Research on the governance of IS outsourcing has recognized two moments of governance: the formal outsourcing contract (promissory contract) and post-contractual relationship management (psychological contract). While this research has been prescriptive of contract terms that lead to successful outsourcing, there is need for clarity on what specific governance options are available at each mome...

The paper assesses the usefulness of selective hedging strategies when combined with forecast techniques in the live hog contract. The use of routine futures and options hedging is not attractive relative to a cash-only strategy. However, forecasting and hedging can contribute to price risk management improvement for risk-averse producers. Consistent with previous research, the results indicate...

ENTREPRENEURSHIP, SUBJECTIVISM, AND THE RESOURCE-BASED VIEW: TOWARD A NEW SYNTHESIS NICOLAI J. FOSS, PETER G. KLEIN, YASEMIN Y. KOR, and JOSEPH T. MAHONEY* Center for Strategic Management and Globalization, Copenhagen Business School, Frederiksberg, Denmark Contracting and Organizations Research Institute, University of Missouri, Columbia, Missouri, U.S.A. Department of Management, Moore School...

We analyze noncontractible investments in a model with shading. A seller can make an investment that affects a buyer’s value. The parties have outside options that depend on asset ownership. When shading is not possible and there is no contract renegotiation, an optimum can be achieved by giving the seller the right to make a take-it-or-leave-it offer. However, with shading, such a contract cre...

This paper uses a data set of industry-level equity returns from both developed and emerging markets to investigate whether the quality of the institutional environment recently shown to affect capital markets’ size also affects the expected return on equity. The paper documents that the required rate of return on equity is negatively associated with the enforceability of contracts and the impa...

This paper surveys researches on the new institutional arrangements for product innovation emerging in Silicon Valley. Special reference is made to the characteristics that go beyond the traditional property rights framework. First, the complicated patterns in allocation of control rights observed in VC contracts are examined to show the limit of Grosman-HartMoore framework. Second, the unique ...

A contract is usually defined as a written or oral agreement between two or more parties involving an enforceable commitment to do or refrain from doing something. In agriculture, contracts between farmers and agribusinesses specify certain conditions associated with producing and/or marketing an agricultural product. By combining various market functions, contracting generally reduces particip...

This paper examines managerial compensation in an environment where managers may take a hidden action that affects the actual earnings of the firm. When realized, these earnings constitute hidden information that is privately observed by the manager, who may expend resources to generate an inflated earnings report. We characterize the optimal managerial compensation contract in this setting, an...

This paper revisits the key success factors of new product development by investigating a software-intensive product development project, which is presented in form of a detailed qualitative case study. The result reconfirms the existing wisdom that factors like top management sponsorship, presence of a heavy-weight project manager, close cross-functional collaboration and communication, skill ...

This paper analyzes optimal incentive compatible debt contracts when lenders are risk averse. The decisive factor in this regard is that risk aversion requires to consider further sources of risk the lenders are exposed to. The main results derived in a setting of asymmetric information – the payment obligation of the optimal incentive compatible contract increases due to risk aversion of lende...