Life Cycle Explanation Research Articles

Academic Assets, Life-Cycle, and Entrepreneurship: A Longitudinal Study of Estonian Academic Workers

This study aimed to find out how academic assets are interconnected with firm creation by academic staff at different academic life-cycle stages. The applied theoretical setting integrated resource-based and life-cycle explanations of academic entrepreneurship. A longitudinal whole population dataset of Estonian academic workers was applied, with a dependent variable reflecting firm creation, and independent variables representing different academic assets. The logistic regression results indicated the varying importance of different academic assets at different academic career stages, while divergence also exists with respect to academic discipline. The results enable postulating several theoretical propositions, accompanied by practical implications for technology transfer at universities.

Social Mechanisms of Local Knowledge Spillover in the Geography of Innovation

We connect the insight that social environments are conducive to individual creativity with the observation that creative persons are attracted to regions in which they can live out their creativity, and in doing so, indirectly contribute to the social environments and creative potential of those regions. We capture the resultant dynamics in a network theory of localized knowledge spillovers. We test this theory using two independently curated, historical datasets. The first consists of the geocoded places and years of the births and deaths of 142,902 creative persons of the secular world who lived in Europe between 1000 and 1900 A.D. The second dataset consists of geocoded places and founding years of 4,220 monasteries of the largest 81 Roman-Catholic Orders in Europe in that period. Between 1000 and 1900 A.D., monastery foundings were entrepreneurial acts, that is, local organizational innovations that require a high degree of creativity and problem-solving. As monastery foundings clearly fall outside the domain of the investigated creative persons, regional variation in monastery founding rates allow us to examine knowledge spillovers resulting from the agglomeration of creative persons in particular regions and at particular times. We extend the proposed network theory of knowledge spillovers to a life-cycle explanation for the rise and decline of regional clusters over time.

A Life Cycle Explanation of Cooperative Longevity

A micro analytical, interdisciplinary informed framework is presented to postulate why and how some cooperatives endure for long periods of time. This five-phase framework was developed through an extended research process employing inductive and deductive approaches. The paper concludes that cooperative longevity is associated with multiple factors, primarily among them, ability to adapt and ameliorate frictions and subgroup factions. This adaptability leads to multi “life cycles”. Cooperative multi life cycle regeneration is facilitated by a learned and embedded process called “cooperative genius”.

The return motivations of legal permanent migrants: Evidence from exchange rate shocks and immigrants in Australia

Why do legal permanent migrants return to their home countries? How do home country conditions influence such a decision? This paper uses exogenous exchange rate shocks arising from the 1997 Asian Financial Crisis to distinguish between the motivations of Australian immigrants to return to their home country. A 10 percent favorable shock (a depreciation in a migrant’s home country currency) leads to an almost 10 percent reduced likelihood of return in a two year period. The effect is stronger for those with pre-existing intentions to return, weaker for those undecided, and zero for those who initially desired to stay. These results favor a life-cycle explanation for migrant behavior and reject the theory that migrants are target earners who seek to invest upon return home.

Investigating the Transformation and Transition Processes Between Dynamic Capabilities: Evidence from DHL

Understanding the emergence, development, growth, or termination of dynamic capabilities (DCs) remains a critical topic of organizational research. This study contributes to and expands this stream of research by investigating the transformation and transition between two distinct DCs—acquisition-based and innovation-based—within the global logistics provider DHL across four time brackets from 1997 to 2006. Using content analysis of interviews with DHL’s managers and secondary sources, we identify DCs through bundles of underlying routines and track their evolution. Our findings provide evidence that a specific DC undergoes transformation before the company transitions to another DC, following a reactive sequence. These insights contribute to research on capability development by challenging traditional life-cycle explanations.

Displacement and gentrification in England and Wales: A quasi-experimental approach

Using event history methods we examine the relationship between residential mobility and gentrification in England and Wales. While our models of residential mobility conform to the life-cycle explanations of mobility, we find little evidence of elevated mobility in gentrifying neighbourhoods. This finding is robust across a variety of specifications. We conclude by discussing possible explanations for this counter-intuitive result.

