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1. Cash‐Flow Based Dynamic Inventory Management

   https://doi.org/10.1111/poms.12571  

   Katehakis, Michael N. ; Melamed, Benjamin ; Shi, Jim ( June 2016 , Production and Operations Management)

   Small‐to‐medium‐sized enterprises (SMEs), including many startup firms, need to manage interrelated flows of cash and inventories of goods. In this study, we model a firm that can finance its inventory (ordered or manufactured) with loans in order to meet random demand which in general may not be time stationary. The firm earns interest on its cash on hand and pays interest on its debt. The objective is to maximize the expected value of the firm's capital at the end of a finite planning horizon. The firm's state at the beginning of each period is characterized by the inventory level and the capital level measured in units of the product, whose sum represents the “net worth” of the firm. Our study shows that the optimal ordering policy is characterized by a pair of threshold parameters as follows. (i) If the net worth is less than the lower threshold, then the firm employs a base stock order up to the lower threshold. (ii) If the net worth is between the two thresholds, then the firm orders exactly as many units as it can afford, without borrowing. (iii) If the net worth is above the upper threshold, then the firm employs a base stock order up to the upper threshold. Further, upper and lower bounds for the threshold values are developed using two simple‐to‐compute myopic ordering policies which yield lower bounds for the value function. We also derive an upper bound for the value function by considering a sell‐back policy. Subsequently, it is shown that policies of similar structure are optimal when the loan and deposit interest rates are piecewise linear functions, when there is a maximal loan limit and when unsatisfied demand is backordered. Finally, further managerial insights are provided with extensive numerical studies.

    

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2. Lack of Selection and Limits to Delegation: Firm Dynamics in Developing Countries

   https://doi.org/10.1257/aer.20180555  

   Akcigit, Ufuk ; Alp, Harun ; Peters, Michael ( January 2021 , American Economic Review)

   null (Ed.)

   Delegating managerial tasks is essential for firm growth. Most firms in developing countries, however, do not hire outside managers but instead rely on family members. In this paper, we ask if this lack of managerial delegation can explain why firms in poor countries are small and whether it has important aggregate consequences. We construct a model of firm growth where entrepreneurs have a fixed time endowment to run their daily operations. As firms grow large, the need to hire outside managers increases. Firms’ willingness to expand therefore depends on the ease with which delegation can take place. We calibrate the model to plant-level data from the United States and India. We identify the key parameters of our theory by targeting the experimental evidence on the effect of managerial practices on firm performance from Bloom et al. (2013). We find that inefficiencies in the delegation environment account for 11 percent of the income per capita difference between the United States and India. They also contribute to the small size of Indian producers, but would cause substantially more harm for US firms. The reason is that US firms are larger on average and managerial delegation is especially valuable for large firms, thus making delegation efficiency and other factors affecting firm growth complements. (JEL D22, G32, L25, L26, O14) 

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3. Start-ups, job creation, and founder characteristics

   https://doi.org/10.1093/icc/dtz030  

   Brown, J. David ; Earle, John S. ; Kim, Mee Jung ; Lee, Kyung Min ( July 2019 , Industrial and Corporate Change)

   Analyzing data on all US employers in a cohort of entering firms, we document a highly skewed size distribution, such that the largest 5% account for over half of cohort employment at firm birth and more than two-thirds at firm age 7. Analyzing linked survey-administrative data, we find that female, African–American, and younger founders are initially less likely to start large firms. The gender gap persists through firm age 7, while racial and age gaps do not. Education is positively associated with start-up size, except for graduate degrees. Prior entrepreneurship and founding team size are positively associated, but team diversity is not. Specifications with capital and industry controls illuminate roles of financial constraints and sectoral choice.

    

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4. Dataset associated with U.S. Apparel Manufacturers Survey

   https://doi.org/10.25675/10217/234595  

   Miller, Nancy J. ; Engel-Enright, Carol ( January 2022 , Mountain Scholar)

