IMD business school for management and leadership courses
Prior literature establishes a link between family involvement and the firm financial performance. However, the mechanisms through which family involvement in a firm affects its financial performance in different institutional settings are largely unknown. Using an unbalanced panel of 3,322 listed firms from 32 countries over a 9-year period, we…
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Based on 41 interviews across three UK-based commons enterprises, this study addresses one of the most pressing challenges of our time: encouraging local actors to contribute to the sustainable governance of supra-local common-pool resources (CPRs)—shared resources whose use and impacts extend beyond community boundaries. While existing research…
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We show that a one-sided price-adjustment rule, with free price cuts but a fixed daily reset for price increases, raises the reset price even under risk neutrality, mean-zero wholesale cost shocks, and perfect consumer information. The mechanism is option-theoretic: a higher reset price preserves pass-through in adverse cost states, while favora…
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The “tragedy of the horizon” captures the gap between long-horizon climate damages and the shorter horizons of corporate decision-making. We provide a contracting account of this idea using a deliberately standard CARA-normal moral-hazard model. Under full commitment, the optimal linear contract can condition on long-horizon outcomes; horizon mi…
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Ever since scholars recognized that family firms are heterogeneous, many studies have attempted to compare different types of family firms without ensuring that the source of heterogeneity is unique to family firms. When the source of heterogeneity among family firms resembles the source of heterogeneity among nonfamily firms, the problem of cou…
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Most research on social entrepreneurship highlights the positive effect of compassion on creating wealth for beneficiaries. However, while compassion drives social entrepreneurs to take prosocial actions that benefit others, the actions it motivates can also be destructive due to the complex, interdependent nature of social issues. This paper ex…
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Transformational leadership is recognized for bringing family members together; however, its role in multi-unit complex family firms that rely on nonfamily managers is poorly theorized. We find that transformational family chief executive officers (CEOs) positively affect the performance of business units run by nonfamily managers, suggesting th…
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Every executive eventually hits a moment of truth. A new project, a bold expansion, a promising acquisition, and suddenly the hard questions are right in front of you: Will this venture be profitable? Will it generate cash flow? How much capital will it demand? And ultimately, will it create value for shareholders or destroy it? If you can answe…
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