How Moroccan managers view dividend policy

Purpose – The purpose of this paper is to survey managers of firms listed on the Casablanca Stock Exchange (CSE) to learn their views about the factors influencing dividend policy, dividend issues, and explanations for paying dividends. It compares the results to similar dividend surveys in the USA, Canada, Indonesia, and India. Design/methodology/approach – The study uses a mail survey of CSE listed firms that paid one or more cash dividends to common stock holders between June 1, 2010 and September 30, 2014 as the primary means of collecting data. Findings – The evidence shows that the most important determinants of a firm’s dividend policy are the level of current earnings, stability of earnings, and needs of current shareholders. A significant correlation exists between the overall rankings of the 25 factors influencing dividend policy between managers of Moroccan firms and those of USA, Canadian, Indonesian, and Indian firms. Managers of Moroccan firms perceive that dividend policy affects firm value. Managers view multiple theories including signaling, agency, catering, and life cycle explanations as credible and contribute in explaining why their firms pay dividends. Research limitations/implications – Despite a high response rate of almost 55 percent, the number of responses limits the ability to divide the sample firms by size, industry, and other characteristics and to test for statistically significant differences between various groups. Originality/value – This is the first survey-based research designed to document how Moroccan managers view dividends. Although evidence suggests that some factors are consistently more important than others, no universal set of factors is likely to be applicable to all firms.

The impact of hospital accreditation on clinical documentation compliance: a life cycle explanation using interrupted time series analysis

ObjectiveTo evaluate whether accredited hospitals maintain quality and patient safety standards over the accreditation cycle by testing a life cycle explanation of accreditation on quality measures. Four distinct phases of...

Age and Variations in the Attitude towards Scottish Independence – An Exploration of Cohort and Lifecycle Explanations

This paper presents findings of an exploration into the sources of the association of age with attitude towards Scottish independence. Polls and surveys have repeatedly shown that the lower the age of a person, the higher is the likelihood of them favouring independence over other ways of ruling Scotland. Using Klandermans' work on why people join social movements as theoretical framework, a binary logistic model of attitude towards independence was constructed (Nagelkerke R2=.21). Subsequently, cohort and lifecycle indicators were identified and used in separate models. It was found that the cohort model reduced the age group coefficients by about a third of their power, suggesting that cohort effects accounted for some of the observed age effects, while the age coefficients in the lifecycle model remained unchanged. While the association between attitude towards Scottish independence and age is weak, the fact that the results presented in this paper suggest that they are at least partly based on cohort differences means that support for Scottish independence may grow in the coming decades.

The Dividend Initiation Decision of Newly Public Firms: Some Evidence on Signaling with Dividends

AbstractWe track the dividend initiation (DI) decisions from a sample of 6,588 firms that went public during the period 1979–2005 and find that 873 of them initiated dividends. Our primary objective is to determine whether information signaling can explain the DI decision. We find that variables suggested by the dividend-signaling models of John and Williams (1985) and Allen, Bernardo, and Welch (2000) are significant determinants of the DI decision and the associated announcement-period stock price effect. We also find support for the residual, agency, tax, clientele, transaction costs, catering, and life-cycle explanations of dividend policy.

Motivation for Repurchases: A Life Cycle Explanation

This study examines the motives for share repurchases. Whereas most prior research points to either the signaling or free cash flow hypothesis, we find that the motives for repurchases differ depending on the firm’s life cycle stage. Specifically, we find that a firm in the growth stage tends to announce a repurchase program to signal its undervalued stock whereas a firm in the mature stage is prone to buy back shares to dispense excess free cash flow. We also find that the market reaction to repurchase announcements corroborates this life-cycle argument.

Dividend policy in Indonesia: survey evidence from executives

PurposeThis study aims to survey managers of dividend‐paying firms listed on the Indonesian Stock Exchange (IDX) to learn their views about the factors influencing dividend policy, dividend issues, and explanations for paying dividends. The study also aims to focus on Indonesia, the largest national economy in Southeast Asia, because relatively few studies examine why Indonesian firms pay dividends.Design/methodology/approachThe primary means of gathering data is a mail survey. The two‐page survey instrument consists of three main sections: 22 factors for determining a firm's dividend policy; six questions that provide background information about the respondents and their firms; and 27 statements about dividend policy in general. Of the 163 firms surveyed, 52 firms responded, resulting in a response rate of 31.9 per cent.FindingsThe evidence shows that managers view the most important determinants of dividends as the stability of earnings and the level of current and expected future earnings. They also believe that the effects of dividends on stock prices and needs of current shareholders are important determinants. The evidence shows that managers of Indonesian firms perceive that dividend policy affects firm value. Managers seem to agree that multiple theories including signaling, catering, and life cycle explanations help to explain why their firms pay dividends.Research limitations/implicationsThe study focuses on a limited number of factors and issues involving dividend policy. While non‐response bias could potentially limit making generalizations to the population of IDX firms, statistical tests show no significant differences between respondents and non‐respondents on various firm characteristics.Practical implicationsThe evidence suggests that no universal set of factors is likely to be applicable to all firms when setting dividend policy.Originality/valueThis study presents new evidence on the perceptions of managers of dividend‐paying IDX‐listed firms about the factors influencing dividend policy, dividend issues, and explanations for paying dividends.

