Belgian Business Research Articles

Language and Intercultural Communication: Belgian Business Owner with Indonesian Workers in Murianto Workshop, Jepara, Central Java

This study explores the dynamics of intercultural communication between Niels Evens, a Belgian business owner, and his Indonesian workers in the Murianto Workshop in Jepara, Central Java. Drawing upon the Communication Accommodation Theory (CAT) by Giles and Coupland and the Conversational Constraints Theory (CCT) by Kim, the study discusses the interplay of cultural adaptation and communication strategies. The objectives of this study are to understand the implementation of CAT and CCT by the owner and the workers of Murianto Workshop in Jepara, Central Java, and also to identify the constraints during the communication between the owner and the workers of Murianto Workshop. The data for this research was gathered through a semi-structured interview conducted with Niels Evens and presented descriptively.The finding shows that Niels Evens’ effort to adapt and understand the local culture can be called convergence from the Communication Accommodation Theory. Although many of his actions reflect collectivist tendencies, he establishes boundaries with his workers to maintain a professional work environment. From the Conversational Constraints Theory, it can be concluded that the constraints faced by Niels Evens are about clarity and effectiveness concerns. The constraints he faced are related to the change of communication strategy from a direct to an indirect approach, which is also his constraint in adapting to the local culture.

It all starts with a story: Questioning dominant entrepreneurial identities through collective narrative practices

Taking a multiple-practitioner perspective on entrepreneurial identity construction, we explore how identities can be co-constructed through social interactions. In the context of a social entrepreneurship course at a Belgian business school, we stress the role of collective narratives in breaking free of dominant frames of reference and shaping emancipatory ones. As the stories unfold, collective narratives provide opportunities to perform and negotiate dominant identities as discursive resources: to ‘thin’ certain parts and ‘thicken’ other preferred traits. Through collective narrative practices, practitioners can disrupt the dominant individual heroic entrepreneur myth and develop new entrepreneurial identities reflecting an understanding of entrepreneurship as collective action. Our original intervention method, scaffolding conversations, shows how narratives can be collected and analysed at the individual and group levels, providing members with opportunities to reflect on their shared experiences, struggles and hopes.

Employee Compensation, Training and Financial Performance during the COVID-19 Pandemic

The purpose of this paper is multi-faceted: first, to analyze the impact of employee compensation and training on firms’ financial performance and the moderating effect of the COVID-19 pandemic on the relationship between employee compensation and financial performance, as well as the relationship between training and financial performance; and second, to analyze the decision-making process pertaining to these two aspects of human resources both prior to and during the COVID-19 pandemic. This study utilizes a sample of 103 Belgian pharmaceutical firms whose financial statements were published in the Bureau Van Djik database between 2012 and 2021. The estimation approach employed was panel data analysis, and the Generalized Method of Moments was used to evaluate the robustness of the system. Whether or not a crisis exists greatly alters the parameters that influence a pharmaceutical company’s business performance. Specifically, the results reveal that the COVID-19 pandemic had a substantial and negative impact on financial performance. Human resource factors, which include employee compensation and training, more accurately explain the company’s performance. The key contribution of such an approach is to illustrate that human resource-related factors have an impact on performance indicators during various types of crises, thereby assisting HR managers in making the best decision during times of crisis. It provides basic guidelines for policymakers to adhere to in order to have a better knowledge of how human capital characteristics might be utilized to improve the performance of their businesses during times of crisis. In addition, this research demonstrates that the firm’s unique characteristics may affect the success of Belgian businesses.

Entrepreneurial Intentions of Business Students: A Matter of Masculinity and Femininity

The purpose of this paper is to investigate the entrepreneurial intention of business students, with an emphasis on their masculine and feminine characteristics, instead of the usual classification male / female. While recent studies have increased the understanding of the implications of being a man or woman (sex differences) on entrepreneurial intention, papers which examine whether masculinity and/or femininity (gender differences) impact entrepreneurial intention are rare. The following paper offers insights into the latter research gap by quantitatively investigating the genderedness of intentions of business students, which is of particular importance for fostering entrepreneurship. The Theory of Planned Behavior is used as underlying framework, with entrepreneurial intention as dependent variable and its three antecedents (‘attitude towards behavior’, ‘subjective norms’, and ‘perceived behavior control’). A survey is administered and filled out by 501 Belgian business students of different universities. Masculinity and femininity are measured by the Bem Sex Role Inventory Model. The results are analyzed by structural equation modeling. Students with high masculinity have significant higher entrepreneurial intentions than students with low masculinity. There is a significant association between masculinity and entrepreneurial intentions through the mediating role of attitude towards behavior and subjective norms. Furthermore femininity has a positive impact on entrepreneurial intentions with subjective norms as mediator. This study contributes to the debate which personality traits influence entrepreneurial intention and further deepens the discussion how educators could approach different types of students in order to stimulate their interest in entrepreneurship. Previously conflicting results about the impact of sex on entrepreneurial intention can perhaps be solved if studies are in the future enriched with socially constructed gender variables.

