More than just agents: the role of executives' psychological ownership in aligning interests of principals and agents

Renz, Franziska M.; Vogel, Julian U. N.

doi:10.1108/mf-09-2021-0437

Cited by 3 publications

(1 citation statement)

References 49 publications

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“…Therefore, the literature on psychological ownership originates from the research on employee stock ownership plans (Brown, 1989; Pierce et al , 1991). Giving employees mere legal or financial ownership in the organization is not enough to instill a sense of ownership in the employees (Brown, 1989; Renz and Posthuma, 2021; Renz and Vogel, 2022). It is psychological ownership theory that explains why and how employees experience ownership feelings towards their organizations or jobs in their entirety as well as towards specific parts of their organizations or jobs (e.g.…”

Section: Introductionmentioning

confidence: 99%

30 years of psychological ownership theory: a bibliometric review and guide for management scholars

Renz

Posthuma

2022

JMH

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Purpose This study systematically reviews the literature on psychological ownership theory since its inception 30 years ago. Psychological ownership describes why and how individuals inform their identities by taking ownership. The authors provide guidance and support to management scholars to access the field and make meaningful contributions to the literature. Design/methodology/approach A variety of bibliometric techniques for performance analyses and science mapping is implemented to examine quantitative bibliographic data of 178 studies on psychological ownership. The data are obtained from Web of Science. The VOSviewer science mapping framework is employed to perform the analyses. Findings Co-authorship, citation and keyword co-occurrence networks indicate the social structures, most influential authors, publications and journals, as well as topics of past research and avenues for future investigation in the field of psychological ownership. While the authors of the seminal studies Pierce et al. (2001, 2003) have shaped the field over the past decades, the future of psychological ownership research requires stronger collaborations across the globe to advance the field from the individual level to the group and organization level. Originality/value This study is the first to comprehensively analyze the management literature on psychological ownership from a historical perspective using a systematic approach, bibliometric procedures and quantitative data. Insightful guidance and avenues for future investigation are offered to move psychological ownership research forward.

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Section: Introductionmentioning

confidence: 99%

30 years of psychological ownership theory: a bibliometric review and guide for management scholars

Renz

Posthuma

2022

JMH

Self Cite

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When R&D investment improves firm value: the role of board gender diversity

Kyaw,

Khatri,

Treepongkaruna

2024

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Purpose Agency theory postulates that research and development (R&D) investments are subject to managerial discretion and thus may not enhance firm value as expected. The inconclusive empirical findings in the literature is a testament of that. This paper aims to investigate the interplay between board gender diversity (i.e. women on boards) and value relevance of firms’ effort to innovate as indicated by firms’ R&D investments. Design/methodology/approach Through a sample of 1,626 US-listed firms from the period 2004 to 2019, the authors examine whether board gender diversity promotes or hampers value relevance of firms’ efforts to innovate. The authors use ordinary least squares as the baseline model and address potential endogeneity through instrumental variable two-stage least square, and selection bias through Heckman selection model. Finally, the authors use the financial crisis of 2008 as a natural experiment to investigate the effect of board gender diversity during the crisis period. Findings The results show that board gender diversity positively moderates the relation between R&D and firm value. In times of financial crisis, R&D does not destroy firm value in firms with gender diverse board. The results are robust to measurement error, endogeneity issue, particularly simultaneity and selection bias. Practical implications The findings in this study have several practical implications. Firms that invest heavily in R&D should be mindful of gender diversity in their board recruitment strategies to enhance innovation outputs and firm value. Current and potential investors (i.e. shareholders) should take into consideration board gender diversity in their investment decision-making processes as the results show that gender diverse boards promote more effective governance, which, in turn, leads to better alignment of R&D investments with shareholder value. Regulators aiming to improve corporate governance policies should encourage gender diversity on the boards. The results align with global initiatives such as the United Nations Sustainable Development Goals, particularly Goal 5 on gender equality. Policymakers may use the findings in this study to advocate for more gender diverse governance structures within corporations. Originality/value This study investigates the role gender diverse boards play in creating value from firms’ R&D activities.

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Better things to do or doing nothing at all? – the implications of incomplete share repurchase programs

Vogel

2024

IJMF

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Purpose Share repurchase programs are the most important form of payout, yet the implications of incomplete share repurchase programs have not been examined in previous literature. This study tests whether incomplete share repurchase programs are seen as a positive or as a negative signal by investors.Design/methodology/approach The perception of incomplete share repurchase programs by algorithmic traders, institutional investors and analysts is analyzed with structural equation models, seemingly unrelated regressions, propensity score matching and buy-and-hold abnormal returns on data from share repurchase programs in the United States. In contrast to previous literature, algorithmic trading is appropriately estimated as a latent variable, leading to more reliable results. Furthermore, decisions about share repurchases and dividends are appropriately modeled simultaneously and iteratively, based on findings from previous literature.Findings The results show that sophisticated investors such as algorithmic traders, institutional investors and financial analysts avoid incomplete share repurchase programs over a long-term investment horizon. Thus, incomplete share repurchase programs are interpreted as negative signals. Additional analyses reveal that share repurchase programs are not completed due to insufficient cash flow, as a result of financial difficulties. Overall, this implies that financial managers should be careful to announce share repurchase programs they know cannot be completed, similar to dividends that cannot be maintained over a long-term horizon.Originality/value This study is the first to consider incomplete share repurchase programs. The findings are of interest to scholars and practitioners, as this study goes beyond narrow repurchase program announcement windows, and instead focuses on the longer-term investment horizon over the life of the share repurchase program, which is often ignored in prior research.

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More than just agents: the role of executives' psychological ownership in aligning interests of principals and agents

Cited by 3 publications

References 49 publications

30 years of psychological ownership theory: a bibliometric review and guide for management scholars

30 years of psychological ownership theory: a bibliometric review and guide for management scholars

When R&D investment improves firm value: the role of board gender diversity

Better things to do or doing nothing at all? – the implications of incomplete share repurchase programs

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