Your World of Legal Intelligence
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Publisher:
Wiley
Publication date:
2021-02-01
ISBN:
1045-3172

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Latest documents

  • Issue Information
  • Public‐to‐Private Buyouts and Innovation

    We study the effect of public‐to‐private buyout transactions on investments in innovation using an international sample over the 1997–2017 period. We use patent counts and citations to proxy for the quantity, quality and economic importance of innovation. Our results are based on time analysis and matched sample regressions. The data indicate that buyouts are associated with a significant reduction in patents and patent citations, including a reduction in radical (i.e. more scientific) patents. When we split the sample into institutional and management buyouts, the negative effect of buyouts is confirmed only for institutional buyouts. This suggests that only institutional buyouts prevent target firms from adopting long‐term investments. This finding is confirmed by reductions in innovator employment and innovation efficiency subsequent to going private. Moreover, the data indicate that the negative effect is most prevalent for transactions where the cost of the deal's debt financing is higher than that of the debt post‐buyout. We rule out some alternative explanations for these findings, including but not limited to outliers, truncation bias and endogeneity.

  • Innovation in Family Firms: An Agency and Resource‐Based Lens on Contingencies of Generation and Management Diversity

    Family firms are increasingly recognized as a heterogeneous group of businesses with specific strengths and weaknesses that make them either superior or inferior to non‐family firms. Recent research has therefore started shifting away from comparisons between family firms and non‐family firms to comparisons between family firms. This study investigates the influence of two key paramete rs of ‘familiness’ – the generation in control and the (non‐family) management diversity – on family firm innovation. While agency‐based arguments stress the liabilities of these two parameters of family influence, resource‐based arguments highlight their benefits. Conflicting effect hypotheses are derived and tested in the context of German family firms. The empirical results imply that family firms’ generational development and higher management diversity influence their innovation positively and that their benefits outweigh their liabilities in the context of German family firms.

  • Measuring Firms’ Market Orientation Using Textual Analysis of 10‐K Filings

    Market‐oriented firms are committed to understanding their customers’ evolving expectations and meeting their needs, while outwitting competitors, to achieve a sustainable competitive advantage and improve performance. This paper develops a measure for market orientation based on textual analysis of 10‐K filings. It utilizes a bag‐of‐words method to identify relevant information from the management's disclosure that underpins the corporate traits measured by the MKTOR scale, a renowned survey instrument for measuring market orientation. Unlike previous studies that rely extensively on small‐scale survey data to estimate market orientation, this novel method leverages instead on the use of big public archival data. We empirically establish strong construct validity for the measures of market orientation and its components, namely customer orientation and competitor orientation. Furthermore, our analyses demonstrate that firms’ performance is positively affected by market orientation and that this relationship is more pronounced in competitive environments. We contribute to the literature by developing an elegant measure of market orientation, which allows for conducting large‐scale longitudinal analyses of its antecedents and consequences.

  • Marketing Integration Decisions, Intermediate Goals and Market Expansion in Horizontal Acquisitions: How Marketing Fit Moderates the Relationships on Intermediate Goals

    Despite their enormous importance for value creation, marketing topics are broadly ignored in merger and acquisitions (M&A) research. Even though the internal aspects of M&A processes receive much research attention, marketing‐related integration decisions play an important role in customer retention and market expansion. In this paper, we develop a model that integrates core marketing integration decisions, intermediate goals and market expansion by considering the contingency of marketing fit. The theoretical framework was tested empirically through a sample of 82 horizontal acquisitions made by acquirers from German‐speaking countries. Our results show that there are no universally pertinent integration decisions; rather, there are important trade‐offs that, when aggregated, may explain the insignificant results achieved by commonly accepted success factors. Furthermore, intermediate goals mediate the relationship between integration decisions and market expansion. Implications for management research and practice are also discussed.

  • Spillover Effects of Capital Expenditure Announcements Within Business Groups

    Using the capital expenditure announcements of Taiwanese business group affiliated firms, this study examines whether the group diversification and ownership structure influence intragroup spillover effects. We find that the stock price reactions of the announcing firms are positively associated with both the stock price reactions and the post‐announcement long‐term performance of their non‐announcing group peers. More importantly, the evidence shows that this positive spillover effect weakens for business groups associated with a pyramidal ownership structure. The evidence supports the conjecture that principal–principal conflicts play an important role in moderating the spillover effects in a business group. The findings further show that the spillover effects are stronger during periods of financial crises. Finally, in the 3‐year period following announcements, the non‐announcing group members experience declining industry‐adjusted performance.

  • The Roots of Informal Responses to Regulatory Change: Non‐compliant Small Firms and the National Living Wage

    How do small ‘non‐compliant’ firms (those evading existing regulations) react to further regulatory change? The impact of the National Living Wage in the UK in 2016 is analysed through 22 mostly longitudinal case studies of small non‐compliant firms. The varied responses, endurance of non‐compliance, and blurred and dynamic nature of transitions to compliance are discussed through the lens of institutional approaches to informality. The analysis sheds new light on the relative autonomy of micro processes and the conditions under which external forces affect these processes. Non‐compliant informality, as a persisting feature of small business, is unlikely to be transformed by legal regulation alone.

  • To Invest or Not to Invest?: The Roles of Product Information, Attitudes Towards Finance and Life Variables in Retail Investor Propensity to Engage with Financial Products

    Little is known in the current literature about the factors affecting retail investor (RI) propensity to engage with financial products other than their attitude towards financial risk (ATFR). This study explores the role of a number of variables, thematically grouped into domain‐specific (product information and attitudes towards finance) and general impact factors (life variables). Data from 970 UK‐based RIs, collected in 2017 across a variant of products, suggest that when analysed thematically, variables related to product information emerge as the most important group of influence factors. While the relevance of ATFR is also vindicated in the findings of this study, the results bring a dose of life context to situations of financial decision‐making by illustrating that information about the product as well as life variables matter significantly, in particular negative emotions and sensation‐seeking, thereby highlighting a duty of care towards potentially vulnerable people. The study discusses implications arising from the findings in relation to research, practice and policy.

  • ‘COVID‐19 and Its Impact on Management Research and Education: Threats, Opportunities, and a Manifesto’
  • Family Firms, Alliance Governance and Mutual Knowledge Creation

    For family firms, alliances represent a form of heightened entrepreneurial risk‐taking. However, a dearth of research exists on the implications of forms of alliance governance for family firms. In a study of 939 non‐equity alliances of family and non‐family firms, we analyse how contracts and trust influence mutual knowledge creation. Both contract completeness and trust assist non‐family firms in knowledge creation. However, family firms rely on high levels of trust for the creation of knowledge. Knowledge creation suffers when family firms encounter very complete contracts tied to attempts at high levels of trust. The negative interaction effect is especially strong for non‐owner‐run family firms.

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