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This study examines the interplay between two influential yet opposing shareholder types—family blockholders and hedge funds—in relation to corporate innovation output. Using panel data on U.S. publicly traded firms listed in the S&P 1500, we find that family blockholders have a negative effect on radical innovation output in the form of citation-weighted patents and that this negative effect is intensified in the presence of activist hedge funds. Our study advances insight into the implications of ownership heterogeneity for innovation output choices in family-influenced firms.

Prior research has revealed a negative association between family influence and R&D spending. The dominant explanation for this association centers on the role of socioemotional considerations in decision-making. These socioemotional decision considerations are argued to play a more prominent role among family firms and to lower their R&D spending intensity. However, to date, this negative explanatory mechanism has not been empirically verified. Moreover, a deeper analysis of the literature suggests that some family-induced socioemotional considerations may actually stimulate R&D investments. In this study, four socioemotional decision considerations are delineated-namely, concern for current control, for extended preservation, for organizational reputation, and for organizational values and traditions-of which the first two are anchored in a family's nurturer role identity and the latter two in a family's organizational identification. It is hypothesized that those socioemotional considerations derived from a family's nurturer role identity constrain R&D spending, while those derived from the family's organizational identification boost R&D spending. The empirical study concentrates on the setting of privately held manufacturing SMEs, and using survey data on 365 such companies in the Netherlands, a structural equation model is estimated. The analyses reveal several interesting results: (1) the overall association between family firm status and R&D spending indeed turns out to be negative, and this negative effect is fully explained by family firms' preoccupation with extended preservation; (2) concerns for organizational reputation and for organizational values and traditions partly compensate the negative effect of the extended preservation mechanism. Key academic and practical implications of these findings are discussed.

The problems of exploitation of technological windows of opportunity are of particular scientific and practical interest in terms of the development of Russia’s national economy, and the Arctic region, which has a strong mineral and raw materials potential, is important in terms of its use for achieving the technological and national security of the Russian state. Considering this, the study of the theoretical and methodical aspects of the development of emerging technological windows of opportunity is important and relevant for the regions of the Russian Arctic zone. The purpose of this study is to assess the potential and reserves for exploitation of the emerging technological windows of opportunity during the deployment of a new technological order by mobilizing material and human capital in the Arctic regions. Methodological tools for the study of this problem included dynamic series analysis, structural analysis, comparison, description, descriptive statistics, cross-correlation analysis, production function model and its visualization. An analytical review of scientific publications, a set of tools and methods of research, allowed to obtain the following scientific results: A significant variability in the contribution of science-intensive and high-tech industry to the formation of gross value added in the Arctic region has been revealed, meanwhile, we can note stable dynamics of the contribution of the Arctic economy to the gross domestic product (GRP) of Russia as a whole. There is a steady excess of the productivity index over the Russian average, which can be regarded as a potential for growth of high-tech components of labor in the development of the economy of the Arctic region. There is a negative statistically significant relationship between the share of the gross regional product of the Arctic in the Russian GRP and the share of gross value added (GVA) of science-intensive products in the Arctic GRP, which can be regarded as a factor preventing the exploitation of the emerging technological windows of opportunity. The construction of a model of production function of technological windows of opportunities for the Arctic zone of Russia pointed to the presence of potential in the exploitation of emerging technological windows in the Arctic zone of Russia in the development of human capital through the activation and use of high labor productivity, creating high-performance jobs. The results of the study, its findings and its proposals can be used in the development, monitoring and implementation of state federal and regional programs and projects aimed at improving the level of technology and science intensity of production in the Arctic zone, improving its competitiveness, which is highly important for the national economy.

