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Transaction cost economics sees a broad spectrum of governance structures spanned by two types of economic adaptation: autonomous and cooperative. Stakeholder theorists have drawn much inspiration from transaction cost economics but have not paid explicit attention to the centrality of the idea of adaptation in this literature. This study aims to address this gap.

The authors develop a novel conceptual framework applying the distinction between the two types of economic adaptation to stakeholder theory.

The authors argue that the idea of cooperative adaptation is particularly useful for describing the firm’s collaboration with primary stakeholders in the joint value creation process. In contrast, autonomous adaptation is more relevant for firms interacting with secondary stakeholders who are not directly engaged in joint value creation and may not have formal contractual relationships with the firm. Accordingly, cooperative adaptation can be seen as vital for resolving team production problems affecting joint value creation, whereas autonomous adaptation addresses how the firm maintains legitimacy within the larger stakeholder environment.

Similar to its significance for transaction cost economics, the distinction between the two types of adaptation equips stakeholder theory with a new systematic understanding of a potentially broad spectrum of firm–stakeholder collaboration forms.

The purpose of this paper is to examine the empirical relationship between gray directors (non-executive non-independent directors) and executive compensation among companies listed in India’s National Stock Exchange (NSE). The paper also examines the possible interplay of relationships between controlling shareholder duality (controlling shareholder being the CEO), ownership category and executive compensation.

A sample of 438 firms listed in the NSE of India was studied using data spanning five financial years, 2012–2013 to 2016–2017.

Empirical evidence suggests that there is a positive association between the proportion of gray directors on the board and executive compensation. The sensitivity of executive compensation to gray directors is found to be higher among family controlled firms. This research has also found that CEOs who belong to controlling shareholder groups received higher pay than professional CEOs. The authors conjecture that these results suggest cronyism and may contribute to lower levels of corporate governance practices in the country.

The hybrid board structure, which India has adopted with the desire to bring the best of Anglo Saxon and Japanese board philosophies, has paradoxically led to self-serving boards. Exploration of alternative thinking to bring about changes in the regulatory framework is, therefore, necessary.

Serious problems are identified with the philosophy behind board composition mandated by Listing Requirements for Indian firms with empirical evidence showing how the existing rules generate cronyism and unfairness to minority shareholders.

The purpose of this paper is to examine and explain the complex interrelationships which influence the performance of politically connected firms to create value for their providers of finance and other stakeholders. In doing so, it examines the interrelationships between efficiency and delivering on corporate performance of a firm with political ties.

The authors gathered the literature from the Scopus website. They reviewed the literature of 58 manuscripts about the efficiency and performance of politically connected firms.

The research finds that the better quality of efficiency of politically connected firms is positively related to the corporate performance of politically connected firms. The authors’ theoretical findings corroborate the political theory, agency theory, stakeholder theory, resource dependency theory and stewardship theory. These theories prove that political connections have an impact on firm performance as a politician reinforces the efficacy. To better understand the effect of political connections on solid performance due to efficiency, this study classifies various efficiencies and links them with political ties.

Several avenues of research are suggested to examine further the interrelationships identified.

The authors’ conceptual findings are valuable for institutional investors, policymakers and stakeholders. To sum up, all theoretical shreds of evidence prove that politically connected firms can enhance performance via efficiency.

The paper conceptualizes the efficiency and performance interrelationships of politically connected firms. The extant literature comparison allows an assessment of the extent to which different efficiency contexts lead to differences in performance.

The purpose of this study is to extend theoretical understanding on social enterprises’ growth orientation. Inspiration is drawn from the fundamentals of prospect theory and threat-rigidity theory, as the role of external threats as a source of growth orientation is largely absent from the social enterprise growth literature. According to previous studies, social enterprises grow mainly because of their social mission and social opportunities.

The qualitative research is conducted by analysing thematic interviews from seven, growth-oriented social enterprises operating in Finland.

The study provides novel insights on social enterprises’ growth orientation by drawing attention to the plurality of growth motivations and showing the importance of perceived threats as the origin of their growth pursuits. Goals of growth are defined mainly in terms of organisational and financial performance of the firm.

Social enterprise managers and boards are encouraged to cooperate in analysing the significance of external threats and opportunities for their business and to concentrate on defining measurable social goals to ensure balanced growth.