Getting Business People on the Coach: A Stated Preference Experiment for Intercity Long Distance Coach Travel

From the middle of the 1990s, the traditional coach industry in Western Europe has been in decline. However, recent regulatory changes have created new opportunities in the sector of scheduled intercity services, resulting in fast growth of both coach lines and passengers traveling on these lines. Until now, operators have persuaded a public consisting mainly of students and people traveling for leisure purposes. In this paper we analyze whether business travelers could also be an interesting target group and what service characteristics are most convincing for them. For this purpose, we organized a stated preference experiment in which we gathered data from 63 Belgian business travelers. Analysis of the data revealed that for business travelers, price is the dominant factor in seducing customers. However, journey length, higher commercial travel speeds, ample leg space, on-board Wi-Fi and the entertainment system also play a role. Moreover, business travelers are prepared to pay for extra services. We conclude that when an adjusted service is offered, business travelers form an interesting (additional) target group for the intercity coach business. Our findings could be used by coach operators for product development and help to understand travel market segmentation, and eventually also have impact on developing a more sustainable travel policy.

The UN ‘Guiding Principles on Business and Human Rights’: Methodological Challenges to Assessing the Third Pillar: Access to Effective Remedy

ABSTRACTThis article presents methodological challenges for legal analysis when dealing with the third pillar of the United Nations ‘Guiding Principles on Business and Human Rights’ (UNGP), particularly principles 26, 27 and 31, regarding the state-based non-judicial and judicial mechanisms that provide ‘effective’ access to an ‘effective’ remedy. The article reflects on the challenges encountered during a research project whose goal it was to map and evaluate the state-based mechanisms available in Belgium for business-related human rights abuses perpetrated in Belgium or by Belgian businesses in third countries. It is argued that the identification and mapping of the existing state-based mechanisms available to victims of business-related human rights abuses should rely on binding legal sources and therefore, on a precise ex ante legal analysis, whereas the assessment and evaluation of their impact, scope or effectiveness require an ex post empirical analysis.

How system dynamics education may enhance virtue-based Ethics

In this paper, the author’s teaching experience at a Belgian Business school gives ground to the tenet that system-dynamics (SD) education would serve virtue-based Ethics in a complex world. Information is first provided on a SD course in Brussels created by the initiator of the Euro Working Group on OR and Ethics, Professor Brans. It is then argued that this teaching may induce a cognitive transformation towards a holistic view on complex decision problems, letting emerge several meta-virtues: respect, attentiveness, and wisdom. This cognitive process is illustrated by some SD modelling examples from the classroom reflecting important young people’s preoccupations in today’s society.

Assessing the electronic invoicing potential for private sector firms in Belgium

Governments around the world identify the advancement of electronic invoicing in businesses as crucial for tackling administrative burdens. This paper examines, for the first time, the potential cost savings of e-invoicing in Belgium. Our analysis shows that the total cost of invoicing for Belgian private sector businesses in 2014 amounted to €3.47 billion (0.96% of GDP) and could be reduced to €1.46 billion (0.38% of GDP) if all invoices were sent digitally. Furthermore, an analysis of both barriers and enablers of e-invoicing reveals significant concerns that remain regarding the safety of e-invoicing, although a majority of private sector businesses clearly identifies the potential efficiency gains. From our contingent valuation survey among 683 Belgian businesses, we learn that the average willingness to pay (WTP) for the required investments for implementing digital invoicing amounts to €2,380. However, the potential annual cost savings of digital invoicing for the average small business in our sample is over €7,000. Additionally, our linear regression models indicate that the WTP is positively impacted by the perceived time and reduced risk gains of digital invoicing.

