Unfamiliar Family Firms

Mario Daniele Amore (Bocconi University)
Mircea Epure (Universitat Pompeu Fabra and Barcelona GSE)
Orsola Garofalo (Copenhagen Business School)

Abstract : Finding the right company name is a challenging decision with major consequences for firm prospects. Drawing on strategic distinctiveness and legitimacy theories, we study the implications of “unfamiliar” names (i.e. foreign sounding and family-unrelated) for family firm profitability. Our empirical analysis shows that unfamiliar names increase profitability. This result is not due to differences in R&D, industry specialization or geographic scope, and holds using both matching and instrumental variable approaches. Consistent with the idea that unfamiliar names endow the business with greater visibility and recognition in the marketplace, we show that the benefits of “unfamiliar names” are larger for firms in crowded product classes and firms smaller than industry peers. Moreover, we show that cultural values that prioritize the local community and the family dampen the benefit of unfamiliar names, which may raise illegitimacy concerns in the eyes of external stakeholders.

The Universal Link Between Higher Education and Pro-market Values

John V.C. Nye (George Mason and NRU-HSE)
Cheryl Litman (George Mason)
Maksym Bryukhanov (NRU-HSE)
Sergiy Polyachenko (NRU-HSE)

Abstract : Does education promote support for liberal economic policies? Despite the wide range in attitudes exhibited in international surveys by respondents towards markets and the desirability of state regulation thereof, we document in a large cross-section of countries that – in almost all cases – those with higher educational attainment are more market liberal and less sympathetic to economic regulation than those who have less formal education. This is true both in countries with high support for markets as well as those with high distrust of markets and strong support for government regulation. The correlations are consistent for a wide range of questions regarding differing attitudes towards a variety of regulatory policies. More important, we find very little evidence that the content of education seems to have a big impact on this effect. Most notably, when considering data from Russia, we observe that whether we confine ourselves to older people who were entirely educated in the Soviet period or compare the results to a sample from the post-Soviet era, we consistently find that those with more education are more likely to be favorable towards markets and relatively less supportive of market regulation. This is remarkable as Russia is among the least market liberal of countries in the sample.

Civic Culture Vs. Apolitical Social Capital: the Case of Moscow Apartment Buildings

Leonid Polishchuk (HSE University, Moscow )
Alexander Rubin (HSE University, Moscow )
Igor Shagalov (HSE University, Moscow )

Abstract : We study the interplay between two cultural traits, one of which is apolitical social capital, which powers up grassroots collective action, and the other – civic culture, which reflects responsibility for social welfare and prompts political participation. We contrast two types of collective action, one of which is civic and the other is not, and present a theory indicating that civic culture augments apolitical social capital in the first type, and impedes it in the second. These predictions are tested in the contemporary urban setting, where in a civic collective action tenants of an apartment building collectively manage funds designated for the building upkeep, and in an un-civic one, build fences and gates around their building. We use a unique database of nearly 30,000 Moscow apartment buildings to demonstrate that apolitical social capital and civic culture are cultural traits that reinforce (complement) each other in the case of a civic collective action, and counteract each other, when a contemplated collective action is un-civic.