This paper examines the influence of cultural diversity on the value of multinational firms. The results show that cultural diversity is negatively associated with firm value. After investigating the underlying channels, we find that the negative valuation effect of cultural diversity is driven mainly by lower cash flows. In contrast, we find insignificant evidence that cultural diversity has effects on discount rates. The negative effect of cultural diversity holds after addressing endogeneity issues. Further, the use of alternative measures of culture, different proxies for firm value and different estimation methods does not change our main result. Moreover, our results are robust when considering agency problems and the global financial crisis. Overall, these findings extend the literature on global diversification and indicate that the valuation discount is, to a certain degree, associated with cultural diversity.
{"title":"Cultural Diversity and Value of Multinational Firms","authors":"John F. Zhang","doi":"10.1111/1467-8551.12855","DOIUrl":"https://doi.org/10.1111/1467-8551.12855","url":null,"abstract":"This paper examines the influence of cultural diversity on the value of multinational firms. The results show that cultural diversity is negatively associated with firm value. After investigating the underlying channels, we find that the negative valuation effect of cultural diversity is driven mainly by lower cash flows. In contrast, we find insignificant evidence that cultural diversity has effects on discount rates. The negative effect of cultural diversity holds after addressing endogeneity issues. Further, the use of alternative measures of culture, different proxies for firm value and different estimation methods does not change our main result. Moreover, our results are robust when considering agency problems and the global financial crisis. Overall, these findings extend the literature on global diversification and indicate that the valuation discount is, to a certain degree, associated with cultural diversity.","PeriodicalId":48342,"journal":{"name":"British Journal of Management","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2024-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141741324","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Several streams of strategy literature emphasize firms’ distinctive strategy as being key to sustainable competitive advantage. Using a unique natural experiment setting, we examine how increased scrutiny and pressure from short‐sellers affect the strategic distinctiveness of the firm. We find that increasing short‐selling pressure reduces the strategic distinctiveness of the firm and that this negative effect is more pronounced for more visible and underperforming firms. Our findings suggest that removing restrictions on short‐selling can have an unintended side‐effect of reducing the strategic distinctiveness of firms.
{"title":"Capital Market Scrutiny and Strategic Distinctiveness of the Firm: Evidence from a Natural Experiment","authors":"Jingoo Kang, Yungu Kang","doi":"10.1111/1467-8551.12857","DOIUrl":"https://doi.org/10.1111/1467-8551.12857","url":null,"abstract":"Several streams of strategy literature emphasize firms’ distinctive strategy as being key to sustainable competitive advantage. Using a unique natural experiment setting, we examine how increased scrutiny and pressure from short‐sellers affect the strategic distinctiveness of the firm. We find that increasing short‐selling pressure reduces the strategic distinctiveness of the firm and that this negative effect is more pronounced for more visible and underperforming firms. Our findings suggest that removing restrictions on short‐selling can have an unintended side‐effect of reducing the strategic distinctiveness of firms.","PeriodicalId":48342,"journal":{"name":"British Journal of Management","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2024-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141746337","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Thang Nguyen, Jiaqi Guo, Daniel Dao, Thanh Nguyen, Bao To
Expanding upon the known impact of investor sentiment on crowdfunding contributions, we delve deeper to pinpoint specific conditions under which sentiment influences investor choices. Grounded in psychological theory, we assert that sentiment's influence thrives at the peak of investor attention, primarily on a campaign's first day and among projects with greater uncertainty. Our empirical study, based on 447 campaigns with 17,244 daily observations from the United Kingdom's Crowdcube platform, substantiates our claim. Our research enhances the comprehension of equity crowdfunding investors and provides practical insights for its proponents.