The positive relationship between innovativeness and firm performance is well established and applies equally to all businesses, including family firms. However, little is yet known about how the unique characteristics of family firms influence this relationship. Drawing upon the resource-based view (RBV) of the firm, this study explains how the interplay between innovativeness as a firm-specific resource and family commitment as a family-specific resource affects performance. The analysis of longitudinal survey data collected from Finnish family firms demonstrates a curvilinear (U-shaped) moderating effect of the owner family’s commitment to the firm, in that the impact of innovativeness on firm performance is strongest when family commitment is either low or high. This implies that owner families should avoid their level of commitment becoming becalmed between high and low if they wish to convert their firm’s innovativeness into performance.

This study builds on the idea that family businesses perform particularly well in the domain of exploitative innovations and explores a possible source of this strength, namely their employees’ spontaneous involvement in informal innovation activity. Specifically, we develop a mediation model on the interrelationship between family business employment and employees’ innovative work involvement. Analyses are based on a sample of 893 Belgian employees using structural equation modeling. Results suggest that family business employment is positively associated with employees’ innovative work involvement, and that part of this relationship can be attributed to their heightened perceptions of organizational support and work motivation.

The aim of article is to systematize the types of intellectual capital investments and to work out intellectual capital investments classification, which is based on enterprise different functional spheres and period of time. The literature review shows that there is no unique approach to intellectual capital classification. The authors have divided investments in three groups: creation investments, development investments, maintaining investments. Depending on the enterprise goal and on the amount of the enterprise's intellectual capital and its quality, the enterprise can make investment decision.

This study provides an exploratory analysis of differences between family and non-family firms in innovation investment, product and process innovation outcomes, and labor productivity. Using data from the Community Innovation Survey on 2,087 German small- and medium-sized enterprises (SMEs), we observe significant disparities at each stage of the innovation process. Whereas family SMEs have a higher propensity to invest in innovation at all, conditional on investing in innovation, these companies do so less intensively than their non-family counterparts. Family SMEs further tend to outperform non-family SMEs in terms of process innovation outcomes when controlling for innovation investment. Given the level of product and process innovation, however, family SMEs underperform regarding labor productivity in comparison to non-family SMEs. These findings complement previous empirical research by illustrating how the presence of a dominant family relates to innovation inputs and outputs of SMEs in Europe's largest economy and its innovative SME sector.

This study investigates differences in the diversity of cooperation partners used for innovation-related activities (i.e., search breadth) between family and nonfamily small and medium-sized enterprises (SMEs), as well as within the group of family SMEs. The results generally confirm our hypotheses derived from the behavioral theory of the firm. Specifically, we show that family SMEs have a lower search breadth than their nonfamily counterparts. Our findings further illustrate how attributes of the CEO (level of education) and the top management team (nonfamily management involvement and educational background diversity) relate to the search breadth of family SMEs.

Aging may be one of the most far-reaching processes defining the economic, fiscal, and social changes societies are likely to experience over the next 40 years. The demographic consequences of aging will have a dramatic impact on labor markets, economic growth, social structures--and government budgets. These issues have gained urgency after the second largest global recession in the past 100 years. Based on a broad comparative analysis of countries that include the EU and non-EU European and Central Asian countries, as well as several case studies and model simulations, the paper seeks to provide broad answers--tailored in part to distinct groups of countries according to their aging-fiscal profiles--to major questions facing governments budgets in aging societies: What are the fiscal-aging profiles of Western European, emerging European, and Central Asian countries? In other words, how good or bad is their fiscal situation--"initial conditions"--in view of their emerging aging-related problems? What kind of public spending pressures are likely to emerge in the coming decades, and what will be their relative importance? How do countries compare in terms of the possible impacts of aging on growth and long-term debt sustainability? What can be learned from in-depth and comparative case studies of aging, fiscal sustainability, and fiscal reform? Are there good-practice examples--countries doing things right at the right time--that may offer lessons for the others? And, perhaps most important, given the need for long-term fiscal consolidation for many countries, what kind of revenue and expenditure policy agendas are likely to emerge to mitigate the effects of aging? A key policy conclusion is that countries should aim for early rather than delayed reforms dealing with long-term aging pressures. The urgency is accentuated by the debt situations and/or adverse debt and demographic dynamics in almost all countries but also by the evolving voter preferences. As societies age and voting preferences increasingly reflect the political will of the older population, it will become more difficult to enact the necessary reforms ensuring social and fiscal sustainability.

