International Cross‐Listing, Firm Performance, and Top Management Turnover: A Test of the Bonding Hypothesis

Lel, Uǧur; Miller, Darius P.

doi:10.1111/j.1540-6261.2008.01377.x

Cited by 235 publications

(157 citation statements)

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“…Furthermore, CFOs leaving their position involuntarily or for upward moves do so after a short tenure in office. In addition, a small share of institutional investors appears to increase the likelihood of a CFO upward move or dismissal (p < 0.05), which stands in contrast to the findings by Denis and Serrano (1996) Lel and Miller (2008). Figure 2 shows the results.…”

contrasting

confidence: 53%

“…Therefore, we calculated the true interaction effect and its zstatistics, based on the estimated cross-partial derivative (Ai and Norton 2003). For another example of the application of this method see Lel and Miller (2008). Figure 2 shows the results.…”

Section: Resultsmentioning

confidence: 99%

“…It is not a constant, which makes the analysis and interpretation of moderating hypotheses more complex (Wiersema and Bowen 2009). Therefore, we used a methodology recommended by Ai and Norton (2003) and used by Lel and Miller (2008) in a similar context to compute the true interaction effect and test its statistical significance, which is based on the estimated cross-partial derivative (Norton, Wang, and Ai 2004). Table 2 reports the means, standard deviations, and correlations for the dependent, independent, and control variables in our study.…”

mentioning

confidence: 99%

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Hanging Together, Together Hung? Career Implications of Interpersonal Ties Between CEOs and Top Managers

Hilger

Richter

Schäffer

2013

Bus Res

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Is it good or bad for senior executives to have strong interpersonal ties to the CEO? We argue that a strong relationship with the CEO raises the likelihood that a top manager stays in office or makes an upward career move when the CEO leaves office voluntarily. At the same time, such interpersonal ties also reinforce the negative spillover effects of a dismissal of the CEO on the career prospects of the manager concerned. Our empirical analysis lends support to both arguments. We contribute to managerial succession research by underlining the ambivalence of interpersonal ties within top management teams. JEL classification: D85, M51, G30Keywords: corporate governance, interpersonal ties, top executive careers, top executive turnover, top management teams Manuscript received February 6, 2012, accepted by Peter Walgenbach (Management) October 29, 2012. spects. Given the generally positive portrayal of interpersonal ties to the CEO in the literature so far (e.g., Cao, Maruping, and Takeuchi 2006;Collins and Clark 2003), we highlight a potential ambivalence in such ties, at least in critical situations such as the dismissal of the CEO. In our empirical study, we investigate the career implications of interpersonal ties to the CEO from the perspective of a senior manager in a functional role that exists in virtually every large company, namely the Chief Financial Officer (CFO). CFOs are in a particularly challenging position, in that they should maintain a balance between independence from the CEO for the sake of greater neutrality and objectivity (Daily and Schwenk 1996), and closeness to the CEO as the primary strategic partner (Arthaud-Day, Certo, Dalton, and Dalton 2006;Collins, Masli, Reitenga, and Sanchez 2009;Tulimieri and Banai 2010;Zorn 2004). Using a matched-pair design, we analyze data on 77 CFO-turnover events in large, stock-market-quoted companies in Germany between 1999 and 2006 to shed light on the ambivalence of strong interpersonal ties to the CEO. Using logistic regression techniques, we find support for our central expectations, namely that strong interpersonal ties to a CEO help to keep a top manager in office. At the same time, when the CEO leaves office, strong ties reinforce the effect of the CEO's departure on the likelihood that the TMT member will leave their position, too: If the CEO leaves for routine reasons, then a strong relationship with that CEO enhances the likelihood that the TMT member concerned will make an upward career move through internal promotion or a move to a better position elsewhere. However, if the CEO is dismissed, a strong relationship with that CEO increases the TMT member's risk of also being dismissed. Our findings add to managerial succession research (Cao, Maruping, and Takeuchi 2006;Fee and Hadlock 2004;Mian 2001;Shen and Cannella 2002a) by highlighting the ambivalence of strong interpersonal ties. 2Theory and Hypotheses 2.1The Importance of Relationships between TMT Members and the CEO According to social network perspectives, interpersonal ties am...