Understanding Electoral Turnout Among British Young People: A Review of the Literature

This article reviews the literature on youth engagement in politics. The article develops the argument that much of the research in this area is not set within the commonly understood and widely accepted political science literature on the determinants of voting behaviour in the UK. The article critiques the methodological approach which underpins much of this research, suggesting that in order to gain a real understanding of the dynamics of contemporary youth engagement an understanding of generational influences and differences is essential. I argue that explanations for youth disengagement tend to emanate from two schools of thought: the traditional political science understanding of youth turnout based on life-cycle explanations, or what I term the ‘anti-apathy’ approach, which, I argue, fails to situate young people's political activity within the context of the political life cycle.

A Growth Type Explanation for Persistence in Retained Earnings and Propensity to Pay Dividends

We show that while firms that typically pay dividends already have high ratios of retained-earnings-to-total-equity (RE/TE) and high propensities to pay (PTP) early on, firms that typically do not pay dividends have persistently low RE/TE and low PTP even after 20 years of growth. This non-ergodic phenomenon goes beyond a lifecycle explanation. We propose a growth type view, in which low growth type can accommodate the popular distribution-retention tradeoff argument in the lifecycle explanation for high RE/TE and PTP, but high growth type is responsible for persistently low RE/TE and PTP. The growth type view can explain why low RE/TE and PTP can be surprisingly long-lived, and suggests that typical non-payers deliberately do not pay dividends even when they can, because doing so may confuse the market.

Behavioral explanations of trading volume and short-horizon price patterns: An investigation of seven Asia-Pacific markets

We investigate whether behavioral postulations offer any implicit explanation of the country-varying relation between trading volume and price pattern among short-horizon winners/losers in seven Pacific-Basin markets during the period 1990 to 2000. Our findings lend credence to the Lee and Swaminathan [Lee, C. and Swaminathan, B., 2000. Price momentum and trading volume, Journal of Finance 55, 2017–2069.] Momentum Life Cycle explanation that high (low) volume winners (losers) are more likely to experience price reversals, whereas high (low) volume losers (winners), price momentum, in the subsequent period. This observation is especially pronounced in Hong Kong. Other models such as those based on an information diffusion process and overconfidence in glamour stocks offer limited explanation for the relation.

The perception of dividends by Canadian managers: new survey evidence

PurposeThe purpose of this research is to analyze survey results on the perception of dividends by managers of dividend‐paying firms listed on the Toronto Stock Exchange (TSX).Design/methodology/approachManagers from a sample of 291 dividend‐paying TSX‐listed Canadian firms were surveyed about their views on dividends.FindingsThe most important factors influencing dividend policy are the level of current and expected future earnings, the stability of earnings, and the pattern of past dividends. Despite dramatic differences in the level of ownership concentration between Canadian and US firms, their corresponding managers' views on the determinants of dividends are similar. Canadian managers believe that dividend policy affects firm value but express little agreement with the theory of a residual dividend policy. They express strong support for the signaling and lifecycle explanations for paying dividends, but not for the bird‐in‐the‐hand, tax‐preference and dividend clientele, agency cost, or catering explanations. Compared with non‐dividend payers, Canadian dividend‐paying firms are significantly larger and more profitable, have greater cash reserves and ownership concentration, and have fewer growth opportunities.Originality/valueThis study updates and expands previous survey‐based research on dividends and provides new evidence from managers of Canadian firms.

