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This study traces the patterns of competition, strategic orientations, and the differential risk/return profiles associated with various business strategies in the banking industry. It addresses the unresolved questions of strategic groups existence, stability, and performance effects by examining two contrasting models of strategic group formation/identification. It extends the literature conceptually by proposing that strategic groups be identified using firm resource bundles/capabilities in addition to observed product market strategies. Further, it tests an expanded model of strategy-performance linkage, and draws several empirical implications for the resource based view. In the longitudinal facet, using data from the Bank Compustat database, eleven scope and resource deployment variables were employed to identify strategic groups at the corporate strategy level, using a two stage clustering algorithm, over a fifteen year period (1974-1988). The impact of discontinuous environmental change such as deregulation on strategic group dynamics and firm level risk-return relationship was examined. In addition, performance and risk differences both across and within groups were investigated. In the cross-sectional facet, scores obtained from an expert panel of leading bank analysts on ten key resources during semi-structured interviews, were used to identify strategic groups. The study found that strategic groups characterized competition in the banking industry both before and after deregulation. Some support was found for the underlying stability of the strategic groups, despite the profound changes characterizing the banking industry. Environmental discontinuity was found to enhance inter-group mobility and strengthen the negative risk-return relationship prevalent in this industry. Across-group performance differences were found on economic and risk dimensions, but not on risk-adjusted dimensions except in the last time period. Within-group performance differences were found, but risk differences within groups existed in only 45% of the tests. A model of firm performance which included strategic group membership along with firm resources was found to have a significantly greater explanatory power than a model which omitted firm resources. Finally, resource based groupings appeared to be a empirically viable representation of industry rivalry and these groups were meaningful predictors of economic performance.

This dissertation probes the interface between foreign direct investment (FDI) and sustainable industrial development in the context of the neo-liberal institutions governing the global economy. Comprised of three essays, it defines sustainable industrial development as simultaneous evolution across three axes: (1) economic, defined as increases in local capacities for production and innovation; (2) environmental, defined as a reduction in the environmental and health impacts of industry; and (3) social, defined as increases in the job-creating and equity-enhancing capacities of industry. The dissertation focuses on the economic and environmental dimensions. The dissertation is structured around three questions. First, is the neo-liberal claim about the positive contribution of FDI to development robust, that is, supported by empirical evidence? In particular, what is the evidence that FDI generates knowledge and environmental spillovers and "crowds in" domestic investment in developing countries? The central finding is that there is a substantial gap between theory and evidence. There is no statistical evidence that FDI generates positive and some evidence that it generates negative horizontal spillovers; and little evidence that it generates positive vertical spillovers. Case studies find evidence of both positive and negative horizontal and vertical spillovers. Second, what factors determine the environmental and economic impacts of FDI? The central findings are that host country regulation is pivotal and that neo-liberal global governance constrains nation-states in both direct and indirect ways. Global and regional trade and investment rules directly limit requirements host country governments can place on multinational corporations. In the absence of global environmental or corporate responsibility standards, competition between states for FDI puts a downward pressure on national environmental policy. While other social forces, including citizen demand, push environmental standards up, the counteracting pressure of competition for FDI keeps them "stuck in the mud," that is, it slows the rate of innovation in response to environmental threats. Third, how should FDI be governed, at the national and international levels, to more reliably promote sustainable industrial development? At the national level, it suggests that corporations work in a "development partnership" with host country governments and civil society. Such a partnership would define, pursue and evaluate progress towards specific development objectives. At the international level, investment rules should provide "policy space" for developing countries to pursue development objectives, and specify social responsibilities of foreign investors.

The basic goal of the dissertation is to understand how different institutional settings, technologies and social preferences could foster different, rival, or complementary organizational forms. The first essay argues that as a consequence of generalized increasing returns to scale, the network externalities in advertising and marketing inhibit the emergence and proliferation of partnerships in the software industry in contrast to legal services. We first construct a model after Rowthorn and Pagano (1996) to illustrate the choice of organizational form under two different types of agency costs: high-agency costs of labor and high-agency cost of capital. Using the US Economic Census Data (1997) we find that there is a negative relationship between the fraction of partnerships in a sector and the average share of advertisement in total expenses in that sector. The second essay uses a large comprehensive and new dataset on Turkish microenterprises to illustrate the importance of institutional complementarities between the credit market and the organizational choice. Employing a generalized selection model following Lee (1983), in the first stage we regress the choice of credit on selected exogenous variables and obtain the selection variable (the inverse Mills ratio). In the second stage we regress log monthly profit on variables describing firm and entrepreneurial characteristics controlling for sectors and the selection bias for separate groups of firms. The empirical results show that both the formal and the informal firms are credit constrained; indeed the formal firms are more credit constrained. Knowing this, we claim it would not be rational for the small informal firms to incur the "entry cost" of formalization if they do not have sufficient assets in the first place. The third essay takes the arguments on the potential negative effects of heterogeneity on economic performances of partnerships seriously and provides a preliminary test in a very simple setting of two-agent firms. Controlling for the selection bias (endogenous choice of the organizational form by the agents) we find almost no effect of heterogeneity on the economic performances of microenterprises, proxied by monthly profit.