{"title":"The Dynamics of Investor Sentiment Impacts in Equity Crowdfunding: Unveiling the When","authors":"Thang Nguyen, Jiaqi Guo, Daniel Dao, Thanh Nguyen, Bao To","doi":"10.1111/1467-8551.12854","DOIUrl":"https://doi.org/10.1111/1467-8551.12854","url":null,"abstract":"Expanding upon the known impact of investor sentiment on crowdfunding contributions, we delve deeper to pinpoint specific conditions under which sentiment influences investor choices. Grounded in psychological theory, we assert that sentiment's influence thrives at the peak of investor attention, primarily on a campaign's first day and among projects with greater uncertainty. Our empirical study, based on 447 campaigns with 17,244 daily observations from the United Kingdom's Crowdcube platform, substantiates our claim. Our research enhances the comprehension of equity crowdfunding investors and provides practical insights for its proponents.","PeriodicalId":48342,"journal":{"name":"British Journal of Management","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2024-07-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141741375","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Corporate risk‐taking is key to a firm's ability to achieve competitive advantages. Drawing on the attention‐based view and the information‐processing perspective, we argue that firms with higher strategy disclosure intensity (i.e. greater frequency of ‘corporate strategy’ mentions in a firm's public disclosure) will allocate more attention to corporate strategy and develop stronger information‐processing capacities, enabling them to undertake more intensive risk‐taking. This is particularly true when investment opportunities are more abundant and the environment is more dynamic. In addition, corporate risk‐taking will lead to better financial performance when firms exhibit stronger strategy disclosure intensity. Findings from 3190 firms support our arguments. Overall, this study advances strategic management research by demonstrating that strategy disclosure intensity provides important insights into a firm's risk‐taking decisions and performance.
{"title":"Cheap Talk? Strategy Disclosure Intensity, Corporate Risk‐Taking and Financial Performance","authors":"Wenjing Cai, Wei Shi, Fuxiu Jiang","doi":"10.1111/1467-8551.12853","DOIUrl":"https://doi.org/10.1111/1467-8551.12853","url":null,"abstract":"Corporate risk‐taking is key to a firm's ability to achieve competitive advantages. Drawing on the attention‐based view and the information‐processing perspective, we argue that firms with higher strategy disclosure intensity (i.e. greater frequency of ‘corporate strategy’ mentions in a firm's public disclosure) will allocate more attention to corporate strategy and develop stronger information‐processing capacities, enabling them to undertake more intensive risk‐taking. This is particularly true when investment opportunities are more abundant and the environment is more dynamic. In addition, corporate risk‐taking will lead to better financial performance when firms exhibit stronger strategy disclosure intensity. Findings from 3190 firms support our arguments. Overall, this study advances strategic management research by demonstrating that strategy disclosure intensity provides important insights into a firm's risk‐taking decisions and performance.","PeriodicalId":48342,"journal":{"name":"British Journal of Management","volume":null,"pages":null},"PeriodicalIF":4.5,"publicationDate":"2024-07-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141645972","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Recognising the Service of our Reviewers","authors":"","doi":"10.1111/1467-8551.12843","DOIUrl":"10.1111/1467-8551.12843","url":null,"abstract":"","PeriodicalId":48342,"journal":{"name":"British Journal of Management","volume":null,"pages":null},"PeriodicalIF":4.5,"publicationDate":"2024-07-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141576275","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Yancy Vaillant, Ferran Vendrell‐Herrero, Oscar F. Bustinza, Yijun Xing
HRM algorithms can profoundly impact organizations in the digital economy era. In the face of turbulent and complex market conditions, strategic renewal is regarded as one of the most important organizational mechanisms for dealing with market uncertainty and a turbulent environment. However, the existing research remains elusive about the relationship between market‐level conditions and firm‐level strategic renewal. Our paper addresses this important gap by examining the potential enhancement of agile strategic renewal in high‐uncertainty environments through the implementation of HRM algorithms. Drawing on Chaos Theory, we argue that HRM algorithms have the potential to support the self‐organization capacity of a workforce, supporting better alignment with changing environments. Using covariance‐based structural equation modelling on a survey of over 500 Spanish firms, our findings provide partial support for the modelled hypotheses by showing that the use of HRM algorithms positively moderates the relationship between market turbulence and strategic renewal, but does not appear to moderate the relationship between market complexity and strategic renewal. The study contributes to our understanding of the importance of adopting internal business analytics systems to stimulate agility and align the workforce more effectively with changing environments, but also highlights their less substantive role in deciphering complex external factors.
