HEC Paris

About: HEC Paris is a education organization based out in Jouy-en-Josas, France. It is known for research contribution in the topics: Market liquidity & Entrepreneurship. The organization has 584 authors who have published 2756 publications receiving 104467 citations. The organization is also known as: Ecole des Hautes Etudes Commerciales & HEC School of Management Paris.

What You Can Learn From Family Business

Abstract: Though the term "family business" may call to mind visions of local mom-and-pop firms, family-controlled companies play a huge role on the global stage. Not only do they include sprawling corporations like Walmart and Tata Group, but they account for more than 30% of all companies with sales in excess of $1 billion. And over the long term, their financial performance exceeds that of traditional public companies, according to a new study by BCG and Ecole Polytechnique. Family-controlled companies surpass their peers because they focus on resilience, not short-term results. During economic booms, this approach leads them to forgo some opportunities (and hence do slightly worse than their counterparts), but it puts them in a position of strength during downturns, when they shine. The researchers identified seven specific ways in which family-run businesses build their resilience: 1. They're frugal in good times and bad. 2. They set a high bar for capital expenditures. 3. They carry little debt. 4. They acquire fewer (and smaller) companies. 5. They're more diversified. 6. They're more international. 7. They retain talent better than their competitors do. Though these practices come more naturally to executives who feel an obligation to be stewards for the next generation, executives at any corporation can adopt them. Indeed, the researchers uncovered a number of nonfamily-controlled companies that mimicked the behaviors of family firms and saw very similar patterns of performance.

Classical Deviation: Organizational and Individual Status as Antecedents of Conformity

Abstract: Beside making organizations look like their peers through the adoption of similar attributes (“alignment”), this paper highlights the fact that conformity also enables organizations to stand out by exhibiting highly salient attributes key to their field or industry (“conventionality”). Building on the conformity and status literatures, and using the case of major U.S. symphony orchestras and the changes in their concert programming between 1879 and 1969, we hypothesize and find that middle-status organizations are more aligned and middle-status individual leaders make more conventional choices than their low- and high-status peers. In addition, the extent to which middle-status leaders adopt conventional programming is shown to be moderated by the status of the organization and by its level of alignment. Thus, this paper offers a novel theory and operationalization of organizational conformity, and contributes to the literature on status effects, and, more broadly, to the understanding of the key issues o...

A Dynamic Model of the Limit Order Book

Abstract: This paper presents a model of an order-driven market where fully strategic, symmetrically informed liquidity traders dynamically choose between limit and market orders, trading off execution price and waiting costs. In equilibrium the bid and ask prices depend only on the numbers of buy and sell orders in the book. The model has a number of empirical predictions: (i) higher trading activity and higher trading competition cause smaller spreads and lower price impact; (ii) market orders lead to a temporary price impact larger than the permanent price impact, therefore to price overshooting; (iii) buy and sell orders can cluster away from the bid-ask spread, generating a hump-shaped order book; (iv) bid and ask prices display a comovement effect: after e.g. a sell market order moves the bid price down, the ask price also falls, by a smaller amount, so the bid-ask spread widens; (v) when the order book is full, traders may submit quick, or fleeting, limit orders.