This dissertation deals with the relationship between executive compensation and corporate control. The chapters II and III deal specifically with the effect, on the compensation of a chief executive officers (CEO), of changes in the perceived threat of a hostile takeover of their firm. Chapter IV considers the general problem of the executive pay in theories of the control and behavior of firms, and the effect of market liberalization on income distribution within firms. In Chapter II, a simple efficiency wage model of CEO pay is combined with a model of a firm constrained by a threat of hostile takeover. Three versions of the model are specified, corresponding to three different assumptions about who controls the pay-setting process (the shareholders, the board of directors, or the CEO). I then ask how the level of CEO pay changes with an exogenous change in the cost of a hostile takeover, and conclude that the sign of the change depends upon who controls the pay-setting process. Chapter III is an econometric exploration of the models in chapter II. The probability of hostile takeover is modeled as a function of time, industry, and a firm's financial characteristics. Probit estimates of this probability are included as a variable in CEO wage equations for large US firms from 1979-1988. An increased threat of takeover is found to cause a small but statistically significant increase in CEO pay. This is consistent with the view that CEO pay is determined by the CEO, and inconsistent with the view that the CEO is the agent of either the shareholders or the board of directors. Chapter IV begins with a critical appraisal of research on executive pay which has been based on the assumption that the locus of control of the firm can be inferred from the relationship between executive pay and various measures of a firm's performance. I show that these inferences are mostly wrong. Next, I show that recent developments in agency theory have undermined the conventional view that the governance structure of the firm can be interpreted as an optimal contract. Finally, I consider the large unexplained differences in the level of CEO pay, between industries and countries, and between time periods. I use a simple efficiency wage model to provide a consistent explanation of how various institutional differences, and differences in industry characteristics, cause differences in the level of CEO pay.

While there is a general impression expressed by many in the media and among policy makers that the economy is becoming more globalized and internationally competitive, these claims are not agreed upon among economists. This dissertation attempts to clarify the validity of these crucial claims through empirical research. This dissertation focusses on one aspect of economic internationalization and integration--the behavior of U.S. multinational manufacturing corporations and their foreign direct investment activities. The research presented here attempts to test two main hypotheses; first, that the extent of internationalization within U.S. manufacturing firms has grown in the recent past and, second, that production abroad by U.S. manufacturers substitutes for production in the domestic U.S. economy by these firms. Using industry data from the Department of Commerce Surveys of U.S. Direct Investment Abroad, this dissertation supports the view of growing globalization by U.S. manufacturing multinational firms in the period from the late 1970s through the 1980s as measured by a range of measures. In particular, the data show that slow or non-existent domestic production growth combined with steady growth in foreign production to result in increased internationalization for these firms. The Department of Commerce data is also consistent with the claim that U.S. multinational manufacturing firms are increasingly substituting away from their domestic production base towards production in foreign countries in response to lower factor costs abroad. Next, merging the Compustat Industrial File and the Compustat Geographic Segment File allowed the construction of a unique cross-section, time-series data set of 123 U.S. manufacturing multinational firms. Employing this firm level data, regression analysis is used to test if foreign production growth by U.S. manufacturing firms represents a substitution away from domestic production. Results of the analysis suggest that whether increased internationalization will displace domestic growth for a U.S. manufacturing firm is dependent on the degree of indebtedness of the firm and the concentration of its foreign operations in low wage areas of the world. For the high debt firms in the sample, the substitution effect of foreign growth on domestic growth outweighs the stimulating effect, while the opposite is true for less indebted firms. Regression analysis also shows a tendency for foreign affiliate growth to substitute for domestic growth when the firm's foreign operations are concentrated in developing countries, a result consistent with the analysis of the Department of Commerce data described above.

