New Article: Shneor & Efrat, The Influence of Market Intelligence on Israeli Born Globals

Shneor, Rotem, and Kalanit Efrat. “The Influence of Market Intelligence and Marketing Mix Adaptation Efforts on the Performance of Israeli Born Globals.” In Handbook of Research on International Entrepreneurship Strategy. Improving SME Performance Globally (ed. Pervez N. Ghauri and V. H. Manek Kirpalani; Cheltenham, UK and Northampton, MA: Elgar, 2015): 45ff.

 
9781783471577_1
 

Extract

The chapter first provides an overview of studies at the intersection of BG internationalization, international marketing and firm performance. This is further extended to the standardization-localization dilemma in particular, and concludes with a list of hypotheses linking localization of marketing mix elements and BG performance. Next, methodology and analysis are presented, and findings are highlighted. Finally, the chapter will conclude with revisiting the main insights emerging from the study, as well as suggested implications for research and practice.

 

 

New Article: Chen and Gavious, Book-Tax Conformity and Tax Enforcement

Chen, Esther, and Ilanit Gavious. “The Roles of Book-Tax Conformity and Tax Enforcement in Regulating Tax Reporting Behaviour following International Financial Reporting Standards Adoption.” Accounting & Finance (early view; online first).

 

URL: http://dx.doi.org/10.1111/acfi.12172

Abstract

This study investigates whether increasing the level of tax enforcement can potentially offset the primary cost of a reduction in the level of book-tax conformity (BTC) following International Financial Reporting Standards (IFRS) adoption – increased tax avoidance. We find that after the decrease in BTC and the concomitant increase in tax enforcement that followed IFRS adoption in Israel, tax avoidance declined significantly. Our results imply that one of the primary costs of reducing BTC can be avoided. Moreover, the results suggest that rather than one strict regulatory approach to deal with reporting manipulations, a combination of trust and control is more effective and less radical.

 

 

Thesis: Schaap, The Commercialization Gap for Cleantech Innovation in Israel

Schaap, T.A. An Explorative Study on Factors outside the Influence of the Entrepreneur that can explain the Commercialization Gap for Cleantech Innovation in Israel, MA Thesis, Delft University of Technology, 2015.

 
URL: http://repository.tudelft.nl/view/ir/uuid:71046301-1f96-408f-961f-e6c2aa881e8d/ [PDF]

 

Abstract

Background
The research is executed as a master thesis for the MSc program Management of Technology at the TU Delft and is conducted in collaboration with the Embassy of the Kingdom of the Netherlands to the state of Israel in Tel Aviv. The researcher has spent six months in Israel to perform this research and was subsidized by Climate-KIC to execute this research.

 

Problem statement and research question
This research is an empirical exploration of the influence of external factors on the commercialization process for cleantech Technology Based New Ventures (TBNVs) in Israel after these ventures have received seed funding. External factors are defined as factors outside the influence of the entrepreneur.
Literature has described the progression of TBNVs in different stage-based models, although these mainly describe the organizational development. This thesis uses models of Kazanjian et al (1989) and Vohora et al (2004) to describe the growth process of cleantech TBNVs and zooms in on the processes which cleantech TBNVs have to execute after they passed the credibility threshold (Vohora et al, 2004). This milestone reflects in the research by only considering cleantech TBNVs which have received seed funding and where thus deemed credible enough by their investors.
Previous research has named Israel the most innovative country in cleantech, but showed that there is a lack of commercialization of this innovation. The purpose of this research is to explore explanations for this phenomenon and test whether the factors distilled from the literature study can be found in practice and explain the phenomenon. Ten factors were determined based upon a literature study and these were tested by conducting field interviews and studying research reports. The overall research question for this study is:
Which factors, outside the influence of cleantech TBNVs, have consequences for the progression of cleantech TBNVs to the sustainable returns phase after seed funding has been received?
 