Chinese Foreign Direct Investment (FDI) into Africa is on the rise and Ethiopia is at the forefront of this trend. On request of the Government, the World Bank surveyed 69 Chinese enterprises doing business in Ethiopia with a 95-question survey in May/June 2012. The survey covered various aspects of the foreign direct investment climate in Ethiopia, including infrastructure, sales and supplies, land, crime, competition, finance, human resources, and questions about general opportunities and constraints for doing business in Ethiopia. This report summarizes the results of survey and provides policy suggestions in light of the analysis; the report also provides some broader background of the expected benefits of FDI into Ethiopia as well as current policies and approaches to promote incoming investment. Addressing identified obstacles could help Ethiopia to take better advantage of foreign investors in order to accelerate the shift from a predominantly low-productivity agriculture-based economy towards a higher-productivity manufacturing and export-based economy. Experiences in successful countries around the world, and especially East Asia show that foreign investment is instrumental to facilitate such a structural transformation and to maintain sustained and broad-based economic development. This study recommends five main areas for policy adjustments to facilitate foreign investors coming into Ethiopia: adjust customs clearance procedures and trade regulations; facilitate currency convertibility and increase transparency of the exchange rate policy; improve tax administration consistency and efficacy; execute impartial labor regulation; and increase the supply and quality of skilled workers.

Afghanistan is in a state of transition which involves the handover of security responsibilities from international forces to the Afghan government. However, at present, Afghanistan's economy is growing strongly as a result of an exceptionally good harvest this year. Real gross domestic product (GDP) growth will most likely close the calendar year at 10 percent, a significant increase from last year's 5.8 percent. The services and construction sectors continue to grow strongly, driven mostly by continued high military spending and external aid. The good harvest has also brought Afghanistan to near food self-sufficiency and slowed inflation to 4.6 percent in July 2012 (y-o-y). Progress in the mining sector is clouded by uncertainty about a new mineral law. While investor interest in the sector is encouraging, gaps in the legal and regulatory framework of the sector do not provide sufficient confidence to investors to start operations or make firm commitments. A new low is in preparation but has also been heavily debated. Afghanistan's economic growth prospects for 2012 give cause for optimism. Although real GDP growth slowed, to around 7 percent in 2011 (from 8 percent the year before), due mainly to unfavorable weather and a poor harvest, the agriculture sector rebounded strongly in 2012 and is expected to boost economic growth to over 10 percent. Agriculture is an important but volatile component of economic growth.

This study investigates differences in the diversity of cooperation partners used for innovation-related activities (i.e., search breadth) between family and nonfamily small and medium-sized enterprises (SMEs), as well as within the group of family SMEs. The results generally confirm our hypotheses derived from the behavioral theory of the firm. Specifically, we show that family SMEs have a lower search breadth than their nonfamily counterparts. Our findings further illustrate how attributes of the CEO (level of education) and the top management team (nonfamily management involvement and educational background diversity) relate to the search breadth of family SMEs.

Afghanistan's economy is growing strongly. The growth drivers in recent years have been above-average agricultural production, strong growth in construction and transportation, and security spending enabled by large aid flows, especially in FY2009/10. Real Gross Domestic Product (GDP) growth reached 8.4 percent in FY2010/11. Afghanistan's fiscal position is strengthening. In the last three years revenues grew by an average of 34 percent p.a., thanks to improvements in customs and tax administration. Larger increases are expected once mining operations and with the introduction of a value-added tax in FY2014/15. However, government expenditures will also increase in the coming years due to higher security spending, the roll out of pay-and-grading reforms for the civil service, rising recurrent obligations from large donor-supported projects (including those financed outside of the core budget) and the fiscal costs of the Kabul Bank bail-out. The first phase of the handover of security responsibilities to Afghan national security forces in six locations has been completed.