Several theoretical studies suggest that coordination problems can cause arbitrageur crowding to push asset prices beyond fundamental value as investors feedback trade on each others’ demands. Using this logic, we develop a crowding model for momentum returns that predicts tail risk when arbitrageurs ignore feedback effects. However, crowding does not generate tail risk when arbitrageurs rationally condition on feedback. Consistent with rational demands, our empirical analysis generally finds a negative relation between crowding proxies constructed from institutional holdings and expected crash risk. Thus our analysis casts both theoretical and empirical doubt on crowding as a stand-alone source of tail risk.

The bursting of the “bubble economy” in 1989–1990 brought decades of challenge for Japanese Small and Medium-Sized Enterprises (SMEs), which had assumed the role of subcontractor within production networks dominated by large companies. This article explores the impact of a rapidly altered business environment, due to economic crisis, the decline of relational subcontracting, and technological change, on the management and organization of firms. It provides a needed historical account of Japanese SMEs striving to avoid “hollowing out,” and detailed case studies explain what gaining greater independence as a flexible specialist meant in practice. A focus on the immediate advantages of computerized tools could not bring about the intended strategic objectives, whereas the systemizing of new and existing resources in skills and equipment enabled sustainable competitive differentiation in production and products. The case studies map out the internal competence transformations of SMEs over time, and indicate the value of historical approaches to exploring strategic and organizational change.

Based on strategic human capital theory, this study examines the effects of star surgeons on two different types of healthcare outcomes (i.e., number of surgical patients and length of patients’ in-hospital stay after surgery) in the surgery department. We also explore whether the relationship between star surgeons and healthcare outcomes is contingent on the expertise disparity between star and non-star surgeons. The results of an empirical analysis on colorectal cancer surgeons in 80 departments in South Korean hospitals show that the number of star surgeons increases the number of surgical patients and reduces the length of patients' stay after surgery. Moreover, the positive relationship between star surgeons and the number of surgical patients is strengthened when the expertise disparity between star and non-star surgeons is low. The implications of these findings for research and practice are also discussed.

Just three weeks after the World Health Organization (WHO) recognized COVID-19 as a global pandemic, novelist Arundhati Roy wrote: ‘Historically, pandemics have forced humans to break with the past and imagine their world anew. This one is no different. It is a portal, a gateway between one world and the next.’1

Human dignity, effective human rights protection and the rule of law are the backbones of the legal system of the European Union (EU).1 The EU and its member states have been front-runners in human rights protection not only on its own territory, but also beyond in their relationship with third countries. They have been the principal standard-setters in the field of business and human rights (BHR). The majority of the EU member states (15 out of 27) have so far adopted National Action Plans on Business and Human Rights.2 As far as legislative action goes, the EU has in recent years adopted two binding legal acts in the BHR field, namely, a Directive requiring obligatory non-financial reporting for large corporations3 and a Regulation concerning mandatory due diligence for the EU-based importers of minerals and metals from conflict-ridden areas.4 More recently, the European Parliament and the European Commission have been working towards adoption of a general directive for obligatory human rights and environmental due diligence for large corporations.5

Working for multinational companies (MNCs) is often viewed as a privilege for host country nationals (HCNs) in emerging economies. This raises the question: Why do HCNs leave their jobs to pursue the hardship of establishing their own business? This article addresses this question by adopting a phenomenon-based approach to study 12 professional service firms in Vietnam. We explore why HCNs initially become entrepreneurs and identify how they make this transition. We reveal several idiosyncratic motivations and identify four types of migration pathways: MNC returnee, committed hybrid, transitional hybrid, and direct spin-off. Our findings address the shortcomings of the existing HCNs literature that centers on MNCs’ view and employee entrepreneurship literature that overlooks the context of emerging markets. We find evidence that institutional voids often promote, rather than suppress, entrepreneurship in emerging markets. Importantly, by taking a local perspective, our findings help MNCs increase their awareness that in the fast-growing market of Vietnam, a brain drain might occur as a result of HCNs becoming entrepreneurs.

Recent developments in the international banking system, especially the 2007–9 crisis and subsequent wave of postcrisis regulation, have drawn increasing attention to the structural power of banks and banking systems. States need a functioning financial system to ensure the overall health of their economies, so states must shape policy to protect their financial firms. National financial systems may be dominated either by banks or by capital markets. In states where banks dominate provision of capital, states must shape policy to protect their banks because of their structural importance, independent of any lobbying or other direct action on the part of banks to exercise instrumental power. The entangling of structural and instrumental power means studying differences in structural power requires either careful case-study work or cross-national comparison of responses to a common shock. The implementation of the 2011 Basel III Accords provides just such an opportunity. This article offers a quantitative analysis of a new dataset of implementation of Basel III components in the Basel Committee on Banking Stability member states from 2011 to 2019 and demonstrates the structural power of banks in bank-based systems to accelerate implementation of favorable policies and slow implementation of unfavorable ones.