Compliance costs caused by agency action? Empirical evidence and implications for tax compliance

Compliance costs of taxpayers should not only be affected by the tax law itself but also by its implementation through the tax authorities. In this paper we analyze the effect of authority behavior on the burden of complying with tax regulations. Using survey data of Belgian businesses, we develop an estimation strategy to overcome simultaneity bias by the construction of proxy variables. According to our estimate, a customer-unfriendly tax administration increases the average compliance burden by about 27%. Our outcome has interesting implications for further research. First of all, authority behavior does not only affect “soft” tax compliance factors like fairness and trust, but also “hard” aspects like costs. Second, the distribution of administrative cost burdens between the taxpayer side and the authorities may be important regarding the cost-efficiency of the tax system as a whole.

Capital structure adjustments in private business group companies

The literature on capital structure dynamics assumes that companies trade-off the advantages of a leverage adjustment and its costs. In general, private companies are assumed to face relatively large adjustment costs, and should have lower financing flexibility. However, we argue that an important class of private companies – business group affiliates – may face relatively low adjustment costs because of their access to both internal and external capital markets and the beneficial reputation effects of belonging to a group. Our empirical results show significant differences in the composition of the capital structure and the leverage adjustment process between affiliates of private Belgian business groups and comparable stand‐alone companies. Group affiliates have higher levels of leverage, and adjust their capital structure more frequently than stand‐alones. Our evidence suggests that the flexibility in group companies’ capital structure is not solely driven by the use of internal leverage: group affilia...

You are the Way You Fly: On the Association between Business Travel and Business Class Travel

The objective of this Viewpoint is to scrutinize the commonsensical association between ‘business travel’ and ‘business class travel’. Indeed, in research on theory and practice in air transport, both concepts are often assumed to be almost one and the same. For instance, the number of ‘business visitors’ at an airport is often guesstimated based on the number of ‘business class’ bookings. Thus the Belgian branch of BCD Travel, a leading provider of global corporate travel management, declared in a 2007 press statement that in 2006 Belgian business travelers were primarily flying to New York, Frankfurt, Munich, London and Zurich because these cities were the most important destinations of customers booking business class tickets . It is, however, clear that in practice the business class/business travel relation depends inter alia on corporate policies and individual motives in terms of travel planning. For instance, business travelers do not necessarily travel in business class, while some (ostensibly rich) tourists may well travel in business class because of enhanced comfort . Furthermore, the analytical connection may exhibit a variegated pattern as some business travelers may well fly economy class on short-haul flights because of the short travel time (e.g. some companies have a travel policy that only allows business class travel for intercontinental travel). To our knowledge, the conceptual and empirical relations between ‘business travel’ and ‘business class travel’ have not yet been explicitly broached in research on air transportation. The starting point of this Viewpoint, therefore, is that transport researchers and policy-makers should treat this commonsensical association as an assumption that needs validation and specification rather than as a grounded truth. In our argument, we use a number of recent insights from research on the sociology, economics and geography of business travel summarized in a recent book on this topic (Beaverstock et al., 2010a) to spell these relations out in more detail.

The Belgian Industrial Confidence Indicator: Leading Indicator of Economic Activity in the Euro Area?

The international press has recently reported on the widely-held view in the financial markets that the movement of the Belgian industrial confidence indicator might precede the euro area business cycles. The initial purpose of this paper is to assess whether this market perception is more than a simple optical illusion, resulting from the inspection of graphical representations of the data. For that, explicitly formalised methods are used to identify the timing of turning points in the industrial confidence indicators for Belgium and for the euro area, and the statistical significance of the differences in timing has been assessed using the Randomization Test proposed by Banerji. We conclude that the turning points in Belgium do in fact significantly lead turning points in the euro area from 1993 onwards. The leading nature of the Belgian industrial confidence indicator is not really surprising, as changes in the business cycle stages in Belgium seem to have been ahead of changes in the euro area during the period from 1985 to the first quarter of 2000. Among the three different reference series used to compare the business cycle movements in Belgium and in the euro area, the null hypothesis that turning points in Belgium do not lead those in the euro area is rejected at a confidence level above 90 p.c. in the case of GDP and of the degree of utilisation of production capacity in manufacturing industry. The leading nature is more pronounced for the sub-period beginning with the first quarter of 1993, especially in the case of GDP. However, the comparison of the movements of the industrial production indices does not confirm these conclusions. Due to the lack of sufficiently long time series for the euro area it was not possible to check whether differences in the economic structure could explain the leading nature of the activity in Belgium. However, using partial industrial confidence indicators, three factors (specialisation in intermediate goods, openness and high representation of small and medium-sized enterprises) that might explain why the Belgian business indicator and Belgian activity seem to lead their euro area counterparts were investigated, but could not be validated by the data. As it seems to be impossible to identify one or more sectors or groups of enterprises accounting for the leading nature of Belgian economic activity when looking at turning points, at least when using the business survey data, it looks as if this leading nature is a kind of general feature of the Belgian economy.

