Determinants of common ownership: Exploring an information-based and a competition-based perspective in a global context

Hennig, Jan Christoph; Oehmichen, Jana; Steinberg, Philip J.; Heigermoser, Judith

doi:10.1016/j.jbusres.2022.02.019

Cited by 4 publications

(1 citation statement)

References 82 publications

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“…Foreign investors are motivated to intervene since their own interests might differ from the objectives of domestic shareholders, who are potentially more entangled with the firm and less inclined to exercise strict oversight (Desender et al, 2016; Yamanoi & Asaba, 2018). To intervene, they can use two channels of influence: first, “voice”—that is, direct influence, such as exercising their voting rights or private engagement with the management, and second, indirect influence via “exit”—that is, selling their stakes (Hennig et al, 2022; McCahery et al, 2016). Extant research stresses that foreign investors export effective governance practices (Cumming et al, 2017; Fang et al, 2019; Ferreira & Matos, 2008), such as terminating underperforming CEOs (Aggarwal et al, 2011).…”

Section: Theory and Hypothesesmentioning

confidence: 99%

How the country context shapes firms' competitive repertoire complexity

Steinberg

Hennig

Oehmichen

et al. 2022

Global Strategy Journal

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Research SummaryRecent research has shown that firms' ability to employ complex competitive repertoires can create long‐term competitive advantages. Since research on its determinants has focused on the firm level, we lack an understanding of how country‐level factors impact firms' implementation of complex competitive repertoires. Our cross‐country study addresses this gap by integrating a model of country‐level competitiveness factors with insights from the literature on competitive dynamics and portable governance. We argue that a country context with high‐quality competitiveness factors enables firms to implement complex competitive repertoires. In addition, we hypothesize that firms with foreign investors from countries with high‐quality competitiveness factors can partially compensate for low‐quality factors in firms' domestic context. We found support for our hypotheses in an unbalanced sample containing 1,340 firms from 32 countries.Managerial SummaryEmploying complex competitive repertoires (i.e., diverse and dynamic arrays of competitive actions), such as price reductions or new product introductions, can help firms outcompete their competition. We argue and empirically show that firms' domestic country context, specifically high‐quality governance, factor and demand conditions, related and supporting industries, and strong context for rivalry drive their ability to implement complex repertoires. Moreover, we find that ownership by foreign investors from favorable country backgrounds can partly compensate for firms' weak conditions at home by serving as enabling bridges. Managers who aim to improve their firms' repertoire complexity but are restricted by their domestic country context may consider attracting foreign investors from countries that have what their countries lack.

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Section: Theory and Hypothesesmentioning

confidence: 99%

How the country context shapes firms' competitive repertoire complexity

Steinberg

Hennig

Oehmichen

et al. 2022

Global Strategy Journal

Self Cite

View full text Add to dashboard Cite

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Cross-shareholding, Managerial capabilities, and Strategic risk-taking in enterprises: A game or a win-win?

Wang,

Zhang,

Cebula

et al. 2024

Finance Research Letters

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From attention to action: How board environmental expertise influences corporate environmental performance

Asad,

Hennig,

Oehmichen

et al. 2023

Strategic Organization

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How do board environmental experts influence corporate environmental performance? Drawing on the advisory role of the board, we examine this question and propose that board environmental expertise fosters attention toward stakeholders through the development of decision-makers’ knowledge structures and the identification of opportunities to address a wider range of stakeholders, ultimately contributing to stronger stakeholder orientation. Additionally, we theorize that board environmental expertise fosters substantive actions toward environmental performance by reducing information asymmetry and accurately assessing the risks of investing in pro-environmental initiatives. We also consider how the effects unfold in different institutional contexts. We theorize and find that national stakeholder salience increases attention pressure toward stakeholders and that environment-oriented legislation adds to the action pressure toward environmental performance. Our results, based on 11,634 firm-year observations from 15 countries between 2003 and 2016, support our theoretical predictions.

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Determinants of common ownership: Exploring an information-based and a competition-based perspective in a global context

Cited by 4 publications

References 82 publications

How the country context shapes firms' competitive repertoire complexity

How the country context shapes firms' competitive repertoire complexity

Cross-shareholding, Managerial capabilities, and Strategic risk-taking in enterprises: A game or a win-win?

From attention to action: How board environmental expertise influences corporate environmental performance

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