Coronavirus disease 2019 (COVID-19) has seen a shift in remote work from being a discretionary flexible work policy to a mandatory requirement for several workplaces. This ‘forced flexibility’ has meant that organisations and their employees have had to adapt swiftly to new requirements and arrangements for how work is done. Working remotely, often at home in ‘virtual workspaces’, has become commonplace for many employees across Australia and globally. Drawing on findings from two qualitative phases of research in an Australian resources company, we use conservation of resources theory to explore the factors influencing processes related to wellbeing and productivity for employees working remotely in the COVID-19 environment. We identify challenges associated with working remotely, as well as important resources for wellbeing and productivity. Practical implications are also discussed.

Does financial development facilitate micro-entrepreneurship? Using randomized surveys of over 1 million Indian households and bank-branch location as predetermined by government policy, we find that access to finance shifts workers from informal micro-entrepreneurship into formal employment. Financial access reduces the likelihood of being self-employed but benefits micro-enterprises with employees, as well as formal firms. Using data on 400,000 firms, we find that in districts with more banks, firms have higher loans, productivity, employment, and wages than firms in less banked districts. This evidence suggests a labor-market mechanism by which financial development facilitates growth: by shifting workers from unproductive micro-entrepreneurship into productive employment.

We investigate whether external industry tournament incentives influence the design of executive-compensation contracts. Using staggered negative mobility shocks as exogenous disruptions to tournament incentives, we show that firms treated by these shocks act to restore their executives’ diminished implicit risk-taking incentives by increasing compensation vega. On average, post-shock compensation vegas increase by approximately 10%. These effects are considerably larger for treated executives with strong tournament incentives and high ex ante mobility. Mobility shocks have no impact on compensation delta or total pay. Our results shed light on how explicit risk-taking incentives are optimized with respect to executive career concerns.

We find that acquirers create higher shareholder returns when advised by investment banks with more experience in the target industry. This finding is stronger when acquirers face more difficulties understanding and evaluating the targets. Further analyses show that these banks help acquirers avoid overpaying for targets and thus capture more of the deal synergy rather than making deals generating higher synergy. Our results are robust to controlling for an exhaustive set of determinants of acquirer returns and an identification strategy that exploits exogenous shocks to the supply of investment banks with target-industry experience.

Using the introduction of Fox News as a natural experiment, we investigate whether partisanship in television news coverage influences fundamental corporate decisions. We find that during the George W. Bush presidency, firms led by Republican-leaning managers headquartered in regions into which Fox was introduced shift upward their total investment expenditures and financial leverage. Our findings imply that in making fundamental corporate decisions, Republican-leaning managers are swayed by the Republican slant of Fox that presents an optimistic macroeconomic outlook. The results highlight the importance of heterogeneity in media slant in understanding the role of the media in corporate decision making.

Although employee creativity has been identified to promote organizational competitiveness, its effect on leader empowering behaviors remains underexplored. This study investigated the underlying mechanism and boundary condition under which employee creativity influences leader empowering behaviors. Drawn on social exchange theory and similarity-attraction theory, this study developed a moderated-mediation model in which supervisor–subordinate guanxi serves as the intervening mechanism and supervisor–subordinate similarity serves as a boundary condition influencing this relationship. Using three-wave, time-lagged survey data collected from 309 supervisor–subordinate dyads, this study found that supervisor–subordinate guanxi mediates the relationship between employee creativity and leader empowering behaviors, and that this relationship is stronger when supervisor–subordinate similarity is high rather than low. Finally, theoretical and practical implications were discussed.

Private governance raises important questions about democratic representation. Rule making is rarely based on electoral authorisation by those in whose name rules are made—typically a requirement for democratic legitimacy. This requires revisiting the role of representation in input legitimacy in transnational governance, which remains underdeveloped. Focussing on private labour governance, we contrast two approaches to the transnational representation of worker interests in global supply chains: non-governmental organisations providing representative claims versus trade unions providing representative structures. Studying the Bangladesh Accord for Fire and Building Safety, we examine their interaction along three dimensions of democratic representation: 1) creating presence, 2) authorisation, and 3) accountability to affected constituents. We develop a framework that explains when representative claims and structures become complementary but also how the politics of input legitimacy shape whose interests get represented. We conclude by deriving theoretical and normative implications for transnational representation and input legitimacy in global governance.