A Generalised Dynamic Factor Model for the Belgian Economy - Useful Business Cycle Indicators and GDP Growth Forecasts

This paper aims to extract the common variation in a data set of 509 conjunctural series as an indication of the Belgian business cycle. The data set contains information on business and consumer surveys of Belgium and its neighbouring countries, macroeconomic variables and some worldwide watched indicators such as the ISM and the OECD confidence indicators. The statistical framework used is the One-sided Generalised Dynamic Factor Model developed by Forni, Hallin, Lippi and Reichlin (2005). The model splits the series in a common component, driven by the business cycle, and an idiosyncratic component. Well-known indicators such as the EC economic sentiment indicator for Belgium and the NBB overall synthetic curve contain a high amount of business cycle information. Furthermore, the richness of the model allows to determine the cyclical properties of the series and to forecast GDP growth all within the same unified setting. We classify the common component of the variables into leading, lagging and coincident with respect to the common component of quarter-on-quarter GDP growth. 22% of the variables are found to be leading. Amongst the most leading variables we find asset prices and international confidence indicators such as the ISM and some OECD indicators. In general, national business confidence surveys are found to coincide with Belgian GDP, while they lead euro area GDP and its confidence indicators. Consumer confidence seems to lag. Although the model captures the dynamic common variation contained in the data set, forecasts based on that information are insufficient to deliver a good proxy for GDP growth as a result of a nonnegligible idiosyncratic part in GDP's variance. Lastly, we explore the dependence of the model's results on the data set and show through a data reduction process that the idiosyncratic part of GDP's quarter-on-quarter growth can be dramatically reduced. However, this does not improve the forecasts.

Capital Structure Dynamics in Private Business Groups

The literature on capital structure dynamics assumes that companies trade-off the advantages of a leverage adjustment and its costs. In general, private companies are assumed to face relatively large adjustment costs, and should have lower financing flexibility. However, we argue that an important class of private companies – business group affiliates – may face relatively low adjustment costs because of their access to both internal and external capital markets and the beneficial reputation effects of belonging to a group. Our empirical results show significant differences in the composition of the capital structure and the leverage adjustment process between affiliates of private Belgian business groups and comparable stand-alone companies. Group affiliates have higher levels of leverage, and adjust their capital structure more frequently than stand-alones. Our evidence suggests that the flexibility in group companies’ capital structure is not solely driven by the use of internal leverage: group affiliates more frequently adjust their external leverage as well, unless the group is in poor financial health, in which case the affiliates’ probability of attracting external leverage is severely reduced.

Application of classical and robust chain-ladder methods: results for the Belgian non-life business

The solvency II regulation for the non-life insurance business focuses on the application of the chain-ladder method in the EU. A recent memorandum of the EU also expresses its concern about the treatment of outlying data. Not only the appearance but certainly the consequences for the solvency risk capital are brought up. We will discuss the results of applying classical and robust chain-ladder methods to real data from several lines of business in the non-life insurance branch in Belgium.

Learning mode of small business owners in Belgium

The aim of the paper is to explore the learning mode of small business owners from a theoretical stance and based on empirical evidence. We distinguish between the required learning mode, the actual learning mode and the supported learning mode. Data were collected using the focus group method in a very heterogeneous sample of Belgian small business owners. The results indicate several gaps between the required, actual and supported learning modes, of which many are due to unawareness of learning needs and lack of reflective learning among small business owners. The data also indicate, among others, that solutions to fill learning gaps proposed in the literature are not applicable to all owners, e.g., not all owners are able to learn through networks.