Research Process

Three angles were chosen in the literature study to determine external factors – markets, resources and policy. These factors served in general as a good framework for the practical exploration of the influence of external factors on the commercialization process of cleantech technology based ventures in Israel. The studied factors are accessibility of international markets, the need for high-paced growth, the need for an international network, availability of financial and human resources, risk tolerance of available financial resources, competition for financial resources with other fields of technology, the formal institutional regime for new innovations, the formal institutional regime for new sustainable innovations and perceived stability of the governmental policy by investors.
Empirical research was done in the form of two rounds of data collection. The first data collection contained semi-structured interviews with ten respondents who were (in)directly involved with cleantech in Israel. These respondents were from four different areas – business development, government (policy), late stage finance and venture capitalists and were interviewed about the aforementioned factors. The results from these interviews prompted a second data collection in two specific topics that were thought to hold more explaining value about the observed commercialization gap. These two topics included the availability of financial resources and related factors, the policy for innovation in Israel in general and the policy surrounding cleantech innovation. The second data collection contained another four semi-structured interviews on these specific topics and the study of reports on the topics.

 

Findings and conclusions
The results of the empirical research showed that all the proposed factors were relevant and influenced cleantech TBNVs in Israel, although the influence of some factors is more explicit than that of others. Especially the availability of financial resources which can be used to invest in technology development of cleantech TBNVs were found to be lacking. This can be explained by the high financial costs of technology development for cleantech TBNVs. The investment in such a project bears a lot of risk, which only a few types of investors can cope with – namely specialized, early-stage Venture Capitalists, business angels and the government.
Moreover, many cleantech TBNVs develop technologies related to the field of infrastructure which is a tough market for a start-up. Finally, the shift in policy relevant for cleantech TBNVs can be expected to offset investors, which also contributes to the lower amount of available financial resources.

 

Implications
Scientifically, this study contributes evidence to the validity of the applied theories in a specific setting – namely development of cleantech TBNVs in Israel. The conceptual model used in this study would be useful to explore similar research problems in other countries although a zoom into specific topics remains necessary. In this research the specific topics included policy relevant for cleantech TBNVs and the needs for funding for cleantech TBNVs.
Practically, this research has implications for entrepreneurs and investors in this field and for governments both in Israel and Europe. Entrepreneurs and investors in this field should realize themselves that they are in a precarious position due to factors like the high costs of technology development and instable policy that heighten the already high amounts of uncertainty that is currently surrounding the process of cleantech TBNV development. Risk reduction strategies should be high on the priority list of these actors.
Governments should realize that investors make investments with a five to ten year horizon and regulatory stability is therefore an important factor to take into account if one aims to increase in the sector. Especially the case which described the instability of the solar sector in Israel is an example of an increase in investment insecurity by governmental decisions.
Moreover, the financial resources necessary for most of the cleantech start-ups are momentarily simply not available. The Venture Capital investment model is only suitable for those start-ups that can achieve high growth rates, which can be difficult for cleantech start-ups. Making different financial resources available tailored to the needs of cleantech TBNVs, for instance via debt financing instead of equity financing should be a priority for the governments both in Israel and Europe. Previous research of EIM showed challenges in Europe to be similar to the challenges that have been found in this research.

 

 

New Article: Markelevich et al, The Israeli XBRL Adoption Experience

Markelevich, Ariel, Lewis Shaw, and Hagit Weihs. “The Israeli XBRL Adoption Experience.” Accounting Perspectives 14.2 (2015): 117-33.

 

URL: http://dx.doi.org/10.1111/1911-3838.12044

 

Abstract

eXtensible Business Reporting Language (XBRL) is a language for the electronic communication of business and financial data which is revolutionizing business reporting around the world. It is a tool to bridge potential language barriers and unify financial reporting. This has appeal to foreign investors, among others, who can rely on information in XBRL-tagged financial reports to make investment decisions without having to translate financial statements from local language. In 2008, Israel required most public companies to adopt International Financial Reporting Standards (IFRS) for financial reporting and to use XBRL-tagged reporting format, as part of an aggressive effort to make its capital markets more transparent and attractive for foreign investors. In this paper, we study all Israeli public companies and analyze the accuracy and reliability of their XBRL-tagged financial statements that are available on MAGNA, the Israel Securities Authority’s electronic system. We describe the process by which the XBRL-based data were collected and reported. We document, categorize, and analyze deficiencies in the XBRL-tagged filings, and inconsistencies between them and the Hebrew-based annual reports. We observe pervasive data entry errors resulting in inaccurate XBRL-generated financial reports, which went undetected for over one year. Further, first year XBRL reporting (in conjunction with IFRS adoption) did not increase foreign investment in the Israeli capital markets. This analysis allows us to better understand the benefits and challenges of the adoption of XBRL.