{"title":"HRM Algorithms: Moderating the Relationship between Chaotic Markets and Strategic Renewal","authors":"Yancy Vaillant, Ferran Vendrell‐Herrero, Oscar F. Bustinza, Yijun Xing","doi":"10.1111/1467-8551.12852","DOIUrl":"https://doi.org/10.1111/1467-8551.12852","url":null,"abstract":"HRM algorithms can profoundly impact organizations in the digital economy era. In the face of turbulent and complex market conditions, strategic renewal is regarded as one of the most important organizational mechanisms for dealing with market uncertainty and a turbulent environment. However, the existing research remains elusive about the relationship between market‐level conditions and firm‐level strategic renewal. Our paper addresses this important gap by examining the potential enhancement of agile strategic renewal in high‐uncertainty environments through the implementation of HRM algorithms. Drawing on Chaos Theory, we argue that HRM algorithms have the potential to support the self‐organization capacity of a workforce, supporting better alignment with changing environments. Using covariance‐based structural equation modelling on a survey of over 500 Spanish firms, our findings provide partial support for the modelled hypotheses by showing that the use of HRM algorithms positively moderates the relationship between market turbulence and strategic renewal, but does not appear to moderate the relationship between market complexity and strategic renewal. The study contributes to our understanding of the importance of adopting internal business analytics systems to stimulate agility and align the workforce more effectively with changing environments, but also highlights their less substantive role in deciphering complex external factors.","PeriodicalId":48342,"journal":{"name":"British Journal of Management","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2024-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141548502","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study examines how subgroup formation resulting from group faultlines can affect corporate boards’ CEO compensation‐setting process. Group faultlines are hypothetical dividing lines that can split the board into subgroups based on directors’ diversity characteristics. Using a sample of US firms for the period 2007–2019, we find that if the CEO demographically belongs to the same faultline‐based subgroup as corporate directors who are members of the compensation committee, strong faultlines lead to higher CEO compensation. Furthermore, we show that joint tenure of directors and the CEO strengthens this relationship. Our results are robust to endogeneity concerns and a battery of sensitivity tests. Our findings make important contributions to the literature on CEO compensation, corporate governance and faultlines, as we consider not only the existence of faultlines in the board context but also how the composition of identity‐based subgroups affects CEO compensation.
{"title":"On the Right Side of the Faultline: Effects of Subgroups and CEO Inclusion on CEO Compensation","authors":"Charlotte Antoons, Alana Vandebeek","doi":"10.1111/1467-8551.12851","DOIUrl":"https://doi.org/10.1111/1467-8551.12851","url":null,"abstract":"This study examines how subgroup formation resulting from group faultlines can affect corporate boards’ CEO compensation‐setting process. Group faultlines are hypothetical dividing lines that can split the board into subgroups based on directors’ diversity characteristics. Using a sample of US firms for the period 2007–2019, we find that if the CEO demographically belongs to the same faultline‐based subgroup as corporate directors who are members of the compensation committee, strong faultlines lead to higher CEO compensation. Furthermore, we show that joint tenure of directors and the CEO strengthens this relationship. Our results are robust to endogeneity concerns and a battery of sensitivity tests. Our findings make important contributions to the literature on CEO compensation, corporate governance and faultlines, as we consider not only the existence of faultlines in the board context but also how the composition of identity‐based subgroups affects CEO compensation.","PeriodicalId":48342,"journal":{"name":"British Journal of Management","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2024-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141548503","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We show that climate priorities codified in regulations significantly impact firms’ access to credit, especially long‐term credit, an important financial resource required for achieving business viability and sustainability goals. Following the implementation of a prominent cap‐and‐trade programme aimed at controlling nitrogen oxides (NOx) in the United States (the NOx Budget Trading Program, NBP), manufacturers experienced decreased debt maturity structures, driven by reduced access to long‐maturity debt, but did not alter their use of short‐term debt or trade credit. The NBP's effect on long‐term credit is more pronounced for firms with higher degrees of electricity intensity, financial constraints, information frictions or rollover risk. It ultimately led to deteriorating firm value and operating performance. Increased energy costs and elevated operating leverage explain firms’ reduced access to long‐term credit. Our findings highlight the potential unintended consequences of policy instruments designed to boost a specific aspect of sustainability and the complex nature of managing corporate financial and sustainability goals.
