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Access to finance is one of the most serious obstacles faced by corporations. Financing constraints lead to large opportunity costs and negative consequences for economic growth, productivity, and welfare. In three studies, this dissertation examines mechanisms that can help to reduce financing constraints of companies. First study investigates the costs and benefits of relationship lending. Meta-analytic methodology reveals that relationship lending is generally beneficial for companies, but lenders and companies face trade-offs in lending relationships and lending outcomes. The results document positive effect of bank competition on borrower benefits. Second study develops a more complete conceptual framework of credit constraints. The new framework describes the occurrence of credit constraints in sequential, conditional stages. The results show that credit constraints vary with the bank lending environment beyond firm risk. Bank lending standards are strongly related to credit constraints, but the direction and the magnitude of the effect depend on the conditional stage. Third study examines the role of credit information sharing systems. The analysis documents dichotomous effects of information scope (depth of information) and scale (information coverage). While the information scope is associated with lower financing constraints, the information scale is associated with higher financing constraints, suggesting that accurate and deep information, rather than the coverage alone, contribute to lower financing constraints. The empirical results from the three studies demonstrate that promising new venues exist for increasing firms’ access to finance.

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Access to Finance in a Cros-Country Context

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The overarching goal of this dissertation is to improve our understanding of the role of members’ social motivations and knowledge backgrounds in driving members’ participatory behaviors and their task performance on crowdsourcing platforms. Based on two studies, a longitudinal field experiment and a longitudinal, multi-method field study, we state that the possibility to interact with other members was an important driver of the development of group-based feelings of respect in this social environment and that on online crowdsourcing platforms feelings of pride and respect, and not identification, affect the level and duration of member activity and positive work of mouth behaviors. Feelings of pride and respect are each affected by different forms of status information, which further confirms the importance of actively managing the communication of social identity information on online crowdsourcing platforms. Together these studies offer compelling evidence that social motivations can and do play a role in affecting member engagement on online crowdsourcing platforms, which is crucially important in understanding why some online (crowdsourcing) platforms have success and others fail.

In a third study we investigated the knowledge-performance paradox in crowdsourcing creative problem-solving tasks. By analyzing over 6,000 contributions to 120 creative problem-solving challenges on an online crowdsourcing platform, we showed that the performance of participants of creative problem-solving tasks on online crowdsourcing platforms was best when they possessed knowledge that was related to the challenge context as well as knowledge that was unrelated to the challenge. With these findings we contribute to the ongoing debate on whether the effects of possessing domain-relevant knowledge on an individual’s performance on creative problem-solving are positive or negative, we argue that this effect is in fact contingent on an individual’s level of unrelated knowledge.

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Working Together Alone in the Online Crowd: The effects of social motivations and individual knowledge backgrounds on the participation and performance of members of online crowdsourcing platforms

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Generally speaking, would you say that most people can be trusted, or that you cannot be too careful when dealing with strangers?” This survey question is frequently asked to thousands of individuals globally. The aim of this question is to obtain a measure for how trusting individuals are towards people they do not know, but with whom they nonetheless interact. This thesis shows that trust has substantial economic consequences.

Currently, in economics trust is often disregarded. It is difficult to reconcile trusting behavior with the classical view of ‘economic man’ as a completely rational, self-interested being. This thesis includes four studies where this behavioral assumption does not hold, however. In fact, they show that more trust is better in various dimensions. From individual income and the location decision of multinational firms to the productivity and technological development of countries: trust matters. Each study identifies how trust generates economic value, and how large the effect of trust is. Furthermore, the development of trust is modeled to explain why there exist such large differences in trust levels between individuals, regions and countries.

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Empirical Studies on the Economic Impact of Trust

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In this dissertation I seek to redirect the conversation on stock market evaluations from the more traditional economic and behavioral finance theories, by proposing a neo-behavioral perspective, which views financial markets as socially situated. Specifically I combine theoretical arguments from organization and sociological theories, as well as psychology and linguistics to explain stock market dynamics. I pursue specific research questions emerging from this framework and unpack the mechanisms by which social-psychological and institutional factors influence stock market evaluations of firms and their practices. In doing so, I advance and contribute to organizational theories on practice diffusion and organizational categories, and to strategy theories on corporate communication. 
In my goal to contribute to our knowledge of stock markets, I have taken a phenomenon-based approach, by studying practices that are not commonly understood or studied by management scholars. In the first two studies I examine reverse mergers, a non-traditional way of going public. In my third study, I examine a rather extraordinary Dutch phenomenon -- a codified language scale that managers use to communicate corporate performance. By studying these curious business strategies, I aim to contribute to the existing body of empirical knowledge, beyond the typical theoretical contribution. Finally, my fourth study, which is a replication of a study published in a leading finance journal, lends support to the view that the body of knowledge that constitutes administrative sciences is socially constructed. As such, this study should thus be seen as part of recent efforts to broaden the role and scope for replication studies in finance and management research.