A Case Study of Arteconomy – Building a bridge between art and enterprise: Belgian businesses stimulate creativity and innovation through art

AbstractIn a world where there has long since been more at play than functionality and cost price, we need creative innovation more than ever before. Organizations are trying to find ways to embed more creativity, more innovative potential, and more entrepreneurship into the everyday running of their businesses. They are constantly in search of effective ways to make their organization's culture better equipped for change. The Belgian non-profit organization Arteconomy has developed a method for doing this, by bringing business people and artists together in a series of particularly unique projects. In this paper, you can read about the philosophy that give rise to Arteconomy and the pioneering work that preceded it. The paper describes two specific projects that provide a concrete illustration of the arteconomy approach in two Belgian textile firms: ‘The Dragon of Deerlijk’ at Promo Fashion and ‘The Walk’ at Concordia Textiles. This paper is particularly relevant to illustrate change as an organizational process and to demonstrate how organizations can stimulate employees' creative skills.

A Case Study of Arteconomy – Building a bridge between art and enterprise: Belgian businesses stimulate creativity and innovation through art

AbstractIn a world where there has long since been more at play than functionality and cost price, we need creative innovation more than ever before. Organizations are trying to find ways to embed more creativity, more innovative potential, and more entrepreneurship into the everyday running of their businesses. They are constantly in search of effective ways to make their organization's culture better equipped for change. The Belgian non-profit organization Arteconomy has developed a method for doing this, by bringing business people and artists together in a series of particularly unique projects. In this paper, you can read about the philosophy that give rise to Arteconomy and the pioneering work that preceded it. The paper describes two specific projects that provide a concrete illustration of the arteconomy approach in two Belgian textile firms: ‘The Dragon of Deerlijk’ at Promo Fashion and ‘The Walk’ at Concordia Textiles. This paper is particularly relevant to illustrate change as an organizational process and to demonstrate how organizations can stimulate employees' creative skills.

Executive forum: Public support for the business angel market in Europe – a critical review

Various levels of government have implemented instruments to promote business angel investment, often mirroring those used to support the institutional venture capital market. The paper reviews the existing practices at a point in time when intervention in the field of business angels is becoming increasingly popular in Europe. Governments are looking for innovative ways to enhance business angel investments and the evolution of the policy in the field is rather trial and error based. We see a shift from classical support to network creation and improvement of the fiscal environment, towards guarantee schemes for angel investments and co-investment schemes. This latest, most recent, approach is analysed by a detailed case study of the Belgian Business Angels Plus (BA+) scheme, which matches the financing provided by a business angel investor and the entrepreneur. In its initial two and a half years of operation the BA+ scheme has received close to 70 applications, of which just over 20 have been rejected. The characteristics of the deals financed by BA+ applicants are similar to those found in the average investment in Belgium. Following up the companies applying for the BA+ loan shows that the programme has so far avoided incurring significant losses. However, it is not possible to determine if lack of finance was one of the reasons for the bankruptcy of the companies that did not secure the additional loan.

A Generalized Dynamic Factor Model for the Belgian Economy

This paper aims to identify the Belgian business cycle and forecast GDP growth based on a large data base of short-term conjunctural indicators. The data base consists of 509 indicators containing information on surveys of Belgium and its neighbouring countries, macroeconomic variables and some worldwide watched indicators such as the US ISM and OECD confidence indicators. The statistical framework used is the One-Sided Generalized Dynamic Factor Model developed by Forni, Hallin, Lippi and Reichlin (2003). The model reduces the variables to their core business cycle information, defined as the part of variation of the variables common to the data set. Well-known indicators such as the EC economic sentiment indicator and the NBB overall synthetic curve contain a high amount of business cycle information. Furthermore, the richness of the model allows to determine the cyclical properties of the series and to forecast GDP growth all within the same unified setting. We classify the variables into leading, lagging and coincident with respect to a reference business cycle defined as the common variation contained in quarter-on-quarter GDP growth. 22% of the variables are found to be leading. Amongst the most leading variables we find asset prices and international confidence indicators such as the ISM and some OECD indicators. In general, national business confidence surveys are found to be coincident, while consumer confidence seems to lag. Although the model captures the dynamic common variation contained in the data set, forecasts based on that information are insufficient to deliver a good proxy for GDP growth given a non-negligible idiosyncratic part in GDP's variance. Lastly, we explore the dependence of the model's results on the data set and show through a data reduction process that the idiosyncratic part of GDP growth can be dramatically reduced. However, this does not improve the forecasts.