The study demonstrates that the behavioural theories offer a beneficial departure point for studying social venture growth. By clarifying the role of the perceptions of the firm’s internal actors and showing that growth is sometimes seen as a response to external threats, the study increases theoretical understanding on social enterprises’ growth orientation.

This study aims to contribute to the early but fervent debate on blockchain and supply networks by proposing a novel theoretical perspective on blockchain adoption grounded on social capital theory. In particular, it seeks to answer the following question: what is the role of social capital in shaping the decision to adopt blockchain in supply networks?

Multiple case-studies, based on interviews performed with managers of eight firms, were used.

The social capital theory emerged as an additional but necessary lens to investigate blockchain implementation in supply networks. The intuitions proposed highlighted the importance of managers’ sensemaking for investigating technology adoption. Relational capital emerged as a necessary but not sufficient condition to adopt blockchain in supply networks. In addition, it is argued a relationship between competitive opportunities at the firm level and the idea to adopt the blockchain. The opportunity to act as “Tertius Gaudens” or as “Tertius Iungens” information brokers in supply networks should severely affect firms’ proneness toward the adoption of blockchain solutions.

This is one of the first studies in the literature investigating blockchain adoption in supply networks from a social capital perspective. It introduces new issues to the debate related to the role of blockchain in the supply chain by discussing the role of goal misalignment and competitive advantage, which emerged as crucial for shaping the decision to adopt blockchain in supply networks.

The relationship between risk and return has been widely analysed in the scope of listed companies. However the present literature leaves uncovered an important study area with regards to privately held firms. In order to cover this gap, this study analyses the risk-return trade-off in the context of private enterprises. Furthermore, the authors incorporate the contingent effect of being a family firm on the abovementioned relationship.

Using information from the SABI (Sistema de Análisis de Balances Ibéricos) database, a sample of 2,297 private manufacturing firms were analysed for the period of 2009–2016. So as to ascertain the proposed hypotheses, dynamic panel data methodology was applied. Specifically, the authors estimated the two-step general method of moments (GMM).

The obtained findings reveal that, according to prospect theory arguments, privately held firms adopt a conservative attitude toward risk when results are higher than a target level, while becoming risk seeking when results are lower than a target level. Moreover, the fact of being a family firm softens the risk-return relationship both when performance is above the target level and also when firms find themselves in the lowest performing case.

This article is, to the best of the authors' knowledge, one of the first studies dealing with the risk-return relationship in a privately held firm context. Moreover, the inclusion of being a family firm as a contingent factor in the abovementioned link is a complete novelty.

La relación riesgo-rentabilidad ha sido ampliamente analizada en el ámbito de las empresas cotizadas. Sin embargo, la literatura existente deja al descubierto una importante área de estudio en relación con las empresas no cotizadas. Para cubrir esta brecha, el presente estudio analiza el binomio riesgo-rentabilidad en el contexto de empresas privadas. Adicionalmente, incorporamos el efecto contingente de ser una empresa familiar sobre esta relación.

Utilizando información de la base de datos SABI (Sistema de Análisis de Balances Ibéricos) se analizó una muestra de 2.297 empresas manufactureras privadas para el período 2009–2016. Para comprobar las hipótesis propuestas se aplicó la metodología de datos de panel, específicamente, utilizamos el Método de los Momentos Generalizado (GMM).

Los resultados muestran que, de acuerdo con la Teoría Prospectiva, las empresas no cotizadas presentan una mayor aversión al riesgo cuando su nivel de rentabilidad es superior al valor de referencia establecido, mientras que presentan una mayor propensión al riesgo cuando su rentabilidad es inferior al valor de referencia. Además, el hecho de ser una empresa familiar suaviza la relación riesgo-rentabilidad en ambos escenarios.

Este es uno de los primeros estudios en abordar la relación riesgo-rentabilidad en el contexto de empresas no cotizadas. Además, la inclusión de ser una empresa familiar como factor contingente es completamente novedosa.

The paper aims to identify the differences between developed and developing country firms with respect to firm-specific and country-level determinants of their capital structure. For this purpose, all constituent firms in one of the oldest Islamic equity indices, Dow Jones Islamic Market World Index (DJIM), are considered and the Muslim-majority status of each firm's domicile country is recognized.

The study employs Hausman–Taylor random effects regression with endogenous covariates to explain the debt ratios of firms in DJIM by separating them into developed and developing country subsamples in an unbalanced panel data setting. Developing country subsample is further split into two based on the Muslim-majority status of each firm's domicile country.