This longitudinal research study of the US bicycle industry from 1975 to 1994 and beyond examines the relationship between strategic alliances and industry structures from a resource-based view of the firm. The main argument of this study is that strategic alliances provide firms with flexible facilitating mechanisms to access strategic resources for competing in dynamic competitive environments. A theoretical framework outlines a reciprocal relationship between the creation of strategic alliances and the development of an industry life cycle. Purposes for strategic alliances arising from a transformation value chain are related to changes in industry structures as defined by different stages of an industry life cycle model. In order for a firm to sustain a competitive advantage as industry structures change, strategic alliances facilitate a means for firm resources to be reconfigured accordingly or they may become core rigidities. The following chapters develop the specifics for this research study. Chapter 1 introduces the rationales for studying strategic alliances and industry structures from a resource based view. Chapter 2 reviews theoretical foundations and research findings on the resource based view of the firm, strategic alliances and joint ventures, and the life cycle model. Chapter 3 draws from earlier research findings to develop a theoretical framework that outlines a dynamic relationship between strategic alliances and industry structures. While strategic alliances enable firms to adapt to environmental conditions, the cumulative impact of interfirm activities lead to shifts in life cycle stages. Chapter 4 outlines the case study research methodology and the selection of the bicycle industry for this empirical research study. Chapter 5 presents the bicycle industry with detailed discussions of types of bicycles and component parts, demand and supply conditions of the US bicycle industry, bicycle firm behavior, strategic alliances of bicycle firms, technological innovations, and the global bicycle industry. Chapter 6 discusses the case analysis of the bicycle industry by exploring the theoretical framework that was developed in Chapter 3. The results indicate that purposes for strategic alliances differ during each stage of the bicycle industry's life cycle from 1975 to 1994 and beyond. An important role of strategic alliances was to enable bicycle firms to reconfigure resources to protect the technical core of the organization and/or develop normal assets to leverage core competencies. To conclude, Chapter 7 outlines the contributions and limitation of this research study with future research directions.

This dissertation explores competitive market dynamics and firm configurations of resources and capabilities as a complex adaptive system using a computer simulation. The work is an extension of the broad literature on strategy-environment alignment, integrating concepts from the organizational literature about strategic types, organizational evolutionary dynamics, the resource-based theory of the firm, microeconomics, and artificial intelligence to create a simulation system that makes the process of market evolution with heterogeneous agents available for experimentation. The work provides a means to model and study complex dynamic systems, such as evolving agents and markets, and reveals how such chaotic systems can support and undermine strategic actions initiated by agents. Results both corroborate and diverge from received theory concerning competitive advantage and luck.

This thesis investigates credit in the Marxist tradition. Our premise is that credit has been inadequately theorized because of the Marxist dichotomy, a separation of real and monetary factors. It is a consequence of the well-known Classical dichotomy and an essentialist interpretation of Marx's dialectic, contributing to economic determinism and marginalizing the role of finance in Marxist analysis. Based on our reading of Capital, we oppose this interpretation of credit as inconsistent with Marx's methodological and conceptual break with Classical economics, arguing an overdetermined dialectic integrates credit into the class analysis of capitalism. We show that literature in this area either ignores or overemphasizes credit, consistent with the dichotomy. Two schools of thought, finance capital and monopoly capital, reach fundamentally incompatible conclusions about the development of advanced capitalism. Finance capital is predicated on the domination of corporations by banks due to the primacy of credit. Monopoly capital stresses the ascendancy of monopoly corporations, implying a secondary status for finance. We reject the terms of this debate for retaining a deterministic methodology and jettisoning class analysis for an institutional framework. The thesis then offers an alternative theory based on an overdetermined dialectic. The model integrates bank loans and other forms of credit into the Volume 1 world of Capital as a link to the Volume 3 world. This framework is used to investigate some class and nonclass effects of credit, without essentializing either capital accumulation or bank credit like monopoly and finance capital schools. Finally, this alternative framework is applied to a case study of Texas Air Corporation, analyzing how finance helped transform a small regional airline into the largest carrier in the non-communist world. Through each phase of Texas Air's growth, we elaborate on the relationship between financial, industrial and nonindustrial capitals. This provides a new perspective on the relationship between productive and unproductive capital; competition and the centralization of capital; and the resulting class alliances and struggles. We conclude that this framework elucidates the mutual determination of productive and financial relations in contemporary capitalism, whereas the prevailing approaches cannot.