We test the hypothesis that ownership of a firm does not affect the firm's ability to seize market opportunities once decisions about productive structure are taken into account. By grouping firms in size clusters having a similar distance between the actual and the optimal size, we assess how the sensitivity of a firm's sales to market demand changes in response to differences in the owner's identity. We use data from a panel of 4696 continental western European firms over the period 1995-2010 and Eurostat 3-digit sectoral data on firm size distribution. Empirical evidence rejects the hypothesis of ownership irrelevance: family firms are less sensitive to market demand than other firms, in particular when the actual size of the firm is larger than optimal and in the case of both founder-and heir-run family firms.

The fading stock market response to announcements of bank bailouts • Paper analyzes government announcements of recue plans for banks in the recent crisis • Traditional methods show announcements were priced by markets as abnormal returns • But these effects disappear with modern estimation methods • Conclusion: either announcements not credible or plans inadequate relative to problem

PurposeThis commentary aims to discuss methodological issues and practical concerns of international business scholars who apply the gravity equation in their research.Design/methodology/approachThe paper summarizes and compares theories and several advanced empirical specifications in the gravity equation.FindingsThe paper proposes a relatively low‐cost specification and estimation to implement such correction, which is robust in the presence of various endogeneity effects and non‐stationary variables. In the presence of zero‐values in the dataset, however, the multilateral specification is best estimated with a Poisson maximum likelihood.Originality/valueThe most important message of the commentary is that this equation should correct for multilateral resistance factors.

The ultimate point of origin of the great financial crisis of 2007-2009 can be traced back to an extremely indebted US economy. The collapse of the real estate market in 2006 was the close point of origin of the crisis. The failure rates of subprime mortgages were the first symptom of a credit boom tuned to bust and of a real estate shock. But large default rates on subprime mortgages cannot account for the severity of the crisis. Rather, low-quality mortgages acted as an accelerant to the fire that spread through the entire financial system. The latter had become fragile as a result of several factors that are unique to this crisis: the transfer of assets from the balance sheets of banks to the markets, the creation of complex and opaque assets, the failure of ratings agencies to properly assess the risk of such assets, and the application of fair value accounting. To these novel factors, one must add the now standard failure of regulators and supervisors in spotting and correcting the emerging weaknesses. Accounting data fail to reveal the full extent of the financial maelstrom. Ironically, according to these data, US banks appear to be still adequately capitalized. Yet, bank undercapitalization is the biggest stumbling block to a resolution of the financial crisis.