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In contrast to the U.S., the innovative outcomes of international startups do not always benefit from venture capital (VC) investments. Solving this puzzle requires first understanding how VC firms affect innovation; after all, VC firms lack the complementary assets of corporate VC firms. Instead, I argue that they leverage their industry knowledge and management capabilities through an indirect mechanism: by helping the startup be better managed, the startup can devote more resources, time and attention to innovative processes, which translates into more innovative outcomes. To test this claim I focus on the regulatory uncertainty the startup faces, as a problem the VC firm can alleviate. Besides, regulatory uncertainty varies internationally and ranks high in the list of concerns of investors and startups. I examine the fit with two aspects of the VC firm global strategy: a) VC firm experience or specialization, the latter allowing the VC firm to get involved in the startup problem solving activities; and b) whether the VC has global expertise-- valuable in global industries--or local expertise--valuable to understand the regulatory uncertainty. I test these mechanisms on a sample of 414 international and VC-backed biotechnology startups, founded from 1994 to 2004 (and observed through 2011) across 24 foreign countries, and controlling for the matching between VC firms and startups. I find evidence that VC local specialization fosters startup patents and publications when there is regulatory uncertainty, which supports the idea that VC firms foster innovative outcomes indirectly through mitigating the costs of context uncertainty. [ABSTRACT FROM AUTHOR]

This paper investigates whether and how corporate philanthropy (CP) is affected by a firm's perceived degree of environmental uncertainty in the context of a transition economy. Evidence from a nation-wide survey of private firms across China suggests that both regulatory uncertainty and market uncertainty in a transition economy motivate firms to conduct CP. Further, a firm's political ties and financial performance alleviate its response to environment pressures. Specifically, both political ties and financial performance reduce the impact of regulatory uncertainty on both giving probability and amount, but neither affects market uncertainty's impact. This study illustrates the role of environmental uncertainty in driving corporate social behavior among Chinese private firms, and provides valuable insights for CP activities in other transition economies. [ABSTRACT FROM AUTHOR]

This paper explores the relationship between regulatory uncertainty and firm responses across regulated and unregulated states in the U.S. Electric Utilities industry. We employ behavioral and evolutionary frameworks to propose that regulatory uncertainty drives firms in regulated states to respond by hedging their business and technological investments across multiple options, and firms in unregulated states to respond by investing in collecting information via lobbying. In turn, these differential responses shape long-term strategy by rewarding diversified firms in regulated states, and rewarding lobbying in unregulated states. Our paper contributes by uniquely testing these ideas on a panel of publicly-owned firms in the U.S. Electric Utilities industry from 2000 to 2010, and finding support for our hypotheses. [ABSTRACT FROM AUTHOR]

Top managers' attention to new problems has important consequences for the firm and is often triggered by external factors such as regulatory uncertainty. In this research we draw from behavioral theories of uncertainty avoidance and managerial attention to examine how headquarter and subsidiary top managers allocate attention to a new problems with and without regulatory uncertainty. We find subsidiary top managers exhibit classic uncertainty avoidance by reducing attention to new problem in uncertain as compared to certain settings, while headquarter top managers increase their attention to new problems under regulatory uncertainty. We test these ideas using a setting where U.S. electric utility firms are attending to a relatively new sector: renewable electricity, from 2000 to 2010. [ABSTRACT FROM AUTHOR]