Does restricted stock turn CEOs into risk-averse managers? Insights from the regulatory focus theory

Ma, Rong; Hou, Wanrong; Priem, Richard L.; Wright, Peter

doi:10.1016/j.lrp.2021.102165

Cited by 6 publications

(21 citation statements)

References 121 publications

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“…For instance, it makes it possible to measure top managers’ RF by applying a content analysis of their written texts like annual reports or shareholder letters [ 24 ] and even study different countries’ leaders by analyzing their social media content (e.g., Twitter). Second, we cross the geographic and cultural boundary of the original dictionary by validating this instrument in Polish, which is in line with the recommendation by many publications to employ and test this measurement tool in various geographical contexts (e.g., [ 14 , 21 – 23 ]. Third, we go beyond the current domains where the RF LIWC dictionary were used in past: usually applied settings of management (e.g., [ 23 , 25 – 28 ]) Namely, we validated this instrument by analyzing texts related to a more universal topic—where participants described topics of importance in their everyday life.…”

Section: Introductionmentioning

confidence: 80%

“…Our research has some limitations. First, our goal was to adapt an instrument that was previously validated and applied in several research projects from different fields, such as psychology (e.g., [ 12 ]), economics (e.g., [ 21 ]), management (e.g., [ 14 ]), or even energy policy (e.g., [ 91 ]). One could argue that a translation—regardless of the thoroughness of the procedure we applied—may not capture all relevant expressions concerning the foci in a specific language or cultural context.…”

Section: Discussionmentioning

confidence: 99%

“…RF LIWC uses dictionaries comprising promotion and prevention words and allows the measurement of constructs by how frequently words from these two categories are used in the text. Past research has successfully employed these dictionaries to study the relationship between RF and gun ownership [ 12 ] or RF and responses to restricted stock awards by CEOs [ 14 ]. RF LIWC was used to test the relationship between RF and CEO responses to mortality salience [ 15 ] as well.…”

Section: Introductionmentioning

confidence: 99%

“…[ 12 ]), and economics or management (e.g. [ 14 , 21 ])—none of them provided a RF LIWC dictionary in Polish. This prevents applications of this tool in this language context.…”

Section: Introductionmentioning

confidence: 99%

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Promotion and prevention regulatory focus LIWC dictionary. Polish adaptation and validation

2023

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This article describes the adaptation and validation of a Polish version of the regulatory focus (RF) Linguistic Inquiry and Word Count (LIWC) dictionary. RF theory proposes that there are two types of self-regulation: promotion (focus on gains, growth, and ideals) and prevention (focus on losses, security, and oughts). Apart from self-report questionnaires, one method to measure RF includes a linguistic analysis. LIWC counts the frequency of words from relevant categories and presents the output as a percentage of all words used in a writing sample. RF LIWC contains two categories: promotion (e.g., achieve, ideal) and prevention (e.g., afraid, fail). To test the psychometric properties of our Polish adaptation of the RF LIWC instrument, we performed three studies. In Study 1 (N = 10), experts in RF theory rated the extent to which each dictionary entry was related to promotion and prevention foci. Results showed that words from the promotion category were rated as more promotion than prevention-related, and the pattern was reversed for words from the prevention category. In Study 2 (N = 130) we examined the divergent validity of the instrument by experimentally manipulating RF and testing the writing patterns. When a promotion focus was activated, individuals wrote more words from the promotion than prevention category, and the pattern was reversed in the prevention group. Study 3 (N = 414) investigated whether the promotion and prevention scores obtained through RF LIWC are linked with results obtained using a self-report questionnaire that measures chronic RF. Promotion scores from RF LIWC correlated positively with chronic promotion RF and prevention scores from RF LIWC correlated positively with chronic prevention RF. These preliminary findings provide initial support for the validity of the Polish adaptation of the RF LIWC.

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Section: Introductionmentioning

confidence: 80%

Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

“…[ 12 ]), and economics or management (e.g. [ 14 , 21 ])—none of them provided a RF LIWC dictionary in Polish. This prevents applications of this tool in this language context.…”

Section: Introductionmentioning

confidence: 99%

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Promotion and prevention regulatory focus LIWC dictionary. Polish adaptation and validation

2023

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“…Previous studies have presented regulatory focus as an individual trait and examined its influence on individual, team and firm-level outcomes (Agnihotri and Bhattacharya, 2020). Regulatory focus theory offers crucial insights into entrepreneurial intentions (Johnson et al ., 2017; McMullen and Shepherd, 2002), business processes (Brockner et al ., 2004), strategic actions (McMullen and Zahra, 2009), new venture performance (Hmieleski and Baron, 2008), risk-taking behavior (Mount and Baer, 2022; Ma et al ., 2022) and entrepreneurial experience (Haynie et al ., 2012). Regulatory focus theory postulates that while promotion-focused individuals exhibit approach-oriented behavior, prevention-focused individuals exhibit avoidance-oriented behavior (Higgins, 1998).…”

Section: Introductionmentioning

confidence: 99%

Assessing psychological and environmental factors influencing the long-term orientation of TMTs

Thapa

Shah²

2023

JAMR

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PurposeThis study identifies and examines psychological and environmental factors that influence the long-term orientation of top management teams (TMTs).Design/methodology/approachData on S&P 500 companies from 2011 to 2020 are collected from the Compustat database. Additional variables were measured through content analysis of earnings conference calls. This study used two-stage least squares regression with fixed effects to analyze the data and test the hypotheses. Appropriate diagnostic tests were conducted to ensure validity and eliminate endogeneity.FindingsThe results indicate that a chief executive officer’s (CEO) promotion focus positively and significantly influences the TMT's long-term orientation. However, the influence of prevention focus is statistically insignificant. Furthermore, the results indicate that environmental hostility moderates both relationships.Practical implicationsThe TMT's long-term orientation can be improved through the insights provided by this study.Originality/valueTo the authors’ knowledge, this is the first study to examine the collective effects of psychological and task environmental factors on the long-term orientation of the TMT. Additionally, this study sheds light on the internal dynamics of the top-management team.

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The role of CEO regulatory focus in increasing or reducing corporate carbon emissions

Wagner,

Fischer‐Kreer

2023

Bus Strat Env

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This article contributes to the emerging stream of corporate carbon emission research, which zooms in on CEOs' responsibility in organizations' strategic decision‐making. This investigation offers new knowledge of how a CEO's regulatory focus can shape whether firms reduce their carbon footprints. Building on regulatory focus theory, this study proposes how the two distinct motivational dispositions (i.e., promotion or prevention focus) of a CEO relate to corporate carbon emissions. We empirically analyzed S&P 500 firms from 2007 to 2018. The findings indicate that CEOs with a high promotion focus are positively associated with corporate carbon emissions, whereas CEOs with a high prevention focus are negatively linked to corporate carbon emissions, with the latter relationship weakened by industry volatility. The findings reported in this study enrich carbon emission research by devoting attention to cognitive and motivational aspects of CEOs for corporate carbon management.

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Does restricted stock turn CEOs into risk-averse managers? Insights from the regulatory focus theory

Cited by 6 publications

References 121 publications

Promotion and prevention regulatory focus LIWC dictionary. Polish adaptation and validation

Promotion and prevention regulatory focus LIWC dictionary. Polish adaptation and validation

Assessing psychological and environmental factors influencing the long-term orientation of TMTs

The role of CEO regulatory focus in increasing or reducing corporate carbon emissions

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