Why Do Migrants Return to Poor Countries? Evidence from Philippine Migrants' Responses to Exchange Rate Shocks

This paper distinguishes between target-earnings and life cycle motivations for return migration by examining how Philippine migrants' return decisions respond to major, unexpected exchange rate changes in their overseas locations (due to the Asian financial crisis). Overall, the evidence favors the life cycle explanation: more favorable exchange rate shocks lead to fewer migrant returns.A10% improvement in the exchange rate reduces the 12-month return rate by 1.4 percentage points. However, some migrants appear motivated by target-earnings considerations: in households with intermediate foreign earnings, favorable exchange rate shocks have the least effect on return migration, but lead to increases in household investment.

Why Do Migrants Return to Poor Countries? Evidence from Philippine Migrants' Responses to Exchange Rate Shocks

This paper distinguishes between target-earnings and life-cycle motivations for return migration by examining how Philippine migrants%u2019 return decisions respond to major, unexpected exchange rate changes in their overseas locations (due to the Asian financial crisis). Overall, the evidence favors the life-cycle explanation: more favorable exchange rate shocks lead to fewer migrant returns. A 10% improvement in the exchange rate reduces the 12-month return rate by 1.4 percentage points. However, some migrants appear motivated by target-earnings considerations: in households with intermediate foreign earnings, favorable exchange rate shocks have the least effect on return migration, but lead to increases in household investment.

The Effect of Life Cycle and Parishioner Perceptions on Average Household Giving in Catholic Parishes

Despite the critical importance of financial and other temporal resources to the vitality of religious congregations, little is known about the congregation characteristics that are related to giving. Catholic giving to the parish is related to household income and Mass attendance. In this paper, the authors go beyond these findings and investigate other Catholic parish determinants of average per household giving in the parishes of one diocese in the U.S. This study employs a large sample (264 parishes incorporating survey responses by nearly 27,000 parishioners) to study religious giving and incorporates some parish characteristics and parishioner attitude variables not included in previous studies. In addition to the expected findings that parish average median household income and the average Sunday Mass attendance were positively associated with average household giving, this study offers qualified support for the life-cycle explanation of low giving among younger households. Also, parishioners' perceptions of whether the parish is welcoming, has sufficient resources, helps others in need or has a worship life that assists the respondent were found to be significant.

Effects of pensions on savings: analysis with data from the health and retirement study

This paper examines the composition and distribution of total wealth for a cohort of 51- to 61-year olds from the Health and Retirement Study (HRS), and the role of pensions in forming retirement wealth. Pension coverage is widespread, covering two-thirds of households and accounting for one-quarter of accumulated wealth. Social security benefits account for another quarter of total wealth.As calculated from earnings records, the present discounted value of social security benefits is less than the present value of taxes paid. Earlier than many expected, social security is already a poor investment on average for this cohort on the verge of retirement. When pensions and social security are included, wealth accumulated by the HRS population to date is substantial. At their expected retirement date, using only the wealth accumulated by their mid-fifties, the HRS household with median replacement rate could finance a fixed, nominal two-thirds joint and survivor annuity replacing 79 percent of last earnings, and a real annuity replacing 52 percent of last earnings. Replacement rates for median earners are higher. Additional savings made over the seven years remaining until retirement will raise those replacement rates by about a fifth. When measured against a standard of adequacy based on average yearly earnings over the worklife, with adjustments made for the absence of preretirement savings, children, taxes, work-related expenses and other factors, these replacement rates appear adequate.Lifetime earnings are measured for each individual in the HRS from social security earnings records augmented by self-reported earnings histories. When pensions and social security are counted in total wealth, the ratio of wealth to lifetime earnings declines from very high levels in the bottom ten percent of the earnings distribution, remains at roughly 40 percent from the 25th through 95th percentile of the lifetime earnings distribution, and then falls to 32 percent for those in the top five percent of the earnings distribution.This result is consistent with the predictions of a simple, stripped-down life-cycle model. Also consistent is a finding that the ratio of wealth to lifetime earnings is no higher for those with pensions than for those without pensions. However, heterogeneity is quite important. Real estate and business wealth are a larger share of total wealth for those without pensions, reflecting the importance of self-employment in wealth accumulation.Multivariate regressions relating total wealth to pension coverage and pension value, which standardize for sources of heterogeneity, suggest that pensions cause very limited displacement of other wealth, if any. Pensions add to total wealth by at least half the value of the pension, and in most estimates by a good deal more.These findings are not consistent with a simple life-cycle explanation for savings. They also raise questions about whether pensions are fundamentally a tax avoidance device, allowing substitution of pension for nonpension savings.