{"title":"Environmental Regulation and Access to Credit","authors":"Viet A. Dang, Ning Gao, Tiancheng Yu","doi":"10.1111/1467-8551.12848","DOIUrl":"https://doi.org/10.1111/1467-8551.12848","url":null,"abstract":"We show that climate priorities codified in regulations significantly impact firms’ access to credit, especially long‐term credit, an important financial resource required for achieving business viability and sustainability goals. Following the implementation of a prominent cap‐and‐trade programme aimed at controlling nitrogen oxides (NO<jats:sub>x</jats:sub>) in the United States (the NO<jats:sub>x</jats:sub> Budget Trading Program, NBP), manufacturers experienced decreased debt maturity structures, driven by reduced access to long‐maturity debt, but did not alter their use of short‐term debt or trade credit. The NBP's effect on long‐term credit is more pronounced for firms with higher degrees of electricity intensity, financial constraints, information frictions or rollover risk. It ultimately led to deteriorating firm value and operating performance. Increased energy costs and elevated operating leverage explain firms’ reduced access to long‐term credit. Our findings highlight the potential unintended consequences of policy instruments designed to boost a specific aspect of sustainability and the complex nature of managing corporate financial and sustainability goals.","PeriodicalId":48342,"journal":{"name":"British Journal of Management","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2024-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141548501","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Nikolaos C. Gkoumas, George N. Leledakis, Emmanouil G. Pyrgiotakis, Ion Androutsopoulos
We examine the association between loan portfolio concentration, competition and stock price crash risk in the US banking industry. We find that during economic downturns, banks with poorly diversified loan portfolios that operate in competitive markets are more likely to crash. Importantly, we show that this link is channelled through aggressive earnings management and ambiguous annual reports. Therefore, managerial ambiguity can serve as an early warning signal of information obfuscation, which can eventually lead to stock price crashes. As a quasi‐natural experiment, we use the passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act in 2018. This policy lowered the regulatory requirements and oversight for a specific group of large banks. The results of a difference‐in‐differences analysis support our baseline findings and add to the ongoing debate on the roots of the 2023 banking crisis. Therefore, our findings can be informative to market participants, regulators and policy makers.
{"title":"Bank Competition, Loan Portfolio Concentration and Stock Price Crash Risk: The Role of Tone Ambiguity","authors":"Nikolaos C. Gkoumas, George N. Leledakis, Emmanouil G. Pyrgiotakis, Ion Androutsopoulos","doi":"10.1111/1467-8551.12850","DOIUrl":"https://doi.org/10.1111/1467-8551.12850","url":null,"abstract":"We examine the association between loan portfolio concentration, competition and stock price crash risk in the US banking industry. We find that during economic downturns, banks with poorly diversified loan portfolios that operate in competitive markets are more likely to crash. Importantly, we show that this link is channelled through aggressive earnings management and ambiguous annual reports. Therefore, managerial ambiguity can serve as an early warning signal of information obfuscation, which can eventually lead to stock price crashes. As a quasi‐natural experiment, we use the passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act in 2018. This policy lowered the regulatory requirements and oversight for a specific group of large banks. The results of a difference‐in‐differences analysis support our baseline findings and add to the ongoing debate on the roots of the 2023 banking crisis. Therefore, our findings can be informative to market participants, regulators and policy makers.","PeriodicalId":48342,"journal":{"name":"British Journal of Management","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2024-07-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141522159","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Ribuga Kang, Jingoo Kang, Andy Y. Han Kim, Yoonhee Choi
We examine how CEOs’ facial width‐to‐height ratio relates to their firm's alliance partner choice. Using a sample of 2627 alliances of 184 US firms in high‐technology industries between 1993 and 2020, we find that firms led by CEOs with a greater facial width‐to‐height ratio are more likely to ally with new and unfamiliar partners. This tendency is more pronounced when the partner firm is larger or more central in the alliance network than the focal firm. We also find that this tendency is strengthened when the focal firm's performance is below aspirations. Our findings suggest that wider‐faced CEOs are more inclined to take risks and seek status in their alliance partner choice. Our paper bridges upper echelons theory and strategic alliance literature by examining the role of an important but understudied physical attribute of executives in the context of strategic alliances.
{"title":"Alliance Partner Choice and CEOs’ Facial Structure","authors":"Ribuga Kang, Jingoo Kang, Andy Y. Han Kim, Yoonhee Choi","doi":"10.1111/1467-8551.12847","DOIUrl":"https://doi.org/10.1111/1467-8551.12847","url":null,"abstract":"We examine how CEOs’ facial width‐to‐height ratio relates to their firm's alliance partner choice. Using a sample of 2627 alliances of 184 US firms in high‐technology industries between 1993 and 2020, we find that firms led by CEOs with a greater facial width‐to‐height ratio are more likely to ally with new and unfamiliar partners. This tendency is more pronounced when the partner firm is larger or more central in the alliance network than the focal firm. We also find that this tendency is strengthened when the focal firm's performance is below aspirations. Our findings suggest that wider‐faced CEOs are more inclined to take risks and seek status in their alliance partner choice. Our paper bridges upper echelons theory and strategic alliance literature by examining the role of an important but understudied physical attribute of executives in the context of strategic alliances.","PeriodicalId":48342,"journal":{"name":"British Journal of Management","volume":null,"pages":null},"PeriodicalIF":5.6,"publicationDate":"2024-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141502891","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：