets. 

Risky Innovation Strategies (with Martin Woerter)

 

Abstract:  Earlier studies suggest that innovation strategies affect performance. We find that external innovation increases the mean of different measures of performance, but also increases dispersion and the kurtosis of the distribution of profits. This means that external strategies are more risky and that they may require a very large number of attempts before average returns are obtained. This puts smaller firms at a position of disproportionately high risk. Despite the earlier evidence that the rewards from innovation are positively skewed, we did not find any effect of innovation strategies upon the skewness of the distribution of innovation outcomes.

Reacting to Performance in International Markets: The Rigidity and Learning Paradox (with Luís F. Lages)

Abstract: This paper uses organizational learning and threat-rigidity perspectives to analyze firms’ reaction to past performance change in foreign markets. We find that firms are more likely to change their international strategy when performance declines and that the direction of change depends on the competitive environment. Specifically, in low competitive markets, firms tend to react to performance decline by adapting their strategy to the foreign market, whereas in more competitive markets, firms tend to react by standardizing their strategy. We submit that both threat-rigidity and organizational learning may thus apply depending on competitive circumstances, and that these perspectives should be regarded as complements to each other, not as alternatives.

The Termination of Joint Ventures (with Pedro Portugal) 

Abstract: We analyze the patterns of international joint venture termination, and compare four different explanations for the longevity of joint ventures. We distinguish between three ways in which termination may occur and allow for the possibility that some joint ventures never confront the chances of terminating in these ways. We find that the chances of terminating a joint venture decrease and then increase over time, in particular when the joint venture is terminated by dissolution of the firm and by acquisition by the foreign partner. Our findings thus support a view that sees joint ventures as real options held by partners.

 

Borrowing Patterns, Bankruptcy and Voluntary Liquidation (with António Antunes and Pedro Portugal)

 

Abstract: We study the impact of financial variables upon bankruptcy and voluntary exit. Controlling for eciency, which we find to decrease the odds of both bankruptcy and voluntary exit, characteristics of firms which correlate with the firms’ access to funds, exert very dierent impacts upon the two modes of exit. Our findings support the idea that information asymmetries create cash constraints and that financial decisions are used to signal firms’ quality and reduce the degree of information asymmetries between borrowers and lenders.

 

Articles in journals

 Founding Conditions and the Survival of New Firms, forthcoming in the Strategic Management Journal 2010 (with Paul Geroski and Pedro Portugal)  (full text of an earlier version, pdf file)

 Counterfactual Decomposition of Wage Changes Using Quantile Regressions  Journal of Applied Econometrics, 20, 445--465, 2005 (with José A. F. Machado)  (the decomposition can be performed using the following R-program)

 Patterns of Entry, Post-Entry Growth and Survival: A Comparison Between Domestic and Foreign Owned Firms  
Small Business Economics, 22, 282--298, 2004. (with Pedro Portugal), 

 On the Evolution of the Firm Size Distribution: Facts and Theory 
American Economic Review, 93 (4), 1075-1090, 2003 (with Luís Cabral)

 The Survival of New Domestic and Foreign Owned Firms
Strategic Management Journal, 23 (4), 323-343, 2002, (with Pedro Portugal).

 Earning Functions in Portugal 1982-1994: Evidence from Quantile Regressions
Empirical Economics, 26(1), 115-134, 2001, (with José A. F. Machado).

 Closure and Divestiture by Foreign Entrants: The Impact of Entry and Post-Entry Strategies
Strategic Management Journal, 21(5), 549-562, 2000, (with Pedro Portugal).

 Box-Cox Quantile Regression and the Distribution of Firm Sizes
Journal of Applied Econometrics, 15(3), 253-274, 2000, (with José A. F. Machado)

 Markets, Entrepreneurs and the Size of New Firms
Economics Letters, 52, 89-94, 1996.

  Firm Start-Up Size: A Conditional Quantile Approach
European Economic Review, 40(6) 1305-1323, 1996, (with José A. F. Machado).

  Small Firm Births and Macroeconomic Fluctuations
Review of Industrial Organization, 11(2), 173-182, 1996.

 The Survival of New Plants: Start-up Conditions and Post-entry Evolution
International Journal of Industrial Organization, 13(4), 459-482, 1995, (with Pedro Portugal and Paulo Guimarães).

 Life Duration of New Firms
Journal of Industrial Economics, 42(3) 227-246, 1994, (with Pedro Portugal).

            reprinted in Storey, D. (ed.) Small Business: Critical Perspectives on Business and Management, Routdlege, 2000  and in Audretsch, David B. and Steven Klepper (eds.) Innovation, Evolution of Industry and Economic Growth, Edward Elgar, 2000

 Firm Growth During Infancy
Small Business Economics, 6(1), 27-40, 1994.

 Firm Entry and Firm Growth
Review of Industrial Organization, 8(5), 567-578, 1993.

 Entry and Type of Entrant: Evidence from Portugal
International Journal of Industrial Organization, 11(1), 101-122, 1993.

 

Chapters in edited volumes

 Gibrat's Law. in The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online  doi:10.1057/9780230226203.0641

 Technological intensity, demand conditions and the longevity of firms
in Audretsch, D and A. R. Thurik (ed.) Innovation, Industry Evolution and Employment, Cambridge University Press, 1999, (with Pedro Portugal).

 Competition Policy in Portugal
in Martin, S. (ed.) Competition Policy in Europe, North-Holland, 1998, (with Pedro Pita Barros).

 Sunk Costs and the Dynamics of Entry in Portuguese Manufacturing
in van Witteloostuijn, A. (ed.) Market Evolution: Competition and Cooperation Across Markets and Over Time, Dordrecht, Kluwer Academic Publishers, 1995.

 Small Firms in Portuguese Manufacturing Industries
in Audretsch, D. e Z. Acs (eds.) Small Firms and Entrepreneurship: An East-West Perspective, Cambridge: Cambridge University Press, 1993.

 Concentration and Competitive Dynamics and Competitive Dynamics
in Amaral, J.; D. Lucena e A. Mello The Portuguese Economy Towards 1992, Norwell, Kluwer Academic Publishers, 1992.

 Sunk Costs and Entry by Small and Large Plants
in Geroski, P. e Schwalbach, J. (eds.) Entry and Market Contestability: An International Study, Oxford, Basil Blackwell, 1991.

 

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