Socially Situated Financial Markets: A Neo-Behavioral Perspective on Firms, Investors and Practices

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This thesis contributes to two research streams of the literature regarding agricultural cooperatives, namely, social capital and product diversification of cooperatives. First, the thesis examines the nature of a marketing cooperative by considering both its economic and social attributes. Several formal models are formulated to address the interaction between cooperative governance structure and the different dimensions of cooperative social capital. The cooperative’s social and economic attributes are viewed as the equilibrium outcome of this interaction, while the social context of the cooperative community affects the equilibrium that the cooperative will choose. Second, the governance structure of cooperatives has an impact on the product diversification. An agent-based simulation shows that the single origin constraint of a cooperative creates a centralization effect in its product portfolio evolution, resulting in a lower diversification level and a larger output of the cooperative. Empirical evidence from the Netherlands shows that cooperatives are less diversified than publicly listed firms in 2001. However, the diversification level of cooperatives is comparable to that of publicly listed firms in 2012. It is concluded that, by making a change in the governance model in response to changes in the competitive environment, cooperatives may actually behave not differently from other types of enterprises in terms of product diversification.

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Social Capital and Diversification of Cooperatives

Deaf Effect. We also examine whether the Deaf Effect for the risk warning is affected by the relationship with the messenger: is the messenger seen as a collaborative partner who is of help or is the messenger seen as an opponent who is exposing the Project Owner's failures. Furthermore, we assess whether the Deaf Effect is affected by the presentation (framing) of the message in terms of Gains or in terms of Losses. Based on experiments we analyze the main effects and the interaction effects of those three factors to the Deaf Effect. In a multi-case study we explore other factors that can affect the Deaf Effect and could be interesting for further study. We discuss the contribution of our study to literature on escalating IS projects and to literature on internal auditing. Finally we discuss the implications of our study to the practice of IS Projects and Internal Auditing and to management practice in general. The Erasmus Research Institute of Management (ERIM) is the Research School (Onder - zoek school) in the field of management of the Erasmus University Rotterdam. The founding participants of ERIM are the Rotterdam School of Management (RSM), and the Erasmus School of Econo mics (ESE). ERIM was founded in 1999 and is officially accre dited by the Royal Netherlands Academy of Arts and Sciences (KNAW). The research under taken by ERIM is focused on the management of the firm in its environment, its intra- and interfirm relations, and its busi ness processes in their interdependent connections. The objective of ERIM is to carry out first rate research in manage ment, and to offer an ad vanced doctoral pro gramme in Research in Management. Within ERIM, over three hundred senior researchers and PhD candidates are active in the different research pro - grammes. From a variety of acade mic backgrounds and expertises, the ERIM commu nity is united in striving for excellence and working at the fore front of creating new business knowledge.

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Deaf Effect for Risk Warnings A Causal Examination applied to Information Systems Projects ARNO NUIJTEN - Deaf Effect for Risk Warnings

Undesirable framing effects in information systems projects: Analysis of adjective usage in IS project business cases

Increasingly, the development of today’s “smart” products requires the integration of both software and hardware in embedded systems. To develop these, hardware firms typically enlist the expertise of software development firms to offer integrated solutions. While hardware firms often work according to a plan-driven approach, software development firms draw on Agile development methods. Interestingly, empirically little is known about the implications and consequences of working according to contrasting development methods in a collaborative project. In response to this research gap, we conducted a process study of a collaborative development project involving a software firm and a hardware firm, within which the two firms worked according to contrasting development methods. We found that the software firm was gradually compelled to forgo its Agile method, creating a role conflict in terms of its way of working. As such, our results contribute to the literature on Agile–Stage-Gate hybrids by demonstrating how, in collaborative embedded systems development, hybridization of development methods may cause projects to fail. Our main practical implication entails the introduction of the “sequential Agile approach.”

Dysfunctional Agile–Stage-Gate Hybrid Development: Keeping Up Appearances

This study explores how project names may influence the tendency to escalate commitment through two experiments. Our findings from Experiment 1 show that a positive project name evokes positive affective reactions to the project. These, in turn, are associated with a greater willingness to continue a failing project. Results from Experiment 2 show that a technological project name can similarly evoke more positive affective reactions and a greater willingness to continue but only for decision makers with high technology readiness. For decision makers with low technology readiness the effect was reversed.

The Effect of Project Names on Escalation of Commitment in Information Systems Projects

With the growing role of Information Technology (IT), many organizations have incorporated IT governance practices that include keeping executives apprised of IT risks. To perform this function, organizations rely upon their internal audit staff to obtain an independent evaluation of IT risks. While both general auditors and IT auditors are involved in assessing IT risks, they may not be equally adept at identifying such risks.  We draw on the expert vs non-expert perspective to understand how general auditors and IT auditors perceive IT risks differently. Through a quasi-experiment with 70 internal auditors of a financial institution, we found that general auditors perceived IT risks to be lower than their IT audit colleagues. We also found that personal risk preferences influenced the level of IT risks that general auditors perceived. Personal risk preferences did not affect the risk perceptions of IT auditors. Implications for both research and practice are discussed.

Arno Nuijten

Papers

Deaf Effect for Risk Warnings A Causal Examination applied to Information Systems Projects ARNO NUIJTEN - Deaf Effect for Risk Warnings

Undesirable framing effects in information systems projects: Analysis of adjective usage in IS project business cases

Dysfunctional Agile–Stage-Gate Hybrid Development: Keeping Up Appearances

The Effect of Project Names on Escalation of Commitment in Information Systems Projects

Internal Auditors' Perceptions of Information Technology-Related Risks: A Comparison Between General Auditors and Information Technology Auditors