The Historical Slave Trade and Firm Access to Finance in Africa

Pierce, Lamar; Snyder, Jason A.

doi:10.1093/rfs/hhx091

Cited by 61 publications

(45 citation statements)

References 84 publications

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“…In the simple example previously developed, this stakeholder will decide how to allocate at least part of the $20 of economic profit ($45 to $25) that was generated when this bundle of resources was assembled in the way described earlier-namely, that part of profits whose distribution was not contracted for ex ante. 8 Path dependence of this variety can also be a source of sustained competitive disadvantage (Pierce & Snyder, 2017a, 2017b.…”

Section: A Stakeholder Model Of Profit Appropriation In Resource-bamentioning

confidence: 99%

Why resource‐based theory's model of profit appropriation must incorporate a stakeholder perspective

Barney

2018

Strategic Management Journal

426

443

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Research Summary: Using arguments derived from transactions cost economics and incomplete contract theory, this article shows that the assumption that shareholders are a firm's only residual claimants is logically inconsistent with resource‐based theory's model of profit generation. It follows from this conclusion that resource‐based theory's model of profit appropriation must incorporate a stakeholder perspective. Some theoretical and empirical implications of this conclusion for resource‐based theory's model of profit generation, profit appropriation, the role of managers and entrepreneurs in resource‐based theory, and how conflicting interests among stakeholders can be resolved are all discussed. Finally, some continuing differences between stakeholder theory and incorporating a stakeholder perspective into resource‐based theory's model of profit appropriation are also discussed. Managerial Summary: Some argue that since shareholders are the only stakeholder who have a claim on a firm's profits, managers should focus only on maximizing shareholder wealth. Not only will this satisfy shareholders, it will also satisfy a firm's other stakeholders, since—in principle—these other stakeholders get paid before shareholders. This article shows that this logic is deeply flawed. In particular, it shows that if the only stakeholder who has a claim on a firm's economic profits is shareholders, then—in most competitive settings—a firm will not be able to attract the kinds of resources it needs to generate these profits. To attract the kinds of resources that can generate profits, managers must recognize that stakeholders, besides shareholders, have claims on the profits that their resources help generate. This, in turn, suggests that managers seeking to generate economic profits must adopt a stakeholder perspective in how they manage their firm. This article explores the managerial implications of this conclusion.

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Section: A Stakeholder Model Of Profit Appropriation In Resource-bamentioning

confidence: 99%

Why resource‐based theory's model of profit appropriation must incorporate a stakeholder perspective

Barney

2018

Strategic Management Journal

426

443

View full text Add to dashboard Cite

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“…We build on theories of organizational communication, as well as practitioner insights, to identify three practices that enable entrepreneurs to connect with and learn from peers: (1) asking questions and giving advice; (2) reflecting on others; and (3) following up. resource-scarce and institutionally challenging settings can build business relationships and increase their performance (Dutt et al, 2016;Assenova and Sorenson, 2017;Pierce and Snyder, 2017). Our findings suggest that communication practices may be particularly valuable in these environments, as they help entrepreneurs overcome challenges created by weak formal institutions and increase their business performance (Khanna and Palepu, 2010;Gao et al, 2017).…”

Section: Introductionmentioning

confidence: 81%

“…People who are similar in terms of ascriptive characteristics, such as ethnicity, are likely to communicate more easily, which makes the formation of a relationship between them likelier. Ethnicity is a particularly salient dimension of homophily in many African countries, which are often ethnically diverse (Easterly and Levine, 1997;Luke and Munshi, 2006;Yenkey, 2015;Pierce and Snyder, 2017). We argue that improved communication practices should diminish the role of ethnic homophily in the formation of relationships.…”

Section: Relationship Formationmentioning

confidence: 87%

The Value of Communication: Evidence From a Field Experiment With Entrepreneurs in Togo

Dimitriadis

Koning

2019

SSRN Journal

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Why do some entrepreneurs benefit from their portfolio of peer advisers while others do not? In this study, we argue that communication practices are an important but overlooked factor in the formation of useful advice relationships between entrepreneurs, particularly in the context of developing economies. We hypothesize that improving entrepreneurs' communication practices will affect the relationships they form and have implications for their business performance. To test our theory, we conducted a field experiment in Togo with 301 entrepreneurs who were randomized into a communication practices intervention that was embedded in a business training program. We found that entrepreneurs who were exposed to better communication practices perceived interactions more cooperatively and exchanged more information during those interactions. Moreover, improving communication practices also led to a 50 percent increase in the number of relationships entrepreneurs formed with peers. These relationships exhibited more matching based on skill and were more ethnically diverse. Finally, communication practices training also substantially increased entrepreneurs' business performance. Our findings highlight how communication practices play a central role in entrepreneurs' ability to form portfolios of relationships and perform in challenging business environments.

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“…Because of this peculiar institutional feature in the Italian case, Pascali (2016) detects a positive association between historical Jewish persecution and the present-day supply of banking in Southern Italy. Pierce and Snyder (2017) find that present-day firms in African countries with higher historical extraction of slaves face lower access to formal and informal credit, whereas D'Acunto (2017) shows that variation in basic education across European regions has persisted for centuries, and helps explain the present-day regional differences in income and innovation.…”

Section: A Related Literaturementioning

confidence: 99%

Historical Antisemitism, Ethnic Specialization, and Financial Development

D’Acunto

Prokopczuk

Weber

2018

The Review of Economic Studies

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as well as participants at several seminars and conferences. All errors are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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The Historical Slave Trade and Firm Access to Finance in Africa

Cited by 61 publications

References 84 publications

Why resource‐based theory's model of profit appropriation must incorporate a stakeholder perspective

Why resource‐based theory's model of profit appropriation must incorporate a stakeholder perspective

The Value of Communication: Evidence From a Field Experiment With Entrepreneurs in Togo

Historical Antisemitism, Ethnic Specialization, and Financial Development

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