Consistent with the previous literature, this study finds that firm-specific characteristics are the main determinants of their capital structure. Additionally, the paper shows that country-level characteristics have an impact on the debt ratio, however, the types of factors vary across developed and developing countries. Debt ratios in developing country firms are lower than those in developed country firms, largely due to the significantly smaller leverage ratios of firms in Muslim-majority countries. Although the debt ratios of DJIM firms are higher in “non-Muslim” countries, the set of firm-level capital structure determinants are not statistically explained by operating in a “Muslim” country. The study also documents that, before the global financial crisis of 2008, companies in developing countries have gradually become less leveraged worldwide.

This paper provides a new perspective into the differences between developed and developing country firms' capital structures by focusing on a relatively homogeneous data set restricted by leverage screening rules of an Islamic equity index and recognizing the Muslim-majority status of each firm's domicile country.

There is still an ongoing debate on the value relevance of capital structure and its determinants. Recently the issue has been explored in family firms after being explored in mature firms. This paper investigates the role of institutional investors and the firm's innovation activity in influencing the firm's decision and ability to acquire debt capital.

A large sample of 700 privately-held family firms in Italy from 2010 to 2019. Two analysis techniques are used: panel analysis and path analysis. The value of debt and the debt ratio are used as leverage measures. The value of patent (as a proxy for innovation) and institutional investor are the explanatory variables.

The results show that institutional investors have no relationship with financial leverage measures except when controlling for an interaction variable (Institutional investors × Lombardy region). The patent value is positively correlated with debt; however, the ratio patent-to-asset is negatively related to financial leverage indicating higher risk exposure. The nonlinearity test demonstrates a turning point when the relationship between patent value and debt inverts.

Firms should monitor their innovation activity since excessive innovation increases risk exposure and affects financing opportunities and value. The involvement of institutional investors does not always enhance value.

Existing literature focuses separately on family firm innovations and financial leverage as outcome variables, emphasizing the role of institutional investors in both fields by adopting agency theory and socioemotional wealth framework. In this study, the authors go further by merging both relationships, investigating the dynamics of the institutional-family firm innovation relationship in influencing the firm's capital structure. The authors contribute to the ongoing debate by providing original findings on capital structure, governance and innovation, supported by rigorous methods to enhance family firms' decision-making.

This paper aims to develop and argue for a new research path to advance theory on incumbent firm adaptation to discontinuous technological change. Integrating variance and process epistemologies, implications of distinguishing a firm's capacity to adapt from their adaptive choices are highlighted.

The concepts and argument presented are based on an extensive review and synthesis of the literature on the phenomenon.

Distinguishing resource-based capacity variables and behavioral-based choice variables can fuel progress in the literature on incumbent adaptation to technological changes. More attention is needed on the direct, proximate determinants of what occurs in the process of adaptation, e.g. the intermediate choices to adapt, the timing of adaptive actions and the selection of a means for adapting. Work must then associate specific choices with performance outcomes to complete both sides of the mediated cause-effect model connecting characteristics of the decision issue to performance.

Most studies toward understanding how incumbent firms adapt to discontinuous technological innovation have used variance analyses to identify firm and technology characteristics that explain adaptation outcomes. Focusing on characteristics and content, however, does not adequately explain why or how firms adapt. Scholars thus continue to lament the lack of clear, practical theory. I contend one heretofore unaddressed reason for this dissatisfaction is that too much of the research base neglects the importance of understanding choices and the factors affecting them.

The purpose of this paper is to analyze how the service infusion literature explains competitive advantage through services. The four strategic management theories – competitive forces, the resource-based view, dynamic capabilities, and relational view – are applied in the analysis.

A systematic literature review analyzes the links between the service infusion and strategy literature.

The review reveals that although discussion of service infusion applies strategic management concepts, the stream lacks rigor with respect to construct definition and justification. Additionally, contextual variables are often missing. The result is an over-emphasis of contextually bound measures, such as technology, and focal actors.

The growing trends toward social networks, co-specialization, actor dependency and shared resources encourage service infusion scholars to focus on network-related and relational capabilities, co-opetition, open business models, and relational rent extraction. Furthermore, service infusion research would benefit from considering strategy-based theoretical discussions, constructs, and constraints that would improve the scientific rigor, impact and contribution.

This paper represents a systematic attempt to link the service infusion literature with strategic management theories and thoroughly analyzes the knowledge gaps and possible misconceptions.