   Firms do not continue and prosper purely on their own individual endeavors, as each firm is influenced by the activities of others, and thus direct and indirect relationships shape the firm’s strategic management. These relationships form the tactics by which knowledge and other strategically important resources are accessed and created. Forming and maintaining ties among members of a network have been the subject for numerous research studies in the social, economic, and business literature. Our work is framed by the resource-based view of the firm perspective along with social capital theory and its shared constructs in network theory. Prior findings suggest that networking ties are strategic actions generated for firm growth and continuance. The ties may be short-term or develop into long-term relationships. The purpose of this research is to fill some of the gaps in interorganizational networking strategy by analyzing five antecedents that have been suggested in the literature as individually associated with entrepreneurs’ engagement in network ties. In this way, our work provides another research avenue for examining networking’s contribution to strategic management. We hypothesized positive connections to entrepreneurs’ engagement in network ties from antecedents involving the firm’s knowledge absorptive capacity, business goals, entrepreneurial orientation, social interactions, and support from their environment. We tested our proposed macrolevel direct and moderating connections through an online survey of 125 U.S. apparel manufacturing firms. The apparel manufacturing sector in the U.S., as in many countries, has struggled with multiple disrupting factors contributing to the sector’s decline in firm continuance. Networks, serving to build domestic and international supply chain ties, may provide one solution for adapting the firm’s resources enhancing global competitiveness. Findings from OLS regression analyses support our hypothesized connections in that each of the five antecedents significantly contributed to entrepreneurs’ engagement in network ties; however, when all five were collectively examined only absorptive capacity, social interaction, and business goals were significant (R2 = 0.58). Further examination of moderation effects found the entrepreneurs’ perceptions of a supportive environment to modify both entrepreneurial orientation and business goals. The effects of a supportive environment on business goals’ relationship with network ties were greater when perceptions of a supportive environment decreased, while the effects of a supportive environment on entrepreneurship orientation’s relationship with network ties were greater when perceptions of a supportive environment increased. Future studies may direct attention to other industry sectors or countries for replication with larger sample sizes as we recognize the limitations to generalizability and scale refinement due to our limited sample size. Examining the five constructs sheds light on how an organization’s decisions may relate to engaging in networking and provides theoretical as well as practical implications that contributes to the larger organizational system framework. This dataset contains responses from 97 U.S. apparel manufacturers collected via an online survey during the fall of 2019. The apparel manufacturing sector in the U.S., as in many countries, has struggled with multiple disrupting factors contributing to the sector’s decline in firm continuance. Networks, serving to build domestic and international supply chain ties, may provide one solution for adapting the firm’s resources enhancing global competitiveness. The purpose of the study was to examine connections to entrepreneurs’ engagement in network ties from antecedents involving the firm’s knowledge absorptive capacity, business goals, entrepreneurial orientation, social interactions, and support from their environment. 

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5. Direct and moderation effects on U.S. apparel manufacturers’ engagement in network ties

   https://doi.org/10.7341/20211733  

   J. Miller, Nancy ; Engel-Enright, Carol ; A. Brown, David ( January 2021 , Journal of Entrepreneurship, Management and Innovation)

   null (Ed.)

   PURPOSE: Firms do not continue and prosper purely on their own individual endeavors, as each firm is influenced by the activities of others, and thus direct and indirect relationships shape the firm’s strategic management. These relationships form the tactics by which knowledge and other strategically important resources are accessed and created. Forming and maintaining ties among members of a network have been the subject of numerous research studies in the social, economic, and business literature. Our work is framed by the resource-based view of the firm perspective along with social capital theory and its shared constructs in network theory. Prior findings suggest that networking ties are strategic actions generated for firm growth and continuance. The ties may be short-term or develop into long-term relationships. The intent of this research is to fill some of the gaps in interorganizational networking strategy by analyzing five antecedents that have been suggested in the literature as individually associated with entrepreneurs’ engagement in network ties. In this way, our work provides another research avenue for examining networking’s contribution to strategic management. We hypothesized positive connections to entrepreneurs’ engagement in network ties from antecedents involving the firm’s knowledge absorptive capacity, business goals, entrepreneurial orientation, social interactions, and support from their environment. METHODOLOGY: In our quantitative approach, we tested our proposed macrolevel direct and moderating connections through an online survey of 125 U.S. apparel manufacturing firms. The apparel manufacturing sector in the U.S., as in many countries, has struggled with multiple disrupting factors contributing to the sector’s decline in firm continuance. FINDINGS: The results from OLS regression analyses support our hypothesized connections in that each of the five antecedents significantly contributed to entrepreneurs’ engagement in network ties; however, when all five were collectively examined only absorptive capacity, social interaction, and business goals were significant (R2 = 0.58). Further examination of moderation effects found the entrepreneurs’ perceptions of a supportive environment to modify both entrepreneurial orientation and business goals. RESEARCH AND PRACTICAL IMPLICATIONS: The effects of a supportive environment on business goals’ relationship with network ties were greater when perceptions of a supportive environment decreased, while the effects of a supportive environment on entrepreneurship orientation’s relationship with network ties were greater when perceptions of a supportive environment increased suggesting further study of U.S. entrepreneurs’ perceptions of their environments. Entrepreneurs’ interested in building domestic and international supply chain ties may find network ties provide one solution for adapting the firm’s resources for global competitiveness. Future studies may direct attention to other industry sectors or countries for replication with larger sample sizes as we recognize the limitations to generalizability and scale refinement due to our limited sample size. ORIGINALITY AND VALUE: The examination of five constructs to shed light on how an organization’s decisions may relate to engaging in networks and provides theoretical as well as practical implications that contribute to the larger organizational system framework. 

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