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Section: Resultsmentioning

confidence: 99%

mentioning

confidence: 99%

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Hanging Together, Together Hung? Career Implications of Interpersonal Ties Between CEOs and Top Managers

Hilger

Richter

Schäffer

2013

Bus Res

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“…Thus, the bonding hypothesis has been more accurately characterized as the "legal bonding hypothesis." Overall, the legal bonding hypothesis has been supported by Doidge et al (2004Doidge et al ( , 2009aDoidge et al ( , 2010, Fernandes, Lel, and Miller (2010), Hail and Leuz (2009), Lel and Miller (2008), and Reese and Weisbach (2002).…”

Section: An Institution-based View On Cross-listingmentioning

confidence: 63%

Cross-listing and the scope of the firm

Peng¹,

Su²

2014

Journal of World Business

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Abstract"What determines the scope of the firm?" is one of the most fundamental questions in strategic management and international business. Yet no previous research has investigated the relationship between the scope of the firm and cross-listing-a firm listing its stock on overseas exchanges. We leverage the resource-based and institution-based views with a focus on cross-listed firms from emerging economies. We predict that cross-listing may result in a narrower product scope in the short run, a wider product scope in the long run, an expanded geographic scope overall, and a higher propensity to engage in mergers and acquisitions in the host country.

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“…Portes and Rey (2005), and the fraction of a destination country's stock market that has a public U.S. listing as of 1997. In Ahearne, Griever, and Warnock (2004), the fraction of cross-listing proxies for a reduction of information asymmetries between U.S. and local investors, although some may argue that cross-listing in U.S. exchanges may affect U.S. investors' willingness to purchase foreign stocks because of noninformational reasons (i.e., "bonding" to better U.S. institutions), as in Reese and Weisbach (2002), Doidge, Karolyi, and Stulz (2004), and Lel and Miller (2008). The results show that FDI 1990 remains positive and economically and statistically significant.…”

Section: Other Information Variablesmentioning

confidence: 99%

Information Immobility and Foreign Portfolio Investment

Andrade

Chhaochharia

2010

Rev. Financ. Stud.

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We examine how residents of the United States allocate their stock portfolios internationally. We find that a large U. FDI establishes marginal differences in the endowments of information about different countries, which later translate into differences in stock portfolio holdings. We control for cross-country differences in capital controls, proximity along different dimensions, corporate governance, and economic and capital market development. Our results also hold for the G6 countries collectively. (JEL F21, F36, G11) How do investors allocate their stock portfolio internationally? The capital asset pricing model (CAPM) under purchasing power parity predicts that all investors hold the World Market Portfolio regardless of their nationality (Grauer, Litzenberger, and Stehle 1976). This prediction, however, is clearly at odds with the data (Karolyi and Stulz 2003), indicating that investors take into account factors other than the benefits of international diversification. Economists need alternative theories to describe how investors allocate their portfolios internationally.An important family of models asserts that cross-country differences in stock portfolio allocations arise because investors in different countries are endowed with different information sets (Gherig 1993;Brennan and Cao 1997;Kang and Stulz 1997). A long-standing conceptual difficulty with this argument is that information asymmetry would not be sustainable for long periWe are grateful to Geert Bekaert (the Editor) and two anonymous reviewers for excellent suggestions. For helpful discussions, we thank

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International Cross‐Listing, Firm Performance, and Top Management Turnover: A Test of the Bonding Hypothesis

Cited by 235 publications

References 87 publications

Hanging Together, Together Hung? Career Implications of Interpersonal Ties Between CEOs and Top Managers

Hanging Together, Together Hung? Career Implications of Interpersonal Ties Between CEOs and Top Managers

Cross-listing and the scope of the firm

Information Immobility and Foreign Portfolio Investment

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